It is a story we hear many times. It is part of the American mythology. If you work hard and save your dough, you can be rich. The corollary to that myth is that the rich worked hard and saved their dough to become rich. The rich are somehow better than the rest of us simple lazy peasants. But these myths are simply bullshit. Work ain't got nothing to do with it.
Before I begin, it is helpful for me to accurately designate who are the rich and who are not the rich. If you are reading this in a Western country such as the USA or the UK, you are automatically better off than 97% of the rest of the planet. Congratulations! You won the birth lottery. You stood a high likelihood of being born into poverty and squalor like the vast majority of the rest of the world. But you lucked out, and God made you rich just by putting you in a great country instead of a corrupt third world shithole. From the global perspective, it is helpful to keep this in mind as you envy the 1%. You are part of the 3%. While you envy the millionaire with his yacht, there are millions who envy your indoor plumbing and electricity.
Rich is a relative concept, and most people's ideas about being rich is born more from innumeracy than reality. People are shocked when I tell them that only 5% of the US population make over $100K per year on a single person basis. Here is the source for that stat in case you don't believe it. The six figure income has always been the benchmark for being a successful person in our society. If you make six figures, you have arrived. You are living the American dream. You definitely aren't eating Alpo or shitting in a bucket.
The next benchmark is the millionaire. Being a millionaire is a huge deal for most people. A person who makes a million dollars in a year is equal to 10 of those six figure earners. But here is where I lose a lot of people. Being a millionaire is just not that big of a deal. A millionaire is closer in status to the rest of us with our five figure incomes than to the real big cheese in all of this discussion about wealth. This person is the billionaire. A billionaire is equal to 1000 millionaires. The disparity between a millionaire and a billionaire is vast compared to the disparity between a millionaire and a six figure earner. In the world of the billionaire, that successful doctor or lawyer making six figures is a speck of fly shit. Poor old you making five figures is less than that speck of fly shit, and the guy shitting in a bucket in Zambia may as well not even exist in the world of the billionaire.
There is one myth we need to dispense with right here and right now. We must dispense with the myth that hard work and great wealth are related in someway. They aren't. To tell a subsistence farmer in sub-Saharan Africa that he can attain the same level as a typical Westerner through diligent hard work is unrealistic and cruel. That guy is already working hard merely to keep flesh and soul together while you are wolfing down that grilled chicken salad from Wendy's in the vain hope of fitting into your old pants. Put a typical American in the same situation as our subsistence farmer, and that American is dead in a year after the last of his or her fat stores have melted away. We are lucky. Damn lucky.
The greatest rags-to-riches story of our era is the unpredictable rise of author J.K. Rowling. Rowling is the creator of the Harry Potter series of books, and she was living on welfare in the UK before fortune found her and made her one of the wealthiest women in Britain. We can't say that Rowling became rich through hard work as her workday was essentially collecting a government check while writing a fantasy novel. Let's be blunt here. Rowling was a dreamer and a bum. But a lucky bum beats a diligent worker any day of the week. But luck does not explain her success as much as another word does. That word is scalability.
Scalability is the ability to maximize output with a minimal input. Rowling's success owes less to her work on a novel as it does the fact that her novel can be reproduced a million times through a printing press and electronic mediums like the Kindle. This is why you are more likely to become a billionaire through writing children's books than you will practicing medicine or law. Medicine and law are not scalable. Even the best doctors get paid one patient at a time. But I'm not recommending you give up medicine to be a novelist. Hard work will get you six figures. It takes luck to create something popular like Harry Potter.
Entrepreneurship is where you create something in the hope that a sizable portion of the public will like it enough to actually buy it at a profitable price to you. Entrepreneurship is essentially a massive guessing game because the public taste is fickle. You will most likely lose on this score. The only sure way to win is to provide something everyone already wants. There is only one product that has this universal guaranteed appeal, and this product is money.
The public may or may not like your children's fantasy novel, but they always like money. Money buys everything else, so being the provider of money removes the guesswork from the process. If you combine the certainty of money with the concept of scalability, you have the financial services industry. Basically, you provide what everyone wants without having to lift heavy objects or break a sweat. It takes the same effort to lend a million dollars as it does to lend ten dollars. You write a check. Your pay is determined purely by the percentage of whatever financial service you provide. This requires less of you than writing a Harry Potter novel or even reading one. In the financial services world, work is for suckers.
The easiest and most certain way to become filthy rich is to work in financial services. If you are grinding away on that law degree or trying to get through med school or making a go of that Chinese-Thai-Mexican combo eatery idea you had, you are an idiot. All of these things require work and/or luck. Financial services merely requires the use of money, and the best money is other people's money.
The financial services industry takes other people's money and gives it to other people while taking a percentage or a fee on the transaction and management of it. For instance, banking takes depositors' cash and puts it back out as car loans and mortgages and consumer loans. Suckers work to make the money while other suckers work to pay that money back. Insurance takes the float from premiums and achieves the same effect usually by lending it to the government. Mutual fund companies and hedge funds charge a percentage on the billions they mismanage to achieve below market return for their idiot investors. We can go on and on. Your payday as a financial services person is determined not by your hard work but how much cash you have to play with. The hard work is not in managing the suckers' money but in getting those suckers to give it to you in the first place. This requires that you have the ability to lie and steal.
Financial services people lie all the time. You don't have to wonder about this. Merely look at a financial services agreement and notice the small print and obscure language they use in the contract. This is deliberate on their part. Those people aim to confuse and beguile you. They are inherently slimy. It is their nature. If they were honest people, they would write everything in text that didn't require a magnifying glass. If you want one regulation that will make all other regulations unnecessary, outlaw small print. That one change alone would end much of the fraud we see in the financial services industry.
It is hard to pry money from suckers in order to lend it right back to them at interest. This is where our friends in the government help out our overworked financial services people. The most blatant way they do it is by printing up cash at the Federal Reserve and giving it to these slimebags. This debases the currency in your pocket, so they don't even have to go through the trouble of securing your consent to get your money. They already have it anytime they want it. And if they mismanage it in a really bad way, they only need to get a government bailout which you also pay for because our friends in the financial services industries are just too big to fail. Yes, all of this shit is immoral as hell, but here's the clincher. It is all LEGAL. Theft is still theft, but legalized theft lets you stay out of jail. Unfortunately, it doesn't keep your conscience clear which brings us to our next point which is the reason why you are never going to be rich.
The reason you are never going to be rich is because you have a conscience. It isn't because you aren't smart or hardworking. Your morality and sense of honor are the greatest hindrances to your ability to become wealthy. All of these facts that I just shared with you are known to virtually every economist, yet the bulk of them abstain from cashing in on a certain payday. You know these facts now since I shared them with you. What is stopping you? What is keeping you from working in the financial services industry? What is keeping you grinding away in your present occupation when you can have the cushy hours, the easy math, and the buckets of cash available in financial services?
Morality is a handicap to the person who wants to get rich. If you are are unable to deprive a sucker of his money, you are unfit for the kingdom of the rich. You are condemned to work hard for the rest of your days providing real goods and services to other people. If you are poor or have to work hard to make a living, it really is your own damn fault. Just remember, rats may not sleep well at night, but they always eat well. Conscience is just a pest.
People see something fundamentally immoral in the activities of an outfit such as Goldman Sachs. This is why they can't find it in themselves to work at that place or other similar outfits despite the money these firms are able to make. This is because these outfits don't actually make money. Money is only valuable to the extent that it buys real goods and services. If you doubt this, put yourself in the middle of a desert with a ton of gold and see what happens. You would trade it all for a single glass of water. Similarly, if everyone stopped working in order to join the financial services industry, we would be in the same scenario as the gold in the desert. Money is not the same as value. Money is merely a medium of exchange that is handier than a barter system.
People have an intuitive grasp of this relationship between money and value. If they didn't, we would all starve in a world of paper dollars as greater amounts of cash chased after declining amounts of goods and services. Wealth does not come from a printing press, but you can steal with a printing press which is what our banking industry does.
There are honest people who are wealthy. Despite being very lucky, J.K. Rowling deprived no one of anything by force. She crafted a story people were willing to buy. Similarly, many businesses provide real goods and services that benefit us all. But the real wealth goes to the shysters in financial services who provide nothing more than an exchange of wealth. This is not inherently immoral except they lie, cheat, bribe, and steal to grow their business at the expense of others. That is inherently immoral. The only economic justice is when that financial sector grows so large that it collapses like it did in 2008. It will happen again. The injustice is when Uncle Sugar gives them sweet cash to keep their schemes going.
There will be a day of reckoning on all of this bullshit. It is coming. Things can't go on like this forever. If the collapse of 2008 was bad, you haven't seen anything yet. Even the federal government won't be able to bail out this coming collapse.
There are honest people who are wealthy. Despite being very lucky, J.K. Rowling deprived no one of anything by force. She crafted a story people were willing to buy. Similarly, many businesses provide real goods and services that benefit us all. But the real wealth goes to the shysters in financial services who provide nothing more than an exchange of wealth. This is not inherently immoral except they lie, cheat, bribe, and steal to grow their business at the expense of others. That is inherently immoral. The only economic justice is when that financial sector grows so large that it collapses like it did in 2008. It will happen again. The injustice is when Uncle Sugar gives them sweet cash to keep their schemes going.
There will be a day of reckoning on all of this bullshit. It is coming. Things can't go on like this forever. If the collapse of 2008 was bad, you haven't seen anything yet. Even the federal government won't be able to bail out this coming collapse.
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