Why do the rich keep getting richer and the poor keep getting poorer?
I feel like there is a lot of talk around this topic right now.
So I want to address why this is
happening, why the rich keep getting richer and the poor keep getting poorer,
and what we can do about it to help ourselves become richer and help others
along the way, instead of just sitting around complaining that everyone else is
getting rich besides us because no one really likes a
complainer and especially no one really likes the complainer that doesn't have
a solution to whatever it is they are complaining about.
I am Tiffany Thomas with Wealthy
Tiffany Dotcom and I achieved financial freedom at age thirty eight.
So if you want to achieve financial freedom at a young age as well,
hit that like button and hit the subscribe button and we're going to dove right in.
All right. The reason the rich keep getting richer
and the poor keep getting poorer is because of one simple principle.
And I actually learned this a while ago
when I read Rich Dad, Poor Dad by Robert Kiyosaki.
And I will leave a link below to the book in the description.
You can check that out if you haven't already.
But in the book he talks about this one
principle that his rich dad was applying and his poor dad was not applying this
principle, and that was to invest in assets.
And I want to expand on this a little
bit more so that you can actually apply these principles.
The way that the rich are handling their
money is when they have income coming in, they are putting that income directly
into assets, which in turn will make them more money.
So they have more money coming in, which they in turn put into more assets.
And then they can use those assets to pay for their expenses or pay for any
liabilities that they want or any luxuries that they want.
But that cycle is endless because they keep investing in assets.
Those assets keep growing or keep
increasing their passive income or cash flow.
And that way they have more and more money
and then they can continue to buy more and more assets.
And if they want to buy liabilities then they can.
But everything is taken care of because
they've chosen to invest in assets, they've made it a priority.
And the way that the middle class handle
their income is when they have income coming in, which is usually
from a paycheck, they will put that toward their expenses
and then buy a liability, which sometimes they consider to be an asset.
But it could be a car or even a home.
A home necessarily isn't an asset. It can
appreciate over time and you can make money from it.
But there's a lot of expenses that are tied to a home.
So if it isn't creating money for you, then it can become a liability.
They will also buy any toys that they want, like boats or jet skis,
anything that is fun or whatever, but it doesn't bring them in any money.
And they also might put some money toward a 401k, toward a retirement account.
But it's not really their main focus.
And the way that the poor handle their
money is they have income coming in and it goes directly to their expenses.
So any transportation expenses that they have or their rent or utilities, clothing,
food, taxes, and once that money is spent, that's all they have.
And then they wait for their next paycheck and put it directly toward their expenses.
Again, the poor and middle class have to continue to work for their money
instead of having their money work for them.
And it becomes an endless cycle because they make money and then they spend
that money on things that are not going to provide them more money.
So they have to keep making money to pay
for their expenses and for their liabilities.
All right. So how do we change the cycle?
How do the middle class and the poor move up to the rich?
And the first thing that want to do is
to start thinking more long term instead of short term and instant gratification.
There are lots of things that we want to buy right now, like a brand new car or
a brand new home or that new iPhone, whatever it is.
But all of these things are just for the short term.
They aren't going to bring us long term
happiness and they won't make our money work for us.
So we really need to change our mindset to think more long term.
And this includes investing our money.
We need to think for the long term
and ignore those get rich quick schemes, because if you listen to those you are
going to stay broke a lot longer, start to think where do you want to be
in five years or in 10 years or when do you want to retire or at least have
the option to retire, start thinking more long term and set some
really specific goals that you can achieve to help fulfill your vision that you have
where you would see yourself in five or ten years.
Once we have that vision, we can take a step back and think, OK,
what are the steps that I'm going to need to take in order to get there?
And the second thing that we will need to do is to stop spending all of our money.
If we are living paycheck to paycheck, we will never become rich or become wealthy.
We will stay broke and we will never be
able to accumulate those assets that are going to make our money work for us.
If you haven't started saving any of your money, that is where you can start.
Save a small percentage.
Just put it directly into an online savings that you won't be looking at every
day when you are looking at your checking account and you can be as small as you
want and you can start with one percent and then build up from there.
But start saving something. That is going to be key to breaking the cycle.
Once you're able to save money, then you need to invest that money.
That's the third part.
Make your money work for you instead of you always working for the money.
The rich are not trading all of their time for dollars, that's for sure.
So if we want to become rich or become wealthy, we need to invest our money.
This is key.
And if you're wondering, OK, well, where do I invest my money?
What do I invest in? And that's a great question.
I'm going to share four different types
of asset classes that you can invest your money in.
And the first one that I want to share with you is real estate.
This is one of my personal favorites.
I've been investing in real estate for quite a while now and it has helped me
the most to become financially free at age thirty eight.
And the way that I prefer to invest
in real estate is to invest in residential properties versus commercial properties.
And that's not to say you can't invest
in commercial properties because those will work great.
You could invest in certain businesses.
Maybe you like chick fil a and you want to get a franchise of that.
I don't know about you guys, but I love Chick fil A's lemonade.
I hardly get a drink when I go out to eat, but when I go to Chick fil A,
I always get their lemonade. Comment below and tell me if anyone else
likes their lemonade. So you could go the commercial route.
I just prefer to do the residential and I
invest in properties that I buy and hold for the long term.
And you can do short term rentals like an Airbnb or VRBO and just rent them
maybe on the weekend or for a week or something like that.
So there is that option.
Or you could even do a fix and flip.
You could buy a property that isn't in the best condition and you can remodel
it or completely gut it and redo the whole house and then you can sell it.
So you fixed it up and now you're flipping
it and then you can sell it for a profit and make money that way.
But I just prefer to buy properties that are in good condition already.
And then I put tenants in there and they pay me a monthly rent.
So I receive cash flow every month from my properties.
So this way I'm collecting that income
every month and I could buy another asset with that income or I could buy
a liability, a new car or something if I wanted to.
But I have my money working for me by investing in real estate.
And if you're wondering how I've been able to do that, I did create a video.
So I will leave a link above and below
in the description and you can check that out later.
And when you are investing in real estate, for example, you can leverage other
people's money so you can take out a mortgage and leverage the bank's money.
In order to do that,
you will need a good credit score so that you can borrow money for less money.
And if you want to know how to increase
your credit score, I do have a video about that.
So I'll leave it above and below
in the description and you can check that video out.
And if you don't want to invest
in physical real estate properties, there are some other options you could
invest in REITS, real estate investment trusts.
And you can do that through the stock
market, which we are going to talk about next.
Or you can sign up with a company
that pools a whole bunch of investors money together to invest in properties
and they completely manage the properties and then you collect income from that.
So something like Fundrise or Cloudstreet, I've never used any of those companies.
So I'm not recommending them.
I'm just giving you suggestions. All right.
Let's move to the second asset class, which is the stock market.
And some of you may already be familiar
with this, but you can invest in stocks or in bonds inside of the stock market.
These are also known as paper assets.
And you can keep that long term mindset
when you are investing in the stock market.
And this will make a huge difference
because the stock market will go up and down.
Of course, over the long term,
it will continue to rise up, but there will be ups and downs along the way.
But if you keep that long term mindset, then when the stock market does go down,
you won't be afraid and sell all of your investments.
You'll think, oh, the stock market is on sale.
I better stock up.
I also personally invest in the stock
market and this is what helped me purchase my fourth property.
I had money invested in my Roth IRA
and then a brokerage account and when I wanted to buy a fourth property.
I took some of that money out of my Roth IRA, my contributions and some
money out of my brokerage account and put that toward my down payment.
As you can see, by investing in assets, I was able to grow my assets.
By investing in the stock market,
I was able to purchase another real estate property.
Getting started in the stock market is one
of the easiest ways to make your money work for you.
And if you are interested in what I invest
in, I created a video for you, which I will leave a link to above
and below in the description and you can check that out later.
The third asset class I want to talk about is collectibles.
This could be art or maybe classic cars,
but it's just something that will appreciate over time.
It'll go up in value over time.
And investing in collectibles, you really have to know your market
because I know there are things that people have invested in or collected
over time thinking it would go up in value when in actuality it never.
Did anyone hear of the TY babies.
I have a few of those that my mom had bought for me and they are cute.
I still have them, but there's no way I'm
selling them for more than what she had bought them.
For another example,
it could be coins and maybe this would go under more of a precious metals category.
But my dad invests in coins.
He's a coin collector and he has quite
the collection, so he knows quite a bit about coins and the value of them.
So it's been pretty fascinating to watch him expand his coin collection over time.
The fourth asset class that you could invest in is businesses.
This could be starting your own business
or investing in a friend's business or someone else's business.
And I had a friend that wanted to start
a business where she would have dresses made that were modest.
And when she told me about this idea, I was pretty excited.
So I asked her once she had gotten more information to reach out to me and let me
know if she needed an investor, because I may be interested in investing
in her business. Things didn't end up panning out.
But there's different opportunities
that you could have to invest in different businesses.
And if you decide to create your own business, hopefully that would grow over
time and then you could later sell it for a profit if you wanted to.
And just to give you an example, there is a person on Instagram,
Jeremey with Personal Finance Club that I follow, and he started his own business
and I think he ended up selling it for, I want to say, three million dollars.
It may be four million, but I think it was three million.
And if you haven't checked out his Instagram, I definitely would.
It is a really good one to follow.
So that was a great investment for him to start that business and invest his time
and money into it because he really profited from that later on.
All right.
Hopefully that gives you a few ideas on where you can invest your money.
And like I mentioned,
it is really easy to get started in the stock market and it is very low cost.
And if you are interested in getting
two free stocks, Webull is doing a promotion.
If you deposit one hundred dollars, then they will give you two free stocks.
So you can click on my link below and get
your two free stocks and get started in the stock market.
So that is how the rich keep getting richer.
They keep investing in assets which make
their money work for them, which creates more money for them,
and then they can continue to invest in assets.
And while, yes, it's easier to invest when you have more money.
You can still start small,
like we talked about before, taking that long term approach
and reducing your spending and saving your money and then investing your money.
Let's get out of the mindset of just spending our money on expenses
and liabilities, but really focusing on investing our money
and making it work for us so that we can become rich and become richer.
My friend and I were talking about this
the other night and I had asked him, OK, well, do you want the rich to just kind
of have a cap on how much money they can have?
And he said, well, no, that's not really the solution.
And I feel like what I am sharing in today's video is the solution.
You have to be smart with your money
because we aren't going to get anywhere by just complaining about it.
And yes, there still will be disparity and privilege, but we can at least take
care of our own finances, our own money situation, and help others along the way.
And we can do our part to at least shorten the gap a little bit.
The rich also had to start somewhere.
You now have the solution and you can take action.
So comment below and tell me which asset are you going to invest your money in?
Or if you already are investing, which one are you investing in?
Tell me in the comments below.
I'm curious to know.
And if you found this video helpful, please, hit that like that and share it
with someone else who needs to hear this information and hit the subscribe button.
To subscribe to my YouTube channel
and hit the little bell get notified on when I post new videos.
Thanks so much for watching.
I'll see you in the next video.