Thanksgiving is a major holiday in North America, best known as a time to give thanks for all of life’s blessings. I couldn’t think of a more appropriate time to reflect on some of the life lotteries many of us have been fortunate to win.
Like it or not, there are a few aspects of one’s life, which are assigned to you at birth. Those attributes could have a significant impact on your quality of life.
Hitting one or more of those lotteries could also make a huge difference on your ability to reach financial freedom.
Here are three of life’s most influential lotteries, how many are you thankful for?
No. 1 | Where you’re born
The country you’re born in can have a lasting effect on your ability to achieve financial freedom. There are a number of ways to measure how rich the citizenry of various countries are relative to each other. Almost all will use Gross Domestic Product (GDP) in their calculation and rankings.
However, not all GDPs are created equal. The GDP of a country adjusted for Purchasing Power Parity (PPP) is probably the best comparison to use. It factors in the GDP per person and adjusts for cost of living standards and inflation.
It’s a more realistic view of how well-off someone is on average in one country versus another. Here’s a list from Global Finance which uses 2016 values to rank 189 countries around the world based on GDP-PPP.
I took a snapshot of the top 19 countries (top 10%) to represent the richest countries in the world.
Interestingly, the United States is not ranked as high on the list as one might expect, although it ranks higher based purely on GDP. Of course we’re still in the top 10% by a good margin.
If you were born in one of the countries listed above, you’ve won the kind of life lottery that positions you well for financial success.
If you happen to have been born in a country lower in the rankings, your odds of success (relative to financial freedom) are diminished. Unless of course you manage to emigrate to a top 10% country early in life.
Max Fun Fact: I was born in Lebanon (ranked 69), which is ranked right below Mexico. This was a life lottery I clearly did not win. However, moving to the United States in my early teens definitely improved my odds. Although my journey was harder, I definitely didn’t waste that opportunity.
No.2 | Who your parents are
There’s no doubt that being born into a good family is a major life lottery win. A loving and nurturing home can make a big difference in someone’s character and their potential in life.
Unfortunately, love and support is not always enough to provide a financial leg up on life.
According to a report by the National Bureau of Economic Research there is a strong correlation between how financially secure (employed) children are, and their parent’s income.
The general idea is that if you’re born into a poor family, you have a higher likelihood of ending up poor yourself. That lack of social mobility will vary depending on which country you live in, but the relative impact remains the same.
Notice how the employment rate really falls off for the children of the richest percentile. If you’re born into a very wealthy family, you’ve really hit a life lottery, so much so that you don’t even need to worry about working!
There’s another very similar chart in the same report that compares education levels of parents relative to their children. So if you’re born to parents who have college degrees, your odds are higher than otherwise.
It should come as no surprise that the better off your family is financially, the better your chances at achieving financial freedom. Better roll the dice correctly!
Max Fun Fact: I was born into what I would consider a 30th-40th percentile household with respect to income. I wouldn’t consider my family poor, we always had food and shelter, but I had no financial advantages as a result of my upbringing.
No.3 | What you look like
This last one is probably the most contentious, but must still be mentioned. Although we would all love to believe that what matters most is what’s on the inside (including brains), the unfortunate fact is that one’s appearance does have an impact on success.
Whether it’s your gender, race, or general physical appearance, what you look like can have an impact on how you do financially. It’s yet another random life lottery up for grabs.
Just take look at the gender income disparity across the world (source: theatlas.com)…
If you’re a female in the US, you can expect to make about 65% of the average income of a male. Anyone that has a working spouse is impacted, Mrs. Max can attest to that fact in her occupation.
The data also shows similar disparities by race, at least in the US. According to the Pew Research Center, white and asian men out-earn their counterparts appreciably.
If you happen to statistically fall into the more advantageous categories, you have a considerable running start in the game of life, financially speaking of course.
Max Fun Fact: I’m obviously male, and the closest category I can be slotted into is white, although most people wouldn’t just by looking at me. Since about half the world population is female, the fact I was simply born puts me into the 50th quintile. I guess that’s a life lottery win, although it seems less logical compared to the first two.
It would be silly to ignore the fact that some people are born into financial opportunism. No one can be faulted for simply existing, it wasn’t their choice to be brought into the world after all.
But as we spend some time relaxing with family and appreciating our good fortune, we should remember that our financial success could have been influenced to a great degree by one or more of life’s lotteries.
In my case, I probably benefited to a great extent from No.3, and partially from No. 1 & 2. I’m thankful to have had the opportunity to make a better future for my family.
Of course I also believe that hard work, perseverance, grit, and resourcefulness can compensate for the lottery affect up to a certain point.
What’s important is to keep the right kind of perspective and balance between those attributes you’re born with, and those you have to earn.
Looking for more reasons to be thankful? Here’s a video with even more perspective…
Readers, how many life lotteries do you think you’ve won? Do you believe they had a big impact on your financial success? Do any of the statistics surprise you? Share your thoughts and comments below!