The Poverty of the Rich

The poverty of the rich

People who have great wealth are often perceived as omnipotent when it comes to what money can do. When a rich man complains of being broke, people hardly believe he’s truly broke. Our thought is, with all the fleets of cars and all the big houses how can he say he’s broke?

This post reveals how and why the rich struggles financially like the poor despite their wealth.

I took some time to study the life of the rich, and I found out that there their struggles are not too different from those of the poor, except for the rich who have learned contentment and have good relationship with money. defines poverty in the following ways:
  •    The state or condition of having little or no money, goods or means of support.
  •     Deficiency of necessary or desirable ingredients, or qualities, etc
  •    Scantiness; insufficiency

Take some time to look at that above definitions, do they also apply to the rich? You may not have considered this before now, but they apply to most rich people who have not learned to manage their relationship with money properly.

There is one single law that makes the rich poor, and that law is called Parkinson’s Law. The law states that “expenses rise to meet income.”  Poverty is not just about living in rags, it is about insufficiency.

Read Also: 6 Reasons Why People Remain Poor

Let me do a little illustration, using two persons.  One is rich and the other poor. I will call the rich man, Mr. Rich and the poor man Mr. Poor.
These two men are both working, and have wife and children. Mr. Rich earns five hundred thousand naira per month, while Mr. Poor earns fifty thousand naira per month.  Due to the poor earning of Mr. Poor, he rented a cheap apartment, has no car, put his children in a less expensive school,  live a simple life, and able to enjoy life with his little earning. Mr. Rich on the other side earns fat salary, and because of that he lived a more lavished lifestyle. He lives in a sophisticated apartment with very expensive rent; he uses the latest car, put his children in the best school, with highly expensive school fees, and lives a very flamboyant life.

These two people live based on how much they have or earn. Though they have disparity in terms of living standard, but when it comes to financial deficiencies, they will likely experience the same thing or feel the same way based on their unique lifestyles.
The Rich man could have done better, and be more comfortable, but because he fails to defile Parkinson’s Law, he would definitely suffer from poverty. His poverty may not be evident in living in rags,  psychologically and financially, he would feel poor because he has chosen to live a life that his earning cannot maintain. He has raised his expenses to his income. Like the poor man, he will continue to struggle in his finances.

The poverty of the rich who obey Parkinson’s Law becomes evident when they have serious crisis such as job loss or failure in business.  Some rich people due to the lifestyle they have chosen have to borrow money to maintain that lifestyle when they become broke. To the rest of the world, they are perceived as big men and women, but in reality, they are poor souls.

In the year 1923, according to a popular story, a meeting was held by the top 9 richest men in the world at that time. The meeting was said to have taken place at the Edgewater Beach Hotel in Chicago.

At the meeting were the following big men.

1. Charles M. Schwab, president of the world’s largest independent steel company.
2. Samuel Insull, president of the world’s largest utility company;
3. Howard Hopson; president of the world’s largest firm;
4. Arthur Cutten, the greatest wheat speculator;
5. Richard Whitney, President of the New York stock exchange;
6. Albert Fall, member of the president’s cabinet;
7. Leo Frazier, President of the Bank of international settlements,
8. Jessie Livermore, the greatest speculator in stock market and
9.Ivar Kreugar, head of the company with the most widely disputed securities in the world.

Something shocking and unbelievable happened to these big wigs 25 years later.

1. Charles Schwab had died in bankruptcy, having lived on borrowed money for five years before his death.
2. Samuel Insull had died virtually penniless after spending some time as a fugitive from justice.
3. Howard Hopson became insane.
4. Arthur Cutten died overseas, broke.
5. Richard Whitney had spent time in a mental asylum.
6. Albert Fall was released from prison so he could die at home.
7. Leon Fraizer died by suicide.
8. Jesse Livermore died by suicide and
9.Iva kreugar died by suicide.

The failure of these men can be traced to their inability to outwit Parkinson’s Law. Though they were rich, they lived in such a way that their expenses exceed their income, over time, their real statuses were revealed.
Any rich man who fails to live below his means, no matter how glamorous, attractive his life seems, is a poor man. His current life may show otherwise but time will reveal to the rest of the world that he’s truly poor.

When next a rich man tells you he’s broke, believe him. He’s broke because despite his riches, he has allowed his expenses to rise above his income. The result will always be lack and insufficiency. 

Over to You

What is your take on my assertion in this post? What other ways do you think the rich can experience lack like the poor. Feel free to share your thought in the comment section.

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  1. Hello Taiwo! You did a great job with this post! Having more money does not neccessarily mkae you RICH HUH?
    Great Share My Friend
    Chery :))

    1. Hi Chery, you are on point. Thanks for your comment.

  2. Hi Taiwo,
    This read like a story about the poverty of the rich. I had read that Warren Buffet has outwitted Parkinson’s Law. He lives in the same house that he always has had. I don't know if that is true but you never hear about him being flashy do you? Interesting article.

    1. Hi Kathryn,
      If that story about Warren Buffet is true,then he's a source of inspiration. Thanks for your comment.

  3. Interesting post, definitely gives one food for thought. My dad always told us live below your means, and make sure you save something for a rainy day. I never knew about Parkinson's law, but it sure makes sense to me.

    1. Hi Ruth,
      Your Dad's advice is a great one.Thanks for your comment.

  4. Hi Taiwo,

    Liked how you expanded Parkinson's Law into the theory that expenses expand in proportion to income. In most cases that observation is a truism. On a side note, you may want to check your definition of the word omnipotent. Thoughtful post, thanks for sharing,

    1. Hi Edward,
      Great comment from you. The word omnipotent as used in this post connotes having the might to afford anything money can buy. Thanks for your comment.

  5. Interesting, I guess when you have money you assume you will always have money and so spend beyond your means.

    Enjoy the journey!

    1. Hi Mandy,
      You are very much on point. Thanks for your comment.

  6. Hi Taiwo

    Impressed with this post and i love your thoughts on the difference between riches and being poor.

    You shared a food for thought. Thanks for this post. Take care

  7. Thank you so much for spending your precious time to write this valuable and informative article.

  8. That is very correct. One has to learn to live within one's means.

  9. This article gives the light in which we can watch the truth. This is exceptionally pleasant one and gives indepth data.
    Think and Grow Rich