The rich buys wealth while the poor buys liability

[Kelward]

If you ask what the difference is between the rich and poor, the overwhelming response will be MONEY, this is true but it goes deeper, a major factor is also their mindsets. The rich creates wealth but the poor doesn't, most poor people don't think outside their comfort zones. Rich people invests their money and from the profits they can buy whatever they desire but the poor buys liabilities that depreciates. Rich people builds wealth and it continues to generate money for them, they keep reinvesting and diversifying their income to generate more wealth. But if you give most poor people huge amounts of money, instead of investing it in a profitable investment like Bitcoin they will use the money to buy material things that they have been dreaming of like a car or buying that room size TV that they have been dreaming to own.

If a poor person that has a poor mentality suddenly owns a lot of money maybe through inheritance or hitting the jackpot, they will misuse the money. But if a poor person that has a rich mentality suddenly owns a lot of money they will diligently research and invest the money in a profitable business or investment. From their profits they can gradually afford to buy the things that they've always dreamed of and their assets will be yielding more profits. To become rich you need to think like the rich even you're not there yet, many rich people where not born rich, they were value driven.

[silpersurfer]

Something that happens suddenly will not last long (sudden riches), so that in the end they lose everything again and become poor again. However, this is not the case if the person gets their wealth gradually because they will always know how to maintain the wealth.

No one feels comfortable being in poverty, but only a few people are willing to take bold steps to get out of poverty. Because most people choose to give up on the situation without thinking about finding a way out.

And then why do poor people when they get a large amount of money immediately buy luxury goods such as cars, room-sized TVs, and other things. They do that because they see that rich people have all that in their homes, so they want to equalize it so that they are on the same level. But one thing they forget is that people who are really rich, before they buy all that, they have built a strong financial foundation first, by investing most of the money they have and building a business, and only after getting profit do they buy the things they want.

[Futurexxx]

Something that happens suddenly will not last long (sudden riches), so that in the end they lose everything again and become poor again. However, this is not the case if the person gets their wealth gradually because they will always know how to maintain the wealth.

No one feels comfortable being in poverty, but only a few people are willing to take bold steps to get out of poverty. Because most people choose to give up on the situation without thinking about finding a way out.

And then why do poor people when they get a large amount of money immediately buy luxury goods such as cars, room-sized TVs, and other things. They do that because they see that rich people have all that in their homes, so they want to equalize it so that they are on the same level. But one thing they forget is that people who are really rich, before they buy all that, they have built a strong financial foundation first, by investing most of the money they have and building a business, and only after getting profit do they buy the things they want.

You have practically said it all buddy, the poor don't know that before a rich guy spend $1k box on a luxurious home appliances, it must be one of the profit he makes from one of his investment, not the money that he should be investing.
You will see a young guy that is just starting to making money investing so much on his looks (clothes and other fancy stuff) just to feel among, so until that mentality of wanting to impress is left behind by a poor man, he will still return back to poverty if any huge amount of money got into his hands.

[STT]

The answer is quite simple I reckon which is rich people dont have to care about the rising costs in ordinary things like food or other 'essentials'.   By choice rich people already happily pay 10x the real cost of food just so it can be arranged in a pretty pattern on their plate along with a song & dance made to pamper their ego, its surely tastes better.
 In Japan they sprinkle gold onto food just to make it obvious, a completely inert element with zero taste or involvement in digestion, its so common the water companies make profits from the later retrieval.

So costs rising don't really matter to the rich, its a rounding error and inflation is a boost especially to leveraged  asset worth which is the majority of their wealth.   The poor meanwhile struggle to buy food and boot laces or whatever small  simple item can double in price at times of poor monetary policy as we have now.   Its a natural societal division only growing, hence why politics will continue to become more volatile and extreme making no sense to the rich as the working poor try to find some solution to ongoing government failure.

[Y3shot]

The mindset has always been the problem for people who are poor, even when they get the opportunity to rise above their financial level. Becoming rich starts with the development of the mindset, because one needs to be productive in thinking. If this mindset is not present, no matter the amount of money given to someone who is poor, it will be squandered on unnecessary things. Becoming rich comes from the mind and how to create revenue from money.

[avikz]

Being rich is a mindset. However, this is also what our schooling system does to us. No school teaches us about being an entrepreneur. No school teaches about managing money. So the mindset building process is incorrect from the very beginning.

I was seeing a podcast couple of days back about financial management. The podcaster said one line that hit me real hard - the main buyer of Luxury handbags are the ones who want to look rich. The actual billionaires don't really care about such things.

But that's how it is! This is how the society is created, unfortunately!

[Cookdata]

If a poor person that has a poor mentality suddenly owns a lot of money maybe through inheritance or hitting the jackpot, they will misuse the money. But if a poor person that has a rich mentality suddenly owns a lot of money they will diligently research and invest the money in a profitable business or investment. From their profits they can gradually afford to buy the things that they've always dreamed of and their assets will be yielding more profits. To become rich you need to think like the rich even you're not there yet, many rich people where not born rich, they were value driven.

Why do you guys always makes emphasis on poor people like all rich people does what you are saying. In as much as there are poor people that lack financial orientation, there are rich people that lack financial orientation as well because not all rich people makes money to get to where they are today. There are women that are financial buoyant today and it's not because they made some financial investment to be where they are but through divorce and they are living large.

The thing is a when a poor person hasn't taste money before, you can never know there true character and self, there is always a hidden truth about them until the money comes in that's when they flashy that lifestyle they have always picture in their mind but that doesn't change the fact that there are some poor people do everything right and still don't get to the peak of their financial status, there are poor that are meant to make money and there are the ones that will never make it.

You also forgot nature, not everyone will make it no matter how financial discipline they are, there is no manual to become a wealthy person, it's not written any where that because you spend recklessly you will never going to be rich or be rich forever, these are just basic ways to be financially discipline but it doesn't apply in all situations my friend.

[Porfirii]

<...>

You have practically said it all buddy, the poor don't know that before a rich guy spend $1k box on a luxurious home appliances, it must be one of the profit he makes from one of his investment, not the money that he should be investing.
You will see a young guy that is just starting to making money investing so much on his looks (clothes and other fancy stuff) just to feel among, so until that mentality of wanting to impress is left behind by a poor man, he will still return back to poverty if any huge amount of money got into his hands.

Not in all cases: some people really "invest" in their look, meaning that their image will bring them a better job, a more successful social network, etc.


But before discussing about what rich and poor people do, we should define some concepts. Because if the OP means that being rich is investing the money so you can buy more things in the future, instead of buying them outright, I think there is something that continues to escape us. Maybe being rich has less to do with purchasing power than with asset liquidity, for example. Or with having no debt instead of having many investments.

[Marykeller]

I think we all have different ways we approach things. All the rich and the poor don't have the same reasoning. I hate it when everyone is grouped the same, they have the same character when financial opportunities are given or arise.

There are some poor people who will be given or earn a huge sum of money, they will make something huge from the money. Let's not forget that not all the rich people today were born rich. Many from poor homes. It's from the little earnings they had, they utilize it very well in their running business, in years to come, the money was multiplied through the business started or investment made.

[Fortify]

If you ask what the difference is between the rich and poor, the overwhelming response will be MONEY, this is true but it goes deeper, a major factor is also their mindsets. The rich creates wealth but the poor doesn't, most poor people don't think outside their comfort zones. Rich people invests their money and from the profits they can buy whatever they desire but the poor buys liabilities that depreciates. Rich people builds wealth and it continues to generate money for them, they keep reinvesting and diversifying their income to generate more wealth. But if you give most poor people huge amounts of money, instead of investing it in a profitable investment like Bitcoin they will use the money to buy material things that they have been dreaming of like a car or buying that room size TV that they have been dreaming to own.

If a poor person that has a poor mentality suddenly owns a lot of money maybe through inheritance or hitting the jackpot, they will misuse the money. But if a poor person that has a rich mentality suddenly owns a lot of money they will diligently research and invest the money in a profitable business or investment. From their profits they can gradually afford to buy the things that they've always dreamed of and their assets will be yielding more profits. To become rich you need to think like the rich even you're not there yet, many rich people where not born rich, they were value driven.

Sure, there is definitely a mindset difference, however this is purely due to practice and levels of education. If you've never had to manage excess funds simply because you're existing paycheck to paycheck, then you cannot really fault someone. It's like learning how to drive a yacht - you might be able to teach someone the core concepts in a week but unless they practice it, then it'll all be forgotten in a short time. I thought this thread was going to express the widening and rapidly growing difference between the super rich and the rest of us. Their wealth is constantly accumulating more wealth and consolidating it in the hands of fewer and fewer people - capitalism in it's rawest form is very nasty and needs stronger regulation.

[slapper]

Cassic “Rich Dad, Poor Dad” logic. To me, there is something weirdly reductionist about always splitting humanity into two: rich vs. poor, asset vs. liability, investor vs. spender. Yeah, mindset is real, but so is context. Most so-called “poor” people know exactly how compounding works. The issue is, when your next paycheck determines whether you eat or not, you rarely get the luxury of reinvesting profits. The whole “just think like the rich and you’ll become one” approach is seductive because it promises agency, but ignores the slow grind of actual life

Psychological freedom to “buy assets” mostly appears when you have margin (time, money, a social safety net). Nobody wants to buy liabilities, but when all you’ve got is instability, sometimes that room-sized TV is survival, not stupidity. Blaming the “mentality” of poverty without asking why the system runs on manufactured insecurity is not empathy at all

Sure, a value-driven mindset matters. History is full of people who hacked the system and broke through. But for every one of them, there are a thousand invisible strivers running the same playbook who just hit a wall. What do we do with that? Know how to refuse to play by the default rules, even if it is risky, even if it is lonely. Wealth is a choice for a few. For most, it is a risky experiment in defying gravity. Why not talk about that too?

[batang_bitcoin]

It is common for a poor person that have just held a huge amount of money to spend it for the things that they want, extravagant life, cars, beautiful houses and so on. They don't think what will comes next and about the mortgage, the amortization of it monthly and all of the bills that will come to them. This is lifestyle inflation and it typically happens to the poor people because they have been wanting to live that kind of life. But when they get there, it's not surprising that many goes back to being broke because they haven't anticipated that happening to them.

[peter0425]

If you ask what the difference is between the rich and poor, the overwhelming response will be MONEY, this is true but it goes deeper, a major factor is also their mindsets. The rich creates wealth but the poor doesn't, most poor people don't think outside their comfort zones.

That’s because they’re poor. Rich people can take risks and invest in something that could potentially be great or bad. The poor doesn’t have that luxury or privilege. Yes, some poor manage to get rich by taking risks but not all poor people succeed. Like it or not, the truth is many rich people have money already that they can make grow.

[hafiztalha]

If you ask what the difference is between the rich and poor, the overwhelming response will be MONEY, this is true but it goes deeper, a major factor is also their mindsets. The rich creates wealth but the poor doesn't, most poor people don't think outside their comfort zones. Rich people invests their money and from the profits they can buy whatever they desire but the poor buys liabilities that depreciates. Rich people builds wealth and it continues to generate money for them, they keep reinvesting and diversifying their income to generate more wealth. But if you give most poor people huge amounts of money, instead of investing it in a profitable investment like Bitcoin they will use the money to buy material things that they have been dreaming of like a car or buying that room size TV that they have been dreaming to own.

If a poor person that has a poor mentality suddenly owns a lot of money maybe through inheritance or hitting the jackpot, they will misuse the money. But if a poor person that has a rich mentality suddenly owns a lot of money they will diligently research and invest the money in a profitable business or investment. From their profits they can gradually afford to buy the things that they've always dreamed of and their assets will be yielding more profits. To become rich you need to think like the rich even you're not there yet, many rich people where not born rich, they were value driven.

Rich people are becoming more richer because they know how to invest and where to invest money and they know how to double money by using their investment. Rich people always work on making companies and they are taking loans and they are not afraid to be bankrupt because know they have to chance to conquer the world and they are investing more money. Rich people know that car is liability and they are using business with cars and they are generating income from that and poor people are not using cars to make money but that is liability for them because they know that is big asset of them and they are playing with cars .Poor people have no financial knowledge and rich people have top level financial knowledge.

[DanWalker]

Being rich is a mindset. However, this is also what our schooling system does to us. No school teaches us about being an entrepreneur. No school teaches about managing money. So the mindset building process is incorrect from the very beginning.

Don't blame the school or the education system, it's not their fault.

One thing is, if you want to learn how to make money, you must first learn how to be a human being, you must know how to behave before learning how to make money. Because if you earn money but do not use it for the right purpose or earn money illegally, it will not be beneficial to society or the country.

Not to mention, introducing financial education into schools too early will increase pressure on students and only make them more stressed.
...
Overall, there are many problems that arise when introducing financial education into education and it is more complicated than we think. The education sector has its own reasons for not implementing financial education, it's not that they don't know its importance.

[laijsica]

A religious teacher advised me that wealth earned through hard work can make you proud. It can even give you more joy than wealth that comes suddenly. If poor people easily own a lot of wealth, it may be pleasant for them, but it may be very difficult for them to maintain/hold it. They may be able to build wealth beyond their basic needs and it will be soothing but if they are not mentally prepared, they will not be able to maintain their wealth.

The opportunity to earn wealth comes to almost everyone in their life, but holding that wealth is not easy for everyone. This is because of the difference in strategy. I think that the abundance of wealth is a kind of addiction for the rich. They can look for more ways to increase their wealth and they are successful most of the time. On the other hand, poor people spend time and feel stress in fulfilling their basic needs as a result they do not get the opportunity to think freely, and as a result they become poorer.

[shinratensei_]

It have to do with the fact that rich people are already tired of buying liability and they just want to grow their capital.
I'm sure everyone has that phase where you just buy something you want, doesn't matter if it's liability or not and then you grew tired of it.

Rich people in this case got so much money they can buy anything they want but eventually it will make them less excited, in that case they will just put their money into productive asset.

[tygeade]

I think we all have different ways we approach things. All the rich and the poor don't have the same reasoning. I hate it when everyone is grouped the same, they have the same character when financial opportunities are given or arise.

There are some poor people who will be given or earn a huge sum of money, they will make something huge from the money. Let's not forget that not all the rich people today were born rich. Many from poor homes. It's from the little earnings they had, they utilize it very well in their running business, in years to come, the money was multiplied through the business started or investment made.

They only say it that way because that is what most people from each categories are doing. That being said, they still know that some are not like that. It is common though, although maybe you are spacing your self too much, for you to not be aware of it. If I'm given a lot of sum, it will now be easy for me to allocate some for savings and investment.

So, the people that usually buys liability must not be these types of people but they are still the poor people as we know them. The reason is, because it takes time to bear profits and no one or only less will be left from them if they risk it, and what will they use to buy a food now or something? They also want immediate rewards because they can rarely have it due to their status.

[yhiaali3]

The poor can't be blamed for thinking about the things they've always dreamed of, such as a luxury home, a car, high end electronics, food, clothing and so on, because they are deprived of these things. Once they receive money one day the first thing they do is make up for the deprivation they've endured for so long.

Unfortunately, this is a waste of money. When they buy what they've dreamed of and fill the gap they've always felt they're surprised to find they've squandered their money and no longer have enough capital to start their own business or a successful trade. Therefore yes, the mentality of the poor differs from that of the rich, and their thinking is different because the former has everything, while the latter is deprived of everything.

[tottong]

If a poor person that has a poor mentality suddenly owns a lot of money maybe through inheritance or hitting the jackpot, they will misuse the money. But if a poor person that has a rich mentality suddenly owns a lot of money they will diligently research and invest the money in a profitable business or investment. From their profits they can gradually afford to buy the things that they've always dreamed of and their assets will be yielding more profits. To become rich you need to think like the rich even you're not there yet, many rich people where not born rich, they were value driven.

Don't blame them because people live in the midst of hardship so they tend to have a weak mindset for most poor people.
But what needs to be thought about is how to instill a mindset in them for major changes in every aspect of life.
Poor people are in an environment that only thinks about tomorrow where to get money to eat so they find it difficult to think about achieving success in life.
Sometimes we must realize that the environment is enough to determine a person's steps in restoring decisions and this is what is called aspects of motivation.

How can they think of something big if it is difficult to fulfill life.
This is where it takes encouragement to achieve a progressive mindset for them and the presence of someone can be a medium for them to change their perspective to be better.
This does not look as easy as it is said, but someone who is willing to struggle will definitely get better results.