Greg Mankiw's Blog: How to Become Rich

Greg Mankiw's Blog: How to Become Rich:

Finally, recall this lesson:

Stephen F. Venti of Dartmouth and David A. Wise of Harvard concluded that the primary reason for differences in retirement assets was differences in propensities to save. It is not unusual to see low-income households with high savings rates holding more financial assets at retirement than high-income households who saved a smaller fraction of their income.

The neoclassical theory of distribution teaches us that a person's earnings depend on his or her productivity. But earnings are not the same as wealth. The accumulation of wealth is mostly about the ability to exert self-control.

Ideas:

• earnings ≠ wealth
• earnings = productivity
• wealth = ability to exert self control