Climbing the Wealth Ladder • Hacker News Board

Re: Climbing the Wealth Ladder

#121

Post by iso1631 » Tue, Dec 17, 2019, 4:55 PM UTC

thatfrenchguy wrote: post #114

lazyguy2 wrote: post #86

Earlier quoted context omitted.

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…

> Anybody with a middle class income can do it Median income in the US per person in 2018 is 35000$. 500$ a month is 6000 a month, or 17% of that before tax. At that income level you probably don't have any income to spare after housing + food + car + health care.

Clearly you should be living in a cardboard box round the corner from your wave-slave job and hoping you don't have any medical problems for 20 years, then you're set for life. If you aren't a millionaire by the time you're 30 in the U.S. you've failed.

Even if you did "make it", the plan is always based on exponential growth in the economy - i.e something like inflation+5% returns.

Re: Climbing the Wealth Ladder

#122

Post by departure » Tue, Dec 17, 2019, 4:55 PM UTC

OnlineGladiator wrote: post #45

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…

> like notable entertainer or cardiac surgeon Google says cardiac surgeons make $400-800k, assuming that's true a very talented engineer at FAANG can easily match this (staff or senior staff level) without being mired by an additional 10 years of school. I personally know engineers making 7 digits in liquid compensation. Obviously these are not your average engineers, but it's doable if you're the 1% (to be good enou…

You also need to consider that the median tenure at these type of companies are 2-3yrs[0][1][2] (1.1 at google!). In my experience that's not enough to get the full stock grants.

So even from those that could make it very few stay long enough to make these great riches your imagining.

[0] https://www.payscale.com/data-packages/employee-loyalty/full... [1] https://www.businessinsider.com/average-employee-tenure-rete... [2] https://brobible.com/culture/article/how-long-employees-stay...

Re: Climbing the Wealth Ladder

#123

Post by mnky9800n » Tue, Dec 17, 2019, 4:57 PM UTC

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…

i feel like by definition spending decisions only make you less wealthy.

Re: Climbing the Wealth Ladder

#124

Post by supernova87a » Tue, Dec 17, 2019, 4:57 PM UTC

I think you can pretty easily guess this article isn't written by anyone whose family is recently immigrants. Kids from those families don't need to be instructed on how to spend at the right level (at least in the first few stages) -- everything is about saving money! This story is probably for people whose parents have forgotten what it's like to be poor and skipped the step of instructing the kids (inadvertently, or deliberately) on what that's like.

Re: Climbing the Wealth Ladder

#125

Post by philwelch » Tue, Dec 17, 2019, 4:59 PM UTC

SketchySeaBeast wrote: post #98

philwelch wrote: post #69

Earlier quoted context omitted.

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.

If you buy one share of Toyota Motor Company, you are now a part-owner of a car company, including all the factories and equipment and supply contracts and whatnot that such a thing entails. Owning stock literally entails “owning the means of production”. Buy some stock today and become an evil capitalist!

Re: Climbing the Wealth Ladder

#126

Post by bko » Tue, Dec 17, 2019, 4:59 PM UTC

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.

Being in a country where I can negotiate with my employer as to vacation time in respect to my salary, the idea that someone has to have accept minimum of 7 weeks regardless of circumstances is mind boggling.

Re: Climbing the Wealth Ladder

#127

Post by esotericn » Tue, Dec 17, 2019, 5:00 PM UTC

ThaJay wrote: post #113

esotericn wrote: post #48

Earlier quoted context omitted.

No, they're dependent on preferences in what you want. Your preferences differ from mine here. Either that, or you're assuming that the reasonable benchmark for comparison is close to the absolute most expensive example within a specific sector, which doesn't really match how I spend money. Thinking about it more, I'd probably say I even hit #4 before #3. Why? a) I don't really care that much about eating out, so des…

You have completely missed the point. The fact that you could does not mean you shoud or even would. Wanting a cabin in the woods and being able to afford it does not make you "House freedom level". That level is being able to buy any house you could want without second thought. The fact that you would not choose such a house is completely irrelevant to this train of thought. Some things you have to plan out and some…

The cabin was referring to the travel level, not housing.

I don't think "any X I could want" is meaningful.

You're taking it presumably to mean the most expensive offering that exists in the world, but I _could_ want something akin to Buckingham Palace and no amount of money would get me that, or I could want some generic massive palace that would cost $50bn which obviously is above the philanthropy level by any metric, or maybe I genuinely do just want a bog standard terrace because I'd rather give my money away than 'elevate' myself into a weird Hollywood lifestyle.

It makes far more sense to think about what I actually _do_ want, and in that view the levels can be ordered differently depending on the person.

The point I am making is that to some extent these levels are individual choice, they're not cast in stone.

Re: Climbing the Wealth Ladder

#128

Post by SketchySeaBeast » Tue, Dec 17, 2019, 5:03 PM UTC

philwelch wrote: post #125

SketchySeaBeast wrote: post #98

Earlier quoted context omitted.

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.

If you buy one share of Toyota Motor Company, you are now a part-owner of a car company, including all the factories and equipment and supply contracts and whatnot that such a thing entails. Owning stock literally entails “owning the means of production”. Buy some stock today and become an evil capitalist!

So only if I buy direct? Not index funds?

Re: Climbing the Wealth Ladder

#129

Post by shantly » Tue, Dec 17, 2019, 5:04 PM UTC

bko wrote: post #126

baud147258 wrote: post #95

Earlier quoted context omitted.

> "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.

Being in a country where I can negotiate with my employer as to vacation time in respect to my salary, the idea that someone has to have accept minimum of 7 weeks regardless of circumstances is mind boggling.

It's because, absent that protection, workers on the weaker end tend to get squeezed down to very low PTO whether they want that or not.

[EDIT] weaker end in terms of ability to negotiate—so, the vast majority of workers.

Re: Climbing the Wealth Ladder

#130

Post by tonyedgecombe » Tue, Dec 17, 2019, 5:05 PM UTC

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'm not totally convinced. It seems to me the further you get up the greasy poll the greasier it gets.

Sure if you are on minimum wage then there are probably some easy gains to be made but for someone in the middle of their career they are far more likely to improve their situation by saving rather than getting promoted. That's not to say they shouldn't try but you have to realise the odds are against you getting to the top.

If you are looking at it from the perspective of starting a business then having some savings is going to make it far more likely. You aren't even going to have the mental energy for it if you are spending all your time thinking about how much to pay on the credit cards each month. This is the reality for many people, possibly even the majority.