There is a surplus of millionaires in the world. By 2020, there will be over 30 million millionaires on the planet, and nearly 20 million in the United States. The decline of the scarcity economy, combined with the increasing stratification of wealth distributions are contributing to the fact that, despite the fact that the rich are getting richer and the poor are getting poorer, there are more rich people than ever. Furthermore, planetary demographics, the onset of power shifting from the boomers to Gen X, and the tech boom insure that more and more of America’s millionaires are young. While the average age of a millionaire is 57, and only 10% of america’s millionaires are under 40, these stats still mean that by 2020 there will be over 2 million millionaires in the US under 40.
We should now insert the usual caveats that a millionaire is not rich enough to retire. Roughly the top 10% of the world’s millionaires have $5 million or more of assets. This is enough to never work again. This means, statistically, that there are some 200,000 people under 40, and around 2million people under retirement age in the United States who are rich enough to never work again.
The super rich should retire.
I believe these people should stop working. The super rich should retire. I believe this is almost (not quite, but almost) a moral imperative, contrary to conventional wisdom. There is nothing noble in the continued employment of these people. There is nothing good about their continued accumulation of assets through work. It’s impossible to not continue making money when you have money, through investments and management. But it is not impossible to stop taking jobs that other people could probably do better.
Were wealth a zero sum game, it would be flat out immoral, as the additional money from your unnecessary continued employment would be better used going to those in need, by employing them instead. The world economy is not a zero sum game, it must be admitted, but neither is it the exact opposite of a zero sum game. I believe It’s closer to a zero sum game than not, if you will. There is not infinite money for everyone. This is a personal belief, and difficult for economists to prove.
It is also, however, irrelevant. The math works without it.
Even without the zero sum game argument, it seems to me that there is still a clear moral imperative for these people to stop working. The work they do will be picked up by others. It is a popular American myth that these wealthy people are somehow more talented than those who would replace them, and thus their continued employment will contribute to the economy more than if other people held those same jobs. I do not believe this to be true, and see no empirical evidence to prove it in any economic statistics. Indeed it has been my experience that the opposite is true. The people I have hired have often been monstrously more talented than myself.
I’ve seen a few arguments around luck vs skill in success lately on the web (okay, on Secret). I find that for every person who claims we should credit luck more, many people come out and feel a spontaneous need to defend the skill quotient. I find this curious. It’s nearly impossible to find an example of someone who succeeded that we can conclusively prove that luck did not play a factor. Conversely, all around us we find evidence of idiots who have managed to be wealthy without any shred of skill. When we’re bitching about them, we spit out the word luck contemptuously, but are all too willing to acknowledge its existence. When it’s us, however, we are far more reluctant to do so. Nonetheless, it seems to me we have acknowledged the existence of luck conclusively in these dialogues.
In my view, based on past experience in hiring, the lack of economic data to the contrary, and the clear evidence that much of their previous success was luck, we can safely assume that there is a good chance that whomever replaces the wealthy in their former jobs may well do just as well, if not better.
If the ultra wealthy were to retire they would, I believe, shift from accumulating wealth to a) protecting it via investing and b) slowly spending it to live. This is a stimulus on the economy. Other people would take their jobs, which means 2 million new jobs as people replace those that move out of the workforce that do not need to be in it. By my rough calculations this, alone, would be accountable for a 1.2 point improvement in the unemployment rate of the United States.
This, alone, would be accountable for a 1.2 point improvement in the unemployment rate of the United States.
There is an argument to be made about whether, upon leaving full time employment that the wealthy would shift their fortune to safer investment opportunities, so as to not lose it. This has not been my experience, as the primary gating factor on undertaking risky investments among the wealthy, I find, is time. Once they’ve got the time to pay more attention to their investments, they tend to take a bit more of an active role and, therefore, undertake at least some more risky investments.
Then we have work stress related illness and the commensurate costs associated with it. Only 6% of workplace stress stems from job security. This, clearly, would not be relevant for the super rich. An additional 20% comes from difficulty judging personal and work lives. Though I’m sure the super rich feel this to some extent, let’s be charitable and say they do not. The balance of workplace stress comes from “workload” or “people issues,” that seems safe to say applies to any of the super rich working. Stress related health care costs the US $200 billion a year. Three quarters of all workers report experiencing stress in the workplace. Apply the math to all this pro rata and you have costs of around $1.7 billion of stress-related health care expenses for the super rich or their replacements. These costs, of course, can be borne by the super rich, and the stresses would most likely be felt just as acutely, if not more so, by their replacement workers.
Trickle-up economics > trickle-down economics.
But right now those replacement workers are one level down, already feeling the effects. They, in turn, would be replaced by people the next rung down, et cetera. Jobs would “trickle up” to replace the super rich. At the very bottom, the 1 million new entrants into the workforce are likely to be more expensive to provide health care, now, than they would be while covered by new, employer-provided health plans rather than the public sector.
Let’s call this trickle-up economics. People are promoted to replace a deluge of absences at the top.
This is not at odds with the nobility of work.
It seems to me the largest obstacle to this is the moral/social point of view. Simply put, Americans find working noble. Many of the super rich believe not only that they are providing social good by working (they are, let’s assume, but so would their replacements), but that it is ignoble to retire early. That work is inherently GOOD. I do believe there can be health benefits to staying busy. And, while I question the belief personally that work is inherently good, this theory does not require that. This theory is not incompatible with a belief of the nobility of work. But I question the assumption that this work needs to be done in pursuit of greater wealth. Bill Gates, of course, provides ample evidence to the contrary.
In many ways, this only makes sense. Why should a retirement age of 60 apply when you have already accumulated enough to be set for life? Why hasn’t society adjusted as more and more people achieve that level of wealth at an earlier age. And OF COURSE many more people are achieving that level of wealth at an earlier age, given economic trends that are very much in that direction.
I wrestle with this personally. I have achieved this level of wealth, on paper, and think there is something to be said for stopping. I believe there are other ways I can keep busy, from pursuing charity and philanthropy to the arts to spending more time with my family. That being said, my wealth has not been stabilized or manifested in a safe form. It is still very much paper wealth and liable to sudden disappearance. So, then, I must continue to work until it is truly safe. But I see no reason why I should be on a treadmill of more and more stress, working ever more challenging and difficult jobs just to enrich myself.
Many will argue that they continue working in order to continue striving to make the world a better place. Let’s look at that. Even if I WERE endowed with some genius insight or idea where I felt the world absolutely needed it and to not bring it to fruition would be somehow immoral, I believe the right and moral thing to do would be to work towards getting that to happen, and put younger, more in need, equally talented people in charge of it. Getting it off the ground, so to speak. I see no moral imperative that *I* need to be the one to do it, and important ideas suffer no difficulty attracting talented people to execute them. It’s hubris and ego to think that I, myself, would be vitally important after the idea came into existence (again, being generous to myself and assuming that somehow I was the only one to ever think of this idea — that does not happen).
I’ve written extensively about my belief that those who accumulate wealth have a moral imperative to re-invest the bulk of that money into job creation and things that help others (at the very least: charity, too, is an option). I now further believe that this should be taken a step further. Ask yourself why you continue to work. Ask yourself if someone else couldn’t be doing it. If nothing else, consider trying it for a year. See how you feel. On top of all of this, I believe there is a good chance you will be happier.
Edit: I forgot to mention this but it should go without saying, if you’re in the middle of the thing that made you rich, and you haven’t gotten it to a stable place yet, of course you shouldn’t quit and let it crumble. No one is suggesting that.