Rich are getting richer and Poor are getting Poorer, Even though literacy rate gone high and child labour plunged.
Why is it so? I Guess the only reason is we are literates but not Financial literates.
Money is one form of power. But what is more powerful is financial education. Money comes and goes, but if you have the education about how money works, you gain power over it and can begin building wealth. The reason positive thinking alone does not work is because most people want to school and never learned how money works, so they spend their lives working for money.
We go to a school where they teaches us to work for money, but they never teach us how money should work for us. We all find jobs after completion of our degrees and work for pay checks even though they are paid low because many of us want to be secured and want to take no risks.
As all we people want to live sophisticated we take home loans, car loans etc. w.r.t to the salary we are paid. All of us think that we have made an asset but the fact is that we have made an liability where our income column reduces by paying interests and can’t accumulate assets as already we are in debt of paying loans. We make a liability and work for years together to clear it and even later we don’t try to make an asset.
We work for a short term gain which results in an long term pain.(a job is a short term solution for a long term problem. Most people have only one problem in mind and it’s short term), few people who want to improve their asset column doesn’t want to take risks and they try to play it safe which in turn gives only the inflation rate. Many people instead of trusting their inner wisdom, that genius inside of them, most people go along with the crowd. They do things because everybody does it.
We give more importance to e-factor where as people like Warren buffet , Peter Lynch give less importance to it.
Life pushes all of us around. Some give up and some fight. A few learn the lessons and move on. They welcome life pushing them around. To these few people, it means they need and want to learn something. Most quit and few like you fight.
If you want to become rich just follow the rich, poor and middle class family “ work for money.” The rich have “money work for them.”
Rich is getting richer (look at this statement):
Poor and Middle class
Income <= Expense
Income > Expense
Asset = none
Assets > Liability
Liability = loan from bank
Expenses are low, Liabilities are low.
Why am I saying expenses and liabilities are low for rich because they don’t create bank liabilities which in turn they no need to pay interests on it.
In 1974, Ray Kroc the founder of McDonald’s , was asked to speak to the MBA class at the university of Texas at Austin. Ray graciously accepted.
“What business am I in?” Ray asked. “Most of the MBA students thought ray was just fooling around.”
Finally one brave sole yelled out and said “Ray who in the world doesn’t know you are in the Hamburger business.”
Ray chuckled. “that is what I thought u would say.” “He paused and quickly said, ‘ladies and gentleman I am not in the hamburger business. My business is real estate.”
In their business plan, Ray knew that the Primary business focus was to sell Hamburger franchises, but what he never lost sight of was the location of each franchise. He knew real estate and its location was the most significant factor is success in each franchise. Basically, the person that bought the franchise was also paying for, buying, the land under the franchise for Ray Kroc’s organization.
McDonald’s today is largest single owner of real estate in the world, owing even more than catholic church. Today , McDonald’s owns some of the most valuable intersections and street corners in America, as well as in other parts of the world.
My friend often asks me, “why should we study?”, “can’t we live without studying, the persons with minimum knowledge who does business is earning more than what a professional earns.” He says.
I Never answered his question but in deep heart I know what he is saying is absolutely right, Instead I simply say first gain knowledge and then do the business.
I am concluding with this, Be a Financial Literate. For adults, keep your expenses low, and diligently build a base of Solid assets. For young people not yet left home, it is important for parents to teach them difference between the asset and liability.
This war between the haves and have-nots, has been going on for hundreds of years. The battle is waged whenever and where ever laws are made. The battle will go on forever. The problem is people who lose are uninformed. The one who get up every day and diligently go to work and pay taxes. If they only understand the way the rich play the game, they could play it too. An employee with a safe, secure job, without financial aptitude, has no escape.
Thanks for reading.