Who is responsible for your wealth? How you answer this simple question could be the difference between success and financial failure. In this article, Mark Ford reminds us that it’s not where you come from that matters.
The path from pool boy to entrepreneur
By Mark Ford
The average Nicaraguan is born in a shack with a dirt floor and earns roughly $90 per month.
“E”, my handyman/gardener in Nicaragua, does better than that. He makes about $150 per month in salary and another $50 in tips and side jobs. In the U.S., E could earn in a few days as much as he makes in a month.
I don’t believe I’m personally responsible for this “inequality” of wealth. Nor do I believe that any government-sponsored effort to redistribute wealth would work.
And yet, despite any good reason, I want to pay E more.
Why is that?
I don’t believe that making more money will make him happier.
When I observe E’s daily life — how much he laughs, how often he seems to be comfortable, etc. — it seems as if he’s doing as well as most much wealthier Americans.
Yes, E would be very “happy” if I doubled or tripled his salary. But that wouldn’t make me happy. It wouldn’t make him any more capable of earning more from anyone else. It would simply make him feel entitled to being paid more for the same work.
Wealth is earned, not owed
So instead, I gave E the opportunity to do extra work around the house. I told him I’d pay him $5 per hour — quadruple his hourly rate — for any “extra” work he did.
He rose to the challenge. He began by learning to paint walls and windows. Then, he learned how to change the filters on the air conditioners and do a bit of plumbing and even some electrical work.
Eventually, we switched him from hourly pay to job-related pay. This gave E the chance to learn how to estimate his time, write up bills, keep receipts, and even negotiate (with me!)
Today, he has the house I would have liked to give him, but he got it with his own efforts. It wasn’t a gift, and he knows it.
He used some of the money he made to build and stock a little store that sits in front of his house. His wife works there. It provides his family with a second income.
In his transformation from pool boy to entrepreneur, E faced an obstacle that is greater than his lack of skills.
E went to grammar school (the only school they had) during the Sandinista (communist) years. This taught him two very dumb ideas about wealth:
- Everyone is entitled to an equal share of it. (“To each according to his needs.”)
- Those who have more than others should give it up. (“From each according to his means.”)
These ideas move quickly into thoughts like:
- “It is the responsibility of wealthier people to share their money with me.”
- “It is the government’s responsibility to make sure they do.”
In the old days, I sometimes saw ideas like these flickering in the back of E’s mind. Back then, when he wanted something — a concrete floor for his house or money for his daughter’s birthday party — he assumed he could ask me for it and I would give it to him.
I soon realized that by giving him money when he asked for it, I was giving him a very bad idea: that the path to wealth led to me, his patron. He didn’t want to have more money like me. He wanted to have my money.
He saw money, then, as a never-ending supply, he could just get from someone else. Since I was the only wealthy guy he knew then, it made sense that he based his strategy for growing rich on “101 ways to talk Mark Ford into giving me money.”
I’m proud to say that E now has another idea about how to get money: by offering his professional services and charging as much for them as the market will bear. I’m still his biggest client, but he has done fix-it jobs for other homeowners in our community, and he has his store for extra income.
All this said wrongheaded ideas about wealth are not unique to communist countries. They exist in every country of the world, including the U.S.:
- If you think you’re entitled to be taken care of by the government, it is probable that you’ll spend some time and effort applying for government handouts.
- If you think that all the profits of a company should be distributed to its workers, you’ll never be happy with what you earn.
- If you think that no one is entitled to have more money than you, you’ll spend your time trying to get people you know to give you some of theirs.
None of those ideas will make you wealthy. Rather, they will make it harder. Every minute you spend wanting money you didn’t earn is a minute wasted and a bad habit reinforced.
Success: It’s all in the mind
The lesson here is about the opportunity. In Nicaragua, E has elevated himself well above abject poverty by changing his mindset about how he acquires wealth.
E learned the first step on the path to wealth begins by recognizing that all wealth must be earned. E could well have bemoaned his financial fate. It wasn’t his fault that he was born poor in Nicaragua. But he didn’t. He got to work.
E also learned he needed to acquire financially valuable skills. By learning painting and carpentry, etc., he was able to quadruple his compensation and start his own business on the side.
How are you doing? Have you achieved all of your financial goals? Or, like millions of people around the world, are you struggling through?
If you need more money, follow E. Begin by taking personal responsibility for your financial future and then developing one or more financially valuable skills.
And then you can build on that by acquiring marketing and selling skills. These skills will make you a more valuable employee. They will also form a solid base on which to build your own second or third stream of income.