Why are the rich so rich?

J Gladwell By J Gladwell, 22nd Jun 2010 | Follow this author | RSS Feed | Short URL http://nut.bz/201xpblg/
Posted in Wikinut>Money>Making Money

Ever wondered why rich people are rich? Here's what we don't learn in schools, but you need to know. Its simple, but brilliant. three tips which can make you great fortunes, with detailed explanations.

Lets get started:

In the past, we’ve always envied the rich. Some of us believe its luck that gets us there. However, that is not the truth. Being rich is not about being lucky. Of course, winning a lottery is luck but that’s a different type of rich. Those who win lotteries are not truly the rich people. I’ll explain why rich people are rich, and how you can get there with not so much effort.

1. Rich people don’t have cash. If you want to get rich, you shouldn’t either.

We assume rich people have lots of “cash”. That’s absolutely wrong. Keeping cash is the biggest financial blunder. Banks make big money off your cash, while it sits in the bank doing really nothing. So what do you do with the cash then? Invest it. Lets take some examples. Bill Gates doesn’t have much cash in his bank account. Most of his wealth is in the form of assets. He is an active player in the stock markets, and if at all he has cash, he will spend it as soon as possible.

Idle money is eventually lost. That’s key to remember in our modern economy. The prices of everything goes up, so hat’s the point in having cash? What it can buy you keeps reducing. However, if you own corporations, the value of your money (investment) constantly increases along with the inflation. It is also important to be constantly aware of what your money is doing. Don’t just leave it with an investment company. Don’t you wonder why there are so many investment corporations and banks? They make money off your money. That’s how so many of them survive. Why do you want to give your money to them? Why not make that money yourself?

Stocks and shares are the simplest form of investment, and can give you high returns. Don’t know how to deal with stocks? Learn. Its not that hard. There are plenty of seminars around. Get an investor account and start trading. However, there are a few tips to keep in mind. Don’t put all your eggs in one basket. Be willing to loose, if you want to gain. Do your research thoroughly before investing. Don’t gamble.

2. Rich people don’t work for money. You shouldn’t either.

We all work for money. Rich people get money to work for them. Think about this economic concept: making money off money. Imagine that. We’re so familiar with it that we just ignore it. Just take a moment and think about it. Buy an apple today. Does that turn into 2 apples tomorrow? Money does. Isn’t that crazy? That’s the secret to getting rich. Make money off your money. Lend it for interest, invest it, do anything to multiply it. That’s what rich people do.

3. Don’t pay taxes - legally. No seriously, rich people don’t pay taxes, and that’s legal.

Socialism is based on this concept: take from the rich and give to the poor. It started out with that kind of a “robin hood” idea, but it became disastrous. First, we must all understand this: rich people are not dumb. They’re smarter than all of us. They created the biggest tax evasion strategy: the corporation.

The common man tries to have everything, but ends up not having much. Rich people own everything, but have nothing. Their wealth is hidden in corporations. How so?

Corporations don’t pay taxes until they pay out to a person or shareholder. So what? Well, spend it! Instead of paying money to the owner, buy something (tax free) and give that to the owner. Now see why business people get lots of vacation packages? They just charge it to the corporation in the name of “business travel”, and therefore have to pay little or no taxes on it. Those who make lots of money (100k+) pay up to 50 percent tax. Imagine getting 2 vacations instead of one, just by doing it through your corporation.

Setting up a corporation isn’t easy. Don’t try it unless you are sure, because you could loose money. But get involved in one, or as I said, own one.

Traditionally we’re told: study well in school. Go to university. Get into industry, and climb up the corporate ladder. That’s not the way rich people see things. The rich just say “well, what if I own the ladder?” They’re already on top of us. There’s a lot we can learn from them.

Tags

Become Rich, Bill Gates, Business, Corporations, Fortunes, Investment, Money, Rich, Stock Markets, Taxes, Wealth

Meet the author

author avatar J Gladwell
Sorry, this author hasn't written a bio yet.

Share this page

moderator Sam Wormleighton moderated this page.
If you have any complaints about this content, please let us know

Comments

author avatar drelayaraja
26th Jun 2010 (#)

Wonderful article. I now understand, why the poor are so poor

Reply to this comment

author avatar Charlene Nuble
14th Nov 2010 (#)

Nicely written. I've written 2 articles regarding this subject: http://gomestic.com/personal-finance/why-the-middle-class-are-struggling/ and http://quazen.com/kids-and-teens/college-life/get-rich-by-overcoming-your-fear-of-rejection/

Reply to this comment

Add a comment
Username
Can't login?
Password