Climbing the Wealth Ladder • Hacker News Board

Re: Climbing the Wealth Ladder

#161

Post by chosenbreed37 » Tue, Dec 17, 2019, 5:29 PM UTC

CPLX wrote: post #43

jlawson wrote: post #34

Earlier quoted context omitted.

Saving money, even from a salary job, gives you the breathing room you need to take economic opportunities. For example, if you save a year of expenses you can start a software business without external capital or connections. Most of the paths from middle-class to wealth involve avoiding frivolous spending.

Yes but if you borrow like a maniac from credit cards and default on everything and live in a van but still start a successful software business you still get wealthy. My point being that actually owning that successful business is the mechanism for wealth. Avoiding frivolous spending can be very, very helpful to achieving that status, as you point out correctly, but it isn't actually the status itself. This article…

> Yes but if you borrow like a maniac from credit cards and default on everything and live in a van but still start a successful software business you still get wealthy.

What happens if the software business doesn't succeeded to the extent that it dwarfs the level of debt? What if it doesn't succeed at all?

Re: Climbing the Wealth Ladder

#162

Post by SketchySeaBeast » Tue, Dec 17, 2019, 5:29 PM UTC

pathseeker wrote: post #147

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.

>A bit confused by this - you're now not actually buying anything that produces anything. I suggest you look up what stock ownership means. Most wealthy people only own non-controlling interest in most of their investments as well. If you own a share of stock, you own part of the means of production.

I understand what a classic stock was - it just seems so abstracted now, it doesn't feel like it's an equivalent. You aren't sharing in the companies success directly, but now there's layers of abstraction and speculation and gamification that it appears that stock success is only tangentially related to company success.

Re: Climbing the Wealth Ladder

#163

Post by pathseeker » Tue, Dec 17, 2019, 5:29 PM UTC

account73466 wrote: post #120

greedo wrote: post #94

Earlier quoted context omitted.

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.

You take it out of the context and then accuse me of pushing ageism, well done! The context is that we compare a life where i) you save one third of your income and then start to flash money when you are 55, and ii) you spend one third (or less) of your income on things that matter like finding significant other, having a family, making trips with your friends and family. You cannot avoid spending 1/3 of your income…

>You cannot avoid spending 1/3 of your income without it affecting your life style.

Yet people live super-fulfilling lives with families making $50k annually. Find a job clearing $75k and you'll be golden.

Re: Climbing the Wealth Ladder

#164

Post by rootusrootus » Tue, Dec 17, 2019, 5:31 PM UTC

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…

> $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.

I wonder what fraction of the population reaches $1M in retirement fund by the time they retire. If 401(k) median balances by age are at all accurate, then the answer seems to be "very few."

Re: Climbing the Wealth Ladder

#165

Post by rootusrootus » Tue, Dec 17, 2019, 5:33 PM UTC

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?

I think that depends on who you ask. People in their 20s still think people in their 50s are old.

Re: Climbing the Wealth Ladder

#166

Post by zhdc1 » Tue, Dec 17, 2019, 5:34 PM UTC

Andhurati wrote: post #150

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.

What has this offered to your country? Why doesn't it have it's Amazon or SpaceX? Why is the Linux Foundation here? Why are the salaries in the most unregulated or frontier markets the best in the US and not in Europe? Mandating a week off for everyone doesn't seem to give the space needed for poorer people to become as wealthy as they might deserve. What can be done?

Agglomeration dynamics, a great higher education system, 300M+ people who share the same language, and a common market go a long way. Cheap finance and government support (defense spending) also help.

If you want to attribute America's economic advantage to hours worked or labor regulations (and yes, they do matter to an extent), you have to be ready to explain why Russia, Mexico, Greece, and Chile aren't also economic powerhouses.

Source: https://data.oecd.org/emp/hours-worked.htm

Re: Climbing the Wealth Ladder

#167

Post by sylk » Tue, Dec 17, 2019, 5:35 PM UTC

esotericn wrote: post #108

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.

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 allowanc…

Welcome to life though, the best way to do this is to have a partner that can help you when times are rough.

Re: Climbing the Wealth Ladder

#168

Post by shantly » Tue, Dec 17, 2019, 5:36 PM UTC

bko wrote: post #143

shantly wrote: post #129

Earlier quoted context omitted.

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.

Unfortunately what often happens is that this law applies only to full time workers at some cutoff (e.g. 30+ hours a week). If the cost of full time is too high (e.g. 7 weeks paid vacation for a low skilled job), the employer would be more likely to hire more part time workers. And you would see people working multiple part time jobs rather that a full time job. Some of those workers would likely be willing to forgo…

There must be a lot more people who think the law's helping them than harming them, or it'd be changed. Might take time, but those sorts of laws have been common all over Europe for quite a while and I don't see any especially strong movements to repeal them, or even reduce the days off per year, despite incentives for businesses to attempt to drum up or encourage (at least, surely, not to oppose) such a movement, if possible, which one would expect to make such movements significantly easier to start and grow, if they had much popular support at all.

Re: Climbing the Wealth Ladder

#169

Post by BeetleB » Tue, Dec 17, 2019, 5:37 PM UTC

pathseeker wrote: post #147

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.

>A bit confused by this - you're now not actually buying anything that produces anything. I suggest you look up what stock ownership means. Most wealthy people only own non-controlling interest in most of their investments as well. If you own a share of stock, you own part of the means of production.

> I suggest you look up what stock ownership means.

Stock ownership traditionally means partial ownership of a business.

Except that you almost have no decision making power unless you own a lot of stocks, and that's not going to happen while working a simple middle class job.

It also doesn't mean that the company will pay you a portion of their profits. It is entirely up to the company whether they want to pay you a portion of their profits.

So you own something, but have absolutely no rights to the profits and practically no decision making power. In the spirit of the usual definition of "owning" something, you do not own anything with stocks.

Re: Climbing the Wealth Ladder

#170

Post by maire » Tue, Dec 17, 2019, 5:40 PM UTC

namdnay wrote: post #66

maire wrote: post #56

So the funny thing is this article is the exact opposite of the two most influential financial books in my life: "The Millionaire Next Door" and "Rich Dad Poor Dad". The true wealthy don't ever think of spending money as if it isn't important. Instead they distinguish between spending on income generation vs spending on luxury. They only spend on luxury intentionally but will spend on income generation freely. In oth…

I would steer clear of the bullshit peddled by Kiyosaki... https://www.johntreed.com/blogs/john-t-reed-s-real-estate-in... It's exactly this kind of get-rich-quick crap (that always seems to revolve around heavily leveraged real estate) that was one of the causes of 2008

In general I agree with you. I hesitated to bring Kiyosaki up because of his later activities. I never highly leveraged anything. The first book never mentioned this. But it did get me to invest in income real estate. I have been glad of that. I never read his later books because they didn't pass the smell test.

I also liked the Rat Race game. I used to play it with the kids. One thing he had you do is pick a goal of what you wanted to do when you retired. I always picked saving a forest and my daughter always picked a small farm. We compared notes recently and realized that we have both reached our goals.