The Rich Get Richer

[money blogger]

Originally Posted by Vytautas

On the other hand people in poor and lower middle class families are never exposed to that mindset, and in addition, are exposed to predatory tactics from financial institutions which make it even more difficult for them to gain this mindset. The chances are arrayed against them but it is common for people to think that the poor have exactly the same chance even though they don't.

You're right, they don't have the same chance others have. But they do have a chance. Earl Nightingale, a father of the personal development industry earned the first gold record for 'The Strangest Secret.' http://www.nightingale.com/AE_Articl...estSecret.aspx
He came from an impoverished family and grew up in the great depression. He always wondered what it was that separated the 'haves' from the 'have-nots.' His results of years of searching for the answer is found in this articla and his audio. I think you'd find it informative.

With all this however, you've mentioned a good point regarding mindset and conditioning. Earl talks about our mind being likened to fertile soil that will grow whatever we plant. The challenge with our mindset, as you mentioned, is that we allow others to plant seeds in our soil, and we in turn allow those seeds to take root. We even water them with our belief that those seeds, or comments, or whatever beliefs are handed down to us are true.

I like Earl's message because he teaches a 30 day test to help someone begin to think more clearly. He found the secret to success because he wanted to find it. The information is available to everyone, for free at a public library, assuming they have the basic freedoms even our homeless have.

Let me know what you think of Earl's message,

[Ryan6]

I think this enhanced programming tends to help them lol. This can be replicated, but it ain't an easy thing to do. Certainly possible though.

[starshard0]

I'm sure mindset has a lot to do with it, but simply having money generally begets more money, through interest and stuff. Of course, that's if they're managing their money properly.

[money blogger]

Originally Posted by Vytautas

You mention mindset which is absolutely true, but people tend to get the impression is that all you need is mindset and ignore how to get there.

Hey, I was just reading your post again (top one on page). The first line caught my eye and reminded me of a quote.

"The best motivation is 'motive-ACTION'!"

So again, you're right. As Steve Siebold would say, 'It is much easier to create a positive mindset as a result of positive action, then it is to create positive action from a positive mindset.'

Thanks again for the imput.

Cheers

[mtsen]

Today finance system is designed in a way enabling rich gets richer. There is a famous case study in MBA program describing how trading business was started for the good of everyone, as in win-win. What the MBA book didn't say is the same trading system is enabling the Rich gets Richer ... details in this link

http://malpf.com/2009/07/why-does-pe...urn-south.html

[Socal104]

I agree that a big part of the difference is mindset but there is a financial reality that many non-wealthy don't fully understand. Its the compounding of interest. When you are rich, the compounding of interest works in your favor. Go ahead compound $500,000 at 8% or 10% for a few years and you'll understand why those with people get richer. The same applies for debt. Debt is one of the main reasons why the middle class is sinking lower. Who on earth would pay 29.99% for a credit card and how could you possibly overcome that house advantage? And who do you think is on the other side of that credit card? The wealthy that invested into the banks that loan that money at the ridiculous rate are getting their 10% returns.

For more information read Compounding: You're Best Friend or Worst Enemy

I do know many wealthy people, and most of them made their own fortunes. If I could sum up how they got wealthy in 5 bullet points it would be as follows:

• They started their own company and worked their butts off until one day they looked up, figured it was time to sell, and realized they were rich
• They made some investments into real estate and got out before the recent and obvious collapse or they invested into cashflow rental properties
• They for decades lived below their means. They may not have made that much money along the way, but they saved lots of pennies and invested it into the stock market
• They looked at the tax code and made adjustments to what they were doing to take advantage of it (i.e. they figured out ways to shelter their income)
• They avoided any debt that wasn't for their home or produced income

There is a stereotype that the rich were all given their money but that is just a small fraction of the population. Look at the number of millionaires by year and there is no way that the only rich people are those who inherited it. Think of every small grocery store to gas station that's out there. There are many small business owners that are pulling in cash every year and investing it to grow rich.

LiveCheap.com writes a lot about how people build up wealth and at every level the person has to live below their means. There's another good article about the Millionaire Renters that will dispel some of the notions of who the rich are.

SoCal
__________
LiveCheap.com
Live the Good Life Cheaply

[efolgate]

I would say that it's more like, "the rich get richer and the poor stay where they are". People considered to be poor are in a hamster wheel, not going anywhere, because the amount of debt they are in doesn't allow them to get ahead, and they miss the point that they have an income problem.

[CheapZilla]

Originally Posted by efolgate

I would say that it's more like, "the rich get richer and the poor stay where they are". People considered to be poor are in a hamster wheel, not going anywhere, because the amount of debt they are in doesn't allow them to get ahead, and they miss the point that they have an income problem.

I agree with that. "The rich get richer and the poor stay where they are". I'm neither rich nor poor but I am moving in the positive direction. People should work smart, not hard.

[SilverGlow]

Originally Posted by flipchick1127

I would argue that the rich people are born with more opportunities to make money quickly. They have the opportunity to make investments that those with less money could never dream of. These investments can make them a large amount of more money. For example, how many people who were not born rich can buy a sports team or a large company? Now, the rich person needs to have some sense to determine which investments will make him money and which ones will make him money. The key point is that rich people can afford risk, and with risk comes large returns.

Of course, those who are not rich can become rich with smart spending and investing, but it will take more time and energy than it would for an equally smart person that was rich to begin with.

There are too many self-made millionaires in America that show your explanation is very wrong.

One can start small, and I mean VERY small, and over time can become a self-made millionaire. No need to be born into it, nor with a silver spoon in one's mouth.

I hate this talk of "they have more opportunities"...this is BS because again, there are too many self-made millionaires to prove one makes their own opportunities, finds them, takes advantage of them, works smart, not hard.

There is a trend: The left wing folks will say "its not fair they had the opportunities we don't".

The right wing says: If only I work smarter and think things through before I make a decision, I too will make it big.

I'm proof of what I write here is true. My personal life's experiences have shown me this is correct because I started with dirt, and created a very nice nest egg to retire on, and through this process, I never had distain nor enfy nor bitterness toward those born into wealth....it's 90% attitude & common sense, and 10% ability.

[The Wise Buck]

Originally Posted by money blogger

You're right, they don't have the same chance others have. But they do have a chance. Earl Nightingale, a father of the personal development industry earned the first gold record for 'The Strangest Secret.' http://www.nightingale.com/AE_Article~i~22~article~StrangestSecret.aspx
He came from an impoverished family and grew up in the great depression. He always wondered what it was that separated the 'haves' from the 'have-nots.' His results of years of searching for the answer is found in this articla and his audio. I think you'd find it informative.

With all this however, you've mentioned a good point regarding mindset and conditioning. Earl talks about our mind being likened to fertile soil that will grow whatever we plant. The challenge with our mindset, as you mentioned, is that we allow others to plant seeds in our soil, and we in turn allow those seeds to take root. We even water them with our belief that those seeds, or comments, or whatever beliefs are handed down to us are true.

I like Earl's message because he teaches a 30 day test to help someone begin to think more clearly. He found the secret to success because he wanted to find it. The information is available to everyone, for free at a public library, assuming they have the basic freedoms even our homeless have.

Let me know what you think of Earl's message,

'The Strangest Secret' was the first personal development audio I ever listened to. I can still hear him saying "We become what we think about, all day long" Was a great message and true.