Here are some basic statistics on wealth and poverty:
- 2% of the adults in the world own half of the world’s wealth.
- 10% of Americans own 72% of the wealth in America.
- 28% of Americans are living paycheck to paycheck.
- 10% of Americans age 65 and over live in poverty.
- The personal savings rate for the average American is -1%.
These statistics aren’t only grim, they are incredibly sad. America is by far the wealthiest nation that has ever existed on the face of planet Earth. And yet, 28% of Americans are living paycheck to paycheck. Similar statistics could be cited for most of the rest of the developed world. And, even though many countries have more socialistic policies and taxation, the wealth disparity still exists.
Incredibly, it has always been this way throughout thousands of years of Human history. A quick reference to the Bible, ancient Chinese writings, the Greek classics or the clay tablets of Babylon will all confirm that this wealth disparity has always existed. Throughout various times in history and under many different forms of government, the wealth disparity remains a constant.
The reasons why are debated continuously. Certainly, there are socio-economic factors, such as where you are born, how you are educated, how much you will inherit and what resources are made available to you. There are certainly political factors, such as your country’s form of government, GDP output, trade status and taxation policies. There are definitely external factors, such as war, famine, health and natural disasters. There may even be religious factors, such as the caste system or the disparity of economic opportunity for religious majorities and minorities.
Beyond all of the factors listed above, there is another factor that everyone has complete control over. That is, your own personal beliefs about money and wealth. Unless you are facing some of the many negative factors listed above, your beliefs may be the single biggest factor in whether or not you accumulate wealth. Believing that you are capable and deserving of wealth is critical.
It’s generally up to you, whether or not you choose to be wealthy.
I know this is overly simplified. But, I believe that it’s accurate. Most of the wealthy in America today weren’t born to privilege. They were self-made. They saved diligently, invested wisely or gravitated towards businesses and opportunities that generate wealth.
Self-employed Americans are four times more likely to become millionaires, than those who work for others.
That’s why millions of refugees risk their lives to get into developed countries, simply for an opportunity. Meanwhile, most Americans (and Europeans, Asians, Canadians, Australians, etc.) cannot grasp their unbelievable fortune at having been born into a wealthy society.
I cannot wrap up this segment without a discussion of the responsibility of the wealthy to the impoverished of the world. In a capitalistic society, the wealthy aren’t necessarily obligated to the impoverished, beyond the large amount of contributions they donate in the form of taxes. I believe this is the correct approach. Wealthy and even not-so-wealthy people from developed countries have proven to be very generous to the impoverished and the misfortunate.
Of course, there is always more that can and should be done. I believe relief is something that can be done most efficiently by individuals and Non-Governmental Organizations. Whenever any Government gets involved, money seems to disappear and good intentions are strangled by red tape.
I am planning a series of posts on philanthropy, so stay tuned.