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Climbing the Wealth Ladder

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Re: Climbing the Wealth Ladder

#171

Post by Pfhreak »

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…

I mean, I agree about envelope budgeting and smart saving. Avoid debt is essential to financial health.

> Anybody with a middle class income can do it.

This seems obviously false to me. Let me construct a reasonable case for someone who is middle class income but who I do not believe will be able to meet your savings goals.

Let's assume a single parent, at the median income level of $31,000/year living in Seattle. That gives them $2,500/month to cover food, housing, clothing, childcare, medical care, etc. Rent and health insurance probably eats 1,500 of that alone. To say nothing about saving for a kid's education, buying them school supplies, etc.

Even if you scrimp on food, clothes, etc. you are going to have a real hard time consistently setting aside $500/month.

Re: Climbing the Wealth Ladder

#172

Post by disintegore »

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?

It's not obvious what can be done. Efforts to distribute the wealth (post WW2 style) will most likely lead to capital flight, and you guys have a gargantuan mass media machine devoted to making sure this kind of thing does not happen to begin with. America is experiencing advanced regulatory capture and the solutions were needed decades ago.

My personal conjecture is that you're in for a long period of degradation followed by something violent. Fascism most likely.

Re: Climbing the Wealth Ladder

#173

Post by bronco21016 »

Retric wrote: post #81
bronco21016 wrote: post #63

Earlier quoted context omitted.

It bothers me when people use the phrase living paycheck to paycheck to describe both someone who literally doesn’t make enough money to cover the essential bills of living as well as someone making $200k+. These people are not in the same boat whatsoever. The doctor, or any professional making that much, simply needs to turn in the lease on the luxury car, or downsize their house, or cancel their vacation to materia…

That’s your own assumption and has nothing to do with the phrase. A doctor who loses their license is generally financially fucked. What’s being described is a massive dependence on continued employment, and someone with 200k of student debts and zero net assets easily qualifies.

It just seems really odd to me to use a phrase in a way that combines people who are very literally resource constrained with few options of climbing out of that hole with people who have the resources available to climb out and above their situation. Both are dependent on their paycheck but one has the ability to break away from that over time with wise choices vs the other likely never being able to break that cycle.

Almost all of the world is living paycheck to paycheck by your definition. The majority of US households would be ‘financially fucked’ if their wage income was taken away for a significant period of time.

Re: Climbing the Wealth Ladder

#174

Post by [deleted] »

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.

[deleted]

Re: Climbing the Wealth Ladder

#175

Post by lowercased »

esotericn wrote: post #85
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.

I think that's the point of the article. If you have 4 weeks' worth of spending saved then it's difficult. If you have 40, then it's fairly easy. If you have 400, it's trivial.

well.. I was getting at, it still can be mentally difficult to pry yourself away from it, even if you financially can 'afford' it.

Re: Climbing the Wealth Ladder

#176

Post by ip26 »

pathseeker wrote: post #145
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…

>Outside of real outlier status where you're paid really, really large amounts of money for your services (like notable entertainer or cardiac surgeon) the way to wealth is to own the means of production. Period. This is a lazy view, or a really privileged one at least. I know a couple of people in their fifties who have retired from putting as much money into the market as possible (post-tax and pre-tax) while livin…

Having enough money to retire early is having wealth.

Sort of. There's two pieces to FIRE. Saving aggressively, yes. But also by learning to live modestly, you need less wealth to retire. So half of FIRE is accumulating wealth, but the other half is needing less wealth.

Re: Climbing the Wealth Ladder

#177

Post by SketchySeaBeast »

AlexanderNull wrote: post #136
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…

No family? Also if we were talking about the US (which the article was) then you have to factor in healthcare, average of $200 a month for the insurance IF it's sponsored (mostly covered) by their employer. If the grocery worker is living in any major city then rent is bare minimum of $600 a month for the privilege of living with at least 2 other flatmates or around $1000 for a pretty small apartment. So this person'…

And don't forget about almighty inflation.

Re: Climbing the Wealth Ladder

#178

Post by tempsy »

On the "travel freedom" category - just want to say we live in extremely unusual times when it comes to travel and there's little reason to pay out of your savings to fund travel at the present moment.

In the US we've been living in the Golden Age of travel and credit card rewards for the last decade. I started churning cards in 2012 and have not paid in full for personal travel since. It's become slightly harder to churn than it used to but the sign up bonuses and earnings on cards is still at highs nonetheless.

It's great because I'm not a materialistic person and don't spend much on physical goods anyway, and to get my travel mostly paid for means I haven't had to spend my own money despite being in the "travel freedom" step of the equation.

Re: Climbing the Wealth Ladder

#179

Post by bko »

shantly wrote: post #168
bko wrote: post #143

Earlier quoted context omitted.

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…

I agree that it's not a popular opinion, but with these sorts of things the unintended consequences are not very visible. The people working part time may not realize it may be due to this affect.

It's also interesting to look at percentage of workers that work part time by country. US is relatively low at 22% while countries with a more generous welfare state are higher (France 39%, Norway 48%)

But there are a million other things going on as well so I'm not sure if it's related to that or something else

https://data.worldbank.org/indicator/SL.TLF.PART.ZS?most_rec...

Re: Climbing the Wealth Ladder

#180

Post by disintegore »

pathseeker wrote: post #145
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…

>Outside of real outlier status where you're paid really, really large amounts of money for your services (like notable entertainer or cardiac surgeon) the way to wealth is to own the means of production. Period. This is a lazy view, or a really privileged one at least. I know a couple of people in their fifties who have retired from putting as much money into the market as possible (post-tax and pre-tax) while livin…

Are you aware of the fact that your anecdotal evidence from the fifties may no longer be pertinent?

Have you seen what happened to wages since then? To the cost of living? To the cost of homes?

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