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Money and wealth

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Re: Money and wealth

#121

Post by gethoht »

dragonwriter wrote: post #95
notdonspaulding wrote: post #88

Earlier quoted context omitted.

I'm sorry, how is capital gains tax different from "seizing of assets from wealthy people" again? It seems like a distinction without a difference.

Eliminating the favorable taxation of capital income compared to labor (and most other) income is eliminating a feature of the status quo tax system, which amounts to major capitalists seizing wealth from everybody else.

^This. It's easy to see this when you look at the numbers that show productivity rising while lower income wages stagnate. Higher income earnings have gone up an extreme amount. We've built a society where gains in productivity are not shared and that's not an accident.

Re: Money and wealth

#122

Post by Kronopath »

It's interesting that he defines the three most important pillars of wealth to be health, education, and intelligence -- with the exception of intelligence (which is effectively fixed), these are commonly provided as public services in most countries so that everyone has equal access to them. Taken through this lens, it's clear how social services lay the groundwork for the wealth of a nation.

Re: Money and wealth

#123

Post by aklein »

I think everyone should know some basic macroeconomics, which elaborates some of these points. I just finished [1] and it fundamentally changed how I think of wealth. I used to think only of current value, but the key insight is that assets derive value as claims on future output. Money is not only a medium of exchange, it's also a (temporary!) store of value, and a unit of account as well. It is a tool, but certainly not an end in itself.

[1] http://www.amazon.com/Concise-Guide-Macroeconomics-Managers-...

Re: Money and wealth

#124

Post by smileysteve »

msrpotus wrote: post #3

This makes sense but then what are some useful ways to use cash to build wealth if not buying stocks and other investments? I'm a young guy with plenty of money in the bank (in the tens of thousands; obviously not enough to retire but I could quit my job and do nothing for a while) and basically no debt. I find and I'm sure I'm not alone here with this feeling that, while I could spend a lot more money, I'm perfectly…

> what are some useful ways to use cash to build wealth if not buying stocks and other investments?

This article lacks the humility to recognize that a large collection of publicly traded companies are going to have much more time, experience, and resources (wealth and leverage of it) to properly manage a company toward profitability.

Re: Money and wealth

#125

Post by cconroy »

lmm wrote: post #90
jerf wrote: post #31

This is also why wealth redistribution works far less well than people who imagine it as money redistribution think it will. Part of the wealth is tied up in the owner, and that can't be redistributed without loss, sometimes great loss. Let's take a concrete example. Suppose that class warfare rhetoric utterly wins, and as its first scalp The People decide that the filthy rich Bill Gates needs to have 100% of his wea…

Liquidity is an irrelevant side issue. Gates would have exactly the same problem if he tried to sell all that microsoft stock to buy turnips; he could destroy billions of dollars of wealth just as easily as the people you so despise. (In fact, if you turn it around, Gates doesn't really have 100 billion dollars. He has something that looks like it's worth that much, but only for as long as he doesn't try and use it.…

Agree.

It seems noteworthy to point out in the GP in how he expresses class warfare. When this is invoked (here and elsewhere) it's always the poor who are committing "class warfare" against the rich. When in reality, with evidence abound throughout history it is the rich who actually commit class warfare on a continuous basis against everyone else. Even HN is not immune to this propaganda.

Re: Money and wealth

#126

Post by dragontamer »

ronaldx wrote: post #102
tomstokes wrote: post #10

The takeaway from this article is that hoarding cash is not a good store of wealth, and that the key to long-term wealth is to acquire net income generating assets. Great points for sure, but I strongly disagree with his assertions that saving up for retirement is ill-advised and that traditional investments (stocks, etc.) are too volatile and risky to be useful. He never explicitly gives any advice for acquiring net…

> I strongly disagree with his assertions that saving up for retirement is ill-advised and that traditional investments (stocks, etc.) are too volatile and risky to be useful. With my retirement age ~40 years away, it's not clear to me that locking my money into traditional investments is a good idea: existing historical records are not statistically convincing (to me) over such a term. A single stock market crash or…

The stock market has historically never dropped in value over a 15 year period. If you continually invest through a crash, you will make insane amounts of money.

Lets say you started investing in 2006 (before the crash), specifically in SPY. Lets say you put $10,000 / year into SPY.

You'd have spent $80,000 over those years, and today, your SPY holdings would be worth $118,176.92. You'd make a 47% profit because you invested through a crash.

Crashes are the most amazing thing for your investment portfolio. Investing THROUGH a market crash makes insane amounts of money.

----------------

The risk however, is the day you retire. If you retire during a market crash, you will lose a lot of money. But a crash during your 40 year investment period? That's the best possible scenario. Every crash will lead to insane gains in your portfolio. As others have noted, you can mitigate this risk by simply moving your money away from stocks as you near retirement age.

Bonds don't make as much money, but they're a lot more reliable.

Re: Money and wealth

#127

Post by ricardobeat »

Dewie wrote: post #49
jerf wrote: post #31

This is also why wealth redistribution works far less well than people who imagine it as money redistribution think it will. Part of the wealth is tied up in the owner, and that can't be redistributed without loss, sometimes great loss. Let's take a concrete example. Suppose that class warfare rhetoric utterly wins, and as its first scalp The People decide that the filthy rich Bill Gates needs to have 100% of his wea…

A similar story was illustrated in Carl Barks' Scrooge McDuck story. A tornado lead to Scrooge losing all his money to everyone. This lead to everyone leaving their job and going on vacation. Soon, goods became scarce, so they had to turn to Scrooge who were selling produce from his farm at inflation-level prices. Soon everything returned to its usual equilibrium. (Scrooge owns a lot of businesses, anyway, so that wo…

I don't think that story means what you think it does. It's a tale of wealth and power. Money is just one part of the equation.

It also perpetuates the right-wing myth/prejudice that poor people are lazy and can't handle larger amounts of money than they "need", which has been proven wrong repeatedly.

Re: Money and wealth

#128

Post by ricardobeat »

dragontamer wrote: post #105
01Michael10 wrote: post #86

Earlier quoted context omitted.

I have always found it odd people who are so against wealth (or income) redistribution always talk about the taking of money from the rich to the poor. Where have you been the last 30 years (in the US)? The only redistribution has been from the working poor and middle class to the rich. Really against wealth redistribution? Talk about a bottom up approach to tweaking our economy instead of trickle down...

Actually... the redistribution is closer from "the old rich" to "the new rich". 50 years ago, when you said "the rich", it would mean descendants of Carnegie, Hersey, or other big name company builders who created monopolies in the late 1800s and early 1900s. The majority of "the rich" were lawyers and doctors with Ivy League degrees and long pedigrees. Today's rich are Bill Gates, Mark Zuckerberg, Warren Buffet, Gab…

Those are just the modern rich poster childs. The gross of wealthy individuals still come from the same lineage as a century ago.

Re: Money and wealth

#129

Post by [deleted] »

jerf wrote: post #31

This is also why wealth redistribution works far less well than people who imagine it as money redistribution think it will. Part of the wealth is tied up in the owner, and that can't be redistributed without loss, sometimes great loss. Let's take a concrete example. Suppose that class warfare rhetoric utterly wins, and as its first scalp The People decide that the filthy rich Bill Gates needs to have 100% of his wea…

[deleted]

Re: Money and wealth

#130

Post by jfdixon »

jerf wrote: post #31

This is also why wealth redistribution works far less well than people who imagine it as money redistribution think it will. Part of the wealth is tied up in the owner, and that can't be redistributed without loss, sometimes great loss. Let's take a concrete example. Suppose that class warfare rhetoric utterly wins, and as its first scalp The People decide that the filthy rich Bill Gates needs to have 100% of his wea…

AI pioneer James Albus proposed a novel wealth redistribution scheme he called Peoples' Capitalism.

http://www.peoplescapitalism.org

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