Background
I am 38 Years old. When I was young a very popular animation series was Richie Rich. A very young rich boy surrounded by coins and money, spending whole day! This image may help you to recollect:
I recalled this series today morning when I read the headlines of today’s newspaper, here we go:
It is in Gujarati language, basically saying: the Riches got richer in last calendar year and poor got poorer! This is almost repeated headline each year and believe me, this is common across the globe. News media outlets tells you WHAT happened. They don’t tell WHY this happened??
In Nutshell, Rich got richer and poor got poorer, yet again! and news media not telling poor or middle class why this happened?
Here is my thoughts based on my experience in personal finance field and interactions with industry stalwarts over the years.
Rich people:
– Never speculate means never waste their time in short term trading.
– Believe in wealth creation through investing and knows there is no quick money.
– Have long term vision and clear goals listed out to achieve.
– Invests their hard earned money in growth assets (equities/real estates/commodities).
– Follow their asset allocation plans and rebalance as and when needed.
– They knows their home they are staying in is a liability not an asset.
– Takes advice from competent experts (Advocate, CA, Financial Advisor etc).
– Do not read / follow news media to take their decisions related to investments (newspapers, TV channels, social media).
– Lastly, money works for them!
Middle class/poor people:
– Believe in quick money (stocks/crypto/F&O trading, cheat funds etc)
– Have short term vision (less than 5 years of investment horizon)
– Believes that the Home they are staying is their biggest asset.
– Keeps their most of money in Insurance policies, FD, PPF, gold, real estates (they earn less money or have money locked).
– Don’t believe in asset allocation (max investment in real estates, debt or gold – more than 60% mostly in their home only).
– Believe they knows everything so don’t need to pay any fees to advisors.
– Follows news media, neighbors, friends, bankers for tips to invest their hard earned money.
– Everything buys on loans, creating liabilities throughout their life.
– Works whole life for money!!
This is my personal view about money, investment, rich, poor and middle class people. Comment your views in the box below to share yours!