According to the Credit Suisse Global Wealth Report, the wealthiest 1 percent of the world’s population now owns more than half of the world’s wealth. Individuals owning over $100,000 in assets make up less than 11 percent of the global population but own 82.8 percent of global wealth. The growing concentration of the world’s wealth has been highlighted by a report showing that the 26 richest billionaires own as many assets as the 3.8 billion people who make up the poorest half of the planet’s population. The report also claims that 2,200 billionaires worldwide saw their wealth grow by 12 percent, even as the poorest half saw its wealth fall by 11 percent. The gap of this economic inequality is rising. Rich people are getting richer and the poor are getting poorer. So the question is why it is so and what are the reasons behind it? We will understand what rich people do to become richer so that poor people can adopt and start walking towards the wealthy world.
Have a financial growth mindset:
Rich people always have a financial growth mindset. I am telling you one small story of 6 years old boy. That 6 years old boy made his first money by selling used golf balls, newspapers, packs of chewing gum and Coca-Cola bottles. When he turned to 10, he went on a trip to New York City with his Dad. He had dinner with a member of the NYSE. At that time, the boy planted the idea and made his mindset to become a millionaire. That boy is now the chairman and largest shareholder of Berkshire Hathaway; Warren Buffett. He has been referred to as the “Oracle” or “Sage” of Omaha.
This mindset helps people believe that there are always bigger and better opportunities to work on and there’s always more money to be made. They’re open to exploring new ideas. They believe they’re always capable of making changes and creating a positive outcome.
They value their time:
Rich people always value their time. Time is money for them; time-wasting is like wasting money for them. Rich people use their time wisely to generate even more money. Whenever they get time, they do some constructive work and they do some productive work so that they generate money. They also invest some time in themselves so that they get relaxed and take better decisions to generate income.
They create multiple income flows:
Rich people do not rely on a single source of income. They create multiple income flows. As they earn money, they invest excess money in new income flows. They invest in new businesses, they invest in property, they invest in primary markets, etc. so that in the longer run they can earn from these options in the future. Rich people also focus to earn passive income like rent, dividend, royalty, etc.
They invest surplus fund:
Rich people invest their surplus fund diversified. They do not put all eggs in one basket. They make their money work for them. They kept some money for their rainy days and rest, they do some smart investment. Rich people do not save what is left after spending but spend what is left after saving. So their priority is investment first.
They buy assets, not liabilities:
This one is also the main difference between rich people and poor people. Rich people buy assets – not liabilities. Famous author Robert Kiyosaki said that your personal residence is not an asset. He said that your personal things are not making any kind of money. He claims that it’s a liability as it costs you money.
They take calculated risks & take advantage of crashes:
Rich people take calculative risk. They think twice before investing. They don’t gamble; they do what they can to mitigate risk. Warren Buffett said that “Be fearful when others are greedy and greedy when others are fearful.” Rich people weigh the pros and cons and then take calculated risks. They know when to take advantage. They do their research and analysis and determine which options best suit their financial needs and business desires.
Never completely retire:
Rich people never completely retire. Warren Buffett, Bill Gates, Ratan Tata, etc. are the best examples, they never retire. They always keep ourselves busy and keep working. This is not because they can’t afford to, but because they enjoy what they are doing. They work for their dreams, not for others.
So now you understand ‘how the rich are getting richer’? The rich people are simply doing things that the average person isn’t willing to do. A common man works eight hour every day. Even sometimes he does overtime to earn more to run his family expenses but always his income is insufficient. This is a cycle that repeats daily and that is common for all. But on the other side, rich people continually think of new ways to get wealthy and then act on them, over and over again. If you don’t start learning and follow the correct path, then it is difficult to get rich.