Wealthy People Buy Assets–And You Should, Too!

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I read a quote the other day in an article on a financial website that said simply, “Making money means nothing if you have nothing to show for it!”

Do you know anyone like that? Perhaps they make more money than you, and yet they are strapped, stressed, one plumbing problem or flat tire away from serious financial distress?

Maybe this describes you, you can’t seem to make enough, you can’t seem to get ahead. You’re stuck in the hamster wheel!

The principle is simple: income and wealth are not the same thing.

If you know what you’re doing, income and wealth can and should be tied to one another, but again, making money means nothing if you have nothing to show for it!

Did you know that the average American, with a bachelor’s degree or higher, earns $1.8 million over the course of their lifetime?

That’s crazy! Where are all the millionaires??

The reason that the rich seem to get richer and the poor get poorer, is because of what people do with their money.

To put it simply and bluntly, wealthy people buy assets. Poor people buy liabilities.

Let me repeat that: wealthy people buy assets.

If you feel the way I described—“I just can’t seem to get ahead! I can’t seem to out-earn the cost of life!”—I’d encourage you to check out Robert Kyosaki’s book, Rich Dad, Poor Dad.

He breaks down what a true asset is. Your car, while it does have value, is not a true asset. It’s a liability. A car costs you money (gas, maintenance), while also depreciating in value. In other words, you put money into a car, it costs you money while you have it, and then you get less back when you’re done with it.

An asset is the opposite. It generates money.

If you knew that you could buy a magic box that you could put $10 into, and then it would spit $11 back out to you, would you buy it?

Of course you would! You’d buy a hundred of them!

Well, that magic box is available to you. That’s an asset. Wealthy people buy assets. They use their money to buy more money.

If you choose not to do this, then you are limited to earning only what you can generate with your own labor over a period of time.

So why doesn’t everyone do it?

I believe there are two main reasons:

1) Education.

If you don’t know about the strategy, you’re not going to do it. We don’t learn this in most schools, unfortunately. Rich people teach this to their kids. Poor people, sadly, do not.

2) Comfort.

It’s a lot more fun to buy a boat and a TV and a bespoke suit than it is to buy a condo that will house tenants who will occasionally be a nuisance to you. You can’t show up to a party wearing your sick new condo. Less fun, less immediate gratification, less glory–less people are gonna do it.

So I guess you have to ask yourself: “Would I rather appear rich to my friends? Or actually be rich without them knowing?”

The bottom line is, this is available to you if you feel like you’re in the hamster wheel but you refuse to accept it.

You have to change what you do with your money.

Check out Rich Dad, Poor Dad, and then check out The Millionaire Next Door, for insights into how to build true wealth in the absence of a trust fund.

So here it is: Educate yourself. Buy assets. Use your money to buy more money. You’ll thank yourself later.

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