The Stability of Your Family

It is a verifiable truth that your folks’ income has an extensive impact on your own income. The same applies along with the stability of your family. The following is an explanation as to how your parent’s income and the stability of your family affect your income: Someone in Singapore approaches a jackpot machine with S$20,000 and someone else approaches it with S$20. Common sense states that the person with S$20,000, who of course has many more pulls (chances) is likely to win compared to the person who can only afford one game. Some people are born with more inherent advantages than others have (due to the birth lottery). For instance, the rich get richer, while the poor get poorer. This means that some people are born with inherent disadvantages.

In a study done in the United States, for example, it was revealed that children in families with a higher household income greater than 90 per cent of the population end up with an income of two hundred percent more than their counterparts in the families with less income. Comparing the children from wealthy backgrounds with the children from middle class families, the children from wealthy families still earn around seventy-five percent more. Success I most cases is inherited. If your parents run a successful, multi-million dollar business, you could inherit a business that is already established. This could put you in a high-income bracket right out the door.

At the very least, the children from successful families have good coaches. Their parents most probably know a way to success – such as stock trading, running a business, or even thriving in the corporate world. These children thus have the benefit of expert guidance, from people who are invested in their success. Poorer children, on the other hand, often have to find help the hard way. Children from middle class families tend to earn double the income of their working class counterparts (children from poor backgrounds). It is therefore a simple fact that your parents’ income is a big determinant of yours, as wealthier parents can give you more advantages.

A person from a poor family, starting your own business or a small organization is hazardous. You will most likely have to consult a moneylender just because your own family cannot provide you with the funds you need. It is a nightmare to that person when the business fails because he or she will be saddled with debts and end up not recovering. The opposite is a person from a rich family, which can provide him or her with an interest free loan. Donald Trump, for example, had loans of up to US$9 million from his father. In the off chance that the business fails, there is no real consequence. Wealthy children get repeated chances, while poor children only get one or two. The wealthy are more likely to succeed, just because they have more chances, assuming that people from both backgrounds face similar risks in life. This applies to more than just business, of course. Wealthy families can afford private schools and tutoring for their children, whereas for poorer families, failure in school could lead to a permanent low-income situation. Wealthy families can also support their children who fail university exams, and who need to try again for another year.

Children from better off families are also more likely to have their talents and skills recognized and further developed, whereas the same is not true if you grow up in poor background. For instance, the slightest sign of talent is immediately built upon, in many upper middle and upper class families. If a child displays a talent for music, the parents send the child to the best violin or piano teachers available. Children from wealthy background also undertake expensive coding courses the child enjoys toying with computers. Conversely, poorer families cannot do much other than offer congratulations. In some cases, they just dismiss these talents as “cute” but otherwise not important. This means children from wealthier backgrounds find it easier to excel and stand out because they are more likely to get into a good university, with their varied talents and skills. They find it easier to get jobs and are more likely to stand out in the crowd and thus being promoted. Many of them even find significant income sources through their developed talents.

Higher Income Families Tend to Come with Connections

Children from a poor background might by some chance succeed in in the university. However, most of the time getting a job is not just about formal qualifications it is about who you know. It is quite common for people, who are referred – by a friend or a colleague – to skip ahead of the queue. Most of the bosses if not all are just more likely to hire someone recommended by their relative, than an unknown candidate who happens to have the right degree. This means that there is a correlation between high income families and their connections. Wealthy families tend to be in touch with company directors, captains of industry, important politicians, and so forth. If your family owns three of four major businesses, or your parents are C-level executives, they likely have a wealth of influential contacts.

In addition, there is the issue of going to the right school, and having the right social circle. Wealthier children learn in certain universities, or hang around each other; this creates a social class of elites that engage and back one another up. Children from poorer families tend to be left out of the loop. For them it is like starting life’s race with a bad ankle, or no shoes. They might still get ahead with sheer grit but it takes more effort, and they are more likely to fail because of the poor learning facilities they find themselves in.

However, your family background is not everything. There are plenty of rags to riches stories out there. Warren Buffet, for example, did not come from an especially wealthy background. The key is to remember that the birth lottery just affects the start of the race: It may mean you have to work harder, and sacrifice more, than your counterparts. Nevertheless, it does not mean you cannot find the same degree of success eventually. Successful people are not gifted, they just work hard and then succeed on purpose.