Why The Rich Get Richer and The Poor Get Poorer

I'm sure that you have heard the old saying that goes, "The rich get richer and the poor get poorer". Well, there is a reason why the saying exists, and that's because it is 100% true. The rich do get richer, and the poor do get poorer. But why is that?

First lets take a look at why the rich get richer. The rich have this money working for them. So, they don't need to work in order to trigger money. Their investment opportunities supply them with capital gains or passive income. The rich focus primarily on "capital gains" and "passive income" rather of "earned income". The rich are constantly creating and producing assets in on the cash they have. They create or fashion more assets to provide them with a multitude of supplies of passive income. The rich don't need to worry about layoffs or taking days off as they don't work for this money. Remember, passive income is the key to becoming wealthy.

The poor on the other hand focus too much on "earned income". The main source of income for the poor is "earned income", and it usually remains the same amount for a for a while now period of time. In the meantime, the expenses of the poor generally increase in time. A new child comes along, medical bills look for to be paid, gasoline values stay willing up, taxes go up, etc. And while all this is happening, the amount of money from a crappy individuals earned income remains so same. That's why the poor get poorer. The require barely enough in earned income to smother their expenses. The rich on the other hand make well larger amount of than enough in passive income to make up this expenses.

If you focus too still on "earned income", you can start making the transition to interest freedom by learning to invest for capital gains and passive income. The poor just keep getting poorer when most of them are afraid to make the leap based on earned tax to passive income. They are addicted to their earned income, and jump for joy whenever a raise or promotion comes about. Don't become addicted to earned income.

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