Current events have proven that the quote “the rich keep getting richer and the poor keep getting poorer” holds truth. Wealth gaps between whites and minorities have grown to their widest levels.
Many believe the recession has wiped out decades of minority gains leaving whites on average with 20 times the net worth of Blacks and 18 times that of Hispanics according to new census data.
The Pew Research Center also reports that older Americans are now 47 times richer than the youngest generation, marking the largest wealth gap ever recorded between the two age groups.
Many believe that the top 1 percent have a fundamental understanding of money and know how to effectively manage it. Here are a few ideals that the 99 percent can learn from.
Education is essential
While many Americans question the value of a college education, typically the wealthy don’t. You may not be able to send your kids to Harvard, but post-secondary education has its benefits. Well-paying jobs that don’t require college degrees are disappearing, and the unemployment rate for those with only a high school diploma is twice that of those who have a college degree. Economists say a college degree will be all but essential for those who hope to remain in the middle class, let alone advance economically.
It’s all about perspective
People with million-dollar annual incomes and multimillion-dollar net worths don’t necessarily define themselves as wealthy. They can always point to someone richer. People tend to compare themselves to others who are better off…but even people at the bottom of the wealth ladder are wealthier than some developing nations.
It’s a team effort
More money brings more complexity. The rich surround themselves with professionals who tend to their investments, advise them on tax strategy, ensure they’re adequately insured and plan their estates, among other tasks. Don’t despair, there are also plenty of good advisors serving the modest in money. But good advice costs money, and the not-rich are sometimes reluctant to pay for it. If your finances are simple, you can handle them yourself. Once you begin acquiring assets, seek professional advice.
Money doesn’t equal happiness
Some researchers suggest that once basic needs are met, increases in income don’t produce much more in the way of happiness. Other researchers have found that the rich are way happier than the poor. It’s obvious that wealth can eliminate a lot of issues, but the rich still have problems. Saving money can help. People with a few dollars in the bank will be less anxious than those who live from paycheck to paycheck.
Pass it on
Even families with old money worry that their children could blow the family’s wealth. To avoid this, wealthy families tend to go the extra mile to make sure their kids understand the fundamentals of handling money. Every-day folks can apply the same principles. Give kids an allowance so they can learn about budgeting, deferred gratification, opportunity cost (what you give up to get something else) and other important personal-finance concepts. One of the most important things a parent can do is let their children make mistakes and not bail them out.
Source: money.msn.com
