Billionaire Tom Perkins stated that the top 1% – in terms of wealth – are being persecuted like the Nazi’s persecuted Jews. His fellow billionaire, Sam Zell, stated that “The 1% are being pummeled because it’s politically convenient to do so.” He claims that the top 1% work harder.
John Aziz, in an msn.com news article, points out that the top 1% wealth holders accumulate that wealth through capital gains (mostly through stock options and stock price increases). Aziz concludes that: “They have the financial, educational, and social capital to accumulate an income without having to work so hard.”
– Financial Capital is money that is used to generate income or make an investment. (See the financial-dictionary)
– Educational Capital is education that is useful for generating income or making investments. (derived from the definition above)
– Social Capital is the network of relationships between individuals, groups and entities. (google search for “define social capital”)
I don’t know any billionaires, but I’m the son of a multi-millionaire. What have I learned from my dad?
Financial Capital – He started with no money. He grew up in a two bedroom, one bath home. His parents rode the bus to their daily jobs. He worked in high-school to support the family and worked his way through college. Over time, though, he leveraged educational and social capital into financial capital.
Educational Capital – He had no ivy league education. Having worked his way through the local commuter college though, he knows the value of a good education. Later he earned a masters degree to signal for my sister and me the importance of education.
Social Capital – My dad started with very little social capital. Who could his mother possibly meet waiting tables at the Green Beetle, or his dad down at the local lighting store? This is where his journey to the 1% began, though. He knew the value of having strong relationships. He knew that social capital goes well beyond “who you know.” He always knew that his employees worked with him, not for him. He treated everyone with kindness and true respect. On weekends he’d work on our house or in our yard side-by-side with the man who’d walk through our neighborhood looking for a day job; on weekdays he’d work side-by-side with the governor-future-president and Fortune 500 CEOs. They were equal in his eyes. And so he built the social capital necessary to later build financial capital.
Did my dad work hard? As Aziz points out, its very difficult to measure how hard one works. I can tell you this. My dad worked just as hard as his business partner who experienced multiple stress-related heart attacks during their ride up the ladder-of-wealth.
Did he work long hours? You bet. He likes to say he works 1/2 days, sometimes the first 12 hours and sometimes the last 12 hours. But it seems he used to work all 24. During the years that he was building his business, he never vacationed. Oh, we sometimes went on vacation, but he always worked while on vacation. Conference calls, teleconferenced meetings, emails, reading, researching, networking, writing, etc. We often “vacationed” where he had local offices.
After building his business for over two decades, working long and hard and smart, his team led the company through its initial public offering (IPO). He had built the social and educational capital necessary to generate the financial capital to scratch his way into the very bottom of the top 1%.
Advice to the reader:
Educational Capital – Get a college education if you can. A college education can be expensive, though. If you cannot afford a formal education, educate yourself. Read sound business books by authors such as Victor Claar, Jim Collins, Peter Drucker, and Malcom Gladwell.
Social Capital – Build strong relationships and treat everyone you meet with an equal level of respect and kindness.
Financial Capital – If you have it, use it wisely. If you don’t have it, build it by leveraging educational and social capital. Then, use it wisely. There were things my dad (and I) could have done more wisely to build upon his (our) growing financial capital. To be honest, we were ill prepared in the beginning. Our lack of financial savvy and wisdom cost us together, tens of millions of dollars. Today, having fallen from the top 1%, though financially comfortable, my dad works every day to ensure that no checks bounce … except maybe the last.
© 2014, Dr. Phil Bryant
Dr. Bryant is an Assistant Professor of Management at Columbus State University and co-author of Managing Employee Turnover.