A lot of other fundamental reason is responsible for poverty. Beyond this, the middle-class financial case study illustrates a proper cashflow pattern of normal people that decide they will have a weak financial condition. This content is based on a graph that will revel a clear cashflow direction of a poor person. You will know being poor is not related to fortune or stars instead of financial rules that help to generate wealth.
Spends more than earning
Poor are unaware of spending how much they are earning or spending. They don’t know how to break these habits, so many times the expenses above their incoming. Common families’ earning patterns are fixed ( get a job ) in the same way opposite side expenses are vice versa (not stable).
In addition to this, Most bread earner is a salary type employe. In a job case, the amount of salary is fixed, and every month they earn fixed income, but expenditure is not stable. Moreover, in household life, a lot of expenses that are necessary like as, (children’s bills, rent, electricity bills, kitchen expenses or etc.) Another side income is fixed, but charges are not fixed. The main reason to become weak financial because the middle-class financial case study illustrates over expenses as compared to their earning.
A financial cashflow shows an illustration of a poor person how they always on the same level.
A single job or work
The middle class has only one income source that may be a government or private employe. They only rely on a job, and in a job, they have to work for money, and a contacted based income will credit in the account. Why they always poor due to lack of knowledge of money.
They only know the one way is an active way of earning by getting a job. As a result, their active hours of time waste in a job and get a fixed salary. On the other hand, wealthy people know how money is created and conceive more streams of income. They have multiple businesses active or passive both and handle more business while a day where an employe does not do another thing instead of a job.
After that, monthly income goes through household expenses ( eating, school fee of children, electricity, water bill, clothing, grocery cost or another budget. A hundred percent of common families want to buy own personal car or home. They take Debt or Emi for taking a car or home from creditors so they fall into an EMI trap and every month more expenses grow.
Some people’s salary finishes until here but if some save money for future expenses like as, home, cars or fix deposit government policies, mutuals funds, life insurance or more and the same pattern starts again to earn money from job and income goes throw expenses or at the end finish.
“RICH PEOPLE BUY LUXURIES LAST, WHILE THE POOR OR MIDDLE CLASS TEND TO BUY LUXURIES FIRST”
The most powerful reason for being poor cause monthly income only spends on household expenses or some part they save for future expenses. Finally, the graph of expenses high comparatively earning. They only earn money for expenses unknown investment. How to so invest money to stand more business ideas that can bring more money as well as handle expenditure. All year they busy to handle only expenses and the same situation which is in the present always does in the future.
This image shows the earning from A business is goes 30% to expenses or 70% to invest. Same for B & C Business and at the end only c business’ income handle all expenses where poor whole income spends on expenses and leftover nothing.
Rich people have the same 24 hours and live on the same earth but earning patterns does different.
First of all, Smart people have few or one sources of income. The income that they receive from their first business invests in more making money business ( real estate, passive ideas, the stock market or etc..) They focus to generate more business not spending money as poor want to buy dream things. Making money from one business directly invest in another business. They want to secure by creating more wealth streams.
Moreover, making the profit from other investments works, some percent spend on household expenses or the leftover wealth go back to bring more money from the investment. As a result, their major business income saves, the cost of their expenses handles other businesses. Sometimes, some passive business ideas only enough to handle expenses and more leftover money work to generate more wealth by investing.
SO MAIN REASON IS POOR PEOPLE ONLY RELY ON A ONE JOB OR BUSINESS OR RICH ATTENTION TO CONNECT MORE BUSINESS STREAMS
All in all, a middle-class financial case study can help to track the cash flow pattern. If your earning is very low from expenses you can face weaker financial conditions. A great financial life includes, reduce expenses as compared to earning and that money you waste to unwanted expenses try to invest money to build a source of income empire, one day you will have financial freedom.