Do Hardworking Wealthy People Work Harder Than the Hardworking Poor?

A thought experiment on wealth inequality

Source: Yogendra on Pexels.

Whenever we enter the discussion of hard work, we rarely speak about proportions. Specifically, the proportion of capital we start with.

When you have enough capital, you can hire people to take your problems away. Your capital allows options previously locked away.

Let’s use $10,000,000 as an example.

You can think about this horizontally across industries spanning virtually anything. The stock market, for instance; Carl Icahn’s fund, IEP, yields a 12% dividend right now. 12% of $10,000,000, per year.

Let me just give you two people in this thought experiment. One person has nothing, but works every single day. The other person has $10,000,000. That $10,000,000 is all in stocks that pay dividends. I’m not talking growth or anything of that nature. I’m strictly speaking dividend payments. At the end of the year, this second person who doesn’t actually work makes $1,200,000 doing absolutely nothing except parking their money in an equity.

Median household income is approximately $65,000 a year. That’s household income, not per person, mind you. You are earning $1,200,000 without any growth in a company by doing nothing. That’s about 20 times the median household income, without working. You could look hardworking without doing any work at all. On paper, at least.

For a poor person and a rich person, if you assume a similar amount of work and a similar set of problems, the rich person can afford to think and stress less. We constantly hear about how the rich have more problems, but it’s the farthest thing from the truth.

Those problems are almost always artificial or overblown.

If I have $10 million dollars, and I’m running a company or am running several, I don’t actually need to run them at all.

At each stage, I can hire a manager to overlook the segments of the business I don’t want to. I can slowly become a bystander watching my company grow from the sidelines while I rake in the majority of the money.

If you are poor and you work as one of the managers of that business, you are pretty much doing the same work. You could argue since your boss isn’t working at all anymore, you do most of the work. If something goes wrong with that specific location, you’re screwed. You don’t have the capital to think about the luxury of time. You need to get back to work and pay your bills.

When you’re wealthy, those kinds of thoughts don’t exist. The more capital you have, the more exclusive the club you’re in, the better proportion you can rake in from investments.

You’re never comparing a hardworking poor person and a hardworking wealthy person. For the same reason that you couldn’t argue that a dollar over a million is as valuable as a dollar over ten thousand in income per year.

The dollar might be equal to a dollar, but, depending on how many dollars you’ve made previous, each dollar more becomes more meaningless and sets you farther ahead without actually working.

Our perception and understanding of hard work change depending on where we are stand.

Written by

UC Berkeley, mathematics. Los Angeles. Long-time runner. Top writer on Quora, 100M+ total content views. New to Medium. Inquiries: Moumj@berkeley.edu

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