When poor people write about rich people, they show their lack of real world knowledge. The most glaring omission in this wealth inequality writing is the lack of understanding of how volatile or “high beta” wealth can be.
Expectations of future profits can change significantly and thus the value of those expected future profits – your wealth – can change significantly as well over time. Making poor investment decisions is a really bad idea!
One of the most fascinating things about Thomas Piketty’s work is the lack of discussion of the idea that many wealthy people lose their fortunes while they’re still alive, let alone end up with children who embarrass their legacy with poor economic achievement.
How can Thomas Piketty explain the unfortunate reversal of fortune experienced by Navman founder Sir Peter Maire who has gone from Rich List to still-rich-but-his-ego-has-taken-a-massive-hit? (PAID) His r < g so his stock of capital has been falling…
There is a case to be made that a lot of the income inequality / wealth inequality shtick is emanating from academics and commentators suffering from status-income disequilibrium. The ups and downs of making investment decisions under conditions of uncertainty are completely outside their day-to-day reality! Of course they can’t comprehend the idea of reversal of fortune and explain such regular events credibly!