Rich vs. Poor: How they spend money

The number one priority for a poor person is to save money

The number one priority for a rich person is to get good value.

A poor person will take a TERRIBLE trade (like pay $1 for an item valued at $0.08 that breaks easily and won’t last) because their goal is to save money.  A rich person will take a good trade (like pay $8 for an item valued at $2 that lasts longer) because their goal is to get good value.  As a result, the poor person is losing 92% of what they spend (by giving 100 cents in return for 8 cents), while the rich person is losing 75% of what they spend (by giving $8 to get $2).  Over a long period of time, the poor person overspends and the rich person underspends. The poor person thinks they are spending less because $1 is less than $8, but that’s not the whole story. The value of the trade matters, and the value of what they’re getting is so low it’s not saving money it’s throwing away money.

The system supports this: in a fair market, you get what you pay for. So the less you pay, the worse the trade is for you. The more you pay, the more you get.

Finding good value is a skill. A necessary skill both for success and for survival. The sooner you correct for this mistake outlined above the better.

Read more about articles in the Rich vs. Poor Series here.

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