Poverty, what's truly terrifying about it?

Is it that you're unaware? Most people might consider themselves poor, but do you genuinely understand what leads to your poverty? Furthermore, what's genuinely terrifying about poverty? If you believe your income is average, I recommend you patiently watch this video till the end. Before discussing what it means to be poor, let's first clarify the concept of "capital."

Imagine you ask a high-ranking executive at a large company who doesn't hold any shares, yet earns a yearly salary of one million dollars: Is this person wealthy? I'll tell you, unequivocally, that this isn't wealth. This individual can only be considered a high-level employee. You might think, "A million dollars a year, and still not considered wealthy? What does it take to be considered rich?" The answer lies in whether your income is derived from selling your labor. Regardless of your yearly salary, if you rely on selling your labor, you will forever remain in the working class. Why? Because you don't own the means of production, and in essence, you're no different from those earning a few thousand dollars per month. The only distinction is that your time is sold at a higher price.

So, what exactly are the "means of production"? These include land, factories, machinery, equipment, tools, raw materials, minerals, and ownership or partial ownership of stocks. In essence, owning these assets signifies control. A person without control over the means of production, if they cease working for a day, loses income for that day. In more severe cases, they might lose their job altogether, resetting everything to zero, forcing them to start from scratch. In contrast, those who control the means of production can continue generating income, whether they work or not. For example, landlords collect rent, factory owners maintain production, and shareholders receive dividends, all regardless of their personal involvement.

At the end of the financial spectrum, you have lending in the world of finance and rent collection in the realm of physical assets. A person may not earn as much as a high-ranking executive, but they can count on a continuous stream of income from their control over means of production. On the other hand, a high-salaried employee, no matter how much they earn, is essentially trading their time for money, earning more when they work harder and less when they work less. This is the fundamental difference between the rich and the poor.

This is a concept that mainstream economics in the West often fails to address. Understanding these principles allows you to transition from the working class to the capitalist class. Suppose you're currently working diligently, saving money, and striving to improve your financial situation. In that case, you should simultaneously broaden your knowledge and perspective. Once you've saved enough money, invest it in quality means of production. In the past, this often meant real estate in major cities, shares in reputable companies, or stable investment funds. With means of production at your disposal, you can generate a continuous stream of income. When the income from these assets covers your expenses, congratulations, you've broken free from the cycle of poverty. This is the key to becoming financially prosperous.

It's irrelevant whether you attended university, your field of study, or the company you've worked for. The core principle remains: own the means of production. Now, you might ask, "Why is poverty so terrifying?" The most terrifying aspect of poverty is that understanding it is not inherently difficult, yet realizing it is. It's akin to humans living surrounded by air but not contemplating what air truly is. Likewise, one of the greatest discoveries in mathematics was the concept of zero—the absence of quantity. It's simple, but the realization of this concept as a breakthrough was difficult and took centuries. Most people go through life without truly understanding the principles behind poverty and wealth. However, once you comprehend these principles, you can systematically break the cycle of poverty.