Recently, I was doing some DVR clearing and watched a very
interesting episode of one of my favorite shows – Through the Wormhole with
Morgan Freeman on the Science
Channel. It looks at various topics of life but with a science angle. And fortunately for me, it’s presented in a simple way to understand.
Check out information on the show: http://www.sciencechannel.com/tv-shows/through-the-wormhole/
One particular episode caught my eye entitled “Is poverty
genetic?”. This particular episode
looked in how genetics – potentially – could affect whether or not you will be
wealthy.
Whether or not you agree with the premise, there are a lot
of things to consider, like politics, education, living conditions, etc.
besides just genetics. And I don’t take
any position on those issues here.
What was interesting, however, is something that has been
known and studied repeatedly yet not many people pay attention.
A small minority of people – here and around the world –
own the majority of the wealth.
Not exactly breaking news.
But why does this situation exist?
Quite simply, the majority of the world work for a wage –
either hourly or salary. And that
creates a ceiling on income and wealth.
After all, if you work at a job making $50,000, you are limited to that
level. Yes, you will get your annual 3%
raise, but as long as you’re in that particular job, your income potential is
limited.
This is where most people trade time and skill for
money. They work for their money.
The wealthy, on the other hand, do the exact opposite. By owning a business or income generating
assets, their money works for them. And
there’s not limit on how much they can earn or for how long. After all, if you owned rental property and
someone wanted to pay you above market rent, you wouldn't say no.
The show discussed how even if you hit the reset button on
society and gave everyone the same amount of money to start, eventually you
would get income and wealth inequality because of how people generate income
and wealth.
What does this have to do with us everyday folk?
Well, how many people do you know who work for money instead
of having money work for them?
How many people do you know enable money to work for others
by paying interest on loans?
How many people do you know have money in zero or low
interest bearing accounts instead of putting that money to work for them in
higher earning accounts?
Yes, most people have to work for money to eventually have
money work for them. True enough, but
many people think that they can’t have money work for them until they hit a
certain level of wealth. And that’s
simply not the case. Things take time
and this is no different.
Think about your own finances -
Do you have a ceiling hanging over you or can you go
beyond?
