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Why The Rich Stay Rich and the Poor Stay Poor (7955 hits)

This was originally posted a few months ago but I thought I would share it with you in light of our terrible economy and our (almost) government shutdown. The post is kind of long so I will post the first part here and you can find the rest at this link: http://afrodaddy.com/content/why-rich-stay-rich-and-poor-stay-poor

Poor people want to be rich and rich people want to get richer. Okay, I know that this is a sweeping generalization but for the sake of argument we can say that in America there is a premise that is very similar. How about if we get a little more precise and say it this way - people who are poor and are unhappy with their financial condition want to improve it; and rich people who enjoy their financial situation want to maintain it. With this refined premise, the question that this post centers around is this. If there are so many poor people who want to improve their financial situation, and there are so few rich people “standing in their way”, why can’t poor people become rich?

It is evident in our society that rich people generally tend to stay rich or get richer while the poor among us stay poor. How and why does this happen? There is a famous sociological study that says if you took all the money away from everyone and divided it EQUALLY among rich and poor that in 5 years the wealth would be redistributed almost exactly as it was before the experiment. Now you might say this is ridiculous. Certainly if poor people got their hands on some money they would finally have the opportunity to come up and the world would be much more balanced between the number of rich and the number of poor. Well, by the time you are done with this post you will see why I believe in this study 100% and why it is so obviously true (even if only hypothetically).

It is no accident that rich people are rich. Generally speaking, people who are rich have several things in common:

a) Rich people own property

b) Rich people own businesses

c) Rich people own investments (stocks and equities)

There are many recent articles and studies that state very clearly the facts and figures related to what the rich own and what others don’t. Here are some of the key facts:

83% of the stocks in the United States are held by 1% of the people.1

The top 1% of U.S. households own nearly twice as much of America's corporate wealth as they did just 15 years ago.2

For the first time in U.S. history, banks own a greater share of residential housing net worth in the United States than all individual Americans put together.3

Poor people on the other hand are the proud owners of these statistics

As of 2007, the bottom 80 percent of American households held about 7% of the liquid financial assets.4

The bottom 50 percent of income earners in the United States now collectively own less than 1 percent of the nation’s wealth.5

For the first time in U.S. history, more than 40 million Americans are on food stamps.6

The statistics above serve to reinforce the concepts of why rich people are rich. Mainly, if you want to be rich you need to have what rich people have: property, businesses and investments. Likewise, if you don’t want to be poor you need to have less debt, more wealth and more autonomy.

So now that we have some basics about what needs to be done to become rich, let’s get back to the hypothetical experiment. The rich people have lost most of their money and the poor people have gained a lot of money so what do these people do for the next 5 years? MOST PEOPLE DO EXACTLY WHAT THEY DID BEFORE.

The man (or woman) who had a business before the experiment takes his money and immediately starts another business. The rich person knows how to run a business so he makes his new business successful and makes just as much money as he used to make.

The man (or woman) who got rich from investments before the experiment immediately takes his money and invests it again. The rich person knows how to invest so in 5 years he has become rich through his proven investment strategies.

The man (or woman) who got rich investing in properties before the experiment takes the money and immediately buys property. The rich person knows how to buy property so in 5 years he has a stable of properties equal to what he had before.

Deducing from the last 3 repetitive sentences, the following should be obvious – rich people know how to make money and will use their proven methods to do so. With this pattern established it should be no surprise what the poor people do in this situation. The poor man who has this new money does what he does best – he spends most of it on things to improve the quality of his life and the lives of his family. This is not a bad thing. The poor man is just doing what he knows how to do.

This scenario is not just about white collar rich people. It is also not about race or geography. Place the black basketball player from the hood in this scenario and the same rule applies. The black athlete got rich playing basketball and will immediately return to his lucrative profession because he knows how to get rich playing basketball. It should be clear that the only way the money gets redistributed from rich to poor over the 5 years is if the rich person or the poor person does something DIFFERENT with their money.

The rest of this post: http://afrodaddy.com/content/why-rich-stay-rich-and-poor-stay-poor
Posted By: Darrell Garrett
Monday, April 11th 2011 at 1:48PM
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Wealthy people pay people on Capitol Hill to make laws in their favor so that is how it goes while the middle class carry the burden of the country on their shoulders paying the highest taxes. What else could it be? There are people who own businesses, properties, etc but they are not living like the wealthy.
Monday, April 11th 2011 at 1:53PM
Jen Fad
...Furthermore, 40 million people are on foodstamps because of those rogues on WallStreet who stole and haven't gone to jail yet...
Monday, April 11th 2011 at 1:55PM
Jen Fad
Poor people need to learn how to play the money game similiar to preparing your child for the SAT examination. The best course of action is to go to the appropriate resource on how to take the test to ensure excellent scores. Private schools have courses on how to take the SAT test, therefore many of their students score higher on SAT apptitude tests. The experts in education should insist that this course be implemented in public schools or at the minimum made available through Community Action programs for 'OUR' people.
Also I suggest two references from author Robert T. Kiyosaki:

1) New York Times Best Seller- "Rich Dad Poor Dad"
2) "Rich Dad's Success Stories"

Let me share this quote from "Rich Dad's Success Stories"
"If you want to achieve financial security, you' ll need to learn the game of money. I learned the game of money from my rich dad. From my Rich Dad's lessons I created the board game CASHFLOW. This game teaches you financial skills through fun, repetition, and action. It is so unique that it has been awarded patents. It will challenge you, teach you, and require you to think like rich people think. The people in this section describe their financial successes and attribute those achievements to playing the CASH-FLOW games."

Reference Book: "Rich Dad's CASHFLOW Quadrant"- By Robert T. Kiyosaki
Monday, April 11th 2011 at 2:22PM
Seems like a major difference between rich and poor is education! Why the rich stay richer and the poor stay poorer? Thats easy......THE TEA PARTY. DIRTY SOBZ!
Monday, April 11th 2011 at 4:57PM
Capital is delayed gratification; you got to save money to have money, and when you have it, you have to know how to put your capital to work to make money.

Starting from nothing it takes discipline, sacrifice and hard work.

Tuesday, April 12th 2011 at 12:52AM
I was reading an article the other day from" The Street". It listed 10 reasons somone is not rich. It states that the reason isn't because you are not earning enough money but how you treat money in your daily life.
1. You care about what your neighbors think. You waste hard earn money trying to impress others instead of building wealth.
2. You are not patient.
3. You have bad habits( smoking, drinking, gambling,etc) . The habit is using up a lot of money that could go toward building wealth. Think of a year's cost of smoking.
4. You have no goals. It's difficult to build wealth, if you haven't taken the time to know what you want. If you haven't set wealth goals, you aren't likely to attain them.
5. You haven't prepared. Death, accidents happens, if you haven't prepared for such things through insurance, any wealthyou have earned could be wiped out with just one incident.
6. You try to make a quick buck. (lottery) The want to get rich quickly likely willcome from the way you invest.
7. You rely on other to take care of your money.It's ok to listen to others but you need to be better informed to make your own investment decisions about your hard earned money.
8.basically the same as as #7
9.You're financially afraid. You're scared to take a risk and hold your funds in low intrest bearing accounts.
10. You ignore your finances. some take the attitude that if you make enough, your finances will take care of themselves

It has become apparent that we can not afford sit back rely on the social networks that are in place. It's going to be a "every man(woman) for themselves.
to get a more detailed review of the article go to http://www.thestreet.com/print/story/10345796.html
Tuesday, April 12th 2011 at 1:27PM
Dorothy Johnson
I think that there is always going to be ways that people separate themselves from others. Do you think that the rich man wants the poor man moving into his neighborhood just because he got a fee extra dollars to spend. He has to make sure that the rent you pay in the poor neighborhoods is just as high as possible. The cost of living is beyond the average person's reach.
Tuesday, April 12th 2011 at 2:27PM
Helen Lofton
Hello Mr. Darrell and to all,

I will tell you the reason why we (41 million Black Americans who are descendents of plantation slaves) are not rich is because we do not have our own money.
For example, White America is rich because White America has its own money. You know I'm right because of the portraits of the many different presidents printed on White America's currency.
Another example, Chinese are rich because China has its own money. I know that I am right because the images on the China's currency are Chinese people.
Yet, another example is, Japanese are rich because Japan has its own money.

Now, Black Americans will never be rich until we begin to print our own money and to do that we must first desire to become a sovereign people on a fertile portion of this continent that we could call our very own country with borders to worship God 20% and the other 80% will be to pursue life, liberty, happiness and prosperity in our own way.

All the stars are in line that our time is now. Likewise, all the stars were in lined, if you will for the children of Israel to become a nation for the first time after they first develop the desired to be free of bondage and slavery in Egypt. When we develop the desire to be sovereign and free in fertile land of our own right here on this continent everything else will fall into place. As a matter of fact, education will be at the very top of the list. We don't want anyone to educate us. We will assume the responsibilities to educate ourselves since we know that education is a matter of national security. We will spend eternity learning how we can use the physical material of God creation to benefit ourselves first and then others.

But, getting back on track, God anointed the children of Israel a prophet, Prophet Moses. Likewise, God has anointed me, Prophet Harry. I am genuine and everything that I say is going to happen as everything Moses said happened.

Tell me what you think.

Tuesday, April 12th 2011 at 6:22PM
Harry Watley
1.Harry what do you mean we do not have our own money? Not to mention descendents of plantation slaves! Man do you think thats as far as your history goes?
2.White america has its own money!!!!! What money are you talking about? Do you realy think a portrait has anything to do with it? Dont forget a portion of this land was colonized. Also if it was not for the plantation slaves the value of that piece of paper could be used to wipe your behind! (LOL)! The same currency that we spend keeps that top of the peramid on the back of the dollar happy, and roles down from there. Power has no color just a Decimal Point.
3. Comon Harry print our own money! ( You know thats illegal. LOL) Did you know that currency is backed up by a governments natuaral recourses? Remember in the plantation days it was cotton not to mention gold ect.
4. If you think we as blacks should have a country with borders....... My grandparents, and parents generation should have just settled for thier OWN WATER FOUNTAIN " on a portion of this ect, ect we could call our own! (go figure)
5. People should have their faith in their religion with all heart, mind, body, and soul not 20 percent brother.

Sunday, April 17th 2011 at 11:29PM
These are great comments and I love the dialog! @Harry: If nothing else, you are consistent in your views (as scary as they may be)
Monday, April 18th 2011 at 5:29PM
Darrell Garrett
...actually, I see this as an illusion. exAMPLE, most who have never been to this country believe all here ar rich...

the same goes for those who have no idea that members of our active duty military are in the food stamp as well as the welfare lines, as well as not getting proper medical and dental care. (nup)
Thursday, April 10th 2014 at 6:47PM
@Corey, "I" agree with you on Education 110% (smile)

And, as that old southern saying goes, "Being poor and wearing ragged clothes is still no excuse for them not being clean". lol (smile)
Thursday, April 10th 2014 at 6:47PM
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