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Why You Will Never Be Rich

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    Does being rich make you happy?
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    That's the billion-dollar question, but
    most experts on the matter agree that having
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    certain freedoms and securities that come
    with having lots of money does indeed improve
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    our feeling of well-being.
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    Psychologist Daniel Kahneman and economist
    Angus Deaton concluded that once you have
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    an income of over $75,000 a year, you won't
    necessarily get happier with even more cash,
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    because it's the safety net and opportunities
    afforded to people that really help maintain
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    some level of happiness.
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    A life of penury is often full of fears, set-backs,
    drudgery, and having to see all the time all
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    the things you can't have.
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    But then something called the Easterlin paradox
    tells us while rich folks are happier than
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    poor folks, rich countries are not necessarily
    happier than poor countries.
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    Today we'll explore this, in this episode
    of the Infographics Show, Why You Will Never
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    Be Rich.
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    Don't forget to subscribe and click the
    bell button so that you can be part of our
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    Notification Squad.
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    So, what are your chances of becoming rich?
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    Before we answer that, we need to know how
    much money you need to be considered rich.
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    This is obviously relative to every country,
    but one would think if you have a million
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    dollars in your bank account, you can say
    you are rich.
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    However, it seems people don't always think
    this way.
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    In 2013, a report by investment bank UBS stated
    that only 28 percent of people with $1-$5
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    million thought they were rich.
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    Even more surprising was that only three out
    of five people with more than $5 million thought
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    they were rich.
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    The report focused on assets, not cash in
    hand.
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    Still, who would have thought with over five
    million bucks in assets, many people wouldn't
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    consider themselves rich.
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    It would be quite confusing to talk about
    relative wealth in every country, so let's
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    stick with the United States.
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    There we have the mega-rich, the 563 billionaires,
    but we also have a lot of just plain old rich.
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    As for millionaires in the country, a World
    Health report told us there were 4.8 million
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    of them in 2016.
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    Many of those may not consider themselves
    rich, but many of us would say they are doing
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    pretty well.
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    The U.S. Census Bureau states that median
    net worth of a 35-year-old in the USA is about
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    $35,000.
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    It goes up with age, and from 55-64 it's
    almost $150,000.
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    It peaks at 65-69 at just under $195,000.
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    We couldn't say these people are rich.
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    Even the top 10 percent might not be considered
    rich.
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    The Internal Revenue Service reports that
    the average household income for the top 10
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    percent of U.S. earners is $295,845.
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    For the top five percent, it's $350,870.
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    The average for the top one percent is well
    over one million dollars.
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    For argument's sake, let us say that if
    you are in that top five percent you are rich,
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    never mind what you think of yourself.
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    How hard is it to get into that bracket?
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    It's actually quite hard, given that money
    often begets money, and unfortunately breaking
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    out of poverty is no easy task.
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    There is an old saying that goes, “The rich
    get richer and the poor get poorer.”
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    But what does this mean?
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    For starters, most people who earn the big
    money have a university education.
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    As you'll know from our other money-focused
    shows, many tech entrepreneurs drop out of
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    university, but most of them grew up in affluent
    families where they were afforded all kinds
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    of comforts and opportunities poor people
    are not.
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    In Malcolm Gladwell's book, “Outliers”,
    he points out that there are no self-made
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    millionaires.
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    Most people were helped with luck on the way,
    and often this luck meant supportive parents,
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    good schooling, and having fostered in them
    that they can do anything they want.
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    You'll also know from watching our other
    shows that there is a direct affect on how
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    much money you have, to how far you go in
    education.
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    Statistics differ depending on what you read,
    but it's thought that around 30 percent
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    of Americans over the age of 25 have a bachelor's
    or master's degree.
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    The Atlantic tells us that more than 70 percent
    of those that went to the top universities
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    came from America's wealthiest families.
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    These guys will no doubt have no problems
    paying off their student debt, if they had
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    student debt.
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    In 2017, Forbes reported that the Class of
    2016 had $37,172 in student loan debt.
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    If you are not from a wealthy family, then
    you are already struggling just when you get
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    going.
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    So, how do you get rich when you come from
    meagre beginnings, given that you might have
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    had only a basic education or that your education
    became a financial albatross around your head.
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    Still, back in 2012, a Gallup poll revealed
    that 28% of Americans expected to get rich
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    at a time in their lives.
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    That's positivity for you, but this is a
    country full of natural born American dreamers.
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    Many will be disappointed, especially if we
    realize that about 60 percent of American
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    wealth is inherited.
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    That means that those hoping to get into the
    five percent already have to contend with
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    those already in the five percent.
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    It seems they are not making much headway
    either.
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    An article in Evonomics tells us that “The
    rich are getting richer, faster.”
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    At the same time, the poor and middle classes
    are not going anywhere fast.
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    “Because wealth begets more wealth, it's
    a self-perpetuating picture,” said the economics
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    website.
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    Wealthy households usually hang on to their
    wealth, whereas less wealthy households face
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    all manner of dilemmas.
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    In 2017, CNBC wrote that the average American
    family owes $8,377, and that means you'll
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    be paying off interest on that.
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    Rich folks buy their goods outright for the
    most part, and so as a poor person you are
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    continually being faced with borrowing fees.
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    When you are struggling to pay for things
    outright, you are prey not only to lenders
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    but to the system.
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    Did any of you watch John Oliver on Last Week
    Tonight when he showed how many Americans
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    actually end up in jail for municipal violations.
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    That's right, when you can't pay a parking
    ticket, things can just pile up.
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    As Time magazine pointed out, when you are
    wealthy, a violation is no big deal, but when
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    you are poor “tickets can wreck your life.”
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    For not paying immediately, additional fees
    arrive, and then if you can't pay the fine
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    you, could be locked up.
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    If you ever need a lawyer and you are poor,
    you won't be able to hire yourself someone
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    totally dedicated to you, which is one reason
    why rich people can get away with things.
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    We could say the same about medical treatment.
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    If you live hand to mouth and can't afford
    insurance, but need medical attention, that
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    bill could ruin your life.
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    Being sick could take all the money you'd
    saved to send your child to college.
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    Being sick, physically or mentally, could
    be on the cards given you might not be able
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    to afford nutritious, naturally grown foods
    for every meal.
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    Poor and sick in America is an endless money
    pit.
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    One health journal stated that in the USA,
    38.2 percent of poor people are in “fair
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    or poor” health, compared to 12.3 percent
    of the affluent.
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    One millennial writing about how “screwed”
    his generation is, wrote in an article featured
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    on Highline, “My rent consumes nearly half
    my income, I haven't had a steady job since
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    Pluto was a planet and my savings are dwindling
    faster than the ice caps the baby boomers
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    melted.”
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    This is a generation that is growing up when
    all the media is telling them the robots are
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    coming and automation will take all the jobs.
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    If you're rich, it's likely you'll find
    those niche jobs, or your family will own
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    the company that employs the robots.
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    This is a generation that has around 30 percent
    more student debt than its parents did, and
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    those are the ones fortunate enough to have
    gone to college.
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    People born in this generation are also half
    as likely as their parents ever to own a house.
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    The American Dream may just be a myth, as
    money doesn't always trickle down and swimming
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    upstream isn't as easy as people may have
    once thought.
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    Researchers at the University of Illinois
    found in 2015 that, “The United States is
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    faced with record levels of income inequality
    and one of the lowest rates of actual social
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    mobility among industrial nations.”
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    It seems for the most part you are what you
    are born to be, and that means the rich stay
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    rich and most of you will not be part of that
    club.
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    Or, do you disagree?
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    Please let us know in the comments why you
    will be different and why you will definitely
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    be rich!
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    Also, be sure to check out our other video
    called 10 Surprisingly High Paying Jobs!
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    Thanks for watching, and, as always, don't
    forget to like, share, and subscribe.
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    See you next time!
Title:
Why You Will Never Be Rich
Description:

We all want to be rich, but what are that chances that you will ever become rich? Why is it so hard to go from poor to rich?

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Sources for this episode:
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Some Images used under license from Shutterstock.com

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Video Language:
English
Duration:
07:25
Alexandre Clemente edited English subtitles for Why You Will Never Be Rich
Alexandre Clemente edited English subtitles for Why You Will Never Be Rich
Alexandre Clemente edited English subtitles for Why You Will Never Be Rich

English subtitles

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