121–130 of 152 posts
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Every one of those quotes is portraying selfishness. Why should anyone discuss those points? They don't have long-term value to anyone else.
Hm. Not caring about material possessions is selfish? Not sure I follow that logic...
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Everyone's appetite for risk is different. If I had $10,000,001.00 in the bank, I personally would not feel secure enough to spend $300k on a car (and also pay all the expensive maintenance that it entails.) Since the car is 3% of my available funds, I'd be constantly hyper paranoid about a stray rock being kicked up by the truck in front of me. If I had $100 million, the $300k car would feel a little more "disposabl…
I get your concerns but also think you are better off without $10 million in the bank, if you are scared of spending it because you fear you could lose some and be only worth $9.7 million.
You misunderstood what I'm saying if you think $10 million to $9.7 million is some kind of reduction in self-esteem. That's not the point.
It's not the absolute $ amount. It's a subjective sense of the magnitude of payment in relation to what I get in return. The calculus includes the mental state.
In my 20s, I spent $500k on a music studio thinking it would earn multiples of that. Things didn't pan out that way but I'm still young enough not to be gun shy about spending large amounts of money. I'm just a little wiser now and won't be throwing money away at such endeavors.
Today, if I came across a web startup I believed in and they need $900,000 (3x the $300k of Ferrari), I'd feel compelled to reduce my bank account to $9.1 million to see if my angel investment will work.
With the Ferrari, the ownership of it also includes many headaches in addition to whatever pleasures I could derive from it. The pleasures are seriously curtailed in my city where I couldn't floor it and race it above 80mph.
On the other hand, with the killer web startup, I would lose sleep at night if I missed the chance to invest so in that situation, I must spend $900k just to have some piece of mind. Mathematically, I'm "poorer" at $9.1 instead of $9.7 but I feel better. Maybe the startup will crash & burn but I spent the money hoping they could change the world.
Here's the crazy thing: it's very possible for someone else to think of the Ferrari as the "sure reward" and the web startup investment to be a fool's game. We all have different risk profiles.
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You can invest, or you can spend in a way that generates GDP. If you "invest" or put your money into the stock market, you are not deploying your money in a way that generates GDP. Unless the stock is an IPO, you are essentially trading paper when you buy a stock. No GDP is generated on that transaction. In a sense you could be redeploying if the seller of the stock takes the money from the trade and redeploys it in…
And what if a nonnrich person needs access to capital in order to pay workers? Who would buy an IPO if they knew everyone else took your advice and would never let the IPO buyer exit? Trading stock is dealing in liquidity. Liquidity is where all the wealth in the market is made available to humans.
The most natural/good way of doing this is running a legitimate working business and paying workers with revenue money generated by the business itself. Other ways include borrowing money, getting money from angels/venture capitalists, or money from an IPO or reissuing of shares.
>Who would buy an IPO if they knew everyone else took your advice and would never let the IPO buyer exit? Trading stock is dealing in liquidity. Liquidity is where all the wealth in the market is made available to humans.
There are many IPOs that don't let the buyer officially exit yet people still buy it: Google, facebook, microsoft. In fact almost all IPOs are like this. When you buy stock from these companies you can't officially redeem your shares for the value it's worth. You can only sell it to another person.
Believe it or not the stock market is a market of people trying to outthink each other in buying paper for a low price and selling it for a higher price. No GDP is generated in these exchanges. Magically, the prices for these pieces of paper follows the intrinsic value of the company they "represent." People simply being told that the paper represents a percentage of the company is enough to make people behave as if it actually does even though the owner of the "paper" can't use the paper to redeem a portion of the corporate value.
You can only do one thing of monetary value once you own a stock share: Sell it to the next idiot. It's funny how it all works out. You could say that the entire stock market is a bubble of empty dreams.
The only time you can officially redeem a stock share is when a company liquidates. But that almost never happens, and people buy stocks expecting it not to happen.
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Unless they've sacked their money away under their mattress, it has been deployed back into the economy. It is either invested or in a bank where the majority of it has grown the pie of total dollars through loans (this is often not well understood). If I have ten dollars that I place in a bank, they will only hold the required reserve. Assuming this is 30%, then seven will get distributed in loans. The effective siz…
No, assuming a reserve of 30%, the whole $10 is the entire reserve, and they loan out $33.33, making $43.33 total.
What you are describing is fractional reserve banking under a SINGLE or central bank. The United States Federal Reserve does this kind of lending to commercial banks deliberately to control the money supply. Actually, I'm not even sure if the federal reserve is required to maintain a reserve ratio (of federal notes to cash) at all. I think those federal reserve notes are literally created out of thin air.
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Good for you. How does you running a business without access to capital make me naive? Doesn't that make you niave?
I have had to chair share holder meetings to discus difficult financing decisions. I have also been made redundant the hard way when a company went bust ie they hand been paying the social security so I could claim unemployment. Are you still a student as your attitudes certainly indicate you might not have had to deal with the real world.
You still haven't answered how YOU running a company without access to capital makes ME niave.
Please note that although we respect frugality over lavishness. Frugality among rich people is one of the primary reasons behind wealth inequality. Sitting on top of an perverse amount of wealth and not doing anything with it is bad for the economy. Wealth needs to be redeployed back into the economy and it must be done in following a method that doesn't grow the wealth in an unnatural compounding way.
http://www.ted.com/talks/nick_hanauer_beware_fellow_plutocra...
This person elucidates my views completely and in a way that may be easier to understand.
Please note that although we respect frugality over lavishness. Frugality among rich people is one of the primary reasons behind wealth inequality. Sitting on top of an perverse amount of wealth and not doing anything with it is bad for the economy. Wealth needs to be redeployed back into the economy and it must be done in following a method that doesn't grow the wealth in an unnatural compounding way.
The dynamics of capitalism put wealth into the control of its wisest custodians - frugality being defined as among the wise virtues in this context. For those who argue that democratic government is the wisest custodian, e.g. there is estate taxation and government redistribution and investment.
I urge you to watch this video, your comment compelled me to find it:
http://www.ted.com/talks/nick_hanauer_beware_fellow_plutocra...
The millionaires at $1m to $10m absolutely DO have to be "frugal" if we use define "frugal" to be about "smart spending" as opposed to fishing pennies out of public fountains. The word "million" is deceptive because it is an amount beyond what 99% have. It makes it seem like some mind boggling amount of money but mathematically, it really isn't that much. A person classified as "millionaire" could be tagged that beca…
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I have had to chair share holder meetings to discus difficult financing decisions. I have also been made redundant the hard way when a company went bust ie they hand been paying the social security so I could claim unemployment. Are you still a student as your attitudes certainly indicate you might not have had to deal with the real world.
No I'm not a student, but you publically, immaturely and insultingly stating that my behavior marks me as someone who has not dealt with the real world does not bode well with your claim that you chaired shareholder meetings. I certainly wouldn't want such a person making difficult financial decisions. You realize what would happen if you called someone niave in the real world? Surely you would know that such a state…
Also look at how your comments on this thread have been treated.
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That looks like some blog pushing info products and ebooks...
Yeah, it's not. In fact, I don't see anything for sale at all. Are you looking at the wrong site? http://www.mrmoneymustache.com