Do the Rich Work Harder?
"Blast from the past - Best of Eddie" - This one is originally from December 2010. If there's an old post from Eddie you'd like to see up again shoot me a message.
Sorry for the delay this morning, guys. I'm back in the States and writing this from a CC's coffee shop in New Orleans. It's good to be back in the ol' U.S. of A. Anyway, this is a conversation I've been wanting to have on the site for awhile. Do the rich work harder than the poor in America, or are they just lucky? This Journal article from late September lays out the case.
According to Virgin's Richard Branson, luck has more to do with it than hard work. I can't really say for sure, as I've done fairly well in life and I've worked very hard (at times), but I'm also the luckiest bastard I know. If past is truly prologue (and I believe it is) then being rescued as an infant from a London orphanage by an American family had more to do with my success in life than anything that happened after that. And no one, least of all me, could ever claim that wasn't anything but a giant stroke of unbelievable luck.
A recent study conducted by Nobel-winning psychologist Daniel Kahneman indicates otherwise though. It shows that the rich actually do work harder than the poor, and by a wide margin.
His study found that people who earn less than $20,000 a year, for instance, spent more than a third of their time in passive leisure, like kicking back and watching TV. By contrast, those earning more than $100,000 a year (more affluent than wealthy), spent less than a fifth of their time in passive leisure.
I don't think there's any doubt on WSO that the majority of wealthy people are workaholics, despite the Paris Hiltons of the world who receive all the press. Another study by Steven Landsburg indicates that the uber-wealthy consider their work to be their recreation, and therefore eschew what most of us consider leisurely activities in favor of more time at the office.
For many of today’s rich there is no such thing as “leisure” in the classic sense — work is their play. They don’t sit around the polo field or lounge around the country club all day like Old Money. The new rich are perpetual-motion machines — young, driven and always working on the next project.
Building wealth to them is a creative process, and the closest thing they have to fun. They’re uncomfortable hanging around the club or sitting on the beach (Several people I interviewed for my book said they’ve never sat through an entire movie, because they get bored.) Their version of “fun” or “leisure” revolves around making money and creating businesses, activities defined as “work” in most economic studies.
While I often admire the gargantuan work ethic of these guys, I can't say I envy them. In a lot of ways, the poor know a lot more about work/life balance than the super rich. And I love my time off.
So I have two questions for you guys, and I'd like your input.
First, does the average rich person work harder than the average poor person? And second, how much of becoming wealthy is hard work, and how much is just dumb luck?
Comments
When you bust your ass, get
When you bust your ass, get an education and move up the ladder, work is less menial and more impacting. Of course it will be more fun. When you factor in all the work it took for a wealthy person to obtain that position, usually they work harder.
MSF Website
MACC Website
MSF Twitter
dinner tomorrow eddie? hit me
dinner tomorrow eddie? hit me up on im
WSO Conf - June 29, 2013
It seems to me that if you
It seems to me that if you are making below $20,000 a year you are probably in a job that makes you not want to work harder - which it sounds like harder is being defined as longer in the quote above.
It also seems to me that if you are complacent with your $20,000 then you don't have the motivation or drive needed to make more money and become rich.
I almost feel as though the "hard work" phrase should be replaced by the word motivation or drive. Are the rich more driven? When put it in those words it makes you think about it from a different perspective.
“Whatever you do, don’t be a victim. If you’re in a bad situation, try to fix it. If you can’t fix it, move on. Don’t whine.” --Jack Welch
When I was 20 years old, I
When I was 20 years old, I shared a 1-bedroom apartment with two other guys. It was basically a sick party pad. Anyway, one of my roommates was about 24 and hung drywall for a living. He was a die hard wake-and-baker, and I didn't need an alarm clock - I'd just wake up at 5:30 when I heard his bong gurgling.
That guy worked like a BEAST and didn't make much. But he spent most of his time high (even at work), so it didn't bother him.
There's more than one way to
There's more than one way to earn $20,000.
My cousin used to make around that after dropping out of college working on a loading dock, moving loading crates of bottled and canned drinks on and off of trucks. He was physically exhausted every day and it was hard for him to muster the energy do to anything BUT passive leisure, even though he preferred golfing and swimming to watching TV. The fact that he was such a hard worker eventually showed through and he now has a good job going as an assistant manager of a department store with 1/4 of a college education-pays his bills with a good amount left over and he works around 60 hrs a week, leaving him time with his wife and kid.
My high school buddy never started college and makes about that delivering pizzas and working in the kitchen of the same place he's worked since HS, not even full time. He spends probably 6-8 hours a day minimum playing videogames. I have a hard time seeing him breaking that cycle.
There have been many great comebacks throughout history. Jesus was dead but then came back as an all-powerful God-Zombie.
Fist- Eddie I'm sure you were
Fist- Eddie I'm sure you were an adorable young lad and luck had nothing to do with your adoption.
I think the achievement of mega-wealth and success is a blend of luck and hard work. Take my dad for example, non target, poor background, and mediocre grades. What he does have going for him is his farm boy work ethic. He is where he is today because he ALWAYS worked hard and well and this opened the door for luck to play a role- which in his case were international assignments coupled with promotions.
Hard work is the necessary foundation; luck is what opens those amazing opportunities up rather than the mediocre opportunities.
""First, does the average
""First, does the average rich person work harder than the average poor person? And second, how much of becoming wealthy is hard work, and how much is just dumb luck?""
I think the average poor person might work a little harder than the average rich person, but with the caveat that first generation (nouveau riche) wealth tend to work much harder than anyone else on the planet. They usually have an internal drive for success, refuse to personally compromise, their work is more play than actual work, etc., that most of the general population don't appear to have.
I also think luck, at least in some quantities, is required to become wickedly successful/rich. There are a few solid psychology/sociology writers out there who discuss this at length. One example, I believe it originates from Malcolm Gladwell, covers the story of Bill Gates who has/had stellar personal drive, but also had the good luck to attend a school that provided access to computers that many other schools didn't. So if Gates hadn't had early access to computers, would we live in a Mac only world?
So much like the primordial ooze that generated the first macromolecules... and later us (the dumb monkeys)... it's a synergy of what's there and timing.
__________________________
Attempting to be the chess player, not the chess piece @ Steadfast Finances
Wealth seems to a byproduct
Wealth seems to a byproduct of both hard work and luck. I think about it this way:
Let's say Person A has a 5% chance of becoming wealthy (through sheer luck). This person gets average grades in school, goes to the average amount of college at an average school, works average hours at an average job, etc. This person, though, could get rich through wealthy family, the lottery, a lawsuit, etc.
Then say that Person B is the high school valedictorian, gets into Harvard where he makes a 3.9 while spending summers building houses in rural Kenya and working at Goldman Sachs. This person still has a certain "luck" factor associated with becoming wealthy, but because of his hard work that "factor" has increased to, say, 90%.
My point is that luck certainly plays a part, but you can certainly stack the odds in your favor by working hard.
The average rich person does
The average rich person does work more than the average poor person. Just imagine how many people are ready to take over our jobs (well, since I'm not working yet... your jobs). You really have to stay on your toes in finance, and that take a lot of work.
And reiterating what Bob Saget CFA said earlier, some people get lots of lucky breaks, and some people get only one lucky break. Edmundo, you got lucky, but you didn't slack off either. I would say averaging the people in the world, 50% luck, 50% hard work.
--Meliora sequimur
"I'm a great believer in
"I'm a great believer in luck, and I find the harder I work, the more I have of it." - Thomas Jefferson.
I think a part of becoming
I think a part of becoming wealthy is just plain luck. It's being at the right moment at the right time. For instance when you meet someone; you could meet someone (on the street for all I know) and they could just be talking about business. You find it interesting and decide to butt in. This could lead to anything (you might want). This is being at the right moment and the right time. Of course it was also up to you to join the conversation.
I think people wanting to be wealthy will lead people to be busy with getting wealthy. So they're alway looking for opportunities. If you always looking for opportunities you could see it as being busy. Therefore getting wealthy can be hard work.
sofib09 wrote: "I'm a great
"I'm a great believer in luck, and I find the harder I work, the more I have of it." - Thomas Jefferson.
I love that quote, SB.
I feel like the people who are self-made wealthy are those motivated to succeed and therefore are less complacent than someone who sees no immediate incentive to work harder, no reward for greater effort. i.e. I have a huge disconnect with a ton of kids at my school because of the attitude of entitlement and general apathy so pervasive amongst everyone. I have something in common with Eddie, apparently; I'm an adopted kid who found my way into a family, came up out of the wrong part of Philly, know and witnessed kids, peers, and friends of mine get shot, cut, hurt, or swallowed up by crime and gang life, and got out by the grace of God and the talents he gave me. I got into a target, a number of great schools, work my ass off to put myself through school with a maximum credit load, and you know what, I just got an offer as a sophomore from Morgan for two summers in both IBD and S&T along with a scholarship for the next two years of school, my choice for either division too.
I'm a firm believer in the fact that the people who want something and are made of any character worth mentioning at all will find or create a way to succeed. So many things fell into place for me and I'm incredibly blessed to have the opportunities I enjoyed, but just as much was in my way too.
A lot of people do certain things to add days to their life. I do things to add life to my days.
i have two friends that work
i have two friends that work min wage and spend all there money on magic the gathering cards :(
How rich are we talking?
How rich are we talking? Maybe becoming a billionaire is more about luck, while becoming a millionaire is more about hard work? I'm not even sure if I believe that, but I did hear Nassim Taleb say something along those lines, so at least it's food for thought.
For my aspiring Entrepreneurial Nomads, check out my blog.
If we are talking the
If we are talking the ridiculous rich than it is more of a case of luck They are clearly an outlier when compared to the majority and were in the right place at the right time with the right background. However, if we're talking about the upper class individuals who have several millions, than I would venture to say its about hard work. Having that defined, I am one who has experienced in my life time that the "poor" have a tendency to be lazy, lack ambition, and would rather live poor than exhaust themselves trying to keep up with those that they consider smarter than them. It is these characteristics that force them into blue collar jobs that don't require the knowledge that a white collar job does. I think we can all agree a blue collar job is laborous and taxing on the body. However, just bcause it is more laborous does not mean it is harder than studying for an undergraduate degree, pursuing a Master's while working full-time, and sitting for the CFA to finally have the credentials necessary to pursue your dream job. Simply put ... The rich work harder!
It's easy to work harder when
Anyone can become a
econ wrote: How rich are we
I am not cocky, I am confident, and when you tell me I am the best it is a compliment.
-Styles P
I agree with the general
Logger54 wrote: I agree with
"Greed, in all of its forms; greed for life, for money, for love, for knowledge has marked the upward surge of mankind. And greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the USA."
I don't think Daniel
sofib09 wrote: "I'm a great
Please don't make me talk to you like an asshole...
Kools wrote: I don't think
I feel like the people who
This is an interesting piece
A base level of luck plays
First, I agree that the
IF YOU DON"T TAKE A SHOT
Carla was the prom
"Greed, in all of its forms; greed for life, for money, for love, for knowledge has marked the upward surge of mankind. And greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the USA."
TheBigCheese wrote: If we are
For my aspiring Entrepreneurial Nomads, check out my blog.
I think self-made rich people
For the most part, the rich
"The trouble with our liberal friends is not that they're ignorant, it's just that they know so much that isn't so."
- Ronald Reagan
Some of the work I do is in
A good friend will come and bail you out of jail...but a true friend will be sitting next to you saying, "Damn...that was fun!"
the line between rich and
I think people underplay the
Contact: [email protected]
See my other blog posts
Rich people took actions that
Jefferson was spot on The
if you like it then you shoulda put a banana on it
econ: TheBigCheese: If we
Here is my argument for luck
prudentinvestor: Let's flip
Luck definitely has something
I think it's both hard work
The Auto Show
DCDepository: prudentinvest
"Nothing is work unless you
It's not about the money. It's about the game between people.
"Nothing is work unless you
It's not about the money. It's about the game between people.
To really assess the question
We are talking about luck
Black Jack: We are talking
DCDepository: econ: TheBi
For my aspiring Entrepreneurial Nomads, check out my blog.
prudentinvestor: Here is my
For my aspiring Entrepreneurial Nomads, check out my blog.