A lot of people who believe that money will make them rich. That is why they leave school and go to university to become doctors, lawyers and other professionals who earn lot of money. They believe that the more money they earn they will become richer. But that's not true, generally speaking, the more people earn, they become poorer, because the more debt and buy more things that go down in value.
My friend is a highly specialized, and earning lots of money. His wife is also highly specialized and has a private practice of psychology, so they make lots of money. But so far everything seemed to do with their money is to accumulate more debt. Of course they are nice cars and nice furniture, but now they need to do more than I do, because their costs are higher. Their money is not making them rich. That's what makes them comfortable, but not making them rich.
My friend was talking to me about financial advice. Sometimes it's interesting when you talk to people who earn lots of money because they think that because you have money that they are more valuable than my partnership. But the funny thing is that I am more valuable to the partnership from them, because money alone will not make you rich, but what do you do with your money makes you rich.
Let's say my friend had a $ 100,000 (I know that he is or has or can build up quickly), with their financial education is one of the best things he could do is put money in the bank and earn 4% interest. Then it will be taxed at a 50% interest earning him 2% of the total (annual). The value of his money goes down 3% -5% per year inflation, which means that ultimately loses 1% -3% a year on his $ 100,000. It is a loss of $ 1,000 - $ 3,000 per year. Now this is not a very good investment. I on the other hand can take $ 4,000 and earn 25% income tax without having to purchase the property. When inflation goes my property goes up in value and so is my return on investment, so you do not lose money. I eventually earning $ 1,000 to $ 4,000 a year, until he loses $ 3,000 per year to $ 100,000. So, as you can see it's not money that makes you rich, but the financial intelligence and why did you do with the money that will make you rich.
money is going down in value over time
One of the reasons money does not make you rich, because money is going down in value during vremena.Vlada can print as much money as they want (and do). More money they print more money becomes worth less and less. People say the cost of living goes up (this is also known as inflation), but the real purchasing power of money goes down. So, the only saving money is actually losing value each year as the buyer can the dollar go down.
The money itself does not make you rich
Money does not seem rich, but that's what you do with your money makes you rich. Poor and middle ranks of people use their money to increase their costs. They do this by buying bigger houses, expensive cars and gadgets. As they get a raise their costs go up and they end up with newer stuff, but they are actually poorer than before and are constantly forced to work just to pay for their expenses. Wealthy people use their money to buy assets that generate them income. Because they buy the assets of its revenues steadily going up. They can be used for passive income (income they do not have to work for) from their means to pay for their expenses, such as a long and expensive gadgets and cars, etc.
Maybe you have a lot of money, you have very little. But the fact is that money does not make you rich. What do you do with your money you will be rich or poor and know what to do with their money in the end determines how hard your money works for you. For me, a good financial education, little money can work very hard for me. For someone in a high paying job even millions of dollars would not allow them to withdraw their money because they do not work for them. So if you want to be rich to focus on increasing your financial education.
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