I wrote the post Why Financial Equality Will Never Be Obtained, and I left the reader to do some thinking. I had the readers draw their own conclusions of what would happen if a lump sum of money was distributed to a poor person, a middle-class worker, a white-collar corporate employee, and an entrepreneur/investor.
Before I give you my own opinionated conclusion, I just have to disclose that I am a business owner and an investor. I own a plumbing service company out in Hawaii (hawaiiplumbingservices.com) and invest in private and public businesses (the stock market). So damn right my opinion is going to be biased!
My conclusion is that the poor, middle class, and corporate employee will spend majority of their money in “non-money making” items other than the necessary living expenses, also known as liabilities. The lump sum of cash will come in and go right out back to the economy, much like how their regular income flows regularly.
The business person/investor will likely invest the lump sum of money into assets that will create more money. Whether if it’s in a business of his/her own or in other companies, the mindset will always be to preserve the money (capital) and compound it.
Here, in this situation, money will flow back to the competent business person/investors of the world. Even if the middle class and/or the corporate employee decides to invest their money into stocks, real estate, or other assets, the business owners/investors will likely be the ones to sell them the assets at a more premium gain.
Now why does this happen? It’s not because the economic system is flawed. Everyone has the potential to become rich and wealthy here in the U.S. I can say that it is intentionally being fixed, but more on that in a later. As mentioned in the post, it’s knowledge that is the defying factor. Knowledge is the fundamental aspect that separates the economic classes.
Now, think about it. And come back soon. Maybe you’ll learn something, not like when you were in school…