Top 5 Reasons Why The Rich Become Richer

Ever wonder why the rich become richer?

Though the concept of who is rich is very subjective if we will base it on a person’s net worth, rich people, for purposes of our discussion today are the people who understand their finances well, manage it well, grow it and make money work for them.

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If you try to follow the steps of the rich, you will see that they are the people who have a different mindset about finances. Thus, this makes them even more richer.

5 Reasons

We listed here the top 5 reasons why the rich become richer.

1. They do not have the “poverty” mindset.

Kung ano ang iniisip mo palagi, that will shape your behavior. And your behavior will develop into habits. From habits, you develop your character.

The rich people do not have the poverty mindset. Ask those who lived from “rags to riches”, you will see that they refused to accept their poverty. At hindi lang sila nagtatapos sa di pagtanggap ng poverty nila, kundi they act about it.

Take for example the life of the late Henry Sy, Sr. If you will read anecdotes about his early life, you will see that though he lived in poverty, his mindset was not poor. He persevered, kahit mahirap magsimula. After so many decades, the poor shoe boy became one of the richest business tycoons in the Philippines. Henry Sy, Sr. built an empire from starting barely nothing.

Sabi nga, wishing and dreaming is a different thing from doing. Alin ba ang mas may effort, ang mangarap o ang kumilos para sa pangarap? Your choice spells the difference. Madali mo lang malalaman sa sarili mo if you are living in a poverty mindset.

2. They know the difference between an asset that is spent and an asset that earns.

Our money can only go into 2 pockets:

  1. Expenses
  2. Assets

Dalawa lang ang pwede mong pagkagastusan nyan. Expenses, gaya ng mga bills, utang, luho at mga gastos sa needs like food, shelter and clothing. Assets are things you buy that can be used in the long run, like cars, houses, jewelries and appliances.

But assets can be still classified into 2:

  1. Assets that are spent
  2. Assets that earn

Assets that are spent are those things we buy that decrease in value over time. Good examples are cars and gadgets.

Assets that earn are those things we buy that increase in value over time, or even earn us more money in the future. Examples of these are investment in stocks, VUL and rental properties.

Rich people know where to put their money. They know that in order to grow their money, they have to invest it on assets that earn them more money. They are not just content on spending their hard-earned money, but they spend it in such a way that will give them future returns.

3. They think long-term.

Rich people usually have a vision. They decide today not just for the immediate effects, kundi nagdedesisyon sila in a way that it will positively affect their future.

They invest in skills and knowledge that will give them leverage in the future. They consider the future value of their money whenever they will purchase something.

4. They know how to delay pleasure for the sake of longer and larger benefits.

Mostly, rich people know how to sacrifice immediate pleasure for the sake of future benefits. They can restrain themselves from indulging too much on things they can’t afford now.

Nakakita ka na ba ng mga taong nalulubog sa pagkakautang, lalo sa credit card? Pero kapag tinignan mo naman, meron syang gadget. Yun nga lang, wala syang budget!

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The mindset of the rich is this: if I want to buy this, do I have the money to afford it? If yes, then I buy it. If not, what can I do so I can afford it? The rich does not overindulge in debts.

Hindi porke’t naka-sale ngayon sa shopping malls ay bibili ka na agad. Tanungin mo muna ang sarili mo, kailangan mo ba talaga yan? Maaaring mas mura nga sya ngayon dahil nga sale, pero hindi sya mura kung ikaw ay bibili ng isang bagay na hindi mo naman talaga kailangan.

5. They start small and grow money, little by little.

Many rich people start small. We only see the tip of the iceberg kapag tinignan natin how financially well they are today.

Ika nga, growing your money is very much like planting a seed. You plant a small seed today and it will grow into a tree with many fruits in the future.

Pero gaya ng pagtatanim, it does not come overnight. No one says he saves overnight. Saving and growing your money is done gradually, little by little. Rich people know that their habits disciplined them to a life of saving and investing.

The good news

The good news is that you don’t need to have 1 million today to grow it into more than 1 million in the future! You don’t believe it? That is the power of compounding interest! I tell you, you can start at even P 2,500 per month!

I can help you start on this financial journey! Are you ready and willing? 

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