In the United States, if you start a business that brings you to an upper middle class net worth, you’re doing ok. If it’s you’re only source of income. Make it to the top 10% of asset holders and you’re pretty much laughing to the bank. Poor countries are different. If you’re in a poor country you need to create all of your wealth by working and saving. There’s no way around it. Those living in first world countries have no idea how privileged they are. Hands off wealth doesn’t work in middle-income countries, let alone poor ones. In a lot of the world, capital hasn’t decoupled from labor. It makes for some interesting differences with places such as the United States and Canada, and I wanted to discuss, in case someone was interested, or wanted to move overseas.
In wealthy countries, those who own assetts are far better off than those who labor
This much is clear. If you’re a worker bee, you’re stuggling compared to the superelite. All you can do is keep pushing, and add your little drop in the bucket. Nothing works, and it feels like you’re on a treadmill. If you own assetts, life is easy. Everything is just a loan away. It’s pretty insane how much of a difference in people’s quality of life this makes, especially those who are on the grind and chasing wealth.
Fewer people have access to credit in poor countries
This means that a dollar has more value. There are fewer of them floating around. People have to put in a lot of work for what they have and they don’t get a lot of second chances to regain their footing if they’re sloppy. This means that more people are working jobs, and fewer people own businesses. This means that wages are low, but so are assett values. The country is just poor. Think about it. Those living in wealthy countries are the only ones with the privilege of being able to shuffle capital around.
Content has less value in poor countries
Think about it. There are few TVs, subscriptions, cable packages, and certainly video game consoles. There’s less ecommerce. A lot of businesses that exist and generate wealth for Americans simply don’t exist in poorer locales. If you create content in a poorer country, prepare to be creating a lot of it. You won’t have a good local audience.
Fewer people own stocks
So, if you can get involved in something like that, you’re in the minority when it comes to asset holders in a lot of middle-income countries. Poor countries, forget about it. If you buy stocks in a poor country, you’re ahead of the game. You’re one of the few people who has a shot at retiring.
A lot of money is spent on consumption in poor countries (there is a very wealthy superelite)
A lot of people in poor countries are not thinking about retirement. They are living life on a day-to-day basis. How many people? In my estimation, between 60 to 90% of people in poor countries are living this way, depending on where you are. A lot of the super wealthy people in poor countries work for conglomerates that do basic stuff for the everyman. Why? Because the economy is basic. That means in order to totally support yourself as a lone wolf, you need to become incredibly skilled.
Capital gains legislation hasn’t caught up with the climate
There is no capital gains tax in a lot of the world. Some places are really good for launching startups. If you can build and sell them while living in these countries, you’re going to be making money much more easily than your peers. The loopholes likely won’t last forever. People are getting more and more educated.
Capital and labor will separate
This is why now is the time to start a business if you’re living in a middle-income country. The distance between capital and labor will grow. The financial sector will continue to expand. Life will probably continue to get easier for the common man, but the flattening of society and low wages will cause people to complain. Capital and labor will become separate, and if you’re not creating capital you’re going to be in a world of hurt.
All you have to do is outlast others in business
Once you break into the top 20–5% of asset holders in your country, you’re going to feel a lot better about your life. Spending won’t be as scary, and you’ll be far more willing to take risks with your money. The key is actually making it to this point, however. You need to run through the finish line. Don’t just create a bunch of content and rest on your laurels. Truly do more than what everyone else does as a beginner, and you’ll set yourself up to be in a position of power.
If you’re thinking of moving to a poor country, now is probably the time. If you can succeed in a poor country, you’re probably doing better than most people who live in wealthy countries. You’ll have a better social and dating life to show for it too. Moving to a poorer country can be daunting and scary, but look what’s happening to the West. I think learning about emerging economies and keeping an eye on them has value to everyone, even the rich.
Thanks for paying attention.
