Corona Makes the Rich Richer and the Poor Poorer
By: Christian Soschner
Tags: Life Lessons, Success, Rich People, Poor People, Money Mindset

I do consider both statements as clickbait — close to nonsense. Corona is not the problem that we face when it comes to inequality.

We had this inequality in our society for ages. At least since capitalism was on the rise and we gave up the law of the jungle. Being strong means having money in this new world — the post jungle law era.

But, is that really true? I say no. Being strong in a capitalistic world means knowing the rules of the game. And the rules have a name.

Its name is

Financial education

And this is the real problem in our world. Poor people only lack this one thing.

It is financial education.

The good in the bad is, it is a problem that we can fix.

Especially in the 20s of the new century — I know I make old man statements, born in 1974, it still is a new century to me. I ignore that we are already 20% through the new century — so, in this century, many millionaires share their experience of how they made their millions.

They share this on social media: Medium, TikTok, Instagram, Facebook, and Youtube are great sources of information on the topic:

How to become financially independent

I followed some of them for years, and here are my findings. The red line that connects the dots between most of these self-made millionaires.

Self-made? Yes, about 90% of all millionaires are self-made.

The power of keeping a tight budget

People and organizations are similar. The successful ones know how to budget. The ones that fail have no clue how to do that.

Most of the time, 20% of what you do delivers 80% of the results. Yet, many people and organizations overspend on 80% of the activities that only deliver 20% of the result. Finding 20% and focusing your attention on these activities leads to wealth.

So what has that to do with budgeting? Well, a lot. To find out what makes you successful, you need to start documenting what to do. And budgeting is the right tool for that.

In these articles, you will find my thoughts on this topic:

The first thing millionaires did on their journey to create wealth was sticking to their budgets. They quit overspending.

Several streams of income

The usual person has one income stream. The wealthy person has at least seven. Well, this is what many articles say—the seven streams of income of millionaires. Seven is a golden number. That’s all.

What I did find out reading through millionaires material was that all millionaires had many income streams organized. So what is an income stream? According to the Cambridge Dictionary, it is:

an amount of money that keeps coming in or being produced from an investment or by selling products or services

Most millionaires from the self-made category (90% of all millionaires) started from a single source of income:

a salary

Yes, an ordinary job. From that point on, they created a second one. How? They started saving money. By doing so, the money saved created interest income.

Yes, I dunno; in 2020, we have negative interest rates. So we can directly screw savings and jump to ETFs. They create the second/third and fourth income stream—capital gains from value increase and dividend payment.

The next thing those millionaires did was starting a side hustle. Basically, a second job that fits into their spare time. At this point, they created five streams of income.

For some of them, it was enough to become a millionaire. Lawyers, Physicians, Tax consultants — they all made it. For some, it wasn’t enough. They had a special calling and created a sixth stream of income.

A business

It is what Jeff Bezos did back in 1993/94. He discovered the potential of the Internet. And with his finding, he created Amazon. It started the eCommerce movement.

And the rest is history

Buy assets instead of stuff

The working poor has many things in common: They mostly waste money on their addictions. It’s just that their addictions create expenses only without return.

Alcohol, Drugs, Gaming or Shopping

Are a few of those addictions. At the end of the money, there is still a lot of months left.

The rich ones in the making — do not do that. Instead of spending their money on expenses, they invest in assets.

Oh yes. I hear your words. This is so difficult. The truth is, in 2020, it is simple. The first thing you need to do is eliminating unnecessary expenses. And yes, I hear your words already.

It takes out the fun of life

No, it doesn’t. If you believe getting drunk every night is fun — go ahead. It is your life. But if you want to get out of misery, get drunk two nights per week. And invest the saved money on the stock market. Eventually, you will become a millionaire with this simple change of habits.

This is one of the main reasons why millionaires create more millions, and the poor stay poor. Expenses vs. Assets. I wrote one article on this topic: