Financial Wisdom

Why Won’t the Rich Share the Wealth? March 27, 2010Financial Wisdom5 Comment

The age-old question.

I grew up in one of the richest suburbs in Minneapolis. Everyone and their dog had a BMW, and people would take their yachts out on Lake Minnetonka for fun on the weekends. The prom was a national holiday at my high school – parents would shell out hundreds (sometimes thousands) for their kids to dress their best and for the after-parties. Living in this kind of bubble as a kid, it’s difficult to grasp the concept of what it would be like to be poor, or to have to struggle to earn a living. To me, a house, a nice car, and a beautiful suburban paradise by a lake was the entire world.

Wealth is a strange thing. As someone who considers himself a “self-made” person, I have a lot of respect for those that live with a “trial by fire” approach to life. People who have become successful financially by their own intelligence, skill and consistency should be praised and rewarded for their efforts. Should they be expected to “share their wealth?” There is a dual nature to this position because there are those of us who:

  1. Don’t care about making money
  2. Try, but fail to make money
  3. Make money but then spend it in equal or greater amounts

Plenty of people are happy with their jobs and see the “ultra-rich” as greedy scoundrels who care nothing about the suffering of the poor. Some people who have a lot of money think that if you work hard enough, anybody can become successful. The government shouldn’t help out out, they figure, “because I was able to make it work. Why shouldn’t you?”

The truth is, there is a middle ground, and I fall somewhere along this spectrum. If you care about others at all, then so do you.

Why Hard Work isn’t Always Enough

It is a hard world out there, no doubt about it. Hard work can make you successful. It can put you squarely in shrinking the middle class. It can put you in McDonald’s making minimum wage. I’ve met plenty of McDonald’s workers who “work hard.” Clearly this is not the answer.

Someone with a college degree coming from a wealthy background might argue, “but if you had just gone to college, put together a professional resume and looked for a well-paying job, you’d be fine.”

But they are coming at it from their own perspective, which maybe be valid for them, but it will not hold any water when applied to someone else. For example, if I grew up in inner-city Detroit with an abusive father, no mother, 5 siblings, and no money, I would likely be more worried about my own survival than getting a job at a software company some day. It would definitely put me at an enormous disadvantage.

So no, hard work is not always going to make you wealthy, or even get you off food stamps in some cases. I cringe whenever I hear someone from a wealthy background (like where I grew up) slam any government effort to better the state of the country by increasing taxes on the wealthy and corporate interests. Sure, they are coming at it from their frame of reference, but not everywhere is Orono, Minnesota.

The Other Argument

There are plenty of people who don’t understand the value of money. They work hard, earn a decent wage, and then watch it blow out the window, often because they spend it on things that make them (in their minds) look good. Who really needs a Hummer? Really think about it. Nobody needs one. It’s all about standing out. Why do you need to spend $40,000 to stand out?

Image is incredibly powerful – we are all effected by its pervasiveness. Perhaps if we were not so concerned with how we looked to other people we wouldn’t mind taking some of that $40,000 that we spent on the shiny new Hummer in the driveway and saving it. Heck, if you invest $40,000 the right way you can be a millionaire in 30 years.

Or even better, you can give some of it to people who really need it.

Which brings us full circle. It’s a confusing circle. Personal responsibility, insight, and ingenuity are valuable traits. It’s nice to be able to work hard (or work with a degree of foresight and intelligence) and make a lot of money. But it’s also nice to share it with those who do not have the ability, the insight or the resources to make their own. Not everybody grows up in a standard of living that makes it possible to become wealthy, or even to live well.

This is why I feel that it is ok for the government to help it’s least fortunate citizens AND it’s ok for citizens to work hard and become wealthy. There is a balance that needs to be achieved at some point for any kind of global financial health to succeed.

Yes, I grew up in one of the richest suburbs of Minneapolis. But in other ways it was perhaps one of the poorest places in the world. Poverty of spirit, of “big-picture” understanding, and of caring for those who have no chance are the traits of a different kind of poverty. Growing wealthy is fine. Growing wealthy at the expense of others is unethical. Ignorance is commonplace in bubbles such as in the city I grew up.

I’m sure glad I don’t live there anymore.

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