Financial Freedom

The One Financial Secret of the Top 3%

  • Conventional wisdom holds that the richest Americans are hoarding the nation’s wealth for themselves, but that isn’t true.
  • Today, Alexander Green explains how accepting responsibility for our choices and actions can help us achieve more income and wealth.

Economic inequality has become an obsession in recent years.

President Obama called it “the defining challenge of our time.” Pope Francis called it “the root of social evil.”

Between 2009 and 2016, the number of articles in The New York Times containing the phrase soared tenfold.

Conventional wisdom holds that the richest Americans are hoarding the nation’s wealth for themselves, while everyone else stagnates or loses ground.

This is laughably wrong. Yet most people don’t know it, thanks to biased reporting.

U.S. average household income and household net worth hit all-time records in 2018.

There have never been more households making more than $100,000 a year. There have never been fewer households earning less than $35,000.

Yes, the rich are getting richer faster than everyone else. And we should do what we can to improve social mobility in this country.

Yet economic inequality in itself is not morally objectionable.

What is objectionable is poverty.

If a person lives a long, healthy and pleasurable life, what difference does it make how much the Joneses make, how big their house is or how many cars they drive?

Our goal should not be that everyone has the same. It should be that everyone has enough.

This confusion of poverty and inequality is due to what psychologists call “the lump sum fallacy.”

This is the mistaken notion that wealth is a finite resource – like a pizza – that is divvied up in zero-sum fashion, so if some folks have more, others necessarily have less.

That’s not how the economy works. Wealth is not just distributed. First it must be created. And it increases over time.

That is why the economy, household income and household net worth rise.

Notice that the people who grouse the loudest about economic inequality never explain why this occurs in the first place.

There are five main reasons:

  1. Some people don’t work.
  2. Some work but don’t save.
  3. Some save but don’t invest.
  4. Some invest but not prudently.
  5. Some invest prudently but spend the money instead of letting it compound.

There is plenty more to say about each of these issues. It’s also worth noticing that successful risk-takers see their economic fortunes rise the fastest.

Yet you’ll find this objective, matter-of-fact explanation is highly unpopular in some quarters.


Because it makes clear that the real source of economic inequality is not greed, selfishness or “a rigged system.”

It’s personal accountability.

It is only when we accept complete responsibility for our choices and our actions that we take the giant step from childhood to adulthood.

Yet many choose to embrace the psychology of helplessness and victimhood, preferring to explain all their struggles in terms of the actions of others.

Like you, I meet middle-aged men and women who are still grumbling and complaining about earlier unhappy experiences, who are still blaming their problems on other people or “the breaks.”

They are angry with their parents, fuming at an old boss, still simmering over their ex-spouse. They tell us that society is unjust and life isn’t fair.

You know what? They’re right.

There is no perfect justice. Life isn’t fair.

Some are born with many advantages, some with few. Yet all of us must play the hand we’re dealt.

Fear, self-pity, envy, jealousy and anger hold us back, tie us down and suck the joy out of life.

Management consultant Brian Tracy points out that there is a simple antidote to the factors that create these negative emotions. You need only say three words: I am responsible.

Whether your problem is joblessness, addiction, overspending, obesity or poor finances, you move closer to a solution the moment you say “I am responsible.”

It is impossible to say these words and still feel angry. The very act of taking responsibility short-circuits and cancels out negative emotions.

Yet many would rather train for the Boston Marathon in 3 feet of snow than utter these words. Why?

Psychologists say human beings have a natural propensity to accumulate pride and shun regret.

In other words, we tend to take responsibility for the positive developments in our lives and attribute unfavorable developments to others or circumstances.

This is not to say there aren’t times when our lives are significantly influenced by outside forces.

Maybe you are a great worker who lost her job due to a corporate downsizing. Maybe your parents really were poor role models.

But it is only when you choose to focus on what you can do and how you should act that you gain power.

Businesses and other organizations today are looking for people who are willing and able to think, who are self-directing and self-managing, and who respond to problems proactively rather than merely waiting for someone else’s solutions.

A study done in New York a few years ago found that people who ranked in the top 3% in every field had a special attitude that set them apart from average performers in their industries.

What was it? They chose to view themselves as self-employed throughout their careers, no matter who signed their paychecks.

These are people who set goals, make plans, measure progress and get results.

Personal responsibility changes everything. It means you own your thoughts, impulses, feelings and actions.

You are accountable for the consequences they bring and the impact they have on others.

This is not a burden, incidentally. It’s a privilege and an honor to take ownership of your actions. It creates freedom and control. It gives meaning to life.

Self-reliance is the great source of personal power. We create ourselves, shape our identity and determine the course of our lives by what we are willing to take responsibility for.

If you want to do something about economic inequality in this country – especially as it relates to your own financial circumstances – the important thing is not what you believe or whom you vote for.

It’s how you handle your own time, choices and money.

Good investing,


P.S. I recently sat down with Bill O’Reilly to discuss the American Dream and how it’s achievable for everyone. Right now is possibly the best time in U.S. history to build your wealth. Tune in to The Great American Wealth Project to learn how you can build your own seven-figure retirement.


An expert on momentum investing, value investing and investing based on insider activity, Alex worked as an investment advisor, research analyst and portfolio manager on Wall Street for 16 years. He now runs the wildly successful Oxford Communiqué, ranked as one of the top investment newsletters by Hulbert Digest for more than a decade. He is also the author of four national best-sellers: The Gone Fishin’ Portfolio, The Secret of Shelter Island, Beyond Wealth and An Embarrassment of Riches. He shares his wisdom in his free daily e-letter, Liberty Through Wealth.

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