The six most overrated factors in getting rich

Dr Rainer Zitelmann, 05/02/2020

Oprah Winfrey came from a simple background, inherited nothing, didn’t study at an elite university, and probably only bought stocks long after she was rich.

So many people have the wrong ideas about getting rich. The most common misconceptions are these:

- People get rich because they are lucky

- People can only get rich if they had an excellent education

- People get rich because they invest in stocks

- People get rich because of their parents’ connections

- People only get rich at the expense of others

- Most rich people inherit their wealth

People Get Rich Because They Are Lucky

Some people believe that rich people have simply been luckier than everyone else. Of course, lucky breaks do play a role in becoming exceptionally wealthy, but the role luck plays is largely overestimated. Over the decades, good luck and bad luck usually balance each other out—hardly anyone experiences a run of good or bad luck that extends over decades. Take lucky lottery winners for example: most end up poor again just a few years after their ‘life changing’ wins because they do not have the right mindset for wealth. In contrast, there are plenty of examples of entrepreneurs and investors who rebounded from bankruptcy within a few years because, having risen to the top once, they still know how to make money. And getting rich is not just about having a lucky break, it is far more a question of whether someone recognises the opportunities life throws their way. Lots of people get opportunities, but they simply don’t appreciate them for what they are. Others might recognise an opportunity when it comes their way but fail to act on it. People get rich because they are not only good at recognising opportunities, they are also able to act decisively and effectively.

People Can Only Get Rich If They Had An Excellent Education

Some people think they don’t have what it takes to get rich because they didn’t attend university. But a quick glance at a list of the world’s richest people reveals that many of the superrich were university dropouts or didn’t even make it through high school. Clearly, attending an elite university is by no means a prerequisite for getting rich. In Germany, the study The Wealth Elite confirms that there is no correlation between school and university achievement on the one hand and financial success on the other. If success in life came down to academic business knowledge, then business administration professors the world over would all be multimillionaires or even billionaires.

People Get Rich Because They Invest In Stocks 

Of course, investing in stocks is a good thing. But stocks are more about staying rich than getting rich. In a survey of 472 rich people in Germany, only 2.4 percent said that stock market investments were the main reason they became so wealthy. Then there’s Thomas J. Stanley, who interviewed 733 millionaires for his book The Millionaire Mind. Although his survey was conducted as stock markets were enjoying an extended boom, only 12 percent of his survey’s participants said stocks were a major reason for their financial success. Among the superrich, the proportion who became rich through stocks is lower still. Take a look at the Forbes list of the world’s 500 richest people—almost everyone on the list got rich as an entrepreneur (or they inherited their fortunes from their parents, who were entrepreneurs). Warren Buffett is frequently cited as a prime example of someone getting rich as a result of canny stock market investments, although the truth is not quite so straightforward as all that. But anyway,...

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