I have often wondered why the poor remain poor and the middle class remain, socio-economically, between the poor and the wealthy.
Growing up in a middle class family, I watched my parents work very hard to break the glass ceiling. Despite their hard work, our standard of living never improved. Were they working hard to secure a place in the middle class? Is there a poverty trap for the poor and the middle class?
After a lot of reading and research, I realised that the poor and the middle class are trapped in poverty by the things they buy. On payday, the poor and the middle class spend their money on things that don't generate any income. Hence, they depend on one source of income - usually a job.
The poor spend money on inexpensive things that they don't need to survive. They buy "stuff" that don't add real value in their lives. Their income does not generate any income. Consequently, they're trapped in poverty by the things they buy. Simply put, they've not mastered the wealth creating formula.
People in the Middle class have the same delimma. These are people society mistakenly thinks are rich. They earn good money from their jobs. Some even earn up to 6 figure incomes and bring home a lot of money on payday. However, just like the poor, they're trapped in a life of struggle by the things they spend their money on. When the middle class go shopping, they buy things that don't generate any income (just like the poor). They spend their money on things like cars, boats, credit card debts, mortgage on the lovely large house. After all their expenses, they're left with no disposable income and MUST go back to work in order to maintain the lifestyle they have designed for themselves.
No doubt, the poor and the middle class are trapped in poverty and a life of struggle. All their income is dependent on their personal effort and they must exchange their time for money - money they spend buying things that don't generate any income. Worst of all, if the poor and the middle class don't go to work, they don't make any money. The things they buy trap them in the middle class.
The wealthy don't buy "stuff" and things that don't generate income. They're constantly looking for opportunities to invest and generate more money. They've mastered the wealth creating formula and fully understand the concepts of assets and liabilities. They know a job alone cannot make it happen. The wealthy spend money on assets - things that generate income. Consequently, they make more money and get richer. It's not a mystery.
In a nutshell, the poor and the middle class are trapped in poverty and a life of struggle by one thing - MINDSET. With a change in mindset, the glass ceiling would be broken and more and more people would become financially free and wealthy.
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