From the beginning of history, it has always been said that money brings money. The power of this proverb may go back to the invention of money as a tool of the trade.
Around the poverty line
Among economic thinkers, there is a well-known theory, called the “cycle of poverty," which is the proverb of money brings money. According to this theory, if you have a small income, you will have a small saving, and because you have a small saving, you will invest a little or you will not invest at all.
Because you have invested little, you will have little or no return, and because you have no return, you will earn a little, and this cycle will continue, and you will remain poor.
The only way out of this situation is to turn to save some money from your income and investing it in a useful business that, in addition to guaranteeing the principle of your capital, will give you significant profits over time. So you no longer have to worry about factors that reduce your income, such as market downturn, special circumstances, rising inflation, retirement, and anything else that fluctuates your income.
Today, with the changing economic situation, this proverb has also changed. Today, there are solutions that can eliminate the cycle of poverty. Robert Kiyosaki, a well-known American-Japanese hybrid writer who is one of the most successful people in investing and finance, points to these strategies in his rich and poor father’s book. Kiyosaki says the main reason Most people who are in financial difficulties can spend many years of their lives in schools, but they don’t learn anything about money.
Kiyosaki mentions two ways to get rich:
1- Using compound interest.
2- Using leverage. Regarding using leverage, he says that to do something that you are sure of the result, use all your power as well as the power of others, to have a greater result.
To get help from others, you can apply for a loan from banks and financial institutions, or borrow from and partner with other people. They are used or shared with them. Kiyosaki’s other solution is to use compound interest.
When a person invests, if he makes a profit, he can invest instead of making a profit, and make a profit through this new investment. Just as Microsoft was able to convert just $ 6 million into $ 1 billion every 10 years by using compound earnings and making a monthly profit. Interestingly, by making the same 6% monthly profit, if they had used a simple profit, the company’s assets would have reached $ 8.2 million after 10 years.
Published and authored by FalconProfit.com