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Wealth is rarely fair

Welcome to this month’s newsletter.

This time, I would like to discuss some of my observations on the subject of “fairness” in wealth creation. Now this might upset some of you, but let’s find out if it is the case for you.

Let’s take a look at some of the people you have around you, to see if any of the following applies:

  • You have old school friends who couldn’t compare with you in terms of ability, looks or personality back in your school days, but who now live a much wealthier life than you because they married into a wealthier family;
  • You have colleagues with a greater equity share in the company you work for because they got into the business before you arrived, but you are in every way a more productive and capable staff member than them. What frustrates you even more is that the greater the contribution you make to your company, the wealthier you make these guys. In other words they can simply get richer by riding on your effort;
  • You have friends with a few investment properties who are way ahead of you in terms of wealth, even though you are at a higher income level than them. You just didn’t find out about property investing as early as they did. To make you feel worse, you believe you’re more capable than they are in most things you’ve done together;
  • You have spent a long time working on a property deal. You know everything that is required to make the deal work, and yet someone else comes along and picks up your deal for peanuts because you simply don’t have the cash flow to continue. To add insult to injury, you feel that person doesn’t have 10% of your knowledge about property, he or she just happens to have access to the money they need at the time you don’t;

So what does all this tell us? At the very least, it tells us that wealth is rarely fair, at least by most people’s yardstick, which is usually based on our perceptions of ability and skills.

When we make these observations ourselves, most of us choose to react to this “unfairness” of wealth in a negative way. We often choose to spend our time finding fault with those people who are “luckier” than us and stop doing what is right for our own situation.

For example, we may choose to walk away from a perfectly good opportunity for ourselves just because other “less capable” people got into the opportunity before us, or we may choose to not invest in the same opportunity because other “less respectable” people are already in the opportunity holding a better position.

While we can’t always control the events happening around us, we can choose our reaction after the event has happened. I guess the “unfairness” in wealth can teach us a few things about acceptance. It is very hard for most people to not look at what other people are getting out of life and just keep our focus on our own business, i.e. one thing we can learn is to accept other people’s good fortune and be happy for them, and just keep on putting our focus on working better on our own situation. For example:

  • If you find yourself arriving late to a business partnership or investment opportunity, all you have to do is focus on is what is fair for your effort and resources, and not worry about what other people might get because of your input in the future as you simply can’t tell how much benefit you might receive in the future because of other people’s effort and resource either;
  • When cutting a business or investment deal, try to ignore what your partners or co-investors might be getting, and work out what is fair for your part and get on with it and be happy for the other parties if the deal turn out to be in their favour.

I suspect there is a simple law somewhere in this universe that goes like this: if you are not happy for other people to get lucky, then the universe won’t be happy for you to get lucky either. The way you admire other people for getting lucky before you, will probably be the same way you’ll be admired later by other people for the luck you get.

Maybe after all, there is still some fairness in wealth.

Until next month, happy investing.

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