There are two types of rich people, the ones who live on credit and the ones who have money in the bank. When the credit-rich meet financial trouble they lose everything, but those with money in the bank will simply continue to get richer.
No interest vs. interest
Interest is basically a charge for not waiting until you can afford something. The interest that you pay each year is vast when you take into account a mortgage, a car loan, and your credit cards. Those with money in the bank do not pay this cost and they get the bonus of earning interest on the money they have too.
Investment over expense
Making wise financial decisions is vitally important and this boils down to investment versus expense. Being prudent in spending so that it is an investment rather than a cost is essential in building wealth.
Owning over renting
The other key benefit for the rich is that they are able to own their own property. Owning rather than renting is a huge benefit because it means that you are not losing money each month. Even if you are paying for a mortgage this money is still being invested into bricks and mortar rather than going to the ownerâs pocket.
