Wealth Vs. Poverty: What Determines The Difference?

Here is a debate that swirls eternally: Why do some people gain wealth while others remain poor?

Depending on who you are talking to, you will hear a variety of contributing factors.

Being born in poverty with no access to resources, such as a village of subsistence farmers or a war-torn region.

Being born into a situation where poverty is perpetuated by modeling and certain attitudes coupled with lack of resource or example to the contrary, such as teenage motherhood in underserved urban core neighborhoods.

Discrimination - being the wrong gender, race, ethnicity, religion, sexual orientation, and so on…and the societal and cultural attitudes, norms and legislation that maked it very difficult to break free from these reinforcers.

Luck - being born into money or connections, the right location, a family of aspirations

Education - good schools, good teachers, access to the best minds

I agree that all these factors contribute significantly to achieving personal wealth or not. One can hardly blame a man in, for instance, a refugee camp on the Thai border of Myanmar, for not being able to better himself. One would not be surprised to hear of the business success of a young woman whose parents sent her to an Ivy League university and whose grandparents left her a small windfall.

However, let me bring the focus in from these extremes. Suppose we select a mid-sized city in the middle of the United States, choose a random middle school, and list every student in the 9th grade. All of these students have access to the same books, the same teachers, and are leaning from the same course material. Thus, it would be much more difficult to predict future attainment of wealth.

Fast forwarding twenty years with these same students, we are very likely to be surprised as to who “got rich” and who did not. Some will remain in the same financial condition they grew up in, some will be worse off, and some will be enjoying the benefits of considerable wealth.

This group of youngsters represents roughly identical demographics in terms of socio-economic background and employment opportunities, and they are all under the influence of the same teachers and curricula. So what makes the difference?

Certainly there is the element of chance, unexpected encounters with someone else’s lifestyle and character that inspire personal efforts and provide tangible advancement like finances or a job. There are also unexpected events that propel someone deep into circumstances for which there are no good choices. However, I maintain that the driving difference in personal success and wealth is choice, that is, the decisions that each individual makes and the internal determination they draw upon to face the challenges life hands out.

I frequently speak with those who have obtained a university degree and who are thinking about years of hard work ahead and wondering if they will reach the manifestation of accomplishment they are hungry for, be it financial independence, influence or a platform for change. It is gratifying to see the spark of interest and hope that comes into their eyes when I outline the possibility of purchasing a business as a way to short track their success, skipping the years of labor and the extra indebtedness for an MBA or university degree.

Perhaps the conversation is one of those chance encounters that not everyone will get, but what these graduates do with the possibilities I mention is up to them. They can decide to try something different and work hard a different way than everyone else, or they can float along with what they have always known and expected - and wonder why things did not turn out better. Some choices are made without much thought about potential outcomes, and some decisions must be made with a lot of calculated risk. But I firmly believe that personal choice is the primary shaping factor in whether someone ends up wealthy or poor, or having achieved goals of intellect or artistry or physical triumph.

Our current economy offers all the elements needed for business ownership without the unpredictability of growing a startup. I call this Acquisition Entrepreneurship. There are many small and medium sized businesses available for sale right now - and an increasing availability of capital for such purchases. For the individual who is determined to find out how to pull all the pieces together and put in the work, realizing a seven figure income within five or so years is much more than a pipe dream - it is a goal entirely within reach. I have done it myself and I am currently helping others do the same thing.

The working out of our choices proves wrong the nay-sayers, who insist that success cannot be had and that failure is someone else’s fault. We have the greatest chance to see our own dreams come true as well as positively impact our communities by taking advantage of these opportunities we have before us.