Why the rich getting richer while the poor becoming poorer?
Understand the 4 laws of spending!
Spending is a transaction. It enables money flow. There are four laws of spending which when kept in mind helps one to continue growing their riches and also be prepared for the rainy day. The four laws of spending are:
- Spend less than your earn
- Spend only on appreciating assets
- Spend not to impress anyone
- Spend only if you understand
Lets see how it works in real life.
- Spend less than your earn
If one spends less than one earns the net credit is positive which is called saving and if one spends more than one earns the net credit is negative which is called debt. Prioritizing ones needs is the most crucial aspect in deciding what to spend on. A good starting point can be spending only on those which is essential for ones survival and living simply within ones means.
2. Spend only on appreciating assets
Some assets increase in value over time while some others decrease in value over time. Investing on gold is an example of appreciating asset. Investing on vehicles is an example of depreciating asset. Investing on appreciating assets not only helps one to growth wealth but also helps when in the time of danger or urgency when money is most needed.
3. Spend not to impress anyone
Pride is one of the seven deadly sins. Spending to impress someone may satisfy ones and others ego in the short term but in the long term it is meaningless as those who are there for status or benefits will cease to exist when these disappears. While there is nothing wrong in celebrating for an important occasion but some celebrate only to show off in spite of them not having the means to celebrate lavishly. This results in debt.
4. Spend only if you understand
Before making any purchase make sure one understands the nature of what is spend upon. If one is not sure about something it is better not to go ahead with it. Some people especially the poor to fetch quick money involve in lottery and gambling without understanding that only one in a million will win a million dollar lottery. It is too ambitious. This is somewhat similar to sitting inside home and expecting to get hit by a lightning.
Spend wisely
Of all the millions of planets in our galaxy, earth is the only known planet to harbor and sustain life. Spending the money wisely will not only help one to grow their riches but is also good for the planet. Materialism and spending more and more for oneself will one day deplete the earth of its natural resources and we may require another earth to sustain life. Live simply so that others can simply life.