5 Ideas You Need to Rise From Poverty to the Middle Class
Authors who advocate government action in order to address income inequality and upward mobility are fond of their statistics. An example from Foroohar:
The Pew Charitable Trusts’ Economic Mobility Project has found that if you were born in 1970 in the bottom one-fifth of the socioeconomic spectrum in the U.S., you had only about a 17% chance of making it into the upper two-fifths.
Such figures are meant to inform a social diagnostic which too often prescribes more subsidy of the poor. However, that prescription takes a dim view of the human condition and fails to account for how 17% of children born in 1970 beat the odds and rose from the bottom one-fifth of the spectrum to the upper two-fifths. It wasn’t chance, as the figure cited out of context suggests. It wasn’t the mechanical effect of flipping society’s bureaucratic levers. There is no magic formula of government action which propels people from one class to another.
The key to upward mobility, to improving the quality of life, is the acceptance and application of certain ideas. At first glance, they may seem overly simplistic or blatantly obvious. Yet so few actually implement them that it is worth our time to review them. To that end, here are 5 ideas you need in order to rise from poverty to the middle class.
Thank you for writing this. I will read it to my family during tonights dinner.
Could I recommend The Millionaire Next Door by Dr. Thomas Stanley?
I second that suggestion The Millionaire Next Door is a great book and like the other listed in the article can be obtained at low cost or free form the library.
Powerful writing, thank you.
Your #5 certainly echoes a point from a recent article in the NYT that looked at why affirmative action at top colleges is sometimes a failure- the advice they gave was to cut all ties and don’t look back. I thought that to be quite harsh, but here you are saying the same thing. In retrospect, I did that myself, though in a less radical way, by going to school out of state in order to leave my rather hard-partying and early-marrying friends behind.
And your #1 is more important now, than ever. The old ways to make it up the socioeconomic ladder are disappearing- I personally can’t advise my children in this regard, as the professions my friends and I used to climb into the upper middle class are much less likely to afford that opportunity in the future. I suspect that in the future, a great deal more creativity and risk-taking is going to be required.
I certainly wouldn’t advise “cutting all ties.” The point is to properly value your relationships. Not every friend or relative in your life fills the same role, and that’s okay. Your mother doesn’t have to be your financial advisor, or your priest. or your life coach. She can just be Mom.
I agree with your assessment of the financial generation gap. Of course, times are always changing. However, if you have the general skills required to adapt, you can make out just fine.
You also have to be prepared to pull up stakes entirely, leave the land of your birth, and start over on a foreign shore, if you find that you are no longer living in a “land of opportunity.”
That is just as important as the other five ideas, and I would argue, more so.
Good point. That is a concept I have personally had to abandon since I know my wife will never live away from her family. Perhaps that is why it didn’t occur to me to include it.
A few years into my marriage, my mom actually started giving me a hard time about the job I was in and the way I was dressing (like I wanted a good job). She started telling me that I was dressing “above my station” and telling me I was ashamed of my roots.
I didn’t end my relationship with her, but I made it very clear that I was running my own life, and that it was my decision how I lived. She’s mellowed out after several years, but the lesson I learned was, you can have the relationship with your family as you move up, but YOU have to set the terms of the relationship. Don’t put up with guilt-tripping, insults, insinuations, and rudeness. Put people on notice that you won’t tolerate it.
Great article.
IMO, a lot of what keeps people in poverty is their mindset.
There was a woman on TV within the past month who had won a few million in a lottery.
If I won a million, I’d be thinking about paying off any and all debts, making sure a financial nest egg for life was set up, setting my kids financial future up, what kind of business I’d want to start, etc….
This woman, with millions of dollars, was exclaiming how she was going to go out and buy her a BIG screen tv!
I’ve read where most lottery winners are no better off just four or five years after winning. It’s all spent with nothing to show for it- they can’t even keep the fancy cars and houses because those things cost money to maintain.
As you say, it’s the mindset. The same mindset that leads one to buy the ticket, leads one to blow the money after it’s won.
I saw a TV show a few years ago that tracked down people who had won big in the lottery. Some were in jail. Some were bankrupt. A few still had most of the money and one guy had doubled his money through wise choices. More money just amplifies your virtues and vices.
thanks. I hope you keep writing.
Our family- we read “millionaire next door” right when we got together. I’ve made his lunch for close to 20 years at this point. He mentors guys at work- it’s one thing they get their wife to do. It’s not just lunch- it’s mindfulness that we’re trying to get to a rich life- children, church, civic involvement, values, value.
I do hope you keep writing about this- there was so much snarkiness about occupy leftists- without writing about how to change life for the better.
for what its worth:
Even if you live next to drug dealers, and you have to work as a janitor, if you are going to school it gives you an identity. You are a scholar, not a loser. Even if your life is preposterous, and you sleep on a second hand sofa. yada yada. you know. bus rides across town to class. crazy sobs that want to kill you.
I never got rich, but I got out and I am doing I would say ok. I’m proud of what I do. I could obviously do a better job managing money.
hello. all of these articles about the formula to get rich are hilarious. you are already rich. you respect yourself. you could have joined the drug dealers. you could have killed any one of those sob’s who would sooner kill you than look at you. then you would be them. instead, you choose to honor yourself. you did the right thing to not end up worse than you already were. stop dreaming about managing money better. you have good character. it is worth more than what money can buy. wealthy investors as friends are the only ingredient missing from your get rich formula. you will never meet them, so if you have an idea for your own business that a bank will not lend you money for- solicit investors at your church, or on the internet. meanwhile, be proud of who you are not; and not just these rich people who just don’t know poverty.
It’s strange that so much of this should be other than common knowledge — that it should need to be said, and said loudly, at this time. Yet it is so.
It calls to mind a marvelous old movie: The Score, which starred Robert DeNiro and Edward Norton. DeNiro, an older, much-traveled and highly successful thief, at one point counsels the far younger and less experienced Norton character:
1. Make a list of all the things you want to achieve or acquire;
2. Make a plan to spend the next 25 years getting them — SLOWLY.
That’s the usual path from nothing upward: gradual achievement and accumulation, which is impossible without religiously following Mr. Hudson’s maxims. Make sure your kids know it.
(PS: The Norton character completely disregarded the DeNiro character’s advice — and suffered badly for it.)
About 8 years ago, my husband, an aerospace engineer from a blue collar background, was offered a promotion to Director of Engineering at the small company where he worked. Without first discussing it with me, he turned down the promotion, explaining to the V.P. of Engineering that he did not want to become that kind of person; he did not want to be in charge of directing other people because he did not want to be “bossy,” and not personally creative. When I found out, tow months later, I was horrified, and I asked him whether he did not think this was needlessly insulting to the boss, and destructive of his relationship to both that VP, and to the company, which had asked his help to fill an empty position – for a nice raise – and been ungraciously refused. By then, it was too late.
His next few years at that company were increasingly unhappy, and he was eventually R.I.F.ed.
His fundamental objection to promotion was that he just could not think of himself as anything but one level of status above his parents — in spite of demonstrated ability and aptitude. Up to a certain point, there and at a new employer, he works very hard indeed. However, he stops with a skreech whenever he gets close to outperforming his parents by more than just a little bit.
There are some people who just want to deal with technical issues and not be a manager. Dealing with subordinates and their issues requires a certain skillset to do well and a lot of people just aren’t cut out for the job. In some companies, the only way for a technical person to advance was to become a manager even if he/she wasn’t suited for the job. If you’ve ever read about “The Peter Principle,” you’ll see what I mean. Perhaps your husband falls into that category and didn’t want the hassle of dealing with people or knew his skillset wasn’t suited for the job.
I’ve been fortunate to work for companies where we could advance on a technical or managerial career track. Smaller companies may not have that luxury, though.
Larry makes an excellent point. Two excellent points, actually. It certainly requires an additional skill set (or sets) to cope, not only with manage the workload and schedules, and interpersonal, inter-project coordination required of a manager, but also to represent one’s division and one’s company to other branches of the company, and to customers, supplier, and others. We have all know managers who have such difficulty with this that they retreat into micro-managing and hovering over those who report to them — doing the jobs of the people who report to them, rather than doing their own, because they can’t do their management jobs well.
Larry is also correct that in a small company –which is where 50% of private sector jobs are — there is generally not the luxury to advance on a technical track without acquiring management responsibility.
My brother was the same way, he is a very skilled welder. When he was offered a job in his company to be a supervisor of others, a sure step to management, he imploded because he couldn’t handle the pressure. It required a different skill set.
He eventually got a job with another company, and has been solidly welding his way as a superioir technician. His only complaint is that he works too much now, about 72-90 hours a week. I just hope he learned how to manage his money.
I know a few gifted people who just want to do their 40 hours a week and go home who have refused management positions because they prefer easy to demanding, even if demanding brings status and pay.
(My English teachers would be horrified by that sentence.)
I recommend paying yourself a huge wage for doing nothing while low wages are paid to hard workers who are then sacked to cut costs
Thank you for this comment, which I sincerely hope brought you as much satisfaction to offer as it has brought me to read. Allow me to return the favor by offering you some insight which has the potential to make you a happier person. Let me start by suggesting that if you truly believe a CEO gets paid a huge amount for “doing nothing,” that you go out immediately and start a corporation of your own and do the same. After all, if it’s that easy to do nothing and get paid for it, surely anyone can. In truth, the value that a CEO brings to an organization is orders of magnitude above that brought by “hard workers” whose assigned tasks are either unskilled or low-skilled. Apply your own worldview to this problem for a moment and attempt intellectual honesty. If shareholders and board members are just greedy bastards who don’t give a damn about anything but profit, why would they tolerate the “obscene” compensation that a CEO commands? If the CEO truly “does nothing,” why would anyone pay that person instead of increasing their own pay by eliminating that position? Your problem, if I may be so bold as to identify it, is that you fail to recognize the mind as the source of all value. “Hard work,” mere muscle, is nothing aside from the mind which directs it. Do yourself a favor and think about that long and hard before embarrassing yourself by attempting to refute it. Accepting the objective truth that the mind is the source of value will open your heart to an appreciation of the many noble accomplishments made by your fellow man. It will make you a more grateful person, and you’ll be happier as a result.
Scorching retort? Why yes, yes it is. (Phineas and Ferb reference for those without small children)
“Those who refuse to learn, lift.” A quote from my father.
“If the CEO truly “does nothing,” why would anyone pay that person instead of increasing their own pay by eliminating that position?”
Mr. Hudson! Have you ever ‘shadowed’ a major coprorate CEO say for a week? Have you ever ‘shadowed’ a major corprate CFO for say a week? A stark difference in daily routines in case you’re unaware! Have you ever ‘shadowed’ a mid-level manger of a major corporation? Again, a very stark difference in their daily routines as opposed to a CFO or a CEO.
The very heart and soul of a corporation is the mid-level management downward! Theres a lot of merit in the theories of operating models, top-down vs. bottom-up managment. The mid-level managers down are what accounts for the productivity, profit and loss of any corporation! They are the first line identifiers of problems and problem solving from HR, marketing trends and shifts, time in motion productivity cost analysis, logisitics, equipment and engineering, and on down the long line of corporate functionality.
CEOs don’t produce anything! Not even the corporate strategies! Not even their social and business speeches! They can’t even keep their own social and business calendars! NO corporate data is generated by any CEO! Most all are the greatest frauds perpetuated upon any corporation! Most play the social and political game having come from ‘successfully’ run corporations and most when chasing the big bucks, going to a failng corporation, fail also. Just study the history of the major corporations. One of the latest to study might be JC Pennys newest yo-yo who thought he would come in blazing with his top-down management and turn the company around. Look at the P&Ls since his arrival and how many stores they plan to close if they survive at all. Take a look at the hitoric retail management of Sears, and K-Mart, Best Buy, Radio Shack. Take a look at the large consolidated financial companies and on down the line. Most CEOs are frauds and many even criminal, peeling off million and even billions of personal income and benefits from the corporations they serve. Then if that study doesn’t make you sick enough, take a good look at todays wealth disparity charts in America.
Zeke, you haven’t addressed Mr. Hudson’s core argument, if the CEO is a value taker not a value creator than why would shareholders tolerate this?
An investor owns the stock for sole purpose of making money. You might argue that a pensioner does not have the time or the sophistication required to properly analyze the companies financials and see what a drag the CEO is on the organization. However the same can not be said for the institutional investors who have the clout with the board and capital to press for a change in management or restructuring.
The corporation and the people that run it are not perfect, these are human organizations subject to all of our flaws. What the left fails to grasp is that these voluntarily organizations are superior to meeting human needs and wants then any other organization. The profit they earn is measure of account demonstrating how successfully they’ve added value to society.
The Wall Street of today control the destiny of publically held corporations. They are constantly moving chip (corps) around to leverage either direct profits or or indirect profits from acquisitions and merger activity. Todays CEO and for the most part, CFOs are operatives of the Wall Street technical analysts who determine the fate or success of companies. Regardless of being a CEO of a congolomerate or a successful midcap being positioned and leveraged for an acquisition or merger, the CEO, CFO and the board of directors get to be fat cats while the rest of the employees and investors get…..
Wall street values companies many times over their real book values and when you don’t make the unrealistic numbers demanded by Wall Street, unless you use questionable accounting practices, you’re ‘groomed’ for leveraging by several types of acquisition or merger games. Todays CEOs are expert at this Wall Street game and that why you never see high profile CEOs going away with millions stuffed in their pockets even though what the general public see is a failure on their part.. You only see them reappear at another corporation being groomed.
Thank you for taking the time to craft a heartfelt and thoughtful comment.
Taking your analysis for granted, can you then answer my question? Why, if CEOs and other executive contribute nothing of value, are they paid anything at all let alone exponentially more than middle management or wage earners? Why don’t boards of directors simply eliminate these executive positions and reallocate the compensation to increased profit or equity? Why would anyone voluntarily pay someone to do nothing?
You cite examples of bad executives. Surely, there are many. That is all the more reason why executives commands such pay. The good ones are a rare commodity.
And what’s this nonsense about executives not being able to keep their own schedules or write their own speeches? They also don’t take out their office garbage or mop the floors. Hiring someone to handle menial details frees you up to focus on the areas of business where your skills are best applied. Such delegation is a sign of intelligence, not ineptitude.
It seems you’re not following what’s been happened with executive compensation over the last twenty years. I won’t go so far as to say CEO’s do nothing, but look at the numbers. Back in the eighties a CEO would make say 40 times what an average worker made. Nowadays the average is over 300 times what their average worker makes.
Now you can look at this and say that CEO’s are worth more because they add more value to a company. That’s true, but the thing is that compensation keeps on rising even when companies perform badly. Part of the problem is that it’s not the shareholder who decides this.
Compensation is generally decided on by Board Members. This is where a bunch of business elites many of them CEO’s themselves decide what a CEO makes. It’s not exactly free of conflicts of interest.
Dodd-Frank has changed this a bit by at least putting CEO compensation to a non-binding shareholder vote and you can see how that played out for Vikram Pandit over at Citicorp. Still, Ma and Pa Shareholder don’t really have the same amount of say as Institutional investors who are part of the same elite status quo.
So, does it matter that the management elites keep pushing their salaries higher? Yes and no. It’s a private company, but take a look at what’s happened in sports. If everyone on the team is getting multi-million contracts and the cost of the team keeps going up the money has to come from somewhere to pay these salaries this pushes up ticket and concession prices and makes it harder for all of us to take our kids to a ball game.
If taxes are just another bill that gets passed on to end consumers, so is executive compensation.
Notice how envy is the prime motivator of the responses?
The vaule a CEO brings is estimated by the shareholders. Thats it. If he doesn’t perform, he is gone and hopefully hasn’t damaged the company too much.
I worked with a CEO who came on board and turned a company around who everyone else thought was dead. Quadrupled the share price in 4 years and later sold at a tidy profit. The bad news was most of us got canned after the merger, but that is the fate of all small-medium size companies. If you are not growing through sales or acquisitions, you become a target for a larger organization or simply go bust over time.
The investors are trying to flip a return on their investments, not provide people with jobs. They really should bring civics and economics back into schools.
To present fairness and completness to your questions would take a bit of time. Volumes of textbooks and industry white papers have been devoted to the general questions you pose — which are questions a lot of people should be exploring, especially in todays corporate environment. I will try to stay in the realm of publically held corporations in responding to some of your questions.
First, the issue of CEO value of yesteryear. There were historic times in the U.S. when Wall Street valued corporations by real book value. These were times when the job of CEOs and their ‘value’ and ‘earned respect’ was very much real. They traveled their production and profit centers almost constantly knowing most employess down to janitors by name. Study JC Penny! Corporations were run equally bottom up/top down – a real operating team! These were valuable CEOs who had to ‘personally’ perform based on ‘real’ book values using stright up ‘standard’ accounting principals quarter by quarter to benefit their shareholders — and most did! Study the old Carnation Company or Purina or Kellog or any of the old household name corporations that still exist today though some have been acquired by other entities today.
Second, the issue of CEO value today. Today, Wall Street abandoned the real book value system in favor of projected/speculated values based upon all kinds of subjective and technical variables to ‘drive’ corporate profit performance. In other words, today corporations work for and their strategies dictated and formulated by a corrupted Wall Street and not in the best interest of company practices and longivity, for a legitimate P&L report. So how does this relate to the value of todays CEOs? First, the moral character of todays CEOs! First and foremost, they are corrupted puppets of todays corrupted Wall Street. They are ‘driven and controlled’ by Wall Steet technical advisors. They have to be willing to bend, stretch and innovate accounting systems to achieve what Wall Street dictates for any particular corporations returns — commonly referred to as cooking the books. There are basically two classes of corporations today. An acquisitioning entity or an acquistion or merger candidate corporation as determined by Wall Street bureaucrats. Wall Street has been quite successful over the past many decades of consolidating industries for motives that should be criminal. Todays CEOs are mostly all conspirators with the ‘criminals’ of Wall Street. They have this very clean public persona and then they have their dirty down in the sewer Wall Street persona. Todays CEOs have become the special interest lobbyist of government for Wall Street and bedamned the best interest of their companies for their employees and the national economic security. Just ask yourself this question. How many of todays high profile CEOs go away when they fail and why don’t they? They don’t go away! They go from corporation to corporation, some quitely and some with great media hype, but nontheless they move around at the dictate of Wall Street.
Starting to get the picture? Todays major corporate CEOs are not a part of any corporation but rather part of the corrupted Wall Street team. And as earlier discussed they have no problem with scraping off hundred of millions or even a billion or so from the corporations they are perceived to be working for — not just once, but time and again.
Today, there are few ‘real’ corporate CEOs unless you get down to some of the smaller mid level and below corporations and if any of those become success CEOs they will be made history through an acquistion or merger.
“To present fairness and completness to your questions would take a bit of time. Volumes of textbooks and industry white papers have been devoted to the general questions you pose — which are questions a lot of people should be exploring, especially in todays corporate environment. I will try to stay in the realm of publically held corporations in responding to some of your questions.”
Zeke, your full of shit, but its clear you like to pontificate on what you know not.
All true Zeke, except that you forgot the CEO’s most important function: inceasing their wealth and power by outsourcing middle-class jobs overseas, de-industrializing the economy thus destroying social mobility and making mr. Hudson’s, otherwise sensible suggestions, irrelevant .It seems to me, given the last 20 years, that they have been working overtime on this project, and very effectively too!
“CEO’s most important function: inceasing their wealth and power by outsourcing middle-class jobs overseas, de-industrializing the economy thus destroying social mobility…”
The corporate world in partnership with Wall Street today, is a very sad story in our long history — consolidated, centralized and controlled by greedy and sometimes criminal insider wall street players. Its all now just one big corrupted ‘machine’ that is as destructive to the nation as anything one can think of. If you don’t play ball with the wall street boys, they will destroy you. If you decide to play with them they’ll eventually drive your profitablity ‘demands’ to unsustainable levels. ALL the high profile corporate CEOs and most board of directors types have long sold their souls and companies to the greedy, corrupted wall street boys — joint conspirators in destroying Americas core economic enterprises and at the same time, stuffing great amounts of ‘personal’ wealth accumulation in their pockets from their corrupted activities! Take a look at all the corporations that have either gone away or become the acqusition chips for their ‘created’ large conglomerate (to large to fail) corporations. Where do they do most of these large conglomerates conduct their business in order to generate the wall street demanded profits? Right! Off shore around the world for the benefit of cheap labor and increased high profits.
Moral and patriotic CEOs would make a stand against Wall Streeters and be an active part of domestic problem solving but NOOO, they are all a part of the wealth greed machine destroying Americas economy. There is a solution but, most in congress (especially the GOP) sell their souls to the same corrupted greed machine so don’t expect to see any resolve from there. Look at the trade inbalance charts that drags down our domestic GDP every year but make large corrupted american corporations and wall streeters very wealthy ! Then take a good look at the top 10% wealth disparity and increasing poverty gap charts.
The GOP of today, can only hope the the majority of citizens don’t acquire and understand these kinds of information or they’re in big trouble considering how they strive for less wall street and financial regulations!
This was an article that touched very much.
I was born into poverty. I lived in government projects, had no father and received some sort of government handout until I moved out on my own at 18.
Almost on a dare I enrolled in college. The goal being simply to be able to put on future job applications that I at least had some college background.
Six years later I had Bachelors in Electrical Engineering.
I only had 2.1 grade point average, but I made it.
I would have done better, but I worked almost full time while going to college.
There has always been a drive inside of me to push as far as I can. I was always happier to get a “C” in the advanced High School math class than get an “A” in the math class they throw the dumb kids in just so they can pass graduate.
I’ve been an Engineer for over 20 years now and I’m certainly not “rich”, I am doing better than anybody would guessed looking at me back when I was a kid in old clothes living in the projects or the trailer park.
The one bit of advice I would pass on to any young person reading this and wanting to get ahead is this: You have to make scarifies to get ahead.
In college I had nearly zero spending money and very little time for a social life.
Don’t complain when you’re 45 about how you’re still competing for jobs with High School drop outs if you weren’t willing when you were younger to give up all your video games and hanging out with your friends so you could go to college.
So I’m giving you the same dare I got.
Enroll in college. Just for one semester. Don’t even quit your job. Just take a couple of night classes to see if you can do it. You may be shocked to find out what you can do.
Now do some research into what the starting salaries are for your degree and compare it the salary you get now.
#10 Steve G. An absolutely dead on comment. Success requires perseverance in the face of failure or rejection as well as self sacrifice. The student in a tough field (engineering, medicine), the entrepreneur, the successful businessman is burning the midnight oil while his or her peers are out spending their money and time on wine, women (or men), and song. The ability to overcome defeat and defer gratification are keys to success. Such success may not come instantly but will accrue over time.
Well said.
A sixth idea: “Stop Thinking That Anything Below ‘Middle Class’ Is Poverty”.
…and who exactly is making that assertion? It really is an odd, extra-topical observation that shows you ignored or misunderstood the meaning of the article.
Seems that liking your work should count for something.For your own health if nothing else.Managing a lot of people would be last on my list of enjoyable jobs and akin to herding cats.When done properly management or ownership work could become all consuming,and not a life at all.
Clam, I beg to differ. In my experience in two rather large publicly held corporations, the best managers made it look easy. They seldom had a crisis, they had good retention rates. They seemed to have a knack for explaining what the wanted and setting up work flows and processes that ran themselves after a short time. They understood and followed the basic rules of delegation and accountability. Often it appeared they had spare time to do other things.
On the other hand, lots of very smart people just didn’t get the hang of it, and were constantly trying to hose down fires that shouldn’t have happened.
I’ve noticed that i most like using my hands,trying to fix everything,i enjoy that.It’s like completing a puzzle,but that’s just me.My point is that i have a knack of some sort,a muscle memory combined with curiosity.I admire someone else’s skill set for making things run smoothly!
I would add “accept some personal responsibility” to the list. Far, far too many people have the viewpoint that their life is something that “happens” to them, rather than something they can shape by their choices. It’s about more than just time management (see “Live Intentionally” above)–it’s about the choices one makes about EVERYTHING, from the time they wake up until the time they lay their head down at night. We need more people who have actively planned their course, rather than a glut of folks who feel they are the victim of circumstance.
Out-bloody-standing essay.
Thank you.
Great stuff! I’ve thought for a long time that it’s not the vast numbers of poor people that’s the problem; it’s that there aren’t enough rich people. And here you pop up you with your ‘get advice from rich people’ suggestion.
This corresponds closely to my idea that, rather than spending gazillions on programs to support the poor, the Government should reward business leaders for their mentoring of protégées from the entrepreneurial start-up through to ‘maturity’. It seems to me to be essential, though, that the mentor does not own or have a stake in the venture – the reverse of ICU visiting hours, viz. no family members or close friends allowed.
Parameters to measure the likely continuity of the venture? It might be the number of full-time employees, business volumes, RoI or some other value added factor – but, as it’s the business of business to stay in business, and not a Dragon’s Den in search of ratings, it would be sensible to reward the mentor only after, say, 3 or 5 years of tax returns of the new venture, that reward probably taking the form of a personal income tax allowance.
A rich-ish man myself, were I younger, I know this would motivate me because there’s a double win for me: reduced taxes and a good feeling to know I’m “paying back”; if you don’t recognize the boon to entrepreneurs you’re obviously not a candidate for a mentored start-up.
For Catholics — pray the rosary. And don’t act like a Mexican, Puerto Rican, Italian, Irish, Haitan, or any other kind of gangster.
Interesting article. For me mobility means going from one town to another. I live in poverty I guess. We have no debt. We own no property, at least property that is stationary. We actually have a 5th wheel trailer that for us is property. We sold our “property” and used the income to pay off all out debt back in 2004-5 and the freedom gained and felt is incredible. We work here and there, we quit when we decide it is time to move on. We are pleased with our life and what we have. We always have what we need and that is Gods blessing.
I was raised with a hard-working ethic, from an immigrant family — where my parents didn’t so much transcend class, as transcend their circumstances after their families lost everything in the war. They came to this country from deportation camps, and made a good life for themselves. My father became a respected executive in his company, my mother studied science and worked in a technology field.
But there are caveats. Even as hard as my parents worked, and they did, my mother will still maintain to this day that she had advantages as a sponsored immigrant that even some of her impoverished American peers did not. Through her immigration program, she was sponsored by a family and then by the church which paid for her private religious high school. She and my father could both afford college at that time on the meager job wages they earned — she as a secretary. Tuition was not what it is today, and this year, her own son, despite earning many times more than she and my father did, is taking out loans to pay for his daughter’s college education. California college used to be free, before Reagan’s governorship.
My father had a pension that was never cut. His company paid full benefits health insurance while we were growing up, which included dental care and even, if necessary, mental health care. He did not pay a dime into his health insurance program throughout my growing years.
Ironically, it was when my father got cancer that the company started cutting back on all of these benefits. After a lifetime of diligent work and immense sacrifice, his cancer broke him financially because he could no longer make enough money to keep up with the treatments that were no longer covered by his policy. He had to dig into every element of his savings, his hard earned savings over the years, to survive and try to get well. He did not get well and, despite his many years of company service, he did not qualify for full retirement benefits for my mother because he died at 62.
One of his own children, the highest achiever among us, became ill in his 20s and could not work full-time until about the age of 35 when he was properly diagnosed and treated for an autoimmune illness. Even still, that son worked as hard as he could while he was ill and never took unemployment, disability or any other program he might have qualified for. He was brought up as we all were with a hard-working ethic. (All of us kids worked as teenagers and never stopped working into adulthood). This son, too, was broken by medical costs when insurance companies refused to pay for his treatments. My father, now broken from his own medical treatment couldn’t help. His son is doing okay, and once he got well, went back to work full-time and worked his way out of medical debt, at great cost to himself and his family. They’ve never been able to afford a house or other common assumptions for men of his age.
In the end, yes, we make many, many choices. But there are so many extenuating circumstances. I just don’t feel the same judgment toward people who don’t “succeed.” I try to look at what happened in their lives, often circumstances much worse than my own. And I certainly don’t begrudge people a helping hand when they have the desire to work their way out of their circumstances. I wish we had some kind of safety net in this country for people like my father, like my brother, who, through no fault of their own, just couldn’t make it financially when hardship struck. There ought to be consideration for those elements of our culture.
In my family were, again, taught to take care of ourselves. We believe in and love hard work, and all of us kids refuse to succumb to victimization no matter what the circumstances. But I find more and more that people who haven’t suffered the travails of life’s unexpected circumstances, fail to remember that each one of us is given a helping at certain times in life. And, looking around at the world, I see clearly there are people whose lives would *not* have been as upwardly-mobile had a father, say, not loaned a downpayment, or had they not started off with some measure of assistance from an adult. I’m not saying that I support people who whine and never do anything to overcome their plight. On the contrary. I support helping those who simply haven’t had the advantages some of us have. It’s not a stark black and white equation. Your father and mine grew up in a very different world, where certain things like paid health insurance were taken for granted. One single thing like catastrophic illness can take you from upwardly mobile and a diligent hard-working individual, to a person wondering how on earth you will get well and pay all of your medical bills. It’s just not that simple.
Well said!
I would guess, that most of the people reading, and perhaps commenting, here, are of IQ 140 or higher. So there is a big “can do” attitude, and a concomittant lack of understanding of those who “can’t do”.
I would suggest they all get some brain surgery. So they could understand, that life at 120 IQ is a different world. Life at 100, 90 IQ. So they could understand failure, repeated failure, not being able to learn, even after a lifetime of constant repetition, and of constant admonishment, from those smarter than them, calling the “lazy”, and “making poor choices”.
This column is full of good advice, for those who can take advantage of it. But most of the people here, would not last a month in a low IQ persons world.
They don’t understand, all that they have, they have been given.
um, there’s ignorant and slow, and there’s immoral. A low-IQ janitor who tells the truth, shows up for work on-time, has decent manners, doesn’t have a kid out of wedlock, attends a welcoming church- that person will have respect and love and care.
a really smart douchebag with the morals of an alleycat might have a good run, but will likely have two or three divorces, and end up living in an SRO, and no family at the funeral.
The only way to rise from poverty is to start poor.
Since our country requires several hundred million people to labor at just above the poverty level, I want it safe to be poor.
“Since our country requires several hundred million people to labor at just above the poverty level”
So that would be just about all of us then?
Since this article is for the person who wants more but doesn’t know how to get it, I would add an additional bit of advice to make the way out of need and want easier.
That is to count your blessings every day.
The poorest of us is awash in wealth but are just not very conscious of it so we get down, especially by comparing yourself with somebody else.
So, I’d say, spend some time thinking with gratitude of every good thing you enjoy. You might be amazed of how much you actually already have.
I don’t know about relying on the “Rich Dad, Poor Dad” books for advice. The author has made some bizarre claims in the past about being a deserter from the Marine Corps only to later retract that claim.
Some of the advice he gives in his books is downright illegal. The author also recently filed for bankruptcy: http://www.dailymail.co.uk/news/article-2215642/Rich-Dad-Poor-Dad-bankrupt-dad-Best-selling-author-files-corporate-bankruptcy-losing-24m-judgement.html#axzz2JqmzmU8v
Go here for a very in-depth dissection of the problems with the “Rich Dad, Poor Dad” books: http://www.johntreed.com/Kiyosaki.html
Very interesting read. You recommend some great books for managing money. My Dad gave me The Richest Man in Babylon when I was 17 and I found it critical to my education in personal finance and my ability to rise a couple of rungs beyond my parents. But you don’t recommend any books for shedding the success guilt or learning about the virtue of money. For that you need Ayn Rand. The Virtue of Selfishness is a great start, or Atlas Shrugged.
I think the commenters above who don’t think a CEO or CFO is worth a damn would particularly benefit from Atlas, a story that shows the heroic effort required to keep a company going, especially in our bureaucratic, mixed economy. I think importantly the book makes a distinction between the CEO who uses pull and politics to run a company and those that use their own mind and effort. Don’t let people equivocate between the two types of men. They are moral opposites.
My Dad also gave me Atlas Shrugged when I was 17. I will be forever grateful to him for this early guidance.
oy.
CEOs decide what direction the company will march. He checks to see that they are all on-board, that the day-to-day stuff is going okay. Should he fail at any of those three things, then he fails, possibly the company fails, and then all those middle-managers have no place to show up and be productive.
He has to be able to judge future performance based on past performance- not just what’s on the resume, which is perfumed and powdered. He has to see that his staff has sound judgment- not necessarily his judgment- he’s not there- but sound, and trustworthy. Everyone at the top is technically sound, but maybe not wise. That’s what he’s got to find out.
Second- which direction? What will the company make? real things? high-end? cut-rate? middle? what price? world-wide? local? what will the company research to make later? what contracts will it sign? what products go into making this?
how’s about the staff? are they doing their job? do they know their job? is that really their job? ex: office supply store that checked the bathrooms were clean every 15 minutes, but let customers wander around. They passed their checklist, but didn’t have sales. What’s the right checklist?
Does staff want to stay? Do you want them to stay? How much staff?
I haven’t met a CEO who works less than 80 hours a week, and dreams about the company at night, and will talk about it if you even mention it in passing. And dreams about it at night.
Zeke, meet some CEOs. they aren’t the ridiculous fools that Hollywood movies make them out to be.
Unfortunately you don’t categorized any corporations from another and your ‘lumping’ corporations as such, doesn’t give any creedence to any of your comments. Private vs. public. Small cap vs midcap vs large cap , all are different and most all have very different corporate missions and objectives.
I was addressing major large cap publically held corporations.
in which I now laugh at your naivete. to get to the top of the greased pole of a publicly traded corporation takes way, way,way more personal discipline than a smaller corporation.
It’s what makes cable tv interesting. Eccentric owners of small businesses who don’t answer to shareholders:they can do anything they want, if they pay the bills.
Seriously, you do have a point per Codevilla. About 15% of the population can be on the sociopath spectrum. I’d put Jamie Gorelick in that group. Codevilla talks about the pre-selection that happens at the more exclusive Ivy League schools, where most blue- ribbon corporations recruit. Codevilla says they have not been selecting for quality or range for about two generations, and they don’t know they’ve moved the quality level down so much, so fast.
As well, they’ve got the technician/ owner dichotomy working against them- “it was like that when I got here” and “I’m just passing through.” It’s the difference between the aristocratic landowner- he might be a twit, but he’s a twit whose family has lived on the land for 800 years, and he grew up in the barns playing with the mouser-cats and boot-black boys, and the manager hired from another part of the country.
And then I will say, Jamie Gorelick managed to get rid of risk and downside, in wildly fiscally immoral fashions, by putting taxpayers on the hook for bad loans, but Gorelick did do something.
So, mention the 15% sociopath rate- that’s the group that makes true crime half-hour shows for everyday things like dating- so, take out that group- what’s left?
Those who remain are usually fantastically decent guys, nearly monk-like in their devotion to their companies. They sound normal, and then, they slice to some balance-sheet analysis, right in the middle of a conversation. They are usually really brilliant and dedicated and not-flashy. The best ones make everyone else feel brilliant- that brilliant underling wants to keep shining- so they work harder.
Your middle-managers are auditioning for promotion, every day they go to work, more or less. I don’t fault them for not making it to whatever top they seek. America had unbelievable amounts of new companies in the 1920′s. More guys should be owners and managers of companies. The guy who wrote “patriot’s history” books talks about this- what most kids know about the 20′s is that some Democrats dressed up in sheets and hung a black person from a tree every few months. It’s the most consistent photo of the 20′s. It’s shocking, and horrifying. The books don’t usually mention Pres Wilson, who’d spent from 1900 or so trying to undo the progress of blacks from the Civil War, onward.
Anyway- there were companies being created left and right, to invent and then manufacture all the modern conveniences and pleasures we are so accustomed to, today. FDR pretty much shut down that froth. Add it taxes that hoover out savings- which one needs to start companies- and you’ve flattened the Himalayas down to a few names.
There ought to be more big business titans, not less. Heroic middle-managers ought to be heads of mid-size companies, or founders of companies. They ought to wake up scheming to make better, oh, clothes-washers, or flags, or customizable car seat covers.
( I vant one that is a Vera Bradley perfect fit, on my minivan driver seat- yes, crappy, tacky, middle-aged lady- but it’s not on the market- the constituent parts aren’t even on the market- and they should be.) There’s only one washing machine factory in America, right now. There should be several- the one they have has one defect in manufacturing that gets commented about on, say, knitting boards. I’ve got one- it’s sturdy except for that one defect. There aren’t any sewing machine factories here, that I know of- Japan has them- and the Japanese are getting older and less likely to make stuff. There are two custom-flag manufacturers that I can think of- one started on a kitchen table- one’s in a house. That’s…..well….that should be bigger, should be more innovative ( have you seen? british labour union flags? Gorgeous. I have no idea how they make them, but- wow! our stanley cup flags are okay, but nothing like those). These are all small examples of my life under a rock- but see- that’s just three things between carpooling, and coffee at my desk. For that matter- there ought to be other fast food dry goods suppliers. There ought to be….see?
IOW- there ought to be a lot more fluff and innovation, and right now all that fluff is going to fund Washington, DC.
Great article! It’s all true. I’m 62 years old, and I’ve been thru all 5 suggestions, (I recognize myself in them!).
I would add some other qualitles;
You have to have dogged determination to do some of the things listed above, or just to survive a bad boss until you are ready to go elsewhere. I can’t count the number of times I’ve saluted & done something I thought was stupid (not immoral) simply because the alternative was to quit.
You have to have self discipline. NO matter how chaotic your family life is, you must transcend it so that you get to work on time, have a lunch with you and don’t get constant phone calls from your family wanting you to Do Something for them while you are working.
I think of money as “stored energy”. The guy who owns a business has a lot more energy than I do – He was willing to talk the bank into a loan, find reliable employees, sell his product successfully, and take the hit if things don’t work out. What a gamble!! I don’t have that kind of energy, I prefer to work for someone else, since I also have to go to the grocery store, cook, do laundry and clean, too. My boss deserves a heck of a lot more money than I for the amount of energy he is willing to put into his livelihood.
Susan Lee