The Rich are productive, intelligent, and knowledgeable. They are the driving force behind the economy. They have secret methods to build and maintain their fortunes, little known to the middle and lower classes. They should be taxed less, as they are the source of our country’s fortune.
The Rich are lazy, greedy, and unproductive. They take more than they deserve, and don’t contribute a fair share of taxes. They benefit from government programs without contributing their fair share to the public good. They should be taxed more, as they’ve only gotten where they are due to help from favorable government programs, created by their rich pals in government.
If you spend much time reading financial literature, from blogs like this and money-related websites to books and magazines, you’ve probably come across statements like this at one point or another. The first paragraph is the sort of thing you hear from Republicans or personal finance advisers like Robert Kiyosaki, who want you to believe that the rich are special (and that he knows how to pass on that knowledge); the second is the sort of thing you hear from liberals during campaign season. But the fact of the matter is, neither is correct.
The problem with talking about ‘The Rich’ is that wealthy people are not a single, homogeneous group that shares goals, methods and techniques. There are numerous people that qualify as rich, who have many different traits. Just as with any group, there are a variety of people who qualify as rich. The only thing they all have in common is that they have a high level of wealth.
There are rich people who reached their current level of wealth due to hard work, personal effort, and years of struggle and preparation. By the same token, there are rich people who did nothing to earn their riches other than being born into the right family (which, although I can’t remember my own birth pretty well, is something that’s usually out of your control). Some rich people build up wealth slowly over a lifetime, skimping and saving to generate riches for themselves while others have one good idea or invention and are catapulted to a high net worth overnight. Some start with little, if anything, in terms of money and create their wealth through hard work, and still others start out with everything and gradually lose it all.
Even among those who built up wealth from modest means, there’s an incredible number of ways for them to achieve wealth. Some start businesses, others invest in real estate, some simply work and invest over the course of a lifetime. A few find work in professions like Hollywood actors or mainstream singers that provide them compensation high enough to boost themselves up to riches in a short period of time. Once they achieve wealth, they can use their riches in a number of ways, from providing for a charity, to providing for their own future, or even blowing it all on wild parties and ending up as a joke before they reach forty.
These same points can apply to ‘The Middle Class’ and ‘The Poor’, as well. No social economic group is homogeneous; just as you may have a similar net worth to your friends and neighbors when you have completely different salaries, saving habits, and types of investments, so are other groups a collection of individuals, all of whom are well, individual.
Why go to the trouble of writing out a whole blog entry to state what (hopefully) is already obvious? Well, there is an unfortunate tendency for people to demagogue by appealing to class distinctions. The rich are idolized and scapegoated, treated as sources of inspiration and as those holding you down. Neither is entirely wrong; there are rich people who should be well-regarded and respected, because of how they got their money or what they choose to do with it (Warren Buffett and William Gates both come to mind). There are also rich people who, well, we would be better off as a society ignoring. *cough*Paris Hilton*cough*
But that’s the point; assuming all ‘The Rich’ people are the same and equally deserving of any particular reaction is wrong. They are just people, people we group into a particular clump due to the amount of money they have. Building policies or perceptions based on how we view them is not the right way to do things. We should set tax policy based on government needs and economic realities, not whether we think that ‘The Rich’ deserve their money or not. We should follow investment advice based on whether it will meet our needs, not whether rich people do the same thing. Finally, we should remember that there are many different ways to become rich, and that these differences should affect how we view the rich, whether we treat them as role models, sources of entertainment, or examples of what NOT to do.
Alright, that’s enough preaching from me; remember that ‘The Rich’ are people too, and any claims about them as single, uniform group should be taken with a huge grain of salt.