Recently, there have been numerous reports highlighting the distribution of wealth and income inequality in both America and around the world. The news is far from healthy:
- It is currently estimated that by the year 2016, the richest 1 percent will control more than half of the world’s wealth.
- Even more shocking, the combined wealth of the 80 richest people in the world is the same as that of the bottom 50% of the Earth’s population—totaling 3.5 billion people.
- In America, the wealth inequality gap continues to grow as America’s middle class shrinks. The share of American households in the middle class fell from 56.5 percent in 1979 to only 45.1 percent in 2012. And there is no indication this trend will reverse itself.
Regardless of how you think the problem should be resolved, this is not good news.
Numerous economic studies indicate the significant dangers to society when the wealth gap widens—both economically and for personal well-being. One of the most important factors designating first-world countries from third-world countries is the size of the middle class and opportunity for social mobility. I have seen firsthand the damaging effect of income inequality.
There are solutions to this problem and we need to find them.
But recently, I have begun noticing another unhealthy trend. One that may be related to the widening gap, but more likely, finds its root in the human spirit. It too requires a solution, albeit a much easier one to define.
This equally negative trend is the wealth gap we focus on in our mind and the resulting division we artificially create because of it.
Let me explain what I mean with a short story from this past weekend:
On Sunday, I was spending some time with neighbors. Economically speaking, we live very similar lives in our suburban neighborhood outside Phoenix. At one point, one of the guys struck up a conversation with one of the teenage boys in attendance—the son of another friend. In response to a question, the teenager mentioned the Soccer Club he had begun playing for. This Soccer Club, not too far down the road from us, just happens to be located in one of the wealthiest counties in the country.
My friend’s immediate response to this information was telling, “Oh, so you’re on a team with a bunch of rich kids?” The jealousy contained in his voice was difficult to mask.
His statement, I believe, is indicative of how most of us view wealth: “Those with more are the rich ones, not me.”
I mean, never mind the fact that earlier in the day my friend had to decide which of their two vehicles he would drive to the party. Forget the part that we were enjoying fine food and drink in a comfortable, well-decorated home. Disregard that he had enough money to care for his health needs, was making plans to retire in the near future, and had even saved a bit of money for his child’s college education… in his mind, he was not rich. The “other guys” down the street were the rich ones.
We experience this often in our thinking. We usually compare our financial circumstance to those who have more. And as a result, we rarely consider ourselves wealthy. The world is big and there is always somebody with more. No wonder 55% of millionaires do not consider themselves rich.
We see this also on a macro-level in our society. In our country and around the world, “The 1%” has become a derogatory term describing the wealthiest among us. Subtly, it is used to designate the apparent, insatiable greed of those who already own enough. We use it in conversation to draw a sharp contrast between those who are “rich,” and those of us who most assuredly, are not.
Again, because we compare our financial circumstance to those who have more, we refuse to consider ourselves among the rich. But something interesting happens when we begin to expand our comparisons.
Globally, an estimated 6 billion people live on less than $13,000/year. And nearly half the world’s population, 2.8 billion people, survive on less than $2 a day.
According to the non-profit group Giving What We Can, an annual income of $40,000 places you in the richest 2.0% of the world’s population. An income of $25,000/year puts you in the top 3%.
Even a minimum wage job ($7.25 an hour, 40 hours a week, 52 weeks a year) puts you in the top 8% of all people on the planet in terms of income. Adjusting for actual purchasing power makes little difference in the percentages.
In other words, we are the rich ones. When we begin to expand our worldview beyond those who only have more than us, we quickly discover we are already among the wealthiest in the world today. And in most cases, we are the 1%, globally speaking.
We are already wealthy. And this should change entirely the way we live our lives. (tweet that)
This realization invites us to pursue happiness elsewhere. If I already exist in the top 2% of wage-earners in the world, is reaching the top 1.8% really going to increase my happiness index significantly? Maybe having more money is not the answer, maybe I will need to look elsewhere.
It requires us to rethink contentment. The level of income in our countries is just one economic measurement. In addition to income, average home sizes have nearly tripled in the past 50 years, televisions outnumber people in the average American home, and the average British 10-year-old owns 238 toys but plays with just 12 daily. Despite our material accumulation, discontent fuels more desire, more shopping, and more debt. If all that we already own has not satisfied the deepest longings of our heart by now, they probably never will.
Our wealth calls us to embrace a higher standard. Most of the “us vs. them” conversations concerning wealth focus on how those with more should spend their money differently—whether by governmental authority or by personal initiative. But, if “we” became “they,” shouldn’t we try to live by the same standard we called them to uphold?
It opens the opportunity for greater generosity in our lives today. The thinking runs deep in many of our hearts: Once I make more money, I will become more generous. But the research indicates otherwise. We are already wealthy—most of us ranking in the top 2% globally. The time for generosity is now. And maybe the greatest benefit of generosity is the realization that we already have enough.
Are you the wealthiest human being in the world? Absolutely not (I mean, unless you are reading Bill). But that doesn’t mean “rich” is some far off concept you will never attain. In reality, most of us have already achieved it. And this ought to change both how we live and define wealth.
Gail says
I often say I was born nekked to 2 22 year olds, so everything I have now is an increase over how I started out (gentle smiles). All is good
daphne says
I LOVE this post and have already shared it with several people. You said what I have been thinking for years but have not had the statistics nor the clarity to communicate so brilliantly. Thank you for this Joshua!
Chris Barker says
Thanks, this is great piece (among many). I concur 100% per cent ith what you say, but the habit energy to always want more remains strong in us. I know I am rich and I am committed to wanting to live more simply, but still i find myself wanting more or spending money needlessly. Training the mind to know that we already have ‘more than enough’ to be happy is a continual practice.Best wishes.
Peg says
Right on, Joshua!
“To know you have enough is to be rich.” Lao-Tzu
Christina Jurgens says
“To know when you have enough is to be rich beyond measure.” – Lao Tzu
I am a professional home and office organizer. The majority of my clients are happiest when he/she donates time, money and/or goods to others. I have yet to meet the person who regretted making a conscious decision to be generous. Thank you for the well-written article. Reading it was the highlight of my day so far.
Mary E says
Beautiful post, thank you.
As a tax accountant, I can confirm that on average, the more people have, the less they give.
Sometimes I am asked by clients or friends, how much should I give? My answer – it should hurt a little bit. Generosity is meaningless if it doesn’t cost you anything, if you don’t feel it a bit. Give enough that it hurts a little bit. And someday, if you are the one who needs help, you will be grateful that someone else cared to do the same.
Brady Faught says
I remember reading about Michael Jordan, that he won every known basketball award and was by no question the best basketball player on earth. But that didn’t satisfy him, he went to go play baseball in attempt to master a second sport. It’s one of many examples that we are rarely satisfied at our current state. The millionaires are jealous of the billionaires. The mantra we need is simple: I have enough. I am enough. Thanks for the post!
Lori in Prescott says
Wow! That would make a great bumper sticker: “I have enough. I am enough.” Well said.
Maria says
The income of $13K that is mentioned can mean poverty in one part of the world, and a modest way of life in another. It’s necessary to have a car in most parts of the U.S.–it may not be in rural Africa. It’s not possible for all of us to go live in Finland, or Africa, or wherever you can actually live off of $13K. Where I live, $13K covers our annual health insurance premiums and medical co-pays for my family of 4. Yes, we have a lot to be thankful for and even if the majority of Americans are near the top of the list in terms of income, unfortunately too many are only one serious illness away from bankruptcy. Many would not be able to manage should they be without a job for several months or a year.
A minimum wage job can make you look “wealthy” according to the statistics quoted, but the reality is that many families making minimum wage require government assistance to make ends meet. So the idea that these families are rich and should be more or just as generous as the billionaires behind the 50% of the worlds’ wealth is absurd.
It’s more of the same “one latte a day” argument… You’re rich already–stop complaining! You’re not saving enough, you buy too much, you’re wasteful, you should be giving more… The reality is most of us live modestly and are working just as hard as we did 50 years ago, but we come home with less and less each year while everything is becoming more expensive thanks to economical factors and corrupt leaders who no longer truly work for us, but mostly have their own interests in mind.
joshua becker says
Thanks for the comment Maria. The “actual purchasing power” statistic that you are looking for is not much different from the numbers cited (the link to those statistics are embedded in the post).
I should mention, however, that this is not a post about “not saving enough, you buy too much, you’re wasteful, you should be giving more.”
This is a post about realizing the fact that if we have running water, paved roads, a roof over our head, and clean clothes on our bodies, we are more wealthy than most of human beings alive today.
Maria says
Joshua–Your main message, encouraging people to share whatever wealth they have and helping others, is a positive one. I believe we should help more and donate more money and goods, or our time, if other resources are not available. However I have trouble with the argument that we should do this because we are wealthy (and wealth is defined by being richer than a large percentage of the world). I don’t think someone making a minimum wage in the U.S. is wealthy, even though their wages are in the top 8% of the world. It’s all relative to where you live and the world around you. $1 here doesn’t buy you what it does in other parts of the world. Many of us are wealthy because of higher salaries compared to the rest of the world, but are poor because of lack of affordable healthcare, availability of affordable education, and ability to grow or obtain healthy food. Our homes and wealth can quickly disappear with a loss of a job, where that small farmer in China will always be able to feed his family. Also, when you remove a couple of statistical outliers (highly populated countries like India or China), the statistical results change drastically.
The fact that we know how many people may be poorer or richer doesn’t change any specific person’s situation or wealth–it’s just looking at the same thing in a different way. If you’re using the statistics to make us stop and think, that’s fine, but I feel each person needs to look at their own specific situation, get rid of excess that doesn’t enrich their lives, and help others because there are many people in need and because it’s the right thing to do, not because one statistical average labels them as wealthy. So I wish you had written this article without going into economics at all! :)
Christel Klinger says
Thank you. This is a wonderful thought. And I know already this changes my mind, how I think about wealth !!
Darey says
Thanks for your post Joshua. I agree also with most of the comments. Our society (does not matter where you live, I’m from Spain) tells us how to behave and how to feel about money, and this is very different from wealth and life.
Today I thought about this when my boss said: what the other departments do with these numbers, will affect in a wrong way directly to your extra paycheck.
In fact, I do not mind my extra paycheck. It will help my home economy for sure, but I prefer to be collaborative, to communicate with people, and to live fully, better than being jealous and wanting my money at the end of the year, no matter what happens to other people.
So thanks for sharing. It’s a good thought for today :)