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Climbing the Wealth Ladder

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Re: Climbing the Wealth Ladder

#211

Post by frogpelt »

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 think you can get from level 1 to level 4 just by being careful and wise. You might even get to level 5 by the time you die.

But level 6 will require taking risk and that risk paying off big-time. Usually it requires taking several risks. Jay-Z got from level 1 to level 6 by taking the risk of going public with his craft. He decided he would put in the work, make the connections, and not fear the rejections.

The reason entrepreneurs get rich is they take the risk.

There is some luck involved but most people (me included) aren't willing to risk their current level to level up.

Re: Climbing the Wealth Ladder

#212

Post by opportune »

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..…

Google and I believe Facebook have uniform monthly vesting, so these figures are accurate for any amount of tenure.

TC is not computed using the total value of your grants, it’s based on the amount that will vest over the course of a year. Yes, that means there are engineers getting grants of $2m+ over four years (putting TC around $700k+)

Re: Climbing the Wealth Ladder

#213

Post by wonderwonder »

tonyedgecombe wrote: post #148
wonderwonder wrote: post #109

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…

Just after you saved your first 3k, your alternator goes out or you get in a wreck. Some people seem to have these sort of problems more often than others. I guess poverty is about a lot more than lack of money.

I don't think its that, I think its more when it happens to someone who has the money to easily deal with it, you don't hear about it.

About 6 months ago I had to get a new alternator and brakes, total cost was ~2,800 as my car was past warranty. I just paid it, got the dealership rental car for a day ($50 per day) and went about my life. If I did not have the money, they same thing would have happened but I would not have been able to get it fixed and would have had to desperately reach out to people hoping to borrow money. If I happened to have just enough to fix the alternator, I would have had to drive around on very worn brakes potentially leading to an accident in the future, putting me back at square one. I would have had no choice though as I would not be able to afford not going to work.

Not to mention I would not have been able to afford the rental meaning I would have had to spend the whole day at the dealership, missing a day of work and probably that pay.

It is very expensive to be poor.

Re: Climbing the Wealth Ladder

#214

Post by BeetleB »

C1sc0cat wrote: post #194
BeetleB wrote: post #169

Earlier quoted context omitted.

> 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…

Your point is? a lot of the USA's railroads where funded by Investment trusts based in London and Edinburg which had small middle class investors going back to the 19th century.

The point is that if you want to "own the means of production", as was discussed somewhere above, buying stocks as a middle class investor is not going to get you there.

Re: Climbing the Wealth Ladder

#215

Post by imesh »

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?

Heart surgeries, joint replacements, kidney failure. Stuff like that. Good for you if you don't end up with those issues... But they are common for a reason. Take a look at your parents/uncle's/aunts and you will have an idea of what your 60s will be like. I'm watching my father and all his siblings have different issues in their 60s and I have suddenly realized that lifestyle can't beat genetics. I haven't quite figured out what to do with this new realization yet.

Re: Climbing the Wealth Ladder

#216

Post by BeetleB »

C1sc0cat wrote: post #195
SketchySeaBeast wrote: post #185

Earlier quoted context omitted.

You own a portion of a company, but that portion can be watered down at any time, no? Can't a company produce more shares and disseminate them at any time? I know that conceptually you own a portion, but it's so watered down and abstracted it seems like a far cry from actually owning anything that actually correlates to an actual means of production.

No which country do you live in thease are not US employee stock options but real stocks. There strict laws about that sort of things even more so in places like Germany and the UK

In the US:

1. You are not entitled to any of the profits of the company by owning stock. Not even if you own preferred stock.

2. You have virtually no control over decisions the company makes. And your vote may not count as much as someone else who has the same number of shares as you. Furthermore, you can have no voting privileges at all as well while owning stocks.

3. A company can devalue the shares you own by simply issuing more (similar to governments printing money).

Not only is all this legal, this is normal. For the average person, the only real reason to own shares is to hope the value goes up. In a few cases it is to get dividends from the companies that have a track record of paying out, but the RoR is not particularly good.

Re: Climbing the Wealth Ladder

#217

Post by analyst74 »

slumdev wrote: post #77

Not a good article. There are three steps on the wealth ladder: 1. Wage slave - Most people will never leave this step, no matter how many ugly Merc SUVs they own or first-class flights they've taken. 2. FU Money - This person has enough money set aside to walk if they don't like a job or a customer. 3. F-Everyone Money - This person doesn't need to work at all.

Yeah, I was thinking about this, my happiness didn't change much between making $10k during college versus $100k later in life, in major part due to my balooning living expenses keeping me in the wage-slave category.

Re: Climbing the Wealth Ladder

#218

Post by knightofmars »

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.

What happens if you bought Enron?

Re: Climbing the Wealth Ladder

#219

Post by hultner »

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'…

Well as I said those numbers are based on Sweden but I lived like that at those costs (actually 20% lower than that for a couple of years) and that savings level or higher for many years.

It wasn't glamorous but I managed to afford a small apartment, I kept my food budget at an average at $100 a month including a restaurant visit or two by good planning I could keep most meals under $1, I would take the buss out to wholesale food retailers and buy semi bulk, I went to the cinema every now and then, I had internet, smartphone (with some data), computers, furnitures, I went out drinking every now and then, I only bought high quality clothes on sale and no cheap wear and toss from H&M, I traveled to other countries once or twice a year for vacation and visited family across the country every now and then (would go when prices were low or buy cheap tickets 10 minutes before the train departs with leftover seats). I had a good (and frugal) quality of life in the countries second biggest city of the country and didn’t experience any significant difference in happiness from living on twice that now. Main difference is that I travel more (less flexible and more expensive) and eat dinners at Michelin restaurants every now and then.

Re: Climbing the Wealth Ladder

#220

Post by auiya »

wonderwonder wrote: post #90
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…

I would argue that this overlooks the factor of time and compound interest. Lets say I make 60k a year and am 25 years old. If I am living paycheck to paycheck due to bad choices (partying, eating out, etc.) and then I switch my spending habits and can now live comfortably on that 60k and I can save / invest. Lets say my take home after taxes and health insurance (32% reduction) is $3,400 a month. If I can invest $1,…

42 years in the future your $4 million has deflated in value to the equivalent ~$1.4 million worth of buying power today assuming 2.5% inflation rate. Which isn't really worth much in the U.S., certainly not enough to recover from a major medical disaster.
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