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Climbing the Wealth Ladder

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Re: Climbing the Wealth Ladder

#221

Post by slowhand09 »

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'…

Thats a terrible best case. With a beater car you can deliver pizza and make $1500 a month in most metropolitan areas. Put aside a small emergency fund. Pay off debts, smallest to largest to build psychological momentum. Once debts are paid, start saving for home if you want. And put 15% in a retirement plan. People go to college paying their way while doing this. They live frugally now and benefit later. They major in lucrative subjects. And they earn good money after (and sometimes before) graduating with minimal debt. It can be done.

Re: Climbing the Wealth Ladder

#222

Post by pfranz »

yibg wrote: post #155
tibbon wrote: post #7

This is similar to how I’ve thought about money for a while. Through high school, I had dollar problems. As in, things in the $1-9 range were pretty important. Through college I had $10 problems. Early career it become $100 problems. Now anything under $1000 just doesn’t strike me as an issue. New hot water heater? Just go buy it. $10k things however are what feel like real issues now- new roof? I can do it, but’s it…

I seem to have stopped at some level. I still look at prices for groceries (those mangosteens are pricey) and restaurant items, let alone flight prices. This despite being in the level 4 category in the article. Maybe it’s being poor since childhood or the first generation immigrant frugality.

I definitely think the frugality can get baked in for a bunch of reasons. Also, I'll often do stuff myself because the "administrative overhead" is worse than just doing it. I had a problem with my oven and called 5 places. 3 didn't service my area and 2 didn't service my brand. I ended up just buying the part even though I would have preferred to have someone else deal with it, but I'm sure that wouldn't even occur to a bunch of people.

Re: Climbing the Wealth Ladder

#223

Post by knightofmars »

pathseeker wrote: post #154
yellowstuff wrote: post #93

Earlier quoted context omitted.

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…

>* It sounds like she lived more frugally than most people would find tolerable. Sounds like an issue with most people. >* She lived in a rent controlled apartment, meaning her rent was probably closer to free than to market rates for much of her life. Needless to say, this subsidy isn't available to young people today. The subsidy is available via home purchase. Fixed-rate mortgage payments don't increase over time.

Property taxes do.

Re: Climbing the Wealth Ladder

#224

Post by BeetleB »

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!

> 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.

Assuming this is not specific to Toyota, what does "owning" mean?

If I own one share of a company, it's incredibly rare that I have any say on any of the things you listed above. I usually do not get to vote on those. I also do not have any rights to the profits (in the US, but I doubt this is US specific). So in what sense do I own it other than the company writing me a piece of paper stating I do?

I mean, if I'm part of a joint venture with others to own a 100 unit apartment complex, I would expect to get some of the profit, at least. Likely about as much as my ownership stake. Shares do not guarantee this. A company can be very profitable, and just keep the money and pay you nothing, saying that "we think the value of the stock will go up and you can get paid that way."

I'm not anti-stocks or anything - I own plenty of them. But people should understand what they are and what they are not. And for most English uses of the word "own", it is not ownership.

Re: Climbing the Wealth Ladder

#225

Post by TheOtherHobbes »

AnIdiotOnTheNet wrote: post #184
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.

Even if you don't need it, you really probably do. A lot of people talking about entrepreneurship and whatnot have some kind of blindness to the idea that one can fail at these things, and once you've eaten up your savings you're back at square 0 and back to the soul-crushing reality of job. Objectively it is wiser to simply keep the job in the first place.

50% of small businesses fail. 20% fail in their first year.

The real cost of failure isn't just loss of savings. It's potential homelessness, bankruptcy or death through less of health cover, or bankrupcty through student loan payments.

In a functional culture the cost of entry for small businesses is much lower, as is the Total Cost of Failure.

For a country that claims to be business friendly, the US makes it unbelievably dangerous to start a small business without the backing of a significant financial safety net.

Re: Climbing the Wealth Ladder

#226

Post by _Microft »

duxup wrote: post #57
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 reminded of when Radiohead sold their album for whatever folks wanted to pay on the internet and someone wrote an article about how all bands could do that too: Step 1: Be Radiohead... The idea being that the hard part is getting to where you can even use the advice, and after that you're all but done.

Same category: Musk's "The Boring Company" merchandise. You need millions of followers in first place to be able to sell out 50000 basecaps for a million dollar in total or even 20000 not-a-flamethrowers for $500 each in a few days.

Re: Climbing the Wealth Ladder

#227

Post by bboygravity »

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…

Summarized: nobody in the history of humanity ever got wealthy from having a job. If you want to get rich you have to learn how to invest other people's money and make it work for you.

This is also my main take away from "rich dad, poor dad" (the book). It is so simple, yet I was so blind to this for a long time.

Re: Climbing the Wealth Ladder

#228

Post by hultner »

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…

$3K net after taxes monthly is certainly high income in Sweden (almost second bracket of extra high income state tax). Most engineers here make around $3k pretax out of school. Your living wage example would be high income middle class in Sweden.

I ran the numbers quickly for $ 68k/year you'd be in the top 3% earners all ages in the entire country enough to put you well beyond the public pension roof, on the edge to put you into the highest ultra high earner tax bracket (70k).

So I guess a poor person in the US would be part of the ultra rich in Sweden and I'd be poor beyond salvation in your country, living on ~1.5k/mo while bootstrapping my company.

Re: Climbing the Wealth Ladder

#229

Post by hultner »

zulln wrote: post #203
kangnkodos wrote: post #140

Earlier quoted context omitted.

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.

That's my thought, but maybe students in the US struggle to keep a $2k budget?

Re: Climbing the Wealth Ladder

#230

Post by umeshunni »

bboygravity wrote: post #227
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…

Summarized: nobody in the history of humanity ever got wealthy from having a job. If you want to get rich you have to learn how to invest other people's money and make it work for you. This is also my main take away from "rich dad, poor dad" (the book). It is so simple, yet I was so blind to this for a long time.

> Nobody in the history of humanity ever got wealthy from having a job

I think thousands of people in the valley who made their money from stock options / RSUs will disagree with this

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