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5 factors that can determine whether you'll be rich or not

Moving up the economic ladder is a lot like losing weight. You can do all the right things — work hard (exercise), go to college (buy all the diet books), diligently squirrel away 10% of your earnings (count calories) — and still wind up short of your goal.

The same way our genetic makeup can determine how quickly we gain and lose weight, some factors are simply beyond our control when it comes to our potential for building wealth.  

Researchers are constantly trying to figure out who ends up wealthy and why, studying all the factors that can give some people a leg up and leave others stubbornly stuck at the bottom of the socioeconomic ladder. And while the following five factors are not a guarantee of future riches, they’re a good indicator that you have a better shot than others.

How much your parents earn

Pew Research Center

It’s not terribly surprising that kids raised by high-earning parents are more likely to become wealthy later in life. In fact, the Donald Trump Jr.’s of the world expect to earn 200% more than children raised by parents in poor families and 75% more than children raised in middle-income families, according to the Pew Research Center. Middle-class kids also have a leg up, Pew found, as they will likely earn twice what poor kids earn in adulthood.

Your ZIP code

Increasing a child’s odds of financial well-being depend a lot on whether his family lives. Simply moving from a predominantly high-poverty ZIP code into a more affluent one can improve children’s school performance, according to research by Harvard University economist Raj Chett.  “Low-income children are most likely to succeed in counties that have less concentrated poverty, less income inequality, better schools, a larger share of two-parent families, and lower crime rates,” Chett writes. In one example, they determine that for every year a child grows up in DuPage County, Ill., one of the best counties for economic mobility, their household income in adulthood rises by 0.80% — over 20 years, that would make their earnings 16% higher than the U.S. average. The outlook was much bleaker for kids born in Baltimore, which falls to the bottom in their ranking for economic mobility. Their earnings in adulthood would fall 14% short of the national average. This trend unfortunately favors white children and disproportionately penalizes minority children, who are more likely to live in high-poverty areas that lack quality schools, child care facilities, parks and high-paying jobs.

Whether you were raised by one or two parents

American Enterprise Institute

At a basic level, it would make sense that two-parent households might fare better financially than single-parent households. That’s two potential income streams and even if one parent doesn’t work, you would arguably save money on childcare by having a parent home to help out. The decline in the number of two-parent households over the last 20 years is one factor experts attribute to the increase in economic inequality in the U.S. Growing up in a two-parent household can also increase your odds of becoming highly educated, which can translate to higher earnings later, according to research from the American Enterprise Institute, a conservative think tank. The institute looked at marriage and family income trends between 1979 and 2012. Girls and boys raised in two-parent households earn $4,700 and $6,500 more per year, respectively, than kids raised in single-parent homes.

Married men and women who were raised in two-parent households earn $42,000 more annually than unmarried individuals who were not raised in two-parent households. (This is one of the reasons some economists are pushing to reform government income assistance programs, which can indirectly disincentivize marriage. When low-income parents marry, their dual incomes can potentially push them over the income limits for assistance, leading some parents to choose to remain unmarried.)

What you look like

Little though we like to think of it, attractiveness can influence your earnings, as multiple studies have shown. Attractive people earn an average of 3% or 4% more than people with below-average looks, according to Daniel Hamermesh, professor of economics at the University of Texas at Austin and author of the book "Beauty Pays: Why Attractive People Are More Successful.” Your weight and height also have an impact: Every inch above average height (5’3’’ for women; 5’9’’ for men) can translate to an average $789 more per year in earnings for both men and women, according to a 2004 a study in the Journal of Applied Psychology that analyzed pay for over 8,500 adults. The researchers surmised that, “Tall people may have greater self-esteem and social confidence than shorter people. In turn, others may view tall people as more leader-like and authoritative.” Height tends to matter more for men than women and in highly social jobs like sales, management and customer service. Height matters slightly less for workers in blue-collar and clerical positions, they found.

Your race

Pew Research Center

Any way you slice it, minorities have a harder time climbing the socioeconomic ladder from birth. Minorities are more likely to live in poverty, come from economically segregated neighborhoods, and be raised by single parent households, each of which have been shown to lead to lower earnings in adulthood. They are also more likely to be on the receiving end of racial bias that is beyond their control. Mortgage lenders are less likely to extend loans to minority families, going so far as to redline entire neighborhoods in order to avoid them.

There’s racial bias in the workplace as well, which can have an adverse effect on minority workers’ potential to get hired, promoted and compensated as much as their white colleagues. Bias can hurt minority homeowners as well. Most black homeowners live in majority minority neighborhoods, which tend to have lower home values and lower quality amenities like schools, childcare and hospitals. The Brookings Institute labeled this phenomenon the “Segregation Tax” in a 2001 study. Even when controlling for income, homes owned by black families were valued at 18% less than homes owned by white families.