Migrant Success - HERE is the answer

For the last few days I've led you on a merry chase. Trying to get you to THINK - use your noggin - about why a migrant has a tendency to succeed more oft than a native born citizen.

I could've just come out and said it. You would have nodded your head and gone on your way. Far better if you discover it for yourself. Because then you own it... it becomes an epiphany. The kind that Archimedes had when he sat in his bath and it overflowed.

Let me thank all of you who took part in that thread... and the many who read along without posting. Some of you "got it" right away. Some of you skirted around the edge. And some decided it would be better to hit me with a sock full of pennies.

Before telling you what it is (oh my, I sound like Morpheus talking to Neo in The Matrix... would you like to know what... it... is?), let me relate a story which has the necessary ingredients - though hidden as usual...

Joe - not his real name - arrived in the US with some clothes and a few spare bucks. He could not speak English.

He got himself a minimum wage job - the kind people who cannot speak English get because they don't really have any other choice - and a place to stay.

He worked during the day and took English lessons at night. Once he had learned English he saved up enough money to buy a welder and some metal (he loved welding). He then set about welding security bars for windows and selling them to the people who lived around him.

He now has a very large business selling security devices for windows, hires only migrants who cannot speak much English and pays for their English lessons himself. He also donates $250,000 per year to "bodies" that teach English to newcomers who cannot speak English.

His story is typical of migrants.

Now let me quote some of the posts that "got it right". (All bold added by me.)

First there is Tam's post... the first person to get it...
Having nothing (especially debt) can be very liberating. Think about it, many imigrants come from extremely poor countries looking for a better life and don't take for granted all that we do. Instead of spending their earnings to pay debt (for items that could be considered luxeries) or keep up with the Joneses, they invest in themselves and the basics. There are so many things people think they need simply because the have always had it or becuase someone else has it.

Here's an example of the difference. A kid moves out of his parents home to live on his own. He gets cable, an entertainment center, new car, eats out, etc. and goes into debt - why? Because that is what his parents did but what he doesn't consider that either they are carrying a lot of debt (and that money could be spent elsewhere) or that they slowly worked up to the point where they were able to afford the extras. Then he sees other people have things and he thinks he needs them to.

An imigrant comes to this country with nothing (and usually not having had all these extras) and worries about the basics. He then invests in himself.

Next to get it was Chris H
> WHY are they able to survive on the minimum
> wage job?

> "They are able to survive on a minimum
> wage job because they... (insert thing
> here)"

... have no debt and stay out of debt.

When they enter their new home, they (presumably) have no debts...

Steve Rollison also got it (pretty well) in a round about way...

Immigrants--most of them, anyway--arrive without any "stuff" (as the great philosopher and observer-of-life, George Carlin, puts it). Consequently, they don't have to divert any of their meager incomes to "maintaining and upgrading" their stuff.

Example: If I drove a beat-up wreck of a car, I'd "have to" spend money on repairs to keep it running... or buy a newer car (probably on credit).

Without having to spend money on maintaining any "stuff," (going into debt - MR) immigrants are able to invest their meager incomes in themselves (e.g. education) and in their dreams (e.g. entrepreneurial undertakings or savings/investment accounts).

Such investment becomes habit... which leads to long term financial success.

In a similar vein, many "native" citizens come to the conclusion late in life that they need to invest in themselves--instead of buying more stuff--if they are going to be able to enjoy comfortable retirements.

Unfortunately, most of them reach this conclusion with too few years left to be able to turn their "spend, spend, spend" lives around.

Steve, like Tam, expanded on the reasoning. Showing how it matched the criteria I hinted at.

They arrive in the country debt free! They are adults with all the usual adult knowledge but without debt. With no credit history or the other items Simon mentioned in his post, they can't even get into debt if they wanted to. They are forced to live within their means. As their means are very little, a minimum wage job does see them get by. The excess (savings) is spent in self-investment or business pursuits. By the time they "qualify" for the opportunity to get into debt, they have the habit of living without debt.

People spend their whole lives trying to get out of debt. They want instant riches - to pay off their debt. Bankruptcy is viewed as debt relief. Look at all the "debt relief" ads in your local newspapers. They start their adult life in debt - from university fees, etc. Then immediately get into more debt right away - car loan, home loan (got to have the American, UK, Australian, whatever country you live in, dream), hire-purchase, rent-to-own, lease to own, pre-approved credit cards, and so on. As long as they can make the payments they think they are fine.

Reality check. Sell off all your do-dads to pay off your debt. Are you debt free? The answer is probably NO! So, you have a negative net worth. (Scarey thought.)

The migrant with just $1 in their pocket and no debt has a positive net worth. They start out infront of where most people are today.

Sure they have less "stuff". They have NO DEBT though. So they aren't going to spend the next 25 years paying for something that has long outlived its usefulness, and may even be thrown out with the trash.

Amber also...

...save part of their earnings... and can then, much easier, take advantage of an opportunity than if they are encumbered with debt...

And Alexander too...

Immigrants have cultivated a THINKING PROCESS/HABIT of living on essentials with the money they have back in their country. When they arrive in the 'better' new country, not only they have no debt, they CAN live on 'minimum wages' (minimum wages IN THE NEW COUNTRY - could be MAXIMUM back in their country) because that's what they have been doing.

To expand... and not just from a poor-to-rich country example, but from a western country to another western country example...

It costs money to go live in another country. Airfare. How much? At least $1,000 one way, per person, from Australia.

But that other country won't just let you in with a passport. They want to see: proof you can support yourself, proof of job offer, proof of the half a million to one million dollars you are bringing with you. (Depending on which type of Visa you want to enter on.)

To do this... have enough money to live on and enough money to get over there in the first place... usually means you have to save it up. Very hard to save when you are in mountains of debt.

Also, the moment you leave you will most likely have sold off everything else you own. Clearing your debt in one hit.

You arrive as a debt free adult with a life's worth of knowledge - and hopefully - wisdom.

Most people in the country you move to will be in debt. They will only get out of debt when they retire and their "payout" pays off their debt. But at 65+ years, this is too late for most people to increase their wealth. And besides, they still do not have the "no debt" habit.

But you, with no "history" in that country, are forced to live a debt free life. Without debt tremendous amounts of money can be saved and then invested - which will make more money.

The Richest Man in Babylon tells the story of the camel trader who got no-where until he paid off his debt.

THINK. Lenders will lend an amount of money that could be serviced with about 30% of your income. In other words... if you earn $3,000 a month, they will lend you an amount that would require monthly repayments of $1,000.

If you did not take on this debt, you would have $1,000 a month spare money to spend.

It also means... with such a debt you could actually live on $1,000 less per month - after all, with the debt you don't see that money anyway.

I mentioned Karol's post... in that post his parents arrived with about $400. Including whatever else they had (clothes etc.) they may have had a positive net worth of $500 and no debt.

In that situation they are forced to spend wisely and can't get into debt even if they want to. The no-debt habit forms, they end up not ever needing debt. And certainly not using it to buy do-dads.

So there you have it... the plain & simple (and yet ellusive) advantage migrants have - and why they often become more of a success than a native born citizen.

Thank you all for your input. Please feel free to add to this.

Michael Ross


The publication started by the children of migrants