Why You Are Poor?

There are 2 main reasons why a person stays poor:

• The first emphasizes differences in fundamentals, such as ability, talent or motivation.
• The second poverty traps view is differences in opportunities that stem from differences in wealth.

For most people just working hard is the only way that they know how to become rich. They have this assumption if I just put in the hard work all day every day someday I will become rich.

This is not to say hard work isn't necessary to become rich because it is, however, the idea that hard work in itself is the only thing needed to become rich is a flawed statement.

Many other factors go into building wealth beyond just working hard that most people often overlook in life which keeps them poor.

How is wealth created?

In 1900 when Henry Ford revolutionised the assembly line mode of production this gained traction across all of the United States and we see a huge boom in productivity this produced a lot more money. For the workers, during those times their input was directly tied to their output.

Input= Output (Wealth earned based on hours working in a factory)

During those times, there weren't a whole lot of jobs. Hence, in effect the more hours you put in the more hours you were able to produce the more money you can make.

Despite being a leading driver of employment growth for decades, manufacturing has shed employment over the past 40 years as the U.S. economy has shifted to service-providing industries.

The introduction of the internet as well in the 1990s into 2000 has created a platform for users to monetise and build wealth through the internet.

Currently, there ate thousands of ways to build wealth, with many different paths and not just manufacturing work.

The rat race

Here is the common scenario:

You work hard at your day job, your typing away in the office. You go in early and stay late to make sure your boss is happy. You come home late and sleep for 5 hours before going in early so that your boss is happy. When you have free time on the weekend, you give up your free time to get more done by working to make your boss happy.

And what do you get in return?

You will probably get the same fixed salary every month.

Here is the reality, although your boss may be happy with your work he is not going to give you a raise every month. You typically would need to work for a year before you get a raise. The raise probably is a small pay bump to keep up with inflation.

But what if I told you that at a 2% raise it might not even be worth it.

The downside of just working hard alone

The downsize of just working hard in and itself is that:

• You get more exhausted.
• You might have trouble sleeping when you get home.
• You might not have time to just live life outside work.

Keeping yourself busy all the time all day every day by just working hard will prevent you from thinking outside the box. 

This will affect your creativity and mental clarity which is what you need to solve problems in the world and build your side hustle and business.

Why you won't get rich just working hard alone?

Ceiling on your earling

At a day job, you are trading time for money. Here's an example, let's say you earn $10 for 1 hour of work. In a day you work 10 hours, hence the amount you can make is $100, and if you do overtime, maybe an extra hour or two. However, the number of hours you can work is limited to the number of hours in a day, so the maximum you can earn is probably $240 ($100 x 24 hours) However, we know that isn't practical as you need time to eat, sleep, shower, rest, and labour law doesn't allow that.

Even if you make $100 an hour rather than $10 an hour, eventually you will hit a ceiling as the market won't pay a higher price trading time for money. 

The rich on the other hand don't trade time for money, they trade time for value. Value is scalable and isn't limited to the number of hours in a day.

CareerBuilder found that 78% of U.S. workers are living paycheck to paycheck. Living paycheck to paycheck means you are spending most or all of your monthly income on expenses. Once essentials are paid, there's no money left over for savings.

This all comes back to creating value to build wealth:

• Mark Zuckerberg revolutionised social media and keeping in contact with friends and family through Facebook.
• Steve Jobs, revolutionised the concept of smartphones and utilised phones as a gadget for more than just making calls.
• Bill Gates revolutionised how businesses work and produced data through Microsoft.

Practical ways could even include writing a simple article, recording a short Youtube video, or creating a simple new product or service. The list is endless.

Here's the secret:

Instead of thinking of what is a job that you can work hard for and people will pay you for it, start thinking about the value you can provide that will solve a problem. It is a nuanced difference where instead of just directly trading yourself as a person, your time and energy you focus on scalability and how you can create one thing that will provide more value to people.

How can you create one thing that will provide more value to more people?

Conclusion

In life, I believe it's important to step back and reflect on what's important to you. Going through the motion of just grinding without an end in sight and without stopping to consider where this is taking you isn't a wise plan.

Finding out what value you can provide and bring to the table can be a crucial point in building wealth and unleashing your true potential.

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