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Fascinating

America is falling out if love with billionaires, and it's about time.

[latimes.com]

Many people don't understand what that kind of wealth even means. Most people would consider themselves rich if they had some money left over every month, drive nice cars, live in a nice house, and be able to travel and not think twice about random small Amazon purchases.

In reality, everyone is living one paycheck or chronic illness away from total. fucking. ruin. No one has any cash for anything, it's all charged. No one buys cars outright, it's all loans and leases. No one goes to school without loans. If you step back and for the sake of argument ignore whatever equity homeowners built up in their homes, everyone is underwater and everyone is broke, which means even those of us who are doing better (own a home, have steady jobs with 401smile020.gifs, etc) are one financial crisis away from foreclosure and eviction.

Meanwhile, what does it really mean to be near-billionaire rich? Well, for starters, it means not having to punch the clock. That right there removes ALL issues related to transportation, childcare, work-related stress.

Money-wise, any equity you own, such as stocks, bonds, ETFs, mutual funds, etc, will pay dividends. I just got a 2% divident on a Vanguard retirement fund, but it didn't make a dent because I'm broke. But if I had $100M in that fund, the dividend ALONE would be $2 mil.

Now consider you needed a little money. You just sell a little of that stock, pay barely 15% cap gains, buttress that tax with prior year loss carryover and "business-related deductions", and boom, you're paying sub-10% tax, if at all.

That's what people don't realize. Being that wealthy doesn't mean boats and luxury cars. It means complete freedom to tell everyone to go fuck themselves while removing 80% of all common stressors out of your life.

For an average person, it wouldn't take that much to get out of the rat race. Two-three grand a month would be lifechanging. It would mean daycare for the kids, more freedom to go to school, more freedom to work on the house, travel, take care of the aging parents.

By dokala
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9 comments

2

Where are all the Libertarians on this site? They LUUUV them some billionaires and jump up and down like cheerleaders all giggling and oogly about how wonderful entrepreneurs are and how they achieved through hard work while the rest of us are a bunch of lazy losers. This is the bullshit put out by the Cato Institute, the #1 Libertarian think tank financed by (who else) the KOCH BROTHERS.

PalacinkyPDX Level 8 Feb 2, 2019
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People with 3 jobs barely getting by are also lazy, right?

2

IMO the reason some people are poor is not because other people are wealthy. Money is not wealth, rather it is an accounting system whereby contributions to society are repaid in kind.

If a person wants more they ought to think of ways to contribute more. Sitting there in envy will get you nowhere. The options are to either learn to be happy with little (maybe the best option) or find a way to contribute something that people value.

That C&W song about not counting your money at the table delivers a potent message. Thinking about money is a distraction that impedes productivity.

WilliamFleming Level 7 Feb 2, 2019
Reply

Some problems with that is that some people contribute almost nothing, and get huge financial rewards (simply by virtue of luck, or inheritance dividends), while other slave away at jobs that have actual value to society, but which do not pay anything because society doesn't recognize them as actually valuable (or the value isn't immediate but cumulative, so society doesn't care until a huge problem develops). Moreover, depending on your circumstances, there may be nothing you can contribute that is of any more monetary value to anyone than what you are already doing, and no way to improve that circumstance under your own power alone. Simply having food, shelter, and a car to get to work may trap many people in debt (just to be able to keep working, eating, and being sheltered), so that they are trapped in an endless cycle. Indeed, many elements of our financial systems are designed to do exactly that.
...
Productivity is higher now than it has ever been. Wages adjusted for inflation have been flat for 40+ years. CEO compensation and profits have skyrocketed over that same time. In 1978, CEO pay was about 30 times the pay of the average worker. Today, it is almost 300 times more than the average worker.
...
Learning to be happy with little and blaming yourself for not contributing enough or not being productive enough, while not thinking about money, will only make the problem much, much worse.

Edited

I'm not certain you understand economics and the way laws are written in this country. It's complex and not written for you or designed for you to understand, hence the 73,000 page tax code. Most welathy people in the US inherited their money, not through blood, sweat, and tears from nothing to something (once known as the American dream). The wealthy used to pay into the system, now they lend the system money and collect interest off our backs.

@dokala Do you honestly think that without such people as Bill Gates we’d all be better off? Think again. Wealth is not money. Wealth has to be constantly created. Create something and you’ll have.

I doubt Gates actually consumes much more than I do. His well-earned money gives him certain power, within limits—that is all.

Sure, some people win the lottery. Their having money is not causing anyone to be poor.

Edited

@greyeyed123 There are reasons why a Wall Street speculator might earn more than a retail clerk. It is society that determines the value of an individual’s contribution, based on supply and demand.

As an example, my first job was picking cotton. There is no longer demand for that kind of labor. Should I throw a fit and demand that “my” job be somehow resurrected—that I am entitled to a job?Pout that I want my way, the hell with what’s needed? Society doesn’t owe us anything.

I remember living conditions of 1950, and let me tell you that people live better today than then. And people of 1950 lived much, much better than those of 1900. Modern technology along with free trade has brought great bounty but it is not appreciated. We have become a nation of greedy spoiled brats.

Edited

@WilliamFleming Both society and the market can be wrong, however, and mis-value many things. Ever read the book "Moneyball", or see the movie? Even within a market ostensibly based on skill and money, both the skills and the money paid for them were completely misvalued by all parties in the market. (The market wasn't even understood, so the outcomes for the money paid did not match--and no one initially understood why.) I also recommend Thomas Piketty's book "Capital", which includes all economic data in history. I completely agree with you if all things were as they seem. But many are not as they seem, and many things are not as they were economically in 1950 either. Additionally, many people today are much worse off than many people were in 1950, and getting a single, blue collar job to support yourself and your entire family for decades with no college and no special skills is also no longer possible (it was very possible in 1950 and the years immediately following). The top marginal tax rate is no longer 91-92-93 percent as it was in 1950 either. If a rising tide raises all boats, why have real wages remained flat for 40-50 years? Why have college costs skyrocketed? ...while CEO pay and profits have all skyrocketed as well? I highly recommend reading "Capital".

@greyeyed123 if the market has misjudged the value of something the effect will be felt immediately and the market will correct itself automatically unless foolish politicians and bureaucrats step in. If manufacturing wages are too low people will quit working and wages will rise. If unions force wages to rise artificially the result might be off-shoring or it might be general inflation. Either way, nothing is gained for the workers. If managers are being overpaid, then new prospective managers will come forth and offer their expertise at a cheaper rate. If that doesn’t happen it is because managers were not overpaid in the first place. I would think that a truly good manager is a rare animal, hard to find.

From an overall perspective having to do work is a liability, not an asset. Creation of work should never be the object. Creation of wealth in the form of goods and services, yes, and if labor is needed for that endeavor, jobs will emerge. At one time, to have a job was a special thing, but it has gotten to the point that people think they are entitled to jobs, and high-paying jobs at that.

All that said, I favor social programs if they are well managed and modest. State Capitalism as done by Norway seems like the best option to me. With automation there is simply less work that needs doing.

Edited

@WilliamFleming It doesn't appear you are understanding what I am saying.

I choose to live with little. fewer ties makes life easier to navigate as I explore my path in this existence.

@greyeyed123 Nothing is ever misvalued. Value is an emotion. Whatever people think something is worth will always be what it’s worth, period.

Of course they might evaluate differently at other times.

@WilliamFleming Again, you are not understanding what I am saying.

@greyeyed123 I do understand what you are saying—we disagree, that’s all.

No big deal.

@WilliamFleming If you know what I am saying, tell me what I'm saying.

@greyeyed123 What you are saying is plainly displayed above. What good would it do for me to take time to repeat your words?

It is ok for different people to have different opinions. It doesn’t mean that one person is correct and the other wrong, and it doesn’t mean that one of the people is weak in comprehension.

Our opinions are usually based on past experiences and they are deeply ingrained in our subconscious minds. We do not change our opinions based on someone else’s logic or experiences. It is a fun little game to needle each other but I doubt that needling ever changes anything.

@WilliamFleming My claim is that you do not understand the point I am making. I am not asking you to repeat my words above. I am asking you to rephrase what I am saying in order to demonstrate that you understand what I'm saying. It is fine to disagree, but since my claim is not that we are disagreeing but that you are not understanding what I am saying, we can remedy this miscommunication using the Socratic method.
...
I will start. You are claiming the market is always correct, and a even in instances where it may not be working perfectly, those in that market will very soon know what the errors are and correct them. You are also saying that values are based on emotion, and whatever anyone is willing to pay for something is the correct price, no exceptions. If I am incorrect in anything I have said, feel free to correct me. If I am correct, feel free to explain my view to you in your own words and I will correct wherever there is a misunderstanding. Only then can we pinpoint an actual disagreement rather than a miscommunication.

@greyeyed123 Baloney! I understand everything you wrote in minute detail. You simply disagree with my opinions and because they are different than your opinions you are diverting—claiming that I don’t understand what you are saying.

Is it possible that all of your opinions are not 100% correct? Just because someone disagrees with you doesn’t mean that they lack the ability to understand what you are saying. It might just be that you are at least partly wrong.

@WilliamFleming It could be. Why not test out that theory by explaining what I said back to me in your own words, and I will tell you if it is what I'm saying or not. I see you did not respond to my attempt to explain your points, which suggests to me that you do accept that I understand what you were saying. I see no evidence you understand what I was saying yet, and several indications you didn't understand. If you are uncomfortable trying to find out if you did misunderstand something, that's fine. If I was not "100% correct" in explaining your view, why not explain how? So I can learn? If this intimidates you, I will drop it.

Edited

@greyeyed123 No thanks. I am open only to the discussion of substance. Both of us have clearly stated our opinions and there it’ll stand unless you want to add something.

BTW, quoting something from a book proves nothing. I could give quotes supporting what I wrote if I wanted to.

@WilliamFleming The book is by a Nobel Prize winning economist, and is the first instance all economic data throughout all of human history has been analyzed.

@greyeyed123

Business profits are not all that high:

[aei.org]

Profits have ranged from 5% to 14% since 1947. We are currently in an era of moderately high profits but that level can not be sustained as wages rise:

[epi.org]

CEOs have a huge effect on the profitability of a company:

[hbr.org]

However, in reading various articles I have become convinced that executive pay is indeed out of kilter for larger corporations:

[google.com]

Companies that vastly overpay their executives will eventually go into decline and be overtaken by those with more sensible policies IMO. Tax policy might be used to discourage extremely high executive pay. It is important to keep in mind though that money is not wealth and that high executive pay in general does not affect the availability of goods and services.

The fact that real wages have remained flat since 1950 I see as a good thing. Why should real wages increase?

Our opinions are shaped by our strongest experiences. My earliest memories are of many poor people living in shacks with outdoor toilets and open wells, whose only income was from seasonal farm labor. I know that there were people in industrial areas up north with union jobs who were living well. After the advent of mechanized agriculture many of our poor people moved to such areas. People in my area seem to be living very well today—much better than before. Free market evolution trumps leftist revolution.

@greyeyed123 I’ll look into “Money Ball”.

Edited

@WilliamFleming
He's not arguing with you. He's explaining why he's right. You aren't grasping any of the concepts or straight forward information.

Also, please don't hark back to 1950 with anecdotal evidence because it only enables fallacies to flow freely.

@WilliamFleming Check out "Capital" by Piketty also.

@dokala
It’s not arguing that you are right when you just say that the other person is not grasping the concepts. If you want to argue that you are right you need to elaborate on those concepts and present evidence and logic.

It is a matter of record that living conditions are much better in my region than they used to be—you could verify that easily if you wanted to. Why does it disturb you for me to point out how much better conditions are than they were in 1950. Sort of undermines your pessimistic aggrieved outlook doesn’t it?

Edited

@dokala, @greyeyed123

And for you to read I recommend “Economics in One Lesson” by Henry Hazlitt.

@WilliamFleming Fair enough. A couple of things you misunderstood.

One, you are projecting some kind of "radical socialist" view on me that I don't have.

Two, I gave "Moneyball" as an example of when the market failed to value skills because everyone involved in that market misunderstood what was going on. Some players were given credit for luck, other players were devalued because of other's mistakes, etc., and thus the data collected to value them was incomplete and far more complex than anyone in the market understood. The market didn't correct immediately because understanding the market was too complex for everyone in it (one can easily argue it is STILL not immediately corrected, for if it were, people could easily tell which teams would win simply by how much money was spent on each one). Similarly, the market for higher education is misvalued because those who need it have very little power to choose (they are young, with no skills, and little money--you accept the terms the colleges give you in terms of cost, or you stay ignorant a poor...or, increasingly, to spend enormous amounts for the chance at not being poor, and are poor anyway because of crippling student debt), and by the time one finishes college, years have gone by and the market for certain jobs may have changed (thus, the market doesn't "immediately" respond to your choice of a career which was very much in demand when you started college, but not so much when you finish).

Third, many of the links you provided above do not support what you are saying. For instance, "While this research has not been able to identify the exact reasons for the growing importance of CEOs, one plausible explanation is that we — investors, markets, shareholders, etc. — think they are more important now. In other words, although there is no reason to suspect that what CEOs do now is more consequential than what they did in the past, their effects may have snowballed over time due to a self-fulfilling prophecy that attributes organizational success to them." Which is an example of my overall point of market failures.

Fourth, the link on the lay person's estimate of business profitability relies on percentages, while apparently ignoring compounding percentages and the explosive growth of those percentages over time. It also ignores the actual dollar amount those percentages represent. The article's very odd and deceptive thesis is to claim people don't really understand how much businesses make (implying they make much less than people think), and to make that case, they ignore the actual profits and the compounding of percentages that are at the heart of companies' record profits. To claim (or imply) companies are not making record profits because lay people misjudge profit margin percentages is dishonest. A simple google search results in this...from FOUR HOURS AGO:

"Facebook last week announced $16.9 billion in revenue for the final quarter of 2018 and $55.8 billion for the year, a 37 percent increase from 2017. Amazon also reported record profits for a third consecutive quarter, generating $3 billion in net income.4 hours ago"

Fifth: as I said, I am not some kind of radical socialist. Capitalism is the engine that makes the country run. But we do need wheels and seats and windows on the car, an occasionally brakes when we are about to go off a cliff.

Edited

@greyeyed123 Yes, the market for higher education seems out of balance, with extremely high tuitions, forcing students to take on unsecured debt at a time when they have meager prospects. I know y’all don’t like for me to harp on the old days, but my dear father was able to pay my way through college and he was a long way from being wealthy. I believe that was the norm at the time—it was possible to get through college without taking on debt. I knew people who worked their way through college with part-time jobs.

Enter politicians with their grand plans to mend perceived flaws and improve the world—they made student loans available. I might be wrong but it appears that schools leapt in to capture that money, with the result being a generation of disillusioned and angry young people.

A similar problem exists with our disgusting, busted healthcare system. Originally hospital insurance was conceived of as a way people could subscribe to their hospitals with a moderate monthly fee. That plan worked as long as it was left alone. Compare that with what we have today—people are devoting a quarter of their working years just to pay for medical care. The free market is not working because people don’t shop for the best price—they don’t even know what is to be charged. The medical establishment is able to leap in and capture insurance dollars because the laws of supply and demand have been tinkered with.

I apologize for projecting some sort of radical socialist view on you that you don’t have. I agree that we need certain regulations, and we need some government-sponsored social programs IMO.

Maybe in cases where the market mis-judges the value of things the solution is analysis, awareness and the spread of information.

Edited

@WilliamFleming My mother paid much of my way through college in the '90s without much trouble. (I hope the '90s isn't the old days yet, but maybe it is.) I am so glad I had that opportunity without debt.

3

Why am I rich? Because I don't spend money I don't have,on things I don't need, to impress people I don't like.
No phone, no pool, just pets. And some cannabis cigarettes. I did without then, so that I do anything I choose now.

Countrywoman Level 8 Feb 2, 2019
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Exactly.

1

Absolutely correct. $ = freedom.

bigpawbullets Level 8 Feb 2, 2019
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I was told freedom costs a buck-o-five. Damn inflation.

@dokala, my favorite movie! 😄

2

The sad fact is fewer and fewer people are doing more and more work so the rich could become richer.

Kojaksmom Level 8 Feb 2, 2019
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0

I realized what you were saying many years ago, and spent my whole life working toward eventually eliminating money stressors (all indications so far is that I hit escape velocity financially in July 2017--but I always realize I could be kicked in the teeth at any time). I have been lucky in places, though--or if not exactly lucky, always taking every opportunity from those times I was unlucky...and turning it into luck. (Dad was rated 100% disabled through the VA in 1996, but I had already finished my undergrad program by then, commuting and paying cash for everything as I went. I went back to school after that and used dad's VA benefits, increasing my job prospects and increasing my knowledge base.)
...
I know Suze Orman always said, "People first, then money, then things," which I've lived by. I know that Christian financial radio dude says, "Live like nobody else...so you can live like nobody else," which I have also done, although I think his religiously-infused view of money is weird. Also realizing that money literally comes from you as a person, and values and economies that are not directly connected to money. I had students just this week who asked me how they are ever going to use "Romeo and Juliet" in their lives. The real answer, as I see it, is far too complicated for them to understand as 9th graders. But reading widely and deeply in college and independently over years and years has given me a very strong sense of empathy--of understanding how others are thinking and feeling, and taking all the best wisdom humanity has ever had to offer. That is the most valuable skill I think anyone could ever have. It creates stability in your life in every way, including financially. Even in investing, the markets are powered largely by fear and greed. If you can master those two emotions in yourself (within a larger context of information and other emotions), and understand them well in others, you will rarely fail. "Know your enemy and know yourself, and you will always be victorious." (Oddly, setting both fear and greed aside seems to be the best way to make money. It also seems to be extremely, extremely difficult to do.)

greyeyed123 Level 6 Feb 2, 2019
Reply

Right, reading, exposure, and experiences certainly help with developing emapthy. Travel is a great experience that helps many people realize the world is not as they think. Being insular and tribal only serves to encourage fear of anything different or "unknown" while harming all involved.

@dokala And traveling is another problem for the poor.

2

It’s Capitalism. We’re fed the line that if we do what we’re told, work hard, we too can get rich! And, anyone who’s rich is obviously more deserving than us; cleverer, harder working…

Communism fails due to collective laziness and few incentives.

Socialism is the answer, as practiced in most European nations. Allowing for the perks of working hard or being clever, but limited - so as not to leave the remainder of society impoverished. Shared healthcare, guaranteed education, birth & retirement benefits…

The heydays of Wild West Capitalism have ended, there’s no longer enough to go around when wealth is hoarded by the walled-off few.. We busted Monopolies a century ago, and with societal support & political leadership - we can do it again ~

Varn Level 8 Feb 2, 2019
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I read Piketty's very long book, which was actually very interesting. It basically boils down to the fact that all economic data anywhere and at all times tells us that money made from money (rent, investments, business, etc) always increases over time at a faster rate than money earned from work. So basically it means that the rich get richer and fewer, and the poor get poorer and more numerous over time, unless there is a means imposed upon the system to even things out. If things get really bad, it's a revolution, as the money and power increasingly gets concentrated to fewer and fewer people while greater and greater numbers suffer. (As I have heard some say in the last few years, the economy isn't there to serve itself--it's there to serve the people.) Anyway, Piketty's data suggests that if things do not change substantially in some way, the entire system will collapse by 2100.

0

I consider myself rich as I don’t need much and what I make I don’t even need half.

Antidronefreeman Level 8 Feb 2, 2019
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Nothing wrong with embracing what you have. I'd say it's the healthiest way to live.

Just yesterday, I felt the urge to buy something. I ran squarely into a brick wall when I realized that I really didn't want or need anything. Sad.

4

The whole problem is a debt driven economy. Debt and credit is what america runs on. The rich run on wealth and asset. The stupidity of Americans never ceases to amaze me.

Veteran229 Level 7 Feb 2, 2019
Reply

POTUS lives on debt. "I love debt". Bankruptcy means the taxpayer pay & his contractors are stiffed. Banks won't lend to him so he goes to.....well you know where he got loans thru Deutsche Bank. Infamous for laundering Russian & Ukrainian money.

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