15 Reasons Why The Rich Are Getting Richer
Summary
TLDRThis 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
💼 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.
🏦 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.
🤝 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.
🛠 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.
Mindmap
Keywords
💡Wealth Gap
💡Taxation
💡Investments
💡Financial Education
💡Value Creation
💡Opportunities
💡Long-term Investments
💡Financial Freedom
💡Leverage
💡Emotional Attachment
💡Practitioners vs. Theoreticians
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
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