How Debt Makes the Poor Poorer and the Rich Richer

The gap between the upper and lower classes is widening. In fact, some predict that the middle class will be non-existent in a relatively short time. As this gap widens what side of the gap will you be on? More importantly, where will your children and your grandchildren be? The most critical factor in determining the future of your financial standing is how you view debt.

The majority of middle and lower class people view debt as a means to improve their quality of life. Through the use of debt large homes, cars, and luxury can be afforded. Without going into debt none of these things would be possible. In a word, they are faking their lifestyle.

The rich view debt in a completely different way. Debt is used to buy things that produce more money. They leverage debt to buy income-generating businesses, real estate, or start new sectors of the economy. The very richest of all don’t use any debt and still achieve great heights of wealth.

The poor pay three dollars for every dollar they spend on premature luxuries. When they buy the newest iPod, a home that is too large, or a new car every couple years they are spending more in interest then they are on the actual products. The poor work three of every five workdays to pay interest. Of every dollar a poor person earns almost 70 cents pays for interest on premature luxuries.

Who does the interest go to…the rich. Rich people love loaning poor people money through credit cards and pay-day-loans. They also like that the poor will work three days a week for them. The rich aren’t mean, cruel, or wicked. They just understand one simple fact: wealth comes from assets not from liabilities.

An asset is something that makes money for you day and night. In a way, when poor people borrow a lot of money and pay interest their whole life, they are assets to rich people.

Liabilities are things that cost you money day and night. Interest and debt are liabilities. New electronics, cars, too large of homes, are all liabilities. Salesmen and people who provide loans will use every type of persuasion to convince poor people that liabilities are assets. A poor person will buy a liability and believe sincerely that it is an asset. In fact, middle class and poor people will argue passionately that their liabilities are assets.

Right now most people have a choice of which side of the gap they will be on. In the future the gap will be so large that the middle class will not exist and that choice wont be available anymore. There will be the extreme poor and the extreme rich. Avoid such a fate by choosing today to avoid debt and buy assets with every extra dollar you have. Your children and your grandchildren will thank you for it...I promise.

For additional information read more about Debt Consolidation Programs and Free Debt Consolidation