“The rich get richer and the poor get poorer.”
That’s a common saying among people. In fact, I heard it said the other day by a colleague. One person was complaining that his insurance premiums, along with all of his co-pays, were recently increased. So he’s paying more money to the insurance company and getting less back, and all of this was well beyond the mere level of inflation. So his response was, “the rich get richer, and the poor get poorer.” He’s referencing the wealthy shareholders and leaders of his insurance company pulling as many dollars out of the “average joe” insured person they can.
But is this saying useful? In some ways it is, because it helps people leave the responsibility elsewhere instead of with themselves. The statement is true, not because of price increases like this, but because of the mindset and the understanding that richer people have over poorer people. The truth of the matter is that the poorer have access to the same system as the richer.
Now, to be clear, I’m not talking about really poor people. The people who make these statements are not often poor, they’re middle class generally. There are indeed some poor people that have forces outside of their control holding them down, whether it’s an oppressive regime or an unlucky childhood that didn’t provide a way to receive education, or some sort of limiting mental disability. If you’re reading this, however, chances are you’re not one of them. The type of “poor” I’m talking about in this article is any person who feels unsatisfied with the direction of their wealth.
How do the poor get poorer?
The poor get poorer by having a short-term view, by letting their greed and emotions get the better of them, and by not striving to understand the systems and approaches that allow one to consistently and ethically build wealth. A good way to stay “poor” is to spend most of your income on things that don’t really improve yourself as a person, rack up credit card debt by not being conscious of your financial habits, and then complaining that life isn’t fair.
How do the rich get richer?
The rich get richer by having a long-term view, by making sure their reason trumps their emotion in the arena of finance, by understanding simple concepts like compounding, and most importantly by actually applying all of this each and every day. A good way to get richer is by learning about investing, being prudent with your resources, and making it a goal to build your wealth. Don’t be complacent with a financial position that you’re not satisfied with, and don’t shift responsibility from yourself to something else. You have the capability and the resources to point your finances in the right direction.