Over the last several years, I have spent a great deal of time thinking about the causes of success and failure both in my life and the lives of others. More recently, I have begun to study the idea of multigenerational wealth. Finally, over the last few weeks, due to the plans of my church, I have begun to study the problem of multigenerational poverty. I have identified 5 important factors that seem to lead to fulltime employment over most of the 40 or more years we can expect to be a part of the workforce. 1)Confucian/Protestant Work Ethic
2) IQ (there is a correlation between intelligence and income up to an IQ of 120)
3) Love of and Respect for Education
4) Supportive Social and/or Family Network
5) The Ability to take Calculated Risks
It is not necessary to have all of these traits, but a sufficient quantity of some combination of these traits seems to be evident in everyone who manages to stay in the workforce through good years and bad.
I have had considerable exposure to the working poor in the mills of South Carolina during the early years of my career. I have some understanding of the difficulties faced by single moms. I have met people with various sorts of money problems at almost every socio-economic level of our society. However, I have never had much in the way of contact with the victims of multigenerational poverty. My initial readings seem to indicate that they do not have a work ethic, they have no respect for education, their social networks encourage and engender failure, and while they may take risks of a criminal nature, they seem to be unable to calculate the risk reward ratio of these actions. IQ? That is the old nature or nurture question. Children of intelligent educated parents grow up in a culturally rich environment. Public housing is not a good place to find opportunities for educational or cultural enrichment.
There is another piece to the puzzle, the ability to defer gratification. As far as I can tell that is essential in building wealth over time no matter what the income or starting point. It is more than the obvious ability to live with a rust bucket automobile until you are able to pay cash for something better. It is your perception of time.
Just about everybody has seen videos of the Stanford marshmallow experiment. A two year old is alone in a room. An adult enters the room, offering the child a marshmallow. The piece of candy is placed on a plate in front of the child. Then the adult tells the child he can eat the marshmallow at any time. However, if the child waits until the adult returns she will get two marshmallows. The adult then leaves the room. It is funny watching the toddlers engage in any activity they can imagine in order to distract themselves from that little white blob of sweetness. They lie face down on the floor; they cover their eyes; they sing and wave their arms in the air. Some get the second marshmallow; some don’t. The researchers followed these children through life. The children that were able to wait to get the second marshmallow did noticeably better than the children who settled for one marshmallow in the present moment.
My mother worked as a teacher in a mine camp in West Virginia. She didn’t last very long. She couldn’t stand watching her children sucked into a life of despair, poverty, and self destructive behavior. She noted that when there was money, the children brought ridiculously expensive meals to school. When there was no money, they had no food. She correctly observed that these poor people spent money as soon as they had it for whatever they wanted without any thought for the future. More recently, in New Orleans following Hurricane Katrina, the Government issued unrestricted debit cards to the flood victims to help them during the recovery process. A depressingly large portion of that money was spent in places like liquor stores and strip clubs.
In order to defer gratification you must believe in a future reward that is great enough to justify the current denial. Otherwise, why bother? A young person who would really like to be out with their friends slogs their way through medical school, a very difficult and unpleasant experience, knowing that a pot of gold waits for them at the end of that rainbow. The diet that is most likely to be successful is the diet undertaken by a young woman looking forward to her wedding. It is easy for her to forgo bonbons today because she has a clear vision of herself in that wedding dress standing before her friends, family members, and her new in-laws.
No matter who you are or the particulars of your situation if you want to improve your situation; defer gratification; more importantly change your perception of time. If you are desperately poor, try to save something for tomorrow. If you are working poor, begin to think in terms of a month rather than making it to end of the week. If you are middle class, stop thinking in terms of making those monthly payments. Decide where you want to be this time next year. If you are rich change your focus from years to decades. Envision the world as it could be in 40 or 50 years. Perhaps long after you have passed from this world, your vision could still be a blessing to your children, your grandchildren, and the world.