15 Reasons Why The Rich Are Getting Richer

Summary

This video script explores the dynamics of wealth accumulation, highlighting 15 key strategies employed by the rich to grow their wealth. It emphasizes the importance of thinking big, being financially educated, creating value, leveraging other people's money, and not being emotionally attached to money. The script challenges misconceptions about wealth, stresses the value of financial education, and encourages viewers to move from theory to practice in their pursuit of financial success.

Takeaways

• 💡 The wealthy think on a larger scale, focusing on solving bigger problems and building businesses that can serve millions, rather than just their own needs.
• 💰 The rich always have money set aside for opportunities, which allows them to grow their wealth when opportunities arise, unlike those who do not save for such moments.
• 🏦 Rich individuals make value-based, long-term investments that generate income or appreciate in value, such as real estate, rather than spending on depreciating assets like cars.
• 🌳 They only spend the interest earned from their investments, not the principal, ensuring that their wealth continues to grow without depleting their assets.
• 📚 Financial education is crucial for the rich, as it helps them understand how money works, how to invest wisely, and how to manage their finances effectively.
• 🤝 Surrounding themselves with other wealthy individuals helps the rich stay motivated and inspired, supporting each other in achieving greater financial success.
• 💼 The rich create value by transforming ordinary items into more valuable products, understanding that value is not fixed but can be increased through innovation and effort.
• ⏰ They do not trade their time for money, focusing on building businesses that can operate without their constant presence, thus not being limited by the number of hours in a day.
• 💭 The wealthy are not controlled by their emotions when it comes to financial decisions, allowing them to make rational choices that benefit their wealth in the long term.
• 🏗️ They build the future by creating businesses and technologies that shape the world we live in, understanding that they can influence the direction of progress with their wealth and ideas.
• 📉 The rich understand and often try to influence the rules of the financial game, leveraging their knowledge and connections to their advantage.

Q & A

What is one fundamental difference between the rich and the average person in terms of thinking?

One fundamental difference is that the rich think bigger than everyone else. They aim to solve bigger problems and build companies that can serve millions of people, understanding that it takes almost the same amount of effort to build something small as it does to build something big.

Why do the rich often have money ready for opportunities?

The rich have money ready for opportunities because they understand that opportunities may present themselves at any time. When an opportunity arises, having the capital to invest in it allows their personal wealth to grow, whereas those without the capital remain the same.

What is the significance of making value-based long-term investments according to the script?

Making value-based long-term investments is significant because it allows the rich to use their money to buy assets that generate income either directly or through appreciation. This strategy helps them accumulate wealth over time and eventually reach a point where the income generated by their wealth is greater than their living expenses.

Why is it important for wealth building not to spend the principal of investments?

It is important not to spend the principal because doing so would deplete the assets that generate income. Keeping the principal intact ensures that the wealth continues to grow and generate income, leading to financial freedom and the ability to reinvest for even more wealth accumulation.

How does financial education contribute to the wealth-building process for the rich?

Financial education contributes to wealth building by equipping the rich with the knowledge of how money works, how to buy assets instead of liabilities, how to invest for cash flow, manage debt, and control spending. This education is crucial for understanding and applying the principles of wealth creation.

What role does the inner circle play in a person's financial success?

The inner circle plays a significant role in financial success as they can motivate, inspire, support, and help refine ideas. Surrounding oneself with other rich people and helping each other can lead to faster wealth accumulation and personal success.

How does creating value contribute to wealth building?

Creating value contributes to wealth building by allowing individuals to increase the worth of their assets or products. The rich understand that value can be created and leveraged, unlike the poor who think value is limited and needs to be divided.

Why is it important for the rich to not trade their time for money?

It is important for the rich to not trade their time for money because there are only 24 hours in a day, and being paid by the hour caps their earning potential. The rich focus on creating businesses that can operate without them, allowing them to build wealth beyond their personal time constraints.

What does it mean for the rich to focus on 'return on time' rather than 'return on investment'?

Focusing on 'return on time' means that the rich prioritize how effectively they use their time to generate wealth. They understand that time is a limited resource and aim to maximize its value, rather than just focusing on the financial return on their investments.

How do the rich avoid being controlled by their emotions when it comes to financial decisions?

The rich avoid being controlled by emotions by treating money as a number on the screen and focusing on achieving a high score in the game of wealth. They make rational decisions based on long-term value and do not let emotions dictate their financial actions.

What is the significance of the rich being practitioners rather than theoreticians in the context of wealth building?

Being practitioners rather than theoreticians means that the rich take action and build their wealth through actual steps and investments, rather than just consuming information or talking about it. They apply what they learn and are actively involved in the process of wealth creation.

Outlines

00:00

💼 Wealth Gap and Strategies of the Rich

The script addresses the increasing wealth gap and the misconceptions about the wealthy. It emphasizes the importance of rewarding hard work and clarifies that the rich do not hoard money but invest it. The video promises to explore the strategies used by the rich to amass wealth, starting with their 'think big' mentality, which involves solving larger problems and building companies that serve millions. It also mentions the importance of having capital ready for opportunities, which is often misunderstood as 'cheapness' by the middle and lower classes.

05:00

🏦 Financial Strategies for Building Wealth

This paragraph delves into the financial strategies employed by the rich, such as making value-based long-term investments, spending only the interest earned, and being financially educated. It contrasts the investment choices of two individuals, one who invests in a rental property and another who purchases a depreciating car and TV. The emphasis is on the power of assets that generate income or appreciate in value, and the importance of not liquidating these assets to maintain wealth momentum.

10:01

🤝 The Importance of Network and Value Creation

The third paragraph highlights the significance of surrounding oneself with successful individuals and the concept of value creation. It suggests that one's environment and peer group can significantly impact personal wealth. The script stresses that the rich are not just accumulating wealth but are creating value, which is a key to wealth generation. It also touches on the idea of not trading time for money and the importance of emotional intelligence in financial matters.

15:03

🛠 Building the Future and Influencing the Rules

The script moves on to discuss how the rich are shaping the future through their ventures and how they understand and influence the rules of wealth creation. It points out that the rich are not just consumers but builders, and they are the ones creating the platforms and services we use daily. It also addresses the darker side of wealth, where the rich may influence rule-making to their advantage, leading to a cycle of corruption and wealth concentration.

💰 Leveraging Resources and Emotional Detachment

This paragraph focuses on the use of leverage and other people's money to build wealth, the importance of hiring experts for financial, legal, and medical security, and the emotional detachment from money that the rich exhibit. It explains that the rich are not emotionally invested in their capital, which allows them to make rational financial decisions. The script also introduces the concept of 'good debt' versus 'bad debt' and the value of a strong network.

🏆 Practicing Wealth Building Over Theoretical Knowledge

The final paragraph serves as a call to action, urging viewers to move from being theoreticians to practitioners in the pursuit of wealth. It emphasizes that knowledge alone is not enough; one must take action and build step by step. The script concludes with a bonus point, encouraging viewers to write 'trophy' in the comments if they are ready to actively pursue wealth rather than just observing others' success.

Keywords

💡Wealth Gap

The term 'Wealth Gap' refers to the disparity in the distribution of wealth among different social classes or economic groups. In the video, it is identified as a critical issue the world is currently facing, highlighting the debate around wealth inequality and the differences in wealth accumulation between the rich and the average person.

💡Taxation

Taxation is the compulsory financial charge or some other type of levy imposed upon a taxpayer by a governmental organization. The script mentions 'higher taxation' as one of the options discussed in the debate on wealth gap, suggesting it as a potential method to redistribute wealth and address the disparity.

💡Investments

Investments are assets or property that are purchased with the hope that they will generate income or appreciate in the future. The video emphasizes that rich individuals often have their wealth spread out in investments, which is a key strategy for wealth accumulation and growth, rather than hoarding money.

💡Financial Education

Financial education refers to the knowledge and understanding of financial matters, including how money works and how to manage it effectively. The script points out that the rich are getting richer because they invest in financial education, which equips them with the skills to make informed decisions about assets, liabilities, and cash flow.

💡Value Creation

Value creation is the process of generating economic value through the production of goods and services. The video script explains that rich people understand the concept of creating value, which is essential for wealth building. It contrasts the idea of value as something that can be expanded and leveraged, rather than being a fixed amount to be divided.

💡Opportunities

Opportunities refer to instances of potential benefit or a chance for advancement. The script mentions that the rich always have money ready for opportunities, which allows them to capitalize on them and grow their wealth when they arise, unlike those who may not have the financial means to do so.

💡Long-term Investments

Long-term investments are assets that are expected to yield returns over an extended period, often years or decades. The video explains that the rich make value-based long-term investments that generate income or appreciate in value, which is a strategy for wealth accumulation as opposed to short-term, consumption-based spending.

💡Financial Freedom

Financial freedom is the state of having enough wealth to live without having to work actively for basic necessities. The script describes financial freedom as a point where the income from assets is double the monthly expenses, allowing the individual to reinvest excess capital and continue growing their wealth.

💡Leverage

Leverage in finance refers to the use of borrowed money to increase the potential return of an investment. The video script illustrates leverage with the example of buying a house with a down payment, where the property pays for itself and appreciates in value, using other people's money to build wealth.

💡Emotional Attachment

Emotional attachment to money refers to the personal feelings and emotions tied to financial matters. The video explains that the rich are not emotionally attached to money, which allows them to make rational decisions about investments and wealth management without being swayed by short-term emotional outcomes.

💡Practitioners vs. Theoreticians

Practitioners are individuals who actively engage in the practical application of knowledge or skills, whereas theoreticians focus on the theoretical aspects. The video concludes with the message that the rich are practitioners, actively building their wealth through action, as opposed to theoreticians who may only study or discuss wealth-building without taking practical steps.

Highlights

The wealth gap has become one of the hottest issues in the world, with debates on higher taxation or wealth redistribution.

There is a misconception that rich people hoard money, whereas they actually invest in companies and other assets.

The rich think bigger, aiming to solve larger problems and build companies that serve millions.

Wealthy individuals always have money ready for opportunities, unlike the middle and lower classes.

Rich people make value-based long-term investments that generate income or appreciate in value.

Financial freedom is achieved when income from assets exceeds monthly expenses, allowing for reinvestment.

The rich are financially educated, understanding the importance of buying assets over liabilities.

Surrounding oneself with other rich people and helping each other is key to wealth building.

Creating value is a concept that rich people leverage to build wealth, unlike the poor who think value is limited.

The rich are not trading their time for money; they create businesses that can operate without them.

Emotional intelligence allows the rich to not be controlled by emotions in financial matters.

The rich build the future by creating things that everyone else uses and enjoys.

Understanding and influencing the rules of the money game is a strategy used by the wealthy.

The rich use leverage, such as borrowing money to invest, which is a key to wealth building.

Hiring professionals for security, legal, and financial advice helps the rich protect their wealth.

The rich are not emotionally attached to money, treating it as a tool for achieving higher results.

Practicing, not just theorizing, is what truly leads to wealth and success.

Transcripts

in the past few years the wealth Gap

debate has risen to be one of the

hottest issues the world is facing with

many throwing out options relating to

higher taxation or mass redistribution

of wealth in this piece we'll take a

look at how the rich are getting richer

and what differences in approach they

use versus the average person but before

we get started on this list there are

two things worth mentioning one there

needs to be a reward for working harder

than everyone else and two rich people

are not hoarding money they actually

have it spread out in other people's

companies or Investments and this is

really important because unless we can

reward those who perform well there

wouldn't be an incentive to do great

things and this is a very popular

misconception people think that rich

folks have a room in their house filled

with gold coins because that's what they

saw in Scrooge McDuck cartoons when in

reality the amount of money you hear is

a valuation based on how much money you

could possibly get if you were to sell

everything of value today okay so with

these two things out of the way here are

the 15 reasons why the rich are getting

richer welcome to alux the place where

future billionaires come to get inspired

starting off at number one they think

bigger than everyone else this is one of

the fundamental differences between the

rich and the average in order to be rich

you need to solve bigger problems while

the average person concerns themselves

with issues related to to themselves the

rich are figuring out ways to build

companies that can serve millions of

people this think big mentality is the

foundation of wealth building truth be

told it takes almost the same amount of

effort to build something small as it

does to build something big so if you're

going to think about something anyway

you might as well think big number two

they have money ready for

opportunities one of the reasons the

rich keep getting richer is because they

always have money lined up for

opportunities that's why the middle

class and poorer class think of rich

people as cheap they're saving money but

here's the simple truth let's say we've

got two people one has money saved ready

to invest in Opportunities while the

other doesn't the same opportunity

presents itself to both individuals

because person a has the money to access

it their personal wealth will grow while

person B will remain the same

this is a fundamental reason why some

people move ahead While others never

move at all number three they have

value-based long-term Investments they

don't touch this is where things get

interesting let's keep the comparison

going shall we so say we've got the same

two people each of them have

$20,000 one person uses that 20 grand to

put down a down payment on a house

that's worth

$100,000 which is to be be rented out

while person B uses it to buy a new car

and a new TV so because of the rental

income the property is going to pay for

itself in 10 to 20 years down the line

that property is now worth

$200,000 and has been paid for in full

by the tenant while the car has needed

constant repairs eating up more money

and is now unusable this is how the rich

are getting richer they use their money

to buy assets that generate money either

directly or through appreciation if you

can buy enough of these assets you could

reach a point where your wealth has

gathered enough momentum that it's

constantly going up basically the income

your wealth generates is greater than

what it would cost you to live the life

you want let's expand on this because

it's really valuable number four they

only spend the interest not the

principal so there's a point in wealth

building when a person becomes

financially free Financial Freedom is

when the money coming in from assets is

double that of your monthly expenses as

long as you don't dramatically increase

your lifestyle your wealth is constantly

going up you've got excess Capital which

you could reinvest leading to more money

coming in and so on now the catch is to

never spend the principal or liquidate

the asset in order to cover temporary

expenses we've seen this happen many

many times with families when parents

die the children immediately liquidate

the Assets in order to spread out the

money evenly but this is where the poor

are getting poorer once they see the

cash they spend it it only takes three

generations to build a legacy wealth if

three generations work at an average

pace and only acquire without ever

selling any of the previous assets by

the time the fourth generation comes in

they'll all be rich but people are

selfish and they would rather spend it

all now than secure the

future number five they're financially

educated the truth is the rich are

getting richer because they invest in

financial education they learn about how

money Works how to buy assets instead of

liabilities how to invest for cash flow

manage debt or how to control their

spending think of it like this let's say

you want to bake an apple pie that is

your desire you must first learn the

recipe for an apple pie and then go out

and get the proper ingredients but

without the decision to bake that apple

pie there's no need to look for the

recipe or get the things you need there

are plenty of recipes for Building

Wealth we've shared a number of them on

this channel that's why over 4.5 million

people have chosen to subscribe already

number six they surround themselves with

other rich people and help each other if

your friends are poor guess what you're

probably poor as well that's why you and

your friends live in the same

environment you've got the same problems

and issues and your lives are pretty

similar but here's a wakeup call if you

stay where you grow up you will end up

exactly like your parents for some

people that might be enough While others

are looking to make the jump the people

you surround yourself with are one of

the biggest factors when it comes to

personal success and Building Wealth

they motivate you they inspire you to go

after bigger things they call you out on

your and support your ideas you

cannot do epic stuff with poorm minded

people the higher the quality of Your

Inner Circle the faster you'll all get

to the top that's why many people

believe that your network is more

valuable than your net worth the right

friends can make you rich the wrong ones

will keep you

poor number seven they create value the

concept of value is not under OD by many

that's why those who do get to leverage

it build wealth rich people understand

that value can be created while poor

people think that value is limited and

needs to be divided between people if

you take anything away from this piece

of content let it be this one a bar of

iron costs $5 made into horseshoes

that's now worth $12 make it into

needles and it's now worth

$3,500 make it into balance springs for

watches and it's now worth

$300,000 your own value is determined by

what you're able to make of yourself of

the things you have at your disposal the

more you learn how to create value the

Richer you will become so ask yourself

what do you see when you look in the

mirror what can this person be made into

and then go ahead and start shaping

yourself number eight they are not

trading their time for money as long as

you're getting paid by the hour you'll

always have a money cap over you because

there are only 24 hours in a day and you

can't go beyond it even if you were

really well paid life is unpredictable

and things could go wrong and you would

end up unable to physically work the

rich don't have this problem their focus

is on creating businesses that can work

without them running on the hamster

wheel this is another fundamental

distinction that helps keep the rich

getting richer because they're not time

bound to one job for eternity they can

build a business find great people to

run it and grow it while they jump on to

creating something new you might be

familiar with the term Roi or return on

investment but rich people don't measure

Roi as a priority instead they focus on

Ro which is return on time at some point

you understand money so well you start

to focus on what's really important and

valuable your time here here if people

understand just how valuable time is

very few people would be willing to sell

it for as cheaply as they do

today they are not controlled by their

emotions this is one of the reasons why

average people think of the rich as

stuck up or so serious they don't care

about your meaningless drama because

they got that Ro on their mind emotional

intelligence is one of the strongest

weapons someone can have in their

Arsenal the ability to control your

emotions gives you a massive Competitive

Edge over everyone else feelings are

important when it comes to emotional

issues not Financial issues money

doesn't care about your feelings okay as

long as you're emotionally invested in

your money you are not owning wealth

your wealth is owning

you number 10 they're building the

future you're going to live in we are

already living in the world of Jeff

Bezos Mark Zuckerberg Bill Gates and

many others just like them they're the

ones building the world that we're

living in today now of course the rich

are getting richer when they're making

the things that we get to use and enjoy

you've got the power to Signal what

direction they should build in and they

will you get to vote with your money

there's this really great quote by the

late Steve Jobs that really stuck with

us everything around you that you call

life was made up by people that are no

smarter than you and you can change it

you can can influence it you can build

your own things that other people can

use once you learn that you'll never be

the same again the world is made of

Builders and consumers alexir builders

get paid consumers pay others you need

to decide who you want to

be number 11 they understand the rules

of the game money and Building Wealth

are simple games with a clear set of

rules the more you learn the rules the

better you are at playing the game so

start off with the basics learn about

supply and demand about assets and

liabilities about creating value and

starting a business once you do you can

progress into more complex rules and

even push them to the Limit the better

you are at understanding the rules the

more you can do within the rules of the

game if you don't know them seek help

okay find people who understand these

rules and have them Mentor you

give them something in return and now

you're both

growing number 12 they try to influence

the rules of the game there's a dark

side to having so much power and wealth

there's always the temptation of skewing

the rules in your favor and you know

unfortunately this does happen one of

the reasons why the rich keep getting

richer is because they've got direct

influence over those people making the

rules this is one of the biggest issues

the world is dealing with right now

money and power corrupts people into

wanting even more and this is a

dangerous cycle we can't rely on anybody

to self-govern when their personal

interests are at stake something to

remember though the more efficient the

government is the Richer Society is when

the system is corrupt few people get

their hands on unearned wealth at the

expense of the masses this is why the

general population has such a poor

perception of the rich they assume

everybody who got to where they are

twisted the rules in their favor at the

expense of everybody else and sometimes

that is the

truth number 13 they make money using

other people's money now here's a magic

word you almost never hear average

people use leverage at the beginning of

this piece we mentioned a person buying

a $100,000 house with a $20,000 payment

the main difference is the buyer will

not be living in that house instead

it'll pay for itself as long as it's

managed properly this is the most

simplified version of how the rich use

other people's money to build wealth for

themselves you know what's more

important than throwing money away at

the club credit okay credit allows you

to borrow money and make yourself rich

we call this Good debt poor people

become poorer because they borrow money

to buy the car or the TV and the example

we gave earlier that's called called bad

debt now rich people also rely on their

Network the friends we spoke about come

together and leverage each other's

resources to build more success for

themselves having this infrastructure of

funds and knowledge available for you

will dramatically accelerate your growth

everybody else is busy living paycheck

to paycheck envious of their friends

while the rich are helping each other to

become even

richer number 14 they hire the smartest

people to protect them money can buy

security and we don't mean bodyguards or

laser sharks okay money buys you

Financial Security your accountants take

care of the financial issues on your

behalf it buys you legal security your

lawyers deal with legal issues for you

it buys you medical Security Premium

doctors can solve issues before they

become life-threatening you can also buy

psychological security therapy and

marriage counseling can help you to

solve problem s before they ruin

everything you've built together and

many more these all keep the rich from

losing their wealth and power and number

15 they're not emotionally attached to

money now this doesn't mean that rich

people don't care about their money no

because that is not the case it means

they're not emotionally invested in that

capital for some the next paycheck means

stocking up the fridge or getting the

car fixed or paying the bills maybe

getting yourself something nice or a new

Gadget you can correlate money to an

emotional outcome but the rich don't

have that for the rich money is just a

number on the screen and they're playing

for a high score when you remove this

emotional connection you allow for a

reason to make the calls in order to get

better results the rich keep getting

richer because they position themselves

correctly they educate themselves on how

wealth is being built and what the rules

of the game are they're not emotional

about their Investments and they always

buy for the long-term value usually with

other people's money and at the expense

of other people's time they're building

what everyone else is using and at the

end of the day wealth is the reward for

being really good at the game of money

and of course as a thank you for

watching this video until the very end

you get a bonus piece of info number 16

the rich are getting richer because

they're practitioners not theoreticians

almost everybody wants to be rich right

they desire wealth and fame and success

but they're not making the moves to get

there you can watch as many money-making

videos on YouTube as you want okay read

all the books go to all the conferences

and you'll still be behind the ones who

actually are putting brick over brick

building their future our videos they

work incredibly well for those who are

already moving they find them 10 times

more valuable than anybody else because

it's Sparks in them a better

understanding of what the next steps

they need to take are in order to pick

up speed stop saying I could have done

that when talking about another person's

success because maybe you could have but

you didn't did you the Trophy goes to

those who are performing not to those

who are spectating if you really want to

win you have to start making moves okay

start building if you've got your eyes

on the prize and are finally able to go

after it please write the word trophy in

the comments let's see who's ready to be

a practitioner and not a theoretician