Rising Wealth Inequality And Why It Should Concern You?
Are The Rich Getting Richer, And The Poor Getting Poorer?
Most of us may have heard of the adage, “the rich get richer, and the poor get poorer”. But in reality, is that really the case?
According to Wikipedia, the top 1% of the world’s population owns about half of the world’s wealth. What’s more alarming is that the “3 wealthiest individuals in the world, have assets that exceed those of the poorest 10% of the world’s population.”
In Singapore, the top 20% of the population owns about a staggering 73% of Singapore’s wealth according to an estimate whereas the bottom 20% of the population owns only 1% of Singapore’s wealth.
Here’s something that is even more startling. Since 1976, the wealth owned by the top 1% of the population in the U.S has been on the increase, from 19.9% in 1976 to 35.4% in 2010.
Similarly, in a recent 2016 news report in Singapore, it was revealed that the wealth inequality between the rich and poor in Singapore is on the rise.
Does this mean that if we are not among one of the richest in our country, we are destined to become poorer sooner or later? Are there ways to break away from this downward spiral?
According to Wikipedia, economic mobility refers to the “ability of an individual to or some other group to improve (or lower) their economic status—usually measured in income.” In other words, for places where economic mobility is high, it means that it is easier for someone who is currently less financially well-off to improve their wealth.
According to some studies, in some developed countries like Singapore, Denmark and Norway, economic mobility is relatively high. What this means for us is that if we happen to live in countries with higher economic mobility, it will be easier for us to become more wealthy, should we choose to do so.
However it also does not necessarily mean that less well-off individuals living in countries with lower economic mobility will never become rich.
What’s more important are the daily actions that we take, are consistently helping us to improve our financial well being. In other words, with the right strategy, each and every one of us has the opportunity to improve our financial well-being.
How Do We Increase Our Wealth?
One characteristic that is similar among the rich is that the bulk of their wealth does not come from employment income. Rather most of it actually comes from the returns from investing.
Indeed, according to a Forbes survey done a few years back on Singapore (Singapore has one of the highest proportion of millionaires in the world), about 72% of the wealth of Singapore’s millionaires was made through personal investments.
To get started on how to invest successfully, do check out some of our investment articles (https://www.wealthacademyglobal.com/topics/investing/).
Alternatively, if you would like to cut-short your learning curve, do check out our live 3-hour investment workshop.