How the rich get richer

One word: Arbitrage.

That’s the game the wealthy play on repeat.

Arbitrage is just leverage – finding a way to get more out than you put in.

If their tax rate will be lower tomorrow, they will wait to recognize income. (Max out your pre-tax 401k.)

If their investments are earning 10%, they’re not rushing to pay off a 4% loan. (Do NOT pay down your mortgage.)

If they make $200 an hour, they’re not doing $30-an-hour work. (Hire a housekeeper to clean and do laundry.) 

They’re always asking: How can I get two units of output for one unit of effort?

And once they find that leverage point, they don’t stop to admire it –

They go all in. Gasoline on the fire. Keep pushing until it can’t burn any hotter.