There is a lot of talk about socialism in the United States. Much of it is coming from people who are pretty well-off, relatively speaking.
Don’t you think that’s weird?
Take a family led by two white-collar workers who make about $75,000 a year. With $150,000 in income, you still have to mind your Ps and Qs.
You find ways to scrimp and save, you don’t travel that much, and maxing out your 401(k) contributions are just a fantasy, especially if you have kids.
Life isn’t hard, but resources are limited.
Read: The No. 1 money-saving question Americans asked Google this year
It doesn’t seem like $150,000 goes very far. But a household income of $150,000 puts you in the top 15% of all households in this country. In South Carolina, it would put you in the top 8%, which most people would call borderline rich.
And yet $150,000 doesn’t feel very rich. It feels resource-constrained, actually.
Here’s the thing.
The rich feel strapped too
There is probably a part of your town populated by people who earn more than $150,000 a year. Houses are bigger, they’re on more land, and the cars in the driveway are nicer.
I’ll let you in on a little secret: There is a good chance that the people in those houses feel resource-constrained, too. They are probably comparing themselves against people who have even bigger houses, and even better cars.
This is totally normal economic behavior. Everyone is always sizing people up. You go to a dinner party, you walk out afterwards to the car with your spouse: “I wonder how much their house is worth?” Now we have Zillow ZG, -0.19% for that.
Certain aspects of this behavior are healthy. Envy isn’t always bad. It can be a motivator.
I love Instagram — cars, suits, watches, models — it keeps me going. I can’t imagine what it would be like to feel resentful every time I logged into Instagram.
Apparently, a lot of people do.
Putting in the work
If you want more money, a bad way to go about getting it is hating people who have it. There is not a lot of introspection out there. Nobody likes to think of themselves as lazy, or lacking ambition, or incompetent.
If you go up to a rich person and ask how they did it, you will probably be surprised at the amount of work that went into it. You might even question whether you are willing to make the same kinds of sacrifices.
Most people making high six figures and up are making a lot of sacrifices, or made sacrifices along the way. Money is a path that you can choose. Some people have different priorities.
These are not politically correct things to say in 2019 America. You could say them in 1999, for sure, but not 2019.
One thing that gets on my nerves is that a lot of Federal Reserve critics (like myself, sometimes) like to say that quantitative easing and zero rates lifted financial asset prices, which helped a lot of rich people get richer. That is true, perhaps, but it’s not exactly like the Fed was writing checks.
People had to be positively exposed to this phenomenon; they had to take the risk, and there was no guarantee that it would turn out. Plenty of rich people did not get any richer in the past decade because they were shy about taking risk. (They were probably penalized for being too smart.)
Mind your own business
People tell me that I am rich. I am not so sure. Like I said in the beginning of this piece, there is always someone with more. I’ve never had someone come up to me and ask me what I did to get rich. You know what — I would be happy to tell them. I think most people would.
In the course of my business, I have met a lot of super-rich people. Most of them either managed money or started businesses, or both.
If I wanted to get super-rich like them, I know exactly what I would have to do. So far, I have been unwilling to do it. I have been unwilling to make the sacrifices or take the risk. That is a choice.
Some folks lately have been complaining about the perceived lack of class mobility. Especially with this college admissions scandal; super-rich jackasses are bribing their kids into college. What kind of chance does everyone else have?
You just have to work harder. Having money gives advantages. That has always been true. But America is still the same country where you can work your way up from the mail room.
I have a Horatio Alger story. A guy on Wall Street (someone who I actually disliked) honey-badgered his way into Goldman Sachs GS, +1.18% from a non-target school and is now probably a centimillionaire after working on the buy side at a series of hedge funds. I have lots of stories like this.
I am the patron saint of the non-targets. There are politicians out there who will use words like “elite,” “billionaire” and “rigged,” sometimes all in the same sentence. Tell your story walking. If I can do it, anyone can.
Jared Dillian is a former head of ETF trading at Lehman Brothers. Get his free report: Five key ETF trading strategies every investor should know about.
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