There are fundamental problems built into our society and system. The way our government, education, healthcare, and financial system have been structured are put in place to keep the average person misinformed and in the lower class. The Federal Reserve and banking system inflates the money supply which directly affects the lower class. Less fortunate individuals end up paying higher prices, higher taxes, and no savings.
The system we live in today is the exact system the founding fathers fought for. The founders wanted to put the power in the hands of the individual to make their own choices and control their own destiny. The pursuit of happiness doesn't mean government handouts it means you have the freedom to chase your dreams and no one can take that right away from you. The government was originally put into place to protect that right. As long as you don't harm anyone else's freedom, you can do whatever you like.
The average person has many obstacles in there way, however financial freedom is possible even though the system is built against them. For example, if you are not an accredited investor you are not allowed to invest in startup companies. The government views this as too risky for the poor. I don't understand how this can be acceptable. Basically they are saying the average person isn't smart enough to invest their own money. Meanwhile, the people who are legally allowed to make these investments become richer, while the poor are stuck in their lives.
So if you're not allowed to invest in new ventures what do you do with your money? Well you only have two options, either spend it or save it. Spending your money makes you have less money, but even just holding your money in a savings account you lose money through inflation. The government reports a 2% inflation rate per year, which means you are losing 2% of your money ever year. There are many people who believe the inflation rate to be much higher then what the mainstream presents.
Robert Kiyosaki who wrote the book Rich Dad Poor Dad simplifies how the poor can get out of poverty. He breaks down how the rich spend their money and how the poor spend their money. Cashflow is defined by money coming in, which for most is a paycheck you receive from your employer. Expenses is money you spend. So you receive money from your paycheck and use it to pay your expenses. An asset is supposed to be something you own, but Kiyosaki changed this definition to something that generates money. Liabilities are actually something you own. So if you own something, but it doesn't generate you passive income, it is a liability. If you own something and it is generating you money, then it would be considered an asset.
Poor people buy things, like new cars, appliances, televisions, video game systems, and monthly subscriptions services. So as people acquire more stuff, they are required to increase their expenses. So people who buy more stuff eventually become less wealthy and put themselves into more debt. Rich people acquire assets, things that generate them more money and more assets and a regular basis.
An asset can be house, but it can also be a liability. If you purchase a house to live in, most people are locked into a 30 year mortgage and every month are making a payment to that liability. You end up paying tons of money in interest and property taxes. In this scenario, it would be considered a liability. If you purchase a house, then rent it out to someone else, it is now an asset because you have monthly income generated each month.
Warren Buffet the multi-billionaire, started out with acquiring pinball machines. He purchased one pinball machine and placed it in a barber shop. He would save all the profits the machine generated and used them to buy more pinball machines. He continued to do this until he had enough pinball machines to grow a nice profit month over month. Eventually he switched his business to the stock market which made him a self made billionaire.
So the best advice is stop acquiring every product that we are shown. We don't need the new car, new house, new toys. Instead direct that money towards something that will give you more money. There are plenty of assets that can generate money. In the cryptocurrency space buying a mining rig would be an asset. The mining rig generates more money on a regular basis. Once the cost of the rig is covered, you are now generating a nice profit every single month. I've recently changed my mentality from buying stuff to buying assets and I've already seen huge gains on my investments.
You don't need to be a genius to make a passive income. You just need to keep an eye out for the right things. Nothing comes to those who don't look. Do your research and find those hidden gems. Once you have a nice steady income from your assets, then you can start worrying about buying the stuff. Unfortunately, the poor have been taught to buy the latest new toys. While the rich become richer by selling them. In the movie Rounds, there is a quote that always stuck with me, "You can't lose what you don't put in the middle, but you can't win much either".
@johnnyyash