This was published 8 years ago
The sure-fire path to wealth in Australia: already be rich
Worried about your financial future? Never fret again by following the V from the S guide to wealth creation!
By Andrew P Street
So, you want to be rich, right? Of course you do! Who doesn't? No one, that's who.
And the Turnbull government that we almost have back in power is promising to do all that it can to encourage an entrepreneurial, agile approach that rewards innovation.
Sure, today would have been the 100th birthday of the PM that made universal tertiary education a (brief) reality for a generation of Australians, but we all know that's just a wasteful federal money pit.
No, the way forward is for Australia "to embrace an entrepreneurial, risk-taking culture which is critical to drive jobs and growth into the future", in the words of Minister for Industry, Innovation and Science Christopher Pyne.
Malcolm Turnbull may have more than 645,000 Twitter followers but nearly half are considered fake.Credit: Peter Rae
And there's a simple trick guaranteed to ensure that you're in the elite strata, rubbing shoulders with Australia's most financially successful movers and shakers.
And it is this: already be rich! Sounds too simple to be true, right?
However, by using the simple trick of having been born into a wealthy family you can leverage such useful things as "having a safety net if the risks you take send everything to hell" and "easy access to other wealthy families who have investment cash to splash around" into making the kind of sweet, sweet scratch that will ensure that you make even more sweet, sweet scratch!
That was the conclusion of researchers at the University of California, Berkeley, who discovered that successful US entrepreneurs had several important characteristics.
Being focussed and proactive and ready to push the envelope outside of the box was well and good, it turned out, but not nearly as useful as being white, male and highly educated.
A joint study by Dartmouth College, NBER and Warwick University found that gumption and sticktoitiveness was nowhere near as important as "whether the individual ever received an inheritance or gift" and that personality is utterly irrelevant: "It is access to start-up capital that matters" - almost as though entrepreneurs are born, not made!
After all, look at the rags-to-riches story of our own PM, the nation's greatest advocate of agility and innovation.
Malcolm Turnbull was a man who overcame being supported by two professional parents wealthy enough to handle a marriage split with nothing more devastating than a brief foray into living in (very lovely beachside) rental properties. His father made enough to send his son to one of Sydney's most prestigious private schools, get a top notch university education and a well-paying law job and make some shrewd investments via access to Kerry Packer's mentorship and money. He eventually inherited millions from his late father, and therefore had enough of a financial buffer to lose big on bungled investments before cashing in on one surprising tech company windfall.
Boom! Easy! Heck, if he can do all that, why can't you?
Suggesting that the situation into which you are born remains a staggeringly reliable predictor of the class in which you're going to die might sound like the carping of the losing classes, those woe-is-me naysayers that endlessly moan about how upfront university fees might somehow prevent people that can't afford university from going to university – in turn thereby all-but-guaranteeing that they will never have the qualifications required to make enough money to, say, go to university.
But that's negative talk!
And we all know that innovation is the driving force of the economy – although it's never been at any point in Australia's primary industry, mining, manufacturing and service provision past – and that the $45 billion we're about to remove from company tax will encourage this innovation – aside from the 60 per cent of it that will immediately go offshore in investor dividends, obviously.
And, of course, Negative Nellies will make the argument that most startups fail, and fail badly - for example, one hundred former staffers are currently attempting to get their outstanding money out of streaming music service Guevara, which launched with great fanfare and more than $50 million in investment in 2008 and went into administration last week.
But it's important to remember that any talk of levelling the playing field is actually punishing success. And that's why we need to maintain wealth-absorbing structures like the existing negative gearing and capital gains benefits.
In fact, provided that you're already comfortably well off in 2016, the sky's the limit!
And if you didn't have the innovative foresight to be born into comfortable wealth - well, you presumably just didn't want it enough.