World's richest 500 see their wealth increase by $1T this year
As capitalism matures, it&#x27;s clear to anyone with a thread of financial literacy that most wealth is created through capital gains rather than salary. We&#x27;re approaching a state (at least in developed countries) where productivity is so high, that you can literally park your money in 500 of the biggest businesses and you&#x27;re almost guaranteed a 7% annual return (if you hold stocks for the long term).<p>Using the commonly accepted safe withdraw rate of 4%, if you inherit $3 million (which is not even that much), you can safely collect $120,000 of capital gains&#x2F;dividend income every year without <i>doing anything</i>. This also frees you up to work on other things that will acquire you even more wealth. People whose parents didn&#x27;t leave them a large inheritance have to rely on salary, which is taxed at a higher rate and more difficult to earn.<p>In effect, late stage capitalism becomes the anti-thesis of the spirit of capitalism - devoid of competition, free innovation, and upward mobility. In an ideal capitalism society, the most talented should earn the most, but the compounding effect of capital makes it so that whoever holds wealth the longest earns the most.