What Are Wealthy Families Doing Differently?
A recent study looked at more than 90,000 families from developed countries worldwide, searching for the differences that set wealthy families apart from the poor.
The researchers noted that they saw a significant gap between the poor and wealthy in capitalist countries such as the U.S., and they concluded that the decisions which could possibly greatly impact your future financial security are the decision to own your home and the decision to start your own business.
Worldwide, researchers admitted that they discovered homeowners to be wealthier than renters, for the United States alone that gap was seen to be at least a 8x difference in wealth between the two groups.
As far as starting your own business, researchers discovered that this was the most sure way to accumulate wealth if you weren't born into it.
For Americans, if they own their own home and they own their own business, researchers estimate that they could become 4x as wealthy. For those who owned their homes and worked for someone else, rather than being their own boss and an entrepreneur, they too were seen to have accumulated less than those who both owned their own home and had their own business.
This doesn't mean that everyone who goes out to buy a house next week or start their own business, is going to end up wealthier.
There are many businesses that fail, most of them within the first few years. For many people worldwide right now, buying a house is almost out of the question for them because it would mean locking themselves into debt for many decades to come. Not many people have tens of thousands of dollars available to them to satisfy the down-payment for the purchase of a home that would be needed today.
The researchers divided the tens of thousands of study participants into 3 different groups:
- ppl who owned their home and business
- ppl who owned their home but worked for someone else
- ppl who rented and who also worked for someone else.
The bottom 40 percent represented those who were renters and who worked for someone else.
Despite the seemingly overpriced real estate market in many regions, there are still a great deal of people out there who do have that dream of some day owning their own home. However, it's now estimated that 1 in 3 millennials might never get the chance to own a home.
Other investigations have found that renters commonly face trouble meeting their basic needs and those who do have to pay their landlord every month are 2x as likely to report that they wouldn't feel confident having to try and cover an unexpected expense.
Pics:
Pixabay
This is Not Financial Advice.
Personally I think the biggest difference between people who have and who haven't is the desire to have. I know plenty of intelligent people who have little more than the smile on their face because aquiring wealth is not their priority. Freedom and happiness do not depend on wealth.
Financial stability can be a huge stress relief and there are definitely other things involved in preventing that stability like mental and physical disability, emotional health, upbringing, dependency on substances both legal and illegal.
That being said renting from the man and working for the man are both bogus and should be avoided for more reasons than just the size of your bank account.
I think over consumption is a problem for rich and poor alike in the US and those who stay out with enough to fund their over consumption do all right and those who don't sink into debt. But I gotta have that big ass boob tube and tons of junk food! Not to mention plenty of beer, cigarettes and gas o lean... That shit aint free.
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Happiness doesn't depend on wealth, no I agree. But I can see how it could enhance freedom. Many white collar criminals have been able to maintain their freedom in spite of their crimes for ex, violent or otherwise, because of their wealth. I think you can achieve a higher level of freedom with more wealth.. you get more freedom of choice, you're able to pay for services that can save you valuable time, and if you are wealthy then you are afforded the freedom to pursue your true interests and dreams rather than simply seeking to pay bills and live doing something that might make you miserable.
Agreed on the over consumption, with the store at our finger tips it makes buying easier than ever😂. Thanks for your thoughtful feedback! appreciate you taking the time to read and respond ✌
These things are true. I’m still crossing my fingers for a complete societal makeover but admittedly I’m chasing dollars in my own weird way in the meantime while reducing my costs as much as possible.
I think wealth is a bit of a trigger word for me and a lot of others. It’s one of those words that should be really beautiful but has been associated with everything evil in the world (for good reason imo). I guess it’s one of those concepts we each have to define for our selves.
My idea of wealth is a piece of land that is unpolluted, with clean water and in which I live in harmony with the natural systems in place in order to always have the things I need for life while improving the ecosystems around me until life is optimized.
In this vision it’s my time, health, and the quality/health of all life in the system (essentially all life) that are valued and define what wealth is. I think by thinking anout what is really important to us we can “take wealth back” in the sense of having a more conscious understanding of the word and its connotations.
Blahblah... ;)
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Regarding wealth and business, it's been said that's it's not what you know, but who you know that matters. It's also been amended such that it's not who you know that matters, but how you know who you know.
Wealth and business aren't merely matters of numbers, but strategy, and the nature of the relationships.
Given corruption, endemic and ubiquitous, participating successfully in business is morally hazardous. Swimming with sharks isn't easy for the wholesome, and there are other profits than financial that I personally value more than mere money.
I consider myself immensely wealthy, but have little money. The wealth I have is in the community I live in. Last month I prepared maybe two meals, yet ate more than I should. Yesterday my work truck failed, but I got to work because a neighbor lent me their truck. When things go wrong, it's far more valuable to have a community than a bank account, IMHO.
Thanks!
I always felt there was a certain amount of freedom in owning my own home, as being able to change it as I like etc.
but when having to fork over those property taxes, the whole concept of ownership really comes into question 😂
Unfortunately this is old info, and very poor advice for today.
Just like the old line, those who go to college make $XX,000 more.
What is the difference between these groups is financial literacy.
Or, understanding the difference between good debt and bad debt.
Not everyone has the mental capability to run a business in a developed world. The regulations are killer. The run ins with the govern-cement gang can cost you more than a protection racket.
So, this research just basically separated people into two groups, those who had a brain for finance, and those who didn't. I bet you would find that IQ pretty much separates the two groups also.
Today, going to buy a house with a jumbo loan is financial suicide.
We are looking at a financial collapse along with a housing bubble burst.
So, it is not a good time to put any money into realestate.
However, it is very much the best time to start a business. Online startups are almost without cost. Start a side hustle.
past research has shown the opposite, that personality more than IQ is a determining factor of business success. Even those who do have the "mental capacity to run a business" will still likely fail👍😄For those who can afford to own their own property and funnel that money toward owning their own asset it seems like a much wiser decision than simply paying someone else to rent their space but no of course this wouldn't be the wisest nor the most ideal situation for everyone. There are many overpriced real estate markets today so it does make it more difficult.
The differences between the groups were outlined above, some owned homes and their own businesses, some owned homes and worked for others, and some rented and worked for others--you can assume the financial literacy of the tens of thousands of individuals if you want to just based on those category parameters but it's just a guess.
I have seen many studies, using other categorizations of the same end result.
The IQ graph is weird because, like up to 130 you get more and more wealthy. After that, you fall into two camps, very high paid expert (employee), or professor. So, the top end of IQ doesn't pan out.
The most indicative graph is the one comparing the ability to delay gratification. With the longer you can delay gratification the higher in the wealth bracket you become.
"Your house is not an asset! It is your biggest liability" - Robert Kiyosaki
The reason home ownership has worked so well is the inflation in housing caused by fractional reserve lending. So, the earlier you bought the house, the better off you would be over your life. (until wages stagnated)
The research does not surprise me. They probably are more creative and think outside the box. And they probably are more go-getters or have a college education. Thanks for sharing appreciated reading the article.
Very interesting write up, and thank you for sharing this research with us.
I have always believed that to make money, having business is probably the best if not the only way to do it, since being an employee is almost impossible to become wealthy and I can understand how owning your own home could be a great part of becoming wealthy, but I only see it if you keep on buying and selling the homes, since I believe owning a home just to live and not selling it, or renting it, is also a money eater since we never finish working and putting money into our homes, it seems like that is all we work for to keep our houses updated and in good condition. That is just my thought after being a homeowner since I was 20 years of age and we had many investments into housing including renting properties.
This is how you say friend not because you are going to buy a house because you are rich, it is a better quality of life, I believe that you have to do everything possible to acquire your own house no matter what the debt, since what you are going to spend paying a rent is paying the house fees
Of course there a multitude of factors that define a person's wealth but I can't help but think those that do not invest and work harder than others will continue to stay in the lower end in terms of financial capacity.
Which causes which? Does buying a house and starting a business lead people to get wealthy? Can we account for financial savvy or industriousness? Wealth or inheritance or assistance from parents or family?
interesting topic @doitvoluntariamente we the people have to dedicate ourselves to have a better quality of life