Wealth is a subjective term, and yes, there are many types of wealth. For example, a person can be wealthy relationally, in health, spiritually or be aware of their gifts and purposes in life and living them out (they too are wealthy). However, financial wealth is equally important for many reasons, or at least in my opinion. Wealth should be created ethically and not harming self or others, and yes, sadly, this is not always the case.
Wealth does not make you superior as a person, but it does provide many options on our journey called life. Without having more than enough wealth (you need to figure out that number for yourself), our world shrinks in terms of what we can accomplish and make a difference. Poverty and lack have seldom elevated a person or a society. Being broke habitually makes a person miserable, desperate, and stuck in all aspects of a meaningful life. If we can choose, the majority of people would elect to be wealthy over being poor.
But, back to my original statement: “Why is it so hard to become wealthy?” Firstly, financial wealth is very hard to accumulate and keep. In most cases, it takes a lifetime for those who do build sizable wealth. There are ongoing risks you must take (hopefully calculated) and, at times, setbacks or failures. If it were so easy, everyone would do it.
So to prove my point, let’s get down to stats in both Canada and the USA, and it would be similar in most developed nations. We all hear the term endlessly in the media about the 1% wealthy crowd. So what does it mean?
In Canada, in 2021, the one-percenters have accumulated 9 million in net worth. Approximately 764,000 Canadians have assets in value of one million to five million USD. There are only 92,000 Canucks that have achieved assets between five to thirty million USD. There are 10,395 super-wealthy in 2021, having built over thirty million USD in wealth. Canada has just over 38 million people; 866,395 people are wealthy (2.27% of the population). Based on household income in Canada, you would need to have $225,000 or more to be considered wealthy.
In the USA the numbers are higher. The one percent has $11,000,000 or more in assets. A wealthy household income is $531,000 per year. So as you can see, very few people amass considerable wealth. Why? Let’s look at a few factors that are true in most nations.
- The cost of living continues to climb (inflation by design from Central Banks), while household incomes have been stagnant for decades.
- Government policies and taxation have made it harder to create sizable wealth.
- Financial education is dismal. Most people lack the basic knowledge or disciplines to grow wealth.
- The majority of wealth comes from business ownership (niche, medium or large businesses, often taking decades to build) or being a professional (doctor, lawyer, specialist, accountant, etc.) Second, real-estate acquisition and building a sizable portfolio. Third, building a sophisticated stock, bond, precious metals, real-estate portfolio, private equities, etc.
- Most people lack the skills, the drive, the network, and the team to build and protect their wealth.
- The majority of people are unwilling to take considerable risks to capital and venture into these asset classes.
In conclusion, I have shared several of the valid issues that prevent people from becoming wealthy. But, I cannot end there as that would be depressing! So, instead, you and I can grow as a person, achieve new skills, take education and learn the essential knowledge necessary to become a wealthy person. So whether you are just beginning or well on your wealth journey, the key to your success is to keep learning. Here is my offer. Check out the link to my website: https://fivefoldfinancial.ca/wealth-courses/. If you are willing to learn new skills and knowledge from my Wealth Foundation Series course, I am offering a $100 discount for the first 100 students.
Increase your financial IQ, and you will make better decisions.
All the best in 2021,
Bill