Income Inequality: Are the Wealthy Superior People or is the System Unfair?

I’ve often wondered philosophically about discrepancies in human ability. Human beings are inherently different in many ways. We differ first and most obviously in our physical strength, stamina, height and weight — our physicality. We are also different in our ability to think, reason and judge — our mental prowess. Finally, we differ in our outlook, work ethic and humor — our attitude.
It’s an uncomfortable realization, then, to understand that if the above are true, that some human beings are as a matter of fact ”better” or “worse” than others in each of these areas — perhaps we can even acknowledge that some individuals are “far better” than us in some or even all of those areas.

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An Example of a “Better” Person Physically

I’d imagine that in a broad test of our athletic abilities, Calvin Johnson and I would differ dramatically. I’d expect to lose in everything from a sprint, to the high jump, to long distance running, to the balance beam — and any other competition I can imagine.
Calvin Johnson would probably run a 100-yard sprint in just about 10 seconds. I ran one the other day and clocked in at 13.2 seconds That’s a huge difference, insurmountable in a lot of ways, but if we were to measure that mathematically, Calvin Johnson is probably about 30% faster than me.
Along the same lines, I can just barely reach the rim of a basketball hoop 10 feet off the ground. Calvin Johnson can reach a point that’s over 12 feet, 5 inches off the ground. Mathematically speaking, he might jump 25% higher.
What I’d like to point out here is that against Calvin Johnson, I as an average athlete would lose in every athletic competition that I can dream up at present.
I’d also like to point out that in spite of the fact that I’d lose in every competition, the differences physically between an average guy like myself and one of the great athletes of all time are not that large. He’s only perhaps 30% better.
But his income is 20,000% higher.
Is that unfair?

Small Ability Differences Result in Massive Income Differences

Today, Calvin Johnson’s athletic prowess is worth $64 million – guaranteed. In contrast, my skill set out of college was worth about $50K per year, with no guarantees. In this case, the 30% variation in our physical ability amounts to a HUGE income discrepancy — he will probably make 200 times what I make in the first 6 years out of college.
When it comes to income, folks who produce better work can and should get better pay. Calvin Johnson produces far more yards, catches and touchdowns than the other receiver options in the NFL. He is a better producer and is paid better than the rest of us as a result.
This discrepancy might be considered unfair if income really made a linear difference in quality of life. It is unlikely that any set of circumstances could arise in which I would be able to compete with Calvin Johnson physically. Thus, it would be frustratingly unfair that his relatively small physical advantages (~30% superior to an average guy like me) equates to immense earnings differences and a lifestyle 200 times better than my own.
But this leads to another question: Just how much does income matter when it comes to quality of life? Quality of life is, after all, what we really care about here, right?

How Impactful is Income Inequality on Lifestyle?

In spite of earning more income, I’d be surprised if life is actually that much different or better for a person who earns 100 or 200 times more than me.
A person with high earnings might drive a Lamborghini to work, whereas I own a Toyota Corolla. I actually prefer to bike to work — yes, even in the rain — and probably still would if I had access to a Lamborghini. Sure, the difference in cost between our vehicles is 50 fold, but the quality of life difference is probably not that large. On a daily basis, it might come back to that 30% better mark. Feel free to disagree — maybe a Lambo is 2 times better for you, maybe it’s 10 times better, but would your life be 100x better if you drove a Lambo? That initial “This is so cool, I’m driving a $1M car!” wouldn’t wear off after a month? Really?
The high earner might live in a huge house with fancy furniture and a huge TV. I live in a space that’s less than 700 square feet with a roommate. But is watching Game of Thrones really way better for the guy with the fancy stuff? How much more comfortable is his couch, bed, hot tub or the other luxuries that big spenders tend to accumulate?
The high earner probably eats at fancy restaurants or might even have a personal chef preparing his meals. I cook my own food and eat out at cheaper fast food joints like Chipotle. I would be very surprised if anyone making a median salary could not eat food nearly as healthy and delicious as the wealthiest folks on the planet do. No, I don’t eat lobster or caviar, but vegetables, fruits and quality meats are well within the realm of reason for most.

Related: The 5 Steps Necessary to Master Your Personal Finances

In my opinion, income inequality doesn’t really make much of a difference at the end of the day. Slightly better items and luxuries don’t change the day to day freedoms and passions that we pursue. I bet that most of us don’t think that life is 100 times better for a high earner, versus a low one.
I prefer to take that assumption a step further, as I think that earnings have almost nothing to do with happiness or quality of my life. Think about two different people: the guy who earns $25,000 per year but works 10 hours per week and surfs all day in Mexico on the beach, and the $1M per year executive who works 100 hour weeks. Who is happier?
The answer is that they’re probably both happy in equal and opposite ways. One may love freedom; the other may love productivity. They might also be unhappy — one might yearn for money and luxuries, while the other may yearn for freedom and peace. Honestly, I don’t know which I’d rather choose!

Wealth Inequality vs. Income Inequality

The really big problem is NOT that Calvin Johnson earns 200 times more than me; that’s income inequality. The problem is in wealth inequality.
Income inequality might best be evidenced by the immensely impactful Taylor Swift earning $64 Million in 2014. Wealth inequality might best be evidenced by this average guy who became a billionaire. One person inarguably produces a benefit to millions of people in our society. The other “did nothing for decades.”
Jay Z and Dr. Dre, are examples of famous people that have wealth. While they earned high incomes during their musical careers, its important to distinguish their financial position from that of Mike Tyson or 50 Cent.
Mike Tyson and 50 Cent are perfect examples of high-income earners with low wealth. They both went bankrupt, and it’s important to remember that’s the exact same amount of assets as the person begging on the street corner. While they will probably go out and earn more down the line, their ability to control their environment will always be limited to what others pay them. Jay Z will be wealthy forever, even if he never produces another piece of musical content.
Where income inequality becomes a real problem is when it is combined with wealth inequality. Income is usually (not always) based on merit and natural ability. Income can be taken away and can come and go. Wealth, on the other hand, is a function of knowledge and time. Wealth in the right hands is much harder to lose, and in many cases, accelerates forever.
50 Cent earning and losing tens or hundreds of millions of dollars is not a sign of systemic unfairness in society today. His power is limited to what he can collect during the most physically capable and appealing years of his life. It’s actually the folks like Warren Buffet and Carlos Slim, folks that have 1.5 million times more wealth than your regular Joe, that are the real problem. Their wealth and power are virtually unlimited and perpetually growing. It can be passed to the next generation and allowed to continue accelerating infinitely.
Buffet has $66,900,000,000 in wealth vs. $45,000 for Mr. Average Joe. And Buffet’s not slowing down.
That’s a problem.

Is Massive Wealth Inequality Unfair?

Individuals like Calvin Johnson earn good money early in their careers due to inarguable natural abilities — mentally, physically or with respect to their attitudes and their work ethic.
That part makes sense to most of us.
What’s incomprehensible to many folks is that while the mega rich billionaires of the world earn way more than Average Joe, they also understand how to make their money work for them. This is a manipulation of a money system that harnesses mathematical principles to snowball wealth over long periods of time into staggering sums.
Now, neither Buffet, Slim, nor any other billionaire necessarily did anything wrong, and they have all provided a lot of value to the world. In fact, many billionaires have pledged to give away all or materially all of their massive fortunes. That’s fantastic and wonderful, but totally optional.
Where our society fails is when the masses neglect to become aware of the fundamentals of wealth creation. This knowledge and the skill of patience and long-term thinking are learned and must be taught early. When that fails to happen, the wealthy continue to snowball into ever more powerful, almost mythical beings, while much of the society doesn’t even know where to begin.
It’s this disparity in wealth and the corresponding differences in power and control over others that are the societal problem. It’s not a problem that skilled, athletic or hardworking people are paid more. The problem is that average Joes that possess a certain type of knowledge are worth more than their peers. That problem compounds exponentially when skilled, athletic and hardworking folks with high incomes harness the system of wealth creation. It results in a situation where a select few wield the same economic power as millions.


Wealth doesn’t care if you are smart, stupid, fat, skinny, tall, short, white, black, male or female — though some evidence certainly indicates that income is perhaps unfairly impacted by these characteristics. But for wealth, it doesn’t matter if you are “better” or “worse” than someone else. Wealth is simply a function of knowledge, action and time. Wealth is a system. The principles of wealth are well within the grasp of every human that has the capacity to learn.
Thirty years from now, it won’t matter what your income level was at 25. If you understand and apply fundamental financial concepts (earn, save, invest), then mathematically you’ll automatically become a millionaire without making noticeable changes to your lifestyle and happiness. Imagine what happens if you go even just a little above and beyond in the pursuit of financial gain. You’ll wield almost complete economic power over those who either aren’t exposed to or don’t bother to learn about building wealth — and those who learn too late. It’s not a bad system, but the results can be unequal or (in my opinion) unfair when only a tiny portion possesses sufficient knowledge early enough in their lives.

Related: 3 Negatively Cashflowing “Assets” That Devastate 20-Somethings’ Finances

In our system, knowledge is key. I want to make a clear distinction between knowledge and intelligence, as finance doesn’t necessitate intelligence, but a simple ability to manage basic financial math, to speak the language of money and to develop a long-term outlook.
Educate yourself and learn about the incredible power of long-term wealth creation and the principles of investing and value creation. Make your money work for you. If you don’t, you’ll be stuck in a rut complaining about rising income inequality and not discuss the real issue: incomprehensible inequity of wealth.
Fail to learn about finance, and you’ll be like those sad folks who tried to “Occupy Wall Street.” They knew that something was wrong — they knew that the guys on Wall Street had something they didn’t and that the unfairness was represented in terms of dollars. But the Occupy Wall Street folks didn’t even know how to begin solving the problem. They didn’t understand that there are entire financial concepts that aren’t a part of their world.
This topic is immensely important to our society. I’m definitely of the opinion that early possession of this knowledge is an unfair advantage and believe that the only way to level the playing field (short of moving away from capitalism to a far worse system like communism or socialism) is to educate folks, early in their lives, on how to be successful given the current framework.
For the record, I’m personally making sure that I do everything I possibly can to take (unfair?) advantage of the knowledge I’ve gained and my youth to build wealth for myself by earning, saving and investing systematically for the long-term.
I’d be a fool not to.
What are your thoughts on this subject? What do you think is the best solution for educating our population on finance better?
Be sure to weigh in with a comment.

About Author

Scott Trench

A longtime fan of BiggerPockets and a Real Estate Investor managing his first property, Scott is the company’s Director of Operations. BiggerPockets is a BIG website, and Scott’s background in finance and big data analysis will be instrumental in the next phases of company growth and in helping to bring the resources of BiggerPockets to more investors worldwide. Scott is passionate about helping others build wealth and serving his community in whatever ways he can. In his spare time, Scott enjoys skiing, biking, and cooking, and he is a lifelong rugger.


  1. David Roberts

    I think most powwow don’t stand a chance. Think about it. By age 25, by the time you are fully developed, most people decided on college, bought a car, get married, maybe even buy a house. Every decision that buried you in debt is made before you are old enough to realize it. I think the system is set up to keep people working in the class that they are born in to. I think there are only certain ways out, and the easiest way out is to scam your way out. The hardest way is to do it by the book.
    Most reference some billionaire or top superstar as an example, but in reality those guys started off gifted or in the right family with the right connection. If you could trsin your way to calvin johnson levels then there would be alot more calvin johnsons. Why aren’t there more warren buffetts if he just “invested for the long haul”? Lots of people do that and lose. Its great hearing the very rare story of an average joe that turned billionaire.

    The fact is most people start with such little money that they can’t ever build enough to compound it fast enough into billions, and one wrong decision wipes them out. Unless of course, they run a big bank or credit rating agency that controls the very system.

    The idea is to jump on the same boat if you can, and try to make good decisions. But at the middle class level, I’ve wrong decision sets you back to 0.

    There was a study put out awhile ago that concluded once you reach a salary of 78k there really isn’t a better quality of life emotionally. I forget where i read it.

    Hopefully having parents that “know” can help steer you earlier than normal, but at 18 yrs old are you really interested in listening?

    • Brandon Hall

      Buffet didn’t just “invest for the long haul.” He’s an entrepreneur. He created his wealth.

      My parents always played CNBC every morning and night. At a young age I, along with my sisters, would watch with them and ask what everything meant. That springboarded our financial education. It wasn’t anything fancy, but it was enough to peak curiosity and highlight the importance of secure finances.

      I think it’s the parent’s fault if someone is uneducated about finances. There simply isn’t an excuse, even if your child doesn’t want to learn about it. Kids look to parents to set the example and will mimic their actions and habits. So the question is – what are the parents doing wrong?

      Scott – awesome article man. I’d like to add that knowledge of wealth creation is probably even more important than financial knowledge as that will truly set someone apart. However, I agree with you that everyone needs the basic financial education that isn’t being evenly distributed.

      • Joseph M.

        Definately true about Buffett being more an entrepreneur than simply a wealthy stock picker. Although he has been in the public spotlight for a long time I don’t think most people realize how Buffett made his wealth and how many companies he controls.
        We always hear about the stocks he owns in huge corporations Coca Cola ,etc …but Berkshire owns many more companies outright – GEICO , See’s Candies, tons of other ones.
        I wonder how many articles have been written on “How YOU can invest like Buffett!”
        or “Warren Buffett’s top tips for wealth” blah blah.
        This wasn’t a guy that just invested his savings from his job. He started a fund and got OTHER people to invest their money with him. If he had just been investing his own account this whole time and not created a business out of it , he would have nowhere near the wealth he has today.

      • Don Johnston

        I agree with @Brandon Hall that true education begins with the parents. In high school, one classmate was already buying his first investment property. His dad was in real estate. Another was buying and restoring and selling MG TD’s from the 50’s. This was in the late 60’s. Obviously, someone had taught him.
        What is unjust (not unfair) is the breakdown of the family unit. That term does not exist today for the majority of “families”. Youth of today are at a disadvantage from those of the past generations BUT that doesn’t mean the opportunities aren’t still there.

    • Scott Trench

      David – I agree that most people don’t stand a chance, but only in the sense that they don’t believe that wealth creation works like I describe over the long haul. It’s very difficult to show someone how their $10,000 is going to be worth 10, 20, or 50 times more than that with a diligent effort over 30-40 years. It’s even harder to show them that when you couple that with $11,000 more saved and invested in year two, things go even further.

      If you aren’t able to see that and understand the math behind it, you’re right, you don’t stand a chance!

    • Susan Maneck

      Hey, I only stared working on serious wealth creation four years ago and I’m sixty now! As a professor at historically black college and now a landlord, I can tell you that the lack of understanding about how money works is a major drawback for the poor. Let’s face it, we don’t work any harder than they do, for the most part. I wish my university which requires students to take too many gen ed requirements would add one in home economics. No, not cooking, sewing and cleaning, but personal and family finances, how credit works and how to avoid predatory lending. I tell my students, if you don’t want to stay poor “don’t drink, don’t do drugs, don’t rent furniture.” They laugh at the last one which is the one I most want them to remember. What the OT prophets hated most after idolatry was predatory lending.

  2. David Roberts

    Yep, and he started with a lot of money relatively speaking. And his parents were involved in investing and business.

    You can blame the parents of children but parents can’t teach what they don’t know or understand. My mother and father didn’t go to college, so how were they going to teach me about college? All they knew is working hard to pay the bills, and pushed me to be better than that. Saying its the parents fault is too easy.

    Where is the class anywhere in grade school that teaches you about credit cards, budgeting? It isn’t there. Who sets up the educational system? Hmmm… no, the simple fact of the matter is society is programmed and brainwashed into thinking one way, and to making others feel that it is impossible to not have a day job.

    Which leads me back to my point which was by the time people realize it, the system already has them by the throat.

    Anyway, i enjoyed the article.

    • Says who? You sound like you have already given up. What about people like Oprah who had a horrible childhood and started with nothing?

      We can blame the educational system or bad parenting or the government, but the truth is we need to take personal responsibility. I’m one of those people who knew nothing and came to the realization that my own ignorance was to blame for my financial situation. I followed the Dave Ramsey plan to get out of debt. No it isn’t perfect, but for most people, his plan is the best thing to help.

    • Scott Trench

      Anthony and David – I think that I lie somewhere in the middle of both of these arguments… thank you for sharing your thoughts!

      I totally agree that parents that have not experienced financial success or have proven incapable of creating wealth over a large number of years are not to be expected to teach their children. This gives the children of parents who ARE good at this and who DO have lots of financial knowledge to pass on a huge advantage – this is the unfairness that I am attempting to rectify.

      On the other hand, after decades of proving incapable with money, it is incumbent upon the financial failure to reform himself and realize that his stuff isn’t working. Anthony is 100% correct when he says that most people can easily follow a basic plan like Dave Ramsey’s, resulting in a better life.

  3. Larry S.

    There is certain internal wiring that you are born with. I taught my two sons quite a lot about earning a living and making money. At age 40 today one is quite wealthy and one is poor and spends every penny.
    One invests in good wealth building activities. The other spends money on foolish “stuff”. I dint think its the parents fault. I think some are born to be wealthy and some to be poor due to their mental wiring..

    • John Barnette

      Yes agreed. Father is a retired banker and grew up with financial education, a real interest in it from young age, and unofficial mentoring for a good portion of my life. I would consider myself weathy be most accounts and definitely am a saver, investor, builder type. Whereas my brother spends and spends, doesn’t seem to have financial common sense. Some is probably due to differences in innate interest in the subject matter as youngsters, and I know my dad really tried to instill the importance, benefits, freedom, etc of financial planning common sense. ..but he just doesn’t get it. Luckily he married someone who I think does have more “natural” behavior than he does…but not likely the education.

      Interesting topic

    • Scott Trench

      Larry – thanks for sharing this. I think that this is a great example of how financial education can vary even in one family.

      I will follow up with this thought though – if the wealthy son hadn’t received an early financial education from you, would he still be wealthy? Is it possible that his affluence today can be both partially attributed to his wiring and the teachings you passed on?

  4. Arlan Potter

    The real,issue is a lack of drive. My Dad and Mom were not rich, in fact my Dad was a high school dropout who joined the Air Force. Retired a Tech Seargent. We weren’t dirt poor, we had enough but it was not a luxury life. Even imagine that I had to buy my own cars. But we had a great family. Now about the wealth part, I was a near college dropout at 21, working on a trash truck for the city. At a dead end on a trash truck before the invention of trash bags. But I never felt that I would not be a businessman, to get someplace. I ended up with a roofing job. Then my own roofing company, worked full time while going to college to get an Accounting degree. Staff account, acts manager, Controller, CFO. Having my personal house paid off by 33, started buying rentals at 44.

    I just did the next thing. Moving forward. I never planned to get into the rental business but when presented with the idea, it stuck.

    Drive someplace. Leave the video games behind. God has blessed me and I kept moving forward. Most people are too content with little, and therefore are never able to get anywhere, or to be able to give

    • Scott Trench

      Arlan – I agree that drive is a huge component, just like physical and mental health. If you are detremined to succeed you can make up for a whole bunch of weaknesses in the physical or mental arenas.

      Thank you for sharing.

  5. David Roberts

    My father and mother divorced when i was 7. My dad had a very lucrative illegal business building and selling cable descramblers, but also enjoyed taking drugs. Had it all, then lost it all. He went into the navy right after grade school and learned electronics there. Its a shame that’s all he learned.

    He left my mother high and dry with us two kids. Somehow she never gave up and busted her butt to make sure we always had a decent life. Somehow i went to engineering school and my sister is a doctor. Now there’s no way we should have come out of that broken home in this condition. Granted we all have our quirks! Lol. It certainly wasnt my mother watching cnbc, and it wasn’t learning about budgeting in grade school or college. I dunno. Maybe like someone else said, we are all just wired different and that has an impact on whether we learn sooner, later, or never.

    But the system still gets you early. The system puts that noose on your throat early in life. Its wonderful to see people succeed despite that, whether its one right decision (like investing in real estate in 2011) that propels you, or just digging in and working your butt off..

  6. The author put a lot of thought and effort into this article and I thoroughly enjoyed it. However, the use of the word “unfair” to describe the inequality of wealth is a bit naive. This is not a new phenomena, despite what some would have you believe. For just one relatively recent example, John D. Rockefeller at one point was worth in today’s dollars over $500 Billion. He reached the peak of his wealth after the breakup of Standard Oil by the way.

    This wealth inequality has been part of the human condition for thousands of years, and will continue to be for thousands more. It’s not unfair, it’s reality. To use the Standard Oil example again, no matter what the masses do to try to curtail the growth of wealth by some, it will not work. The masses are not capable of creating a system where the wealthy will not exist. Not yet anyway.

    Trying to control wealth accumulation is like trying to control the free market. No matter how much people tax, price-control, flood the market, break up monopolies, etc. the market always adjusts in its own way. The black market flourishes, shortages exist, etc. It can’t be controlled by mortal humans. The market is like a law of nature, more powerful than us.

    For now, so is wealth inequality. Human society has hundreds, if not thousands of years to mature before it could even come close to managing wealth inequality. Hopefully, when it gets there, it will realize how insignificant the whole “issue” of wealth inequality really is.

    • Joseph M.

      True wealth inequality has been around forever. Many people speak of it as a new thing because many people don’t know much about history.
      I agree that trying to break up monopolies has been pretty much futile. Lot’s of companies still have virtual monopolies for the most part.
      It seems that more people are focused on income inequality because more people live day to day or month to month.
      Many cities are starting to enact laws with the goal of raising the minimum wage to $15 an hour. Personally I think this shows that many people including top politicians don’t understand how business works and how small the margins can be on a small business. I predict that many businesses will leave these areas or layoff staff and definately will raise prices significantly. Not a good situation for anyone. Of course for the politicians it’s a win because it’s not costing them any money..and they are ‘giving the people what they want’ .

    • Scott Trench

      Thank you for this thoughtful comment Dana! I’m glad you enjoyed it.

      As for the use of the word unfair, I’m sure that naive is an accurate word to use when discussing income inequality as they relate to the masses perceptions of immense wealth inequality. That said, I think that “fairness” is the root of the system and that the perception of a “lack of fairness” is what results in mass discontent, political firestorms, and movements.

      Fairness is a perception. Equity is a mindset. When something is unfair, it’s because people believe that someone else has an advantage that cannot be overcome or sets them too far apart.

      Restoring “fair” to the economy, such that every citizen FEELS that the game is equal is critically important to the long term health of our society. Therefore, while I agree that unfair is immature and naive, I also think that it is the correct word to use in this context. It’s the one that matters to the people complaining about income inequality.

      • Erik Nowacki


        First of all, thank you for a thought and discussion provoking article!

        I agree with you that fair and unfair are part of people’s perception. If people believe they are treated unfairly or that the system is rigged against them in an unfair way, there will be protests and political pressure, that usually results in some form of program that ends up hurting the people who protested; i.e. minimum wage, rent control, war on poverty or any number of failed programs and policies.

        What if every individual was instilled from birth that your wealth and income is directly proportional to your productivity and creativity; now go and figure out how to become as productive as possible. If people looked inside themselves instead of looking to the government for a solution, we would have more growth, more wealth and fewer government programs…

        Just my little utopia…


        • Brad Lohnes

          I agree with your comments (again :-). I think that the difficulty is that SO many people don’t know this truth. I certainly didn’t; I was raised by good parents with absolutely no understanding of finances. I was turned loose in the world and did a predictably brilliant job of squandering my earnings. I knew how to work, but not how to build wealth. It took me until I was 37 to take the red pill – and I have to credit Robert Kiyosaki’s Rich Dad Poor Dad for that. Fortunately, I had picked up just enough “basics” over the years that we weren’t deeply in the hole and we were able to turn things around pretty quickly.

          Sadly, as I know from my upbringing and those around me, “the masses” are living under the illusion that somebody else is in charge of their lives, and therefore responsible. I even see it in my industry (software development) where people who are well-paid for their knowledge and skills still rant against “the greedy rich”, big business, etc. Business owners are painted as villains, and it’s so frustrating that this comes from people who actually earn a good living from just such a business. The concept that I could be the business owner, for example, wasn’t even in my thought process.

          This brings us back to Scott’s point in the article – that education is the key.

          We now have 3 little kids, and I’m just at the very start of building my own corner of the utopia you speak of – just starting to teach my 3-year old about basic money concepts. Nothing too fancy to start with, but it will definitely build to the concepts that you mention, in due course. I plan to feed my kids little bits of the red pill with their meals so that they grow up seeing “the matrix” the whole time. 😉

          What I really want to do, is to find out what, if anything, is being taught in our local schools and if it’s not adequate, potentially volunteer my services to at least go in and speak kids about these concepts.


    • Angel Ruiz on

      Like the article. Like the comments.
      Agree that all counts, genes, “education” (not just schooling, life itself and like I think Aldous Huxley (decent man from an indecent family) said Experience is not what happens to you; it’s what you do with what happens to you. The attitude mentality and drive make a lot.
      Don’t need to be a millionaire CEO to be happy and thus “rich”. Sometimes it’s quite the opposite.

      See some can see something’s wrong with the system. So I’ll let you know what it is:
      The lack of any morality among the top. The Trillionaire gangs Rothschild the UK through the Waterloo battle scam and kept the Bavarian Illuminati Mafia murderous scams until now. Their next in grade, the Rockefellers, leveraged by Rothschild US front J P Morgan Jr (whose father J P Morgan Sr had been openly a Rothschild’s agent), have been openly involved in politics, mainly as senators and through their multiple “Philanthropic” Foundations, Institutes and “Think-Tanks.
      You can have a better notion by listening to Aaron Russo or Prof. Anthony Sutton.
      Deeply evil and immoral people who plant Crisis, Wars and deliberately Poison (fluor, drugs, vaccines, GMOs, herbicides, etc), and dumb-down (entertainment, drugs & school system) humans and divide and disrupt society and family For Their Fun and Profit.
      They have of course accomplices, some fully aware, most just by opportunity.

  7. Joseph M.

    Good article, I feel it brings up some important points. I definitely agree that there is hardly any emphasis on wealth creation in schools , at least from my experience. If isn’t a self learner, they will be at a huge disadvantage.
    Our whole system seems to be setup for people to achieve average results. People are investing money in their 401k or IRA accounts and then they are told they can expect an ‘average’ return of X and if they put X amount each month they will be able to retire by X year.
    I had read a little while ago that even if people want to work in their later years, this plan doesn’t always work out. Unfortunately many people will have health issues in their later years, and then layoffs, etc make it so that many people are forced to retire early.
    I spoke recently with a former boss and she has been working at the same place for over 30 years, but the politics of the place has changed and she doesn’t feel that she has any say there anymore and doesn’t feel wanted. She was expecting to work longer , but thankfully she is good with saving and investing and said she can comfortably retire. She has done well with stocks but spends a lot of time doing real research on them. In addition she owns a couple of pieces of property that are high valued .
    Hopefully she will have a nice long retirement.
    For others that have not built wealth it’s uncertain what will happen. You hear some pretty startling data about the numbers of people that are closer to retirement age that have practically nothing or a tiny amount in their retirement accounts.
    I never understood the idea of planning to retire by 60 or 65 or whatever age. More people should have the goal to retire much earlier; if they reach that goal and they still want to work they can still work and have the satisfaction of knowing that they can leave at any time and are not dependent on that income source.
    I feel like we still have an unhealthy perspective on money and wealth in this country and perhaps in others too. We know that people (usually) do not become wealthy just by working at a job and investing in a 401k. I’ve been reading the Fortune “Richest Lists” since I was younger and I never once read, “Bob Smith became the #52 richest man in America by showing up at work on time, living below his means, and investing in his employer’s 401k” . It’s always Bob Smith started his own business and grew it to be huge or Bob Smith bought real estate and developed it or something along those lines. I believe it is possible for someone to work as an employee (hopefully doing something they enjoy) and become wealthy too, with the right type of investments.
    Of course not everyone wants to be on the Fortune 500 richest list, but the mere multimillionaires typically made still achieve wealth the same way through business and real estate (which is a type of business anyways) I think a big issue is that there people associate a ‘mystery’ to the wealthy. “The Oracle of Omaha” for example is used to describe Warren Buffett. There are many that feel wealthy have some kind of gift that allowed them to achieve wealth and they are just mere mortals so pursuing wealth for themselves would be futile. A lot of people view wealthy people as being greedy and that they are “hoarding money”. If you view a certain type of person as greedy (negative) , you won’t take steps towards achieving wealth.
    As far as our possible future Presidents. I heard Hillary clinton is going to focus on ‘growing middle class incomes’ and Jeb Bush has stated that Americans need to work more hours. I had read that Jeb makes $45,000+ for a speech. I wonder how that works out to per hour!
    I think it would be great if these very wealthy candidates were open about how they achieved their wealth. I know that Jeb made a lot of wealth in real estate , it would be interesting to hear more about that. Of course Donald Trump is also running too..but I think we’ve all heard pretty much everything he has to say and he has several books about real estate investing too.
    I’m willing to bet most of them won’t spend much time talking about their wealth and will speak more about the average ..or ‘middle class’…

    • Brad Lohnes

      I agree that it’s strange that people still have the goal of “retiring” at a certain age – usually around 65. I think it’s tied to the ability to collect a pension, since most people haven’t planned for their own source of income in retirement. Anyway, that’s why I like to think of it as “financial freedom” rather than “retirement”. Once the goal is financial freedom, then you can focus on how long it will take to achieve that, and it becomes obvious that if you want to do that while you’re still young, then you need to do more than just set money aside and gain “average” returns. Don’t get me wrong – I do this, but it’s the backup plan. Creating wealth is, of course, the step change that will speed up this entire process. Starting younger, and starting without debt, also help immensely. This is what I want to pass on to my kids – so that they could “retire” by age 30, or whatever goal they set for themselves.

      Besides, who wants to just stop working and put their feet up for the rest of their lives? This may sound great when you’re working hard every day and not getting a rest, but after a bit of a rest, most people – at least those with drive to get ahead – will want to engage in another productive activity, even after reaching “financial freedom”.

      • Scott Trench

        I totally agree with this point Brad! Why would you ever want to stop and just “do nothing” that only sounds fun for the guy who hates his job. The good news is that even by getting just halfway to financial freedom, in just a few years of intelligent investing the guy who hates what he is doing can take a paycut and go do something he loves. That’s the power of financial math and passive income.

        Choices. Opportunities expand exponentially for the financially free. They aren’t even existent for the cubicle slave.

    • Scott Trench

      Joseph thanks for this thoughtful comment. I agree that most people are set up for, and receive average financial results, and also agree that most people have the opportunity to do far more without too much added effort.

      As for our political candidates’ wealth – value is created through scale (reaching lots of people) and magnitude (reaching them deeply). I think that whether or not you agree with these politicians views, all of them have achieved vast scale and magnitude in reaching folks. It’s thus no surprise that they’ve been able to accumulate vast fortunes for themselves.

  8. Michael Woodward

    The great thing about this country is that everyone has the freedom to choose their own path and do as much (or as little) as they want. I always hate to hear the question come up about “fairness” because I think it gives people an excuse to blame someone else for what they have or don’t have. Unfairness is obviously a part of life whether it’s gazelle vs. lion or Buffet vs. me but I’m never going to use that as an excuse. I choose to take responsibility for my life.

    Thanks for the article Scott!

    • Scott Trench

      Thank you for this comment Michael – I can see that you have the correct mindset. I think I replied to a similar concern with “fairness” earlier, but I’ll say it again real quick:

      Fair and Unfair are both naive, immature words that should have nothing to do with shaping one’s own decisions. That said, in the context of important issues, they are what people care about. Fair is a “feeling”. We have to make the system “feel fair” for it to continue to produce the excellent results it has for hundreds of years. For that to happen, everyone has to be aware of opportunity. The easiest, lowest cost, highest impact way to do this, is to make everyone believe and understnad the principles of wealth creation.

      That’s through education.

      “Fair” and “unfair” are immature and naive words. But they are the right words in my opinion.

    • Erik Nowacki


      One way to view the fairness issue is that since money and finance is not taught in school, the people who are taught at home or those who have the drive and determination to learn about it outside of school have an advantage.

      If these topics were taught to everyone in school, you would still have a situation where only some of the people would act upon the information and begin investing. However, you would lose the fair/unfair argument as everyone had the same basic information.

      Robert and Kim Kiyosaki mentioned on a recent podcast that they had tried to donate teaching materials to a local school and were met with a cold shoulder “we don’t teach about money.” So while it is sorely needed in schools, it may be an uphill battle to get there…


  9. Peter Mckernan

    I would agree with Michael, yes there are some people that are born into different genetics or intelligence, but should that cause someone to turn cynical or use blame to help cope? I know that there are many people that grow up in all different situations, but to look at as a flaw is not a way to look at it.

    This should give motivation to what a person needs to strive to. Buffett did not make his first million till 31 years old. He saved, saved, and saved some more until his wife found a check with a total that would cover the cost of a house in full and she begged him to buy a house. He lives in that same house today. That lavish life styles was not for him and is not for him; however, some people that are wealthy live lavishly and they may or not be happy.

    This brings to mind Jack Canfield, he is a motivational speaker and speaks about stories of people that have succeeded even with the odds stacked against them. Also, think about the podcast that Grant Cardone was in. He spoke about living to his potential. Listen to Dave Ramsey’s rants about people blaming the system and it being broken.

    Just turn those negative odds into motivation.

    Thanks for the thoughts!

  10. Erik Nowacki

    As to wealth inequality, whether it is fair or not depends on if you think there is unlimited wealth or whether we are all fighting for a slice of the same pie.

    I firmly believe that wealth is created, not redistributed. If Buffet and Trump have created more wealth than me, good for them, but it doesn’t take away any of my opportunities to create wealth for myself. If a home builder spends $100K to buy a lot and materials to build a house, which he later sells for $200K, the $100K in additional wealth to the builder was created, not “stolen” unfairly from someone else. If a person creates a great phone app and sells 100 million copies for $1, good for him or her, wealth has been created, but it doesn’t mean someone else can’t write an even better app tomorrow.

    If you are of the mindset that we are all fighting for a slice of the same pie, then Buffet’s enormous slice is a problem as it limits others from achieving wealth. That’s an Occupy Wall Street argument and I’m not a believer in their cause.

    I wholeheartedly agree that the school system is failing our children. The school system should assess each individual and educate them so that they can take maximum advantage of their skills. The schools should teach how to create assets and build wealth, but because most teachers are non-wealthy union members, they think their job is an asset; thus perpetuating bad information to the kids.

    Everyone can create assets, sometimes out of thin air, with hard work and creativity. It is our society’s great failure that more people are not told that fact.


    • Scott Trench

      I think that this is spot on – you are completely right – but to the untrained mind, abundance is not a concept. The untrained mind sees business like monopoly – there are X properties and Y houses and hotels. Creating new hotels and houses is not a concept.

      Maybe it would be if we educated people to have that mindset though…

    • Chuck Forgo

      Totally agree Erik,

      Growing up saying something wasn’t “fair” was forbidden in my house because “life isn’t fair.” We were poor. Everyone that’s a member of BP is striving for more than they have now. If we succeed do we become the problem? Whether you are introspective, look to an individual like Buffett or to generic “They” for inspiration, we are all looking to create wealth; this site is literally called Bigger Pockets.

      As far as I’m concerned the people that are at the top had to/have to fight for what they accumulated, and they are living proof that it can be done. Very few of them had billions fall out of the sky into their laps, the ones that do will manage to squander it. Buy a super-yacht, it’s going to put dinner on the table for a ton of people who work to get it from concept to billionaire opulence.

      I know this is a thought provoking discussion so I will apologize in advance for voicing my own opinion, but one of my favorite things about BP is that it is so focused on all areas of real estate and not is not filled with politics, religion and sex. I hope to see less of this type of content so I can focus on all of the other really great, really valuable content available to us here.

      Lastly, I don’t know how long it’s going to take me to get there, but I hope to see all of you way up there at the top somewhere down the road!

      • Susan Maneck

        But it simply isn’t true that most of the people on the top fought for what they accumulated. Self-made billionaires are in the minority. Most inherited wealth. It is a lot easier to become a billionaire if you’re born a millionaire. Even self-made men like Mark Zuckerberg came from a sufficiently wealthy family to have the best education money could buy (even if he dropped out of Harvard.)

  11. Brad Lohnes

    Good article, thanks. It’s very thought provoking in certain areas. I just wanted to mention that it seemed to skip from “some people make more money because they’re stronger/faster/smarter” straight to “you need to keep more of what you earn”. I think that, to some extent, people kind of expect stronger/faster/smarter people to earn more – but what is truly surprising is that this is not actually the primary factor at all, even in the “earning” space (as opposing to the “keeping” space). Sure, some amount of people will have talent in the areas of entertainment – athletes who excel at particular sports, musicians in particular genres – and these will end up being well paid for it.

    But the key to the earning side as well is actually more about knowledge than talent. That specific knowledge is “how to create value” – some others have already mentioned it in the replies. If you know how to create value, then there will be no upper limit to your earning potential, particularly when compared with salaried occupations/professions. And then it doesn’t matter how strong/fast/smart you are – you will earn lots of money if you know how to create value, and then you will keep lots of money if you know how to manage it.

  12. Gerardo Dominguez

    Great article, very thought-provoking. I think income inequality is a HUGE problem in this country. And I think one of the main reasons it exists is a lack of education. Access to university education will, at the very least, lead to better paying jobs. More importantly however, financial education is all but non-existing. I’m blessed to live in a day and age where I can ask my friend Google any random question that pops in my head and get an immediate response. I am blessed that I can literally teach myself anything my heart desires by spending some time online; youtube, khan Academy, BP!, etc.

    However, there are unknown-unknowns in this world. If no one has ever taught you that financial education is important, or for that matter, what financial education is….then how would you even know what to learn more about. (What’s a 401K? How do I use a CC responsibly? Why is having a budget important? How should I save for retirement? etc)

    An early access to this type of education (or really any type of education) is unfair because not everyone has easy access to it. It’s not the fault of those who have said access, so they shouldn’t be chastised. However we, as a country, need to do a better job of making education easily accessible to all.

  13. Jesse T.

    It is an interesting article. I think the point that wealth doesn’t greatly increase happiness is an important one.

    Buffet is in someways a poor example because he has no interest in creating a financial dynasty – his intent is to give away the vast majority of his wealth.

    The small differences in ability leading to vast income differences is very interesting. It probably gets even more dramatic comparing the borderline NFL receiver who might net 200K over his career to Calvin Johnson.

    Have their been any studies comparing rich and poor in some type of marketplace/economic simulation?

    • Scott Trench

      Jesse – now THAT would be an experiement. Take a bunch of folks, wealthy and poor and reduce them to zero assets. Then put them back into the business world and see how they fair five years down the line. I bet that things go right back to that previous dynamic. And fast.

  14. Tyler Flagg

    Leave it to Scott Trench to get people talking! haha. Great article man, I enjoyed the read. I couldn’t agree more that financial literacy is a huge problem for the majority of people in the country. Heck, it wasn’t until I was 25 that I realized I was going down an unsustainable path and needed to fix myself. Luckily, now that I’ve seen the light, I’ll be able to pass this knowledge on to the next generation of Flagg’s.

  15. David Goossens

    I really enjoyed the article, Scott. I believe that part of the problem with wealth inequality has to do with what people want out of life. I’ve met people who shoot for stars, budget, save and invest for the life they want. I’ve also met people who are content with working all week so that they can drink beer and go fishing. There is nothing wrong with that, but the decisions made based on what a person wants out of life will affect the wealth level achieved.

    • Scott Trench

      Hey the thing is you can still work all week and then drink beer and go fishing… and still build a very solid nest egg. Just cut back on something else! This is the point I’m trying to make – you can easily have it ALL with the correct knowledge base!

  16. Colin Smith

    This is certainly a thought provoking article. I am with others that there is not a single slice a pie but an essentially unlimited amount of wealth to be attained. Inflation is the basic concept of unlimited wealth. A pie is an unchanging one size and if everyone has to fight for a portion of it then it would be more challenging. As inflation grows, so can our our wealth leaving us limitless opportunities while those who want, want, want and feel entitled to certain lifestyles continue to live the poor life seeking the next immediate pleasure.

    • Scott Trench

      Colin – I agree completely with the sentiment that the pie is ever expanding. One man’s gain is not anothers loss. But I also think that it’s almost impossible for the untrained eye to veiw the economy that way. I see it that way because I studied and read, and learned about this subject over the course of years. I do not fault the average joes for being unable to see it without being exposed to matter on the subject!

  17. Laura Johnson-Morris

    Great article! My parents gave me a lot of personal finance lessons growing up (always pay for cars in cash, avoid personal debt whenever possible, live within your means and save the rest, etc) but I didn’t learn much about how to build wealth until my mid 20’s. Now I’m excited to put these new lessons into practice by investing in real estate and other endeavors…bought our first duplex this Spring. I really wish personal finance AND wealth creation were taught in schools. I had a teacher in high school who taught us about compounding interest and that lesson has stuck with me ever since…schools need more teachers and classes like that!

  18. Aleksandar P.

    Well written Scot.
    The problem with thinking in terms of “unfair system” and “the wealthy are oppressing the poor” is that it shows a stunning disregard for the capital formation process and it assume that wealth is built at the expense of others rather than by providing others services that they need (through your labor) and products that they want (through your ownership interests).

    Now, lot of people ask – If this has always been the intrinsic nature of the relationship between those who are business owners and those who are product consumers, then why has inequality risen in the past few decades? The short answer to that question is that almost incomprehensible shifts in technology have changed the rules of production over the past four decades in ways that make it more lucrative to be an owner of a business than ever before.
    Understanding capital formation, and the need to acquire ownership interests, is what is going to separate those who can take a page out of Uriah Heap’s “Easy Living” from those that have to continue to grind it out.

    • Scott Trench

      Thank you Aleksander! I agree that “unfair” and “oppressing” are not correct. But only the wealthy feel that way. How the majority of folks FEEL is the important thing at issue.

      By educating everyone equally so that everyone understands capital formation, you at least partially solve the problem of people “feeling” that the system is unfair. They are no longer poor or stuck financially becuase of an “unfair system” they don’t understand, but due to their own actions (or inaction).

  19. Jace Mattinson

    Great article! In short, wealth inequality or income inequality is fair. We live in a free market and people tend to pay you what you are worth or what the market says you are worth for a particular job or skill. Getting paid more or creating more wealth comes down to creating more value in the marketplace for others and value that people will pay you for.

    Yes, there are some people that might get paid a lot that arguably don’t provide a lot of value to the broad range of people, however, those people (usually celebrities) have built a brand and use that brand to provide value to companies using their brand.

    If you look at the wealthiest people in our country, they are all entrepreneurs who have created massive value for others. Think about Google, Apple, Facebook, Microsoft. Created by a small team that scaled into a large operation that provides a whole lot of value to others. Rightfully so they are generously compensated for it. Is that unfair, definitely not. They totally deserve it and they can manage their wealth however they want, however most of them are extremely generous which is great to see. Might as well spend time figuring out how to join them than moaning about “wealth inequality.”

    With that said I do agree with some previous statements that the average population is financially illiterate. We spend countless hours studying all sorts of subjects in school, yet fail to have a basic understanding of financial principles that will affect us our whole lives. Much of the history we learn or science experiments we do, we’ll never encounter again or we’ll forget, but financial habits that should be taught at a young age will stick with us forever. Who’s duty is that? Well I think the responsibility is to be shared between parents, schools, and individuals.

  20. Wilson Churchill

    Of course there are differences between individuals and different groups of people. Taking money from someone that understands how to make money and giving it to someone that doesn’t have a job will not make the one without a job any more wealthy. Income tax policy is not a cure to “wealth inequality”.

    One thing we don’t hear about in the media is how importing hoards of poor people from third-world countries affects income inequality. If you separate groups by ethnicity, you will find that the “wealth gap” is much smaller.

    The way to decrease the wealth gap is to force the classes to work together through protectionism. Raising the minimum wage will only force unskilled people out of the labor market. The key is to increase the demand for labor (and wages) by creating incentives for businesses to operate domestically.

  21. Michael Di Paul

    Hi Scott,
    Good posting, but I’m not sure you really addressed the topic fully. It seems most of the posts, not all, just seem to be of like minded people agreeing on wealth creation strategies and giving their advice…all good stuff, but not really addressing fairness…whatever fair truly means! Some opinions spoken as fact.
    I like your take on things Wilson.

    As an investor myself and someone who came from poverty, I can relate very well to the mindset of success and agree with the process and the fact we’re not taught about this when we should be…at a very young age.
    I quit a 6 figure job at 35 to return to school. Graduated at 40, broke and in debt and am now a successful professional and business person who also owns real estate…and plans to own much more! Mindset is what did it mainly.
    I’d like to share my experience as an American living abroad for a different perspective.

    I’m much further ahead in a foreign country than most I graduated with in the US. Much further!

    The reason I mention this is I now live overseas and do return to the US periodically. When I first left, I spoke and sounded EXACTLY like most of these postings. just put my name on one of them! It took me awhile to see it a bit differently and how harsh it has become at home.
    Things are definitely different, it feels harsher and angrier than when I left…Jan 2008.
    People are exhausted, stressed and believe it’s normal. It’s glaringly obvious. We take 4-5 weeks off and travel around the US and Mexico visiting friends and family. People thinks it’s odd we have that much time and money to travel.
    The inequality situation there is much more than just the market doing its thing. It feels like an economy only and no longer a society.
    This inequality issue is much more than a market issue only. Prior to my current profession, I studied, economics, finance and such. Read Adam Smith, Ayn Rand etc. When disparity reaches certain levels, for whatever reasons, societies start to breakdown. History has shown this time and again . Look at the US from afar and the place seems to be coming unglued! Mass shootings, etc.
    So what about fairness?
    People at the bottom are starting to learn a bit more about how things work at the top and don’t believe that their input to the success of a business is worth as little as they are paid when they know how profitable a business is. This makes them angry and hence the feeling of unfairness. Once again, fair is subjective. Also, little time off, no retirement, etc.
    Ben Franklin once said, time is the stuff life is made of, use it wisely…not exact words maybe, but the sentiment is understood. To that end, what is someone’s life worth if they are helping that company by giving up their time ‘life’ to help them reap huge profits. This stuff used to be common thought at one time in America. Again, I fully understand what the market rewards. Are we nothing, but just a market now? Some food for thought.
    They know now that CEO’s run up stock prices by buying back shares, so they can collect a bonus, instead of investing those funds to grow the business…or God forbid, pay a bit more. I’m not sure this adds any value to anything, but short term-ism…and of course bonuses. Slows economic growth too.
    I worked in corporate America…this is rampant. I’m not a left wing socialist, etc, just got a little perspective leaving the ‘bubble’ so to speak. Please take it as this.

    My experience here in Australia, where the minimum wage is pretty high…maybe too high, (another topic!) I thought it was crazy. Industrial relations are stronger and people are much better paid. Visitors to the US are shocked at the amount of homelessness and violence when they visit. They can’t understand why it’s this way in the richest country on the planet. They love the US, just perplexed. They see the riches, even though the average Australian is wealthier, but to what end if so many people don’t share in it and the country is so polarised. Why bother they say! Remember, just repeating the impressions!
    My friends that own small businesses here don’t want people on starvation wages, it’s cultural, a sense of ‘fairness’, their words, and don’t mind paying higher wages. it’s good for business too. What you don’t see here is much homelessness, etc.
    Don’t be fooled though, business is taken very serious here. Money talks here too…just not at the expense of the wellbeing of the population and consequently most thrive. It’s a mindset. Just like wealth creation.
    I previously would have argued otherwise, but now I have lived it and seen that better wages and great profits aren’t mutually exclusive! Consumers have more to spend I guess…and they spend it! Henry Ford got it.
    Less educated do get paid less here too of course, just not rock bottom and the society doesn’t have to make it up in welfare, etc.
    People have more money to spend (and higher net worths than the US) and it was never a race to the bottom where workers are treated like just another input cost on a balance sheet and balance sheets are pretty healthy too!
    The GFC had almost no effect here due to the soundness of the economy that didn’t race to the bottom.

    Just some thoughts, from afar-:)

    I really look forward to participating here and meeting some like minded folks. We want to start investing in the property market there also and will leave the equality/fairness stuff for another time and place…maybe over drinks when we’re back in the US later in the year.

    Cheers and Kind Regards,

    • Maria Pileggi


      What a great reply to this article and all of the responses placed on it. I do think it was an interesting article, but naive in terms of understanding what’s happening with the poorer people of this country. Scott, I’m sorry but where in this country is someone who only works 10 hours a week and spends the rest of his time surfing managing to make $25,000 a year? He’d have to be making $45 an hour! The minimum wage in my area is $7.25/hour, obviously not a livable wage and most would say well that’s just for kids out of high school in their first job. That may be true, but what is considered a very good wage in this area is $10/hr. This equates to less than $21,000 a year (if you are lucky enough that your company allows you to work a full work week). Benefits are nearly unheard of around here, so there’s not a whole lot left over after paying rent, utilities, health insurance, water & sewer, and buying a few groceries. This is a rural area as well, so most people need a vehicle and then you can add gas and auto insurance to the monthly budget. I know a lot of people for whom that $10/hr doesn’t even cover the bills. That’s where the defeatist thoughts start to come in. They’re thinking, “How can I save money when I can’t even pay my bills?” And then they give up trying. Or maybe they only have an extra $5 a week to save and think that, since they’ll only have $260 after a whole year and the bank will give them about 15 cents on it, why bother? This is where the education you all talked about would serve its purpose. People need to understand that there may be other opportunities they can start small with and grow…an option beside the normal stick it in the bank route.

      By the way, the thought that people are only getting paid what they are worth is an uneducated view. I have over 25 years of management experience and the best I’ve done around here is $14/hr. But it’s really pretty here!

      • Susan Maneck

        Actually my son did that for awhile. Not the surfing part, but when he finished college and couldn’t get a job he started tutoring, making $60 an hour. But of course, you have to have an education for that. Try to persuade a young man he needs a real job if he is making that kind of money working part-time. Then a certain young lady came along and he got that real job. Still tutors part-time though, now making $80. He’s taking that extra money and investing in real estate!

        But most people can’t teach calculus or prepare students for college entrance exams, through no fault of their own. Over all the wage situation here is closer to what you describe. And class had a lot to do with the direction his life too. He was raised very lower-middle class but I sent him to the best private prep school in the state. And it was his connections with the wealthy families in that school which enabled him to get tutoring jobs that pay that well. It was one of the parents who eventually offered him a decent paying full-time job (not at $60 an hour, however.) If I’d sent him to a public school in Mississippi, no way would this happen! It wasn’t the quality of education that made the difference, though the difference was significant, but the social class of the people that now surrounded him.

  22. Don Johnston

    Didn’t realize how old this post was. Thought it was new since I just got it in my email. My opinion…great article but to use terms like “inequality” or “unfair” sounds a lot like my 17 year old daughter who wants everything given to her without her doing a thing for it (how she got this way is another story centered much around a failed marriage and divorce on her parents’ part). Today, income inequality and wealth inequality are the platforms of the socialists and socialist democrats. Unfair has been the term used for decades when they are referring to what really amounted to just circumstances. Example: We claim it unfair when a good husband and father goes to prison for a number of years for getting drunk, driving and killing an innocent person. But it is JUST! It is the law and the law was served.
    The “law” of wealth is “applied knowledge plus time” and CAN result in wealth. The knowledge is available everywhere…more so today than when I was in school. All a young person has to do is “google it” and they are inundated with more knowledge than they can handle. Fairness is not involved. Justice would be served if the law of wealth were obeyed/followed through. But the youth of today, when presented with this law see only work and for a long time. They cry unfair because they want it / are “entitled” to it without work and instantly.
    The phrases “income inequality” and “wealth inequality” should only be used in comparing individuals or groups of individuals who have followed the exact same “paths” to income or wealth and the outcomes are different because of gender, race, religion, etc.

    • Susan Maneck

      Young people don’t always know what to google. As I mentioned earlier I teach at a historically black college. I’ve had students quote stuff from Stormfront, apparently not understanding the nature of that ‘source.’ The internet is full of stuff, but most of it is not good stuff. Unless deliberately and properly trained people aren’t going to know a good investment from a scam. As I mentioned before the poor work plenty hard. That’s rarely the issue. The issue is they don’t know how to work in ways where they benefit from the fruits of their labor instead of being exploited by others.

      • Don Johnston

        I agree with you, Susan. AND I agree with your point about “Home Econ” classes. There should be a high school graduation requirement regarding basic home finance concepts and fundamentals.
        Since the family unit has deteriorated and the schools have become testing centric and less practical content oriented, it then becomes important/imperative for sites like this to reach out to young people in general by creating a “Finance, Income, Wealth Building 101” course. Then if I would refer my own daughter to the course and have her forward the link on to her facebook contacts… If you would refer the course to the students you come in contact with and encourage them to forward the link to their contacts… If others would do the same… There would be no excuse for anyone to say “I didn’t know how” or “I didn’t know where”. NO EXCUSE at that point. We can only lead the horse to the water trough; we can’t make them drink. The choice would then be theirs. Sounds simplistic but sometimes simple is best.

        • Susan Maneck

          Yeah, but as in the story of my son, sometimes the best way to get money is to hang around money, something that is not usually an option for the poor. Of course my son also understood the rule of 72 by the time he was six. Okay, he wasn’t normal.

  23. Troy Purcell

    Just an excellent article.

    I have been showing my kids the power of compounding in the hope that it will stick. They are 11 and 9 so time is on their side. I have also shown them our financial situation on spreadsheet and driven them around our rental properties here in Wellington, New Zealand. They also have small share portfolios that I regularly update them on. Mostly they seem to like the fact that they own planes, buildings and banks (part of them anyway).

    My wife is horrified that I talk to them about money but I want them to understand how it works and where it comes from so they don’t make the same consumer mistakes that I did and that a lot of their friends will make. I also want them to realise that being an employee is not the only way to go. There are so many opportunities to make money now especially combined with the internet.

  24. Vitaliy Volpov

    As I write this comment, I realize that this article was originally published in July 2015. However, it just came through my inbox in a BP e-mail as an archived article and I was compelled to comment after reading it…

    I think this is a very thought provoking article. Lots of great insights. But I disagree with Scott on one fundamental point — that there is something “unfair” about people using financial knowledge to accumulate wealth. If knowledge was hidden and secret and only available to a select group of people, then perhaps that would be unfair. But that is simply not the case! Knowledge is free and available to anyone with an internet connection or with a library card. Financial literacy is not a secret, nor is it unattainable. Those who want to learn and have a desire to excel will do so. Those who do not have the desire, will remain where they are. I cannot think of a more fair paradigm than that.

  25. You get what you put in to anything you do! Therefore, planting the right seeds, starts from the one planting the tree. If there’s not one planted, then it’s your job-as the head of household, to be pro-active enough, and get the right nutrients. Then create your own foundation-with the right soil, to plant your own in.

  26. Ken Blakely

    All these Horatio Alger stories are very nice, but they are the result of painfully limited sample sizes; usually of just 1 or 2. And the comment (by the author) that “…earnings have almost nothing to do with happiness or quality of my life.” only indicates that he’s never been poor. Again, small sample size. I humbly suggest that the self-righteous, “I made it myself through grit and drive” crowd read Piketty’s “Capitalism in the 21st Century”.

  27. Curtis Mears

    I contend most of the issues people face on a day to day basis is a result of poor decisions. I know people who make 1 bad decision after another (often the same mistake). There are some very simple decisions in life which will almost guarantee you to be poor, drug/alcohol, not graduating high school, marrying very young, getting pregnant very young. Maybe there are some more, but these account for most. And for the most part, none of these are forced on people. They are often chosen, then chosen again. Sadly, our choices in life do have drastic results as we go through life.

    Here is another exercise. Let’s say everyone in the USA received 1 million dollars at the age of 21. How many of you would have zero in 5 years, how many would be at $1 million, and how many would have vast sums of money? We all know individuals who would fit into each of these categories based on their decisions they make, and maybe because of luck. Life is never going to be fair, even if you try to legislate it or force it on people. The most we can do is try our best and treat people fairly.

  28. PJ Muilenburg

    Wealth doesn’t care if you are smart, stupid, fat, skinny, tall, short, white, black, male or female”. Nice!
    You made a great point…that perhaps the system is unfair, but not because certain people earn less but that they don’t understand their ability to build wealth in spite of their income.
    I’m afraid our generation, Scott, in particular has missed the ball and is barking up the entirely wrong tree (handouts) to mend their financial troubles.

    • Susan Maneck

      In regards to young pregnancies consider the following:

      50 – 60% of teens were molested prior to their first pregnancy
      30 – 40% were victims of rape or attempted rape
      the age of first unwanted sexual experience was 9.7 – 12 years of age
      the average age of the rapist was 22.6 years
      50% of perpetrators were family members
      over 75% of the sexual assaults involved force and weapons

      Tell me again how those not old enough to give consent are victims of their own poor decisions.

    • Susan Maneck

      You realize that a large portion of the those ‘handouts’ come to us? How many of us take Section 8 vouchers? One of the things I’ve realized since I’ve become a landlord is that Section 8 helps inflate rents. Without it many of us would not be able charge nearly as much rent. I know that’s the case in Mississippi and I’m willing to bet it is the same way elsewhere. It works similar to food stamp which subsidizes employers like Walmart so they can pay less than a living wage.

  29. So few people take personal responsibility for where they are at in life. They are quick to rationalize and blame circumstances for their present condition. Life was unfair to me. I didn’t have opportunities that others were given. I didn’t have a rich daddy to give me a proper start in life. I decided to raise a family so I didn’t have the money to do other things. I had a controlling spouse. I had a nagging wife. I grew up in a poor area. On and on and on people make excuses. When you are ready to take full responsibility for your decisions in life, your life will begin to change in positive directions.

    I can admit, I am not where I wanted or hoped to be financially at this point in my life. It is my fault. It is the result of decisions that I have made. Here is a quote, I keep over my desk, that has become my mantra in life: You don’t decide your future. You decide your habits and your habits decide your future. I have chosen to change my circumstances and my future. So maybe I’ve learned these lessons later in life. So what? It’s never too late to change. I am not stuck with who I am.

    Hand in hand with the principle of habits is that “you become what you think about. “What does your self-talk sound like? Is it uplifting and positive or is if filled with negative self-deprecating talk? The difference between the wealthy and the poor is rarely about opportunity, gifts or birthright. It is about how you think!

    I have spent much of my life in sales. In every case 10% of the sales force account for 90% of the production. Why? It’s the bell curve of life. You saw it grade school. You see it daily in real life. But you are not stuck with where you are at on the bell curve. You have free agency. You can choose to change your position in life. That begins with how you think and the habits you choose to develop. Human nature, by default is to take the path of least resistance. This is the path of weak character and poor habits.

    It takes effort to resist the path of least resistance. Body builders don’t develop great bodies lying around just thinking positive thoughts about how great it would be to have a great physique. You have to want it bad enough, your “reason why” has to be big enough, to get off the couch, into the gym and get it done. Most people will never do this. There are reasons why, there are excuses and there are results… and the first two don’t count. Be proactive with your life. How will you choose?

  30. Buffet and Slim are not a problem. They worked hard and made correct decisions most of the time. That is the system.
    No matter what endeavor you examine you will always find a few that rise to the top. It is natural order.
    You will then have a certain number that will identify themselves as being comparatively weaker by crying about how “unfair” it is.
    The only way to make this unfair is for all to have the exact same and that is dangerous nonsense.

    • Susan Maneck

      Let me suggest the following as measure as to whether our wealth is coming from our own efforts or whether it comes from exploiting others. Are the people working for you earning a living wage? If not, it might be coming from exploitation.

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