In todays world, the distribution of wealth is never going to be equal, there will always be someone with more money, and someone with less money.
I have heard a saying going around which goes something like, if you where to take all of the worlds wealth, and divide it equally amongst the worlds entire population, within a short time, the top 20% will gain control of 80% of the worlds wealth again.
So why do the rich get richer, and the poor continue to be poor? My opinion is, that it is all down to mindset, and the way the poor think. Poor people think that if they had the money and the resources the rich have, then they would get rich, but is this actually true? Rich people have to start from somewhere, not all of them come from wealthy families. Take Mark Zuckerberg for example, he created what is now the worlds biggest social network from a dorm room at Harvard University with just his dated computer and knowledge, he had no silver spoon, but he took a risk, and it paid off big time.
So, if you don’t need money to become rich, why is it so damn hard to get wealthy?
Let me tell you a quick story. A few years back, I worked for the local council as a bin man when I was between jobs, and there where a number of things that really stood out in terms of how people in that line of work (and income bracket) viewed life, and their approach to money.
As you have already probably guessed, bin men in the UK aren’t paid that great of a wage, it was about £230 per week, so the people I was working with, where lower class, now, I don’t have anything against lower class people, I actually really enjoyed working with some of them, and others, well, I didn’t enjoy it so much.
So, heres are few things I picked up on when working for the local council bin collection service. Please note, this is not typical of all poor people, but my general view of how they perceive life and money.
They don’t save any money
Many of the people I worked with during my time at the council never actually saved a penny of their income. I remember one day hearing a guy say, “I will never have any money, I’m going to rely on the state for everything when I retire”. At that time, I wasn’t as focused on money and retirement as I am now, but I remember thinking to myself, what the actual fuck, you useless bastard.
This is the reason poor people will never get rich, they just don’t have the right mindset, they don’t save a penny of their wage, but, instead, they blow it all on material things, new phones, TV’s, all the latest gadgets, while they have £0 left in the bank, pr put them selves into debt.
There was hardly a day went by that having no money was a topic of conversation, whilst they sit and play games on their brand new iPhone or Android. Yeh, the reason you have no money is because you blow it all on stupid things, things you don’t actually need, but rather, want. If they where to save that £50 a month, it could grow nicely over 15-20 years.
Saving money to most people who worked in the low income bracket of the council was foreign, they didn’t have a savings account, they didn’t think it mattered about saving money, but, when their car broke down, and they couldn’t afford to fix it… now, maybe if they had some savings, they could afford to pay the bill and have the car fixed…
Rich people know the value of saving money, and understand compound interest, and how powerful it is. Rich people understand that it is important to have emergency cash, and also have a plan for unforeseen events. They understand that planning for their future, and saving/investing money now will have a great impact on their lives when they come to retire.
They think short term
Highlighting my point above about the guy saying he is just going to rely on the state for everything, this actually says a lot about how poor people think. The guy that came out with this statement was about 40 years old, and was employed through an agency, so he had no pension from the council; now, that is too late in my opinion to start planning for early retirement, but, it’s not too late to start thinking about retirement at the usual age of 67 here in the UK.
If this guy was to stop thinking short term, and actually think about the long term, and how he could invest some of his wage now in order to have some money when he retires, then he may actually not have to rely on the state to provide everything.
I know that on £230 per week, it would be hard to save money, but, these people tend to live in housing estates, or council houses, which are very cheap, around £300/month rent, or mortgage, so going by the 50/30/20 rule, he should be able to save/invest around £184 per month.
If he was to invest £184 per month, into an investment that produces an average yearly return of 7%, in 27 years, at retirement age, he would have a whopping £178,346.15.
Rich people focus on both long and short term goals, building wealth for the future, whilst generating income for the present. You can check out my post about how I am planning on generating multiple streams of income.
They think they can never get rich
Another reason poor people will always remain poor, and rich people will always get richer is pretty simple, poor people think they can’t get rich. Mindset plays a big role in getting rich, if you don’t believe you can do it, then you probably will never get rich. Poor people think along the lines of not being able to do something, instead of thinking positive, and trying to do something and beating the odds (not gambling odds, which was a popular thing in the council lol.)
Having a positive mindset, and trying your best to achieve a goal isn’t something that poor people are good at, this is not their fault, it could be to do with the way they are brought up, or they just don’t know any better. Rich people are always setting goals, trying to achieve bigger and better things, thinking outside the box, this is what makes them different.
They always complain
Poor people complain a lot. There is always something wrong, something to complain about, their phone bill was too much, they have a £16 charge on their credit card because they didn’t pay it on time, and the bank won’t cancel it because it’s the 5th time they have made a late payment, or whatever else they complain about. When I was working in the council, everyday, they had something to complain about, they where given too much work to do, yet, have time for a 2 hour lunch break, they can’t go home early, it’s too cold to work… the list goes on.
Rich people don’t complain about things, they try and find a solution to them, a work around, a way to get the job done. Rich people know that complaining does no good, it’s a waste of time, unless you are complaining about a shitty meal at a restaurant.
They tend to be lazy
Rich people are not lazy, well, most rich people who are self made. Poor people tend to be lazy, though, not all poor people, please remember, I am taking primarily about my experience of low income people in the council.
Most of these guys where hell lazy, they did as little as they could, took 2 hour lunch breaks, sneaked off home for an hour or 2 during the day, pulled the council van up the high street and abused their “power” of being able to park anywhere to get the Christmas shopping done, or whatever other errands they had to do. Sometimes it really pissed me off, like, get the fucking work done, get back to the yard, and head home!
I remember talking to a guy one day about trying to make some money online (me trying), and said to him that he should give it a shot, it was pretty easy, matched betting (I will cover this in another post), I actually made about £500 at it in a few weeks!
So, a few days went past, and I asked him, well, did you take a look at that… his answer, “ahhh, no, I couldn’t be arsed.” This is why poor people never get anywhere, and rich people get everything.
Rich people are willing to put hard work in now in order to reap the benefits later.
They always take the easy road
Poor people always tend to take the easy road, again, back to my time in the council, these guys loved trying to get a claim, be it falling out the door of a bin lorry, getting their foot run over, or jamming their finger in the door, they would try their best to get a claim if they got injured.
Now, I am not saying taking a claim is a bad thing, if you really need it, say you break your back at work due to something that was totally out of your control, then yes, I agree a claim would be good, but, jamming your finger in the door because you didn’t move them on time, no, your just a fucking idiot.
Rich people are rich for a reason, they tend not to take the easy road, they fail multiple times over, but are not put off by these failures, instead, they are motivated even more to succeed. Rich people know that taking the hard road today, can greatly benefit them in the future, and it is due to this fact, they tend to take the hard road, every time.