Formula To Generate Wealth For Youngsters

Formula To Generate Wealth For Youngsters

Generating wealth is not only about how much money you earn but about how you use it when you receive it.

The poor, rich, and middle-class people spend their money in a very different way. Next, we are going to talk about how to generate wealth regardless of your income.

The main cause of your socio-economic status is the way you think. The poor are getting poorer, the rich are getting richer and the middle class is increasingly trapped in an enslaving system.

For what is this?

So that you can understand it, we are going to review some basic concepts:

• Income:  Money you receive.
• Expenses:  Money you pay.
• Assets: Things that make you more money.
• Liabilities:  Things that generate more expenses.

The last two terms are the least known to people, but understanding them is crucial to getting out of poverty or the middle class.

How do people of each social class use their money?

The poor

When payday comes, poor-minded people use their money for basic needs. What little they have left they use to acquire very cheap items that they do not really need, but they justify themselves by saying that it was a very low price.

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Over the years all these objects accumulate in their houses and literally become garbage.

At no time have they received information on assets and liabilities. Their mentality leads them to live from day to day and, sadly, that is what keeps them stuck in poverty.

Middle class

The biggest problem with the middle class is that they always appear rich.

In some cases, they are people with a good income, but the way they use their money keeps them tied at that economic level.

Most people buy liabilities, which means they are generating more expenses.

A clear example of this is houses, cars, credit card debt, etc.

Many times, these types of acquisitions are the ones that lead you to spend more than you earn. Simply put, the income they receive is below their debt level.

This is the reason why they cannot generate wealth.

This is why it is so common to hear people complaining at the end of the fortnight and anxiously waiting for the next payment. If there is a period of unemployment, they enter into serious financial problems due to the debts they have accumulated.

Both the poor and the middle class were educated to generate linear incomes; that is, those who depend on your time, your knowledge, and your effort.

The day they stop working, they stop receiving money.

For example, a doctor usually receives payments for visits that he performs. The problem is when you stop offering your services to customers, at which point your income also stops. For people in this situation, enjoying free time is not an option.

There is a formula to achieve wealth

The rich invest in assets, which, as I mentioned earlier, are things that generate more profits.

Listen to the advice of Rodrigo Herrera Aspra, one of the best-known entrepreneurs in Latin America, mainly for his participation in the Shark Tank Mexico program.

If you pay attention to their way of using the money you will realize that once they have already acquired an asset, they use the earnings they receive to buy another asset, and they do so consecutively until they have different sources of income.

Simply put, the rich use their money to buy things that make more money. Some examples are investments in real estate and stocks. Although any profitable business can enter this list.

A very important tip when investing in assets is to educate yourself about the businesses you are about to acquire, or instead, surround yourself with experts who can guide you along the way.

One of the most important secrets of rich people is that they are constantly looking for businesses that generate residual income, those that come in steadily because of the effort that has been made only once.

Even if you are broke, this information can change your financial future if you apply it properly in your life.

I invite you to watch this video in which I speak more thoroughly and in more detail on this topic.

If you liked this post, you may be interested in learning how to earn money online in different ways.

Have you applied this strategy before, or do you plan to do it in the future? Share it in the comments.