The misconception surrounding how capital and income are interpreted could not be more evident, especially when it relates to the increasing wealth divide pandemic between the rich and the average joe.
Anyone can earn an income. We all have the same 24 hours so it is pretty easy to sell some to generate some monetary reward.
But, access to capital is what we need and sadly enough it is the one thing that is not available to many by design. The difference between the wealthy and the poor can be a lot of things, capital been the most pivotal.
A couple could be earning a good income from their respective jobs but don’t have the capital to make a down payment for a house. So in order to raise capital, they may decide to move in with family or friends.
It is easy to make an income when you have capital but can be difficult to raise capital with your income.
Access to capital resource is why the rich stay rich and as such maintain their power in the economic ladder. By the same token, the have nots lack such access.
The most widely recognised ways to build capital are through owning a business, buying real estate and invest in stocks. But, there are other new forms of capital that is rarely talked about, audience been the obvious one.
For example Kim Kardashian has over 250 million followers across her social media. This means she can market and sell items faster than Nike or Adidas.
Relationships (who you know) is another powerful source of capital. The legendary Shaquille O’Neal told a story great story of how he became one of the major shareholders of Google to date. In 1993 he got a call to chip in a few grand to start the search engine, which they promised would be on every computer device by the 2000s.
Google is now worth over 1 trillion and Shaq still has his stock from 1993. Click to watch video
In our travails to financial freedom, it is imperative to bear in mind that access to capital is key. Income comes in drove when capital is available.
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