Table of Contents
The reason for poverty in some people’s lives is not because God likes them less or gave them less to work with. There are various tangible reasons for poverty in different countries of the world, depending on the region. Some of these are natural disasters, such as earthquakes, hurricanes, tornados, floods, droughts, and other natural disasters that do not allow people to rise up and be successful. Another tangible reason for poverty is the dictatorship in a country. According to the Democracy Index 2021 published by the Economist Intelligence Unit (EIU), there were 23 countries in the world considered to be under authoritarian regimes, which they define as a “system where elections are not free and fair, and civil liberties and political rights are absent or severely limited”. The corruption of the government suppresses freedom of speech and religion, the right to fair trials, and does not allow money to get to ordinary people.
In democratic, free-market nations, however, there is absolutely no reason for people to live in poverty. In these countries, the reasons for poverty are not always attributable to bad government. Even in cases where there is corruption in government, people still manage to make money. Neither is it attributable to the fact that one lives in a poor country, for even in the poorest countries there is wealth, just as in the richest countries there is poverty. The main reason for poverty anywhere is that people fundamentally lack an understanding of the laws and functions of money. Money comes to those who know how it works.
“It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.” – Robert Kiyosaki
Now let’s understand the following rules that govern money.
Know The Distinction Between Assets & Liabilities
Having a clear understanding of the distinction between assets and liabilities is crucial for financial success. The wealthy tend to accumulate assets while the less affluent tend to accumulate liabilities. An asset is something that you own that generates income and increases in value over time. In contrast, a liability is something that you own that requires ongoing expenses to maintain and decreases in value over time. For instance, a house or a car can be a liability because they require upkeep expenses and depreciation.
Many people mistakenly believe that money is only necessary for meeting basic needs, such as food, clothing, and transportation. While money is certainly needed for these necessities, relying solely on it will not lead to wealth. Instead, to achieve financial abundance, it’s crucial to accumulate assets that generate income and appreciate in value over time.
It’s also essential to recognize that the first rule of money management is not to spend it unnecessarily. The parable of the talents reminds us that money should be put to work rather than wasted. Although it’s possible to acquire money through unexpected events like winning the lottery or inheriting wealth, it’s not a reliable way to accumulate lasting wealth.
Money Is A Seed Meant To Multiply
“If you apply your mind, there is no obstacle you cannot overcome, no problem you cannot solve, and no goal you cannot achieve.”
Money functions as a seed. What do we do with seeds? We can eat them, but that would be unwise. If we consume the seeds, next year will come and we will not have anything to eat because we have not sown a thing. “Whoever does not sow does not reap” is a universal law. Therefore, we must turn the money that comes to us into planted seeds. Even small amounts can multiply.
The parable of the talents illustrates this fact: God will not swing into action on our behalf, and He will not give us something big if He does not see our faithfulness in small things. We are smart and can overcome any obstacle. Some people in the world are smarter than others in terms of money management. They have learned the main purpose of money. One of the lessons of the parable of the talents is that money cannot be stored, but rather needs to be put to work.
We think sometimes, “I am a believer. I pray to God, and I serve Him. God will bless me.” This is not smart. Not if it means you are just going to sit around and wait for the blessing. No matter how much you pray, God will not give you much, because He knows you will consume everything anyway. God does not sit in heaven with a money-printing machine, waiting for us to ask for riches so He can drop a few bundles into our laps. God gives us power, authority, intellect, wisdom, and ideas—in other words, the abilities—to make money ourselves.
Notice something: God does not give wealth, but rather He gives the power and ability to gain wealth. The first talent or the first money that comes to us is not for spending. Sow it into good soil, which is the beginning of producing fruit, or profit. This is the difference between the rich and the poor: the rich make a profit from their money and the poor consume their money quickly, afraid someone will take it from them.
Distinguishing Investment Mentality & Consumer Mentality
A savings culture is the first step to wealth. The second is investment. As soon as you complete the first condition and start receiving returns on your money, the next question arises—how to keep it? Keeping money does not mean burying it somewhere. We have all heard about investors who put money into different projects. We also know people put money in banks in order to keep or save it. These are the smart things to do.
Too many people do the opposite when they get some money in their hands. They count how far the money will go and then go out and spend the money on new clothes or new shoes, expensive cars, extravagant travel, and so on until the money runs out. This is because most people lack the knowledge and understanding of the laws of money. That is why the poor get even poorer.
If all of a sudden you came into one hundred fifty thousand dollars, would you go out right away to buy an expensive car without thinking about how those expenses would only bring more expenses?
Differentiating Financial Discipline From Instant Gratification
It is no surprise that businesspeople invest billions of dollars into advertisements. Why do they do that? Because millions upon millions of people watch commercials and then run to the stores to give their money away on the things they have seen advertised. Money goes from hand to hand; the rich get richer and the poor get poorer. This emphasizes the significance of saving money as the crucial step towards building wealth. One must begin their financial journey with a savings philosophy as even small savings can lead to significant growth over time.
Savings culture is the foundation of true investment, which allows us to multiply our wealth. It’s essential to exercise financial discipline by controlling the urge to spend money. By resisting the temptation to spend, a person gains power and control over their finances. One hundred or fifty dollars could turn into a million in five years through the law of money and really take care of children and grandchildren. Do not eat your first fruit. If you are in need, wait a little bit, and from your returns, you will be able to buy whatever you need.
The following is the true story of a twenty-six-year-old man who was formerly a drug addict and had no work experience or college education. In spite of this, he purchased two plastic bags for only ten cents and began selling them on commuter trains. With the money earned from his sales, he bought more bags and continued selling them. Within a year, he had established stalls in various stores, employed four people, and was earning two hundred and fifty thousand dollars annually from his plastic bag sales. This story demonstrates the power of money circulation and the importance of understanding its nature. Without this understanding, the man might have quickly used up his earnings and still been selling bags on trains to this day.
This is how many people unknowingly spend large amounts of money. No one can ever become rich by focusing only on spending instead of saving, no matter how little or how much. This is what the wise person knows, and so he disciplines himself and invests the money to get more returns, rather than spending it immediately. Let the money multiply itself many times over—and then enjoy it more. The person with power over money will never be poor. Those without that power tend to pursue a flashy lifestyle, thinking that their extravagant lifestyle and careless spending is what wealthy people do. That is not so. The rich are very accountable for their money.
Way Ahead
Many individuals aspire to join the 5 percent of the population that owns 95 percent of the world’s wealth, but this is a dangerous delusion. Such desires only result in becoming submissive to the wealthy, rather than their equals. The wealthy do not immediately indulge in lavish lifestyles with their earnings or profits. Instead, it is the poor and proud who attempt to appear affluent by driving cars they can’t afford, living in homes they can’t pay for, and wearing their wealth on their backs. They take pleasure in the impression of wealth, but in reality, it’s all an illusion. In an attempt to maintain the illusion, they must spend even more of their meager resources and gradually become slaves to those who already have more than enough.
But by following the laws outlined above, individuals can build a strong financial foundation and achieve their wealth goals by making smart investment decisions, saving & controlling spending, and focusing on long-term growth rather than instant gratification. (Inspired from ‘Money Won’t Make You rich’ by Sunday Adelaja).
The Wealth Code: Volume 1 is a personal development and financial education book written by Vinod Singh. It is designed to empower readers by teaching them principles of wealth creation, financial freedom, and personal growth. The book offers practical strategies to achieve financial success, with a vision to uplift and transform the lives of millions by promoting financial literacy and entrepreneurial thinking. Singh’s approach is rooted in inspiring individuals to take control of their financial destinies while cultivating a mindset focused on long-term success and abundance.
