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The main reason the rich get richer and the poor get poorer is because the subject of money is taught at home, not in school. School focus on academic and professional skills rather than financial skills.

You have to understand three things to be rich.

• Job mindset.
• Taxes.
• Financial literacy.

Job mindset

The regular recipe of getting up every day, going to work, paying bills, and investing some savings in mutual funds won't make you rich. You need to map your work's impact on your paycheck. Strive to be a generalist who knows a little about many things to deliver a holistic value instead of perfecting a specific skill set.

Learn

• accounting: profit, loss, pricing strategies.
• valuing: identifying opportunities and market size.
• visibility: branding, position, sales & marketing
• communication: writing, speaking.
• risk mitigation: learning to manage

Always have something to show to yourself as an outcome. Don't toil the best years of your life in a job with no learning opportunities, even if it is high paying. Job security is an illusion. The sooner you realize better it is. Also, basing your lifestyle solely on your employer's paycheck is a bad idea because it is a single point of failure.

Taxes

Number one expense for most people is Taxes. There are two things that you need to note

• investors & business owners: Lesser tax slab than individuals incentivizing them to invest back in the economy.
• workers: Govt takes its share of tax even before you receive it. The higher you earn, the higher the tax outgo will be.

In a nutshell, Taxes punishes those who frequently take their money out and reward those who stay invested. Even if incentivized with tax credits, Mortage takes cash from your pocket, whereas every $ invested becomes your loyal employee and works 24 hours for you. So you need to factor in tax + inflation when building your cash flow.

Financial literacy

financial literacy = understanding your cash flow.

The main reason for the financial struggle is the ignorance of handling money. It is not how much you make; it's how much money you keep and invest matters. Our spending habits reflect who we are. Avoid consumer debt at all costs. Keeping up with jones won't make you rich. Instead of buying investment instruments focused only on wealth building, learn how money works. Understand the fundamental difference between asset and liability.

• Asset: puts money in the pocket.
• Liability: takes money from the pocket.

So, Focus on acquiring income-generating assets instead of assets that take money out of your pocket.

Money without financial intelligence will be, money gone soon.
E.g. athletes making millions during their careers were miserable when they were on their retirement.

Learning alone won't cut it. You need to refine these skills through practice. So, start small, and expect failures to be part of the process. We learn by mistakes, and people who avoid failure also avoids learning. Action beats inaction every single time.