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Climbing the Wealth Ladder

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Re: Climbing the Wealth Ladder

#101

Post by plughs »

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…

> Other methods, whether they involve quantity of free time or already-available money, are intrinsically tied to the quality of your job or, failing that, the quality of your parents' or partner's jobs.

For a lot of educated types, the best chance of really climbing the wealth ladder is early involvement in a startup. The startup founders I know have a single unifying factor, they come from the sort of wealth that allows them to go completely bankrupt and still live comfortably.

We have good incomes and live pretty frugally, and for us that translates to a decent amount saved for retirement and college funds. I would never knock that, that we are incredibly lucky and a lot of people work very hard for less. But it doesn't move us up a class such that we have a house overlooking the beach and kids in 20k/year private schools. I know people who have those, and they didn't work their way up a ladder. Their ladder started on the 10th floor.

Re: Climbing the Wealth Ladder

#102

Post by doubleInt »

CPLX wrote: post #29
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…

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…

It's blatantly obvious that you can make decisions that will move you from not wealthy to really wealthy. However, if you want to do it without risk, it takes time, patience and iterating the same frugal choices many times over the years.

If this isn't your cup of tea, fine. Don't pretend it's impossible.

Re: Climbing the Wealth Ladder

#103

Post by account73466 »

IndrekR wrote: post #97
account73466 wrote: post #88

Earlier quoted context omitted.

>> 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?

less interesting

Re: Climbing the Wealth Ladder

#105

Post by giggitytex »

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 agree with you, and this flies in the face of Kiyosaki-isms.

Re: Climbing the Wealth Ladder

#106

Post by thatfrenchguy »

yellowstuff wrote: post #93
hello_1234 wrote: post #52

Earlier quoted context omitted.

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 almo…

> * 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.

Sampling biais: there's no going to be any article on the people who lost all their money doing this

Re: Climbing the Wealth Ladder

#107

Post by leetcrew »

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…

does a swedish exec really make just $5000/month post tax? that's not much more than I net at my first software gig out of college (and not in SF or NYC).

Re: Climbing the Wealth Ladder

#108

Post by esotericn »

baud147258 wrote: post #95
lowercased wrote: post #79

Earlier quoted context omitted.

"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.

I'm talking about taking a week _off_ off.

For example leaving one job and having a gap before another one, or getting sacked and having a few weeks without work, or moving town before you have something lined up, etc.

Basically, being able to function without income for a nonzero period.

I wouldn't want to use my holiday weeks looking for work more than a few times in my life even if I have quite a generous allowance (well, generous by 'normal people' standards, I find the idea of working >80% of the year quite odd)

Re: Climbing the Wealth Ladder

#109

Post by wonderwonder »

People without a safety net who start out poor are generally going to end up poor. In another post I mentioned how its possible to save and due to the power of compound interest retire with millions on a 60k salary but that is a best case scenario. Most people don't make 60k. Also life has a funny way of stepping in. Just after you saved your first 3k, your alternator goes out or you get in a wreck. Or suddenly find out you are having a kid. Emergencies and unexpected expenses are very likely a major reason why so many people don't make it. If I have a low end salary it likely takes a year to save that 1 - 2k that is wiped out via major car repairs cost or the trip to the ER with a broken arm.

Most people are on a treadmill just trying to make it and life always sends them back to the beginning.

Re: Climbing the Wealth Ladder

#110

Post by icedchai »

lazyguy2 wrote: post #86
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…

It's entirely possible for a wage earner to become a millionaire in the USA. Anybody with a middle class income can do it. It's not even complicated or hard to figure out. The problem is that it requires discipline and living under your means. The first step is to eliminate debt and don't make stupid purchases. Debt includes credit card, personal loans, car loans, and mortgages. Stupid purchases are things like expen…

Yep. "The Millionaire Next Door" should be required reading for high school students.
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