The highlight topic for the longest time from political campaigns to day to day discussions at the coffee shop has been on "why the rich are getting richer and the poor getting poorer". The explanation to that is fairly simple as we dive into the differences in mindset.
Playing the long game.
When such question is raised, the first thing I dove into is the way rich people think versus the poor. Before I go any further, there is no concrete way to label one being rich from the other being poor. However, in this context, I'd say the rich are ones who posses more assets and vise versa.
To explain the "long game", those who are rich often prioritize their long-term return on investment (ROI) over the short term. To put it simply, If John (Mr. rich guy) gets a bi-weekly pay of $3000, the number one thing he'll prioritize would be to pay his bills and cater to his basic necessities while maintaining a good amount of savings and put what's left to investments. From there, John grows his wealth and put what's needed to starting a thriving business which he believes would be the "next big thing". To John, what matters most is he can retire with enough money to take him around the world and enjoy the greater things in life.
Now let's take a look at Michael who works the same job. He too gets $3000 bi-weekly and lives in a rented apartment. However, he is packed with streaming service subscriptions, eats take-out almost every day, goes for parties and buys trending products on Amazon he probably doesn't need. Sure he has some savings, but the bulk of it would end up be spent on a lavish boat trip in Miami.
In summary, rich people focus on how to capitalize on societal needs and market trends while poor people look for opportunities to enjoy the latest trends and attractions created by the rich.
(BONUS) The Plus and the Minus.
It's not difficult to see that the difference between who make more money during tough times versus those who lose more is the way they think. In addition to what's been discussed above, what differentiates the rich from the poor is looking at a tough situation positively versus the negative.
A great example would be to look at the past pandemic that shook the world and the economy. Many were out of a job and out of funds. However, new millionaires were sprouting at the same time at a rate no one has seen before. So why was this the case?
Simulating the pandemic and using the same people before, now John and Michael have been retrenched from their job. John now thinks of ways he can continue putting food on the table and keep up with his mortgage payments and Michael thinks the same. John figured it would be a great idea to venture into a business his friend has been pitching to him awhile back which involves Amazon FBA. John knows that people being at home means an increase in online shopping which lead him to think of selling trending products on Amazon under his own brand. John puts his savings to good use by sourcing a reliable manufacturer in China, brand the products, and gets them shipped and fulfilled by Amazon while he runs his marketing campaigns. Before long, John sees a $10,000 profit every month and it keeps growing.
On the other hand, Michael has the same worry in his mind but figured it would be too risky to get into an entrepreneurial business at this point when he has bills to pay and to feed himself. Michael feels sad but feels an excitement when he sees something cool on Amazon and buys them to make himself feel a little better. He still has his streaming accounts and uses this time to catch up on the latest shows and sports events like his friends. He still gets paid half his pay during this time, but he sees that he can no longer sustain his normal lifestyle as he's running out of savings and he just wants the hardship to end.
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Though these examples are purely through observation, there are so many more reasons and examples how the rich stay rich and vice versa. These are just some examples how the rich get richer and the poor get poorer based on a case by case basis. What would you do? Maybe it's time we started planning ahead and look at situations more positively. Who knows what we'll achieve?
This post is about One Reason Why The Rich Getting Richer and Poor Getting Poorer.