Why Rich get Richer and the Poor Stay Poor

Do rich people use some getting rich quick scheme if not then whats help them to become rich.

I used to think the same as you but after analyzing reach rich peoples lifestyle I came to know that there are some techniques which they use to get rich

And sad to say that there is nothing like getting rich fast scheme.

So In this article, I am going to share with you 3 Techniques that rich people use to get rich and at the end of this blog post, you will get your answer Why rich get richer and the poor stay poor.

So without taking any more time, Let’s dive into the topic.

  • Active and Passive Income
  • Asset and Liabilities
  • Tax Deduction

Active and Passive Income

Before Learning anything we need to know what is active income and passive income.

Active Income

First, let’s talk about active income.

When we exchange our time with money it is called Active income.

Let’s use a real example of it Imagine that you are a teacher and you teach children in school in behalf of your teaching the school gives you a monthly salary.

Or if you are absent a day they will cut it from your salary and you left your job then your income will also stop.

that means if you stop working then the income will stop coming.

Passive Income

What is passive income?

Passive income is the source of income where we do not exchange time with money and we create an income source that can generate money while we sleep.

To help you relate to it let’s think about a businessman does he need to go to work every day absolutely not or he can go on vacation without getting tension of doing work.

But this is not going to make any difference in his income source it will come even he will sleep

what do you think which income source rich people make?

You may know the answer is passive income source.

And that is the thing which creates a great difference between rich and poor people.

when poor people focus on making active income sources by getting jobs then rich people focus on creating passive income sources.

Now you understood the difference between active and passive and also know the importance of passive income.

Let me share four types of income sources.

  • Employee
  • Self-Employee
  • Business
  • Investment


you obviously, know who an employee is?

An employee is a person who works for salary or wages under someone.

Self – Employee

It is better than an employee but by becoming a self – employee you can never become rich.

A person who is self employee thinks that he is doing business but he is not.

He is exchanging time for money and if anyone is running a business he never has to exchange his time for money.

We can take here an example of a dentist, A dentist who is running a clinic is self-employed as he is giving his time to generating money by treating patients.


Business is something which you build to serve others by making products or by putting value on other’s life is known as a business.

We can use here the same example a dentist who is serving other people but it is not a business and he is a self-employee.

So he hires more dentists and starts opening new clinics in other areas now he is not a self employee he is actually doing a business.

As he can go anywhere and his income is not going to stop.


This is the thing which I love the most as most of us are not capable of starting a business so we can use this option to become rich.

And Most of the rich people in the world are investors.

So you can easily understand by became an employee and self employee you can create active income and that means by doing that you can never become rich.

But the next two options, Business, and Investment are the passive source and you can create a lot of wealth in these two fields.

My personal opinion is that Is you should invest sidely if your family depends as it will be stupid to leave your job and then try to make passive income sources.

You should start it as a side hustle in your free time and when you will think your side hustle is grown and it a fair amount of money from which you can use run daily necessity then you can leave your job.

Assets and Liabilities

I explained to you active and passive income so that you can easily understand what are assets and Liabilities.

This is the concept that i read in Rich Dad Poor Dad book by Robert Kiyosaki.

If you do not know him let me inform you that he is a millionaire and he created that amount of wealth on Real State.

what are assets?

An asset is anything that puts money in your pocket.

So simple Yahh!

This simple thing can create a lot of money but sadly most people ignore it.

An example of the asset could be a rental income as your home is generating cash for you or you can say putting money in your pocket.


What are Libilities?

Liabilities are the things that take money out of your pocket.

And most people spend on liabilities instead of assets.

The important thing to see if you are spending your money on liabilities is that liabilities prices always reduce over time.

An example of a liability is buying an expensive phone as its cost will decrease by time and you are spending your money to buy it.

It is also not generating any type of income for you.

Now you understood the difference between assets and liabilities.

Then you may guess now what rich people invest to create passive income sources.

Yep! you are right it is assets.

Now, what are the kind of assets you should make?

they are many kinds of assets but few are the most important and easy to make the asset.

  • Realestate
  • Stocks
  • Digital Products
  • Courses
  • Creating content in Social Media
  • Learning a new skill
Real State

Most of the millionaires create wealth in this field, and it is very easy to make as make will easily give you a loan for buying Realstate and you can increase your time up to 30 years for returning a loan.

As I said to you earlier Robert Kiyosaki became a millionaire by buying real estate you used to buy Houses on a Loan and Give it to rent at higher prices.

So that he should not have to give a loan from his own pocket and the extra money was his profit.


It is the thing which most people are afraid of And think is gambling.

But think of this like you are going to give a test without any preparation what obviously you are going to fail.

So before doing anything we need to know about the same is applicable for the stock market as it is the best asset where you can create a lot of amount money in the long run.

And among the 10 richest men in the world is a stock market investor ( Warren Buffet )

Digital Products

Creating digital products is one of the best assets which can make you a lot of money.

For example, think ofOLA and Uber made a digital product where people can easily book their cabs.

And through it, they are generating a lot of Money.

Or we can take a simple example by making a digital course which can really solve other people problems can be a good asset

Learning A skill

Learning a new skill is the best asset among all asset categories as it is the only thing that will remain with you.

And if something happens and you lose your wealth by using your skill you can create your wealth once again.

Think you want to create a digital course but you don’t have any skill to teach them what will you teach them.

that is why skill is the most important asset as it will remain with you forever.

Tax Deduction

You may people who are paying lots of their money in Tax and wants to save it but do not how?

So the question comes here is there any way to reduce our tax?

I can glad to say Yes you can save your money from taxes.

Rich people use the tax deduction method for paying low taxes and it is one of the secrets of rich people which most people don’t know.

And I am sharing with you 2 methods which all the rich people use for saving taxes.

Business Expenses

The first method is by showing personal expenses also as business expenses by doing that you are showing the government that you are using it for your business.

And because of that government will see OK, it is for business purposes and will give you a tax deduction.

For Making it simple let’s use the example that you bought a fancy car so that you can easily go for your business meeting that’s how you are showing that it is for business purposes.

And you will get a tax deduction on it.

But why the government gives tax deductions to businesses.

The answer is Businesses are creating employment in the country and people are getting jobs and which in return growing their economy.

On behalf of that favor, the government gives tax deductions to them.

Re Investing Their Money

Warren Buffet the most famous Investor of our time says that he pays low taxes than his secretary.

Yup! And that is the power of investing.

Don’t you think why wealthy people like Jeff Bezos and Elon Musk are paying low taxes than us?

The reason is they reinvest all of their money in their business useful equipment and the rest of the money in their business stocks.

Basically, they don’t have any cash in their bank all of their money is invested back in their business.

And as they have 0 cash they are paying very low taxes.


So if you are reading this line that means you have already read the article where I shared with 3 Techniques which rich use to become rich and by using you can also create a lot of wealth.

I hope this blog post has put value in your life so if you like then do not forget to share it with your friend and family.

Tell me which of these techniques you are going on today for becoming richer.

Or if you have any thoughts related to this post then feel free to share it in the comment section.

And thanks for reading 🙂

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