Poll: How do rich people become rich in the first place?

[dyre]

I imagine a few of them worked super hard for a really long time, a few of them were at the right place at the right time, a few of them saw an opportunity before most others did and took a risk to pursue that opportunity, and a few just got it from their rich parents.

Like when asking "how do the poor become poor," you're likely to get a huge range of answers.

Most people get rich the REAL 'Ye Olde Fashioned Way'...they inherit their money.

Incorrect, while that was true a few centuries ago,the vast majority of millionaires and billionaires these days did not inherit their fortune.

Got to love all the unsubstantiated hate going around this thread. Jealousy is a powerfully blinding emotion. The simple truth of the matter is that no one, even given all of the advantages in the world, can make that kind of fortune without a great deal of personal ability and hard work.

Hey, at least of all the groups of people who have been the subject of unsubstantiated hate, the rich are doing well enough to generally shrug off that hate!

How do the poor become poor?
Well I can answer that. Parents have good jobs, make loan, build (not buy) house on bought terrain with loaned money. Parents think "sure we can pay for the loan in 10 years with our salaries." Company goes bankrupt, whole city is full of unemployed people, parents can't get new jobs, children are learning well, want higher education, can't go where they want, they stay in the city with their parents and study at city college. kid graduates. tries to find work (still searching) in a city with lots of unemployed people and few options (besides slave labor with subminimum pay) => BINGO: broke ass family. no food on the table. bank threatens to sell house built for peanuts, family in the street. savvy?

Also: true story.

Incredible, I had no idea "the poor" were a homogeneous group, with each member sharing the exact same life story! My parents told me a story about how their parents became poor because the government in Cultural Revolution era China seized the possessions of all the business owners, college educated people, scientists, etc in the country, but clearly they must have been lying because that doesn't at all match the story you told...

Happened to my family too in the communism era. So that would be another reason, before the present one . I even have a grand parent who went to jail because he refused to freely give up his business (a bakery) to the state. So yeah, but I was giving just one example, I didn't say it's universal. Point is, some people are poor because others want to be very rich, no matter the cost to others.

Eh, alright. My point is that rich people and poor people get where they are for all sorts of reasons. Sometimes they have others to blame / thank, sometimes the achievement / fault is mostly their own, sometimes they were just lucky / unlucky. I'm just a little amused that over half of the people in the thread seem to believe that the rich only became rich because they were lucky or inherited / robbed someone.

 

[Timmey]

Believe it or not i think working hard and choosing the right profession are the main factors. Something like medicine is exceptionally well paid, likewise with things such as property and banking. Of course that all depends on your definition of rich.

 

[infohippie]

Most super-rich are born into it, and ensure the wealth keeps flowing their way through lobbying for law in their favour. This video might be eye-opening for some of you.

 

[Launcelot111]

If you want to be rich, then outside of being a successful athlete/actor/etc. or inheriting it, then you have to pretty much choose a path in life dedicated to making money. Getting a finance degree, going to a good business school, working 100 hours a week in investment banking, getting on the board of directors of a multinational corporation. If you like your family or your free time too much, you probably won't end up obscenely rich. To become comfortably well off, I guess being talented and successful at whatever you do combined with some level of moderately aggressive investing and a little luck

 

[DkLnBr]

I think there are a lot of different ways people do it
[li]Luck is one. They came across a great idea or business venture at the right time and "strike gold"[/li]
[li]Hard work. My Dad's boss has a perfect example of a success story through hard work. At 19 he got kicked out of his parents house and had to sleep on a park bench, but he never gave up and put 100% of his effort into what he did, and now he has a million dollar house in palm springs and a Lamborghini[/li]
[li]Good planning and money management. If you strike it rich, but squander everything you have by living outside your means, then you obviously wont remain rich[/li]
[li]The last one I can think of would be just plain inheritance. Someone else was lucky/hardworking/smart and then you just piggyback on that.[/li]
I think that to be truly successful you'll need a little bit of the first three (inheritance is a different story)

If you want to be rich, then outside of being a successful athlete/actor/etc. or inheriting it, then you have to pretty much choose a path in life dedicated to making money.

This is also one, hard work and luck wont help you make millions off of your philosophy degree, but I suppose this could fit under "good planning"?

 

[zidine100]

Alot of brains , charisma and drive. Brains to know what to do to get it, when to do it, and how to hide what your doing so someone else doesn't cut in on your busness, charisma so you can pull it off, you cant be a good businessman without being charismatic.

unless your bloody lucky ofcourse

well thats what ive seen from the tv anyways.

 

[StashAugustine]

By sitting in a burned out hotel, far away from any traders, and being elitist jerks to the outsiders because they somehow have marginally cleaner living conditions.

Sorry, watching a FO3 LP.

 

[Skeleon]

Often inheritance and connections. Unless there's a lot of investment from the public, vertical mobility is rather low. Rquality of opportunity requires intervention.

 

[rasputin0009]

Opportunities and taking risks. Being born into a family with opportunities, whether it being financial or just good DNA. Both my parents didn't come from rich backgrounds, but they were smart enough to get through school. From there, they were lucky enough to have the opportunity to start a business which they grew into a large company through more opportunities and hard work. And since I was born into their success, I've had more opportunities than they had so I'm able to use those opportunities to get even farther ahead. For example, I started up my own engineering firm as soon as I was out of school, and now I've got enough time on my hands to troll escapist forums.

But seriously, I make too much money.

 

[DaSmart1]

Depends what you mean. If you mean RICH rich, like 1% rich, then yeah there's a lot of luck and inheritance involved. But really, it mostly has to do with just being smart with your money. If there's one thing you notice about people who become a success, and STAY a success, is that they actually know how to handle the money once they get it. If you're waiting on the lottery or dumb luck to get your rich then you're going to be waiting a long time.

 

[TakeyB0y2]

Yeah, don't count on the lottery as most people are broke as Hell a short time later. Probably has something to do with the publicity winner(s) receive.

That, and then most people who win the lottery throw the whole concept of budgeting out the window, and forget about that whole taxes thing.

I'm not talking about prize taxes, although that is certainly a factor. I mean, you win the lottery, you buy a nice huge house, or multiple houses, and then your money starts to drain fast because then you realize "Oh yeah, I gotta pay taxes on those things"... Unfortunately, you retired early so you don't exactly have an income. Whoops.

OT: A lot of things can factor into being rice; being discovered, being born into it, having an innovative idea for something that the world needs or didn't know it needed but as soon as it learned about it wanted it in vast quantities and are willing to throw several hundreds of dollars at it every year just because the latest model has a slightly bigger screen or voice recognition...

I kinda shy away from luck to a degree. Yeah, you can say Justin Bieber is pretty lucky; after all, the only reason he got so successful is because Usher happened upon his YouTube videos and scooped him up. This can be said about quite a few celebrities, although many got their spot by sheer persistence and accepting crappy bit-parts and background roles until someone decided to give them a line or two. Entrepreneurial rich people most definitely worked towards their wealth, even the ones who were born into that wealth and continued it on my inheriting a company owned by their parents. Just because you were born to an ultra-rich all-powerful CEO doesn't mean you're gonna know how to run a business from birth after all.

 

[Callate]

The vast majority of the time, you have to have some kind of help.

Help comes in a wide variety of forms. It could be that you're a shoe-in for education at a place like Harvard or Yale because your family went there for generations. It could be that you had a mentor in high school who pushed and guided you so you were able to get scholarships that put you on a path to medical school, law school, or an MBA. It could be that a family friend was willing and able to give you a loan to start a business, or someone with the appropriate connections liked you enough to set you up with people who could move forward on a great idea you had, rather than stealing it for themselves.

But virtually no one makes it on their own, which is part of what makes the myth of the "self-made man" so insidious. It's true that some people are better at seizing on the opportunities they are given, and others are blessed with the endurance to pick themselves up after innumerable failures. But there are plenty of decent, hard-working people out there who never get a fair shake, and quite a number of wealthy people who were never likely to be anything else.

Only the tiniest of the wealthiest people in America are entrepreneurs, according to tax return data; most of the wealthiest are in management or finance, and they didn't generally get there without top-flight education or top-of-the-line connections, and usually both in spades.

 

[Ihateregistering1]

Read "The Millionaire Next Door" to get actual good advice.

Bottom line? Most people who are rich and stay that way do so because they're extremely frugal. The ones who spend all their money on yachts and jewelry and cars are the ones you mostly see on TV, and they're also the ones who usually end up losing it all. Oh, and here's a good article.
http://www.businessnewsdaily.com/2871-how-most-millionaires-got-rich.html

 

[Jfswift]

I read a book a few years ago that chronicled how Howard Schultz founded the Star Bucks franchise. From what I gathered, Howard was very passionate about his ideas, a hard worker and possessed strong salesmanship skills. This was from a college background in communications and also from having the benefit of working at Xerox. Some time later while employed elsewhere he was in Italy and really liked these cool little coffee bar hang outs that provided a unique social atmosphere and served good expresso. At that point he basically brought that idea to the America (wiki).

I kind of agree with a few other posters though, I think some luck is involved although you can augment luck a bit in your favor. There's a book called, "The Tipping Point" where the idea is brought up that to sell a product you need someone popular to like it and promote it.

It helps to understand taxes and how to properly invest money too.

Alternatively, I suppose a family could keep taking out massive life insurance policies, over generations slowly gaining wealth.

Also, I recommend the book, the automatic millionaire covers common sense savings tactics over your work life. Its a good read imho for planning for retirement anyway.

 

[asinann]

Its the rich that pay almost all of the taxes in the US

Actually, most of the income tax revenue comes from the rapidly shrinking middle class in the US. Sure the 1% people pay a larger amount each, but they only make up 1% of the population. When you stack a few thousand people paying a few million each (because it's taxed at 15% AND they write off things like trust funds to family members and donations to their churches) vs 150,000,000 people paying 10k each, the masses end up paying more overall.


I also don't see many small businesses hiring people. Where I'm from they tend to be places where the owner works 12 hours a day and barely scrapes by.

Most of the wealthy started there, were handed high paying jobs on silver platters, screwed them up, got another one ad nauseum while any idiot could have outdone them given the chance.

that assuming they all pay taxes (big shock they dont). <url=http://money.msn.com/tax-tips/post.aspx?post=292d620a-6459-4381-a22b-f3b59dc64ff8>45% of the tax paying populace doesnt pay income tax (The one that gets raised and usually supports the Federal Budget's spending) for being in too low of a tax bracket or other loopholes to avoid taxes.

also, <url=http://www.ntu.org/tax-basics/who-pays-income-taxes.html>according to AGI for 2009, the top 75% (those making 100K+ which I would certainly say is wealthy, but hten again where I live the median tax payer) pays close to about 70.5%, the top 5% paying near 59% (well over majority).

According to <url=http://www.istockanalyst.com/finance/story/6142878/who-is-paying-the-largest-share-of-taxes>this story, those earning 200K+ pay over 50%.

<url=http://web.sba.gov/faqs/faqIndexAll.cfm?areaid=24>Small businesses also created about 65% of jobs in private sector up till 2009.

and of course I dont see many large businesses (500+ workers, as classifed by the SBA (small business association) hiring, or at least making the positive gain (new hiring > layoffs/firings), but thats just my area.

And contrary to most popular belief, not just any idiot can run a company when presented. please, feel free to pick up the nearest drifter or welfare abuser and place them in a CEO position of the Fortune 500 companies and tell me they can do better jobs. Tell me they could have prevented Enron, the financial and housing bubble pop, and the crippling debt congress is putting the nation through if we're going to just get straight to the point.

I could have prevented Enron or the housing bubble. DON'T COMMIT FRAUD (Enron CEO) DON'T LEND MONEY TO PEOPLE YOU KNOW CAN'T PAY IT BACK (housing bubble)

A small business isn't up to 499 employees. If it was, EVERY BUSINESS in my town would be a small business: INCLUDING MCDONALDS (each franchisee is their own business.) A small business is a business that the employee total is so low that laws like the FMLA don't apply to them.

Wealthy is also defined as 450k+ (the 39% tax bracket.) And I would love to know how nearly 50% of the US doesn't pay taxes when I barely cleared 12k last year and STILL had to pay taxes. I didn't have to send them MORE money, but I sure as shit didn't get everything back. I'm guessing the hack report you got listed people that had to pay more than they sent in initially. (though I DO love how you said a chunk of the tax paying populace doesn't pay taxes, wouldn't that mean they aren't a part of the tax paying populace?)

And as evidence that any idiot is given the chance repeatedly if their family is rich enough: George Bush Jr.
He ruined more companies than I will ever get the chance to run just because he comes from a rich family.

But this thread wasn't about taxes. It was about how the rich get there: they start there almost to a man. Their families got there in the first place through crime or some big scam.

 

[Mcupobob]

Sometimes you luck into, sometimes your born into. For the most part its hard work, sacrifice, and brains. Study the market, anticipate any future needs and fill it. Most rich people weren't at the right place at the right time. They thought of an idea or learned a skill the was profitable at the time and place. Though thats only to be successful and moderately wealthy. I do think it requires a effort from a couple of generations to go from rags to riches.

Though thats just my belief, I don't care enough to back it up with stats or facts and examples. Though neither does the "They just got lucky! Those criminals!" Crowd does.

 

[Rachmaninov]

Almost all rich people are born into it these days.

But riches begin by stealing money from other people;

Either you become a warlord/royal/dictator and take it from everyone by force or taxes, or you start a business offering people something they really want, for lots more than it's actually worth. With the latter, the larger the difference between the value of the item and the price, the better (outright fleecing people is the best way, if you can get away with it).