Will you ever get rich? Probably not. Most people won’t. It’s possible but unlikely. If you’ve bought into the lie they’ve sold you since birth and you don’t break the chains you’ve put on willingly, you won’t.
There is no middle class, and if you believe that there is then you’re believing a lie. The rich are rich for a reason. The poor are poor for a reason.
The reason most people never get rich is because they think they can make their fortune with a single stream of revenue. They believe that if they work hard at their job they’ll be able to save up money all their life and retire one day and live a richer, more comfortable life. One day they’ll be a part of the super rich elite.
These people don’t visualize. They aren’t running multiple scenarios through their minds. They have an unrealistic expectation because they have a flawed understanding of the world and especially of money.
Don’t be like them. If you are like them, you should stop before you’re too far behind.
Let’s think about it for a moment. You work an average job, you earn money, you save as much as you can. You put your money in a savings account or money market account or whatever your preferred type of bank account is. You spend years saving. You spend your entire life saving. Forty years later you take a look at your finances and what it can buy and it’s not even enough to buy a brand new modular home, much less the mansion you were promised. What happened?
Inflation happened. You were saving this year’s dollar for next year’s spending. The problem with that is that next year that dollar is worth ninety-seven cents. The year after, that ninety-seven cents is worth ninety-four cents. The next year, that ninety-four cents is worth ninety-one cents. You get the idea. The same thing happens to houses, cars, just about anything. With most things that’s called depreciation.
They don’t say “your money is depreciating every year” because that would send all the nine-to-fivers into an orgy of panic and outrage. Instead, they call it inflation. Inflation is simple to understand: money depreciates every year. If that money isn’t making more money, if that money isn’t appreciating, then its depreciating. The average inflation per year over the hundred-year period of 1913 to 2013 was 3.22%. If your money isn’t making more than 3% more money for you every year, it’s losing 3% of its value every year. If you’re only increasing your wealth 3% per year, the best you’re doing is staying exactly where you are and chasing your tail.
If you’re REALLY blind to the whole system, you might be saying “Hey, that’s not true! I had $100 in my savings account last year and it’s still there right now! I just checked so I know!!”
The AMOUNT of money you’ve saved isn’t decreasing every year. The VALUE of your money is decreasing every year. A hundred of 2016’s dollars will likely buy around ninety-seven dollars’ worth of goods and services in 2017. It could decrease a little more or a little less, since inflation doesn’t follow a fixed pattern (in the 1970’s the United States experienced an average of 7% inflation per year) but you can be guaranteed that it won’t buy any more if you just let the money sit in a safe. The rich are rich because they understand this and work around it.
You might be wondering why there has to be inflation. Why not deflation? If everything costed less and less every year and your money GAINED buying power every year, you could work for ten years and live the rest of your life at ease, couldn’t you?
No, you couldn’t. You’d be lucky to survive the chaos that would undoubtedly break out in the streets.
Run another scenario, again keeping the numbers simple. Imagine you’re a retail sales associate, possibly the most common job in the US. Your company gives you thirty hours per week. You make $10 per hour. You lose $100 a week to tax theft and other deductions from a combination of Uncle Sam and Big Papa Boss Man. You’re paid weekly. Let’s assume you’re a good little lackey and you do your absolute best for your company. Let’s assume you bust your ass every second of those thirty hours because you want to wake up rich one day and you think your loyalty will be rewarded.
You get your little $200 check and it feels like a million bucks to you. You go buy your groceries, spending almost all of it. Oh, all this damned inflation! You can barely afford to eat! Your masters in Washington decide to give this deflation thing a try (not exactly how it works, but bear with me) and overnight there’s 10% deflation.
Fast forward to next payday. You open your bank account and see that Big Papa deposited $180 into your account instead of the usual $200 and you’re outraged. What the hell happened? You did the same job! You did a GREAT job! You worked just as hard as you did last week and you’ve got less money to show for it. You fail to notice that your $180 buys the about same amount of the same groceries your $200 bought last week.
Keep in mind that these examples are extremely simplified. Still, you get the idea. Deflation is a lot more complex than that, but it basically means less money in your pocket and more buying power per dollar. Less money in your pocket is usually all people care about when it comes to deflation. That’s all you really need to know.
Inflation makes people bitchy. Deflation would drive people absolutely insane (ever heard of the Great Depression?) and cause the whole house of cards to come tumbling down. That’s why you can pretty much count on inflation every year for the rest of your life. Saving your pennies for a rainy day just isn’t going to work.
There is good news though.
You’re not limited to one stream of revenue. You’re not stuck with the options of spending every dime you get or saving it and watching it wither away along with your dreams. There’s a third option, the only real option.
This third option has three easy steps:
- Make money.
- Save that money UNTIL YOU FIND SOMETHING TO INVEST IT IN.
- Make your money make you more money by investing it.
Bonus fourth step: Chuckle to yourself every time someone tells you they’re just saving up money.
If you think you can’t find something to invest in, you’re wrong. You can, you just won’t. There are money making opportunities all around you, you just have to keep your eyes and ears open and pay attention. If you don’t want to be the guy sleeping under the bridge or the guy living in a debt prison you need to start asking this question every day: “What can I do to make more money TODAY?”
Make that money, save that money, invest that money, repeat. Always have more money coming in tomorrow than you have today. Never stop building.
“But that’s being greedy, and greed is bad!”
Yes, that’s being greedy. Greed is good.
Greed will save you from ever having to worry about the little man from the collection agency and his scary threats.
Greed will keep you from having to hide your car from people so it doesn’t get repossessed.
You can call it drive, you can call it ambition, or just accept it for what it is and be greedy.
When you’re in the position that no one can claim to own your property but you, you’re a lot less inclined to care what people think about you.
People can call you greedy until they’re blue in the face, but the bank owns their home and you own yours. Would you rather be greedy and free or pious and a slave?
Stay greedy, my friends.