Philosophy of Building Wealth
So today's blog ties in with my podcast regarding tax season and huge tax refunds for those in the low socio economic class with children. Unbeknownst to the masses, the culture of consumerism had held them in financial hostage for decades. They continue to be manipulated into believing they have to spend every dime on things that bring no value other than personal instant spending gratification i.e. impulse buying. To most of these financially struggling folks, it is the only time they can "blow" money like rich folks do on a regular basis, or so they think. Not necessarily true. According to many studies a lot of rich people are thrifty. Super rich people, like Warren Buffet, are super frugal. There is a saying in the "Invisible Rich", "the biggest barrier to becoming rich is living like you're rich before you are." And that is exactly what people do when they get these huge refunds.
They are bombarded by ads that manipulate their minds hypnotizing them to Buy! Buy! Buy! So you find the Walmarts and the Targets and the shopping malls filled with people pushing shopping carts with big screen Tvs etc. In fact, I bet this time of the year is even busier than Christmas. Why? As I said earlier this is probably the only time of the year people from the lower social economic class get a chance to splurge as if they are rich without worrying about how to make ends meet. But consumerism doesn't just affect them during this time of the year. The culture of consumerism has led to the masses making financial decisions. Some so bad they would spend their money on things before paying their bills i.e. spend more money than they make. This is the reason title loans and pay day loan companies are so profitable you can find them all over poor neighborhoods. The rich owns the things that the masses buy so the rich stay rich and the poor stay poor. Why is this so?
No one taught them to think about building wealth, whether for themselves or for their descendants. This is not taught in schools. In fact, they don't even teach kids how to develop good credit, which is a must in this country for one to climb the stairs to financial success. There is a reason for this. Status quo; in order for the ruling class to stay in their class, the masses need to stay down. Of course there are those of us who manage to break away from this status quo, the majority are kept ignorant. Even religion teaches them to accept and embrace their position because heaven is filled with poor people. Or that God wants them to be poor. So between the culture of religion and the culture of consumerism, instead of using these tens of thousands of dollars on investments for the future, the masses just Spend! Spend! Spend!
To those who listened to my podcast and those who read my blog, why don't you put that money towards buying a house instead of renting? At the rates today, your mortgage could possibly be 2/3 if your rent if not half. Can't qualify for the loan? Put that money away and start moving yourself towards qualifying. Even if you splurge half of your refund and put away the other half, say $5K, you do this every year and you will have $20K in 4 years. Do you know what you can do with this money? Plenty towards building your wealth.
I will end this blog with a tax tip; ask your preparer about the sick leave and FMLA refundable credit for self-employed people. It could mean thousands more in refunds.
Bye for now,
Dr. KnowItAli