How to Stop being Poor?
Rich people often borrow money from banks or various financial institutions. Although the debts increase, in reality, the rich can use this loan to make more money through years of accumulating relationships, resources, business models, etc. So, this debt is essentially a source of profit, a leverage for wealth growth of the rich.
In contrast, the majority of the poor have income only from wages, very little income from real estate investments and zero bank debt. Of course, debt is a burden on the poor, because ordinary people don't get richer through debt, and debt only adds to their fatigue and stress.
It is true that many people say that debt can make you richer, the more debt, the richer you are. Of course, debt here is healthy debt. To some extent, this statement reflects the rules of the economy as well as some differences in ways of thinking of the rich and the poor.
I- Why do Rich people borrow more than Poor people?
Practice proves that: The more debt, the richer. It can be summed up with the following three points:
Firstly, the fact that some rich people can borrow so much debt clearly shows that they have a very good reputation with banks, they must have good economic potential, enough ability to pay the loan amount to get credit from banks. And as long as there is such a financial institution that is willing to lend you a loan, other big financial institutions and banks will one by one offer to lend you. For financial institutions today, it is very difficult to find potential customers. The more debt, the stronger the financial strength of these people, so banks don’t worry about lending them money.
Secondly, debt is essentially a leveraged investment. For example, a person can initially only do an investment project of $100 million, but if they borrow more capital, they can do a project of $1 billion or even hundreds of billion dollars. In this way, they not only build more relationships, but also expose themselves to more information in the business world. From there, the business will also get bigger and bigger.
In fact, many people wish they would never be in debt to anyone. But it is very difficult to get rich if you have such a mindset. Because relying only on one's own finances and ability, it is difficult to achieve the effect of leverage, so that existing wealth can achieve rapid growth in a short time.
Finally, inflation dilutes the debts, the inflation makes some currencies become very strong now, the purchasing power of the currency is not as good as it used to be. If corporate borrowers fail, the purchasing power of money continues to shrink, their debts can be diluted to a certain extent. Moreover, even as the business grows, it is not easy to repay the principal and interest of the existing debts.
The more debt, the richer, but not all become richer, but only certain groups of people.
The popularity of the saying "the more in debt, the richer" will lead many people to misunderstand that the more debt they have, the richer they are. This leads to various risks and problems of online lending.
Therefore, it is not advisable to over-promote some ideas that are only suitable for certain groups of people, as this will cause many people to misunderstand, leading to be in debt. Especially according to recent survey data, 60% of young people under the age of 35 in China have no deposits and are heavily in debts including mortgages, car loans, credit cards and different online loans.
Finance is a double-edged sword, if used well, a person's assets can increase rapidly in a short time.
A penny in your hand is worth only one, but through the integration of resources in others, the value of one or two is multiplied. This is the meaning of financial existence.
Any group of people who have to pay interest even if they take out a loan, but the amount earned on the loan can exceed the amount of interest payment, so such a person is in the case of more debt, the richer. On the contrary, if the financial cycle is broken, if the borrowed money is only used for consumption instead of being used to earn money, the more indebted the borrower will be, the more likely it is to fall into the troubles.
II- How to get out of poverty?
In fact, no one is born poor, and no one is born rich. As long as you find the right method, you can still change the situation.
1- Improve yourself
Regardless of temperament, knowledge or working skills, there is a need to improve quickly. As you hone and improve yourself, the opportunities will multiply, the income will increase, the deposits will increase and finally, the amount of money we can own will increase.
2- Know how to save money
The important thing is that you know how to save money. Don't wait until something happens to regret it, curb your material desires first, saving money as soon as possible is the right thing to do.
3- Well-planning
Once we have accumulated a certain amount of wealth, we must learn how to properly allocate assets to get benefits. Only by making good use of the leverage principle for good capital planning can we get an asset-based income.
What the world lacks is not wealth, but an eye to discover wealth. In essence, the mindset of the rich is to be able to see the world from different dimensions, discover differences and exploit wealth from these differences.
Good at observing, diligently thinking and seeing the world with multi-dimensional eyes, you will always find gold in life. Start now to cultivate and train your own wealth mindset step by step, and sooner or later you will be able to mine your first pot of gold.