It is created by Tim Sales and it illustrates this wonderful concept of how to be Wealthy. It is not really the amount of income that a person makes which decides if this person becomes Wealthy, but rather, what he/she does with the income that comes in.
In summary,
1) The poor buys “stuff”, things people buy and do not really know why they buy it for.
2) The middle class buys “liabilities”, which are things that you will have to continue to finance out of your pocket once you buy it. E.g. are like cars, boats, houses, timeshare program, a the latest electronic gadget etc etc… which once you buy, you will have an increase in your monthly/ yearly expenses. That is why the middle class are the most ‘stressed-up’ people, having tonnes of expenses and bills to pay every month. These people have the highest monthly expenses. Please do note that these can potentially become “assets” as well… if you know how to turn them into assets.
3) The wealthy buys Assets. Assets are things that put money in your pocket, as simple as that.
Some very common assets known to most people will be fixed deposits, annuities and bonds.
Once you buy these assets, money will be generated for you on a yearly/ monthly basis.
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