Discover the Amazing Secret of the Wealthy 1%!

Problem #58: The top earners (1%) are getting richer, while the rest are getting poorer!

We’ve all heard about the 1%, and how their income is “growing at an alarming rate” compared to the rest of us. Does that make you un-easy? That someone else’s net worth or income is larger than yours? Do you think it’s unfair that they “have” whatever they want, while you struggle to get by with your finances as a so-called “have-not”.

What is causing this disparity? What secrets do they have, that us peasants haven’t discovered yet? Or is it luck, karma, or perhaps just good fortune? Let’s dig into this PROBLEM a little more.

Secret of the wealthy 1%So before we get to the income disparity issue, I wanted to discuss the whining about the 1%. If you’re upset that someone else is doing well, then it’s YOU that has the issue. Stop comparing yourself to others, and worry about yourself. The whole attitude surrounding the 1%-vs-the-rest is unhealthy to say the least. And the rest of us aren’t getting poorer, we’re just on a different part of the exponential curve that is compound interest.

But since we’re comparing ourselves to others, compare yourself to the rest of the world. There is no one living in the good ole’ US of A that is a “have-not”. No one! That’s just media speak to rile you up. Read this article if you don’t believe me.

Put on your big-boy pants, and take the responsibility to make the changes necessary to be a part of the 1% instead of griping about their success.

Hard Work is Not a Secret.

Now that we have that out of the way, I would submit that the secret to their success isn’t secret.

Take the advertising videos that are all over social media. Some young good-looking guy is walking around his million dollar house and through his five bay garage talking about how he’ll show you the secret to getting all the things he has? It looks like he barely works, and he buys whatever he wants.

But he’s preying on most people’s desire to get without effort. Think about it. If you could have what he has with little to no effort, you’d be all over that like white on rice.

But what he fails to mention is that it takes work to run whatever program he’s selling. Work! You don’t deserve it. You have to earn it!

The reason his testimonials say in fine print “Results not typical” isn’t because the “program” doesn’t work. It’s because most people give up on it before they have success, because “it’s too hard”.

That’s exactly what my seven-year old son says when he’s trying to get out of sweeping the floor – “it’s too hard”. I usually tell him to suck it up, and finish the job. Or something like that. And he usually does. He doesn’t like it, but he learned (even if he doesn’t realize it) what work is, and how to finish the job.

Now before you write me off because there’s a ton of people who work hard who have little to nothing, know that it takes more than hard work to become a 1%’er.

Work Smarter, and Save, Save, Save.

Have you ever heard the phrase, “Work smarter, not harder,”? Well, I think you should work smarter and harder. Let me show you what I mean.

When you get a paycheck, what do you do with it? You check your budget, and split up your paycheck into a bunch of tiny pieces. Right? All the bills that need to be paid, and of course necessities.

What about savings? How big of a portion are you saving? Or are you skewing your budget towards other things that you “need” now?

This is one of the other “secrets” of the “haves” that isn’t really a secret. Saving more money. Actually, saving as much as you can!

Think about a crisp hundred-dollar bill. What can you do with it? There’s a ton of stuff you could buy. Maybe a new outfit, new shoes, nice pocket knife, dinner out and a movie, groceries, cable for a month. But once you spend that Ben Franklin on any of those things, that money is gone. Sure you may have something in it’s place: a shiny “thing”, a full belly, a great night out. But the $100 is gone.

Instead, if you save or invest that $100, you’ll still have it. The stock market historically has averaged a 7% rate of return.  So to be conservative (allowing for inflation), let’s assume 5%. You’ll get 5% on your investment – FOREVER.

Update: This linked site actually references a already inflation-adjusted rate of return of 7%. So I was adjusting an for inflation twice. -facepalm. Thanks Brad for pointing that out. But that makes my point even stronger.

In other words, your original hundred-dollar bill will make five dollar babies for you – every – single – year – for a lifetime. Your whole life, and perhaps even your kids’ lifetimes as well.

The secret to working smarter is to work hard, and then let your money work for you, while you’re still working hard.100 dollar bills

The 1% Have Figured It Out.

The more money you can save and invest, the faster your money will be working and supporting you (instead of you supporting you).

Like I said, it’s not really a secret. I think we just don’t fully grasp the power of compound interest and the future value of our current investments.

Delayed gratification is what makes this possible. Because, let’s face it, you can’t live on five dollars a year. You’re going to need a whole lot more bills. But that’s why you need to start now. Delay purchasing that new outfit or new shoes (you already have clothes – right?), and instead put your money to work for you.

The 1% have prioritized letting their money work for them. As a result, compounding has taken over, and their net worth is exponentially increasing – just like all the news outlets are reporting. But it’s not because of some underhanded deals. It’s compounding interest! And it can work for you too.

Start saving and investing! Find a “Benjamin” from somewhere and invest it.

Give a man $100 - he'll eat for a few days. Teach him to invest it - he'll have $5/year - forever! Click To Tweet

Are you prioritizing savings/investing over buying cool things now?

Let me know in the comments, and as always, please share this post using the social media buttons below.


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  1. We try to automatically route as much money to investing and savings first, before it hits our checking account. So my paycheck has the 401K, HSA and DCFSA money taken out, then it is split between savings and checking so that only a small portion of the paycheck shows up in our checking account. If we go over-budget from there, we have to take the money out of our savings, which is both annoying (different bank) and “painful” (lost savings!). This method has kept us on track with saving and investing!

    • Sounds like a great plan. I love automated savings. Eventually you get used to living on less, and before you know it, you have a great nest egg. Keep it going!
      Thanks for the comment.

  2. Great Post. Monthly money for investments should be automated and taken away immediately, in my opinion. In doing this we are never tempted to buy shiny things with it. Once it is swept away, it is pooled with dividends and waits for an investment.
    If we save on monthly expenses, anything left over gets transferred to our investment pool.

  3. Really enjoyed this. The process for creating wealth as you’ve described it isn’t rocket science, but it is hard to stick to. It’s not difficult to put money into an investment account. Keeping that money to invest when everyone else is spending it or when the newest gadget comes out – that’s hard.

  4. Great article Chris.

    My dad always told me growing up “if you work for your money, you’ll always be working, but if you can make your money work for you, you won’t have to work your whole life”

  5. It is easy to compare and complain. As you said, I don’t focus on who has more or less than I have. That will always be the reality of life. I just focus on my financial life and try to do better when I can. Keep the spotlight on yourself.

  6. I’m maybe the only guy I know who walked away from a big corporate salary years before normal retirement just because he didn’t need the money or the hassle anymore. Had I not saved and invested aggressively that would not have been possible. There really wasn’t much of a community like this one in place during most of my career but I applaud what you are doing now. Had I been plugged into the FIRE community twenty years ago, had there been one, I suspect I would have retired even earlier to what is the best life I’ve known so far! But better late than never. Almost every one of my former work colleagues is still stuck there and I know they aren’t really very happy with their careers.

    • Congrats on the FIRE accomplishment. That’s great! Well done. Hopefully more of us will be able to join you soon. Thanks for stopping by and commenting. I appreciate it. 😎

  7. Nice post. The return number is a bit off though.

    The 7% return cites for the source, which itself cites as the source.

    Looking at the data (and confirmed just now from my own calculation) the total return through 2009 was just over 11% CAGR. (It’s even higher now that we’re farther from the recession date used in the analysis).

    Anyway… note that the original source shows 7% as the “real total return” – which means it is already adjusted for inflation. In your article above you are re-adjusting it for inflation and lowering the returns by a further 2%.

    So the point of the article is even more impressive with the higher CAGR return rate. 🙂

    • Thanks for the clarification. I missed the already adjusted for inflation part. I also wanted to get to 5% for the ease of a five dollar bill – out of a $100. And in my enthusiasm, mis-quoted the source.
      But as you said, that only makes the point stronger. Invest, and let your money work for you.

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