Sta Hungry Stay Foolish

Stay Hungry. Stay Foolish.

A blog by Leon Oudejans

The rich get richer, the poor get poorer

Regardless of our differences in political ideology, the above title appears to be true. But why? On 24 March 2021, I already noticed this quote in Axios Markets: “One part of it is if you start with a pool of wealth you have something to accumulate wealth upon. If you start without one [then] you don’t.”

This quote combines two aspects; input (ie, “starting with a pool of wealth”) and output (ie, accumulation of wealth). This probably explains the complexity of the above assertion.

A simple visualization might help understand the above assertion:

In my view, there are two main reasons for escaping your horizontal line: talents and stupidity. The poor can get rich as a result of their talents (eg, artists, sports). The rich can get poor due to stupidity.

Matthew 25:14-30 mentions the parable of the talents. The message for (not) using your talents is in Matthew 25:29; “For to all those who have, more will be given, and they will have an abundance, but from those who have nothing, even what they have will be taken away.” I believe my diagram is a match.

Since my 2013 burnout, I am surviving as a result of my home equity. My parents taught me that owning a house safeguards your retirement future, when your income is low and your expenses are high. I’m glad I listened and that I took their advice to heart.

The advice of my parents used to be common sense when I was young. Even the “poor” did their very best to own their house. Nowadays, some people are actively promoting to rent your house while claiming this gives more “freedom”. In my view, freedom is a privilege of the rich; not the poor.

Rich Girl (1977) by Hall & Oates
band, lyrics, video, Wiki-band, Wiki-song

You’re a rich girl, and you’ve gone too far
‘Cause you know it don’t matter anyway
You can rely on the old man’s money

Note: all markings (bolditalicunderlining) by LO unless in quotes or stated otherwise.

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