How the Rich Make Money

The Poor

These are people of very little financial literacy who suffer from living paycheck to paycheck. Poor people make it a priority to pay their bills first using sometimes more than sixty percent of their paycheck. The extra income that is left is usually spent on things of no value such as, new clothes, electronics, decorations, flashy items, and etc. These items do nothing for the income but they add to the list of things owned by the person of this category. These items are purchased through a desire of wanting nice things because poor people admire middle class people. The cycle of the poor flows from a paycheck, to bills and purchases, and back to a paycheck. This cycle is usually called the rat race because it is a cycle that goes on and on but never gains anything.

The Middle Class

Middle class people can make up to a six figure income or even more but their buying and spending habits are what categorize them as the middle class. These people are mistaken as rich people by the poor because of their luxury cars, clothes, boats, expensive electronics, and etc. Middle class people usually mistake liabilities for assets. The things that they buy that are mistaken for assets are things that take money out of their pockets by creating monthly bills. Car notes, credit cards, and house mortgages are examples of things that take money out of their pockets. Robert Kiyosaki introduced a different definition of an asset which is something that puts money into your pocket. Not knowing the difference between an asset and a liability is why the middle class suffer financially and lack financial literacy.

The Rich

These are people with multiple streams of income. They usually put their money into assets which are also referred to as investments. These investments are things like stocks, bonds, real estate, and business opportunities. Rich people are more flexible to have more free time because their investments create residual income. Residual income is income received on a regular basis, with little effort required to maintain it. The rich create other streams of income with profits from previous investments. This allows an increase in cash flow month after month and also allows one to enjoy financial freedom.

While the middle class focuses on saving money, the rich focuses on earning more money. Working smarter and not harder is how the rich make money. Rich people use money as a tool only to create more money. This mentality is the reason that the rich continue to get richer.

Roman Odom is a successful entrepreneur who lives a life of peace, prosperity, and purpose. To learn how you can build a financial foundation and receive financial freedom click HERE for a free report.

By Roman D Odom