How many people do you know?
I’m not talking about people with whom you have deep, personal connections. I’m talking about people you know…kids who went to your school, co-workers from current and previous jobs, family, extended family, etc. People who loop you in when they have babies or get married or something.
I’ll count any people about whom you could tell me one single thing beyond their name.
The Atlantic said that on average, you can guestimate a person’s total actual social network by adding 355 to their number of Facebook friends.
The failing, overrated New York Times said we each know about 600 peeps. Sad!
For the sake of argument, let’s just set a basic number: you know 750 people. You might know more or less, but I don’t actually care, because you are reading this and we are not having an actual conversation, because you never call me. Would it kill you to pick up the phone now and again?
Now, here’s a thought experiment for you: out of the 750 people you know, how many of them are dramatically wealthier than they were at the beginning of their journeys?
Not “how many people are doing better,” that’s easy and expected. I’m talking about going from rags to riches. People living a lifestyle 100% different than the one in which they were raised.
Like going from a BMX to a GS Lex.
Or maybe from having holes in your zapatos to celebrating the minute you was having dough.
I’m talking about Horatio Alger/Jay Z level class mobility.
How many people can you point to in your literal social network who’ve gone from humble beginnings to being rich on the level where subsequent generations will now also be rich?
My bet is that your number is either zero, or at best, in the single digits.
I’m thinking through my network, and I can count the total on two hands.
I know a few people from middle-class beginnings who started their own companies, and they are now all multi-millionaires.
I know a few lawyers who came up poor who do really well for themselves now, and will do so for another 20+ years…likely to alter the course of their progeny’s status.
There are about 10 people out of my 1000+ friends/co-workers/family that I can point to who’ve successfully jumped 2+ class barriers and are now comfortably “rich.” 1% of the people I know, after 40 years of life, have gone from ashy to classy.
That means 99% of the people I know – including me – are either in the same class or maybe one above or below where they grew up.
I grew up lower middle class with two hard-working parents who made sure I never needed anything for long. They weren’t able to pay for my college education, put a down payment on my first house, or anything else like that…but I also never went hungry, missed a Christmas or birthday present, or failed to get medical attention when I needed it.
And now, I’m pretty much “middle” middle class. I would absolutely feel it if I missed a paycheck, but I also have top-of-the-line medical insurance, I can pretty much go out to eat or go shopping at will, and I take a few vacations/long weekends every year without too much problem. And to my significant other’s chagrin, I run the AC at the slightest hint of humidity or temperatures above 72 degrees. I do what I want, y’all.
Now, none of this is to say that people can’t jump classes. Indeed, people do. And people get picked up to play in the NFL, become movie stars, or sell tech companies to Google. There are lots of things that are rare on a statistical level but still demonstrably occur nonetheless.
The difference between professional football player and, for lack of a better way to put it, the 1%, is pretty simple:
None of us would ever dream of sacrificing our own family’s well being for the benefit of the lucky few who play on Sunday.
But a sizable part of the population gladly votes/rants/emotes in favor of the 1% of the population who has jumped classes, and does so almost exclusively at the expense of the other 99% of us.
“But Rickey, when we do what’s best for the rich, they create jobs for the rest of us!”
There’s a problem with this statement, imaginary friend. That problem revolves around the utility of money.
I’m glad you asked, imaginary friend. You’re good at this back-and-forth. I would offer to pay you, but I’m broke because of all the pro-rich people policies of our country. Sorry.
The utility of money is basically what people can do and need to do with their money. It’s the idea that rich or poor, you have to dedicate a portion of your income to shelter, food, clothing, health care, transportation, etc.
When you are poor, you tend to dedicate a bigger percentage of your income to minimally sufficient “basics,” and even make choices between which basic you’re willing to give up to cover others. You rarely have income left over with which to save.
When you are rich, you are able to spend a smaller percentage of your income to purchase more-than-sufficient “basics.” You can buy everything you want and need, and still have a good chunk of change left over to save, invest, or use to light your cigar.
So back to the original statement: when we do what’s best for the rich, they create jobs for the rest of us.
Utility of money would indicate otherwise. Let’s say I hand a poor guy $1000. What’s he going to do with that $1000? If you said “strippers and blow,” (a) we should hang out, and (b) you probably don’t know many actual poor people.
If you said, “catch up on bills, buy new shoes for the kids, get the a/c fixed on the ’87 Toyota Tercel, and buy a few six packs of brew and a scratcher or two,” you are on the right track.
[bctt tweet=”Let’s say I hand a poor guy $1000. What’s he going to do with that $1000? If you said “strippers and blow,” (a) we should hang out, and (b) you probably don’t know many actual poor people.” username=”trifectablog”]
Poor people spend incremental extra money. That money goes to their creditors (who employ people), Walmart (who employs people), the mechanic and/or auto parts store (who employ people), and the corner store (who employs people). When poor people as a class get extra money, that money goes into the market in a massive wave. Employers get some slack and can schedule extra hours. Their employees have more money to spend. And it continues and continues.
What if I give a rich person $1,000? Or let’s say I give him $10,000. What does he do with that?
All of his “basics” were already purchased without this windfall. The rich guy was already living in beautifully appointed and ample space. The bills were already paid. The kids already had 20 pairs of new shoes from which to choose. The Mercedes is new and under warranty. The 18-year single malt is already on the kitchen counter, and everyone knows that playing the lottery is a negative expectation game.
But there’s one thing that rich people are really, really good at. It’s how a lot of them got rich to begin with. Rich people are amazingly good at keeping their money.
A rich person getting a windfall saves the windfall. No money goes into the economy (at least not in the moment). It goes into an account, where it is used to accrue more money for the future.
Let’s hit it from a different angle. Since rich people are pretty well represented in the decision-making ranks of most of our employers, let’s say that we enact a policy that lowers the tax burden on companies. Let’s say it was 15%, and we take it down to 0%, just for argument’s sake.
The rich guys at the top get to decide what to do with that windfall, too. And assuming the company was already at break-even or better, the same issue applies again. The basics were already paid for.
Sure, some of the windfall might go into gearing up for growth or replacing dated equipment or fixtures. But “some” will absolutely not equal “all.” The shareholders will expect a piece of this in the form of dividends. The decision-makers will likely celebrate their victory with some raises and bonuses for themselves. And some will be placed in a large vault in the form of gold coins, in which the fat cats will swim.
So here’s my problem.
99% of us are likely to spend our lives within one class level of the one into which we were born.
99% of us are literally never going to be rich. We have a fair shot at becoming upper middle class, but we have a 1 in 100 shot at becoming wealthy.
And when you do things that benefit the 1%, they use that benefit to their own advantage. A tiny bit of overflow might “trickle down” to the rest of us, but the vast majority of any windfall we grant them will stay in their own coffers.
So why do so many people in the United States vote for pro-big business, pro-rich people candidates?
It’s the same reason that get rich schemes work. It’s the same reason you watch late night infomercials about getting rich through real estate. It’s the same reason you buy lottery tickets or go to the casino.
Because you, too, could someday be rich.
…except, based on the experiences of your own circle of friends, statistics, and reality, it’s about 99 to 1 that fantasy will ever come to fruition.
What if instead of crossing our fingers and hoping that we each rise above 99 of our friends to have a ton of money, we did things that made quality of life for the vast majority of us significantly better?
What if instead of viewing the “answer” to income inequality to be “work harder and get lucky,” we changed the question itself? What if instead we asked, “how can we make life – irrespective of income – the best it can possibly be for every member of our society?”
What if we found ways to get free healthcare for everyone? What if we found ways to make college and trade education free for everyone?
What if we all had 3 day weekends every week? What if new moms got a year off to bond with their babies? What if new dads did too?
What if we had ample green space in every city? What if we had inexpensive and accessible fresh fruits and vegetables that made buying a $1 value menu burger less appealing?
What if we removed all corporate donations, PAC’s, super-PAC’s, lobbyists, and other undemocratic realities, and collectively and minimally funded our elections? What if we had term limits for Congress such that our representatives focused on “what’s best” instead of “what’ll get me re-elected?”
What if public transportation was free, child care was free, and working 40 hours in any job was enough to guarantee protection from poverty?
It’s all possible.
What do you have to give up to get that?
First, you have to give up a bit of the chance that you, too, will someday become rich. You’ll still have a great shot at becoming upper middle class. But instead of a 1 in 100 shot of being rich, maybe you’ll have a 1 in 200 shot now. So your odds go from long to longer, though it’s still possible.
Second, you have to give up the idea that because some people might take advantage of the system, we should gear the entire system to punish everyone. The rich like it that you have that prejudice. It works to their advantage. It gets you to vote for things that make class mobility impossible. They like you dumb, racist, angry, undereducated, and gullible. They like it when you think that this line of reasoning is “class warfare.”
Snap out of it, friends. Do for what’s best for the 99% of us and our families. Even if it pisses off a few NFL players, movie stars, and Silicon Valley elites.
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11 thoughts on “You, too, could someday be rich.”
Practical advice for an impractical world. Folks need to realize that they really are the solution.
Thank you for taking the time to read my post! And yes, I agree. So many people are caught in a reactive cycle, never stopping to question the cause/effect itself. Hopefully, little by little, society will adapt and there’ll be more of us “do the best for as many people as possible” folks, and less of the “screw everyone so I can maybe get rich” folks.
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Excellent analysis. I shared this post on facebook.
Another thing that has always bugged me is the notion that “government should be run like a business.” This is a fallacy that many voters appear to embrace with their eyes closed. I guess the reasoning is that businesses turn a profit, therefore they work better than government. It’s almost as if they don’t understand the difference between business and government.
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