According to statistics, in the past ten years, the wealth of the top 1% has been increasing significantly while the wealth of the remaining 99% has stayed the same. The average earnings of an American household equals to $44000 annually while the top 1% earnings equals to over one million. There are several reasons for this.
Wealthy people have more options for investment
Wealthy people invest more and cover a wider range of investments due to the increasing capabilities of their income. A middle-class person has half of their income already spent on covering bills and basic needs, while a rich person has over three quarters of available income ready for investment. In addition to this, they make sure to have good quality investments and are not afraid to cut away previous assets if the company is doing bad.
They have a wide range portfolio covering several industries so that if there is a market collapse, the rest of the industries will cover the losses. Naturally, wealthier people are considered risk takers. By striving to get away from the herd mentality, a wealthy person would always be on the lookout for potential opportunities to increase their wealth, regardless of the risk involved.
When the housing market collapsed in 2008, the people that got rich of it were the ones who didn’t sell their property at the time but rather invested in houses and real estate when their prices were at their lowest. When it happened, my ex colleague Maxim, today owner of financial markets review site, said : the history’ll just repeat. Only weak ones are gonna to be touched by the crisis.
Due to situations like these, they can substantially increase their wealth.
They have created their own perfect world with high resistance to change
Another reason behind the increasing gap between the top 1% and the rest of the population is because of the rules the society has placed over salary distribution. The salaries of top executives have skyrocketed since the 70s by 200:1 in comparison to the average person’s salary. While executives are faced with complex problems and their experience in leading a firm is a rare talent, a pay gap of 200% difference and growing is a bit too much. Same could be said for lawyers, celebrities, athletes, etc.
They are constantly exploring for new options to increase their wealth
Probably the most important reason behind their wealth increase is that they are not falling for the quick get rich schemes. Getting rich is hard work, it requires a lot of hours, a lot of dedication and effort. And above all, it requires you to think outside the box. Think about the books on business, finance, or trading that you have read in the past, either leisurely or during college years.
Who wrote those? Is that person famous or rich? If they are, ask yourselves, would they give away all their secrets just like that? And what about the get rich fast schemes?
There is no information out there that would make you rich fast. Our world is moving faster and faster every day, which means that the information you read in that book on wealth/business/trading is already outdated by tomorrow. Instead of going through old information, get out there and experience the adventure first handedly. Don’t be afraid fail a few times until you finally find your path to become rich.