The United States had 98 new billionaires in 2020

Photo by Brock Wegner on Unsplash

A report from Forbes says that the USA added 98 new billionaires in the pandemic year of 2020. It was second in the list of the highest number of newcomer billionaires after China, which added 205 new billionaires in that year.

A 2021 report from the Global Wealth Report from the Credit Suisse Research Institute finds that the number of millionaires in the U.S. has reached nearly 22 million. This makes the USA the country with the highest number of millionaires.

In a capitalistic society, the rich keep getting richer and the poor keep getting poorer. One of the main reasons for the gap between the rich and the poor is the differences in the financial literacy between these groups of people. If you want financial success, you need to increase your financial literacy. Robert Kiyosaki, an American businessman, wrote a book called Rich Dad Poor Dad, which became a bestseller and got regarded as one of the best finance books of all time. Here are some of the most important money lessons taught in that book.

Put your money to work

If you only save money in your savings account, your wealth won't increase much. This is because the interest rates given by banks are too low, and will only add a few more dollars to your savings. Instead of working for money, you can make your money work for you and bring you some earnings.

You can put your money to work by investing it into appreciating assets like businesses, stocks, real estate, and bonds. The profits you earn from these investments will serve as a passive income for you.

Buy assets

In the world of accounting, the things you own are divided into two categories, assets, and liabilities. Assets are those things that bring money to you. Liabilities are those things that take money away from you. Rich people buy assets from their money and become richer. Middle-class people buy liabilities, like expensive and luxurious items, and do not become rich.

Anything you buy that has the potential to increase your earnings in the future can be termed as an asset. Stocks, bonds, and cryptocurrencies can be termed as assets because these financial instruments have the potential to give you high rates of return in the future. Expensive watches, cars, diamond rings, etc. are liabilities because these things will not make you any more money in the future.

Don't be afraid of taking risks

There is a difference between investing and gambling. When you put your money into an asset after analyzing its graphs and trends, you are investing. When you put your money into an asset without having any knowledge of the current market performance of the asset, you are gambling. You are just hoping that your investment gives you a high return without analyzing the performance asset in the market.

All investments are subject to market risk. Market risk can never be eliminated. It means that there is always a chance of loss whenever you invest. But that does not mean that you should never take a risk. If you take no risk, you would never get any gain as well. Profit is the reward that successful investors get for taking calculated risks.

Retained money matters

In the end, it's not the amount of money you made that matters, it's the amount of money that you keep for yourself that matters. Even if you make a lot of money, you would still not be a rich person if you spend it all immediately after receiving your salary. Your wealth depends on the amount of money you can offer whenever requires.

Your wealth is the total value of all the assets you own, minus your debts. Income also has a positive correlation with wealth, but it is not the only factor when it comes to increasing your wealth. To increase your wealth, you need to increase the number of assets you own and reduce the number of liabilities and debts you incur.

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Content creator and freelance writer. I aim to provide quality content that readers will enjoy and find useful. I write about relationships, personal growth, health, life, finance, and a variety of other topics.


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