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Myth: The rich get rich because of their merit.

Fact: Researchers have uncovered dozens of social factors that contribute to becoming rich.



Summary

The vast majority of academic studies on who becomes rich have found that intelligence and merit are only a part of the reason -- social factors play a huge role as well. Studies of Fortune 500 companies have found that American executives are seeing exploding pay, but there is no correlation between their pay and a company's profitability. In fact, companies with the greatest inequality of pay suffer worse product quality. And many studies have found that societies with the greatest equality generally enjoy the fastest rates of economic growth.
http://www.huppi.com/kangaroo/L-richmerit.htm
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The rich get rich because they work hard, make smart investments, and stay away from debt. It's a very simple concept. My family didn't have much money when I was a kid, but after many years of hard work and smart money decisions, my parents are living comfortably.

I'm doing the same thing. We put quite a bit into savings and investments, we make all of our purchases with cash except for the house, we work hard and budget carefully. This isn't merit, this is setting financial goals and achieving them.
The executives that get these disproportionate bonuses are doing so because they negotiated this prior to getting the job. If you're smart enough to be able to negotiate a bonus that is not tied to any performance goals, then you are getting what you deserve. It's all about the signed contract.

I'm in the same boat as Nash, regarding finances and financial philosophy. When I got out of college I did not have a pot to pee in. 14 years later I'm doing pretty good and I achieved this through work ethic and discipline, not merit.
The greatest growth in the American economy came in the wake of WW II. A time when wages were relatively high, taxes on the rich were extreme, education of the returning Veterans was government sponsored, and America was exporting all manner of goods, from electric hair clippers to Catipillar Equipment Machines to the rest of the world.
We are in decline, even the Republicans agree to that, despite growth in the economy. Taxes on the rich are lower than ever, unions are weaker than ever, education is getting further out of reach, and people need a second job to pay for gasoline to get to their primary employment.
The economy was booming after WWII not because of tax on the rich, but because of the need for industry to supply the war effort. WWII gave the economy the jump start it needed to get out of the depression. People previously unemployed now had jobs, returning soldiers began having kids and the baby boom began. This meant more demand for industry and jobs as the demand for housing increased. This is also the time subdivisions first started to appear.

Taxing the rich does not give money to the poor, it simply takes money from the rich. Taking money from the people who have earned it and giving it to those who haven't is a socialist idea and does not work. Education is not further than ever, more and more people are getting college educations than ever. My alma mater has been reporting record attendance for the past 4 or 5 years, they're over 20k students.
quote:
Originally posted by NashBama:
The economy was booming after WWII not because of tax on the rich, but because of the need for industry to supply the war effort. WWII gave the economy the jump start it needed to get out of the depression. People previously unemployed now had jobs, returning soldiers began having kids and the baby boom began. This meant more demand for industry and jobs as the demand for housing increased. This is also the time subdivisions first started to appear.

Taxing the rich does not give money to the poor, it simply takes money from the rich. Taking money from the people who have earned it and giving it to those who haven't is a socialist idea and does not work. Education is not further than ever, more and more people are getting college educations than ever. My alma mater has been reporting record attendance for the past 4 or 5 years, they're over 20k students.

NashBama, You are WRONG. The economy boomed after WW II because of repressed demand. From 1941 to 1946 no new cars were produced for civilians. No refrigerators, No washing machines, no motorcycles, no bathtubs, mining of non essential materials was halted. Tires and gasoline had been rationed. Meat and Dairy products were Rationed. Shoes, Clothing, bedsheets, paint all in short supply and very pricy.
The economy boomed because Labor was in EXTREME DEMAND during the war, and while wages were "fixed" there was not much to buy with the wages you got, and prices were "fixed" too. Result a lot of unspent money in the hands of the population, and renewal of production for civilian use. LOOK AT A 1940 CHEVROLET, AND AN 1940 FORD, AND COMPARE THEM TO 1946 MODELS.
My family had a 1938 Packard until 1950. When we went shopping for a replacement car, SURPLUS ARMY JEEPS WERE TOP OF THE LIST. During the war we used the school bus my dad drove as a part time job for transportation. We walked, me, my and my brother, while mom pushed a carriage with my baby sister, a mile to the grocery store, and a mile back. No Gasoline. When the horses broke the fence at got into the neighbor's cornfield, we chased them down ON FOOT. We kept Chickens and Rabbits for Meat, and eggs. And, after the war, the governmnent taxed the devil out of everyone to pay off the War Bonds. And the economy was as strong as it has ever been. Stronger than it is now.

Five years before WW I, in 1913 (actually the year WW I started to heat up in Europe) The USA amended the constitution to institute an income tax. It was set at 1% of all individual income over 100 thousand dollars. By the time WW I ended practically every working citizen was paying income taxes. The economy boomed after WW I too. Inflation follows war, like rainbows follow thunderstorms. Inflation LOOKS like prosperity. Inflation makes old debt easier to pay off. Genuine Economic Growth DOES NOT INCLUDE GROWTH OF DEBT.

Right Now we, as a nation, are borrowing ourselves into a false prosperity.

Sure feels good to have someone borrowing money to pay wages with, but it is short term, those loans are going to have to be paid back.
In simple terms, get a financial advisor, because of some of the things I am reading here, makes no sense at all...

Nash, you have told us where you work... and the technician who came to our house the other day told us what he made a week, and the only way to make a REAL good living with that company is to get all the overtime you can... AND with that said, then I have to say that I cannot for the life of me see where you get your ideas from, or how you can GIVE that sort of advice on a forum here. Advise like you are saying needs to come straight from a GOOD Financial Advisor/Expert... those are the ones who can tell you how and where the BEST place for your money to go... but in no way can they tell you that you are going to get rich where you are working... Good living, maybe, rich, no.

Unless you own that company, the way you speak and the arguments you try to throw out to us just don't make sense....

NO WAY is anyone going to get rich by working overtime for a big corporation.... even with loads of overtime, they will just "make" it... done been told that by people who work in the same place you do.

And don't get upset by my saying that, you are the one who said where you worked... I am the one who had some problems with the equipment that comes from the place you work and have had a lot of interaction from a lot of workers on different levels, different jobs... so although I am definitely NOT an authority, I do know that it isn't a "GET RICH" company... Anyone from that company who gets rich, sure isnt the workers, or so I have been told, ... ???
quote:
Originally posted by NashBama:
The economy was booming after WWII not because of tax on the rich, but because of the need for industry to supply the war effort. WWII gave the economy the jump start it needed to get out of the depression. People previously unemployed now had jobs, returning soldiers began having kids and the baby boom began. This meant more demand for industry and jobs as the demand for housing increased. This is also the time subdivisions first started to appear.

Taxing the rich does not give money to the poor, it simply takes money from the rich. Taking money from the people who have earned it and giving it to those who haven't is a socialist idea and does not work. Education is not further than ever, more and more people are getting college educations than ever. My alma mater has been reporting record attendance for the past 4 or 5 years, they're over 20k students.



WOW, it took literally YEARS to recover from that!!!! Our Country REBUILT Japan, and other countries BEFORE starting here.... We may have been booming by sending our workers over to rebuild other countries, but here at our homeland, it took MANY years for the VAST MAJORITY of people in this Nation to get their heads above water... and some literally died trying!!!!

PBA, this article is very informative, and I googled several others related to it, and it is CORRECT!!!! Hard work, relentless hours just causes major health problems.

That is NOT the way the majority of RICH people got RICH... it just isn't... If one wanted to take a list of all the RICH people in our nation, you would find MANY factors. I shall use just ONE example.... Bill Gates!!!! Ninth grade drop out, but VERY VERY intelligent on the inner workings of VIDEO GAMES..

He never worked hard, he didnt even graduate from high school, and but he was in the right place, in the right mind-set, with the right intelligence at JUST the RIGHT time....

He is just ONE example.... Then you got your Trumps, and so on it goes... they didnt work hard at all.. most of our Rich people either FELL into it like Gates did, or they come from VERY VERY old money.... so much so that they can live off the interest if they so choose...

Hard work... long hours... YEP, that will get you a PAY CHECK.
quote:
Originally posted by Southern Patriot:
If hard work and long hours only get you a paycheck, how did Sam Walton build the largest retailer in the world?


INVESTMENTS man, INVESTMENTS!!!! AND the United States was ripe for that type of business and HIS way of doing business... FINANCIAL ADVISORS!!!

He INVESTED well, then BORROWED well, then HIRED well...

Good decisions, good investiments, good timing, and a wonderful American that other American's backed... Too bad his heirs do not feel the same.
quote:
Originally posted by Southern Patriot:
If hard work and long hours only get you a paycheck, how did Sam Walton build the largest retailer in the world?

Have you ever heard of Woolco? How about Fed Mart? Two companies that you will not find anymore, K mart is still around, ShopKo and Gibsons too.
Wal Mart started in Niche Markets. Places most people never heard of Like Tucumcari New Mexico, and Pratt, Ks. They had one thing in common, a fairly large city 50 miles away, and a GOOD highway as a main street. WalMart built on the outskirts of these small towns, and offered a wide range of goods that were only available in the large city. Great Idea, and for about 20 years the only place you could find a WalMart was in those locations. 1995 Joke on the "Tonight Show," "How can you tell you're in a small town? -- There's a WalMart nearby."

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