Climbing the Wealth Ladder • Hacker News Board

Re: Climbing the Wealth Ladder

#201

Post by leetcrew » Tue, Dec 17, 2019, 6:23 PM UTC

r0fl wrote: post #197

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…

Your example of a person with $10,000 accumulated wealth and no job makes perfect sense. However this does not hold true higher up the scale. People with mid 8 figure liquid net worth, ex: $50-70,000,000 do not need to have any income for extremely long periods of time without having any large negative effect on their spending ability.

these people get income from capital gains or take loans against their assets. even very rich people try hard not to spend their principal.

Re: Climbing the Wealth Ladder

#202

Post by pb7 » Tue, Dec 17, 2019, 6:24 PM UTC

departure wrote: post #122

OnlineGladiator wrote: post #45

Earlier quoted context omitted.

> 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..…

The average tenure is short not because people are getting fired for underperforming. It is short because 1) a lot of people get hired with massive YoY growth even for their size, and 2) people leave to earn even more at other companies in which case they’re still getting the compensations discussed here.

Re: Climbing the Wealth Ladder

#203

Post by zulln » Tue, Dec 17, 2019, 6:24 PM UTC

kangnkodos wrote: post #140

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…

My guess is that it would be almost impossible to save 1K/month if your take home pay is only $2K/month. There are minimum requirements for food, shelter, transportation, etc. A pre-tax yearly salary living wage to cover the minimum in the US would be $45K - $68K depending on location. Let's look at a low end, low cost of living state. $45K pre-tax translates to about $3K per month take home pay. Which means that if…

What is the monthly budget of the average student? I would certainly guess under $2k.

Re: Climbing the Wealth Ladder

#204

Post by dirtyaura » Tue, Dec 17, 2019, 6:25 PM UTC

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…

Being frugal and saving everything for 30 healthier years of your life to be able to spend money only when your body seriously starts to fail you.

I’m not sure why people see that an attractive way of spending their life.

Re: Climbing the Wealth Ladder

#205

Post by disintegore » Tue, Dec 17, 2019, 6:26 PM UTC

anewguy9000 wrote: post #59

disintegore wrote: post #47

Earlier quoted context omitted.

Saving 10% on a median income adds up to roughly three thousand dollars saved, a year. Depending on the amount of risk you're willing to accept, you may find yourself making between ~2 to 10 grand over a 10 year period from interests alone. I think those numbers are reasonable (and that saving in general is absolutely worth it), but I don't think they're significant enough to grant you upwards mobility. Even furnishi…

2-10 grand over 10 years wont even cover inflation. so you're actually poorer.

I suppose you're that much less poorer.

In any case, you have something like 30 grands on hand, which you wouldn't have otherwise. That's cash down on a house.

Re: Climbing the Wealth Ladder

#206

Post by josephdviviano » Tue, Dec 17, 2019, 6:30 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…

Well, there are always ways to make yourself more wealthy. You spend less on consumables and spend more on investments.

People who typically become extraordinarily wealthy do so via high-risk, high-reward activities like business ownership.

Now you can argue that the risk reward equation isn't the same for people who have 20 million in the bank and 200 dollars in the bank, and that is very true, but it doesn't make the advice to spend as much as you can on investments incorrect.

Re: Climbing the Wealth Ladder

#207

Post by account73466 » Tue, Dec 17, 2019, 6:30 PM UTC

greedo wrote: post #183

account73466 wrote: post #120

Earlier quoted context omitted.

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 don't provide any context in your attempt at a wry comment, and then you compound it by not only reinforcing the ageism, but adding in classism as well. You're defining the cashier by their job/role, as well as how they spend their money on saving for retirement. Textbook classism. My anecdotal reply would be that I've made it to this golden age, I've earned far less than the average, saved more than the average,…

>> You're defining the cashier by their job/role, as well as how they spend their money on saving for retirement. Textbook classism.

I didn't talk about cashier nor I defined any role. What are you talking about?

It looks like you was struggling the whole life and counted every dollar (see "I've earned far less than the average, saved more than the average"), do you manage to "to provide for your loved ones"? People rarely change, greedo.

Re: Climbing the Wealth Ladder

#208

Post by leetcrew » Tue, Dec 17, 2019, 6:33 PM UTC

bronco21016 wrote: post #173

Retric wrote: post #81

Earlier quoted context omitted.

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 cycl…

what's wrong with using "paycheck to paycheck" this way? we already have the word "poor".

"paycheck to paycheck" means something like no liquid savings and no positive cash flow. there are certainly a lot of people living this way (especially in less wealthy countries), but it's not "almost everyone".

Re: Climbing the Wealth Ladder

#209

Post by Izkata » Tue, Dec 17, 2019, 6:33 PM UTC

greedo wrote: post #183

account73466 wrote: post #120

Earlier quoted context omitted.

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 don't provide any context in your attempt at a wry comment, and then you compound it by not only reinforcing the ageism, but adding in classism as well. You're defining the cashier by their job/role, as well as how they spend their money on saving for retirement. Textbook classism. My anecdotal reply would be that I've made it to this golden age, I've earned far less than the average, saved more than the average,…

> I've married, raised a family, and had memorable trips with them.

I think this part is their point. Even you are looking backwards at what you have done, instead of future plans, implying the younger years are the more interesting ones.

Re: Climbing the Wealth Ladder

#210

Post by AnimalMuppet » Tue, Dec 17, 2019, 6:40 PM UTC

Kirby64 wrote: post #12

esotericn wrote: post #3

Earlier quoted context omitted.

I'm not so sure, personally. The six levels: Level 1. Paycheck-to-paycheck: You are conscious of every dollar you spend. This includes people with crippling debt. Level 2. Grocery freedom: How much specific grocery items cost don’t impact your finances. Level 3. Restaurant freedom: You eat what you want at restaurants regardless of the cost. Level 4. Travel freedom: You travel when you want, how you want, and stay wh…

I think you're overthinking this. The article examples maybe aren't descriptive enough. #4 would mean I don't price shop Airbnb, hotels, and plane tickets so much. Or maybe I just take first class everywhere. Either way, you're talking spending amounts in the $10k+ range. #5 means you can buy whatever size house you want within limits. That's more a $1M+ decision (although, amortized out long term) #6 means Bill Gate…

But see, I've done my dream vacation several times. It means driving out into the Mojave Desert, by myself, and car camping. It basically costs the gas to get there and back.

Dropping $10K on a vacation without thinking about it? No, I'm not there. Taking the vacation I want without thinking about the cost? Easy - I just don't want that kind of vacation.