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Why do you think people are poor?

harpers.org

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Re: Why do you think people are poor?

#171
post #160

Earlier quoted context omitted.

I only really discovered the advantages of creating my own business when I was around 23, I'm 25 now. I also got into a significant amount of debt in order to get a degree to make me more "employable" - and I'm still paying it back. I'm perhaps most irritated by this because I'm mostly self-taught (in computer science) and university did very little for me. I should've studied business instead, but probably like you…

Maybe what we need is less of a udacity for coding and one for business, expressed in a way anybody can understand but not as rigid as a bschool or mba program? Reading the Thiel lectures for instance is very educational but without the basics how do you apply something like that?

That's what I do: http://personalmba.com. Business is not that difficult once you know the basics.

The best place to start is my book: http://personalmba.com/book/

Hope you find it useful!

Re: Why do you think people are poor?

#172

Because the system makes sure people stay poor. How many of you were taught in school that if you pay yourself a minimum wage and make up the rest as a dividend/bonus you can avoid paying a significant amount of tax (legally)? Or how many of you were taught how to become "employable" so that you can earn the same amount of money and pay considerably more tax, unavoidably - because you aren't in control of your own fi…

It sounds like you're talking more about things that could help middle class people. Very few poor people have issues that could be helped with "pay [themselves] a minimum wage and make up the rest as a dividend".

Sure it'll help the middle class with out current system, but the point was more about how all people should value themselves. Rather than selling your time in exchange for money (i.e., being an employee), you are better off exchanging your value for money. This should apply to any class really.

The reality is different for poor people, but my point was more about "what could be", rather than "what is". Trying to think about it in terms of the current system is flawed, because the current system is designed to enrich people.

If everyone was avoiding tax then the tax would need to rise, or the laws would need to change - this may or may not be a good thing to the masses - but it's certainly not a good thing to the rich - which is why they make sure it doesn't happen.

Re: Why do you think people are poor?

#173

Earlier quoted context omitted.

IRS only applies to US companies. Each country has it's own different loopholes that allow you to pay less tax if you're earning more. The big corps pay far less tax than they should. Note to term, "tax avoidance". "Tax evasion" is illegal, but there are plenty of legal ways to avoid tax, many of which I'm not aware of myself, but will be grateful for anyone willing to share. And that's a big part of it - people don'…

1) Wealth is not zero-sum. 2) You're recommending that we defraud our federal government in your original post. Just stop.

I'm not recommending you defraud your government, or do anything illegal - I'm recommending you do the same thing that every big corp does - pay the minimum tax they are required to by law, and no more.

People are led to believe that the richest pay ~40-50% in tax, or whatnot depending on where you are - but that couldn't be further from the truth - they generally pay less (as a percentage of their total earnings) than the middle or working classes.

You know, when these bankers pay themselves a $9 million tax free bonus at the end of the year - are they defrauding the government?

Work it out, say a banker is on a nice $1m salary, which he pays 50% in tax, but pays zero tax on his fat $9 million bonus.

Re: Why do you think people are poor?

#174
post #72
post #11

I remember reading an article at one point about a study done on high school students. I can't remember exact details, but there was a program where students in areas with bad high schools could apply to be sent to better high schools. If I remember correctly, admission to the program wasn't merit based, but first-come, first-serve. The study compared the students who got into the program, and the students who applie…

Why is it, then, that despite the school someone goes to not mattering in outcomes once you control for external factors, rich people still disproportionately prefer to send their kids to private schools, and are willing to pay 20-30k per year over a decade to do so? I could totally believe that it's totally irrational on the rich parents' part: kids and health are places where people lose much sense of rationality a…

Because going to a private school gives your children the opportunity to network with the children of other wealthy people.

Re: Why do you think people are poor?

#175
post #74

Earlier quoted context omitted.

Note that correlations between populations are not transitive like that. http://en.wikipedia.org/wiki/Ecological_fallacy

That is indeed true, and I thought about putting in a note about that in my original comment, but... c'mon folks, I don't think there can be any serious doubt about the idea that some people are born stupid, and that stupid people are more likely to be poor. Can there? Is this a concept which people genuinely doubt?

Likewise, some people are born ugly, and ugly people are more likely to be poor, and why didn't TFA mention all the research on this?

Contra-point: the rich have more resources to invest in beauty.

Contra-point: but surely there are some beautiful poor people, denied the opportunity to maintain, develop and leverage their beauty for material gain. What of them, the deserving poor?

Contra-point: it's not just good genes, it takes hard work too, with proper diet, exercise, plenty of sleep and good grooming. I deserve my success, I earned it.

Contra-point: do beautiful parents necessarily have beautiful children, and vice-versa? I know this girl, she's really hot, but her sister is such a dog....

Re: Why do you think people are poor?

#176

Earlier quoted context omitted.

1) Wealth is not zero-sum. 2) You're recommending that we defraud our federal government in your original post. Just stop.

I'm not recommending you defraud your government, or do anything illegal - I'm recommending you do the same thing that every big corp does - pay the minimum tax they are required to by law, and no more. People are led to believe that the richest pay ~40-50% in tax, or whatnot depending on where you are - but that couldn't be further from the truth - they generally pay less (as a percentage of their total earnings) th…

You seem quite naive. I'm assuming you're fairly young.

1) Top marginal tax rate is 35%.

2) Bonuses are taxed as income as well.

3) The rich pay the majority of taxes. (http://www.usatoday.com/money/perfi/taxes/story/2011-09-20/b...)

The world isn't out to screw you.

Re: Why do you think people are poor?

#177

Because the system makes sure people stay poor. How many of you were taught in school that if you pay yourself a minimum wage and make up the rest as a dividend/bonus you can avoid paying a significant amount of tax (legally)? Or how many of you were taught how to become "employable" so that you can earn the same amount of money and pay considerably more tax, unavoidably - because you aren't in control of your own fi…

>There's a reason this isn't taught in public schools folks - it's because the people at the top want more for themselves and less for you.

While I agree with you that schools should do more to encourage people to own their own business, do you really think school curriculums in the US are decided by a shadowy cabal of the wealthy?

Whether to teach business and entrepreneurship would be almost entirely up to the local school district. There are thousands of them and each one is independent--that's a pretty far reaching conspiracy. I know members of my local school board, and I can assure you they aren't part of the "people at the top" trying to keep the poor man down.

The real reason people more people aren't self employed is that we've managed to link health insurance with employment.

Re: Why do you think people are poor?

#178
I see lots of people blaming "the system" and whatnot for not teaching you to be rich..... and getting you into debt. And to be sure, the financial industry has been given too much rope to hand out credit without enough risk.

But I seem to recall seeing many other forums about university, mortgages, etc, where people who's parents paid for their education, helped with a house, etc, are ridiculed - and I don't mean super rich dynastic trust fund babies....

It only takes a generation and some common thinking for a family to stick together and get ahead, and ensure their children never need to borrow money from a bank to get an education, or buy a house. You don't have to be rich... but why can't we live, you know, a generation ahead? I know a guy who told me his parents paid for all his stuff, his house, etc, and therefore all his work and all that (good tech guy) was just being saved up for HIS kids, ad-infinitum. They aren't trying to be rich - they just stay a generation ahead.

How many people, 10 years into their working life, have a year's minimum expenses in liquid cash, a cushion, just in case? How about 6 months? Most don't even have 2 weeks.... most live hours away from disaster if they don't get paid on time, and they blame everyone else. Get a couple months ahead and you no longer think about when payday is.... it's not relevant. Want to be an entrepreneur? great. Do it. People don't understand what money is for, or how to really use it to their advantage. They learn abou their "credit rating" - that's it.

My rules: - There's nothing wrong with cash in the bank (really secure, liquid assetts). People tell you you are losing out because of inflation..... most of those people got smashed when the stock market crashed. I'm not knocking investment, I'm just saying, cash is okay. I've weathered the ups and downs of the financial world without worry or concern while everyone else was freaking out. A good credit rating is good - but it should be a side effect of good financial practices, not a goal in and of itself. My credit rating probably isn't great - it's not bad because I've done nothing wrong, but I haven't borrowed large sums and paid them back, that kind of thing.

Credit cards should work for you, they are not a privilege. They should protect you from risk of theft, and help you balance out and manage cache flow. They should never be used for money you don't have. There are other ways to go about that (and in a circle of friends with similar practices, you borrow from friends - imagine a society based on the same)

Avoid debt. Debt is okay - but don't get over your head... stay far, far away from that kind of debt. Debt carries a psychological burden as well.... for me it feels great knowing that when I get paid, my money is mine. If I borrow some money, pay some interest so I can keep some liquidity rather than spend cash on something big the interest payments are worth keeping my security cushion adequate - but if push comes to shove, I can just pay it off - that's what I mean.

You want a simple credit card without fees or nasty interest rates. You want protection and no nonsense. You want cash in the bank, always growing - I don't mean retirement savings, I mean a cushion - it should grow all the time. After 20 years of working you should be in a position where you could have no job for a year or more without screwing up your life. (not saying you SHOULD do that, you probably shouldn't - but you should be able to - that makes negotating salaries and dealing with employers much, much easier).

It's really simple. Avoid debt. Build and keep adding to a cash cushion. Dip in once in a while, no problem, but keep it growing. It'll hurt at first, but before long you'll LOVE it. Be as aggressive as you can. Liquidity = opportunity. (Imagine having a rented home and lots of cash in the bank rather than an underwater mortgage when the housing market crashed. Most people tragically sufferred - you would be in a position to take advantage of the situation immediately.

Re: Why do you think people are poor?

#179

Earlier quoted context omitted.

IRS only applies to US companies. Each country has it's own different loopholes that allow you to pay less tax if you're earning more. The big corps pay far less tax than they should. Note to term, "tax avoidance". "Tax evasion" is illegal, but there are plenty of legal ways to avoid tax, many of which I'm not aware of myself, but will be grateful for anyone willing to share. And that's a big part of it - people don'…

1) Wealth is not zero-sum. 2) You're recommending that we defraud our federal government in your original post. Just stop.

Perhaps relevant: yesterday's news. (http://www.bbc.co.uk/news/uk-politics-18521468).

Those are just few of the tax avoidance schemes that come to light - which it should be noted are not necessarily illegal. The reality is that the rich and famous are involved in these schemes - earning big money and paying less tax than hard working, honest men.

The government doesn't take the necessary steps to put an end to these kinds of schemes in any haste - probably because they're involved in many themselves, along with their friends. If everyone was doing it, the schemes would be closed. I therefore recommend everyone do it, when legal.

Re: Why do you think people are poor?

#180

Earlier quoted context omitted.

I'm not recommending you defraud your government, or do anything illegal - I'm recommending you do the same thing that every big corp does - pay the minimum tax they are required to by law, and no more. People are led to believe that the richest pay ~40-50% in tax, or whatnot depending on where you are - but that couldn't be further from the truth - they generally pay less (as a percentage of their total earnings) th…

You seem quite naive. I'm assuming you're fairly young. 1) Top marginal tax rate is 35%. 2) Bonuses are taxed as income as well. 3) The rich pay the majority of taxes. ( http://www.usatoday.com/money/perfi/taxes/story/2011-09-20/b... ) The world isn't out to screw you.

I'm less naive than I was a few years ago since learning somewhat how the system works.

1) Perhaps you missed the part where I said IRS only applies to US? Tax rates do differ in different countries, if you weren't aware. That's one of the major tax avoidance methods - do what you can offshore, wherever you benefit by paying less.

2) Again, depends where you are. While all bonuses may not be tax free, they are usually taxed differently to income tax anyway - such that less tax is paid. Why do you think people pay bonuses rather than just increasing salaries?

3) I wasn't claiming otherwise - my claim is that the rich don't aren't paying more as a proportion of their total earnings, which is what is claimed to be the case by the system.

Whether the world is out to screw you or not I'd debate. It's more like the world is out to get as rich as possible, and you get screwed as a side effect.

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