Money won’t make you rich

Many people believe that money will make them rich. So they drop out of school and go to college to become doctors, lawyers, and other professionals who earn a lot of money. They believe that the more money they make, the richer they will become. But this is not true, generally speaking, the more people earn, the poorer they become because they get more in debt and buy more things that go down in value.

One of mine is very specialized and earns a lot of money. His wife is also highly specialized and has her own psychology practice, so they make a lot of money. But so far all they seem to do with his money is rack up more debt. Sure they have nice cars and nice furniture, but now they are required to work more than me because their expenses are higher. Your money is not making you rich. You’re making them comfortable, but you’re not making them rich.

My friend has been talking to me about financial advice. Sometimes it’s interesting when you talk to people who make a lot of money because they think that because they have the money they are more valuable to a society than I am. But the funny thing is that I am more valuable to society than they are because money by itself won’t make you rich, but what you do with your money makes you rich.

Let’s say my friend had $100,000 (which I know he has or could accumulate quickly), with his financial education one of the best things he could do is put the money in the bank and earn 4% interest. He would then pay 50% tax on that interest, giving him 2% overall (per year). The value of your money is going down 3-5% a year due to inflation, which means you’re ultimately losing 1-3% a year on your $100,000. That’s a loss. from $1,000-$3,000 per year. Now that is not a very good investment. I, on the other hand, can take $4,000 and get 25% tax-free income when buying an asset. When inflation goes up, my asset goes up in value and so does my return on investment, so I don’t lose money. I end up making $1,000 a year on $4,000 while he loses $3,000 a year on $100,000. So as you can see, it’s not money that makes you rich, it’s financial intelligence and why you do it with money that will make you rich.

Money loses value over time
One of the reasons money doesn’t make you rich is because money loses value over time. The government can print as much money as it wants (and does). The more money they print, the more their money is worth less and less. People say that the cost of living is going up (this is also known as inflation), but in reality the purchasing power of money is going down. So by simply saving money, you are actually losing value each year as the purchasing power of the dollar declines.

Money itself doesn’t make you rich.
Money doesn’t make you rich, but it’s what you do with your money that makes you rich. Poor and middle class people use their money to increase their expenses. They do this by buying bigger houses, more expensive cars and gadgets. As they get a raise in salary, their expenses increase and they end up with newer things, but in reality they are poorer than before and are forced to constantly work just to pay their expenses. The rich use their money to buy assets that generate income. Because they buy assets, their income is constantly increasing. They can use passive income (income they don’t have to work for) from their assets to pay for their expenses, such as debt and expensive devices and cars, etc.

You may have a lot of money, you may have very little. But the fact is that money does not make you rich. What you do with your money will make you rich or poor, and knowing what to do with your money ultimately determines how hard your money works for you. For me, with a good financial education, a little money can work very hard for me. For another person in a high-paying job, even millions of dollars won’t allow her to retire because her money doesn’t work hard for her. So if you want to be rich, focus on increasing your financial education.

Author: admin

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