Posts Tagged ‘wealth’

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Addicted to Risk

Thursday, June 9th, 2011

sky-jumper.jpg
(photo credit: jeroen_bennink)

When you have a lot to lose, how likely are you to engage in risky behavior?

Apparently people with a lot of money to lose – people known as “the wealthy” – are pretty likely to take those risks. But not simply because they can afford to lose here and there. Many of them are just hard-wired that way.

At least, according to this study by Barclays Wealth. We definitely don’t endorse trying to make money by taking excessive risk or doing things like trying to time the markets. But, interestingly, neither do the millionaire risk-takers themselves. Most of those who reported trading more often than they should also reported feeling guilty about it – and slightly out of control.

Surprising, right?

What’s your risk tolerance? Find out by taking our Risk Assessment Quiz!

Do you know where the wealth is?

Friday, March 25th, 2011

According to new research from Harvard Business School, most Americans have no idea how wealth is distributed in this country.

Here’s a handy chart from the study that pretty clearly illustrates how Americans think wealth is distributed, how they wish it was distributed, and how it’s actually distributed:

wealth-actual-and-perceived.gif
(click chart to download a pdf of the study)

Did you know that there was such a huge difference between the very top and the very bottom of the wealth scale?

  • - The top 1% (about 3 million people out of 300 million) holds 50% of the nation’s total wealth, and the top 20% owns 85%.
  • – The bottom 20% of Americans (about 62 million people) owns less than 5%.

There’s an interesting discussion on the New York Times about why this might be the case, why Americans underestimate income inequality, and whether we should even care.

Are you surprised? What would you have guessed?

$74 Billion Still Buys an Awful Lot…

Thursday, March 24th, 2011


(photo credit: clagnut)

Carlos Slim (is that really his real name? Googling… his real name is Carlos Slim Helú, which is still kind of funny) is officially the richest man in the world, with a net worth of $74 billion.

That’s more than 6% of Mexico’s entire GDP!

But being the world’s richest man in a country as poor as Mexico isn’t easy on your rep. Unlike Bill Gates and Warren Buffet, America’s wealthiest citizens, Slim hasn’t really focused on philanthropy.

Which led Cyntia Barrera Diaz from Reuters to ask, “What could you pay for with that kind of scratch?”

Here are some gems from the list she came up with:

  • - Enough tortillas for all 112 million Mexican citizens for 11 years
  • - NASA’s total budget for the next four years
  • - Mexico’s entire public education budget for ten years
  • - 1,617 25-carat pink diamonds

What does Carlos think about giving away his money?

“Wealth is like an orchard. You have to share the fruit, not the trees.”

What would YOU do with $74 billion?

Does thinking luxuriously impact your decision-making abilities?

Thursday, January 13th, 2011

mr-burns.jpg
credit: lisatozzi

You know how some medications say “do not operate heavy machinery or make important decisions while taking this medication?” Well, according to a new study conducted by Harvard Business School, it might not be the best idea to make certain decisions while thinking about your next big bonus either. Especially if those decisions impact other people – like your boyfriend or girlfriend, your sibling, your friend, your co-worker.

Here’s an excerpt from the study:

  • People who were asked to think about luxury before a decision-making task were more likely to endorse self-interested decisions that might potentially harm others.
  • Although luxury does not necessarily induce people to harm others, it may cause them to be less considerate.
  • Limiting corporate excesses and luxuries might be a step toward getting executives to behave more responsibly toward society.

Billionaires as far as the eye can see

Thursday, January 6th, 2011

billionaires-of-the-world.jpg
click to see the full-size version

Woah! There sure are a lot of billionaires in America. And at least one of them has been doing a great job of living within his means… Bill Gates tops the list of American billionaires for the 13th year in a row.

Maybe it’s time to start that software company you’ve always dreamed of…

ilovecharts:

via Kurt White

An impressive life, or an authentic one?

Tuesday, January 4th, 2011

“You’re probably not doing things right unless the other people in your world are at least slightly uncomfortable with some way in which you’re challenging its assumptions.” – Conor Friedersdorf

hadley-nagel.png

Did you see this Style profile of 19-year-old New York debutante Hadley Marie Nagel? She’s kind of amazing, with skills (skeet shooting?) and interests (like lobbying for a James Madison monument on the National Mall) all over the map. Being wealthy allows her to pursue these activities, and apparently to throw awesome dinner parties.

But according to Mr. Friedersdorf (who unfortunately gets Hadley’s name wrong in his opinion piece), having a lot of skills and interests won’t necessarily win you a good life. Important decisions about career and family are more complicated than having a sparkling resume, he says.

Having wealth and connections can score you all kinds of opportunities, and we think you’d be crazy not to take advantage of them. But those advantages can also lead you down a path that’s just not “you.” So before you start making the big decisions, do a gut check. Do you really want this, or do you think someone else wants it for you? (Or for themselves, for that matter.)

Rising Income Inequality Hurts Everyone

Monday, October 18th, 2010

Research shows that inequality is bad in any number of circumstances. So why are we so reluctant to look at the effects of excessive wage inequality in the U.S.?

  • Unlike economists throughout history, modern economists seem unwilling to address the negative effects of rising income inequality. There is no convincing evidence that shows it supports economic or individual success in America, but experts in this case avoid making value judgments when it comes to money.
  • Studies show that money can buy happiness – up to a point. But because of hugely inflated wages for the extremely wealthy, Americans become trapped in a cycle: their peers spend ever-increasing amounts of money on their lifestyles simply because they can, and everyone who can afford it follows suit.
  • This cycle trickles down from class to class in “expenditure cascades,” until soon enough everyone feels the psychological distress of never having enough. This distress results in higher divorce rates, longer commutes, and voters who are less interested in spending on public services like road rehabilitation.

Facts & Figures

  • In 1976, 8.9% of the country’s income went to the top 1% of earners.
  • In 2007, 23.5% of the country’s income went to the top 1%.
  • Between 1976 and 2007, the average hourly wage went down by more than 7%.

Philanthropy As A Badge Of Wealth

Monday, August 16th, 2010

Philanthropy becomes a symbol of wealth as more billionaires pledge their fortunes to charity.

  • Warren Buffet and Bill Gate’s philanthropic challenge to the wealthy encourages more wealthy families to give.
  • As a result, philanthropy is rapidly becoming a status symbol.
  • Not only is there a growing expectation for wealthy families to give their money away, they are expected to be actively involved in philanthropy.
  • Some are worried that if philanthropy is seen as a privilege of the wealthy, it will devalue the charity endeavors of regular Americans.

Facts & Figures

  • Individual Americans gave more than $227 billion in 2009.

Best Quote

“Clearly pressure on the elite is high right now to say that they are giving money away and that will make it trendy. People who have enough money to give away but maybe haven’t thought about that… those folks will want to do what Warren Buffett and Bill Gates are doing.” – Stacy Palmer, Editor, The Chronicle of Philanthropy

Motivating Children Of Wealthy Families To Work

Tuesday, June 22nd, 2010

Affluent parents struggle to maintain a balance between helping their children financially and teaching them how to become self-sufficient.

  • While parents mean well by providing financial help, they may be hampering their child’s productivity and preventing them from learning the value of work.
  • Affluent or not, parents are concerned how to raise productive children. Setting financial limits and sticking to them can help ensure that their children don’t depend on what they see as an endless supply of money.
  • Banks like Gibraltar and J.P. Morgan have begun to offer classes and seminars focusing on understanding and managing finances and preparing for the future.

Best Quote

“You have to help a kid understand what it means out there. You can’t expect kids to go out in the world and be self-sufficient if they don’t know what a utility bill is.” – Joline Godfrey, Chief Executive of Independent Means

It’s Time To Talk About Your Rich Kid Guilt

Tuesday, November 24th, 2009

Young people from wealthy families in Washington, D.C. take comfort in talking to their peers about the mixed feelings and guilt they experience because of their societal privilege and wealth.

  • Resource Generation, a national membership organization, brings wealthy young people together who want to use their money for progressive change.
  • The organization’s meetings provide members with a place to discuss personal issues that accompany being young, wealthy and committed social justice.
  • Many members feel their inheritance and the accompanying privilege they enjoy perpetuates the injustices they work hard to fight against and change.

Facts & Figures

  • A Boston College study concluded that about $50 trillion will be passed from one generation to the next over the first five decades of this century.
  • The number of children of millionaires decreased from 26 million in 2007 to 19 million 2009, according to the Center on Wealth and Philanthropy at Boston College.
  • There are a little more than 250,000 millionaire households in which the head of household is 35 or younger.

Best Quote

“I definitely feel like I am at war between my desires instilled in me to eat out at nice restaurants and my better sense and principles. If I make different choices when I am older, I hope to God they’re coming out of principles. Everyone changes. My great-grandmother was a communist in her 20s and a total conservative in her 90s. I won’t rule out anything.” – Janelle Treibitz, 28, Part-Time Waitress

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