How The 1% Get Richer & The Low Middle Class Poorer

It almost feels like the rich know something that us common folk don’t. If you think this is true I’d say you’re onto something.

With the ever-increasing gap between the rich and poor, there has to be something at play other than ‘luck’ and ‘hard work’. And there is.

You could say that the wealthy have some financial life hacks that they abide by. And in this article, I’m going to give you some of them so that you too can be on your way to financial success.

The rich network with other successful people

Networking comes with a lot of benefits, which the rich know. Networking is time well spent since it lets them meet new individuals with innovative and thought-provoking ideas and keeps their minds on success.

Rich people usually network with other wealthy people who also possess ambition, talent, and, most importantly, the potential to achieve extraordinary achievements or who already have success. This is what helps them get richer as they end up making more connections and even more people to do business with.

This isn’t just something for the rich — you can also start networking with people today. If you start networking, you’ll get better connections, which can lead to better prospects. Hence, it goes without saying, because of their greater connections, the wealthy can continue to amass wealth through better investment opportunities.

So, whenever you are in a crowd of people (hopefully successful people), learn to sell yourself and exchange contacts, as you never know what the future holds for you. Maybe that one person may later on come to help you big time in life.

I mean, who wouldn’t want their contact list filled with influential and high-end people? You don’t need to go to fancy black-tie events to connect — you can go for a simple cup of coffee and connect that way.

Technology has altered the nature of work

While it has created many opportunities for the highly-skilled, the digital revolution has also been the reason for many losing their jobs. Jobs ranging from clerical labour to ordinary manufacturing have been taken away from middle-class earners.

These tasks are now completed by machines and robots. Additionally, since highly educated professionals typically possess these tablets in abundance, the value of abstract problem solving, interpersonal communication and organising skills has increased. While at the same time, many cognitively repetitive jobs performed in offices and on production lines have become devalued.

For those with less education, this has exacerbated downward pressure on wages as well as economic uncertainty. As long as the low and middle classes keep struggling to get better-paying jobs, the rich will keep using this to their advantage and get richer.

The rich make important financial decisions when they’re free from stress and worry

As the rule goes, never make any important decisions when you are angry, stressed or worried among others. These decisions have an impact on your life, which includes issues related to your finances.

When it comes to finances, every decision made matters a lot, and this is one thing that the rich know. Stress and worry plague those who are not wealthy.

Since these feelings are constant, it’s hard to ignore them whilst making important financial decisions. This is a recipe for disaster as it can make one’s financial matters even worse.

According to a study, stress and anxiety can have an adverse effect on your life by preventing you from making wise financial decisions. If your finances are already tight, you are more likely to make decisions that will ultimately cause further financial issues.

You should avoid making poor financial decisions, and any decision made should be made in a clear and calm mode, like how the rich do it. Try it out and you’ll see yourself on a positive level when it comes to your finances.

The rich place a higher value on their time

Time is a precious commodity that the rich use to their advantage. You should too. The rich value their time so much that they tend to place more value on it, and this is something the poor and middle-class folks don’t do.

We all work for money, which is typically just a reward for the time and effort you put into it. The wealthy, in contrast, believe that a bigger salary is necessary for their time; hence they end up receiving more money for each hour worked as they also work on things that give them a higher income.

Time is a very precious resource which we have, which should not be wasted. So, the big question is, do you value your time?

The rich invest

A few of the many advantages of investing are: being able to stay ahead of inflation, helping you build wealth because it will double your money; saving you money on taxes; and also, being able to achieve other financial goals, among many other benefits.

This is how the 1% get richer, by investing and making money work for them.

The biggest tip is to make smart investments. Investments typically do the heavy lifting to help individuals become wealthy, and this is fundamental to growing your financial situation. You can reinvest your profitable earnings from these wise investments.

You always want to invest as much as you can afford to lose since investing some risk.

Due to high-interest rates that investing often produces, it has allowed for continuous growth and this is something the rich know and use to their advantage to help them accumulate more wealth. Therefore, start your investing today to really reap the benefits.

Oh and be cautious! Make sure to get in touch with a professional who can accurately guide you.

The rich avoid overspending

Spending money recklessly on things that you don’t need is what will lead you into financial issues and it’s what the rich avoid (so you should too).

The wealthy know that the more money you spend, the less you have, and they make every effort to avoid spending mindlessly. When it comes to their finances, the wealthy are frequently exceedingly circumspect and guarded.

If the wealthy spent extravagantly and carelessly without careful preparation, they wouldn’t be wealthy for very long. No matter how much money you make, if you consistently overspend, you’ll never be able to sustain your money.

The wealthy understand that cutting back on expenses gives them more money to invest and so they can grow it for their future. Keep in mind that being frugal depends on your income; a wealthy person may spend a lot more than someone who is viewed as middle class.

But in comparison, the wealthy are usually cautious and monitor their spending. So, simply put: make more, save more and spend less.

The rich have multiple streams of income

It goes without saying that only having one source of income can’t make you rich, as the income itself won’t be enough for you. There are many sources of income you can turn to and for the rich this includes having several businesses.

You can’t be rich if you work for someone else, because you’re assisting your employer in becoming richer while you get just enough to sustain yourself month to month. The more money you have, the more money you’ll make. This is why you need to have multiple sources of income that will generate more money.

In this manner, you can ensure a steady flow of income, invest the surplus, or even treat yourself to that luxurious item you’ve had your eye on without going bankrupt.

There are two fundamental types of income: active income, which is primarily seen by middle-class people and entails working for the money you earn, and passive income, which doesn’t directly depend on how many hours you put in.

We can say that passive income is used by the wealthy and ultimately leads to their continued wealth accumulation. Examples of passive income include rental property, dividend stocks, index funds, writing a book, or developing an app. For more income stream ideas, click here.

All of these will generate a steady flow of income from royalties or sales.

The poor and middle class save more money than they invest

Saving money is not a bad idea, especially if you’ve got a goal in mind, such as saving up for college, a home and so on. But this is something the rich don’t pay too much attention to.

Any time they save, they choose to do it smartly. They would rather put the money in a high-yield savings account that accrues interest before reaching the target goal and invest it to make more money.

This enables them to continue expanding their wealth. Most lower and middle-class people fall into bank traps, believing it is a good idea to have a lot of money in the bank, which in reality is depreciating in value. In fact, research proves that the money you are saving without any interest accruing is what banks use to loan or credit the top 1%.

Take this as your sign to save and invest wisely.

How they stay rich

In conclusion, it is evident that a small portion of the population controls the vast bulk of the world’s resources, and this could pose a serious threat to the majority of nations. Increased employment and the eradication of corruption could be successful approaches to poverty issues.

It all starts with your own personal act. I believe I’ve included all the examples I could think of today about how the 1% keeps getting richer as the lower and middle classes get poorer. One could say that the wealthy have worked out how to play the quote-on-quote ‘game’, while most people aren’t even aware that it’s being played.

But, it’s been a game all along, and the smartest person is the one that always comes out on top. And, for the pessimists, you’re right, having money to leverage makes it much easier to create money. But with a little persistence and attention, as well as looking at things and ways that the rich do, you too can break out of poverty.

The only solution left is for everyone to self-reflect on what they really want.