What determines personal income?
Most people make average money, some earn more, and a few earn an insane amount. Why is that?
From my observation, I think it all comes down to just one unique common denominator: how difficult
would it be for someone else to do what you’re doing. The person who picks up the trash
does a very useful job, a job without which the world would be a mess. But anybody else could do
it too, and so he earns very little. The car mechanic does a job that requires more skills, and
so he earns a little bit more. But becoming a car mechanic is not a skill that's hard to replicate
and so he doesn’t earn that much more. Becoming an engineer is harder, not everybody could do it,
and so engineers earn more. And so on.
What about those who earn millions and billions? Can you bring 50,000 people in a stadium to
watch you play soccer, or listen to your jokes, or hear you sing? Now that’s a skill that would
be very difficult for anyone to replicate: many try, few succeed. What about being an actor?
The hard part is actually getting and staying on stage, and few people can do it, and so some
actors earn a lot. If you can sell software to millions of people, you’ll earn a lot. If you can
write a book that millions will want to read, you can do like J.K. Rowling and become a billionaire.
The world doesn’t reward the usefulness of skills, it rewards uniqueness.