171–180 of 193 posts
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It doesn't matter. The concepts he teaches is what matters.
Yes, it bloody well matters. What's the point in getting some high-level concepts correct if all the nitty-gritty detail is wishful thinking and fantasy? Instead, read Warren Buffett's letters to shareholders and take it from there.
He is even very clear that they were specific circumstances, and that it's not generalizable advice.
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This is a really salient point. I would go a step further and ask whether or not that $100 is better in the hands of a wealthy person (in the context of this article - a person who would put that money to work in the local/national economy to make more of it), or in those of the poor person. Certainly the latter can put it to great use buying necessities of life, but in the hands of the former it might increase the l…
> I would go a step further and ask whether or not that $100 is better in the hands of a wealthy person (in the context of this article - a person who would put that money to work in the local/national economy to make more of it), or in those of the poor person. That's a testable hypothesis, and as it turns out it's already been refuted: research has shown that dollar-for-dollar, tax cuts are a net drag on the econom…
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> spending = inflation. Spending does not equal inflation. Increased money available to the consumers who have non-zero demand for a set of goods can reasonably be expected, under most circumstances, to increase the market clearing unit price for the goods -- but with most reasonable sets of assumptions the relative increase in unit price will be less than the relative increase in available funds to consumers, and re…
> Spending does not equal inflation. It does when it's a nanny state telling people to spend. First, taxation is not redistribution of wealth. In practice, it's always a lot heavier on the middle class than on the elite, the later have better means to avoid taxation. Second, this money is never just handed over to the poor. Here in Brazil, for instance, it's used to back credit programs by state-owned banks, and inte…
States are not magic. Economics does not suddenly turn into a zero-sum game just because consumers are spending food stamp money instead of "real money" from jobs.
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…
In my experience, as part of my family is from ex communist societies, when you distribute money, there is concentration of power. A government powerful enough to distribute all assets is super powerful, and those that control this government(the party) have all the power. Having all the power, they have all the material resources for them, their families and friends, even when they don't have "money". They want a ca…
Wait, you mean they have homes? As in, stable places to live that don't put them in debt peonage their whole lives?
Wow, that's a pretty big rise in their standard of living versus current-day neoliberal capitalism ;-).
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 like how you defined heath, education, and intelligence as the raw materials, but they don't directly give you the return that will make you wealthy. You need to apply those skills in some way to make income generating assets, and that is the tricky part. For most people, including Robert Kiyosaki, income producing assets basically means buying and renting out property. I disagree with doing that on so many levels…
What do you suggest is better than rental real-estate as a income-producing asset to invest in? Entrepreneurship is great and all but the risk is frighteningly high
I really like Rob Walling's description of what he does with software businesses [1] though, and my plan is to do something like that.
[1] http://www.softwarebyrob.com/2010/06/24/websites-as-investme...
Very good comments, though I disagree on just one point: Money is a medium of exchange for wealth, it is not a store of wealth. It actually is a store of wealth. Money buys investments, which is where you store wealth. Money is easily transferable in and out of interest bearing accounts, which is a way to store wealth.
The fact that you can buy investments with money makes it a medium of exchange. Money is theoretically supposed to be a store of value as well, but it is not a good store of wealth, due to inflation. With current central bank policy (or at least Fed policy in the US), most interest bearing accounts are not currently a good way to store wealth, because after adjusting for inflation, their low interest rates mean that…
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I found these posts interesting, and I don't know what to think of them. In terms of large corporations, I do think it would be more beneficial to split the money more evenly amongst the people who helped create the wealth, and, with bill gates in particular, is having money in stock actually generating wealth? Sure, if he sold it all at once it would crash, but if he slowly started getting rid of it and turning it i…
I think I get what you're saying... mainly that when wealth is so centered in that 0.1% upper crust of power brokers, that it keeps potentially wealthy people off the boat. Combine that with the fact these people are well connected and intertwined, and it becomes > Wealth, more evenly distributed, would give more people a greater chance at, in turn, creating more wealth. Yes and no. Look at lottery winners (or other…
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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…
If we're generalizing from fictional examples, I'm sure I can find a great novel about a communist utopia somewhere.
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Until you've figured out what to do with it, just buy shares VTI. Vanguard Total Stock Market. Or get the admiral version if you're in the US. Essentially it's a tiny fraction of ownership of all publicly traded companies. As long as the economy doesn't go completely down the drain it's a very good place for your money. It's not the optimal place for your money, of course, but compared to sticking your money in a che…
Why isn't it optimal? Any other thoughts on what one should look at in order to find an optimal place to put their money?
This is a pretty great intro: http://jlcollinsnh.com/stock-series/