Climbing the Wealth Ladder • Hacker News Board

Re: Climbing the Wealth Ladder

#281

Post by shantly » Tue, Dec 17, 2019, 9:56 PM UTC

hultner wrote: post #256

jdashg wrote: post #242

Earlier quoted context omitted.

$5100 for $1M borrowed (a low) 3%, excluding down payment, property taxes, and likely PMI, given how onerous saving 20% of seven figures is.

Is the interest rate that high in the US? If you negotiate with a couple of banks in Sweden you can easily get sub 1% (0.79% is what I seem to be able to get). Heck I just checked my bank and I can even get a line of credit up to 1M SEK at 1.74% for up to 50% of my portfolio without any property as security.

Checking, I'm seeing rates approaching 4% for 30-year mortgages here (the US), down to 3.5% for a 15-year, which squares with what's been more-or-less the norm for a while, so is probably about right. 1% on a mortgage would... not be normal here.

Re: Climbing the Wealth Ladder

#282

Post by CPLX » Tue, Dec 17, 2019, 10:00 PM UTC

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…

> Views like the one you espouse are insidious because they give people a justification to stop trying and spend everything they make.

Nah. I think it's views like the one you're espousing that are insidious, because they present the illusion that the difference between normal people and the genuinely wealthy is just a matter of some personal self sacrifice, rather than a set of fundamental policy failures that have lead to a collapse of social order and rising inequality.

Of course it's better, for them, if the masses are focused on index funds instead of the abusive effects of concentrated financial power on the middle class.

Re: Climbing the Wealth Ladder

#283

Post by shantly » Tue, Dec 17, 2019, 10:02 PM UTC

tempsy wrote: post #178

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…

Something I've wondered about this: doesn't opening & closing tons of lines of credit fuck with your credit rating? Or do you just leave them open until/unless the issuer decides to close the (unused) account, leaving you more crap to have to watch for fraud & such?

Re: Climbing the Wealth Ladder

#284

Post by shantly » Tue, Dec 17, 2019, 10:03 PM UTC

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.

Poor people with shitty, cheap, old cars have these problems more than others. Because they're poor.

Re: Climbing the Wealth Ladder

#285

Post by npip99 » Tue, Dec 17, 2019, 10:08 PM UTC

I mean if you have $100k in wealth you absolutely have travel freedom. Backpacking in Europe is a common experience so it's pretty cheap and the rest of the countries have crazy USD conversion rates. $100k could be a lifetime's worth of money in a non-western country. You can still find lodging in Ukraine for like $4/day.

Re: Climbing the Wealth Ladder

#286

Post by leetcrew » Tue, Dec 17, 2019, 10:20 PM UTC

hultner wrote: post #229

zulln wrote: post #203

Earlier quoted context omitted.

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?

I really doubt it. $2k was my monthly budget after I graduated and got a job. I wasn't really making any attempt to control my spending. I bought nice alcohol and ordered dinner and/or bought lunch every day. most US students are trying to spend a lot less. if they work 10-20 hrs a week they're probably not even making $1k before taxes.

Re: Climbing the Wealth Ladder

#287

Post by leetcrew » Tue, Dec 17, 2019, 10:27 PM UTC

Izkata wrote: post #209

greedo wrote: post #183

Earlier quoted context omitted.

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.

I think they're just rebutting the claim that they must not have done anything interesting/meaningful if they were able to save so much.

Re: Climbing the Wealth Ladder

#288

Post by hultner » Tue, Dec 17, 2019, 10:36 PM UTC

shantly wrote: post #281

hultner wrote: post #256

Earlier quoted context omitted.

Is the interest rate that high in the US? If you negotiate with a couple of banks in Sweden you can easily get sub 1% (0.79% is what I seem to be able to get). Heck I just checked my bank and I can even get a line of credit up to 1M SEK at 1.74% for up to 50% of my portfolio without any property as security.

Checking, I'm seeing rates approaching 4% for 30-year mortgages here (the US), down to 3.5% for a 15-year, which squares with what's been more-or-less the norm for a while, so is probably about right. 1% on a mortgage would... not be normal here.

Oh but that's with a locked rate, I always go fully moving rate.

Re: Climbing the Wealth Ladder

#289

Post by itake » Tue, Dec 17, 2019, 10:49 PM UTC

Pfhreak wrote: post #268

Wheaties466 wrote: post #257

Earlier quoted context omitted.

I hate to break it to you buddy but 31k is the poverty line, not middle class. http://www.commerce.wa.gov/wp-content/uploads/2019/03/DRAFT-...

Any definition of the middle class that doesn't include the middle of incomes seems wrong to me. Median means half above, half below, how would that not be the "middle" class?

Where did you get the $31k as the median income for Seattle? This source says it is closer to $95k?

https://www.seattletimes.com/seattle-news/data/seattle-media...

Re: Climbing the Wealth Ladder

#290

Post by hultner » Tue, Dec 17, 2019, 10:59 PM UTC

pc86 wrote: post #269

hultner wrote: post #238

Earlier quoted context omitted.

Same in Sweden, about 10k pre tax to take home 5k. I looked up median salaries for CEOs in Sweden last year which was $7600 pre-tax where only service and the industrial sector is over that, industrial is the highest with $9150 pre-tax, that is at the CEO level, putting your take home salary with tax bracket 34 at about 5k/month, so it's probably a bit high for a high level executive at a mid-sized company.

Where is the incentive then? The difference in skill, responsibility, stress, workplace demands, etc between a cashier and a CEO are nuts. How do people do that for a few grand every month?

Well I can't speak for everyone but as a small business owner in a highly specialised business with global public companies as customers, I could financially take out more than twice that as pre-tax salary from my company but my takehome would only increase with about $3k so I hardly see any point in taking out more salary. The salary I actually take out is much closer to that of the cashier and I skipped even taking out any salary for Q1 and most of Q2 of this year since I didn't really need the money. I'd much rather reinvest the money into my company so I can expand and employ more people. I also have a goal of providing a better workplace in general, for instance I'd really like to offer 30 hour work weeks and two months paid time off per year, it's not something I can afford at this point in time but I certainly think it would be possible in the future. From my point of view it's more important to be able to build a sustainable business which can offer jobs that provide a high quality of life as well as both professional and personal fulfillment for all employees. And I do think that capitalism is the only way to produce enough quality throughput to achieve that.