Why are some people wealthy and others not? There are many answers to this with each acting as an apologia for the person or group espousing a particular answer.
Outputs: The easiest is to say that people are rewarded according to the contribution they make to society. Bill Gates would be an example. He developed something people didn’t have but would need, and even before they realized they needed it. We ended up with personal computers and he ended up being very wealthy.
Inputs: Some take a slight variation on this, though and say it is not so much due to the person’s outputs as it is due to the inputs required to place that person in their position (bear with me – I know that sounds convoluted.) An example of this might be a highly specialized surgeon such as a pediatric neurosurgeon. This individual completed college, medical school and multiple years of residency before reaching the credentials that identified him as such. There is a justifiable perception that making it through all those hurdles weeded out everybody except the best of the best. If it is my child with a brain tumor, I need to know what he is capable of, and not wait to see if he succeeded with my child.
Inheritance: Of course we do have those who become wealthy the really old fashioned way – they inherit it. There’s an old saying that it takes 3 generations to distribute the wealth earned by an individual, and there’s reasonable truth to that. Let’s look at one million dollars through several generations. We’ll assume that each generation is able to live but at the end the composite passed to the following generation is able to remain at one million. Each person has 3 offspring who share the inheritance equally.
First generation: One person with $1,000,000
Second generation: Three people each with $333,333.33 (1 billion divided by 3)
Third generation: Nine people with $111,111.11
Fourth generation: Twenty-seven people each with $37,037.04
Of course, have one generation hit bad economic times, a bad business person or a lavish lifestyle and the number drops precipitously.
Luck: The Lucky Lotto winner. I’ve never met one. The only ones I hear of are the cousin of a guy who roomed with the brother of a friend of someone’s cousin. I did hear that the aliens who have Elvis won, as did Bigfoot.
And finally, probably the most common –
The Wealth Seeker: There are some who seek wealth above all else. It may be a desire for power, or perhaps it is the score card that their particular industry uses. Many at the top of the financial world have no other meaningful measure of success, but there are the top litigators, athletes, entertainers and others who acquire wealth as a measure of their overall worth. Some both gain and lose a fortune in a single generation; some do so several times. For these folks the thrill of the hunt truly is in the chase, not the kill. Many wealth seekers are not only known for their ability to generate revenue, but also to protect their earning power from competitors and are very slow to let loose of their wealth.
Personally, I’m among those who will never be wealthy. I’ve yet to come up with the marvelous new idea, and if I did I’d probably be more prone to share it than to aggressively protect it. I’m plumb out of luck with regard to a wealthy family and I know the odds when playing the lottery. Finally, although I like to make a good living, there are other measures that drive how I work. Besides, if I had a sudden inflow of income, I’d rather use it to spend time with my wife and kids someplace interesting. In my case, the experience and the memories would be the treasure.
The good news is that if there is a finite number of monetarily rich people in the world, I am not taking up one of the slots, so it’s all yours.