Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Climbing the Wealth Ladder

ofdollarsanddata.com

Post reply on HN
Print view View original

91–100 of 323 posts

Re: Climbing the Wealth Ladder

#91

Post by account73466 »

arkh wrote: post #87
hultner wrote: post #60

Earlier quoted context omitted.

I wouldn't fully agree with this, I'd say income that non-linear to amount time spent it the highest driving factor. Let's take an example. I'm going to use Swedish living conditions and salaries as an example as that's where I live but they are close to most European/western countries. We have a frugal grocery store cashier who makes $2000 USD/month after taxes. We have a high level executive in a medium-sized compa…

> grocery store cashier who makes $2000 USD/month after taxes Not "close" to most European/western countries. You may be really disconnected from normal people revenues. > assuming average yearly yield with reinvested dividends at 8.5% That's a big assumption. > At this level travling/vacation expenses isn't a problem for the cashier Inflation over 30 years then 20 more years of retirement may change this.

>> Not "close" to most European/western countries. You may be really disconnected from normal people revenues.

He was specific - Sweden. Just divide all numbers by some factor if you prefer.

Re: Climbing the Wealth Ladder

#92

Post by kevinqiu1 »

hultner wrote: post #60
disintegore wrote: post #8

I understand this isn't the point of the article, but it seems like a roundabout way of saying "don't overspend". This part in particular bothers me : > More importantly though, the best way to climb the wealth ladder is to spend money according to your level. As far as I (a non-economist) can personally tell, any notion of climbing up some abstract wealth ladder is synonym with a salary increase for the vast majorit…

I wouldn't fully agree with this, I'd say income that non-linear to amount time spent it the highest driving factor. Let's take an example. I'm going to use Swedish living conditions and salaries as an example as that's where I live but they are close to most European/western countries. We have a frugal grocery store cashier who makes $2000 USD/month after taxes. We have a high level executive in a medium-sized compa…

I think the problem is in America the frugal clerk makes 3000/month, a white collar professional makes 8000/month and a high level executive makes 14000/month after taxes. And I wonder if I'm being too stingy with our executive here...

Re: Climbing the Wealth Ladder

#93

Post by yellowstuff »

hello_1234 wrote: post #52
CPLX wrote: post #29

Earlier quoted context omitted.

Yup. I see this kind of logic in personal finance discussions all the time but it's bullshit. There simply aren't any spending decisions you can make that will change you from not wealthy to really wealthy. Those things can just move you from poor to middle class at best, or to a better level of middle class. Outside of real outlier status where you're paid really, really large amounts of money for your services (lik…

You are completely discounting the power of compounding. Saving every penny won't make you rich in a year or even in 10 years. But think about 20 years in the future. Think about retirement. Every extra dollar that you put into your 401K will make a meaningful difference on how you retire in 20-40 years. Here's one real example for you: 96-Year-Old Secretary Quietly Amasses Fortune, Then Donates $8.2 Million - https:…

Yes, it's a really good idea to live within your means and start saving early for retirement. No, most people who are young today will not be able to save anything like $8M doing that. Some things that are exceptional about the woman in this story:

* She worked 67 years at the same job.

* She invested in individual stocks, mostly during a period when index funds weren't available. This lack of diversification is almost unanimously not recommended for regular people because the vast majority of people who try it dramatically underperform index funds. But if enough people do it someone will dramatically outperform and you'll read about them in the paper.

* It sounds like she lived more frugally than most people would find tolerable.

* She lived in a rent controlled apartment, meaning her rent was probably closer to free than to market rates for much of her life. Needless to say, this subsidy isn't available to young people today.

* Presumably she avoided major illness or other setbacks during her long working life.

* It's also possible that she had an inheritance or some other significant source of income besides her salary.

$1M or $2M in inflation-adjusted savings is probably a realistic goal for a middle class American to have for retirement after a long career and prudent investing. $8M is not.

Re: Climbing the Wealth Ladder

#94

Post by greedo »

account73466 wrote: post #88
hultner wrote: post #60

Earlier quoted context omitted.

I wouldn't fully agree with this, I'd say income that non-linear to amount time spent it the highest driving factor. Let's take an example. I'm going to use Swedish living conditions and salaries as an example as that's where I live but they are close to most European/western countries. We have a frugal grocery store cashier who makes $2000 USD/month after taxes. We have a high level executive in a medium-sized compa…

>> a cashier ending up as a multi millionear set for life at 55 Except that the most interesting part of life is over

As someone at that age, I think this is completely incorrect, not to mention ageism. Dismissing the last 30% of your life as un-interesting is something I'd expect from someone without much life experience.

Re: Climbing the Wealth Ladder

#95

Post by baud147258 »

lowercased wrote: post #79
esotericn wrote: post #62

Earlier quoted context omitted.

It can give you the breathing room to actually _do_ something that can change your status and allow you to have a decent shot at "own the means of production", though. I've probably had hundreds of conversations with people who will say "well, not everyone can afford to move town" or "not everyone can afford to take a week off work" or whatever else. That's an enormous handicap - you're basically a slave to your curr…

"not everyone can afford to take a week off work" even if you can , financially, it's often hard to do so mentally/emotionally. if you're taking time away from work, that means no income - whether you desperately need it or not may be immaterial to the mental state you've built for yourself.

> "not everyone can afford to take a week off work"

Being in a country where vacation time is paid by the company (currently 7 weeks / year, even if I usually don't use up all of it), the idea that taking a day off work means less money at the end of the month is mind boggling.

Re: Climbing the Wealth Ladder

#96

Post by jmchuster »

Pfhreak wrote: post #27

I'm really not a fan of this breakdown because it seems to put each order of magnitude increase in liquid net worth as equal space on the graph. What percentage of people fall into each level. Maybe 50-60% of American adults fall into level 1? Surely, most folks will never reach Level 3 on this chart. While this is an interesting way for someone who has made significant increases in their income over the years, I don…

You might be able to jump by a million with the right job alone, but it's impossible to jump by a hundred million, unless you found a unicorn. Hence why people here are trying to do so.

Re: Climbing the Wealth Ladder

#97

Post by IndrekR »

account73466 wrote: post #88
hultner wrote: post #60

Earlier quoted context omitted.

I wouldn't fully agree with this, I'd say income that non-linear to amount time spent it the highest driving factor. Let's take an example. I'm going to use Swedish living conditions and salaries as an example as that's where I live but they are close to most European/western countries. We have a frugal grocery store cashier who makes $2000 USD/month after taxes. We have a high level executive in a medium-sized compa…

>> a cashier ending up as a multi millionear set for life at 55 Except that the most interesting part of life is over

> Except that the most interesting part of life is over

What makes life beyond 55 uninteresting?

Re: Climbing the Wealth Ladder

#98

Post by SketchySeaBeast »

philwelch wrote: post #69
CPLX wrote: post #29

Earlier quoted context omitted.

Yup. I see this kind of logic in personal finance discussions all the time but it's bullshit. There simply aren't any spending decisions you can make that will change you from not wealthy to really wealthy. Those things can just move you from poor to middle class at best, or to a better level of middle class. Outside of real outlier status where you're paid really, really large amounts of money for your services (lik…

Here's the thing: if instead of spending your money, you invest it, guess what you end up doing with that money? Owning the means of production. Period.

A bit confused by this - you're now not actually buying anything that produces anything. I guess you could argue it produces more money, but you have no control over those things - you can only choose what you invest in, but have no control over how those things perform. Otherwise then savings is owning the means of production, given that you're still making money with it.

Re: Climbing the Wealth Ladder

#99

Post by microcolonel »

kevinqiu1 wrote: post #92
hultner wrote: post #60

Earlier quoted context omitted.

I wouldn't fully agree with this, I'd say income that non-linear to amount time spent it the highest driving factor. Let's take an example. I'm going to use Swedish living conditions and salaries as an example as that's where I live but they are close to most European/western countries. We have a frugal grocery store cashier who makes $2000 USD/month after taxes. We have a high level executive in a medium-sized compa…

I think the problem is in America the frugal clerk makes 3000/month, a white collar professional makes 8000/month and a high level executive makes 14000/month after taxes. And I wonder if I'm being too stingy with our executive here...

You made a pretty massive leap from white collar professional to high level executive. What about mid-level executives, specialized independent contractors, tradesmen, and the rest? You also discount the risk premium of the high level executive position, where often your income is zero or negative some of the years you are an executive.

Re: Climbing the Wealth Ladder

#100

Post by isoskeles »

Pfhreak wrote: post #27

I'm really not a fan of this breakdown because it seems to put each order of magnitude increase in liquid net worth as equal space on the graph. What percentage of people fall into each level. Maybe 50-60% of American adults fall into level 1? Surely, most folks will never reach Level 3 on this chart. While this is an interesting way for someone who has made significant increases in their income over the years, I don…

> Whether you are making $15/hour at a fast food gig, or $200+/hour as an engineer, you aren't going to save yourself into a new level.

My experience directly contradicts this. Large increases to your wages allow you to save money into the next level or make a move that increases your wages further. I doubt it works for everyone, but it worked and continues to work for me. Although I don’t think I’ll get to their level 5, and even if I do, I’m going to be cautious about spending on vacation.

The defeatism that follows from, “I can’t possibly ever afford a home, etc.” is one of worst parts of American culture these days. People use this to make poor decisions throughout adulthood and then pretend it’s evidence that it must be impossible for anyone to get ahead by not blowing money on “avocado toast” and travel.

Post reply on HN