Why The Rich Are in a Recovery...and you’re not
Spring is in the air. Here in Phoenix, the temperatures are rising into the 80’s and we’re heading into the summertime, which everyone dreads. No one likes 100+ temperatures for three months in a row. But for most of the country, springtime is a hopeful time. After months of grey, rain and snow, the trees are blooming and warmer weather and sunshine are on the way.
In many ways, that seems to be the general feeling regarding the U.S. economy — if you’re to believe the news reports.
What economic recovery?
As I’ve written before, much is being made of the job market gains. But it may be much ado about nothing. Even Bernanke admits the market is “far from normal.”
Chances are most people in this country hear the news of this so-called recovery and just laugh as they fill up their car with gas at over $4 per gallon and make a payment on a mortgage that’s more than their home’s value. Positive numbers don’t mean anything if the reality of people’s everyday life doesn’t change for the better.
The overwhelming majority of people in America don’t feel the effects of this “recovery” — and the numbers prove it.
The rich are in an economic recovery
As the Huffington Post writes, “Technically, the economy has been in recovery for two years. But it turns out the rich have been doing most of the recovering.”
According to Emmanuel Saezan, an economist from the University of California, Berkley, “The top 1 percent of earners took in a full 93 percent of all the income gains that year, leaving the other 7 percent of gains to be sprinkled among the vast majority of society...Income for most workers has barely risen in the last 30 years, but the top 1 percent of earners have seen their income almost triple in the same amount of time.”
A smart person reading this news will want to ask, “Why?”
Why the rich are getting richer?
Not surprisingly, the article on Huffington Post spins this news in a negative way, pointing out the Occupy Movement and President Obama’s policy speeches on economic fairness.
While I can certainly understand why this would be discouraging news for many people, there is another direction from which to view it — financial intelligence.
For years, I’ve been saying that the biggest opportunity for wealth transfer was in front of us with the financial crisis but that only those with financial intelligence and a financial education would profit from it.
Playing your cards right
Does the richest one percent get richer while everyone else gets poorer because the cards are stacked in their favor? Yes.
But it’s not that the stack of cards that makes the rich wealthier — it’s their ability to play the hand dealt to them.
This was the point of my books, Conspiracy of the Rich and Unfair Advantage. Many want to fight the system rather than learn it. Fighting the system will get you nowhere. Understanding how the game of money is played and playing by the rules of the rich will; that requires increasing your financial intelligence through financial education.
The rich have a high financial intelligence, and they’ve used it to get richer during the last decade while the poor and middle-class have struggled playing by the old rules of money.
Sick of sitting stagnant financially? What are you going to do about it?
For free, financial education resources, click here.