Income inequality, or the gap between the rich and poor, is a major concern. A recent study discovered that the richest 85 people in the world have as much total wealth as the combined wealth of the poorest 50% of the world’s population (3.5 billion people.) Economic inequality is all around us. In last week’s article a few readers subtly brought up the income gap between men and women. However, just because something is statistically true doesn’t mean it has to be our reality.
Earlier this month General Motors, which is the 2nd largest automaker in the world, announced that its new CEO Mary Barra will be paid a salary of $1.6 million per year. She is the first female to head a global automaker. Woot! Girl power! 😀 She started her career inspecting fender panels on the ground floor of a Pontiac plant at only 18 years old. She used the money she saved up to complete her electrical engineering degree, and returned to GM to work as a senior engineer. She showed so much potential that GM sent her to Stanford Business School so she could get an MBA and become a manager at GM, which she did. In 2011 she was appointed senior vice president for global product development, and now in 2014, she is CEO and taking home the big money 🙂 Congrats Mary!
It may have taken her 33 years to do it starting from the very bottom of the corporate ladder, but it shows that success is not as impossible as some might think. There are many articles out there that discuss the problems of income inequality or wealth disparity, but they don’t propose any good solutions. I don’t have a silver bullet either, but I think we can start by giving everyone the confidence and knowledge that “We can all choose how we want to live.”
Economic mobility can depend on location, but for the most part it’s highly probable that if we consistently work hard then we can improve our financial lives regardless of what kind of background we come from 🙂 I don’t think Mary’s situation is unique to hard working individuals. I believe most people who work their butts off like Mary will become financially successful. The only exception is if they live in a developing region controlled by oppressive regimes. If you are Bongani Nkozanza living in Botswana, Southern Africa making $1.00 a day working at a diamond mine, then I’m sorry, but you probably have a better chance of winning the lottery than ever making a six figure salary 🙁 But chances are, you probably aren’t reading this article either.
We all know I don’t make 6 figures yet today. But if I started to save and invest more aggressively, then my total annual income (rent, dividends, wages, etc,) would be easily over $100,000 a year some time in my 30s. But Mary worked much harder than me. She survived the rigorous MBA at Stanford! She sounds really smart, unlike me. I can barely even spell MBA 😛 I have a friend who is a junior analyst at Raymond James Financial. He works harder than me and will probably make $200,000/yr by his 30s. Lots of medical school graduates make $300,000/yr in their 30s. If these young professionals continue to push themselves throughout their careers, then by the time they reach Mary’s current age (early fifties) they will easily make $500,000 a year, and some will even earn over a million like Mary.
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