Rich get richer because of appreciation of assets and access to capital due to assets. They take on much more debt than the poor but use that debt to invest/acquire more assets.
The underlying mechanism of the Matthew Effect is preferential attachment. In simpler terms, it's the idea that wealth gravitates towards those who already have it. If you have more resources, you'll generally find it easier to gain even more. But if you don't have any resources to begin with, it's hard to grow.
Percy Bysshe Shelley (whose wife Mary famously penned Frankenstein) is credited with first coining the aphorism “the rich get richer, the poor get poorer,” which was itself a riff on the Biblical parable of the talents in Matthew 25:29 which made much the same point.
Higher interest rates may benefit the top slice in a recession, but the attempt not to have a recession at all – by central banks “printing money” and buying government bonds, known as quantitative easing (QE) – also creates a bonanza for the rich by swelling the value of their assets.
The wealthiest people earned their coveted places by investing in risky assets like their private businesses and then multiplying the returns, regardless of whether or not they had initial wealth from rich parents.
Poor people tend to spend their money on liabilities — items that depreciate over time — such as luxury goods, excessive entertainment, or expensive cars. In contrast, the rich focus on acquiring assets — investments that generate passive income or appreciate.
Such injustice is what Jesus denounces through this parable of the talents. At the end of the parable, Jesus says, “For to everyone who has, more will be given and he will grow rich; but from the one who has not, even what he has will be taken away” (Mt. 25:29). The rich get richer, the poor get poorer.
Mansa Musa ruled over the Mali empire in the 14th Century, and his incredible access to gold made him arguably the richest human to have ever lived. So, why is it that he has largely disappeared from the western historical imagination?
It is certainly true that the rich are getting richer all the time, and much faster than poor people are catching up with them. The result is that the income gap between rich and poor seems to get wider.
Markovnikov's rule: when more than one product is possible, the hydrogen will end up on the carbon that has more hydrogens bound to it. A memory tip to help you remember that the carbon that already has more bonds to hydrogen will get another hydrogen is "the rich get richer".
Basically, to accumulate wealth over time, you need to do just three things: (1) Make money, (2) save money, and (3) invest money.
The well-worn assertion that the rich get richer while the poor get poorer echoes Karl Marx's theory of immiseration which said that capitalists could only become richer by lowering wages, thereby reducing the living standards of workers until they had no choice but to revolt.
Social influence often induces a rich-get-richer phenomenon (Matthew effect) where popular products tend to become even more popular.
Steven Kaplan's research finds entrepreneurs are increasingly prominent among the super-wealthy. Different theories have tried to explain why wage and income inequality have increased sharply in recent decades.
In fact, there is strong evidence that most “rich families” will be poorer after several generations. Some of the reasons for this are systemic. Taxes, for example, chip away at a family's wealth. But most factors that diminish a family's wealth over generations are the choices that heirs make.
A trillionaire is an individual with a net worth equal to at least one trillion in U.S. dollars or a similarly valued currency, such as the euro or the British pound. Currently, no one has yet claimed trillionaire status, although some of the world's richest individuals may only be a few years away from this milestone.
There were 337 women listed on the world's billionaires as of 4 April 2023, up from 327 in 2022. Since 2021, Françoise Bettencourt Meyers has been listed as the world's wealthiest woman.
1. The Walton Family: $267 Billion, Retail. Seven members of the Walton family own an estimated 45% of shares in Walmart, which has a current market capitalization of more than $486 billion.
No wonder Jesus explicitly warns us that we cannot love and serve both God and money (Matthew 6:24). But there is nothing wrong with being rich. The rich are no less holy than others. One can be rich and still love God more than he loves or trusts money.
Robin hood steals from the rich and gives to the poor. They don't. They steal from the middle (or lower) class and give to the rich. The club owners, phone and car dealers, and luxury personal shoppers are the ones eating their money.
In 1 Timothy 6 Paul also asks the wealthy to be rich in generosity: “They are to do good, to be rich in good works, to be generous and ready to share, thus storing up treasure for themselves as a good foundation for the future, so that they may take hold of that which is truly life” (6:18-19).
The standard finding in existing literature is that higher income predicts greater happiness, but with a declining marginal utility (Dolan et al., 2008; Layard et al., 2008): that is, higher income is most closely associated with happiness among those with the least income and is least closely associated with happiness ...
The low wage and unreliable nature of those jobs prevents them from saving enough to fund the purchase of indivisible assets needed to run these businesses. As a result, the poor remain poor not because they are only suited to irregular, unproductive work but because they cannot access the better jobs.
Americans have the sixth highest average household and employee income among OECD member states. In 2021, they had the highest median household income among OECD countries although the country also had one of the world's highest income inequalities among the developed countries.