12 Widespread Beliefs About the Rich That Are Not True
We have a lot of negative stereotypes about the rich: it is widely believed that they don’t deserve their wealth, avoid taxes, and are greedy. Yet, research shows that the rich are not as evil or privileged as you think: a significant percentage of them went to public schools or dropped out of college, they are not more likely to avoid taxes than the rest of us, and many of them are first-generation millionaires who did not inherit their money from their parents.
We at Bright Side collected some common beliefs about the rich and tried to find counter-evidence for them. Read the article up until the end to change your opinion about this 1% of our society.
1. If you are from a rich family, you will be rich, as well.
It is true that children from higher-income families receive a college education more often than children from lower-income families, and that there is a positive correlation between your chance of becoming rich and the wealth of your family.
This correlation, however, is not a straightforward one: while “rich kids” have more opportunities in life, they are also likely to lose the wealth of their parents if they inherit it. According to the Williams Group wealth consultancy, 70% of rich families lose their wealth by the second generation.
2. All rich people inherited their money.
According to the 2016 report of the Peterson Institute for International Economics, based on 2 decades of Forbes data, in 2014, the number of self-made billionaires on the list reached 70% from the total number of the rich people included. Among those self-made people were Bill Gates, Warren Buffett, and Larry Ellison. This trend, however, is more applicable for American billionaires as more than half of European billionaires inherited their wealth.
3. Rich people don’t have to work hard.
According to the data, collected by the author of the book Rich Habits, Thomas C. Corley, the rich work harder than the poor: 86% of the rich participants with full-time jobs worked 50 hours or more each week, while 57% of the poor with full-time jobs worked less than 50 hours per week. The rich also take fewer sick days and were shown to spend less time in front of the TV and on the internet.
4. Rich people never go bankrupt.
Not even rich people are guaranteed a business without bankruptcy: Donald Trump declared bankruptcy 4 times. The crucial difference between the poor and the wealthy in this case, according to financial specialists, lies in the proceedings they turn to. Wealthy people like 50 Cent, who filed for bankruptcy in 2015 and was discharged from it in 2017, are usually placed on a strict financial plan by their financial advisors, and it does not take them long to bounce back.
5. Rich people are selfish.
Some recent studies demonstrate that rich people avoid taxes more often, are more likely to break a law while driving, and are, in general, more self-centered. Yet, a study conducted by Dutch researchers shows that envelopes with money or credit cards “misdelivered” to rich or poor households were more likely to be returned by the rich people than by the poor. The authors concluded that the rich are no more selfish than the poor — they just have more money.
6. Their income tax is lower than that of everyone else.
According to the results of a survey conducted by the Pew Research Center in the US, the majority of adults think that the rich pay too little in federal taxes. But what is the reality? The data from the IRS (Internal Revenue Service) says that the top 1% of income earners in the US pay 45.7% of the entire amount of income tax collected in the country. The tax rates increase consistently with the income. The question whether this increase should be more progressive remains.
7. All rich people graduated from top universities.
According to the results of a study from Duke University on the global elites, the majority of them graduated from college, and for a very high percentage of them, these colleges are well-known and elite. Yet, elite school education is the most important in the US, and there are rich people who did not graduate from college at all (Bill Gates is one famous example.) A good education is important, but it is not the only factor determining your wealth.
8. Millionaires migrate to avoid high taxes.
Given that the tax rules for different countries and even for different states in the US are different, millionaire migration would come as no surprise. Yet, a recent study demonstrates that millionaires, in general, have lower migration rates than the rest of the population. Although they do consider tax rates when making a decision to move, very few of them are ready to move to exploit tax advantages.
9. Rich people are less charitable.
Some studies have found that poorer households donate a larger proportion of their income to charities than richer households, while other studies show that the more money people have, the more they donate. It seems that other factors besides wealth play a big role here. As shown by a recent study from the University of British Columbia, by tailoring a message in a fund-raising campaign, it is possible to attract different types of individuals: the rich and the poor react to different types of ads.
10. Money does not buy happiness.
The study conducted by the Harvard Business School among 4,000 millionaires unsurprisingly revealed that money contributes to happiness. Even among millionaires, those with a net worth of $10 million are significantly happier than those with a net worth of $1 million. Interestingly, those who inherited the money themselves were found to be happier than those who inherited it or married into a family with money.
11. Being rich means being extravagant.
A study published by Business Insider revealed that rich people are less extravagant than one might think. 92% of the rich people who participated in the survey said that they had never vacationed on a yacht, and 87% said they had never purchased a new luxury car. A surprising number of 30% said that they clipped coupons. It seems that being rich is not only about going on a spending spree!
12. It’s impossible.
Finally, the most popular misconception is that it is impossible to get rich if you do not come from a wealthy family. But there are enough examples of self-made millionaires who became rich from nothing. Don’t miss your chance!
Were you suprised by some of the facts mentioned in this article? Do you agree or disagree with them? Share your opinion and experiences in the comments with us.