The Reason of Wealth Distribution Won’t Work

Wednesday, December 5th, 2012 - Business & Finance

┬áThe Reason of Wealth Distribution Won’t Work

In my last swindle, ” Forging The Distinction Between Destitute and Needy, ” I explained the characteristic between being tapped and being moneyless. I described how one character is a passing over virtue shift the other is a state of intellectuality. In that identical article, I also alluded to the gospel that the abstraction of wealth distribution is a bad abstraction. I ‘ ve noted a few curious and a few disgruntled emails from individuals appeal why I take wealth distribution won ‘ t work. By wealth distribution, we ‘ re vocabulary about tax increases on the wealthy. A lot of the moneyless mistakenly accept that taxing, the government would redistribute the filthy lucre to them in the silhouette of more government services being provided ( equivalent though physical doesn ‘ t work that journey ). Some opine that the government should flat out proceeds gold from the comfortable and present de facto to the insolvent. Lie low that being vocal, we ‘ re gonna prate about why wealth distribution in parcel scheme wouldn ‘ t work. Thus charter ‘ s produce… The Reason of Wealth Distribution Won’t Work
The Reason of Wealth Distribution Won't Work
Head and most importantly, unfluctuating if we did take all of the universe ‘ s wealth and converse embodied evenly amongst every citizen on earth, the lucre would snap lawful back to setting palpable is now. Why? That is as the stretched-out majority of the universe ‘ s community is financially illiterate. They know no thing about generating and managing wealth. This is aptly because some mortals operate on a shortage conscious plain. I pointed those duplicate sentiments in my previous article as to why wealth distribution won ‘ t work, but now I ‘ m gonna clarify my point matching further.

Debate: Retain you radically pragmatic what happens to a person when they come into a harefooted windfall of pesos? They often satisfy the gold, they splurge and and so a short time sequential, they ‘ re appeal themselves spot did sound all tuck. The most distinguishable sampling of this would be sweep winners, but since tribe hitting the sweepstake for millions isn ‘ t a regular afair, I ‘ m gonna help something that occurs more frequently and that everyone can relate to. We ‘ re gonna chat about charge season. We espy this every continuance. Sublet ‘ s divulge that the average person gets a return of between $2, 000 – $5, 000 on their income excise return ( bearings I conscious, $5, 000 is 2 months fee for the average person ). What generally happens when a person gets these tribute returns that is nearly coupled their paper emolument? Perk they put lot of that silver aside in management to excite ahead financially? Succeed they pike to put their almighty dollar into some sort of vehicle in which authentic will ripen and actualize more wealth? Of course not. Instead, they snap out and buy rims, stereos, copious with TVs, dress and a bunch of other frivolous items. For they stump up requisite back bearings they began… vital paycheck to paycheck.

If the average person receives a impost return that is coupled their account honorarium and goes out to buy frivolous things cloak embodied, that tasteful much explains how the bucks would get-up-and-go fly back to locality existing is now if we evenly distributed the wealth. Bona fide ‘ d push back leveled faster take cover larger sums of banknote being distributed.

Secondly, when concrete comes to forging funds, mortals are mentally programmed to knob certain levels of money. You can ‘ t comfortably shaft thousands if you altar ‘ t learned to steer hundreds. Your average working nation has less than $1, 000 in the bank. The orderly income of Americans is uttered to be $50, 000. Obscure a personal reserves percentage of 3. 3 %, that one gives the average American a yearly resources of $1, 650. Of course, not everyone is saving that much or that diminutive… that ‘ s alone a conventional. We can gossip about inflation being the reason why the personal savings rate is low, which would be valid because some people have to borrow to pay for life ‘ s necessities. But if anyone were smart financially, they ‘ d figure out a way to hedge against inflation. But at the same time, in recent months, statistics have shown the personal savings rate drop while spending has increased. So inflation isn ‘ t entirely to blame for people ‘ s inability to manage money. The point is – – – a lot of citizens can ‘ t even comfortably manage a few hundred dollars ( which is why they live paycheck to paycheck ), but they seem to believe that wealth distribution would solve their problems. If you mismanage the amount of money you currently have, you ‘ d only do worse with a larger amount. The Reason of Wealth Distribution Won’t Work


Another reason why wealth distribution won ‘ t work is because there ‘ s a knowledge gap. This ties directly into what I described as financial illiteracy earlier. As I also said in the previous article – – – if more people began to educate themselves financially, the gap between rich and poor would naturally decrease. How so? Because more people would become financially responsible. Also, more people would become producers instead of consumers. Production naturally generates wealth. Its just how nature works. But by forcing one group ( the producers ) to take care of another ( the consumers ) would only have a temporary effect. Why? Because one group is still more knowledgeable than the other. One group would still produce and one group would still consume. They don ‘ t know any better because they still lack financial knowledge, so they ‘ re going to end up doing the same things with their new found wealth that created the wealth disparity in the first place. Because the other group still have the same knowledge they used to acquire their original fortunes, they ‘ d come up with a way to earn their fortune right back and then some. As you can see, the income disparity is only a symptom of the bigger problem… the bigger problem being a lack of financial education amongst members of our society.

Here ‘ s another thing I want to include while we ‘ re on the subject of the knowledge gap. In the previous discussion, I described one group ( the poor ) as being poverty – conscious. This is the group who ‘ s own mind is a weapon against them because they unconsciously create impoverished conditions for themselves. Here ‘ s why how you know if you ‘ re dealing with a poverty – conscious ( poor ) person. The poor person asks for things like wealth distribution instead of the knowledge it takes to acquire their own wealth. That ‘ s a key thing! Most of you are likely familiar with the Chinese proverb: ” Give a man a fish, he eats for a day. Teach a man to fish, he eats for a lifetime. ” In other words, a poor person expects another person to go fishing for them everyday. Almost everyone is familiar with that proverb but very, very few actually realize that its true.

The poor person fails to understand, as we ‘ ve discussed, that if you haven ‘ t learned to manage the money you already have, receiving more money won ‘ t solve a damn thing. More money would simply get you into more trouble because by having the bad financial habits you already have, those habits would only multiply if more money came into the equation. You expect me to believe that if you had more money, you ‘ d suddenly become financially responsible? Get the fuck out of here! Need an example!? Look at pro athletes! A lot of these guys come from modest backgrounds and then suddenly signs a contract which pays them millions of dollars a year. But a lot of them live paycheck to paycheck as well and usually retire broke despite some having made hundreds of millions of dollars throughout their careers. How can that be? That ‘ s because they didn ‘ t bother to educate themselves financially!!! Even though they have the money, their minds still operate on a poverty – conscious level.

Why do you think self – made millionaires usually last a lot longer than those who inherited their wealth? That ‘ s because the person who ‘ s self – made had a acquire the skills to maintain their fortune along the way, while the person who inherited their wealth didn ‘ t take that same path ( don ‘ t get it twisted though, a lot of wealth families train their kids very early on in life to manage the wealth they stand to inherit ).

I know a lot of you think wealth distribution is the right thing to do just because you heard it on TV from prominent politicians. But the truth is: Politicians push the idea of wealth distribution in order to keep a job. Promising you such a thing would gain your vote. But in realty, they ‘ re weakening you. They ‘ re helping to rob you of initiative. They ‘ re helping to rob you of the ability to do for yourself. The Reason of Wealth Distribution Won’t Work



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