Posted by: nastylittletruths | May 4, 2008

All The Wealth In The World

Had to get quickly to this before I lost my train of thought and also to keep the promise from yesterday’s post.

There was a theory to explain why there will always be wealthy and “not wealthy” people, but it had more to do about money management. And there was a good point in it, so don’t dismiss it outright. The theory suggested that if all the wealth in the world was divided equally amongst all the people in the world, sooner or later it would revert to the people who originally held it. Wrap your brain around that and understand what I meant about managing one’s money.

I was speaking about owning your own home in my last post so this excerpt from Robert Kiyosaki (the author of the Rich Dad, Poor Dad books) is relevant. Now, to hear Robert say it, it sounds rude, so forgive me.

Explaining that poor people don’t know the difference between an asset and a liability, he contended that they think a home is the greatest “investment” of their lives when in fact it is a liability. Consider that most wealthy buy high-priced properties in exclusive areas that increase in value as opposed to middle class purchasers in lower cost housing that invariably depreciate in value. Then think about all the other businesses who offer “deals” for you to own that new car or some other high cost items and you get into the crux of what Kiyosaki calls the rat race.

Buying liabilities and racking up debts puts us in a position where fear and greed takes over. Fear, in that we have to continue getting that paycheck to support the monthly payments and greed in that there is always the pressure for salaries to rise to maintain the lifestyle. So who benefits from all this commerce but the merchants and bankers? The middle-class will work and pay bills for 40 to 50 years of their lives and then live on a meagre pension while the rich enjoys life until they die.

The lesson for us Trinidadians and Tobagonians in this was the closing paragraph – the end of civilisations occur when the disparity between the haves and have-nots get so great it all comes crashing down in rebellion and uprising. Kiyosaki was speaking about America when he made that comment, but when someone in Trindad can drive a $2m vehicle from selling bottle water, you understand what I mean. (I drink WASA’s thank you very much)

Keep this uppermost in your mind at all time: “The main difference between the rich and the poor is that the poor spends first and saves after, the rich invests first and spends after…” Usually, they spend earnings from the investments.

I know how difficult it is to abide by this when the cost of basic necessities continue to rise and salaries are not keeping pace, but it’s a good lesson to learn.

I will stay on this topic tomorrow as I need to get something out there for comment. Money and politics are so intertwined, whether it’s Eliot Spitzer or Keith Rowley, lives are destroyed if one dares to go against the ones for whom wealth is paramount and greed a necessary evil.

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