Why the Rich get Richer, the Poor Poorer and the Middle Class Stressed out?

Why do the rich get richer, the poor get poorer and the middle class stressed out? This is a question we often hear and the common answers are, “because of the government, taxation, access to education and income opportunity.” Partly, they may be correct. But one of the best answers to this question depends greatly on the mindset of the person. Today we debunk what the wealthy, the poor and the middle class buy on “payday” to answer this question.
What the wealthy, the poor and the middle class buy on "payday"
What the wealthy, the poor and the middle class buy on "payday"
Before we start, the terms “wealthy,” “poor,” and “middle class” in this article does not necessarily reflect the current income of an individual rather the terms represent the mindset of an individual regardless of his current income. The way you think will determine whether you have a wealthy, poor or middle class mindset. See where you belong:

1. What the poor buy on payday: STUFF
Stuffs are inexpensive things that people buy that they don’t really need to survive.

The magic word “SALE” usually captures the poor mindset people who buy things they don’t really need just because it is on sale.

Another symptom is buying cheap stuffs thinking that they can save money. Example would be buying too much items in the Ukay-ukay (a term used for places that sell secondhand goods such as clothing, shoes, bags, furniture, etc. at dirt cheap prices), yet never used them because the damages are beyond repair or the clothing is too itchy no matter how you wash it.

Having a poor mindset, their income never produced or created more income.

2. What the middle class buy on payday: LIABILITIES
Liabilities are things that you buy that remove more money out of your pocket.

Examples of liabilities are but not limited to gadgets, cellphone plans, car, and even house. These items often entail more expenses. Gadgets paid in credit cards add up another monthly expense. Cellphone plans add up another fixed expense stream. Car and house maintenance are also the common income outflow additions on top of the regular monthly mortgage.

The middle class is the group that society mistakenly thinks as the rich, however they are not. Most of them are stressed out because of the growing monthly expenses. They work harder every day because their expenses are their motivation to work. On the surface, life may be merry: having up-to-date cellphones and gadgets, brand new car or a lovely house, but in reality their stress level is very high.

What they buy on payday keeps them prisoners in the middle class.

Cellphones, car and house are people’s basic needs and are necessary for us to survive. However, one should not push himself to buy or get into debt if one’s income can’t still sustain its expected expenses. These items can also become an asset when one will use them for business or any activity that will provide them a source of income like house rental.

3. What the wealthy buy on payday: ASSETS
Assets are the things you buy that produce or add more money inside your pocket.

Examples of assets include investments, education and business. Most wealthy mindset people are risk-takers and venture into investing part of their income into different investments that would yield potential returns. They may venture into liquid assets such as stocks, mutual funds and bonds or into solid assets such as investing in real properties.

Most wealthy mindset people also love to spend money to attend seminars and lectures to learn more about how to create more income. They love to keep themselves educated financially. (and if you are an IMG member, congratulations for investing in learning.)

And lastly, while most wealthy mindset people start as an employee, they never remain employees for the rest of their lives but venture business on the side. They keep a part of their income to be used as a capital to start a business. These businesses produce income on the side while they maintain their full-time jobs and when the time comes when they apply what they learn in seminars and that their businesses and investments produces enough income, they happily fire their bosses and become independent.

The wealthy mindset people always dream and work hard to have time and financial freedom.

So, what kind of mindset do you have? Poor, middle class or wealthy? You can change your life by changing your environment and the way you think.
(Source: Advance Training Lectures: Build Long-term Savings in IMG)

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