Ever wondered what it means to be rich? Riches can exist in so many areas of life but not limited to relationship, spiritual, financial, and emotional bank accounts . For the sake of this article, we will restrict the discussion of being rich to one area: acquiring a great amount of money. With that, the goal of today is to expose you to why the rich get richer and arm you with the tools that boost wealth creation.

How much money do you need to be considered rich?

Depending on the part of the world you live in, the amount of money needed to be considered rich will always vary. According to Fortune, most Americans define rich as having an average of $2.4 million. Without a doubt, being rich is relative. What do you consider rich? $100,000 per year income? $1,000,0000 per year income? You are entitle to your own definition of financial riches. Based on your definition of financial riches, what is it that the rich are doing that others are not? Some people believe in working insane hours at a job as a way to get the richer. However, working long hard hours alone will not buy you a ticket to the rich club.

Do the rich belong to another planet or have multiple heads? The short answer is no! There are some secrets behind why the rich get richer. The secrets lie in the tools the rich utilize. You too could join the ranks of the rich. If you’re interested in joining the rich club then keep reading!

How is it that the richest 1% in America now own more of the country’s wealth than at any time in the past 50 years? Around the globe, new millionaires are minted daily. There are two simple rules to getting richer: (1) accumulate wealth (2) multiply or keep adding to the already accumulated wealth.

Now that you know the rule to getting rich, you will discover the tools you need to accumulate the wealth as well as multiply the wealth you have accumulated.

Here are some Tools the Rich Utilize to Get Richer:

1. Leverage

The rich are kings and queens of leverage. In simple words, leverage is doing more with less. Leverage helps the rich reproduce themselves and conserve their resources. There are different types of leverage used by the rich. These are some obvious forms: other people’s money (OPM), other people’s time (OPT) and other people’s experience (OPE).

Let’s explore this scenario: you own an insurance brokerage business that requires you to be present 10 hours a day, Monday through Friday. There is a demand for your services but you can only serve 7 clients a day working. Given that, you are so at what you do, your clientage has grown to 28. Even if you worked for 24 hours a day you still won’t be able to serve half of your clients in one day. To harness the power of leverage like the rich do, you decide to recruit 3 additional brokers to join your firm for a 25% commission per client served. This means you will be working the same amount of hours serving 28 clients but making more you normally would, if you only served 7 clients.

The above scenario details the use of other people’s experience and time to get richer.

2. Systems

Rich people get richer by creating systems around their life and businesses. Instead of reinventing the wheel the rich create systems that enable growth. By modeling things that have created great results in the past, the rich set up reliable structures to yield even greater results. The systems set up by the rich automate their routine activities, hence freeing them up to pursue other worthwhile ventures with their time and energy. The automation of repetitive activities using systems makes the rich more productive. Therefore, increase in productivity is why the rich get richer using systems.

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“All wealth is based upon systems”
– Dan Kennedy

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3. Network

Like the saying goes: your income is the average of the five people you hang around the most. Take a look at your network now, who are you spending the most time with? Rich people get richer by continuously expanding the magnitude and quality of their network. The rich tap into powerful networks and mastermind groups where they talk about changes in law, business and economic trends and lucrative opportunities.

Significantly, that the currency of networking is value. And the rich trade on the flow on value to grow their riches. Networking is a two-way street where people connect at a higher or same level to exchange value. The various ways the rich network to connect at a higher level to get richer are detailed in the article: “5 Powerful Ways to Connect with Successful People at the Top.”

The play here is that the rich get richer by dropping people who do not add value to them. On the other hand, they operate with people who share mutual goals and strive to attain greater heights. Through networking, the rich build solid relationships that help them thrive in their businesses and investments.

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“Networking is not about just connecting people. It’s about connecting people with people, people with ideas, and people with opportunities. “

– Michele Jennae

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4. Investments

The rich understand the compound effect. The comprehension  of compound effect enables the rich to direct a portion of their income towards investments. In the book, Rich Dad Poor Dad, Robert Kiyosaki stated that the rich purchase assets with their money where as, the poor and middle class purchase liabilities and expenses. The assets which the rich purchase are cash flowing and appreciating assets. Given that investment is a marathon and not a sprint, the rich get richer by the compounding that takes place over a given period of time they continuously invest. They rich invest in stocks, bonds, real estate and so on. Most importantly, the rich hold onto their investments and these investments pay them unending returns even while they sleep. Hence, why the rich get richer.

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“If you don’t find a way to make money while you sleep, you will work until you die.” – Warren Buffet (Billionaire Investor)

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5. Continuous Education

According to renowned American motivational speaker and author, Jim Rohn: “formal education will make you a living but self-education will make you a fortune.” These words are very evident in the lives of the rich people and accounts for why the rich get richer. The poor and middle class think the way to get ahead economically is by pursuing formal education. Thus, they stop educating themselves the moment they graduate from college with a bachelors, masters or doctorate degree. The rich understand that continuous education mainly outside of the formal education realms is the key to the expansion of their riches. It has been said that every thing you need to get the rich life you deserve is in a book [or blog] on a shelf [or website] somewhere.

The rich are conversant with the benefits of being a life-long learner. In fact, they understand that the more you learn the more you earn. Also, they strive to learn more to stay innovative and competitive since you will never grow beyond that which you have learned.

6. Debt

Whenever you mention debt to the average person, fear kicks in. Debt is like fire. You can keep yourself warm when you get close to a fire or you can burn yourself when you get close to fire. This doesn’t mean that fire is bad. What matters is how you are using the fire and what you are using the fire for. Fire can make you a meal or destroy your house. Similar to fire, there is a need to understand debt and how it can be used before signing any dotted line.

The rich understand the difference between good debt and bad debt. Good debt is any debt that produces more income for you where as bad debt is any debt that deplete your income. Almost always, good debt is the one that someone else is paying back for you. For example, the rich use debt to acquire income producing assets that others pays them to utilize.

7. Taxes

Let this sink in: Warren Buffet, billionaire investor and one of the richest men alive revealed that he pays less in taxes by percentage than his secretary. How come? Rich people seek out ways to legally shield their money from the tax collector. The do this by reading and understanding the tax codes. Also the rich enormous amounts in taxes by hiring professionals like tax attorneys and accountants with specialized knowledge in taxes. Tax codes are generally favorable to businesses and capital investments. Particularly, if you live in the United States, you have to take advantage of the tax codes to get richer.

8. Charity

Believe it or not, the good old saying, ‘givers never lack’,  is still very much alive. One of the fundamental principles of growth is giving. This is a paradox that many can’t fathom. The reward of giving is one of those things that you can’t unravel until you practice giving. Giving, especially in a generous form opens up flows of abundance.

Indeed, the charity is why the rich get richer. Charity is when you give out of love for someone or to support a cause. Also, you don’t necessarily have to give money. You can give your time. However, since time is a very limited resource, the rich often opt to give a lot of money away to support charity organizations. The rich create trusts, foundations and scholarships with the wealth they have accumulated. The potency in charity is harnessed by the rich to create more wealth for themselves intentionally or otherwise.

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“We must give more in order to get more. It is the generous giving of ourselves that produces the generous harvest.”

―Orison Swett Marden

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Over to you…

You now know why the rich get richer! You can grow your wealth and join the rich too! Since you have gotten some insight on tools that make the rich richer and feel empowered with some knowledge, don’t gain alone. There’s joy in sharing. Do not hesitate to share this article with people in your circle.

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