Sometimes, I don’t know what to think. I notice things, I guess. It happens from reading a lot and reading
varied things. Most of the stuff I read
is not from failures, but from successful people. Either that, or from people who have come up
with really good ideas that I think are worth emulating. Or decent research.
Anyways, Chrystia Freeland talks about the Rise of the new global super rich in a TED talk. But
Freeland ignores the research of Stanley and Danko in The Millionaire Next Door. See, Stanley and Danko talk
about the same thing, except they use statistics. Freeland is worried about aristocracy being
created a generational wealth created through parents who have the abilities to
send their kids to better schools.
Stanley and Danko talk about the same thing, but in the light of
research, the idea of sending kids to “better schools” to perpetuate the wealth
class doesn’t pan out. See, it’s not
education that is the prime identifier of business success. It’s a flawed analogy.
Bill Gates talks about the same thing in Mosquitos, malaria and education, another TED talk.
Gates states that the prime factors for teacher retention and improvement
are education and tenure. Neither factor
is a good identifier of whether the teacher is an excellent teacher. So the metrics used are false metrics and the
idea that more education leads to better something isn’t always a true
analogy. Gate’s talk was based on work
from the Gates Foundation.
So, what you end up with is a false analogy perfectly by
Stanley and Danko. The first generation
of a family is the one that ends up becoming a millionaire. These are generally business minded entrepreneurs
who went to public schools and opened businesses, using the explosive powers
described by Robert Kiyosaki in The Cashflow Quadrant. To simplify as best as I remember, the entrepreneur
creates a system that uses other peoples’ time and other peoples’ money to make money.
Those parents then train their kids out of that system
and into the a self-reliance system where wealth creation is only based on what
an individual can create. The kids of
the rich parent are trained to be doctors and lawyers. Doctors and lawyers make great amounts of
money, but a doctor can only work so many hours in a year. Whereas a person who manages a company of
doctors can hire more doctors and profit from the work of every single doctor.
So, going back to Stanley and Danko the idea that a
generational monopoly on wealth is being created is pretty crazy. 78% of America’s millionaires are first
generation rich. I’m almost guessing
those families are back to generally “well off” in three to four
generations. This is nothing like the ideas
presented by Freeland as being darned near fact.
Going to the wealth gap between the middle class and the
rich. Why do we need to support
failure? The middle class and the rich
have the same amount of time in the day as each other, but the work of Tom Corley show that how the rich and the poor spend their day are as different as
night and day. Stanley and Danko said
the same thing in The Millionaire Next Door.
Their general example showed that the average rich person didn’t look
anything like what media portrays as rich.
Whoops! Looks like
those super rich of the new generation are doing their best to keep up with the
Jones, and the Jones’ just got more expensive.
Such behavior, as described pretty frequently and remarkably by Dave Ramsey, leads to B-R-O-K-E people. Granted,
it might take them a little while longer to blow through a billion dollars, but
it will still happen. Take a historic
look at lottery winners.
So, if people are moving upwardly mobile on a large
scale, then you are dealing with an education issue. And now we’re back to Bill Gates again, so I’m
going to stop that nasty loop right there.
I’m sure I could come up with more on this loop, but I’ll
wait until later to deal with that.
Point is that just because someone is passionate about something doesn’t
mean they are right. And smart people
often have blinders that prevent them from seeing what lies right in front of
them.
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