In this crazy world we live in, everywhere you look, someone is showing off their wealth. Million dollar houses, hundred thousand dollar cars, exotic vacations, you name it – these things are all so commonplace that we barely even notice them anymore. Social media has only amplified this trend, with millions of people taking to the internet to post snapshots of their lives that have been carefully curated to show them only in the best light possible. Especially if you live a pretty typical life, and even if you don’t, you can be forgiven for getting the sinking feeling that you’re being left in the dust – especially financially. And that’s exactly the feeling I want to challenge today.
I’m going to use cold, hard facts – statistics in this case – to do it. When you’re looking at statistics, it’s important to make sure you understand the context. In the case of income statistics, you can start by ignoring average (or mean) and going straight to median. Why? Average income numbers are pulled way up by the highest earners. Median income is a much more accurate concept of what is “normal.” For example, the average household income in the United States is over $70k a year, while the median is roughly $60k. And that brings me to my next point. Household income seems to be the most commonly reported. And that’s fine. But if you’re a single person household like me, an individual income number is a better means of making an “apples to apples” comparison. And in this case, the median individual income is only a little north of $30k a year, while the median household is nearly double that at $60k. You can also drill down deeper using all sorts of other factors. The Bureau of Labor and Statistics (BLS) collects tons of data and it is freely available to anyone.
Now that we’re starting from a realistic point, we can begin doing some comparisons. if you live in the United States, or any of numerous other countries with modern economies, you are already better off than a stunning percentage of people in the world. There is a really interesting website called Global Rich List that aims to bring awareness to poverty around the world. If you enter the $30k figure from above (again, this is someone dead in the middle here in the US), you find that this seemingly small income would put you in the top 1.23% of people worldwide. The federal poverty level in the US is roughly $12k a year for one person. But even a person making that little is in the top 14.5% worldwide. And roughly that same percent (14) of the US population lives at or below the poverty line. So if you live here, the odds are overwhelmingly likely that you have more to be thankful for than you might think. You could do the same type of analysis with net worth numbers instead of income and get similar results.
This is without even getting into a historical discussion. If you started making comparisons with all the people who have ever lived on earth, you’d be looking at almost infinitesimally tiny fractions of a percent of people who have lived as well as even the poorest among us today. And that’s without even factoring in all the technological advances humanity has made. For example, air conditioning was invented in 1902, which means that before then, even royalty didn’t have it. Airplanes were invented the very next year, so the nobility of the past couldn’t travel anywhere nearly as fast as we can. And don’t even get me started on being able to hold the knowledge of the entire world in one’s hand. Before the printing press was invented in 1455, books themselves were very rare because they had to be copied by hand. But today you can carry thousands of them in your pocket – and they’re updated automatically as knowledge progresses!
To be continued…