The poor voluntarily give to the rich…
The wealthy, middle class, and the poor…
People who have money, the wealthy, lend to the people who don't have money, the poor and the middle class. The wealthy do not want to keep their money in cash, so they invest it in equities and debt assets (lending money to you).
Since I'm in the middle class, if I borrow money, I'm voluntarily giving it to the rich. I am paying them a percentage every year to use their money until I pay back the principal. I am taking money out of my pocket, and I'm putting it in their pocket.
Not only are they making money off of the principal they lend to me. But also, they are creating securitized assets based on that debt…and selling it to investors…making 20%.
A more personalized example.
We have a friend, who has less money than we do that constantly gives us stuff. He buys stuff, rarely uses it, it sits in his house for 6 months, then he gives it away.
Clothes, kitchen supplies, food, etc… He gives it to us because he is a nice person, but he also wants to justify some utility in that thing that he bought (my friends will use it). He also wants to declutter his house, but it doesn't do any good, because he buys more stuff to replace the stuff he gives us. I call it a “Wealth Transfer.“
He lives paycheck to paycheck and he struggles with money. I don't talk to him about it because he doesn't ask. My number one rule, never talk about money unless people ask (blogging is different, hehe).
In Conclusion
It has been my personal experience, plus I see it at a macro level, that people with less income and assets borrow from people that have more income and assets. The poor and middle class voluntarily give money to the rich.
Actually, @trabajosdelsiglo brought to my attention a couple of posts ago; the poor need credit to buy essentials, the middle class use credit to elevate their social status, and the wealthy use credit to become more wealthy. I immediately agreed with him, such that I want to write a post about it later.
Anyway, stay frosty people and stay out of unproductive debt.
35% allocated to ph-fund.
hello @fijimermaid,
It is impressive how wealth travels from the have-nots to the haves, I personally believe that the system is designed to extract all the money from the lower and middle classes and then direct it to the upper classes, i.e. poor people are generally conditioned to see things that are not important as important, while the middle class just want to appear rich, ultimately the rich simply create systems that make them richer.
Yep. 100% agree. Fortunately, we do have that power to elevate our financial condition, as long as we stay away from unproductive debt, spend less than we make, and think long-term.
Hello @fijimermaid, I find it very curious but at the same time logical, the situation you share with us in your work.
The rich can help us or get out of trouble at a certain time, but unfortunately that does not give it for free everything has a return and with interest included is why when you want to get out of debt the last thing you should do is look for a loan with interest, as that will affect you financially.
Greetings
Yeah, debt usually gets people into trouble because it's for unproductive, non income-producing, things. So people are spending money, and they’re not getting anything out of it. It keeps the poor poor and it keeps the middle-class stagnant.
It has always been a norm to have taken from the poor and give to the rich, even when the poor does not notice it. While a poor/average person struggles to get his feet up in life, a rich man is already milking through every of those stages of opportunities.
There's this line from the movie “Platoon” (an American movie about the the Vietnam War), where the character “King” said…
“the poor are always getting fucked over over by the rich, always have, always will.”
Once the rich accumulate money, they want to accumulate more money by setting up the system to make them more rich, like you said. If the poor and middle-class understood how the rich did this, they would be less inclined to take out debt and give more money to the rich.
Hi dear friend @fijimermaid
I also agree, but everyone must assume their responsibility, the poor seek to get into more financial expenses and do not save in most cases, Bill Gates said "if you are born poor it is not your fault, but if you die poor it is your fault"
god bless you
That's a great quote, and also true.
The society as we have it today was built to take money from the poor and middle class, and give it to the rich. That's basically how the world is structured. As an individual, it becomes your responsibility, to gradually upgrade your level to become rich too. Thanks for sharing.
Yes, financially progressing, at the very least, to secure a good retirement is pretty important.
The rich know how to play their card and have tossed It nicely to accumulate more wealth by lending to the poor.
From rich dad poor dad book i've learnt to understand the rich will continue to be rich because they know how to turn ideal dollar into work while the poor focus more on liability things getting money out of their hands, a very good post shared thanks.
Your last paragraph was spot-on…I have been a big advocate of more financial education and behavioral economics in schools. As a society, we need to know how to think about money, saving it, and putting it to good work.
While this is too, they poor aren't to be blamed. Unfortunately, they they have control over these and are just playing along with what life gives.
We cannot blame humans for being humans. We have to embrace that this is a problem, and set up a system so we have less rich and poor and a larger middle class.
This trend is quite true and perhaps this is the reason that the rich keep getting richer.
Sad but true
Depressingly true.
This is very true. It becomes expensive to be poorer when your paying interest all the time.
It does. And it's easier than ever. Debt financing has never been cheaper since the 1930s.
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