The quality of information varies drastically across different social circles, especially financial information, which leads to the phenomenon where the rich get richer and the poor get poorer.
In lower-income groups, financial information within their circles mainly revolves around lotteries, gambling (such as sports betting), online loans, and speculative investments in junk cryptocurrencies—all based on luck. Slightly better options include bank wealth management products with high risk of failure and various private 'pension plans,' among other traps. Or high-interest deposits from small banks, and the A-share market.
In higher-income groups, financial information typically includes U.S. stocks, especially large index funds with extremely low fees, such as VOO, or U.S. Treasury ETFs, or Bitcoin. At worst, they may have U.S. dollar time deposits from foreign banks.
Even if both groups have only 300,000 yuan for investment, the gap in the quality of information they're exposed to will cause the former's assets to continuously shrink while the latter's keep growing.
This phenomenon is known in economics as the Matthew Effect, which describes the 'the rich get richer and the poor get poorer' dynamic.
"For whoever has will be given more, and he will have abundance; whoever does not have, even what he has will be taken from him."
— Matthew 25:2
