The poor, the middle class, the rich, and everything in between: What Makes Them So Different?

I'm going to assume you're middle class (because you need a computer to look on the internet, and this stuff isn't new to [self made] rich people). So what makes you middle class exactly? Is it the amount of money you make? Or is it the amount of money you keep? Or is it the amount of money you invest? Yes, it is all three of those. What determines your class, is the amount of money you make, the amount you keep, and the amount you invest. What puts people into a certain class is how they use their money, i.e. their spending habits. The poor spend their money on: Stuff. Things they don't need. Things that depreciate in value in have no liquidity. The middle class spend their money on: Stuff, and liabilties. Liabilities are things that cost them money on a consitent basis. Such as a car, or even a house. So a liability, rather than making money, or even doing nothing, draws money out of the pocket of that person who owns it. It is like a burden. The Upper Class or as they like to call themselves, the rich, spend their money on: Assets. Assets are things that earn money. Their money works for them. An asset can include things such as stocks, a business, or even real estate. The stocks appreciate in value and (some) earn a dividend. A business can also appreciate in value and earn money from whatever service or product. Real estate can earn money from renting, and it has residual (left over) value on the selling of the property. These are types of things the rich invest in. Things that will earn them more money.

Basically it boils down to this: THE RICH INVEST THEIR MONEY (In Assets) So rather than spend their hard earned dollars frivolously they put it into something that can earn them money. But how can you start investing? It doesn't have to be big, you can start of small like most rich people did. It can be an investment in a few gumball machines, or it can be the purchase of penny stocks (note: slightly risky). Whatever it may be, use your money to purchase an asset, and let the money work for you.

There are 3 types of assets: 1. Paper Assets: Stocks, bonds, etc,. 2. Real Estate: Residential properties, commercial properties 3. Businesses There are 4 Types of wage earners: 1. Employees, e.g. cook at restaurant 2. Self Employed, e.g. doctors 3. Business Owner, e.g. own a business but don't work there 4. Investors, e.g. a trader If you want to become rich you have to become a business owner or investor. You simply cannot become rich through being an employee or self employed alone. Employees (1 & 2) are locked in at making certain dollars an hour. They cannot earn more money than the hours they can put in. Business owners and investors on the other hand can. They can increase their assets and investments and make more money that way without having to be there.

Note: Just because you technically own a business, does not fit you into the category of the business owner, IF you work there. You simply own a job, or you are self employed. But don't worry too much, save up enough money to hire workers.

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