91–100 of 107 posts
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Exponential cumulative distribution. Mostly because wealth of the few on the top I'd made by accumulation of wealth of the ones below. A mathematical description of exploitation.
One of the "problems" of capitalism. Excessive capital accumulation past a certain point. What makes the system great, is also one of its fatal flaws.
Excessive capital accumulation is what makes this system great?
Do I read that correctly?
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One of the "problems" of capitalism. Excessive capital accumulation past a certain point. What makes the system great, is also one of its fatal flaws.
> What makes the system great.. Excessive capital accumulation is what makes this system great? Do I read that correctly?
Forbes missed Kimbal Musk. Looks like they need to add a wikisearch to their methods: https://en.wikipedia.org/wiki/Kimbal_Musk
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One way I think about it is I ask myself how long would it take to spend in an average adult life? To spend $1m in 60 years you have to spend $45 a day every day for the rest of your life. To spend $1bn in 60 years you have to spend more than $45,000 a day, every day. Those are figures I can kind of work with.
That's almost like Brewster's Millions, http://www.imdb.com/title/tt0088850/ .
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Suppose I make my first $10M getting lucky in technology, then make my next $1B getting lucky in real estate by leveraging my lottery winnings. What's the source of my wealth in this case? (this seems to be a clarifying exaggeration of what is being asked here)
In my view: Technology. Without that first $10M, you'd never have had the opportunity to make $1B in real estate. When I think "source" I'm digging down to root cause.
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at the $millions level, although technically you could, you generally don't "send money" like you or i or even a typical rich person would do as individuals paying a regular bill. you talk to a person at the bank who calls up another person at another bank, and they wire the money from bank to bank or some kind of intermediary, like an underwriter or escrow co. think of it like financing a new car purchase, on a gran…
>>think of it like financing a new car purchase, on a grand scale. how many people were involved in a $30k car transaction? you, your SO, maybe your kids, the sales guy, the sales manager, the finance manager, the underwriter at the bank, the underwriter's manager at the bank, etc. sure you wrote the dealership a check for the down payment, but did you "send" anyone $30k? I'm not disagreeing with you, but I recently…
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Perhaps obviously, when your interpretation makes the article not make sense, it's useful to try interpretations that work. I guess another way to put it is that a very human mistake to make is to infer something and assume it was implied, then use that assumption to form a dismissal. I get that your particular interpretation is likely meant as some subtle manner of dismissal of the Koch brothers (something along the…
This is a spreadsheet, not an article, so I'm confused about your first point. When looking at a list of billionaires, it's natural to wonder "where did this fortune come from?", and in the case of the Koch brothers, the answer is "oil". I don't think it requires a deep dive into my psyche to defend this interpretation of the "source" field, though I'm always happy to swim around down there.
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>>think of it like financing a new car purchase, on a grand scale. how many people were involved in a $30k car transaction? you, your SO, maybe your kids, the sales guy, the sales manager, the finance manager, the underwriter at the bank, the underwriter's manager at the bank, etc. sure you wrote the dealership a check for the down payment, but did you "send" anyone $30k? I'm not disagreeing with you, but I recently…
Not a personal finance discussion but tying up large amounts of cash in a depreciating asset is almost always the worst possible use of it.
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Deferring tax means you get interest on money that would have been taxed which acts as a tax break. Ex: Supose you have 100$ your tax rate is 15% and you get 5% in interest. Pay 10% now you have (100$ - 15$) * 1.05 = 89.25 next year. Swap that order 100$ * 1.05 - 15$ = 90$ Next year or a ~7% tax break. Push it off long enough (without interest or fees) and you pay arbitrarily close to 0% tax rate.
Yes, borrowing can increase the leverage on an investment. It can magnify gains, but it can also magnify losses. No, you cannot use leverage to reduce taxes to zero. You are confused if you think that. Go play with the numbers some more. Don't forget that you have to pay taxes on the investment gains you make with borrowed money (as you did in your example).
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Yes, borrowing can increase the leverage on an investment. It can magnify gains, but it can also magnify losses. No, you cannot use leverage to reduce taxes to zero. You are confused if you think that. Go play with the numbers some more. Don't forget that you have to pay taxes on the investment gains you make with borrowed money (as you did in your example).
You only need to pay capital gains when you sell an asset. As to deferring if you defer and save 10% then next year defer and save 10% of that it's a net reduction of 0.9 * 0.9 and every year you defer is another * 0.9. If nothing else inflation makes deferring tax loads very attractive.
For example let's say you have $1000. Tax rates are 15% and annual investment returns are 8%.
Under strategy A you sell and pay taxes at the end of every year. Under strategy B you only sell at the end of 30 years and pay taxes all at once.
Under strategy A you will end up with $6,738.55. Under strategy B you will end up with $8,069.6 which is about 20% more.
20% more is a lot so that's a strategy worth thinking about! But it's not reducing your tax bill anywhere close to 0.
In fact you actually pay more in total taxes under strategy B in nominal terms (and about the same in real terms assuming 2% inflation) because you have more overall gains.
Overall, I agree that deferring tax payments can be a very useful thing to do. I just dispute your statement that "Push it off long enough (without interest or fees) and you pay arbitrarily close to 0% tax rate." That's simply not true.