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What is Wealth in America?

forbes.com

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Re: What is Wealth in America?

#21

Post by Lightbody »

0x12 wrote: post #19
TDL wrote: post #18

Earlier quoted context omitted.

Please, please do not use 9% as your expected investment return. The numbers touted over the past decade & a half are mostly an artifact of the post WWII period. Furthermore, consider the demographic issue of boomers retiring. These boomers are forced sellers, in other words returns will be muted for the foreseeable future because of the larger class of people who will sell equities in order to fund their retirements…

Zero effort investment return is typically a shade or two under inflation, so even if the absolute number increases your ability to buy stuff steadily decreases, as does your effective net worth.

Agree, but what is "zero effort"? My financial advisor is self-described "lazy" (he's an odd fellow, we're lucky to have him) but he does quite a bit more stuff than your regular Joe does when it comes to managing our money. That's why I believe that 9% or more is still reasonable to expect - even with inflation.

Re: What is Wealth in America?

#22

Post by 0x12 »

Lightbody wrote: post #21
0x12 wrote: post #19

Earlier quoted context omitted.

Zero effort investment return is typically a shade or two under inflation, so even if the absolute number increases your ability to buy stuff steadily decreases, as does your effective net worth.

Agree, but what is "zero effort"? My financial advisor is self-described "lazy" (he's an odd fellow, we're lucky to have him) but he does quite a bit more stuff than your regular Joe does when it comes to managing our money. That's why I believe that 9% or more is still reasonable to expect - even with inflation.

It could go down too, by 4%. Risk works both ways, hence the higher reward. You can't really expect anything, the only thing that you can do is trade risk for potential gain or loss and hope that you jump to the next ice-floe when you should.

Miss the beat and you'll lose rather than gain.

Re: What is Wealth in America?

#23

Post by tomjen3 »

0x12 wrote: post #7

If you still look at the prices of the stuff you intend to buy then you're not rich. Once you stop looking at prices you're rich, no matter how much actual money you've got.

That is an interesting notion but I don't agree with it.

You can not look at the price for stuff for a long time without having that much money as long as you stay away from cars, houses, etc.

On the other hand even if you have $100 million (which would make you rich in most peoples books) you can waste that in a couple of years buying homes and planes.

If you actually have so much money you can buy planes and houses without worrying about it for the rest of your live then you would be among the top of the fortune 100 list.

Re: What is Wealth in America?

#25

Post by 0x12 »

tomjen3 wrote: post #23
0x12 wrote: post #7

If you still look at the prices of the stuff you intend to buy then you're not rich. Once you stop looking at prices you're rich, no matter how much actual money you've got.

That is an interesting notion but I don't agree with it. You can not look at the price for stuff for a long time without having that much money as long as you stay away from cars, houses, etc. On the other hand even if you have $100 million (which would make you rich in most peoples books) you can waste that in a couple of years buying homes and planes. If you actually have so much money you can buy planes and houses…

You can get rid of any amount of money by wasting it.

But if you live a normal life with normal desires then a couple of million will go a long long way towards realizing your every wish, except for the absurd.

Your own plane = extravagance, multiple houses ditto.

Re: What is Wealth in America?

#26

Post by Lightbody »

0x12 wrote: post #22
Lightbody wrote: post #21

Earlier quoted context omitted.

Agree, but what is "zero effort"? My financial advisor is self-described "lazy" (he's an odd fellow, we're lucky to have him) but he does quite a bit more stuff than your regular Joe does when it comes to managing our money. That's why I believe that 9% or more is still reasonable to expect - even with inflation.

It could go down too, by 4%. Risk works both ways, hence the higher reward. You can't really expect anything, the only thing that you can do is trade risk for potential gain or loss and hope that you jump to the next ice-floe when you should. Miss the beat and you'll lose rather than gain.

Sure, on any given year it can swing wildly, but long term I believe that those who invest in individual stocks ("the rich") will do significantly better than inflation.

It sounds like you're assuming it's a fair game and that everyone gets to participate. The reality is most people don't get to do the things the rich get to do, and their gain tends to come at the everyone else's loss.

For example, the rich often pay a lower tax rate than the middle class due to various tax policies designed to benefit them, such as offsetting margin interest against capital gains or carrying forward capital losses indefinitely. Those gains have to be included in your overall returns and are why the rich are getting further ahead.

That all said, the best way to boost your wealth is to create it from scratch and start a company.

Re: What is Wealth in America?

#28

Post by cellis »

wan23 wrote: post #11
smallegan wrote: post #4

It would be interesting to see Forbes 400 adjusted for local economy. For instance, Warren Buffett who spends most of his time in Omaha certainly gets more bang for his buck than the Billionaires that live in Silicon Valley.

Once you're at that level, differences between local economies are such a small percentage of your net worth that it really doesn't matter.

Exactly. Billionaires are truly international citizens, shifting their wealth to the most amenable climates (often literally, e.g. Florida), so few of them will be truly invested enough in a certain locale for cost of living to matter.

And if they are, well then they own the entire town, so they definitely don't care.

Re: What is Wealth in America?

#29

Post by Gravityloss »

I was expecting a socio-philosophical analysis of why schools are being closed down, the government and people are becoming indebted, yet supposedly the wealth has multiplied in the recent decades etc etc.

But instead you get counting of money, like kids do when they're maybe ten: how much money everyone's daddy and mommy have.

What is wealth in America? Having more money than others.

Re: What is Wealth in America?

#30

Post by mseebach »

dspeyer wrote: post #17

> the chief technology officer ... of a tech startup ... might own a golf membership or two at fancy clubs, costing $300,000 each Really? This strikes me as rather implausible, and makes me doubt a lot of the other claims.

You missed the bit where the startup was sold to Google for $2 billion.
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