In a recent Fortune editorial, Nina Easton writes “. . . don’t blame the rich: a defense of the 1%.” Instead of constantly criticizing the 1 percenters most people could learn a lot about accumulating wealth through understanding the habits of these wealthy people. She states succinctly:
It’s entertaining to wail about the fat cats and the greedy rich. But if we’re serious about addressing widening inequality, we should figure out what the 1% is doing right– and apply some of those ideas to closing the gap.
Again, the original title of The Millionaire Next Door was “That’s Why They’re Wealthy.” One of the main reasons they are wealthy is that they have stable and long term marriages. On the other hand, there are “. . . far higher divorce rates and more children living with one parent in workingclass communities.”
As stated in The Millionaire Mind,
. . . consistent participation in marriage results in significantly higher wealth. Conversely those people who are not married continuously over time have a propensity to accumulate lower levels of wealth during their adult life cycle.
Millionaires and those who will probably attain the status have a unique ability to select mates with a certain set of qualities. Among the first things [millionaires] say [about their spouses] include down to earth, unselfish, has traditional values, my emotional backbone, patient understanding. . . .
Among the 944 millionaires surveyed nationwide for Stop Acting Rich, 91% were married to the same spouse on average for 36 years. Fully two-thirds have never been divorced. Only 2% were never married; 3% are currently widowed, and the remainder, 4%, are currently divorced or separated.
In the same survey, 90% of the milllionaires indicated that their parents were never divorced or separated any time prior to their 18th birthday. Add to this the fact that only 16% of the respondents reported being raised in an atmosphere other than one filled with love and harmony.
It’s not the fault of the 1 percenters that there is an inverse correlation between divorce and net worth. And it’s certainly not the fault of the 1 percenters that fully 30% of households with children under 18 are single parent families. That is nearly 12 million households. And in 85% of the cases these households are headed by women. As Ms. Easton says in the Fortune article, “But the rage against the 1% is misplaced. . . the rich aren’t getting wealthier at the expense of the poor.”
It is well documented that income is a high correlate of wealth. High income households tend to be of the traditional husband/wife type. Fully 84.4% of tax returns at the $200,000 and above income level are filed jointly. Only 20.1% of tax returns with incomes under $50,000 are joint returns. More than ever before the high income household is composed of a husband and wife who are both working full time.
While I agree with your principles of emulating the wealthy, but I think there is some validity in criticizing *some* of the high income people. Those who are earning princely salaries for participating in unethical, if not questionably legal, activities should be highly criticized. Quite a bit of the “fat cat” crowd uses its high income to tilt the playing field of government influence in its favor. That sort of behavior needs to be stopped.
I agree with you that the small fraction of the 1% should be criticized for dealing with unethical business practices, but in what ways do the rich tilt the government in their favor? If you look at the entitlements people receive, many of those are geared towards lower income households. They cut off at certain income threshold.
Everyone; keep in mind that just under 50% of the working population of this country pays no Federal income tax. If anything, the playing field is tilted in the non-taxed 50% of the nation’s working population, that have no skin in the game. In short, they are not paying their fair share. Many never have eother. They have little or nothing to complain about in my way of thinking.
As I read this post I was considering all my divorced friends and remembering the time after my first marriage ended 15 years ago. You would think in a divorce situation money/expenses would be split in two but in actuality it is split in three: His, hers, and those we had to pay to facilitate the legalities of a divorce. Lawyers, new landlords (security deposit, first month’s rent), and nowadays – two separate cell phone bills.
Any wealth built while together is easily spent on starting a new, separated life. The saying is so true: Marriage is grand but divorce is fifty-grand!
Yes, Dr. Stanley,
I agree. People should choose spouses based on those qualities.
I’m sure the 1% live below their means. That is the lesson couples should use today.
What “fat cats” are you referring to?
Ultimately, we have a breakdown of the envious Occupy Wall Street crowd versus the fiscal discipline focus Tea Party people.
Sure, the OWS folks say the Tea Partiers are “tea baggers”, “racists”, etc.
Fiscal discipline, managing one’s finances, taking responsibility for yourself, having a supportive spouse (that 90% statistic is telling) with whom you stick with, these are not the values of Occupy Wall Street . . . and they are not the values of America.
Sir,
I’m sitting in Afghanistan and am truly enjoying your blog. Over the past several weeks, I’ve gone through all your posts and can’t get enough. Please keep them coming!
Best Regards,
Jeremy
It does not take marriage to make a millionaire. Lifelong single guy here. A hard working contract engineer who works in various cities chasing the big bucks. I live below my means but do have a high income. Traditional families are touted by this conservative philosophy, but in my profession the reality is that there is a high proportion of single people. The ones who do not “get it” are single home owners who are dependent on one company and they buy more car than necessary, trying to impress others. I’m a Toyota-driving Millionaire and I am not socially conservative and do not believe in the institution of marriage. Saving money and building wealth is beyond religious values / concepts and cultural conformity. It’s just common sense.
“Saving money and building wealth is beyond religious values / concepts and cultural conformity.”
Maybe, but for no more than one generation. For the really rich, it’s a family thing. For them, it’s all about marriage. No other way to grow the dynasty.
A little late to the game here. Just discovered the blog (not the book) this morning. I disagree with Sam on the 50% not having “skin in the game.” Some of those people are serving in the military. Yes, they do have tax withheld throughout the year. But with deployments, it’s not uncommon for that money (and then some) to be returned to the soldier. I would say those who are serving have way more “skin in the game” than those in the 1% ever will. Just as it’s unfair to attack the 1% as greedy, lying, cheats..it’s also unfair to accuse the entire 50% of not contributing.