What’s the difference between high-income earners and low-income earners?

In June, a user at Ask Metafilter wondered: What are the differences between someone who makes $100,000/year and someone who makes $30,000? As you might expect, this question generated a lot of discussion — all of it interesting.

Many commenters noted that, from their experience, high-income earners generally exhibited several of the following traits:

  • They maintain a strong work ethic.
  • They don’t watch the clock.
  • They seek to improve their skills.
  • They do quality work.
  • They’re flexible and adaptable.
  • They maintain a good social network.
  • They possess self-confidence.

A few commenters noted that there are two other factors that absolutely play a role in how much a person earns. Chief among these is choice of profession. Even if you’re the best damn high school physics teacher in the world, you’ll still probably earn just $50,000 or so. (But if that gives you a fulfilling life, that’s probably worth more than a high salary.)

Hard work, etc. do not guarantee a higher salary — but they do improve the odds. A second oft-overlooked factor is luck. Chance. Happenstance. There’s no question that luck plays a role in how much a person is paid. But as I’ve argued in the past, in most cases luck is no accident. It’s possible to make your own luck — to a degree.

There are many great comments in the Ask Metafilter discussion, including a mention of a Platonic dialogue about wealth and economics. One of my favorite comments is from decathecting, who writes:

Lots of people make six figures, including plumbers, business managers, attorneys, high school principals, military officers, technicians, landlords, psychologists, and people in thousands of other professions. The common denominator is that they’ve figured out what they’re good at that other people are willing to pay them to do.

From my own experience, I know that while I was stagnant and uninterested in my career, my income was also stagnant. It wasn’t until I decided to take charge of my own life that my financial situation improved — including the amount I was earning.

I’ve seen the same in the lives of my friends. It’s easy to coast, to become complacent. But it’s important to remember that with incomes especially, nobody cares more about your money than you do. If you want to earn more, you must play an active role in obtaining the money.

Reminder: One way to improve your income is to learn how to negotiate your salary. Mastering this skill can make a huge difference in your lifetime earnings potential.

Finally, I want to note that a high salary is not the the panacea that many people believe it to be.

Sometimes the costs of a high income make the payoff less than you might expect. For example, I have a friend who is an attorney. He makes a fair amount of money. But he’s also burdened by outrageous student loans and business expenses. Though his income is high on paper, it’s actually rather modest after he’s paid for his necessities.

High income earners face another problem that prevents them from getting ahead: lifestyle inflation. Sure, that’s a nice problem to have, I suppose, but if you don’t learn to control your spending as your income increases, you’re not really much better off in the long run than somebody with half your salary.

Ultimately, I don’t know if it’s possible to say that there’s any one magic thing that leads one person to make more than another. Yes, hard work probably makes a difference. But so does luck. Have you noted a difference between the high-income earners in your life and the low-income earners? Is there a pattern? Or does it all seem rather arbitrary?

Addendum: I seem to have done a poor job of conveying my message today. I’m not trying to imply that “poor people are lazy” or anything of that nature. However, I do think there must be differences between high-income earners and low-income earners, that it’s not purely a matter of luck. So, what are these differences? It must be possible to have an intelligent conversation on this subject without being rude and without becoming defensive.

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There are 233 comments to "What’s the difference between high-income earners and low-income earners?".

  1. Writer's Coin says 19 August 2009 at 05:10

    All good points. I think another part of earning more that gets ignored is stress. As you climb up and earn more, it typically involves more stress. For some people, it’s worth it. For others, not so much.

  2. Sam says 19 August 2009 at 05:15

    I would add education to this list, a lot of higher paying careers require advanced education.

    Long hours, hard work, saying yes, yes, yes (when you would sometimes rather say no), and keeping stress under control to avoid burn out.

  3. Michael says 19 August 2009 at 05:19

    I was lucky to grow up in a somewhat wealthy family. Growing up, my dad got laid off at his job. He had some time and eventually got a job as VP at one of his previous colleague’s companies. There was some people that worked at his new company for 15 – 20 years longer than he did. I remember asking him why is it that he gets to be VP when some people working under him have been at that company for far longer than himself.

    He told me that, “Some people are just meant for it, some people are not.”

    I will always remember that line as it goes to show that hard work and loyalty does not guarantee reward. Even in my current job I am low income and I work way harder than most of my co-workers who probably make more than I do.

  4. Kaitlyn says 19 August 2009 at 05:24

    I’m surprised to be saying this on this blog, but I don’t like this post very much at all. It seems awfully presumptuous. First of all, I work with low-income people everyday in my position at a non-profit. I know low-income, and making $30,000 is certainly not it. Secondly, the list of traits for high-income workers can apply to people all along the economic spctrum. People who live in poverty work hard too–they might not sit at a desk all day, but they work two or three jobs and spend hours securing resources for their families just to meet their basic needs and survive day to day. Please consider this concept in future posts–you do have middle and low-income readers; please don’t isolate us.

  5. Jeremy Keith Hammond says 19 August 2009 at 05:24

    I appreciate that you recognize luck as a factor. I would say it’s a critical one. If you or anyone hasn’t read Malcolm Gladwell’s book, Outliers… please do. It’s implications are huge. While he talks about the reasons for the success of the ultra-successful… similar powers are in control of those of us ‘regular folk.’

    Your environment, which you have little control of – in other words, luck – is the major contributor. Just being born in the US pretty much guarantees an income of at least $18,000 – likely more if you look at averages.

    People on Metafilter suggest high earners:
    -maintain a strong work ethic.
    -don’t watch the clock.
    -seek to improve their skills.
    -do quality work.
    -are flexible and adaptable.
    -maintain a good social network.
    -possess self-confidence.

    These are trivial. Plenty of high wage earners don’t have ANY of these… likewise plenty of hardworking, intelligent people are left behind economically. It’s actually a bit insulting to presume people don’t have these attributes based on income.

  6. kk says 19 August 2009 at 05:24
    I have noticed that many, but not all, high income folks tend to be better at planning than lower income folks.

    And I think this is fundamental to much of the stuff you discuss on this blog. It takes planning to buy the ingredients and have them on hand to cook a good meal at home; planning to have a garden; planning to investigate and cut one’s bills down; planning to navigate a higher educational degree and a subsequent career; etc.

    Much of a lower income, more paycheck to paycheck mentality concerns reactionary spending, impulse spending, deficit spending, all with little or no planning. People often work quite hard, but if they do not step back, however briefly, from the daily grind to do a bit of planning, it creates a serious impediment to increasing income and decreasing spending.

    I, too, though, think that luck has a role to play.

  7. Chamoiswillow says 19 August 2009 at 05:26

    I think the biggest differentiator is a sense of entitlement. People who think the world owes them a living often flounder along from job to job, and never seem to understand why things “never work out”. People who realize that they are responsible for making thier own way are far more likely to succeed in a career sense.

  8. Cara says 19 August 2009 at 05:44

    I agree with comments #4 and #5. I’m conflicted about this post and some of the comments because it assumes a lot of positive traits about high-income earners that may not really be true. As a high-income earner myself, I can say that two traits have helped me: a crazy work ethic and caring more about money than about happiness in my job.

    The second trait, in particular, isn’t something that I’m proud of or something I’d recommend, but I freely admit that I chose a career I didn’t like because of its earning potential (and to please my parents, but that’s another story). Many of my co-workers are the same way: making lots of money is simply a higher priority for them and they’re willing to sacrifice much more than lower-income people to get it. I earn less than some of them because I’m not willing to give up health, sleep, family time, peace of mind, and outside interests like they do. Of course, I’ve also worked with plenty of people who were lazy, but who’ve managed to work the system so they can coast along on their schmoozing and political abilities alone. People like that seem to get a pass on the work ethic part.

    Plus, contrary to the “you won’t be good at something you hate” myth, I’ve managed to be quite successful at my job because I hate failure even more than I hate my career. So don’t be so quick to assign all positive traits to people with money. The reality is much more complicated than that. I’m making changes in my own life right now because I’ve learned the hard way that being happy with my life should be a requirement, not an option.

  9. sandycheeks says 19 August 2009 at 05:54

    Depending on where you live, “luck” can be the biggest contributing factor. I live in an area where you are often defined by where you went to high school. There are lots of private schools, each with it’s own personality. Alumni contacts and support is huge. Many people never leave the area and their contacts have been developed since adolescence. I’ve seen veritable idiots get cake jobs because of the contacts and hard working newcomers to the area are mystified that they are passed over. I call all this luck because we can’t choose our families and whether they can afford 15k a year for high school.

  10. Peter says 19 August 2009 at 05:56

    Just to clarify, the article says that if you’re a high earner, you likely posses X characteristics. Some people are saying this assumes if you are not a high earner, you do not posses X characteristics. That is a mistaken negation and is not necessarily true (and certainly not implied by the article). The contrapositive, if you do not posses X characteristics, you are likely not a high earner would be correct. Too much LSAT studying 🙂

  11. Brenda says 19 August 2009 at 05:59

    Kudos to Kaitlyn and Jeremy (#4, #5) for mentioning that many low-income people exhibit all the good traits that Metafilter pointed out, and many high-income earners do NOT. Laziness is an equal-opportunity trait, as is industriousness. One can’t say that high income earners are usually ‘harder-working, more focused, do better quality work, etc etc’ than low income earners.

    Some of the hardest-working people I’ve known have been low-income workers. They come in early, bust their ass, are the last ones to leave, often skip breaks, etc., for hourly low-income wages.

    Meanwhile, I’ve had the displeasure of knowing several high-earning bosses who were the laziest, sleaziest, dishonest people I’ve ever seen…sneaking into work hours late each day, and sneaking out early, doing no work, having blatantly lied to get their positions (saying they knew the software, but then clearly showing on the job they could hardly turn on a computer much less run the software).

    How well you can shmooze with people, how gregarious you are, how out-going and extroverted you are will often get you further in life than just “hard work” or “Good work ethics”. Luck is often based on how many people you can meet, relate to, and strike up some sort of relationship with. For those people who are severely introverted or have social anxieties, it is hard to ever get ahead. These people work hard, have wonderful work ethics, strive to learn more, but lack the very last two traits on that list, which are the most important ones and really, the key ones: the extroverted, gregarious attitude that it takes to make the necessary “Social Network”, and the necessary self-esteem to have “Self-Confidence”.

    Of course, the exception to this rule (gregarious=social network=higher wages) would be the few people out there who are brilliantly smart in the maths and the sciences. I’ve noticed that brilliant computer programmers make six-figures, but I’ve run across a few that are definitely introverts and NOT gregarious. It’s just that their skills are in such high demand, and so few people can do their job, that they can command a high salary while being very very introverted and grouchy.

  12. Regan says 19 August 2009 at 06:03

    I disagree with this post. The main determinants of your earning power are your education, gender, geographic location and age. Education is very much influenced by your family’s class status to begin with. Women earn less than men, as do other groups facing systemic discrimination, even when they are doing exactly the same work. Additionally, women often take on the unpaid work of childcare which affects their workforce earnings for decades. Geography can place a ceiling on both income and opportunity. Income also increases with time and seniority, peaking in about your mid-50s.
    So while you listed a bunch of individual things you can think about to influence your own earning, this article needlessly oversimplifies earning capacity and blames people for some circumstances beyond their control.

  13. kenyantykoon says 19 August 2009 at 06:03

    high income earners, more often than not do jobs that they love, things that they would gladly do for free. which is not the case for low income earners

  14. Jeremy Keith Hammond says 19 August 2009 at 06:08

    You’re right, Peter, and I appreciate your defense of the author – because I agree, he was not implying that low income people lack X characteristics – but many, and some here are examples, could make that assumption from such claims even when the author does not intend it.

    Human’s naturally try to simplify things. It’s easy to assume that if one state includes X attributes, that the opposite state would include opposite attributes – even if it’s wrong. My only advice is to just be careful – most people don’t take Critical Thinking Courses or go to law school.

  15. Laurie Zieber says 19 August 2009 at 06:17

    My husband is a high income earner. Just last night we were discussing whether a high income was the most worthy pursuit since it is the most consuming of his pursuits.

    Here’s what we decided…

    1. Pursuing a passion would be a worthier pursuit
    2. At the end of the day the wealth comes from how much you keep not how much you earn.
    In spite of our enlightened conversation,this morning he left home bound for the office before 6AM. I doubt he will resign from his position any time real soon.

  16. Mohammad Azam says 19 August 2009 at 06:19


    I think peace of mind is much more important than high income. I have seen many people who are earning six figure income but they don’t have peace of mind. And no amount of money can buy peace of mind.

  17. Walt says 19 August 2009 at 06:20

    I always find it funny when people talk about teachers as low income earners. Maybe it’s just where I live, but teachers start around $45k and after about 10 years are earning $90k+. Not exactly a low-income profession.

  18. J.D. says 19 August 2009 at 06:35

    Some of you are mis-interpreting my intentions with this post. I’m not trying to claim that “poor people are lazy”. I don’t believe that at all.

    Instead, I’m asking if there are, indeed, discernible differences between high-income earners and low-income earners. If there are no discernible differences, logic dictates that it all comes down to luck. I don’t believe this is true, either. I don’t think it is all luck. I think there are real differences.

    But what are the differences? What makes one person earn more than another?

    Unfortunately, I think that in many cases, even in 2009, some of it has to do with race and gender. There have been huge strides made toward economic equality — but parity has not yet been reached. But what else is involved? What are the things that differentiate high-income earners from low-income earners?

    I think it’s possible to have this discussion without becoming defensive and naturally assuming that the question implies disdain of those with smaller incomes. Because it doesn’t.

  19. Stephen Popick says 19 August 2009 at 06:35

    Note that a high salary is also a function of where one lives. If you live in a high cost of living area, your salary will be higher. Rather than think in terms of overall dollars, I find its better to look at Purchasing Power Parity numbers.

    I do not agree that luck is a MAJOR fact. I think its pretty minor. I grew up in, quite literally, next door to housing projects. i went to rough schools. Hard work, lots of perseverance, and a dream/goal, are what I believe are the primary contributors towards my success.

    I prefer however, to look at the difference between high wealth households and low wealth households. You can earn ALOT of money and not be wealthy, because one doesn’t save. You can earn a little bit of money and wind up being wealthy, because of good habits.

    JD is definitely right that lifestyle inflation plays a role. 6 years ago, I made less than 30K. Today, I make more than 100K. Aside from taking on a mortgage which was a monthly difference in rent of a few hundred dollars, my lifestyle hasn’t changed. I know the dangers of lifestyle inflation. And I figure if I was happy making 30K, then I can do the same things making 100K, save the difference, and in time can use those savings towards some of my own more dreamy dreams (like funding scholarships)

  20. J.D. says 19 August 2009 at 06:37

    @Walt (#17)
    I wouldn’t call teachers low-income earners. Kris taught high school for eight years, and I always thought she was paid middle-of-the-road. But school teachers certainly aren’t paid vast sums of money, especially when you consider how many hours they work.

  21. Foxie@CarsxGirl says 19 August 2009 at 06:41

    Well, there’s really little happiness and life satisfaction difference, as multiple surveys love to point out…

    I have a friend who’s a doctor, in his last year of residency, and one of his good friends is a surgeon. This past Sunday, when we went out to autocross, both of them managed to make it out. While it’s common to be envious of the professions for their high salaries, they rarely make it out to do what they enjoy doing. The surgeon’s wife was out there, reading a book, because that was the best she was going to get as far as spending time with her husband, which I joked with her about, the “glamorous life of a surgeon’s wife.” Uh uh, nooooooooo thanks.

    When it comes to making a ton of money, you give up a lot to get it. I’d rather make $50k a year doing what I do or don’t enjoy and having enough time to indulge in my hobbies rather than make $100k a year doing something I don’t enjoy and having NO time for my hobbies. If I could ever make $100k a year doing what I enjoy and still having enough time for my hobbies, that I would love.

    Peter (#10) got it right — It’s simply taking a group of people and seeing what they have in common, no suggestion whatsoever that lacking these makes you the opposite. Shows how much people read into things I guess. I make pittance for money, and I’m not insulted. 😉 (So far for the year, $10k, woo! $8k after taxes…)

  22. Karawynn @ Pocketmint says 19 August 2009 at 06:43

    I’m afraid I have to weigh in with the peeps who believe that the items in that list are not coupled with income level. I feel like I’ve seen at least as many exceptions to that ‘rule’ as examples of it.

    Walt: where the heck are you that teachers can make $90K (and what is the cost of living there?) I just ran a half-dozen ‘teacher salary [location]’ web searches and consistently found salary ranges way below what you’re suggesting. The only one that even came close to that was NYC, and to get $90K you need *twenty* years experience plus a masters’ degree. And with NYC’s cost of living, that’s just middling, not high.

  23. Cara says 19 August 2009 at 06:49

    JD, thanks for clarifying at comment #18. I think part of what got my hackles up was that TSD posted this week on a similar topic, and the judgmental tone of that post and the comments colored the way I read your post. Sorry about that.

  24. ethel says 19 August 2009 at 06:53

    J.D.–perhaps it isn’t “all” luck, but studies show time and time again that it is not mostly personal attributes that determine wage. This metafilter thing is particularly pernicious. It asks people what they *believe* about high income earners–and does nothing to document the statistics surrounding who earns high incomes. In this sense, it reifies our culture’s belief in a meritocracy, even though there is little evidence that such a thing exists. Perhaps this would be interesting if we could ever find two people with the exact same background–in terms of race, gender, parent income, college attended, number of children, stability of spouse, etc., etc.–but that is virtually impossible to do. Wage disparity in this country is real, and posts like this continue to make it sound as if that is to some degree attributable to personal attributes. It’s just a much thornier issue.

    I’d rather you discuss real studies and statistics about these issues, like this:
    You ask why we can’t have an “intelligent discussion” about the personal attributes in the metafilter “poll.” I think the reason you are finding resistance to this is because we so often discuss income as a result of personal attributes, and there is rarely intelligent discussion about the way demographics affect income. Generally, Americans don’t like to believe that there are things outside of one’s control that affects income. We would rather believe that by being an adherent to “Getting Things Done” or what not, that we can change our income and lifestyle.

  25. Lesley says 19 August 2009 at 06:53
    I sometimes wonder how much of it has to do with choices made when you’re young. All the high-income people I know went straight into university, already focused on a specific field that they enjoyed AND had reasonable job prospects. Many people I know who are lower-income earners didn’t really know what they wanted to do yet. Some didn’t go on to get further education, and those who did often started with no plan in mind, switched majors/programs at least once, and sometimes dropped out. It wasn’t for lack of talent, work ethic, self confidence, etc. They just didn’t know what they wanted yet, and by the time they knew they would often find themselves bogged down in life stuff like needing to support themselves, possibly families, etc.
  26. Kevin M says 19 August 2009 at 06:54

    I think most consider teachers to be low/middle-pay since there is a ceiling to their earning potential. Unlike business owners, lawyers, etc who can conceivably have very high incomes. However, most teachers I work with (tax clients) have very good pensions and benefits, something most of us in the private sector lack. Something to keep in mind.

  27. Tyler@FrugallyGreen says 19 August 2009 at 06:55

    There are all kinds of hardworking smart folks making very little money and all kinds of lazy cheats making it hand over fist. I think that’s all unimportant.

    I think the idea of the post was to generalize characteristics that are more than likely to show up in “successful” people, which it did. Of course, when you generalize there will always be outliers and situations that don’t fit. This was just a starting point for discussion.

    Looks like it worked!

    Two things that I have noticed between some of my friends and colleagues that are more successful and those that aren’t (success not equaling $) are

    1) The more successful are usually eager problem solvers and the less successful are usually problem “passers” more likely to complain until someone offers them a solution.

    2)The more successful are those that take 100% responsibility for everything that comes their way no matter what caused it. There are plenty of things that happen in life that we can fairly attribute to “someone or something else’s fault” but taking that stance never gets us anywhere.

  28. Jessie says 19 August 2009 at 06:57
    A few other things come to mind after reading JD’s post…

    Some more reasons also include:
    – time spent in the workforce
    – if your male or female (for a whooole lot of reasons that I won’t get into here and now)
    – if you have chosen to have children or not
    – education
    – location
    – age
    – career path – some jobs just make less money

    I’m sad that a lot of people are saying that higher income earners = success and lower income earners = unsuccessful. That’s simply not true. Success should be defined by each unique person trying to achieve it.

    And let us not forget, some of those high income earners have greater debt and smaller net worths then those who have a smaller income.

  29. ethel says 19 August 2009 at 07:00

    I would also add that I think an intelligent discussion of this very issue can be found in the classic “The Millionaire Next Door,” which actually examines high income folks rather than just asks others about their *perceptions* of high income folks.

  30. J.D. says 19 August 2009 at 07:06

    @Ethel (#29)
    Good point RE: The Millionaire Next Door. The book doesn’t actually look at high-income folks, but at high net worth folks. Or, as the authors put it, prodigious accumulators of wealth. The book is more about keeping the money you’ve earned than actually earning it. Still, it does spend some time looking at how people generate their money. If I remember correctly, the authors conclude that in general, high income earners were self-employed.

    At the same time, I think we all know entrepreneurs who make very little money and who ultimately have to fold their businesses.

    As I say, this is an interesting discussion, and there’s no way we’re going to find the “right answer” here at GRS, but it’s worth talking about.

  31. Emily D says 19 August 2009 at 07:06

    I’ve come to realize something strange lately. Although my husband and I make less than 60K a year we have a higher net worth than a lot of people making 200,000+ a year. That’s a good feeling to us.

    My husband is a teacher. While he thinks his pay is fair I think he is underpaid. I agree with the post that mentioned you have to include the wonderful benefits and pension into that salary. But considering what (some) teachers do (educating America’s future) and the time a lot of them put in they are underpaid. But my husband is passionate about his job and will settle for the salary while doing what he loves.

  32. PhilLover says 19 August 2009 at 07:08
    Holy cow. This is the first time I’ve ever been compelled to post a reply after 2 + years of reading. I have a daily struggle with this. My boyfriend and I are in the crossroads of this exact problem. He decided to leave a VERY lucrative 6 figure career in LA as a camera assistant to become an Occupational Therapist, while I’m still figuring out what’s best for me.
    I fell into my career in high school (I’d rather not reveal) and now I am overpaid for a very easy job. I work a few hours a day and am paid almost 80k. I hate it, and my brain feels empty. Right now, I’m putting all the money in the bank and waiting to be fired, because I assume someone must notice how disengaged I am at this point, due to the fact that I haven’t been challenged in years.
    We’ve both discussed that happiness does not come in the form of a paycheck. My boyfriend worked very long 18 hour days for his high salary, and I, in turn, am searching for my next career.
    Stability is one thing. Happiness is another.
    Do high earners have different traits? Possibly.
    Maybe we just got lucky. But I know that 30k would be an adjustment that would be challenging, but definitely doable for a job that I love.
    I don’t think people should chase a salary. I think they chould chase what they love.
  33. Alexandra says 19 August 2009 at 07:17

    I’d like to point out a rather obvious fact that has not been mentionned – these categories are not static. People move from low to medium to high income earners, and back again.

    When I was younger, I was definitely in the low income category. I stayed in the “low income” category from the time I started working at age 15 to when I graduated from graduate school, where upon I became a middle income earner. Now I am earning just a little below $100K per year. I am the same person, with the same values and charactoristics…just a little older ;-).

    Even the high income earners may become low income earners again if: their business fails, they lose their jobs, they semi-retire, or retire.

    These categories are not finite – people move in and out of them as their circumstances change. I think it is pretty naive to not recognize this. And wrong to attribute a set of charactoristics to someone simply based on their income.

  34. ethel says 19 August 2009 at 07:22

    J.D., I would assert that high net worth people are more interesting and valuable to look at it in terms of the discussion you want to have. I took your post and subsequent clarifications to indicate that you are interested in the attributes that help financially successful people be financially successful. Why would you be interested in the attributes of people who earn a lot but have median net worths? I would assume that someone who earns a lot but can’t/doesn’t hold onto those earnings would not have the very attributes that you want to discuss–i.e., positive personal characteristics that allow them to succeed. If the discussion you want to have is only about annual salary, then I find it even less interesting and valid.

  35. Mohammad Azam says 19 August 2009 at 07:22

    Teachers are paid well since they don’t work long hours and their job is very secure.

    I am talking about University Level Professors!

  36. Nancy L. says 19 August 2009 at 07:22

    Count me in among the folks who are put off by the implications of this post. Not necessarily JD’s take on it–I think his advice is wise in terms of how one should approach their own career. But I think the initial presumptions of the Ask Metafilter article are highly off base.

    I have worked for less than minimum wage (farm labor) and I have worked for six figures, and I have never seen a sustainable correlation between inherent traits of an employee and their ability to earn salary. While I can point out many people who succeeded through hard work, determination, and natural skills, I can also point out just as many people who could not manage their way out of a cardboard box, yet still managed to score high paying, lucrative careers. Likewise, I’ve met hundreds of people who on paper should be earning a lot more–they are talented, intelligent and worked hard–but their salaries didn’t reflect this.

    When I try to quantify salaries, I end up coming down to JD’s last question. It all does seem rather arbitrary to me. Arbitrary in the sense that people are all too often chosen for higher paying roles based on petty and insignificant social traits rather than skill or ability, and arbitrary in the sense that one field may suddenly become highly valued, while another might suddenly drop off the face of the earth due to rapid technological advances. All your efforts in the world won’t get you a higher salary if the demand for your services does not exist.

  37. Nate says 19 August 2009 at 07:24

    Hey everyone!

    I would like to toss some opinion into the mix.

    One of the biggest things I have noticed about someone who earns more is that they BELIEVE they can earn more (or earn whatever they want)…

    I have been trying to adapt this mentality recently – one of my mentors is just so darn sure ALL the time that he can make money. He has the attitude that if he was a professional toilet cleaner – he could make six figures. You know what? He is right! The richest person I know here in South Carolina digs holes and moves dirt for a living (on a very very very large scale).

    I think that you really have to accept that you will never be the best at ANYTHING (there is always someone more skilled then you in some way or another). HOWEVER, you must believe that you have the potential to make more —- and go after it. It is crazy how that has been working for me lately. I’m with JD – you really can create your own luck sometimes!

    As Dave Ramsey says, “Go out of the cave and kill something — bring it home for the family”.

    I think some people believe they can go out of the cave and kill and elephant, while other might think that a pig is as best as they can do. Just my thoughts….

    Also, I am completely not ignoring the fact that some people choose to work a certain career because they love what they do (and for whatever reason it doesn’t pay a high salary). But I am reminded of an episode of, “The Sharks” that recently aired (new show — it is awesome). A school teacher found an amazing way to teach kinds by putting Shakespeare to music. He brought it to, “The Sharks” (who are investors) — they made a deal and surely he is making big bucks now — doing what he loves with kids WHILE finding a way to make extra money doing it.

    Good day everyone!!!

  38. J.D. says 19 August 2009 at 07:28

    @Ethel (#34)
    You make a good point. High net worth folks are indeed more interesting and appropriate to examine than high income earners. But I feel like we explore the high net worth thing often here at GRS, if not always explicitly. The whole purpose of this site is to help others increase their net worth by looking at how others have done it successfully in the past.

    But I’ll grant that perhaps this post was misguided. It doesn’t feel misguided to me, but I’ve learned that usually when something like this happens (I think somethings okay but everyone else does not), I’m the one who is wrong. I can’t always see how I’m wrong until much later, but…

    I’m open to discussions in this thread, then, of how high net worth folks differ from low net worth people.

  39. Troy says 19 August 2009 at 07:33

    I am surprised no one has mentioned this yet.

    The number one determining factor of high income is self-employment.

    Who you work for. Yourself, or someone else.

    Most high income types ($100K), especially extremely high income types (500K+), are fully self employed or some type of self-employed / performance based / commission structure.

    They own their business. They own their work.

    It is not for everyone, and there are many risks, but that is where the real money is.

  40. Des says 19 August 2009 at 07:34

    Purely anecdotal, but the lower income earners I know tend to complain A LOT about what “life” has handed them. They acknowledge that they have made some poor decisions, but still blame the bulk of their circumstances on outside influences. (I’m not saying that is true for ALL low income earners, just the one’s I know.)

    My father-in-law is a classic example of this. He has high blood pressure and a number of other health issues. He also comes up short every month on his bills. Its not hard to figure out why: he told us he stops at the convenience store every day on his way to work and buys a king size candy bar and a Mountain Dew. He eats fast food for lunch. He stops at the convenience store again on the way home for more snacks. Then he eats fast food again for dinner. Some people could probably afford to eat out every meal, but he is not one of them. He knows those things are bad for his health and bad for his wallet, but he continues to do them. He bought a Blackberry because “guys half my age have the internet already” and he was jealous.

    Contrast that to a friend of mine that makes roughly $150k per year. He’s a solution-guy. Whenever I complain to him about some circumstance in my life he says, “Why don’t you just do X.?” Almost always there is some really easy solution, its just not always pleasant. I made a comment about a picture of a beautiful young girl in a bikini, saying I wish I could have a body like that. He said, “why can’t you?” He knows (and I do too) that if that was something I *really* wanted, I could hit the gym 15 hours a week and get it. It’s not a matter of “I can’t” its a matter of “I won’t” because other things are more important to me.

    To sum that all up, I would say one key difference is that higher income earners believe they can do whatever they want, if they just do the right steps, working smart and hard. Lower income earners tend to place more weight on external factors.

  41. olga says 19 August 2009 at 07:39

    I think those points are corrct if the experiment is comparing absolutely same fields of work. For example, bilogical sciences, unless you join the pharmaceutical company, pay very little (academic science in Universities). Education be damned. But not everybody wants/needs to go after big bucks and work in environment of a big corporation, some like discoveries for the heck of them. That said, if two equal PhD’s work at the same University (location matters), then the more hardworking and so on will probably be on better pay. Unless the other one knows someone who knows someone who has an access to grants distribution:) In my experience, those big corporations actaully had this experiment cleaner – there really, if you work well and deligent, you get promoted and pay more. Simple.

  42. Cat says 19 August 2009 at 07:40

    I think the only difference is high net work people have a better understanding of self-discipline and self-motivation.

    Everything else is secondary.

  43. nicvalentine says 19 August 2009 at 07:47


  44. MissPinkKate says 19 August 2009 at 07:48

    In NYC, a lot of high income jobs require extreme life sacrifice- mainly working extremely long hours. If you’re not willing to give up time with your family, friends, and personal hobbies, I think you’ll always hit that ceiling.

  45. JAK says 19 August 2009 at 07:55

    To KK – Post #6

    Wow! You really just hit the nail on the head. You are discribing me. My family makes a pretty good income, but we still live pay check to pay check. I can’t seem to get out of this cycle or know where to begin and so at times, I would just chalk it up to needing to earn more, but what we really need is a plan! Thanks KK and Thanks JD for opening the floor on this discussion.

  46. Steve says 19 August 2009 at 08:01

    The differentiator is our thoughts. What we think about money in this case. When working with clients I often explain the ABC model (http://hubpages.com/hub/The-Ellis-ABC-Model). In short our thoughts create our reality (or at least our perception of reality). I often use the example of the lottery. Most people who play the lottery are lower income. Therefore, most people who win the lottery are lower income. We also know that most people who win the lottery, within a few years, have lost it all and are right back where they started. How can this be? I believe it is because their thoughts about money and how it is used lead them to eventually re-assume their previous level of wealth. See the work of Ruby Payne (http://www.ahaprocess.com/) in explaining poverty, middle class, and wealthy.

    I believe this because the converse is also true. People who are very wealthy, from time to time, lose it all and become bankrupt. Yet many, within a few years are back on top. For example Donald Trump. He has been bankrupt several times. From what I’ve seen of him on TV he doesn’t strike me as very intelligent. Luck would explain how he got rich once, but not repeatedly. All the reasons listed (the Metafilter discussion) increase opportunities, but
    I think the real differentiator is the thoughts and believes we hold.

    (BTW I buy one ticket a week. The current PowerBall jackpot is 1/4Billion dollars. Thats worth a $1 of “fun”).

  47. Scott R. says 19 August 2009 at 08:02
    I agree hugely on the external vs. internal focus. My spouse and I are high-income, and our friends are pretty evenly distributed between high income, low income, and old money. Part of it is luck, obviously… not just whether or not you’re born into old money (which, honestly, that seems like the unhappiest group of all), but whether or not you’re born into a family that encourages and supports you in academic and career success.

    My spouse and I both had a mixed bag growing up…. both lower-to-middle class families, both with some pretty crushing emotional and support problems (meth addicts, suicides, bipolar parents, runaway siblings, lots of unhappiness). However, we were both quick learners and encouraged to do well in school. When a lot of our peers were focused entirely on screwing around with the opposite sex, we were reading and learning to fix computers. We ended up going to the same Ivy League school, where we met at our student jobs (fixing computers, of course).

    Meanwhile, we never made the bad decisions associated with college students. We didn’t sign up for credit cards, we didn’t party 24/7 (though we did start hanging out with new peers who introduced us to the delightful world of upper-class entertainment), and we didn’t coast through on our parent’s dime. We both worked all the way through school, at one point I was working 3 student jobs in addition to my classwork. We had a good time, but we were always focused on moving towards a successful future.

    The friends we made at those student jobs and wine parties and such ended up being our future career network, since we were all interested in the same things. Both of us have kept our focus on building a life that we both enjoy, which has meant keeping resume’s updated and always being ready to jump at a better opportunity when it comes up. We’ve finally, 5 years after college graduation, found the situation that we want to stick with, so we’re now turning our attention to starting a family and finally taking vacations and such. Relaxing a little.

    Were we lucky? Of course. We were both born bright, curious, healthy, and white in the USA. That’s about as good as you can do in the birth lottery. However, we’ve also made a series of good decisions throughout our entire lives, choosing to focus on academics and building our futures, and surrounded ourselves with others who did the same. We solve our own problems, and blame no one else for our mistakes (of which we’ve made plenty).

    So yeah. Looking back, it’s obvious why we’re doing well now. And equally obvious why the folks who made different choices when they were younger aren’t. Is it fair? Probably not, but that’s life, right?

  48. Denise L says 19 August 2009 at 08:03

    My instinct was that this was going to be a “hot” post, and the comments so far have proved me right:)

    I definitely think opportunity and awareness are key, as in someone gives you a chance and you are aware that this presents an opportunity. Unfortunately, there are some out there that never get the opportunity. And, the even more unfortunate, that pass it up when it is presented.

    I agree with those above that say that people at $30k can also have all of the qualities you list (hard work ethic, good quality)…maybe luck/opportunity/fate/etc. play a role here.

  49. honestb says 19 August 2009 at 08:11

    JD, I really think that you can’t underestimate luck as a factor – participating in any market, be it the stock market or the labour market, is a gamble. You can influence your chances a lot with attitude and education, but it’s still a gamble (your chances are also influenced by things you can’t control, like background, geography, and unfortunately race and gender). Some people lose out, and some people strike the jackpot.

    I think it’s comforting to believe that we live in some kind of meritocracy, because it seems fair, but it isn’t really the case.

  50. scordo.com says 19 August 2009 at 08:11

    I actually do think that high income earners “watch the clock” As the old saying goes, time is money and if you’re not aware of where you are spending your time (and whether you are being compensated well for that time spend) then you will not optimize your earning potential.

    My tip would be to track every minute of your day and make sure you’re getting good ROI for your work effort.


  51. Craig says 19 August 2009 at 08:16

    No guarantees in life regardless and it’s true there are differences between high and low earners the way there are between successful and unsuccessful people. All determines on different personalities, industries and more. A lot of factors go into it but there are basic guidelines that will help.

  52. Sunandshine says 19 August 2009 at 08:17

    I do not agree to this at all. Reason being the fact that I fall under a low-income category and still fit into the charecteristics of ‘high income category’. Ha! does it surprise you that I work as a Post-Doc at a top tier university? Yes! career in science does not pay you great but you are expected to deliver quality work, work harder than anyone else. Sadly, being highly educated does not assure you of high salary either! My husband makes almost double income than me and we work in the same research areas. He does not need to go in on the weekends but I have to sometimes. The only difference being that, for what I do at the University, he does at a company and gets paid more. Does it make me any less hard working than me?

  53. David says 19 August 2009 at 08:19

    I think it’s impossible to pinpoint a single factor because there are several factors and those factors are different for each individual’s situation.

    I don’t know why, but comment #7 really stuck out to me. If you set a goal, have the drive and perseverance to see that goal fulfilled, it WILL happen.

    I can’t stand when people make excuses because of their up bringing or neighborhood they grew up in. Granted, we all don’t start at the same level, but we all have the freedoms and liberties to make it to the same place if we truly desire it. That is the true pursuit of happiness!

  54. Dan says 19 August 2009 at 08:19

    I agree with J.D. There should be a rational discussion about what the differences are. There must be something different in the income levels. What makes those differences? Are they the risks that the person chooses to make? There are some controllable aspects such as education. I would like to hear from more of the top earners to know what they are doing or how they got to their position. Was it just sitting it out and waiting for someone to leave? I would like to hear more about how to increase salary substantially. I think this could be a very interesting topic if explored more.

  55. Megan says 19 August 2009 at 08:20

    It’s clear that both internal characteristics and external environment play a role in how much money a person makes. It’s not possible to distill it down to one or the other.

    It’s also valuable to discuss what those internal and external factors are, because if we have a clearer understanding of them, then we’re empowered to maneuver within them more effectively.

    Race, gender, and *especially class* have a lot to do with earning potential. Understanding that, those of us who come up in challenging circumstances are better equipped to deal with them.

    For instance. I am from a middle-class family that fell into lower class circumstances through crises and addiction in the family. Understanding that I didn’t have the built-in social network that some of my more affluent peers did helped me because I was able to consciously build my own version of that network, which got me into my (high-earning) career.

    All lives flow from a confluence of internal motivations and external forces. In my case, I’m smart enough to do tricky IT work, which is a form of luck. There’s also the fact that I looked at my slightly disadvantaged position as a challenge rather than a fact. Others in my family take a more victimized position to our circumstances, and/or have internal barriers that I don’t have.

    It’s complicated teasing these out, but if we can talk about these internal and external factors objectively and without rancor, I think we can actually learn a great deal that will help us, and enable us to help others, in navigating the internal and external limitations we encounter…

  56. honestb says 19 August 2009 at 08:24

    Also – I think it’s more useful to look at what makes people poor than what makes people rich. Most of the poorest people I know are either very young or have something holding them back from taking risks – a dependant (or several), a major health problem, or a need to be employed to stay in the country. Most of the higher earners I know aren’t exactly worried about being able to send money home.

  57. malingerer says 19 August 2009 at 08:25

    what’s the difference this time around….?

    the recession/depression.. I was making over $120k per year, now.. well.. less than half that.. still more than your $30k base, but a long way from the previous.. thank God we sold our house, have money in the bank, currently rent for allot less than our previous mortgage, and adjusted our lifestyle along the way..

    otherwise we’d be screwed 🙁

  58. MSM says 19 August 2009 at 08:25

    I totally agree that high earners have the traits you list. This describes my husband to a ‘T.’ He’s hard working, has found a niche to supply a service that others are willing to pay for, he does quality work, he strives to improve himself and do even better…and he makes three times what I do – over six figures a year. He has time for family, but his work is important to him. He knows how to prioritize.

    Sure, some high earners have earned their six figures using different tactics, but they’re not fooling anyone. It’s the people with the traits you list that others seek out.

  59. Shara says 19 August 2009 at 08:26

    SUPPLY AND DEMAND, as far as I’m concerned that’s all it comes down to. High income jobs (the jobs themselves, not the earners) are jobs that are worth more to the entity paying the money. Plumbing is not a complicated profession. It isn’t exceptionally physically or intellectually demanding and doesn’t usually demand long hours. But there is a serious risk of getting covered in poop on a daily basis. That turns a lot of people off and therefore most of the plumbers I have known have made a very good living considering their level of education.

    The same is true of science/engineering. There are only so many people with the aptitude and desire to do many kinds of technical work. The lower supply means those in demand must be paid more.

    I have heard a number of people both here and IRL complain about people who make more than them and shouldn’t. Instead I look at why a job is worth more. Sometimes it’s nepotism or cronyism, but when one looks closer the vast majority of high income jobs have demands that most people either CAN’T meet or WON’T. Managers where I work might have an MBA and make more than the PhD engineers they manage, but their level of responsibility is much higher, as are the demands of travel and availability (they are available anywhere in the country when their senior management tells them to be). Many engineers complain about the salesmen that make more money, but if you can’t sell it to bring in customers it doesn’t matter HOW good you are as an engineer, you aren’t bringing value to your employer.

    I agree with a previous poster that high income earners are the people more likely to take responsibility for their own lives, because they are willing to make the sacrifices that qualify them for those higher paying jobs. As I said there are exceptions and nepotism/cronyism. But 90% of the high income earners I know EARN their high income. Second guessing the person/people/customers who have deemed them worthy of that income when I don’t know the specifics is rather presumptuous.

  60. Anonnymoose says 19 August 2009 at 08:27

    I think it’s the ability to be decisive. Deciding that holding a job is worth not getting drunk on a Monday night. Deciding that you’re going to say no to things you can’t afford. Deciding that you’re going to go back to school even if it means sacrifices.

    I work at a non-profit, and maybe 1/2 of the people who get our services say they want a job or an apartment, but they can’t stick with a plan, keep appointments or hold down a job.

    Basically everyone we help here at work is low-income, but difference in participant’s trajectories is very correlated with their ability to decide what they want and follow through.

  61. Suzie says 19 August 2009 at 08:31

    Whilst traits such as hard work, self-discipline, good social skills etc probably do contribute to earning more money in many (not all) cases, that is still really luck.

    I mean, if you have good parents, who teach good study habits, and allow you to explore lots of options at a young age – you’re off to a head-start.

    If you have poor parents, a disruptive childhood, medical issues that interfere with schooling… then you’re behind.

    No, nothing is guaranteed in either case, we all have stories of wealthy kids who wind up poor, and poor kids who make themselves a success. But on average, the odds are against those from poorer backgrounds.

    There are so many variables, and so many different factors, that it really becomes kind of moot.

  62. Pierre Lourens says 19 August 2009 at 08:34

    Income is probably one of my biggest worries about choosing a profession. I am finishing my last year of high school and will be attending college in the fall of 2010, yet still can’t decide what career path may be best for me. My passion is teaching and learning, but a teacher’s income is below what I hope for. I think I will still pursue teaching to see where it leads me, because I just can’t imagine myself in any other job.

    Maybe I’ll want to take on a different kind of responsibility and be a principal. Who knows?

  63. Rich says 19 August 2009 at 08:37

    opportunity, awareness, preparation, confidence

    Beyond that, there is a lot of luck and timing. These traits above should be important in every wage earner, but sometimes its about who and what you know.

  64. Shara says 19 August 2009 at 08:38

    Two other comments, I can’t take credit for the thoughts as I got them both from Thomas Sowell (I believe):

    Older people earn more, that’s just reality. As their experience expands so does their value to any given company. But they also typically have quite a few more responsibilities as their houses expand with families, their kids go to college, and retirement draws ever closer.

    Studies have shown success (I believe the study focused on educationally) is dependent on a persons level of self control. Intelligence didn’t determine good grades, ones ability to control one’s impulses and apply oneself did.

    I think the same is true in life. High income earners and ESPECIALLY wealthy people, have a high degree of self control. This translates to getting things done and achieving goals.

  65. ldk says 19 August 2009 at 08:58

    Scott(#47) is bang on….my husband and I are also a ‘high net worth’ couple and I couldn’t agree more with his comments.

    We married at 21 owning nothing but a water bed(early 90’s!)and student loan debt…we took our wedding gift money and bought a cheap room o’furniture from a discount store (so we would have somewhere to sit), honeymooned in Fargo, ND (yes, you read that right) and invested the rest (~$3K) in a mutual fund. We look back now and wonder why we made choices so vastly different for everyone we know….who bought shiny new appliances and honeymooned at resorts in Cancun. Fifteen years later, guess what, we are doing quite well(business owners)…and they are making minimum payments.

    Inherent personality traits? “Lessons learned” from family/upbringing? (in our cases, what NOT to do.) That, I don’t have the answer to.

  66. Avery says 19 August 2009 at 08:59

    ” * They maintain a strong work ethic.
    * They don’t watch the clock.
    * They seek to improve their skills.
    * They do quality work.
    * They’re flexible and adaptable.
    * They maintain a good social network.
    * They possess self-confidence.

    Perfect points.I can not agree any more.And now I know why I am still so poor,hummm…Will take lots of changes before becoming rich.Thank you for the article.

  67. Kevin@OutOfYourRut says 19 August 2009 at 09:03

    I’d like to add a couple of other factors that I think might be even more important than those listed:

    –ENERGY LEVEL! This is often the substantial difference between highly successful people and others in the same field. If you have a naturally high energy level, you can accomplish so much more than others. High energy people are far less likely to get worn down by fatigue. You can do certain things to improve your energy level, but from what I’ve seen, you either have this or you don’t.

    –ABILITY TO FOCUS ON WHAT’S IMPORTANT. Most of us spend too much of our time worrying if the report is in, that our work spaces are organized, that we’re getting along with everyone,and dozens of other details. High earners are usually not detail people; detail people get lost in details. High earners have an almost sixth sense that keeps them almost singularly focused on the bottom line, which is usually money.

  68. kick_push says 19 August 2009 at 09:07
    i make less than 50k a year.. but i bet you i’m better at handling my finances than most people making six figures

    “Give me a stock clerk with goals and I
    will give you back someone who can make history. Give me
    someone without any goals, and you have got yourself a stock
    clerk.” – JC Penney

  69. Etc says 19 August 2009 at 09:14

    You forget “height” – there are several studies that prove that taller people earn more.

    I didn’t like this article, it is sort of the financial equivalent of telling fat people to exercise more and eat better.

  70. Scott Lovingood @Small Business Coach says 19 August 2009 at 09:17

    The biggest reason was mentioned at least once in the comments. MINDSET!! High earners believe they are worth it in most cases. You will always run into someone making a lot of money and having no belief in themselves, but overall our belief system limits how much we make.

    The second biggest reason – Your friends. Your income tends to be the average of your 5 closest friends. It comes down to psychological reasons that go back to reason #1. MINDSET.

    Most people who earn a low income that start to move up get pulled back down by their friends. In most cases to succeed they will have to find new friends. I know that sounds terrible but it is human psychology. You can work the laws of nature in your favor or you can complain that they are not fair.

    I have worked at both levels of income, minimum wage to over 6 figures a year. The only thing that changed was my mindset. I was stuck at 70k for a long time and jumped to 100k once I decided I was worth it.

    Many of the other attributes that were mentioned will drive how far you move up the earnings scale, but mindset is the single biggest limiting factor.

    Talk to people who earn in both ranges. You will see a huge difference in mindset

  71. sandi_k says 19 August 2009 at 09:21

    I totally agree with Brenda in #11; she says:

    How well you can shmooze with people, how gregarious you are, how out-going and extroverted you are will often get you further in life than just “hard work” or “Good work ethics”. Luck is often based on how many people you can meet, relate to, and strike up some sort of relationship with. For those people who are severely introverted or have social anxieties, it is hard to ever get ahead. These people work hard, have wonderful work ethics, strive to learn more, but lack the very last two traits on that list, which are the most important ones and really, the key ones: the extroverted, gregarious attitude that it takes to make the necessary “Social Network”, and the necessary self-esteem to have “Self-Confidence”.

    My husband is amazingly competent at many things. He owns his own business, and if he weren’t so skilled in a multitude of things, his business would have gone under in 2001 or this past year.

    Yet many jobs still go to people who are much more socially extroverted than he; once people know him, and he’s more expansive, he gets lifelong clients. But until they break the ice with him, he’s shy, and it makes a huge difference in new job bidding.

    He’s learned to compensate and has learned some “tricks” to seem more outgoing; he makes sure to say things like “no problem; no worries; I appreciate it” and other things that convey a more enthusiastic business approach, but it’s really HARD for him.

    Last point: management. People who are willing (like me) to take on the crappiness that is people management (hiring, discipline, coaching, firing, etc.) make more money than those who stay in operational and line staff jobs. I saw the writing on the wall early, and became a manager at 27. It’s made a huge difference in my earnings.

  72. Kevin says 19 August 2009 at 09:30

    While this post (and the ensuing discussion) were definitely interesting to read, I was hoping for something different after seeing the headline. I was hoping for a discussion on how people of different income levels SPEND their money.

    For example, our household income is around $100k. When I look at our budget, I see very, very little fat left to be trimmed. I often wonder how these families get by with $60k, $40k, or $30k incomes. What am I spending on that they’re forgoing? Health insurance? Retirement savings? A small (~$1,000) vacation every year? An emergency fund? Cable? What are the differences between my budget, and theirs, and someone making $200k?

    THAT would be in interesting discussion, for a future post (in my opinion).

  73. ebyt says 19 August 2009 at 09:32

    I think it has to do with a lot of factors. Education, for one. Typically, people who have degrees, courses, etc. beyond high school tend to make more money. What about plain old intelligence? Would it be politically incorrect to say that many smarter people get the higher paying jobs? I think there must be some truth to that.

    Of course there are exceptions, like the lazy rich kid who coasts thru university and gets a job at daddy’s business, but that’s hardly the majority. The majority of university students are there because they are book smart.

    Street smarts can get you far, too – not every successful person went to school.

    Laziness can be seen in groups of high and low income earners. You can get stangnant in any job and just “coast”.

    Many people are extremely hard workers and are trapped in lower paying jobs because of circumstance – they never went to school even if they had the ability, they’re a single parent, etc.

    I guess what I’m saying is we can’t really make too many generalizations.

  74. Rachel says 19 August 2009 at 09:33

    Part of why I am transitioning from an office job to a home-office job is because I am more motivated than my current profession will pay me for. Your first point is an important one–as someone working in a nonprofit arts organization, I can only go so far. However, knowing how to negotiate one’s salary, be a personal advocate, and be passionate about one’s work is still very important. I received a 6.5% raise this year, while the rest of my organization stayed the same or took a voluntary pay cut. It isn’t much in real dollars, but it is comparatively significant–and largely due to my self-advocacy!

    So I think there are really two measures: One that compares a person’s wage-earning to others in their profession, and another that compares across professions. My experiences in the nonprofit sector are pushing me toward self-employment. I have always known about my passion for translation, and as I start my business I have realized that people are willing to pay me TWICE as much as I make in the nonprofit sector. And I am just beginning! This is part of the second measure, the side where people happen to enjoy and have the skills for a more highly valued job. It also matters when someone is motivated enough to take risks or innovate to create that higher-paying job.

    I think it is more complex than how you laid it out in your post, but I also believe that many of the comments so far are hitting on other factors in the salary game.

  75. jg says 19 August 2009 at 09:38

    I see some people talking about “luck” when they really mean “choices.” Lacking a better term, “luck” = uncontrollable factors (parents, where you were born, ethnicity, etc.). However, things such as where you live now and where you work now are not “luck” at all; they are the culmination of a series of choices. Working in industry versus academica: culmination of choices. Living East Coast versus Midwest: culmination of choices. Having a lot of debt, having children, staying at home with your kids: culmination of choices. Note that I’m not quite calling them choices themselves – some people really don’t have a lot of choice in their current circumstances, but they can’t disregard that their choices brought them there, for better or worse.

  76. Brett Favre says 19 August 2009 at 09:50

    I am onboard with most of those things but some are not entirely under your control as your upbringing plays a part. Is that an excuse? Maybe.

  77. pk says 19 August 2009 at 09:56


    I am a smart, capable person who gets askes stupid shit like “If you are so smart, why aren’t you rich?”

    My response was/is “There are some things I will not do for money.” And that for me is it in a nut shell.

    That said, a lot of where you end up depends on where you start. (Luck.) Family money, family connections, how you look (I’ve read too many studies that show pretty people are always judged more capable), whether or not you have some unique talent and the means to exploit it.

    I’ve watched so many people who ragged on my lack of “motivation” crash and burn like zeplins while I have quietly done what I pleased. I’ve lived a GREAT life with extraordinary freedom and full of mad adventure. To that end I have made sacrifices and done without a lot that I am sure those pople deem “essential.”

    Some of your respondands openly admit that they make oodles of money because THAT IS THEIR GOAL and they relentlessly persue it to the exclusion of much else that is rewarding and healthy in life. In my opinion THEY are paupers and I pity them.

  78. Peter says 19 August 2009 at 09:57

    Great comments so far. One thing which was left out was. I believe in every one’s life, opportunity knocks one’s door at least once or twice. If you open your door, you are on high net worth track, otherwise, you are where you are.

    Other readers have pointed these : Believe in your self, Social Networking, Friends, and Planning early on.

    I am not a high earner (I make around 80K). I believe I can be a high earner after I read through some of the reader’s comments. let me change my attitude and see how it will work out.

  79. Jeff says 19 August 2009 at 09:59

    How many high income earners have time to read a blogs during work hours? Or are they too busy working hard, going the extra mile?

    I’m guilty of not spending 100% of my allotted work hours working. Rather, I find myself catching up on personal emails, blogs, banking, and news. YET, I think I deserve more money that I make because of the level of service I provide to my customers is head and shoulders above my peers. Hypocritical? Absolutely.

    Time for some reflection.

  80. Kevin says 19 August 2009 at 10:00

    Excellent post as always. I did not get the impression that you were saying poor people are lazy.

    I think hard work is necessary, but so is luck – no question about it. In my case, I made a good choice of parents. But if you are born to poor(as in quality) parents who don’t emphasize things such as hard-work, integrety, honesty etc you are going to have a hard time succeeding. It’s easy to say “pull yourself up by your bootstraps…” but not so easy to do if you were born into poor circumstances.

    As for my circumstance, I make just over $100,000 a year but I’m not happy with what I’m doing. (I made a poor career choice at age 18.) I would gladly take a $50,000 paycut to do something I enjoy. But as crazy as this sounds, I don’t think I could make $50,000 at anything else. The one thing I’m qualified to do pays very well, but I doubt I could get $30,000 doing anything else. A strange situation; I guess the grass is always greener…

    Great discussion everyone.

  81. MichaelM says 19 August 2009 at 10:01

    “…it is sort of the financial equivalent of telling fat people to exercise more and eat better.”

    Well, what’s wrong with that? For the most part, that’s the solution to their situation.

    There are extraneous reasons that people are poor or fat, but the vast majority of people are where they are in large part due to their own choices.

    As a slightly overweight guy making $40k a year, I place myself at fault on both counts. It’s my own fault, and I’m working to make both problems better.

  82. atorres says 19 August 2009 at 10:02

    I agree with # 28 Jessie:
    Some more reasons also include:
    – time spent in the workforce
    – if your male or female (for a whooole lot of reasons that I won’t get into here and now)
    – if you have chosen to have children or not
    – education
    – location
    – age
    – career path – some jobs just make less money

    I would also add race to this list as well. There was also a study recently that showed that the types of majors that women tend to choose for their undergraduate degree is responsible for a high percentage of the wage gap. Obviously, women and men are socialized to choose certain majors and not others. I think there is much validity to the argument that social norms, strict gender roles, race, class, disability, who is given opportunities based on those things and who is not given opportunities, plays a huge role in who makes what kind of money.

  83. Ross Williams says 19 August 2009 at 10:15

    “However, I do think there must be differences between high-income earners and low-income earners, that it’s not purely a matter of luck. ”


    If you are born poor you are much more likely to die poor. And if you are born rich, you are much more likely to die rich. Of course its not inevitable in either case, but it is certainly the most important factor.

    If you are born poor in a poor community in the Congo you are much less likely to become wealthy than if you are born almost anywhere in the United States.

    If you want to become wealthy, cultivate friendships with the wealthy and power. Its not what you know, but who you know. That is why all the Ivy league colleges continue to admit their alumni’s kids. They understand that what their other students are paying for is not the education, but admission to America’s ruling class.

    The hardest working people I know are poor people. They work hard because they have no choice. They don’t get paid to engage in conversations, attend meetings or go to lunch/dinner.

    There is nothing easy about working in a meat packing plant, harvesting strawberries or tarring roofs. But none of those jobs pay very well. You will have to not only work hard, but very long hours to make much money at them. And not even the young and strong can do that for very long.

    As for choices, I don’t recall that the kids assigned to the “slow” classes in my school had any choice in the matter. That choice was made for them and, even if their parents had a role in the decision, they didn’t get to choose their parents.

    There are really two different discussions here. One is why are people rich or poor. The other is whether those differences are a result “moral failings”. Let me suggest that contrary to popular opionin, wealth is more often a symptom of moral failing than poverty:

    If your goal in life is to be rich:

    Being totally selfish helps.
    Being ruthless helps.
    Being dishonest helps.
    Being a good liar helps.
    Being a sociopath helps.
    Being greedy helps.
    Being materialistic helps.
    Lacking compassion for others helps.
    Being predatory helps.
    Begin good at identifying likely prey helps.
    Appearing friendly helps.

    If you are someone who is none of those things, you are unlikely to ever be extremely wealthy unless you were born to it or get very lucky.

  84. TeresaA says 19 August 2009 at 10:19

    I am not sure it is all that simple. I know high income earners that work very little. They are smart, very good with people, know a good opportunity when they see it, are very adept at taking advantage of a situation, and are able to delegate. Some did work hard to get to that point, others not. Likewise, I know low income workers that work very hard, sometimes at two or three jobs. They are not lazy, but they lack the people, social and maybe even the common sense and prowess needed to move ahead.

    I’ve seen situations where luck and the right opportunity coming at the right time had everything to do it.

    Others have mentioned opportunities people are born into….such as being born into money and power, the chance for a higher education, and being a part the right crowd of people.

    There are sooo many factors.

    But, I tend to think that in most cases working smart and being good at what you do and having common sense will get you most anywhere with the right degree of desire.

  85. Scott Lovingood says 19 August 2009 at 10:23

    @Ross Williams – You have a very poor opinion of people who are wealthy it appears to me. You become wealthy by NOT being all the things you listed. You may accumulate lots of financial rewards but it will eventually catch you. Look at Bernie Madoff.

    You become wealthy by providing more value to the world than you consume. I know that may sound a little hokey but think about a business. You continue to go their because the value they provide is worth more than the money you have in your hand. A business who can efficiently deliver that value will grow and be very profitable. The owner will become very wealthy doing this. To make sure that value is continued to be created he will reward his people who are making sure it happens. They will become wealthy as well.

    Too many people have come from nothing to become wealthy. Don’t limit yourself by believing it is not in your control. If you don’t like your circumstances, change them. Make the committment and get to work on it.

  86. Nick says 19 August 2009 at 10:27

    I am a New Mexico teacher and am a low/middle income earner. Before taxes and other deductions my wife and I earn 60k together. Six years from now we will collectively earn 100k.

  87. Kevin@OutOfYourRut says 19 August 2009 at 10:32

    Kevin (80)–I think you’re on to something with your comment, “The one thing I’m qualified to do pays very well, but I doubt I could get $30,000 doing anything else.”

    If high earners had truly universal skills exceeding everyone else, they should in theory, be able to make big money in what ever they might do. But in reality that’s seldom true!

    Many people who are very successful in one career, or even in one job, or at a moment in time, fail miserably when they step into something different. This is very true of entertainers and atheletes, and I’ve seen it many times in business.

    I know many reject the LUCK factor, but many, many successful people are so because they’re in their “zone”. That is they’re doing the job they’re meant to do, at the optimum time it’s meant to be done. Five years sooner, or ten years later, and the results are very different.

    If this weren’t true, than no high earner would ever experience a large drop in income or a business or career failure, but THEY DO!

    There may be skill and planning involved, but the luck part is that they come together in the right place, at the right time and in the right measure. Regrettably, this doesn’t happen for everyone. For those for whom it does, those are the high earners.

  88. lynn says 19 August 2009 at 10:45

    My first thought on this is education/job choice. some jobs will almost always earn more than another. eg, electrical engineer vs teacher.

    but what about those who earn more in the same or similar jobs? i agree with those who say believing in your potential, taking responsibility, taking risk, and i would add thinking for oneself. we have blue collar workers in our family who are hardworkers: work themselves to the bone daily. but they come in and do what others tell them and go home. no higher dream and no higher income. others in the family- same socio economic background- were blue collar workers that started their own blue-collar businesses, and have succeeded.

  89. chacha1 says 19 August 2009 at 10:53

    Hi J.D., interesting post and discussion. I skipped a lot of the early comments after reading your addendum. Clearly, this one set people off!

    As one later commenter said, it appears many are confusing/conflating “luck” and “choice.” It is not luck that causes one student to sit in back of the class and goof off while another sits up front, pays attention, and does all the assignments; nor luck that causes one immigrant to master written and spoken English so she can get promoted, while others do not.

    It is also not luck that causes someone to take a job at a meatpacking plant. It is a chain of choices often going back generations – just as it is in the case of someone who takes a job managing a hedge fund.

    Humans are by nature conservative, meaning averse to change. Most people will do what is presented to them as appropriate to do, just as they will not question what they are taught. They keep their heads down and work away, never looking up to see that there might be other paths.

    This does not make them bad, or lazy, or stupid, but in a sense it is taking the “easy” road. There are an awful lot of people who actively discourage others from taking risks to achieve more than those around them, and it’s hard to buck that pressure.

    Other people will raise their eyes to a horizon and see other possibilities. Those are the people who, over a lifetime, typically earn more and have a higher net worth.

  90. Tyler says 19 August 2009 at 11:03

    I make 6 figures in a field I love. I don’t feel like I work all that hard now. I don’t work particularly long hours, and I’m not often stressed. However, I’ve been working on developing my skills in some form or another for my entire life. (Literally since I could read and write.) I have skills that are in-demand and not very common. I also am pretty decent at networking within my field. None of this is calculated… it just happens to be what I’m passionate about. I’d say luck is certainly a factor, but I’ve definitely paid my dues as well.

  91. Nancy L. says 19 August 2009 at 11:04

    Exactly, Kevin (#87)!

    Luck plays heavily into options when you look at timing and opportunities. When I entered my career, there was no rational reason to choose it, as my field was considered a dying industry. I spent four years after graduation struggling to find even a door let alone trying to get a foot into it. Logically, and by every standard discussed above, I never should have pursued that field. But as luck would have it, my field took off (for reasons that were fickle and unpredictable), and I went from having no options to having a wealth of choices. During that time period, my earnings went through the roof, as I’d succeeded through a choice that rationally I never should have made.

    Then, a few years ago, I made another choice to leave my chosen field. At the time, my choice was based on personal goals, not earning potential, and in some ways appeared to be giving up a good salary for a much lower one. But, as it turns out, my previous field is out of demand once more, and additionally is now overrun with trained individuals who are looking for work. If I’d stayed in my field, I would now be having a hard time finding work, let alone matching my current salary.

    Neither of my choices initially appeared to be the right choice for earning the best salary, yet both have served me very well. That’s where the element of luck comes into play.

  92. Ben says 19 August 2009 at 11:09

    I think there are different mindsights when it comes to accumulating wealth. This does not mean that every one who is rich or poor subscribes to a certain set of principles; it just means that some people are more attuned to acquiring assets. I think Tony Soprano said it best in his exchange with a crooked politician about flipping houses…..Politician: “Tony you’re not looking at the big picture here, we’re talking hundreds of thousands of dollars!” Tony: “See that’s why you’re a politician and not a businessman…maximum value is the big picture. There must be seven grand worth of copper piping in those houses”
    Lol, im not advocating organized crime, but you get the picture. For some people, good is good enough. For others…the sky is the limit.

  93. Jim says 19 August 2009 at 11:16

    Among the people I know the overwhelming deciding factors in income are education and profession.

    The vast majority of people I know who make higher incomes are college educating in professional fields. The vast majority of people I know who make low incomes do not have college education and work in service industries. So profession and education are the key deciding factors.

    Personal qualities like work ethic, self confidence and quality of work are not the difference among the people I know. I know someone with pretty poor self confidence who makes at least $75k and someone with great self confidence that makes $8 /hr. All the people I know making lower wages have good work ethics.

  94. Tyler Karaszewski says 19 August 2009 at 11:20

    When I was 22, I was going to college and working at the same time. I was making about $35k/year. By 24 or so, I was leaving school, and took a job in San Francisco making $68k/year. Now I’m 28 and last year I grossed something like $142k.

    I can tell you the jump from $35 to $68k was a lot more dramatic in terms of feeling financially comfortable than the jump to $100k+. Sure, the extra money is nice, but I was doing just fine on $68k, whereas $35k really required watching where each dollar was going and being careful with what I bought.

    I could give you a long list of traits that people who succeed and get top-tier jobs in the software industry share (based on my experiences), but I’m not sure if anyone’s interested. I do think a lot of the traits in J.D.s list are represented, but I’m not sure if they’re the most important ones. Boiled down to the most basic points, I think the core traits that have helped me, and that I’ve seen help others in this field, are:

    1) Be *good* at something that’s both useful and challenging. You can be good at something that’s useful and simple, but there will be so much competition, since everyone else can do it too, that it’ll drive salaries down. You can be mediocre at something challenging, but you’re not going to be the one sought after for the high-end positions.

    2) Make sure other people know that you’re good at this thing. You may be the best programmer in the world, but if no one knows it, they’re not going to hire you. Be vocal and self-confident. Some people, especially the people you’re out-competing, will call you arrogant, but if you’re confidence is warranted, employers (or customers) wont mind. You can overdo this and start to get annoying, too, but that still might be better than too little confidence.

    3) Know what you’re worth. A good programmer in the san Francisco Bay Area is not cheap. But if you went to school at Midwestern State U, they probably kept telling you that average starting salaries were $55k (or something like that) for computer science grads. $55k around here, in this line of work, is a joke. If that’s what you’re making it’s because you’re either really not very good, or because you don’t realize that everyone else at all the other better companies is making $80k+. Still, I’ve seen plenty of recent college grads saying things like “Wow, they offered me $60k, that’s above average, that’s fantastic!” My first job post-college offered my $60k. I countered with $70k and they offered me $68k, which I accepted. Even still, I knew I was just doing OK, and that I wasn’t earning some super-fantastic salary. I was probably in the top third or so of people just coming out of college in this field, definitely not in the top 5% or anything.

    And yeah, I’m good at what I do. Better than a lot of others I’ve seen. You can call me arrogant if you want — you wouldn’t be the first. I’ve also made risky decisions that turned out in my favor largely based on luck (like moving to San Francisco to work at a startup company). But a lot of the other people, probably most of the other people, who’ve achieved the same level of success have taken similar risks, and sometimes they’ve taken them several times, not succeeding until the second, third or fourth try. But eventually, they’re sitting at the top of the field making six-figure salaries and getting all the flexible vacation time and free food that you read about in articles about Google’s or Netflix’s working environment.

    None of this necessarily applies outside the software industry, but I do know what flies and what doesn’t for programmers in the silicon valley.

  95. Paul in cAshburn says 19 August 2009 at 11:21

    First, two observations from my experience:

    1. People who READ more will earn higher incomes because they know more. Please note that I did not say they’re smarter, I said that if you read more, you know more (unless you’re reading People magazine). Choose your reading material wisely. Good choices for those who want to make six figures might include the WSJ, Forbes, Fortune, and trade journals for jobs you want to have someday.

    2. People who PREPARE themselves for success (accrue experiences likely to be positive, like education, and avoid experiences likely to result in negative outcomes, like drugs or alcohol) are more likely to be ready for success when an opportunity comes along.

    Luck is what happens when preparation meets opportunity. Seneca

    One free association string: When you read a lot, your vocabulary improves. When your vocabulary improves, you are able to comprehend more of what happens around you. When you comprehend more of what happens around you, your reactions are better. When you react to things better, you succeed in more situations. When you succeed more often, you usually get opportunities to make more money.

  96. RainyDaySaver says 19 August 2009 at 11:22

    I think there are many factors to take into consideration. Different circumstances, personality, education, gender, and so on. Plus, a lot of high-salaried folks tend to spend that cash on bigger homes, fancier cars and other items. And when that happens, we’re all in the same boat as far as debt and trouble making mortgage payments is concerned.

    As one poster noted, I’d rather have the time to enjoy life outside of work at a lower salary than a high salary that I’m working 24/7 for.

  97. Kelsey says 19 August 2009 at 11:26

    I’m sure this has been said in the comments, but I agree with Kaitlyn (#4). We are all born into different circumstances and raised differently. It’s hard to break the cycle and everyone is presented with different opportunities. And if you’re not exposed to something it’s hard to aspire to it. I’m not saying people don’t break through the barriers, it’s just harder for some people.

  98. Sean says 19 August 2009 at 11:39

    This kind of topic always touches a nerve.

    As I see it, there are two different questions being looked at here:

    1. Why does [some other person/group of people] make less money than others? How could they make more money?
    This is where unhelpful anger, finger-pointing, and the flinging around of statistics come in. Doesn’t really make for a useful discussion.

    2. Why do I personally make less money than others? How could I make more money?
    Ah, now we’re getting somewhere. Here we can take responsibility for ourselves, our actions, our choices. We can look at what we might change in our own lives to improve our situation, by examining things that other people have done. We can disregard statistics that say we should be failing (or succeeding, for that matter), as statistics apply to groups of people, not individuals. Even asking these questions is a step in the right direction.

    Unfortunately, the first question usually attracts more discussion and responses as people get angry and start arguing. People love conflict, what can you do?

    On the plus side, commenters here are a pretty good crowd. Things are largely civil, and I’m glad to see it.

  99. Hope says 19 August 2009 at 11:40

    The difference is family background. Were your parents college educated? Did they ‘force’ you to go to college? Or, at the very least, was going to college part of your ‘family culture’ (as in, everyone does it)?

    A lot of lower income workers come from families with uneducated parents who are also low income earners.

  100. Ms. Clear says 19 August 2009 at 11:50

    J.D says that he’s not trying to call poor people lazy. That’s nice of him to mention. I believe in his good intentions.

    But when you list bullet points that supposedly explain why some folks are high income, you don’t have to be a highly educated person to figure out that the implication is that if you are not high income, then you must not be that list of desirable traits.

    So really, it’s not hard to see why some read it that way.

    The thing about personal finance blogs is that they’re all about what YOU can do to make things better. That’s what I read them for. I’m a teacher, my hubby is looking for work post-grad school. My family needs good advice on how to live on modest means. These blogs are truly helpful in that regard.

    They are less helpful in trying to explain sociological factors, one of the largest being class. Because the truth of it is that not everyone can succeed. The pie is limited. To say otherwise is rather disingenuous and leads to posts like these, which to me read like:

    “I’m not trying to insult you, but maybe if you just worked harder…..”

    or to take an off-topic analogy, while speaking to a heavy person:

    “Gee, did you know how many calories that soda has?”

    It’s frustrating for some to read this, because people’s lived experiences don’t bear out that everyone can make it. Some can’t. That doesn’t mean that they can’t make their lives better, but not everyone is going to be high income. That’s not the nature of a capitalist system.

  101. Sara says 19 August 2009 at 11:50

    Many posters are still misunderstanding the findings of the report, mistakenly believing that the report says “if you do not make $100,000, then you do not maintain a strong work ethic, seek to improve your skills, do quality work…etc.” That is simply NOT what the report is saying.

    As a parallel example: “People who live in Cincinnati (make $100,000) live in Ohio (maintain strong work ethic)” does not mean “people who do not live in Cincinnati (not make $100,000) do not live in Ohio (not maintain strong work ethic).” Perhaps you live in Cleveland instead (not make $100,000), but then you still live in Ohio (maintain strong work ethic).

  102. David @ DINKS Finance says 19 August 2009 at 11:50

    I think some people do make a boatload of cash doing something they hate. But the most succesful individuals are usually those who pursued what they love regardless of the obstacles. Beside that they make it a focal point to work as hard as possible to do a better job. Hard to do that when you hate what you are doing.


  103. Kevin@OutOfYourRut says 19 August 2009 at 11:56

    Hope (99)–What you’re describing is very real. One who grows up in a “can do” environment has significant intangible advantages over one who hasn’t, on top of better access to education, more connections, and more financial resources. Such a battery of advantages is hard to beat.

    There are, of course, people from lower income families who break the mold though, so clearly some of this at least is within our control. But never entirely.

    Ben (92)–I think you’re right. Accumulating money probably does have more to do with mindset, I think certainly more than it does with income earning. I think mindset, discipline, etc, are all primary factors in wealth accumulation. Luck plays far less a part here, maybe because it’s a very long term process. But people with relatively modest incomes can and due amass considerable fortunes.

  104. Steve says 19 August 2009 at 11:59

    Sorry Ms. Clear (#100). The pie is not limited. That is the great lie we are all taught. There is more than enough wealth in the world. There is more than enough energy. There is more than enough of everything. Successful people simply find better ways to access the resources.

    This comment goes to the core of my previous post, #46. If you believe there are limits, you will find limits.

  105. Greg says 19 August 2009 at 12:06

    When I was working selling cameras a few years back (pay was base $10/hr + comission), there were a few people that made over 100k in the company. One of the top earners was in my store.

    The playing field was fairly level, every customer that walked in was fair game. One big thing I noticed between him and everyone else was the amount of dedication he put in. This guy knew all the programs/services the company offered inside and out, he knew where everything was, when product was coming in, he wrote all his customers’ information down in a notepad he carried around, regularly contacted his customers about big sales and spent no time chatting with coworkers. He was a machine at work and it reflected in his pay. The other people I worked with did some of the same things, but not consistently.

    The job I work at right now is salary based, so as long as I show up on time and meet all my deadlines I get my money. There are yearly pay increases but for my position, it would take awhile to hit the pay cap, which I believe is around 80k. I’m pretty happy with the job though, it’s in my field (Mechanical Engineering) and it pays well for my age (24), mid 50’s.

    A lot of the people I know making less around 30k, seem to complain about it, but aren’t willing to do the work it takes to increase their earning potential by learning new skills or going back to school.

  106. Marisa says 19 August 2009 at 12:11

    I’m a little late to this conversation, but here’s my $.02: a large component of success has to do with your family background.

    An illustration:
    I went to a small, rural high school. Most of the people I went to school with were working class; a significant minority were the children of healthcare professionals at the regional medical center located in our town. At my 10-year reunion, perhaps half of the people I went to school with had college degrees. Most lived near the town where we grew up. Most had several children. Most had working class jobs, though often somewhat higher-paying ones than their parents had (nurses, mid-level administrators, and security/prison guards seemed to be the most common choices). The exceptions to these trends were primarily the children of doctors and other professionals, perhaps half of whom had advanced degrees and were living out of state.

    My partner went to a small, exclusive prep school. Most of the people he went to school with came from wealthy, professional families. At his 10-year reunion, nearly everyone had gone to college; around half had a degree beyond a BA. Few lived close to the city where they grew up, and those with children were definitely in the minority. Many were lawyers or ran their own businesses or non-profits. Several had published books or gone into politics.

    My suspicion is that there are a variety of factors at work here, but the two things that stand out for me are the value of connections (both family connections and the ones you make if you attend an ivy league school) and the degree to which examples of high attainment propel you to high attainment.

    It’s possible that, on average, the people I went to school with are just less motivated than the people my partner went to school with, but I don’t think that’s the primary force at work.

  107. Erin says 19 August 2009 at 12:13

    I think some commenters are getting bogged down by the high income/low income comparison that they fail to see the point of the post. I think JD was asking what differentiates regular workers (possibly earning less than their potential) from people who rise to the top (and have strong incomes to show for it). Below are some traits I see in people who are motivated to move to the top:

    -Having specific goals and clear “plan of action” to achieve the goals.
    -Re-evaluating the goals periodically and setting new ones once previous goals are reached. (Not coasting.)
    -Looking internally to make changes. (Instead of blaming external factors.)
    -Successfully navigating workplace/industry politics, building a professional network, promoting your own work, negotiating salary, etc.
    -I would argue that hard work isn’t necessarily a differentiator for high/low incomes. However, often times people earning less than they should work hard each day to accomplish the job at hand. People who rise to the top tend to work hard with their personal goals in mind… they are more strategic about taking on projects that will give them visibility within their organization and will help them achieve their goals.
    -Strong desire to earn a high income. These people choose prestigious careers rather than lower income careers.
    -And, yes, luck.

    I think it’s good to be aware of what we can do to achieve better pay, get a promotion, etc. But I also think there needs to be a balance. As others have mentioned, a teacher may not have a high income, but their satisfaction with their job (and overall happiness) may be worth more than a higher salary. It’s all up to the individual to decide where their priorities are. But to deny that there are key differentiators that lead some to rise to the top of the pack seems silly.

  108. Victoria says 19 August 2009 at 12:27

    Hey J.D., this is a good post and don’t back away from it (your comment #38). Salaries are always a contentious issue but since most of us here are employees, then let’s be bold enough to participate in this discussion.

    Remember, J.D, you don’t always have to have the whole crowd cheering you on about a post. Controversy is good. Regading salaries, I have discovered that people in Canada (where I’ve lived as an immigrant for two years) are not comfortable about discussing salaries or incomes. I am assuming that it’s the same in the U.S hence all this reaction. They’d rather make you feel like you implied that low income earners are lazy or whatever. But I believe your post was good and had good intentions. It most probably rubbed people the wrong way because they are not high income earners or if they are, they do not necessarily have the traits you listed or maybe people are just sick of their low salaries and seem to be defensive when they are pitted against the high income earners. It hurts.

    I know I earn less than I should because when I first got my job I had been jobless for more than a year and as an immigrant so many things were not necessarily in my favour. So I took the first offer. But I am confident that I will get to my level. I am determined to create my life the way I envision it. I knwo I can. I was motivated to move from my country by the opportunities in this part of the world. I must also say I am amazed at how so much opportunity is not used up by people in these countries. I know people who were born here but do not “see” the opportunities that I see. Some of them only completed high school (which managed to get them jobs but cannot propel them to higher levels) and they always complain about how hard life is. I secretly wonder what kind of people they are. Some are really miserable.

    However, I must agree that because my friends (in my home country)and I were high income earners, the traits in your list resonate with me.

    There is something deep down in your heart that is propelling you to take this site to the next level. Success sometimes breeds controversy. Keep up the wonderful work!!

  109. Ms. Clear says 19 August 2009 at 12:27

    Teaching isn’t a low income job. So using it as an example is a little odd. The post mentions $30K per year jobs. Teaching does pay more than that.

  110. Linear Girl says 19 August 2009 at 12:41

    @Kevin (#72) – It takes a long time to scale back from spending $100K annually to $40K. It involves things like selling a big house and buying a small one, driving your car(s) long after the payments have ended, and asking yourself if something you already own will suffice before making a new purchase of anything. It’s much easier to start living at that level and not increase it, than the reverse.

    How do you live on less to start with? The differences are often ones of scale. A smaller house is pretty typical, saves on house payment and/or rent, property taxes, utilities, and maintenance. If you fill that house with used furniture, family castoffs, and new items purchased for quality to last forever (cast iron pans, e.g.) you save money. All repairs, cleaning, and yardwork is DIY. You put on a sweater or two and keep the house at 65 in winter, lower when you aren’t home, and don’t cool the house in summer. No raiding your home equity to buy a new boat or truck or anything but needed home repairs you can’t swing any other way (a new roof, for example).

    A similar strategy is true for cars. Buy used, learn to work on them to whatever extent you can (anyone can change oil, check fluids and tire pressure, inspect belts, change sparkplugs and air filters, and any fit person can rotate tires and inspect the brakes, with education a person could do more), practice good preventative maintenance, and expect to be the last owner of any vehicle (trading up costs money). Of course, always pay cash so you never have a car payment. Older cars are cheaper to insure and register, too.

    The other things you brought up play into it as well. Savings rate is minimal, both for retirement and emergency, travel doesn’t happen (you think twice about one extra tank of gas and $1,000 vacations are right out). No frills like cable, eating out, and new clothes that aren’t necessary to employment. Health insurance that isn’t employer provided doesn’t exist. No gym memberships, only exercise by running, walking, playing frisbee with the dog or whatever you enjoy that is also free.

    Our income more than doubled four years ago but our spending habits have barely changed. We spend more freely on food and wine, we go camping and skiing more, I joined the gym and my guy bought a used dirt bike for fun. The enormous advantage we have now is vastly increased savings, remedying the only thing I thought was a problem on our previous income.

  111. Anna says 19 August 2009 at 12:41
    The main difference I’ve noticed between high earners and low-to-moderate earners is that high earners care more about making money than the kind of work they do. Period. That’s it. The entire enchilada.

    Most low-to-moderate earners work just as hard or harder than high earners, but they prioritize other things besides income … the chance to work in a field like education, the arts, or social work that does not pay well but that they love for one, time to spend with their family for another.

    Then there are those who do not wish to be Peter Principled … they refuse to move up out of a technical position at which they excel into management where they have no aptitude.

    Some industries and some professions simply pay less than others. A teacher can be very successful in her field, but she won’t make as much as an entry level corporate lawyer just out of college. A hack programmer with appalling work habits will make twice with the highly skilled and efficient tech writer makes in the same firm. And this is before we start addding in issues of family income, education, gender and race.

    Obviously if money is someones biggest priority he or she will pick their profession accordingly. And obviously some people do not excel in any field because they are lazy or have poor work habits. But do high and low earners exhibit different personality traits otherwise? No.

  112. Nova says 19 August 2009 at 12:51

    I think this is definitely a hard topic with no straight answer. Here are my thoughts and what I have seen in my 28 years:

    – Education helps but it not always the answer. It helps open doors.

    – Regarding – “They seek to improve their skills” – I have found this to be very true including personal skills like keeping your cool under pressure.

    – Regarding – “They maintain a good social network” – lots of times it’s not what you know but who you know. Most of the good jobs are not in the Classifieds.

    I’ve seen people with none of the personality traits above make multi-millions because they had a good idea and their workers made him rich…not himself….he barked out orders….anyhow, and some that work so hard and passionate for what they do, only to make pennies. It’s hard to narrow down the personalities for high income people.

    However in the end, the money is a means for opportunity. Use the money from your job/career (whatever the figure) as seeds to grow a life that you want. And in the process, surround yourself with people (resources) that encourage and help mold your ventures. That success is more important than the zeros in your bank account.

  113. Jim says 19 August 2009 at 12:55

    JD said: “I’m not trying to claim that “poor people are lazy”. I don’t believe that at all. ” I sincerely believe that you didn’t mean to say or imply that poor people are lazy.

    But I think the reason people inferred that meaning is the title of your post. When the title is “Whats the *difference* between high-income earners and low-income earners?” then you are specifically looking at the differences of the 2 groups. When you then list traits of high-income earners then this will be taken to imply you mean low-income earners do not have those traits.

    If I said : Whats the difference between Ford and Toyota? and then said Toyota makes cars in Japan then this would imply that Ford does not make cars in Japan. Right? Because the context of the discussion is the differences between the two. A difference is something 2 groups don’t share. So if one of them has something then the other doesn’t.

    Again I realize JD never meant to imply anything negative about low income people. But I can see how people got that impression.

  114. Jac says 19 August 2009 at 12:57

    chacha1: It is also not luck that causes someone to take a job at a meatpacking plant. It is a chain of choices often going back generations

    I strongly believe that the choices made by previous generations can be counted as ‘luck’ when trying to talk about what has contributed to an individuals position in life. Unless you imagine that you contributed to your grandparents choice to start a family business or not?

  115. TosaJen says 19 August 2009 at 13:05

    I’m sure I’m reiterating a lot of what’s already been said. In my not-very-scientific observations, a lot happens beyond the dumb luck of being born white, middle-class, and so forth. My DH has 4 siblings, and I have one, all raised in similar circumstances with similar opportunities.

    Among this limited sample, those who plan, take calculated risks, and delay gratification are making more money and have a higher net worth than those who can’t, don’t, or won’t. (Note, I did not say “rich”. The current dividing line are those on “parental welfare” into their 30s and 40s, and those who are not.)

    But you can say the same about anyone who is successful in achieving any goal. It’s hard to achieve anything difficult without planning, discipline, priorities, and the ability and willingness to say “yes” when an opportunity presents itself.

  116. E says 19 August 2009 at 13:13

    My employer is a high earner. His entire business is based on personal relationships and his talent & passion for wheeling and dealing. I don’t know his background, but with his innate personality he could have pulled himself up out of anywhere.
    He also made the choice to apply his skills and passion to a lucrative field.

    I am a moderate earner. I am clear there are certain things I am not willing to do (sales) and things I am not naturally skilled at (computer programming) which would allow me to make a lot more money. Since I’m not going to change that I concentrate on being the best I can be and making the most I can make within my range of skills and talents – things like choosing certain employers and making myself valuable to the kinds of people I want to work for. I will probably never make six figures but I can live well where I am and I have some room still to grow.

  117. Becky says 19 August 2009 at 13:15
    I’m going to talk about high earners and low earners who started off pretty equally. I was fortunate to go to a private high school and a good college. My high school friends are consistently college-educated, from educated families. So we all had a leg up in life. Now we’re all around 40, so our careers have had time to gel and shake out.

    Some of my friends earn six figures, some around $30 K per year. The differences are:

    – the high earners mostly chose technical fields (engineering, geology)
    – when the high earners complain about work, they complain at a high level – corporate strategy, personnel decisions, process issues, having the right people in the right jobs.

    – the medium earners chose non-technical fields (teaching, interior design)
    – otherwise, the medium earners relate to their work the same way the high earners do – plus, they engage in continuing education and take on challenges such as moving into management
    – the medium earners change jobs when they are unhappy at work, or if they start to feel unchallenged

    – the low earners chose non-technical fields or defaulted into a career of least resistance
    – when the low earners complain about work, they complain about personalities.
    – If there is a process problem, they complain to let off steam, and are uninterested in talking about potential solutions
    – the low earners do not actively look for a new job if they’re unhappy in their current job. Thus their work life spirals downward until they are laid off or let go – not the strongest position for finding a better job next time. They spend a lot of time in dysfunctional workplaces.

    In other words, career success for my privileged cohort is based mostly on initiative and engagement. High earning has a lot to do with field of endeavor, but even in a moderately-paying field like teaching, engaging with the work tasks and doing them as well as possible makes a huge difference in long-term success.

  118. mhb says 19 August 2009 at 13:24

    I started writing a comment, but it just sounded angry – I’m one of those “low wage earners” (though I don’t think of myself as low income, necessarily) who honestly felt like I was being called lazy. I work very hard and am good at what I do, thanks.

    I deleted my rant because Anna (#111) put what I was thinking into a well-crafted comment with a lot more class what what I was going to post. Well said, Anna.

  119. Anna says 19 August 2009 at 13:27

    I have to say that some of the comments here about how people self-sabotage or under-achieve are interesting.

    Perhaps this question would be meaningful if it were rephrased as: how are people who are high achievers in their field different from people who are low achievers?

    Using income alone as a marker of high achievement is too confusing because it brings in a slew of variables that are not within the individual’s control.

  120. Bill G. says 19 August 2009 at 13:36

    It’s not how much you make, it’s how much you keep 🙂

  121. Pirate Jo says 19 August 2009 at 13:54

    Not everyone has the DRIVE to make more money. When I was in my early 20’s and broke, I could quite truthfully and honestly say that a lack of money was the root cause of pretty much all my problems. So it was a big deal back then. I think you really do need to at least get to the point where it isn’t a struggle to make ends meet.

    This is much easier if you don’t have expensive tastes. I do my own nails, drive a used car, and live in a two-bedroom condo instead of a McMansion. I chose between having someone clean my place for me once a month and having cable TV (I chose the cleaning person.) I have a couple of nice bicycles, but don’t buy many new clothes. So in other words I have a few luxuries and comforts, but not all of them I could have, and I’m okay with choosing between them. I have 65% of my mortgage paid off, no other debts, and no kids.

    But once I got to that point (where a lack of money wasn’t a problem), I just stopped caring about making more money. I have no interest in a new car or a bigger home. My life revolves around my life outside of work. I don’t *hate* my work, but it’s never been anything more than just a way to pay the bills. I don’t want to take on the added stress of having other employees report to me, for example. H.R. hassles are not for me! I don’t want to work evenings and weekends. I don’t want to have to make important decisions that affect lots of people. I just really don’t want to have to think about work that much when I’m not there.

  122. Ross Williams says 19 August 2009 at 13:58

    “You may accumulate lots of financial rewards but it will eventually catch you. Look at Bernie Madoff.”

    There are 1000’s of Bernie Madoff’s out there who haven’t got caught. And plenty of others that have kept on the right side of the law while acting no different in terms of the things I mentioned.

    I don’t have a low opinion of wealthy people, most of them were born with it, many of them were lucky, a few used superior talent, intelligence and/or initiative. Very few of them worked any harder than the line workers in a meat packing plant. They didn’t make any “better choices”, they just had a better list of choices to choose from.

  123. Kurt says 19 August 2009 at 14:19

    An independent housecleaner was in my place once, cleaning up after some sloppy contractors. He asked my opinion of the difference between rich people and poor people. I gave him a pretty lightweight answer, then asked him the same question.

    He told me that his (poor) friends all have nicer TV sets than his (rich) clients. His explanation was that poor people have their priorities screwed up.

    Maybe financial planning needs to be taught in high school? Maybe earlier? But you can’t fight the draw of status with a high school class.

  124. J.D. says 19 August 2009 at 14:30

    Thanks, everyone, for a great thread. I was very worried about the path the comments took at the beginning, but things seem to have settled down into a great discussion that examines multiple sides of this issue. Great stuff.

  125. Scott R. says 19 August 2009 at 14:41

    I want to elaborate a little more on my earlier post (#47).

    Both my spouse and I had a lot of responsibility put on our shoulders when we were young; she because of a parent’s suicide and the resulting family nightmare, me because my father was carted off to jail when I was young, my mother is bipolar (unmedicated), and my brother has a severe medical condition. Etc etc. So both of us learned very early on how to take care of ourselves. I remember months when my mom didn’t have enough money to buy groceries, and family friends would leave bags of bread and peanut butter on our doorstep.

    Looking at us now, I’m guessing a lot of folks might assume we had everything handed to us on a silver platter, because we’re both very easy-going and self-confident, and doing very well in life, materially and socially. But, of course, looking at where we started, it would have been much easier for both of us to end up repeating the same cycles our families did, making bad (really, really bad) decisions, then considering ourselves victims, or blaming “the system”. Instead, we learned what not to do from the examples around us, used school as an opportunity to pull ourselves up, and stayed focused on what we wanted (first, to go to a good college far away from home, then to find a good partner, good friends, and a good career). We knew no one else was going to do any of that for us, and that opportunities won’t present themselves to you if you’re not prepared for them.

    Unfortunately, a lot of young people are fed the myth that your teenage and college years are supposed to be basically free of responsibility, and that you shouldn’t worry about anything other than passing your classes, dating, and having fun until you graduate and enter “the real world”. Is it any surprise that so many 22 year olds end up moving back in with their parents?

  126. Shara says 19 August 2009 at 14:42

    @ Ross:

    1) The Millionaire Next Door has some good statistics on people who were “born” with wealth, and how they DON’T hang onto it without work. As far as I know your assumption isn’t supported by facts at all.

    2) Wealth and income are two different things.

    3) I feel sorry for you and your outlook, it’s very pessimistic. Success (and therefore money) only come to those who are dishonest and amoral and steal it from the rest of us? Is there no point to working hard since what you earn will just be stolen? The only way to remain moral is to be poor, or at least not rich?

    In my experience people like you previously described don’t amount to much. Perhaps there are successful people that hide their sociopathic tendencies from me but from my personal experience (opposed to assumptions about people I’ve never met) dishonest people survive, but rarely thrive: People who I knew who cheated in college got okay jobs, but never went anywhere professionally (many are out of work now). Businesses that I know have behaved dishonestly usually have gone out of business and have never expanded (one I know of personally is currently on trial for criminal behavior). Renters who were dishonest still have somewhere to live, but nowhere nice. Of my coworkers who have been dishonest some have achieved temporary success, but have stagnated while others have passed them by.

    I believe you can’t fool all of the people all of the time. There are going to be bad people who achieve enough success that they can float after they are found out if they are smart about it. But for the most part the truth eventually comes out, even if only in bits and pieces.

    And those that HAVE achieved success are usually unhappy. It’s amazing how dis-satisfied the dishonest are with life and they wind up blaming others and attributing THEIR success to dishonest means.

  127. Beverly says 19 August 2009 at 14:52

    I think hard work, networking and opportunity are all big factors. I can’t say I think education is a big factor. I also think it’s amusing that teachers are considered low income. Maybe it’s different in other states but where I live they start around 40k. I have a college degree and I don’t make that much.

  128. Tim says 19 August 2009 at 14:54

    I hate to point out the obvious, but the biggest difference between the two is $70,000.

  129. Allen says 19 August 2009 at 15:03


    I generally enjoy your posts but I find this topic ego driven and not very worthwhile. It seems like the article was to pat those who have high incomes on the back while reminding those low income earners that they need to behave differently. As many have experienced over the last couple of years, you may be a high income earner today but that could be gone tomorrow, a fact that none of the traits you listed will affect!

    I think if you want to have continued success and a high income, you need to rethink your posts.

  130. PC says 19 August 2009 at 15:38

    I believe there is truth to all points made in the post and the comments. Especially when it comes to people pursuing their goals, and luck. By luck I mean creating or taking advantage of opportunities to have luck.

    I came from a poor background and had the “opportunity” to get a regular education and eventually land a great job (after constant trials) where I’m happy and still pursue higher education and goals professionaly and in general life. I trully think having the opportunity is the key. Whether it is to do something different, to get highter education or simply switch careers. The other factor is yourself, you have to want it. Then again who says that the person making 30K is worse off or less happy that the person making 70K poping anti-depressants.

    Now I work with a few people that appear to be working so much harder and longer for relatively same pay but seem pretty peeved when others get ahead of them and call it “lucky”. From what I have experienced and noticed hard work is not everything, there needs to be a balance I think. The long hours, hard work, watching what everyone else is doing and waiting for the giant piece of luck to happen can make for a very long wait.

    Opportunities for “luck” can be created, take people up on offers to do something rather than constantly declining simple things. Even if nothing happens you get to learn or experience something new. Whether it is golf, coffee/tea or a drink after work or a simple hallway conversation, just get in there. I don’t like golf but I still venture out once in a while because I enjoy the outdoors, the people and conversations. That will build relationships, future conversations and more opportunities and memories which are vital when it comes to someone else making decisions about you. It is like the lottery, you have to participate to win. A winning ticket is not just going to fall on your lap.

    Just my $0.02 today, I got worked up about a co-worker complaining that people joke and talk about non-work related things while they don’t get recognized.

  131. Texas Tanker says 19 August 2009 at 15:41

    Two words, “choice” and risk”.

    15 years ago I was married with two small children and was making $20K per year.

    I “chose” to join the U.S. Army, endure some pretty grueling training, be separated from my family, and then uproot them to move across the country.

    After my stint in the Army, I then “chose” to become a full time student at the University of Texas to earn a degree in Economics. During this time, I worked part time and racked up a lot of student loans just so I could pay the rent and feed my family. I knew the debt was a “risk”, but I was betting the risk would pay off.

    After graduating, I “chose” to go to work for an up and coming PC company. I took some “risks” while I was there and took some roles that were a stretch for me. Some of these were near, career limiting disasters. But I learned from those mistakes, and more importantly…I didn’t give up. That tenacity led to bigger and better roles as I was given more responsibility.

    After almost a decade at that PC company, I was approached by another firm that valued by experience and knowledge and offered me a position of greater responsibility and pay. After a little over one year in that role, I have been stretched more than ever and had my share of failures. But I continue to learn and grow.

    Please know that I wake up every day and I am blown away at how blessed I am, and I thank God for the opportunity he has given me. But “faith without works is dead”, and do not tell me that it was “luck”, or that I have no control over how my life turns out. I dare you to tell that to the immigrant from Cuba, Kenya, Russia (name your developing country of choice), that is now a doctor, engineer, or small business owner.

    I also do not attribute “high income” with success. It is more important to pursue ones dreams. I know plenty of people who make lower salaries who love what they do and are therefore an absolute pleasure to associate with. Conversely, I know people who make substantial incomes and are miserable jerks and I can’t stand to be around them.

  132. R Hookup says 19 August 2009 at 15:54

    I’ve worked in recruiting (always inside companies) for the last 20 years, almost all in the high tech sector. The best earners (at least in terms of one year at a time vs. entire career) are sales people. I filled a job last year at $350k and am helping hire three folks at $240k right now. They’ll make a lot more money than that when (if) they beat their numbers.

    Selling is one of the toughest jobs out there, at least considering how few of us actually want to do it (and I’ve turned it down a few times). People who get really good at it and are in the right field and with the right product (there’s that luck factor again) can do just about whatever they want. In almost every field, it’s the people who can sell (formally or not) who end up being the best earners.

    Don’t ask about their net worth, though, because sales people are the worst at lifestyle inflation…(unemployed sales guy: “I need to make $300k because I have a lifestyle to maintain…”)

  133. Des says 19 August 2009 at 16:14

    I think there may be a disparity in what folks mean by “hard working”. Most of the people I know (regardless of their income level) work hard on the clock. I see no difference in work ethic on the job.

    However, the high-income earners I know work hard in their off hours as well. They are small business owners, or techies that have on-call duties. They spend time going to night school and seminars to further their earning potential.

    My low-income friends spend their evenings with their children (if they have them) or watching TV (if they don’t). As stated by others, sometimes that is by choice. I commend those with small children who chose to take a pay cut when it meant more time for family. Are they poor? Heck ya, they are. But its worth it.

    So, I think when some people talk about high incomes earners working hard, they don’t just mean at the job. They mean working hard in life and sacrificing time and energy (unpaid) to achieve their goals.

    None of my low income earning friends spend their off hours on career advancement.

  134. Lisa says 19 August 2009 at 16:14

    I sort of agree with #7’s first sentence, but I think it’s the other way around.

    High income earners must feel entitled to a high income at some stage so that they can ask for it and get it. I have a problem with this. I find it hard to imagine myself earning a lot.

    When I went for my first job after earning my PhD in math (in quantitative finance) they asked me to name a salary. I had done some research but assigned more weight to the lower numbers than the higher numbers I was told, because they seemed more believable. So I think said 50K. The interviewer countered with 60K. So I guess I low-balled?

    Then that’s what I earnt… until I left the job because it was sucking away my life and my health and my soul. I don’t think I’m ever going to earn all that much money.

    (BTW, it wasn’t US dollars, but you probably get the point).

  135. Frugal Bachelor says 19 August 2009 at 16:25

    The amount you earn is mainly a function of your geographical location. You can easily debunk the myth that ‘work ethic’, ‘skills’, ‘quality work’, etc. have anything to do it, by looking at migrant factory workers in China, farmers in sub-Saharan Africa, or janitorial staff in India, who do the EXACT SAME JOB (and frequently longer hours, and deplorable working conditions) as their counterparts in USA, Europe, Japan etc. but their earnings are a tiny fraction of their wealthy counterparts – whether measured in dollars or rupees, size of their house, whether or not they own a car, whether they will be obese vs. starving, etc.

    If conditions vary so drastically across the planet, how can you expect them to boil down to a few simple factors inside the countries where the streets are paved with gold. My personal opinion is that most people who believe it is simply a matter of working hard are taking most of which was handed to them for granted. Immigration shakes things up, only a lucky few can get to USA/Europe/Japan even illegally. Also, USD$30K is not in the ball park of ‘low-income’, it is 8x as much as our average brother or sister who we share the planet with earns, and affords a commensurably more comfortable lifestyle (nice place to live, never worry about being hungry, a car – maybe not a luxury Euro import but something that gets from point A to point B, which is way more than most people will ever have) – bad number to bring out to describe low-income.

    “I won the lottery the day I emerged from the womb by being in the United States instead of in some other country where my chances would have been way different.” – Warren Buffet

  136. Jon says 19 August 2009 at 16:30

    After filing through most of these comments, its clear this is a complex question. The statistical evidence is clear that demographic traits like race, gender, age, education correlate highly with income levels, and set a base level that is difficult (not impossible) to move beyond. Beyond that there are intangibles that influence income. The Metafilter article lists intangibles, but I think they’re the wrong intangibles – not just because they don’t accurately represent either high or low income earners in any identifiable way. In my experience, things like work ethic and solution orientation aren’t even static from job to job for the same person. Intangibles that I put more stock in are an understanding of how income is earned and accumulated in our economic system, and knowledge and willingness to prioritize income level over other goals. If you aren’t able to recognize how your choices might impact your income, you’re much less likley to make the right one! On top of all of that is lady luck.

    An interesting topic, and I think it has provided some answers, but perhaps not the ones you started out with JD!

  137. Sierra Black says 19 August 2009 at 16:56

    @ ethel: I love you. Thanks for saying everything I was thinking, with stats to back it up.

    @JD: I love this blog. But I’m amazed that your original article mentioned nothing about education. In my social community, that seems to be The Thing that predicts whether someone makes closer to $100,000 r $30,000. Granted, I live in a university town, and socialize with a crowd of academics.

    oh – another thing – I do see amongst my friends (who mostly have advanced degrees and work in creative, non-profit, academic or technical jobs), some of the character traits you talk about. My friends who are dedicated to their work, who do what they love, and who are focused on career tend to earn more than people who are chronically disorganized, late, just doing it for a paycheck, etc.

    Additionally, people who love what they do enough to stay in a stable career for about ten years seem to get a big financial pay-off that those of us who gad about from career to career (or step out of the workforce to care for kids) miss out on.

    But this is amongst people who all have roughly similar backgrounds – they’re mostly white, nearly all college educated, most of the higher earners are male, and they tend to be in their 30s and 40s making these six-figure salaries. Why does my husband make 5x what my stepfather earns? He has a PhD.

  138. Janette says 19 August 2009 at 17:07

    Willing to give up everything else for the first ten years while becoming a professional __________ (lawyer, doctor or business owner)
    After 40 years of watching- Those are the differences.
    Laughing that Walt thinks teachers generally can make $45 to start!

  139. Dude says 19 August 2009 at 17:55

    > I have noticed that many, but not all, high income folks tend to be better at planning than lower income folks.

    I agree with this. Most all high income people I know A) set goals B) work towards those goals.

    they delay gratification until they reach them.

    Most low income people do not.

    A lot of it I think; is just good old fashion self-discipline

  140. Caroline says 19 August 2009 at 18:12

    Walt, I thought the same thing.. my husband is a English teacher at a public high school and makes $95 000 after 10 years at the same school. That’s pretty good!

  141. Avistew says 19 August 2009 at 18:28

    I think some differences might be time-dependent. If you study something that’s in demand, you’ll make more than if you have the same job that isn’t on demand.
    Flexibility might be important too. You could find a good paying job in another city or even country, and need to move. You could need to travel a lot.

    If you have a family, you might not want to leave them behind.
    Similarly, on the “hard work” thing, you might not be lazy at all, but have other priorities than your work; spending an evening with your family for instance. Spending time with them regularly.

    One thing I have noticed about many high-income earners is how much of a priority their job is. It’s a very important part of their lives, sometimes the most important ones. They’re willing to sacrifice other things for it, that lower-income earners might not.

    Some are even willing to sacrifice job satisfaction. Do a job they hate but that earns them a lot. My father, a doctor, is one of those. He doesn’t like his job, never has. But he earns a lot doing it.

    Some also have “making a lot of money” as their first priority when choosing a job. They might not even understand why anyone would want to be a school teacher and earn less than they do. I know LOTS of these. They’re very rich, their job is all their life but it’s not their ideal job, and they’re basically waiting for retirement so they can do things they like.

    I think the reason why I don’t even want to be a high-income earner is that the ones I saw around me were either miserable, or happy about things that could never make me happy.

  142. Kaya says 19 August 2009 at 18:48

    Some great perspectives here! I want to add to the point raised that wealth is related to planning. The fact is, if you aren’t taught how to build wealth, even making 100k a year with no major debt won’t guarantee financial gain.

    There are tools that someone like Warren Buffet use that a great many of us were never specifically given. Don’t buy that coffee, wait for the sale, add to investments and savings first…

    Earning income is only one step among many on the road to wealth. You need to be able to see the complete picture if you are to truly capitalize on your earning potential.

  143. Jay says 19 August 2009 at 18:53

    I completely agree with Brenda #11. We do not live in a utopian environment of meritocracy. Class, race and color are factors that can trump all the attributes listed in J.D’s article. I can cite several examples pf Ph.D’s delivering pizzas, qualified engineers driving taxi cabs or working as security guards on minimum wage and also people who cannot even perform simple mental computation of 8X7=56 but still holding 6-figure paying, secure, stress-free government jobs.

  144. Janie Out of Debt says 19 August 2009 at 18:55

    I think it is hard work but I also think it is your belief system. Do you believe that you can make $100,000? Maybe the low earners don’t believe in their abilities as much as the higher earners do.

  145. AJ says 19 August 2009 at 18:55

    Funny you made this post. I just read a book on high and low income earners among women.

  146. AB says 19 August 2009 at 19:31

    I just want to point out for everyone saying they’d rather make less and have free time than make tons of money and do nothing but work… often lower paying jobs require as many or more hours than middle to higher paying ones.

    All the people I know who make more than 50k a year have more free time than the people making 20-30k. So before quitting a high paying job you hate for the magical land of the lower paid but happier, make sure to explore the jobs/lifestyle you are thinking of transitioning into…

  147. ce says 19 August 2009 at 19:31

    Interesting conversation!

    I think high earners are willing to ask for more money. So many people just take what is offered and never negotiate! You’ll never get it if you don’t ask.

    I also think high earners usually stand out. Either by being very good at what they do, or thinking of something that no one else did (creating a new product, suggesting something that saves the company time or money $$), or just by having a “stand-out” personality that gives them an edge over other employees.

  148. J.D. says 19 August 2009 at 20:04

    @AJ (#145)
    C’mon! You can’t just do that. What did the book say? What’s the difference? 😛

  149. Ross Williams says 19 August 2009 at 20:06

    “The only way to remain moral is to be poor, or at least not rich?”

    That was one of Jesus Christ’s basic teachings: “And again I say to you, It is easier for a camel to go through the eye of a needle, than for a rich man to enter into the kingdom of God.” Do you really doubt it is true?

    There is a real effort here to make wealth the result of moral superiority. To the contrary, I think it is far more common that it is a result of a willingness to take moral shortcuts. Compassionate, generous, caring, honest people need not apply.

    No one in the United States earns their money. Whatever added wealth we create is on the backs of the wealth our ancestors created. We inherited most of our standard of living. Warren Buffet, quoted above, makes that point nicely.

  150. Lynn says 19 August 2009 at 20:11

    I’ve thought about this article and comments a lot since I read it earlier today. My first thought was, “Man, I exhibit all of the traits of high-income earners. Why am I a low-income earner?”

    I think it boils down to the priorities in my life. I don’t want the pursuit of more money to rule my motivations. Sure, earning more money would help greatly but it has to fit into the bigger picture. I’m still looking for that “perfect balance.” 🙂

    Interesting conversation!

  151. Shogun @ Financial Samurai says 19 August 2009 at 20:44

    Hard work is definitely KEY to making money compared to people within your own profession. Other than that, at least 50% of making money is being in a profession that allows you to make a lot of money.

    My co-writer RB writes a great post on my site entitled: “Rich People Try Harder: True or False?” The answer is true, to a point.

    I absolutely WISH the teachers of the world could be the well paid. We need more good teachers!

    $30,000 and $100,000 is a decent jump. But after you make about $200-250,000…. much more doesn’t make that big of a difference in your lifestyle. The next STEP is probably around $750,000 and higher. Trust me, I’ve been at these levels. However, one doesn’t need to survive on more than $150,000/yr. Everything else just goes to saving.

    Making more money IS what it’s cracked out to be. Having no financial worries is priceless.

    Ultimately, savings is what it’s all about b/c one no longer has to work and can live free as a bird.


    Slicing Through Money’s Mysteries

  152. Amy F says 19 August 2009 at 21:26

    As the stay-at-home wife of a high school physics teacher, your example amused me. We’ve watched his high school and college friends go on for PhD’s and most are making no more than he is because they’re stuck in post-doc land, but eventually they’ll make much better money. 15 years of him having time to spend with family instead of being always in the lab is worth it to us.

  153. mary says 19 August 2009 at 21:27

    Love this post. I’ve been poor and I’ve been rich. And I’m the same person with the same work ethic. I have to admit though, that when I worked at low paying jobs, I never thought it would be forever. I was always looking to get ahead and make more money. I knew I needed an education. It took me 17 years to get my degree at night. All while working a full-time job and raising a family.

    I think one of the more important factors is your beliefs about money, your level of ambition, and your beliefs about yourself. I saw several folks say something like i traded quality of life for less money. That’s a belief…that you have to make the trade or that you can’t have lots of money from work and a high quality of life. Many people have issues with money…they don’t feel worthy, feel it would take too much education or too much work, that you become a bad person, greedy, part of the machine, etc. if you make high dollars and so on. All of these beliefs can keep you from being a high income earner. There’s nothing wrong with that if it’s what you want.

    I know several folks and have clients who are smart, motivated, skilled, work hard, etc. but don’t make much money. In these cases, it is usually their beliefs that put them there. All of them say they’d like to make more money, but it’s difficult to change these internal beliefs and put that new belief into action.
    I also think planning skills, a certain amount of self-discipline, being goal oriented all help.

    I also agree that things like education, gender, age, personality, personal traits, work ethic, work location, career type, etc. all can support or negate your ability to make high income. But we can all think of examples where any or all of these things were against the person and they still became rich. Or all those things were in the person’s favor, but somehow they just didn’t achieve what they set out to do.

    I also believe luck plays a part, as it certainly did in my own career. A million years ago, I was working as a very low paid junior secretary and heard someone talking about “programming a computer”. They were going to take a test and see if they could get a job at the local insurance company that was offering training classes. For whatever reason, I applied. I didn’t even know what programming a computer meant, but I passed the logic test and the rest was history. From programmer to CIO. Did I love it? Well, I was good at it. I loved the first 10 years, the remaining 15 not so much. There’s nothing quite like working at a job you love and are good at. And the money is just gravy.

  154. Ben says 19 August 2009 at 22:15

    @149 Ross Williams
    Sorry, I don’t want to turn this into a religious discussion but I thought I would point something out so you wouldn’t feel guilty in the future for having or accumulating wealth. The passage of scripture you are referring to is in Luke 18 and goes like this, “For it is easier for a camel to pass through the eye of a needle than for a rich person to enter the kingdom of God.”
    However you are missing the very next two verses (which I think is a big problem in Christianity-things are taken out of context). The verses go like this, “Those who heard this said, “Then who can be saved?” And he said, “What is impossible for human beings is possible for God.”
    Christ’s point was not that rich men cannot be saved (although they may have more earthly distractions, which is the source of misinterpretation). His point was that NO ONE can be saved apart from God’s grace. Rich or poor we cannot save ourselves, it is only God that saves us.
    Also there are many verses that not only validate the pursuit of earthly gain through hard work, but seem to command it. The problem with money surfaces when it is your only goal, on par or higher than the pursuit of a relationship with Christ.
    Proverbs 13:11
    “Wealth obtained by fraud dwindles, but the one who gathers by labor increases it.”
    Proverbs 21:5
    “The plans of the diligent lead surely to advantage, but everyone who is hasty comes surely to poverty.”

    There are many more….

  155. Ann says 19 August 2009 at 22:41

    As someone who was a dirt-poor immigrant and is now a high-income earner (BTW, I don’t think $100k/a is a high income, but for the purposes of this post, I’ll go with it), I hate it when people say I got where I am because of luck.

    Ah, no.

    For me, it came down to drive and an unshakable belief I would get beyond the six-people-in-a-one-bedroom-apartment lifestyle. But I didn’t sit back and hope it would work out that way. I worked my butt off in school (well, not really, since school wasn’t exactly rocket science), in the business I started at 13, in the highest-paying job I accepted after graduation. While other people my age were out partying or giggling over the latest boy band, I was at home writing, programming, planning my path to Freedom 45. I went out with friends, but only selectively because blowing money on beer didn’t seem like the intelligent thing to do.

    All too often, I hear certain co-workers bitch and whine about how the work is too difficult/time-consuming/tedious/etc., how the day is dragging as they watch the clock, and how their raises are always so low. And they do all this within hearing distance of the boss.

    Me? I don’t say no to assignments; I’ll spend how ever many hours I need to get projects done on time and on budget; then I’ll look for improvement opportunities because I want to work smarter, not harder. It’s gotten to the point where I’m doing the job of two and a half people because I automate where I can whereas others stick to the status quo because, for them, it’s the path of least work.

    However, like I said at the beginning, $100k/a isn’t a high income. Reaching that level isn’t that difficult if you’re willing to work for it.

    To do a meaningful comparison between low- and high-income earners, you need to survey the people who earn 7 figures and up. Every time I hit the owners’ box of the local NHL team, which is filled with some of the most successful men in this city, I feel a different vibe. Luck played a minuscule factor in these men becoming multimillionaires and billionaires.

  156. Shogun @ Financial Samurai says 19 August 2009 at 22:55

    28 year old kids fresh out of a Top 10 business school make on average $140,000-150,000 their first year on the job. Some make $200,000 after bonuses.

    The median salary for the Top 50 MBA school graduates is $108,000.

    If you want to make more money, simply go to a great business school and get into finance or strategic consulting. It’s pretty straightforward.

    I’m just agreeing w/ Ann… $100,000 is not that much money, especially in a big city. Oakland dock workers who work 35hours a week earn $120,000 on average.

    It’s easy to make money if you want. What’s hard is saving it, and investing wisely.



  157. Sarah says 19 August 2009 at 23:01

    I see a lot of myself in that list, and that (along with natural talent/intelligence) is what gives me some level of job security. I might even be able to leverage it into a promotion, but I don’t know if I can afford to. I don’t work 10-hour days because I love my job, I work them because I need the overtime pay to cover my medical bills. Management positions are salaried.

    Lists like that may have something to say about why I have more earning potential than others at my current job, and if you’re looking to increase your earning potential, they wouldn’t be a bad thing to focus on. In the grand scheme of things, though, the fact that I have a chronic illness has affected my earnings far more profoundly than any fluctuations in my work ethic. It’s only after you take the big things into account (education, upbringing, location, gender, race, disability, etc) that the little things start to matter.

  158. Anne says 20 August 2009 at 04:20

    Both of my parents fall into the “high earners”, making well over $100,000 each. They are also black immigrants who moved to the US in their 30’s. I’d say the key factors differentiating them from lower earning folks are these:

    1) Choice of career. They’re both in professional careers and my dad’s is pretty specialised. In addition, my parents have both worked in a sector that is pretty well compensated on the whole.

    2) Education. Neither of them went to college in the traditional way, but both have professional qualifications which are broadly equivalent to undergraduate work in their fields. My mother now has an MBA from one of the top business schools in the country, but she was making over $100K before she even got that.

    3) Experience. Neither of my parents started out making such high wages- that only arrived once they had 15+ years working experience and had worked their way up into senior roles.

    4) Luck & location. It was pretty lucky that my dad got a job that led them moving to the US where they could make this kind of money (had they stayed in their home country, they never would have been high earners inthe first place.)

    Now, both of my parents are also hard workers, driven to be successful and are both extremely good at their jobs. These factors of course played a role in their high compensation now, they never would have moved up the ranks otherwise. But these personality traits are in no way the primary factors for how much money they make and have much less of an impact that the four things I outlined above.

  159. Kevin says 20 August 2009 at 05:09

    Ross Williams (#122):

    You are truly remarkable. Every time you post, I disagree with everything you say. I keep thinking surely eventually you’ll say something I can agree with, but so far, you’re unwavering in your ability to write things that I completely disagree with.

    “There are 1000’s of Bernie Madoff’s out there who haven’t got caught.”

    That, of course, is nonsense. You’re suggesting that there are “1000’s” of individuals out there who have swindled billions of dollars in ponzi schemes. That is, there are TRILLIONS of invested dollars out there that aren’t really there, and millions of investors are going to lose everything. That’s obviously impossible.

    “I don’t have a low opinion of wealthy people, most of them were born with it,”

    Provably false, as shown in “The Millionaire Next Door.”

    “many of them were lucky,”

    As has already been discussed to death in this post and countless others, rich people had largely the same luck as poor people – they just were prepared (or willing) to capitalize on it when opportunity presented itself.

    “Very few of them worked any harder than the line workers in a meat packing plant.”

    While I’m sure some of them landed cushy jobs where they didn’t have to do much, I think most rich people do indeed work quite a bit harder than unskilled laborers in factory jobs. I think you’re failing to account for risk and initiative.

    I think many of those factory workers are paradoxes. They THINK they’re working hard, getting up at 5:00 AM every day and griding out another 10-hour day in a boring, manual-labor job, but in reality, they’re lazy. They COULD improve their lot in life with a little extra training, or starting their own business, but that would take them out of their comfort zone. That would entail risk – financial and otherwise – that they’re not willing to take. It’s much easier to instead continue punching a clock at a factory (owned by someone who DID take risks), putting in their 10 hours (with two 15-minute union-mandated breaks), then go home, crack open a beer and complain to your wife about how hard you work.

    “They didn’t make any ‘better choices’, they just had a better list of choices to choose from.”

    Again, obviously nonsense. Choosing to get a degree instead of dropping out of school is a “better choice” that everyone in a given high school has, yet some end up rich and some end up poor. Life is a series of choices. Take the affordable, sensible mortgage, or borrow up to our eyeballs for a McMansion. Drive a beater until we can afford to pay cash for a reasonable used vehicle, or finance a new BMW at 8.9%. Eat fast food every night, or make a week’s worth of healthy meals from $50 worth of groceries. Apply for the promotion or not. Take nigh classes or not. Get a certification to improve your resume or not. Learn a new skill from the vast amount of information available for free on the Internet, or open a beer and watch “Survivor” (after all, you’ve earned some “downtime”).

    Ross, I’m serious – I disagree with everything you say. If you’re trolling, touché. If not, then I really wonder how you came to believe the things you profess to believe.

  160. Ross Williams says 20 August 2009 at 06:02

    “You’re suggesting that there are “1000’s” of individuals out there who have swindled billions of dollars in ponzi schemes. ”

    No, I’m not. We were talking about people’s morals, not their “success” or even the legality of what they did. There was a lot more money lost in the real estate bubble than by Bernie Maddof’s scheme and most of the people who ended up with that money in their pocket understood that they were making money at other people’s expense.

    “Provably false, as shown in “The Millionaire Next Door.””

    No Kevin. The fact that someone wrote a book to prove their point, doesn’t mean they proved it. The fact is very few wealthy people were born in huts in Africa or in South Central LA for that matter. Many wealthy people were born to graduates of Yale and Harvard.

    “rich people had largely the same luck as poor people – they just were prepared (or willing) to capitalize on it when opportunity presented itself.”

    Riiiight.People in born to poor African parents had the same opportunities as people who attend Harvard as legacy admissions? How can you seriously believe that?

    “They THINK they’re working hard, getting up at 5:00 AM every day and griding out another 10-hour day in a boring, manual-labor job, but in reality, they’re lazy.”

    They just work hard at being lazy. While the guy who spends his days socializing with other wealthy people is REALLY working hard.

    “that would take them out of their comfort zone.”

    Probably, but not nearly as much as working as hard as those factory workers would take a lot of wealthy people out of their “comfort zone”. I suspect a lot people stay in their “comfort zone” but some “comfort zones” are more lucrative than others. That undocumented worker who slipped across the border to work in a meat-packing plant is a lot more out of his “comfort zone” than that Princeton graduate who made a fortune bundling bad mortages into securities.

    “Choosing to get a degree instead of dropping out of school is a “better choice” that everyone in a given high school has”

    No, it isn’t. I knew plenty of kids growing up in a middle class suburb for whom college was not an option. They were in remedial classes, I suspect in part because they were born to parents who didn’t read to them as children. Those parents were hard working, those children are hard working. They are never going to be rich unless they get extremely lucky.

  161. oersawv says 20 August 2009 at 06:28

    “It must be possible to have an intelligent conversation on this subject without being rude and without becoming defensive.”


    Welcome to the intratubes.

  162. Josh says 20 August 2009 at 06:38

    Ross Williams might be the saddest commentor I’ve ever read at GRS.

    If I ever believed half of that non-sense I’d do myself a favor and end it right there and then.

    But aside from him and a few others whining about the article, this was an excellent article and even better discussion to read. Very interesting.

  163. Laurie says 20 August 2009 at 06:59

    This is so funny to me. I earn $100,000 a year – I’m 28 and have an MBA – I’ve been working in my field for over 5 years.

    However – yes, I earn $100,000 – but I live in one of the most expensive places in the country. I have a massive amount of debt. I have a huge mortgage.

    What really counts is what you do with that $30,000 – $100,000 that you earn. Do you live within your means? Do you have a lot of disposable income? Have you saved for your future? I think those are much more pertinent questions that how much money you earn, in the absolute sense of the word.

    My father earns about $60,000. He owns his house and his land outright. He’s 62. He’s been saving for years and years and has very few fixed costs. He’s in great health but has full health insurance coverage through his job, where he is essentially the boss. While I earn a full $40,000 more than him in absolute terms, he is far “richer” -since he has almost complete financial freedom. I, on the other hand, am saddled with crippling debt due to no one’s fault but my own.

    So you see – $100,000 is not a magic number. It’s what you do with it and it is how you live your life.

    Not to sound flippant about it, but earning $100,000 was really easy. I went to good, public schools for my undergrad and for my MBA. I’ve always had a high work ethic, but I’m not a genius, and I’m not even particularly talented. I grew up poor but from educated parents. No doubt that helped, but I certainly did NOT grow up with a silver spoon in my mouth – we had food stamps when I was a kid.

    I work at a very intense job in a high-tech field but my role isn’t overly technical. I work many hours of the day but I also get a certain level of freedom that isn’t there in other jobs – because in many ways, I’m also the boss.

    Anyway – you make choices in your life that lead you to these places. But my main point is – $100,000 isn’t always what it seems.

  164. Ross Williams says 20 August 2009 at 07:08

    “aside from him and a few others whining about the article”

    Do you really believe that anyone who disagrees with you is “whining”?

    “If I ever believed half of that non-sense I’d do myself a favor and end it right there and then.”

    You need to believe that financial success reflects moral superiority to the poor in order to go on living? I guess you will believe what you need to believe.

    There are two questions here.

    One is the self-improvement question. What can I do to be more successful? I think, when asking that question, it is important to remember that financial success can come at a high price in terms of other personal values. Which leads to the second question:

    “Are people wealthy because they are ‘better’ than the other people in some important way?” I think what Jesus was warning is that, to the contrary, the moral compromises needed to become rich make it difficult for someone to live a truly moral life.

    I think there are plenty of things people can do to make financial success more likely. And this forum largely focuses on those things people CAN do. But it is important to realize the things we have control over will not, by themselves, make us rich or even wealthy.

    BTW – anyone in their 30’s who is not a millionaire when they retire is going to be poor. If you take the 4% amount usually recommended to take annually from retirement savings you will only have $40,000 per year. That will not be much to live on in 30 years if you are only getting 75% of the currently planned social security benefits.

  165. Ben says 20 August 2009 at 07:30

    +1 on Ross Williams being the saddest commentator.

    Instead of voting for the next staff writer we should be voting for the next commentator to get banned for spouting absolute nonsense.

  166. Julie says 20 August 2009 at 07:47

    @Kevin (#159):

    What you’ve said here is so deeply offensive that I’m not even sure how to address it:

    “I think many of those factory workers are paradoxes. They THINK they’re working hard, getting up at 5:00 AM every day and griding out another 10-hour day in a boring, manual-labor job, but in reality, they’re lazy. They COULD improve their lot in life with a little extra training, or starting their own business, but that would take them out of their comfort zone. That would entail risk – financial and otherwise – that they’re not willing to take. It’s much easier to instead continue punching a clock at a factory (owned by someone who DID take risks), putting in their 10 hours (with two 15-minute union-mandated breaks), then go home, crack open a beer and complain to your wife about how hard you work.”

    To say something like this, and then accuse someone who dares to disagree with you of “trolling”? Wow. What you’ve said in your comment shows such a deeply rooted ignorance of basic socioeconomic stratification that I don’t even think it’s worth trying to change your mind, especially when you’ve already shown your unwillingness to accept viewpoints different than your own.

    No need to reply to me. I will be sticking to the posts and staying out of the comments from now on – I don’t need to see such classism here. I do hope that in the future, you’ll consider the fact that your broad assumptions can hurt people.

  167. Brenda says 20 August 2009 at 07:51

    I’m disappointed with the people who are smugly dog-piling Ross and using personal attacks (ie: “+1 on Ross Williams being the saddest commentator.”) I came to this forum hoping it would be a bunch of mature adults who could discuss their views without making personal attacks on others like the kids do on the chan boards. Hmm. :/

  168. Josh says 20 August 2009 at 08:10

    Man, this post sure brought out the most sensitive people on earth.

    Ross- You have severe reading comphrension problems, a trend with all your replies I’ve read to everyone and this article as a whole. Never once did I say or imply in any way that “financial success reflected moral superiority over the poor”. You seem to be the one making the judgements based on financial standing, claiming most rich people are cheats, liars, etc.

    Brenda- If you consider calling someones viewpoints sad a “personal attack” you seriously need some thicker skin. My lord.

  169. Brenda says 20 August 2009 at 08:31

    Josh @ comment 168 – In answer to your reply to me: You obviously are having some troubles telling the difference between “attacking a person” and “attacking a viewpoint.”

    You said: “Ross Williams might be the saddest commentor I’ve ever read at GRS”.

    You didn’t say his views were the saddest, you said HE was. Had you merely thought his viewpoints were sad, you might have commented like so: “Ross, your viewpoints are rather sad, here is why…”

    Anyway, that’s all I’ll say to that, because any more is just adding fuel to a fire that doesn’t need any help.

  170. Shara says 20 August 2009 at 08:32


    You may not agree with Kevin, but I think he has a valid point. “Hard working” is one of those amorphous terms. I know very few people who would classify themselves as lazy (some do, and ironically aren’t usually the laziest people I know).

    In physics “work” is defined as force x distance. That means if I pick up 50 pounds and carry it around the world and place it right where I found it I have done no work. I have expended energy but I haven’t fulfilled the definition of WORK.

    It is the same in life. If I hire someone to paint my house and he paints it the wrong color he hasn’t earned his money no matter how much energy he spent on it. I think Kevin’s point was that many people misunderstand the value they are adding by how they spend their time. They think the more weight they carry/hours they work the more value they add, when in fact they are figuratively setting down the weight right where it started. They don’t add value to themselves to make more money or think of how they could add value to their hours worked. I made the same point earlier. Brilliant engineers often fail because they can’t convince customers of the value of their work, and often resent having salesmen make more than them without realizing they NEED those salesmen to be successful themselves.

    Kevin’s example of the factory worker is valid. Many people do back breaking work on a daily basis and think the value of their effort should directly translate into income, without taking into account the value they are actually adding. A man running a picker is going to spend less energy and pick more food than a man doing it with his hands and a bag. Should the man with the bag make more money because of his added effort even though he is far less productive? Does the first man get credit for the risk and expense of buying the picker? The man who owns the factory may sit at home half the day and seem lazy, but it is his capital that allows all of the factory workers to have jobs. And the decisions he makes have much higher value because the whole business succeeds or fails on his actions.

    There is an old engineering story about the old man called back from retirement to fix a machine. People have been working tirelessly trying to figure out the problem on the broken machine. The old man comes in and spends 10 minutes with a wrench, or maybe he just resets the breaker or hits a button. When the owner gets a bill for $1,000 he calls the man outraged, “You spent ten minutes here! How can you justify this bill?!” The man’s response, “The ten minutes was $50. It was knowing what to do that cost $950.”

  171. Ms. Clear says 20 August 2009 at 08:40

    There’s a good story on NPR “On Point” right now about upper class kids whose parents can pay for them to land good internships. They work for free for a bit and then get a highly paid job.

    Needless to say, these opportunities aren’t available to working class kids. They have to work to you know, survive.

    I would highly encourage anyone interested in this topic to listen to the show. Thought provoking….

  172. Kevin says 20 August 2009 at 08:59

    @Julie (#166):

    I’m sorry you were offended, but I’m not going to apologize for having an opinion. That’s what the “comment” sections of these blog posts are for.

    For what it’s worth, I’ve had jobs where I worked shoulder-to-shoulder with blue-collar workers in a factory. It was that experience that steeled my resolve to work hard so I would never have to do that again.

  173. Sally Parrott Ashbrook says 20 August 2009 at 09:28
    Really interesting conversations here.

    One thing I realized in college was how important social support networks are to one’s success in life. People really aren’t self-made. (Even people who start out poor and start their own businesses have good employees, spouses, etc. who are helping them succeed.)

    I grew up with parents who were equipped to help me learn, teachers who believed in me (partly because of who my parents were), and a network of people who pushed me to succeed—who, in fact, would not have accepted less. I left one expensive, elite college when my parents got divorced, my available income (from them) for tuition dropped precipitously, and I became depressed. I came home and was able to live with my mother and drive a car of my own (purchased by my mother, with only partial input by me). Through a friend’s parents, I got a job that let me save enough money to get by when I returned to school a few months later. Many people without a social support network wouldn’t have made it to school and/or wouldn’t have made it back to school; I can take some credit for pushing myself to get it done, but I certainly can’t take it all.

    And when I had major health problems, I ended up in debt, but I never would have ended up homeless even if I had ended up with terminal cancer with enormous bills. Now that I’m starting graduate school, I have a relatively high-earning spouse to let my life stay relatively comfortable while I’m not earning much of an income. Etc. My social support network has always been vital to my success.

    Seeing that also encourages me to be a provider of good support to others.

  174. Josh says 20 August 2009 at 09:30

    Brend- Since the only thing I know of Ross is his view points on this situation, me calling him “sad” is clearly the same as calling his views “sad”.

    Regardless, if you consider calling someone or some view point sad a personal attack you are the one who needs to grow up.

    Shara- That is an excellent post. Well done.

  175. Denise L says 20 August 2009 at 09:52

    @Shara says: “In physics “work” is defined as force x distance.”

    Very true and a fun way to look at the discussion! I’d like to extend this analogy (because I’m a nerd:) Force = mass x acceleration…I’m interpreting “mass” as your “stuff” – brains, skills, etc. Your acceleration = your drive to get ahead. What do others think?


  176. Paul in cAshburn says 20 August 2009 at 10:04
    @ce #147:
    “So many people just take what is offered and never negotiate!”

    Having both the ability and desire to negotiate needs to be punched up, since only a couple of people mentioned it here. Key quote to remember:

    “In life, you don’t get what you deserve, you get what you negotiate.” Chester L. Karrass

    So many people would benefit from going to the library and reading a couple of books about negotiating… It could even be life-changing.

    The importance of reading and continuous learning cannot be overemphasized.

  177. Steve says 20 August 2009 at 10:11

    Paul in cAshburn (#176) Fascinating you bring this up. Just yesterday I came across this link (http://www.glennbeck.com/content/articles/article/196/20717/) about an interview with author Paul Richard Evans who wrote a book about lessons a millionaire taught me. One of those lessons are the 7 words, “Ïs that the best you can do?”

  178. Rachael says 20 August 2009 at 11:18

    My husband is a high school teacher and has observed the family lives – or lack of family life – in countless administrators, principals, superintendents, and other high-paid leaders in the school district. His current principal is divorced and his kids live on the other side of the state. People who earn a lot of money have less time for family. It’s difficult to keep their marriages healthy. They’re not always around to watch their kids grow up. My husband has been encouraged to apply for various leadership positions that would pay better, but he’d rather have stable hours and see his wife and daughter.

  179. Neel Kumar says 20 August 2009 at 11:25

    I feel that successful people have one thing in common – that they are able to make better use of opportunities and connections that they have access to.

    For example, when I was in college, I was woefully bad at approaching professors for bonus marks or research jobs. I knew students who were just as good as me but got better grades because they went and argued their point. They were also able to get research jobs which paid better than stacking books in the library *and* looked good on their resume.

    Even now, I see people skip 401k contributions even when their employers are willing to match! All things aside, take advantage (in a positive way) of the opportunities and benefits. That would help you go further on the path of success.

  180. Rick Francis says 20 August 2009 at 11:33

    I don’t think there is any one ingredient for financial success. Also, many of the factors are uncontrollable.

    Wouldn’t a more important topic be: What can I change about myself that would make me more successful?

    We don’t get to change a lot of factors: our race, gender, family etc. Why worry about the things we don’t control and try to do something about the things we can control?

    -Rick Francis

  181. Jim says 20 August 2009 at 11:35

    Ann #155 said: “BTW, I don’t think $100k/a is a high income, but for the purposes of this post, I’ll go with it)”

    For personal income only about 5% of the population makes >$100k. If you’re above 95% of the population then I don’t think thats anything but “high”. Its certainly not “low” and its not “middle”.

    On the other hand $100k might not go as far in some cities. Thats a different matter really and just a reflection of high cost of living in some urban areas.

  182. Steve says 20 August 2009 at 11:57

    Rick Francis (#180) The first and easiest thing to change is our thoughts. See my comment #46. So many of the things people mention such as luck, opportunity, etc., exist whether we see them or not. When we change our thinking about success or wealth or money, we begin to see the opportunities that were there all along. Other people see us as lucky.

    I need to also state what I mean by opportunity. One commenter talked about rich kids being able to afford special internships. Someone else talked about Africans living in huts not have the same opportunities as US citizens. Life is fair, it is not equal. So, while I don’t have the same EXACT opportunity as anyone else, I do have the same opportunities. I may not qualify for the ABC internship program and company XYZ, it does not mean I don’t qualify for any internships. It does not mean I can’t be anything I want. I just have to take a different path. I submit that all paths are equally difficult/easy in their own way.

    We have to consider how the journey has changed us and made us who we are. One mistake many are making with their arguments is that once a certain level or position is attained everything is equal. The CEO of a Fortune 500 company who arrived via a special internship supplied by his parents is not the same the CEO of that same company who arrived via a grass hut someplace in Africa. Some would say the first CEO had an easier path. It looks that way. But, I don’t think this is true. If you were a stockholder of that company who would you pick to run it? Who do you thing is better prepared? I don’t think we say how “easy” the path of another is.

    I do know this, if I spend my time crying about how easy others are I will achieve that reality. I will feel less and be wanting. If spend my time thinking about the reality that I do want I will achieve that. So I choose to spend my time thinking about the latter.

    If that CEO position was what both people wanted, their life goal, they would both say the journey was easy. who am I to say one was better than the other? When you are doing what you love, it does not seem like work.

  183. Shara says 20 August 2009 at 12:45


    As Force is the tendency to change ones state of motion/rest I think that’s apt.

    I would say what we are debating wrt “hard working” is a confusion between Energy (The ability to do Work) and Power (the rate of doing Work). It takes Energy to do something, but unless you have Power it’s not getting done. People expend a lot of Energy doing things that add little or no value (i.e. they’re not getting Work done), but think what they do has Power, when in fact they’re just moving in circles and ending up where they started.

    High income earners have, intentionally or by chance, discovered a position of high Power. Their rate, or perceived rate, of Work is high enough to justify high income.

    For those of you who have made it this far there is also Power Factor, which is an electrical engineering term essentially meaning Power output compared to power delivered. We have IMAGINARY Power (power eaten up without doing anything) which I guess would be those highly paid people who don’t get anything done. A manager seeks to keep the Power Factor as high as possible which would mean weeding out the poseurs who just look good and collect salary without doing anything productive.

    Okay, I’m geeked out.

  184. Venki says 20 August 2009 at 12:49

    I know some low income group people who work 16 hours a day. On the other hand, there are people who earn 6 figures working for just 8 hours a day. What is the difference between them? Is it hard work? I would say smart work and the INDUSTRY in which you work. Whether you get into a high salary paying industry by LUCK or you chose it INTENTIONALLY, the industry where you work determines your earning. Next to it is the PERFORMANCE. Not everyone is lucky enough to change our industry. This is primarily because of the DECISIONS that we have taken in the past and the COMMITMENTS we have. If you have the DRIVE to earn high I think nothing can stop and you will definitely find a way to earn high.

  185. Jennifer S. says 20 August 2009 at 12:57

    Not to get too classics-pedant on you, J.D., but just wanted to let you know that Xenophon’s “Economics” cannot by definition be a “Platonic” dialogue, since it was written by Xenophon! It is certainly a Socratic dialogue, since both Xenophon and Plato used Socrates as a character in their respective writings (Plato to far greater effect than Xenophon, many classicists would argue). But it is not Platonic.

    (Amusingly, many snobby classicists vastly prefer Plato’s Socrates, precisely because Xenophon’s Socrates discusses rather practical and mundane matters, as in the Economics here!)

  186. Jane says 20 August 2009 at 13:11

    I’m still trying to figure out how Ross could in any way be viewed as “spouting nonsense.” His arguments are perhaps cynical, yes, but still perfectly cogent and held by many intelligent people. The reality is class prejudice is alive and well in this country, as evidenced by many of the comments here. I also think some of you have read too many motivational finance books on how to be rich if you think that hard work and perseverance will always lead to success.

  187. Holly says 20 August 2009 at 13:17

    Just to add fuel to the fire: I earn over $100,000 a year, and my husband earns about $30,000. There is no checklist you could go down, no heuristic you could apply, to tell you which of us earns more unless we told you what our jobs are.

    This post was shortsighted to say the least.

  188. Shara says 20 August 2009 at 13:39


    I think Ross’s comments are more than cynical. The fact that he thinks you cannot be both rich and moral is very telling and I can understand perfectly cogent and intelligent people thinking that was “spouting nonsense”.

    You see class prejudice in people thinking that poor people can work harder and be rich. I see class prejudice in thinking that there is a permanent lower class that can’t better themselves and make more. You think we’re saying they aren’t trying hard enough. I see the opposite as saying there is some deficiency that means they CAN’T succeed. I didn’t see anyone state that hard work and perseverance will always lead to success, but that it a) significantly increases the odds and b) it’s hard to succeed without them.

    As you pointed out, there are different classes of thought, and there appear to be two sets: The people that believe there is very little you can do to succeed and it’s based on external factors, and the people that believe it is completely up to you to succeed and it’s based on internal factors.

    Of course there are also the Rosses that believe that it is immoral to succeed past a specific point. Which he has reasons for (the validity of his reasons are what is being questioned). But ironically I have seen a fair amount of class prejudice from the lower income people implying the only way to make a high income is to sell one’s soul to the corporate devil (I believe it has been said as ‘money must be all one care’s about’ or ‘people who make high income can’t have a healthy work/life balance’).

    No matter who is right I think it is a lot more healthy to believe you have the power than to be passive and believe yourself a victim of circumstances. Learn, take control, move forward. I haven’t met anyone who has taken control of their own circumstances (internally or externally created) who wasn’t better and happier for it.

  189. Nancy L. says 20 August 2009 at 13:41

    Steve, while in an emotional sense, I agree with your sentiment that all paths are equally difficult/easy in their own rights, I don’t see how one can extend that argument to tangible opportunities. Are you really saying that, assuming both are equally motivated to achive a goal, the person who has all of the resources at hand to gain the skills they need for the career of their choice has as difficult a path as a person who must struggle for years to simply obtain the resources to begin in the first place?

  190. Courtney says 20 August 2009 at 18:02
    I think this is a really interesting discussion with lots of great points. I also really enjoyed the article itself and thanks to JD for opening up such a great topic.

    I have often wondered about this income disparity within my own family. I am one of a generation of 7 cousins, who were raised with basically similar education opportunities, parental outlooks and involvement, etc. 4 of us are “high earners” and considered very successful in our chosen fields. 3 of us have considerably lower income jobs.

    After serious consideration, I think that the 3 “low earners” stopped caring or lost their motivations at some point for various reasons. Either school was too challenging or not rewarding. One person placed popularity over grades and is still reaping the rewards of that choice–she’s a low income earner. Another thing the low income earners have in common is treating their work as “jobs” while the high earners are much more career focused. They all have issues with instant gratification.

    The high earners were very goal oriented and school focused. All of them have advanced degrees as well as professional certifications. They did not drink heavily or do drugs. They consistently focus on continual learning and improvement and seek out new challenges. They chose spouses with similar career focus and goals. If they have children, those children are raised to also be goal and career focused.

    Just an ancedotal story… BTW, I’m really not sure why the low earners made the choices they did or why the high earners were focused the way they were. Interestingly, we were all born to “blue collar” workers and were the first generation to have the opportunity for college.

  191. Ross Williams says 20 August 2009 at 18:04

    “The fact that he thinks you cannot be both rich and moral is very telling”

    You will notice the source for that “nonsense” was Jesus Christ.

  192. Ben says 20 August 2009 at 18:49

    Ross did you even look at my comment, #54? Peope CAN be rich and moral!! You are seriously misinterpreting the Bible. I don’t think anyone was saying Christ was nonsense either, they are pointing out that we don’t have to live a life of poverty to be moral.

  193. AB says 20 August 2009 at 19:04

    Well, if we’re going on anecdotal ‘evidence’ here, the friend of mine who makes the most money drinks regularly, smokes pot, works “exactly 40 hours” a week (he thinks since he’s salaried, why should he bother to work a minute over?), got a C average in college, and often takes 1-2 hour lunches to play volleyball.
    He makes about 250k a year (including his stock options, so this year is one of the worst, considering).

    Another friend networks, went to an Ivy college, worked all through school, got great grades, and after six years of busting his ass at crappy jobs has finally found a better position that pays 50k a year (which is much better than the 10 bucks an hour he was getting). He often puts in extra hours at work (unpaid, he’s salaried too), doesn’t drink or smoke, and is always looking for new opportunities. He’ll have to change industries to advance much further since non-profits generally top out in salary depending and he’s in the homeless assistance sort of industry which isn’t a bucket of money exactly.

    One friend is hard working and has all the qualities listed, the other friend isn’t exactly lazy, but he certainly works a lot less hard for his multiples of salary more. They both are managers, they both manage about the same number of employees (my non-profit working friend might have a few more, not sure).

    Industry matters. A lot. A whole lot more than where you went to school or how hard you work to get ahead. If money is what matters, get into an industry where there is money or go out and produce a service or product people will pay lots for.

  194. Scott says 21 August 2009 at 01:08

    We can all debate the morality of “hard work generally yields great rewards,” and thus “those who do not reap great rewards do not work hard.” I manage in a major retail chain, and here is what I see daily:

    1) Plenty of hard workers do not earn very much money. I know guys that can stock more cases than you could possibly imagine in a day – they work very hard, but their job is stress free. They do not think about work when they go home.

    2) Those people who do make a lot of money work very hard, but it is from the gut – they stress about work because the situations they are in are often unfamiliar and they are expected to perform. My boss is a great example – she has to attend lots of meetings and isn’t in the store all of the time, but she is on stage for long hours. The stress level that carries is a true burden.

    Here is where it gets complicated – you would think the difference between those who earn high salaries and those who don’t is the stress, but it is really the amount they care. People who earn more care a lot about what they do. I earn more than my employees because I am more invested than they are. We both may care in some cases about what we do, but it matters to me not just what each of them does individually but what they do cumulatively, and therefore the amount I am invested is the sum of their investments plus the addition of my own spin on everything (my investment).

    The low income employees I know aren’t accountable for their work – they are willing to blame someone else (probably me) when the situation isn’t in their favor rather than innovate and find a new solution. They will ask for advice rather than troubleshoot the situation on their own (they lack the confidence in their own ability to create and mitigate challenging situations). Sometimes, they lack a sense of urgency around completing a task – they watch the clock and are bound to how many minutes are ticking away rather than the task before them. The cannot successfully organize and culture relationships with their peers and subordinates to get things done.

    I have met plenty of employees who can read complicated documents and paperwork with the same intelligence as I can – that isn’t it. The opportunities they have had may hold them back at times, but it only slows them down. Those who really exhibit the polar opposites of the traits above will continually be promoted and will eventually exceed their current earnings. Lack of education retards the process, but it isn’t a dead end. It comes down to what kind of person are you? Are you going to take the lead and change your surroundings or are you bound by them?

  195. Steve says 21 August 2009 at 03:24

    Nancy l (#189) What I’m saying is that everyone has all the resources they need to achieve any goal they want and a comparison to others is moot and usually counterproductive.

    The comparison to others is counterproductive because it leads to self defeating thinking. I’m claiming the only difference between the rich and poor is the thoughts we hold.

  196. ackislander1 says 21 August 2009 at 07:51

    I would be amused at those who think some people get by because they are schmoozers who don’t do as much work as the next person.

    I would be amused if I were not sad. It is a misunderstanding that affected a lot of the people who worked for me over the years.

    In some jobs, like sales, schmoozing is the deciding factor in success. You can know every benefit of your product, but if you can’t listen to me and relate to me, and if you focus on your product and not my need, you are not going to go far. This is so hard that I have known sales people making $1 million plus in companies where the CEO made $350 or $400 k.

    In my office, people were often furious with our most effective employee because he didn’t look like he was suffering enough. He added value because he had worked widely in the industry and knew everyone. If someone had a problem, he could make two phone calls and solve it. He had worked plenty hard, believe me, getting to this point, but I paid him well because of his expertise, not because he suffered.

    John F Kennedy was admired, despite many physical, emotional, and moral negatives, because he made it look easy.

    While we are quoting Jesus, I would remind them of the mote and the beam.

  197. Ross Williams says 21 August 2009 at 09:20

    “You are seriously misinterpreting the Bible.”

    Uh – I am simply quoting Christ. You can argue the interpretation of what Christ meant.

    As for context, it follows the following statement by Christ: “If you want to be perfect, go, sell your possessions and give to the poor, and you will have treasure in heaven. Then come, follow me.”

    “you would think the difference between those who earn high salaries and those who don’t is the stress, but it is really the amount they care. People who earn more care a lot about what they do.”

    This is more crap about how people who make more money “deserve” to make more money. While there may be some correlation between what a person makes and what they “deserve” to make, it is really pretty limited. A lot of what is going on here is attributing to the wealthy the attributes people believe are deserving, rather than reflecting on what really lead to those people being wealthy.

    Top point out an example:

    “Take the affordable, sensible mortgage, or borrow up to our eyeballs for a McMansion.”

    In general, the person who borrowed up to their eyeballs for a McMansion from 1990 to 2002 made a lot more money than the person who had a sensible, affordable mortgage. I know. We sold our house in 2005 for over 3 times what we paid for it in 1994 and over 20 times what we put in at closing in 1994. If we had borrowed up to our eyeballs, instead of having a sensible, affordable mortgage, we would have made a lot more money and a nicer house for 10 years. There are plenty of people who did just that and got rich and/or lived a lavish lifestyle flipping houses.

    Of course a lot of the money they made came out of the pockets of people who bought those houses in the last 6 or 7 years. They weren’t deserving or far-sighted, they were mostly just lucky they got their money out in time

  198. Ann says 21 August 2009 at 09:34

    @ Ross Williams #197 – You are not quoting Christ. You are quoting what someone thinks thought he remembers remembered Christ saying. Dude, the bible was written by men and men are fallible.

    Edited to correct the tenses.

  199. steve weaver says 21 August 2009 at 11:38

    One thing a lot of people fail to consider is this: When survival is a struggle, it’s very hard to find the time to even consider finding better.

  200. Brent says 21 August 2009 at 11:58

    Interesting topic.

  201. Steve says 21 August 2009 at 12:02

    When survival is a struggle ALL your time is spent finding better.

  202. Steve says 21 August 2009 at 12:45

    Don’t forget education. I have seen many jobs that could be done by anyone with the appropriate training; however, they require 4 year degrees just to apply. That excludes many.

  203. Cathy says 21 August 2009 at 13:21

    Your example of the high school physics teacher was a good one. My husband has the same situation. Despite the fact that he has two degrees and is a very hard worker, as a military enlisted person he will likely never see a high salary. I’m sure in many other types of professions it may be true that harder work does generate more income, but not in the military.

  204. Tim says 21 August 2009 at 16:09

    wow, I just checked our pay stubs this month and we make more than $250k…yeah us! i remember making $30k/yr it was satisfying too…i was by no means struggling then, nor am i now.

  205. plonkee says 22 August 2009 at 02:31

    Clearly no one (except maybe JD) is going to read this comment, but it reminded me how hard it is to see your own privilege. I mean, I live in the UK (an industrialised wealthy country), I’m white, straight and middle class. This is associated with a particular sub-culture gives me huge advantages that I barely notice.

    It’s not until I talk to some of my friends who are black, or from working class backgrounds who have more useful personality traits than me that I can see the advantages.

  206. Jane says 22 August 2009 at 06:01

    “When survival is a struggle, it’s very hard to find the time to even consider finding better.”

    That’s an excellent point. I remember reading Barbara Ehrenreich’s book about living on minimum wage, and she talked about how the eating habits of the poor were so shortsighted and financially detrimental. She suggested that instead of eating expensive prepared foods, you could make a large pot of cheap but healthy lentil stew at the beginning of the week and eat that instead! What such a suggestion fails to account for is that these people are EXHAUSTED. It takes planning, wherewithal, and resources both material and emotional to do that.

    And to extend that – if life is such a struggle for some that they struggle to improve their diet or other daily tasks, what makes you think that they have the energy or the time to change things? When you work multiple jobs to feed your children, it’s hard to take classes at night. When you barely make ends meet every month, it’s hard to do much of anything else. And when you do have time to yourself, I imagine you want to do something to unwind.

  207. Jeff says 22 August 2009 at 07:26

    In my humble opinion, high income is most directly tied to belief that someone can earn high income. As worthless as this sounds its true. For example, I personally know a family of Chinese immigrants that came to America with nothing. They all worked together, living very, very frugally and worked low income jobs. They were able to buy real estate and restaurants and have become very wealthy. Though lacking education, english skills and resources they built a high level of income. The same is true of a person regardless of income that purchases a lottery ticket, they do nothing more than purchase the ticket and gain high income. However, they wouldn’t purchase the ticket if they didn’t believe they had a chance at the income. The lottery example is a simplified approach that happens to middle/upper income people that expect to make a certain income, many go to school and gain that income they want and believe they can achieve. Its also fairly true of the sleaze bags mentioned above, they believed they could gain that income. I would guess that the highly intelligent geeks from school that work hard have higher than average incomes, but also the society types as well earn high incomes. Both have a belief in there ability to gain income. The geeks from study/intelligence and the society types from social success. I guess my point is that a true belief motivates someone first. Sadly alot of Americans, can’t see the vision of how they are going to really increase their income. After the vision of being successful, comes the hard work, the ability to plan, and the willingness to do what others won’t. But it all starts with belief. It is the same as the quest many of us have for financial freedom. We couldn’t see it before someone showed us, and we talk to our friends and family and they just can’t see it “but you have to have a car/house payment.” To imagine higher income, what would happen if you took those savings after getting out of debt and instead of putting them into those mutual funds for retirement, you put them into a business you believed in…you could be a very high income person yourself.

  208. Mary says 22 August 2009 at 20:01

    I am a teacher in a fairly expensive area. My base pay is is around $60k; I also work summer school and another after school teaching job which boost my total income to about $75k. I finished my M.A. in Education to maximize my income within my profession. If I were even more industrious, I’m also qualified to teach collegiate courses to teachers in training, I could tutor, I could participate in a program to provide support to new teachers, I could write a book, etc.

    I love teaching, but I also want to maximize my income! More importantly, I want to save as much of my earnings as possible to create stability for my family. I think that was J.D.’s intent here – to allow us to share ideas to improve our situations (financially or otherwise).

    As for my role models…both of my grandfathers were poor children of immigrants who retired as military officers. While saving their retirement pay, they both continued to work second jobs, growing their wealth. Both of my grandmothers worked as nurses for the Army and afterwards, including traveling overseas to serve in the war. Both of my parents are college graduates, and my father chose to sign up with the Army for a stint to finance his Master’s degree. I grew up enjoying the comfortability of an upper-middle class life coupled with reminders that it wasn’t free, and I’d have to work hard to maintain that for myself in adulthood.

    Here is another major factor: I’m not going to have kids. I like them, I work with them, but I’m not going to have any. I’m not passing judgment on anyone else’s choice or life circumstance. Some people really want to be parents and are willing to make that sacrifice – kudos to them. Us DINKS (dual income no kids) have a heads up on growing our wealth.

    In order to accumulate wealth, I think it HELPS to have:
    -role models who are savers / wealth accumulators
    -energy, ambition, and focus
    -a positive attitude
    -a social network of friends with positive attitudes
    -a healthy lifestyle (no drugs, gambling addictions, major drama, legal troubles, etc.)
    -a college degree
    -a dual income household
    -no kids or other family members to support (I am NOT saying that I’m not willing to help out family, but the reality is that supporting others is a major expense and will take a huge bite out of growing your wealth)

  209. Mab says 23 August 2009 at 06:41

    I know people from all economic backgrounds and who are in a wide range of income levels. There are super people in all income ranges but I observe the SOME who make a lot of money have more debt than their six figure income can cover at times; they tend to have more personal and work related stress and less time along with the stress of keeping up appearances. One question why when the income goes up does common sense go out the window and the urge to change appearances become so necessary. Given opportunity to dramatically increase my income intent is to stay put in my house continue to drive my paid for car and channel the extra new found income into a retirement fund or Roth IRA. Just amazing to me the number of celebrities, athletes and people from life who make a signiicant income who wind up in the paper under captions of bankruptcy or other issues. Do they not use common sense if not they make enough to at least get a good reliable trusted bookkeeper or learn to do old school – stay out of debt and put something aside for a rainy day. Most parent and grandparents mention that somewhere in our upbringing.

  210. Nancy says 23 August 2009 at 07:29

    What if “what you do best” is not being an attorney, doctor, engineer, etc. but something that does not pay six figures?

  211. Jeff says 24 August 2009 at 03:35

    People have become wealthy by being good at everything and anything. Open the yellow pages, there are thousands of ads for companies that do everything from A to Z (literally). The owners of the larger companies across that book are probably wealthy. My point is, and don’t take this the wrong way, from your comment I perceive that you probably don’t believe you’re going to be wealthy. The reality is this thinking does hold us back. There are people that make the best tortillas, a most humble bread, and have made millions doing it better than anyone else. So believe you can change your life and then decide if you want to do it, because it won’t be easy. It may not be worth it for you to work 80 hours+ a week to gain wealth. You may prefer to spend your time with family, but don’t assume that you can’t build alot of wealth, because you can. In your example of a doctor, they have spend years working at learning. Most doctors work hard in high school to get into a good college, then comes more hard studying in college and medical school, then long hours of residency and internships and then finally, typically 14-18 years after they started they begin making great income. Belief and hard work will help you build wealth, but building wealth is like anything, it rarely comes cheap and its price may not be worth it.

  212. Steve says 24 August 2009 at 05:31

    Nancy asks what is what you do best is not a 6 figure income? No job title is a guaranteed income. One of the richest men in the world, Bill Gates of Microsoft would be considered an engineer by many, but he dropped out of college. I don’t believe he has an institutional education beyond high school. Conversely, I know of a doctor who had to take a job as a factory worker.

    There are plenty of anecdotal stories like these. There is no guarantee of income for a job title. Any body can make money doing anything; and they have.

  213. PChan says 24 August 2009 at 08:15

    Nice to see that poor-bashing is alive and well on PF blogs. I’m financially sucessful AND I’m sickened by some of the moralistic and superior finger-wagging about the supposed laziness and lack of drive of lower-wage earners.

    Some people here cited The Millionaire Next Door tp prove that hard work and financial acumen are always what gets people ahead. I suggest these folks read Richistan. You’ll learn that even multi-millionaires and billionaires overspend.

  214. econobiker says 24 August 2009 at 11:32
    Steve #212:

    Bill Gate’s family was already wealthy when he borrowed $100,000 from them to start Microsoft. This was during a time when an average size home sold for $25,000. So he had a leg up -if he had not been rich to start with but still is a very smart person he would have had to pursue funding in other ways. And if his venture had failed, he would have had a really good family network to fall back on nor would have loss of the $100,000 left him and his family bankrupt.

    As #213 PChan says: “sickened by some of the moralistic and superior finger-wagging about the supposed laziness and lack of drive of lower-wage earners.”

    As we all know money makes money and hangs around money. As some others mentioned early on in the comments, some people are better networkers among the wealthy or come from that environment that helps keep them in that environment.

    Personal case via my sister: She went to high school in a central New Jersey town with two girls who ended up pursueing the same type of career in college. I don’t remember particularly what career it was but let’s say magazine editing. Classmate 1 came from a poor lower middle class family with 4 or 5 other younger children, and Classmate 2 came from an upper to uber wealthy family with only 3 children. Both the women went to about equivalent colleges and get UNPAID internships with equivalent magazines in New York City.

    Classmate 1 takes to the intern job like a pro, has great performance- almost like she was born to it but cannot afford to live in NYC for the intership period and has to commute back and forth to her parents home in Central NJ every day which stretches her days to 12 hours.

    Classmate 2 doesn’t due such a great job- mostly fair to acceptable but she is able to network with uber rich friends of her family who are traveling for the period of the intership and lives for free housesitting their NYC apartment during the intership period. She is able to then network with her coworkers after work hours.

    Classmate 1 cannot continue to afford to commute and runs out of money. She has to drop her internship even though the magazine loved her work and return to her college. She then has to drop out of the college for a semester to work and live with her parents to get enough money to finish college which ends up delaying her graduation about 1 year. She eventually graduates and ends up managing an ice cream shop locally to her parent’s home making about $25,000 per year.

    Classmate 2 finishes her intership with so-so work performance but with profuse networking and is offered a job at that magazine after she graduates starting at $65,000! Her parents give her money towards a downpayment on a condo in the suburbs of NYC so she is able to afford to live in the area.

    So the person who would have benefited that industry the greatest was unable to do that because she couldn’t afford the travel and a person who was about average got entry into the industry and to contribute to it because her family had greater resources to get her there…

  215. Steve says 24 August 2009 at 12:09

    I was responding to Nancy who asked how you do it if you are not a good doctor, attorney, or engineer. Bill Gates is none of these, formally. I do not believe he has an earned business degree either. The borrowed $100k did not build Microsoft either. If it did we could all borrow $100k and become billionaires.

    Microsoft was built on a dream and a vision. It started with thought. The reason Bill dropped out of school was because it was getting in the way of his goals. As I’ve said since #46, it is not job, title, parent’s income, luck, amount of work, or any advantage one person has over another. It starts with a belief, a thought. Hanging on to that belief leads to the actions that take a person to their destiny.

    Bill’s dad did not walk into his bedroom one day and say, “Bill. What are you doing this weekend? Here is a $100k, why don’t you go build a world class software company?” No, Bill already had the vision, the thoughts. Bill already knew what he was going to grow. The money was just seed money. The money was just one of the opportunities that appear when you have a goal. As was stated, if he didn’t get it from his family, he would have gotten it somewhere. Nothing could have stopped him. If Bill Gates had grown up in a grass hut in Africa, he would still be the billionaire he is today. Because his success comes from within. Anyone’s success or failure come from within. Success or failure is just a point of view.

    After testing something like 10,000 different things for a light bulb filament, Thomas Edison was asked how it felt to have failed 10,000 times. His reply was, “I have not failed. I have successfully found 10,000 things that won’t work!”

  216. jtimberman says 24 August 2009 at 16:04

    As Dave Ramsey often says “Your raise is effective when you are.”

    Want to make more money? Work at making more money. Increase your skillset, your knowledge pool, and get introduced to and try to be around people who make a lot of money. The latter sounds hard, but its not really that difficult.

  217. FB @ FabulouslyBroke.com says 25 August 2009 at 09:13

    It cannot be helped, J.D.

    People in all matters of differences between human beings, will find something to nitpick about.

    Race, weight, looks, religion, beliefs, values culture, ethnicity, gender.. and of course, money.

    I agree with what you say. Still, there are exceptions.

    Not everyone who earns a high income was smart or good at finding out what makes them money.

    A lot of it is luck and opportunity as well. And cultural upbringing (females are hit hard here), as well as family values on what they consider important.

    Anyway, you don’t need much money to live a great life, as J.D. said. It’s just really nice to have such a great cushion of a high income ($250k/year) in addition to a very low cost of living ($12k/year), which is what BF and I are aiming for.

  218. Katy says 25 August 2009 at 12:08

    My Dad always liked to say “Luck/Success is an accident, but you can work to be accident prone.” His point was that it was about attitude, how you react to things, and how you let them affect you. I have found many people say things like “I deserve it” or “Good things happen to everyone but me.” Negative emotions like that turn people off, make them not want to pick you for the promotion, or the new job.

    BTW, I’m not talking positive thinking here either. You have to actually BE a positive person. Thinking positive is just putting frosting on crap…it may look like a cake, but it ain’t.

  219. Chris says 26 August 2009 at 13:16

    1. Luck is a HUGE factor

    2. Don’t sob for teachers. The lifestyle is pretty darn good for the wage that they earn. 3-ish months a year off, every holiday in the world off, 2 weeks vacation, world-class benefits, state pension. I will NEVER weep for teachers. Great gig, IMO.

  220. just thinking out loud says 27 August 2009 at 11:22

    Ok, here’s the thing. I’ve pondered as obviously a lot of people here have, on this very issue. And this is in no way meant to be judgemental. But it really seems that in order to ever hit a cap of over, say $100 grand, you will eventually have to succumb to deceiving more people in your life. I really don’t mean this in a bad way, but honestly a lot of people that are millionaires are there due to sales and commissions work of some kind. You sell your soul (your mind, your will, your emotions) to convince someone of something that is “good” for them, that they can’t live without. And isn’t that why a lot of are where we are. Example, I would not have been able to go to college without taking out student loans. When I graduated college on my very meager teacher’s salary, I couldn’t even make the smallest payment which at the time was like $400 bucks a month. I’m not stupid but I kept being persuaded to defer it or forbear it. The student loan corporations are sincerly able to practice legalized loan sharking. But I was constantly convinced (sales tactics, commissions see?) Those different people were making commissions off of me (pimping me as it were). Not that they made that much, but the larger company did of course. This is why that is the one stronghold area they won’t allow to qualify for bankruptcy. They depend on us to be able to pay into them for the next God knows how many years. Sadly it’s like you were screwed from the start. That’s just one example, think of many other industries whereby sales and commissions have propelled people over the wall to the land of wealth. So no I don’t believe it’s that they have a stronger work ethic or many of the other suggestions. There are plenty of people who do seemingly meager jobs who really value work and will stay if people need them to and go extra miles. It’s (again not generalizing to all who are high earners), but many are just flying monkey, evil henchmen to the larger wicked system. Deceit, envy and greed run the gamut to the whole crabs in the bucket mentality. But thankfully on both ends of the spectrum, high earning and low, there are those whose hearts are ruled by love and wisdom. Or else our world would be even more screwed than it is right now.

  221. just thinking out loud says 27 August 2009 at 11:53

    Ok once again I have to have this conversation with a person, being a teacher myself. People, can we please stop thinking teachers live some lavish lifestyle full of bene’s? We DO NOT have it like you think we do. For post #219, which is right before my other one. Here’s the deal, in reality, teachers would really have to work in the summer. What people don’t realize is that what many do to not have to do that and be able to take an “uninterrupted” “vacation” as it were, is that we VOLUNTARILY ALLOW our payroll departments to hold back a certain amount from our paychecks all year long (or rather for the 9 months or so of school)to redistribute to us during the summer months. People always think “Oh, you guys get paid over the summer and you don’t even have to work”. We don’t get huge bonuses all the time. So therein is the trade off. Be honest, would you (outside of 401K’s and other deductions you might already have) VOLUNTARILY ALLOW your current employer to take a significant chunk (and I do mean a pretty big wedge of cheese) out of your paycheck every two weeks. In these times, are you kidding me? Yes we have holidays off, but you may not be aware as well that a lot of our “summer” is spent going to required trainings that help you to keep your licensure with the state you work in. By the end of most school years, you are required to have had so many hours in professional development. When else would we have had time to do it, what with grading and projects, conferences etc. We don’t get to write off lunches of only 25-30 minutes that were spent calling parents or counseling kids who are having a bad day and only getting 7 minutes to sit down and eat. Most teachers have their break time down to a science of microwaving their lunch, going to the bathroom, making a call or running a copy. Let alone the hours often spent after school. During the school year as well, whether having families or not, we often spend nights and weekends in preparation or other trainings to keep abreast of our professional development. And why shouldn’t we have some time off? We spend weekends shopping for our class as if they were our own kids. And then someone will say that’s your own fault. Think of it this way, if you go see a movie or a great show, there was a lot that went into before and afterhand that made it awesome. But we are not paid according to our true value of helping to create all other professions. What people want and tell us we should be satisfied with is being a “Charlie Brown teacher”. Ever thought about why you never could here anything but “Wah, wah wah-wah, wah???” The teacher was mundane and the class time was unimportant. Praise those of us who truly try to engage kids short of doing Krusty the Klown backflips in class, or having kids play Halo all day and doing whatever we can on meager incomes that we can barely “write things off for” (vs. business world)for making learning engaging. That’s why most people can remember their favorite and least favorite teacher. So again, people please think about assuming this or that about teachers.

  222. Jim says 27 August 2009 at 13:36

    just thinking said: “it really seems that in order to ever hit a cap of over, say $100 grand, you will eventually have to succumb to deceiving more people in your life.”


    There are TONS of people making over $100k who aren’t just evil liars.

    I work in a building full of engineers and I’m assuming most of them make >$100k. Virtually every doctor or dentist out there undoubtedly makes >$100k. Most professors at universities make >$100k. These professions account for many if not most of the people making >$100k. They are not built on deception.

    Regarding teacher pay: What is your degree in? What are you paid? What state is it in? What else would you be doing with your degree in your state?

    Teachers are usually not low income given the 9 month work year and substantial benefits. I don’t think people are saying teachers are highly paid, just that they aren’t really as underpaid as people think. Of course teacher pay will vary substantially based on location.

  223. PChan says 27 August 2009 at 14:26

    You know, I was thinking of going into teaching. Then I saw what the starting pay was and realized that I simply couldn’t afford the almost 50% pay cut. Even with summers off, it was not feasible.

    To all of you people who think teachers have a cush, overpaid job–if it’s so great, why don’t you do it?

  224. Mary says 27 August 2009 at 19:43
    You may remember learning about the concept of Locus of Control back in Psychology. People with a higher locus of control believe that they control their lives. Those with a lower locus of control attribute their life situation to fate or chance.

    The rich tend to believe that they have worked hard and earned their way in life. It makes sense that they would not want to admit to being privileged, spoiled, lazy or just lucky, for those who may not have earned their way.

    Similarly, the poor tend to believe that fate or chance has placed them in that position. Naturally, they would not want to admit that laziness, complacency or other undesirable traits have earned them a low income in life. I feel that some people may bounce around from job to job, maybe just doing the bare minimum, and then they don’t take accountability for their actions or try to improve their performance at the next job. However, I also feel that some people who are poor genuinely have been fated with a tough situation. You never know who’s caring for a dying or disabled family member, has a serious/painful illness, etc. and might not be available to take on extra duties at work, volunteer to go above and beyond, or even think of such ideas while engaged in a true struggle for survival.


  225. Marie says 29 August 2009 at 20:37

    I notice the word “luck” used a lot, but what I don’t see mentioned very much is “skill”. Some jobs require talents that are, for lack of a better term, God-given. For example, someone with shaky hands will never be a high-paid neurosurgeon. Some abilities hard word and practice simply cannot create.

  226. DDFD at Defensive-Entrepreneurship says 01 September 2009 at 12:12

    Interesting post. I don’t think is a matter of laziness. Supply and demand plays a big role here. What are people willing to pay and how available are the people to perform a particular job?

  227. FreedIncome says 07 September 2009 at 16:31

    I’d also add:
    – They surround themselves with other successful people. Never underestimate the effect of learning through osmosis. The habits of other successful people rub off on you.
    – They mimic the habits and skills of those those that are more successful then them. In the work place and in life, I find the most successful person in my interest group discuss with them what makes them tick and what how they work.

  228. Ellen says 08 September 2009 at 07:01

    Many of the higher income people that I know make more because they took a big risk to get there. They either took an internship that paid little to nothing, invested in a start up, or took a position overseas that led them to where they are now. Sometimes it’s just making a huge leap that gets you to where you bring in serious cash. If you always play it safe, something will not (likely) just land in your lap out of the blue.

  229. Nell says 10 September 2009 at 10:58

    Another factor that no one has mentioned is health. The state of your childhood health has a huge impact on your success later in life. The nutrition you receive impacts your ability to learn and your energy levels. Studies have shown that asthma rates are much higher among the children of the poor, who incidentally live in neighborhoods with much higher air pollution rates. (Often times because they are near to the factories where they work.) Missing school due to illness impacts how much you learn which impacts your grades which impacts whether or not you are able to go to college.

    Additionally, I have an engineering degree and I worked as an engineer for several years, before turning to teaching. I took almost a 50% pay cut and as much as I loved teaching I burned out after 5 years. It is the hardest job I have ever taken on. I was lucky because I had already paid off my student loans by the time I started teaching. I can’t imagine adding the stress of having that additional expense to the low pay.

    The truth of it is that there are many factors that go into ones’ income level. Hard work is part of the equation, but it is only part. For those of you pushing the entrepreneurial spirit, remember that 60% of all new businesses fail in the first three to five years. It takes more than hard work and knowledge to make a business thrive and yes some part of it is luck. Hiring managers often get down to two or three potential candidates who would be great in a position and they have to choose one. While sometimes something like a thank-you note can make you stand out, other times it is chance. It doesn’t mean you didn’t work hard to get there, but it does mean that others worked hard to get there too, but didn’t get the job.

  230. Jake says 20 October 2009 at 07:07

    There’s something else that i think hasn’t been touched on although it may be a bit depressing. Sometimes higher earners are those willing to exploit people or situations for their own personal gain. I briefly worked for a company that was contracted to sell AT&T coverage to small businesses. Several of the people who trained me encouraged deceiving customers into thinking that their bill would be much cheaper than it was going to be or adding extra or more expensive services on the plan after the paperwork had already been signed. I left after I found that almost all of the companies highest earners exploited their customers in this way on a very regular basis. The management doesn’t care as long as the sales reps are discreet and careful. Remember to always go over the paperwork several times before you sign anything.

  231. Shishir Gupta says 14 February 2014 at 02:40

    Self-confidence is one of the main factor. Like you said, we cannot depend on luck at all. That can be very hampering to anyone. Well read.

  232. Stephen says 22 April 2014 at 17:22

    Reminder: One way to improve your income is to learn how to negotiate your salary. Mastering this skill can make a huge difference in your lifetime earnings potential.

    .. This is what I like in this article, we need to lean how to negotiate our salary. Thanks for sharing!

  233. Sunny says 01 August 2016 at 14:24

    I wonder my self because I’m not an earner, but iWork hard, computer technician,do properties, but still my income is less than RM 500.00 why ?

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