What is the income trap and what to do about it?

From my observations many people believe that the way to become rich is by increasing their income. So they work harder and longer and manage to survive on a basic wage and everytime they get a raise they use the extra money to buy “stuff” – a bigger car, a new TV or a bigger house. It is called a consumer society. Buy more stuff.

And on it goes – the more they earn the more they spend and now even their substantial salary wouldn’t cover their increasingly expensive lifestyle.

You see…when you focus on income you fall into the trap of spending all you earn.
More income, without the right financial understanding, habits and skills, is as dangerous to your financial success as too little income.

The solution is to earn passive income; money you make when you don’t work. Robert Kiyosaki in his books mentions the Cashflow Quadrant; with the ultimate goal; where the money makes the money and you are not exchanging hours for dollars, but where your dollars are making the dollars. The dollars work for you and you are not working for the dollars.

The question is; have you thought about this? If so, what are you doing about it? Putting your money into a savings account or Superannuation will not do it for you.

Call me biased, but I always say and will always say that you cannot go past ‘Property.’ The above diagram says ‘why.’
So I hope that this might spur you onto making some changes to your life; for the better.

Nothing changes till you change.