Some people will never be rich, and no, it’s not about where you grew up, who your parents are, your gender, or the color of your skin. The path to wealth is a complex interplay of various factors, and understanding these can make the difference between a life of financial struggle and one of abundance. In this article, we’ll delve into the fundamental reasons why most people will never be rich and explore what it truly takes to break free from the constraints of mediocrity. Welcome to a journey of self-discovery and enlightenment that could transform your financial future.
The Relativity of Wealth
Being rich is relative. It’s not a fixed status but rather a comparison. You are rich only when your wealth and quality of life surpass those of the majority around you. To qualify as rich, you need 80% of the comparable population to have a lower quality of life than you do. This principle holds true both on a global scale and within local communities. By simple statistics, if we agree that the top 20% rule applies, then 80% of the population will never be rich.
This concept of relative wealth can be seen everywhere. Imagine two people, one living in a developing country and another in a developed one. A person with a modest income in a developed country might still enjoy a higher standard of living than a wealthy individual in a less developed nation. However, within their own context, the person in the developed country may not feel rich because they compare themselves to those around them who have even more. This constant comparison creates a never-ending cycle where only a few feel truly wealthy.
The Evolution of Living Standards
If we take a historical perspective, we see that almost everyone today enjoys a higher standard of living than people did 100 years ago. This is where the mind-blowing part happens. Unless you’re in the absolute bottom 0.001% of the population, your quality of life today is higher than that of most kings and queens in history.
Consider a king in the 1600s. If he fell ill, he relied on rudimentary medicine, which often involved superstition and ineffective treatments. Life expectancy was under 40 years, and common diseases were often fatal due to the lack of medical knowledge. Fast forward to today, we have access to advanced medical care, antibiotics, and vaccines. We live longer, healthier lives, and enjoy conveniences like electricity, clean water, and instant communication that historical royalty could never have imagined.
Despite these advancements, we don’t feel rich because of the top 20% rule. Our sense of wealth is relative to those around us. So even though we live better than historical figures, we still compare ourselves to our contemporaries and often find ourselves wanting more.
What It Takes to Make It to the Top 20%
So, what does it take to make it to the top 20%, and why aren’t more people willing to do whatever it takes? It boils down to two simple truths, one of which is harder to digest than the other.
Macro Scale: Access to Resources and Infrastructure
On a macro scale, becoming rich is about access to resources, information, cultural norms, and infrastructure. This is why everyone in Switzerland is considered rich compared to everyone in South Sudan. People love this argument because it places the blame for their poverty outside of their control. Governments can be corrupt, wasting money and keeping everyone poor, which is factually true in many struggling countries.
Access to quality education, healthcare, stable political environments, and robust infrastructure makes a significant difference. In countries with these advantages, individuals have more opportunities to thrive. However, in regions plagued by instability, corruption, and poor infrastructure, people struggle to break out of poverty regardless of their efforts.
Micro Scale: Personal Sacrifice and Discipline
On a micro scale, the reason most people don’t become locally rich is that they aren’t willing to learn and make the necessary sacrifices. It’s only a small subset of the population who are willing to sacrifice decades of their lives, embrace high levels of risk, and accept a small chance of success to break out of the general population for financial and societal gain. This happens in both rich and poor countries. Anywhere you look, you can find examples of people who come from nothing and mold themselves into greatness.
The Sacrifices Required
We know it can be done, but most people ignore the dramatic level of sacrifice and discipline required. If the biggest factor keeping you in poverty is geographical, it usually requires leaving your roots to relocate to places with more opportunities. It’s incredibly hard to leave your hometown and venture into the unknown alone. Over 80% of the population is not willing to take that kind of risk. Statistically, you’ll likely be born, educated, find a partner, work, and die within a small radius of where you were born.
The idea of leaving behind the familiar is daunting. Your family, friends, and entire support system are often in your hometown. Moving to a new place means starting from scratch, facing uncertainties, and taking on challenges without the safety net you’re accustomed to. This kind of risk is not something everyone is willing to embrace, which is why many people remain in their comfort zones.
Maximizing Regional Opportunities
If you can’t maximize the opportunities available to you regionally, you’ll likely live an average life. A decent life, but nothing extraordinary. The second part involves discovering your physical and mental limits. Are you able to work 8, 10, 12, or even 14 hours a day? Are you willing to learn continuously without immediate outcomes? This part relies on delaying gratification, a concept unfamiliar to the 80%.
Most people prefer immediate rewards. The idea of working hard now for benefits that may come much later is not appealing to the majority. However, those who understand and practice delayed gratification are often the ones who achieve significant success. They invest time and effort into learning and developing skills that will pay off in the long run, even if it means sacrificing short-term pleasures.
Self-Control and Continuous Learning
Self-control is crucial, and discipline is the highest form of self-love. Are you willing to learn daily and apply what you learn over medium to long periods, knowing you’ll be better off? If so, there are tools out there, like the Alux app, designed to be your executive coaching tool.
Continuous learning is a vital part of success. The world is constantly changing, and those who keep up with new knowledge and skills have a competitive advantage. Self-control and discipline help you stay focused on your goals, resist distractions, and maintain the motivation needed to achieve long-term success.
The Game of Delayed Gratification
Money, success, and fame are a long-term game relying on work that compounds over time until a goal is achieved. Are you willing to sacrifice the present for the future? How much are you willing to sacrifice? Are you willing to work while others party, learn valuable skills instead of being entertained, and face ridicule and failure knowing they are part of the journey? Most people aren’t. Many who try will quit at different stages. But because richness is a delayed gratification game, you only win at the end. If you quit at 20%, 50%, or 80%, you don’t get anything.
The idea of delayed gratification can be illustrated by the famous “marshmallow test,” where children could eat one marshmallow immediately or wait a bit longer to receive two marshmallows. Those who waited tended to have better life outcomes. Similarly, in the pursuit of wealth and success, those who can delay gratification and keep working towards their goals despite the lack of immediate rewards are more likely to achieve significant results.
The Role of Luck and Timing
There is also a portion of luck and timing involved. If you’re watching this, you already won the luck part. If you’ve survived until now without major physical or mental disabilities, you’ve already won the luck part. You have access to technology, quality information, and the largest marketplace for opportunities humanity has ever known. Every generation has unique opportunities to build wealth. For us, it was the internet revolution. For future generations, it might be the gamification of AI or digital realities.
Luck and timing play crucial roles in success. Being born in a stable country, having access to education, and encountering opportunities at the right time can significantly impact your chances of becoming wealthy. While you cannot control luck, you can position yourself to take advantage of it when it strikes.
Understanding Timing and Opportunities
Timing is crucial. You probably don’t want to start a physical newspaper business today. Some opportunities rise, and some fall. Be careful which you choose. Find where the opportunities of your time are and focus your efforts there. Gain specialized knowledge in a field where value is being generated, and society will pay you for your skills. Most people aren’t willing to learn the tools of the present because they’re locked in on the tools of the past. Those who do have a massive competitive advantage.
Understanding the timing of opportunities can make or break your success. Industries evolve, technologies advance, and societal needs shift. Staying informed about these changes and adapting accordingly can give you an edge. For instance, those who recognized the potential of the internet early on and invested in it reaped enormous benefits. Today, emerging fields like AI and blockchain offer new opportunities for those willing to learn and adapt.
The Simplicity of Wealth
Money, wealth, and success are less complicated than they seem. Life is a winnable game, but you need to learn the rules. Once you learn the rules, you’ll discover concepts like asymmetric risk or marginal utility, which will help you amass great fortunes. Your ability to win isn’t dependent on others. You will win based on what you do today, tomorrow, and every day moving forward. Ignore the naysayers and focus on making your life better. Opportunities abound for those who don’t listen to those who say it can’t be done.
Understanding the rules of the game is crucial. Wealth creation often involves taking calculated risks, leveraging opportunities, and continuously improving your skills. Concepts like asymmetric risk, where the potential rewards far outweigh the risks, can guide your decision-making process. You can overcome obstacles and achieve success by focusing on your actions and consistently working towards your goals.
The Decision to Be Wealthy
Will you live your life based on what you want or let others decide for you? Let’s see how many of you are not just looking to get to the top 20% but aim for the very top. If that sounds like you, write “top” in the comments.
Choosing to pursue wealth and success is a personal decision. It requires a commitment to lifelong learning, disciplined effort, and the willingness to take risks. You can chart a course toward a prosperous future by setting your own goals and not allowing others to dictate your path.
Conclusion
Achieving wealth is a multifaceted endeavor requiring more than hard work and determination. It involves understanding the relative nature of wealth, leveraging opportunities, and making significant personal sacrifices. While external factors like access to resources and infrastructure play a crucial role, the most challenging barriers often lie within ourselves. Discipline, continuous learning, and the willingness to take risks are essential components of this journey. As you reflect on the insights shared in this article, remember that the power to change your financial destiny is in your hands. Embrace the challenges, seize the opportunities, and pave your way to the top.