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Climbing the Wealth Ladder

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Re: Climbing the Wealth Ladder

#241

Post by blaser-waffle »

disintegore wrote: post #180
pathseeker wrote: post #145

Earlier quoted context omitted.

>Outside of real outlier status where you're paid really, really large amounts of money for your services (like notable entertainer or cardiac surgeon) the way to wealth is to own the means of production. Period. This is a lazy view, or a really privileged one at least. I know a couple of people in their fifties who have retired from putting as much money into the market as possible (post-tax and pre-tax) while livin…

Are you aware of the fact that your anecdotal evidence from the fifties may no longer be pertinent? Have you seen what happened to wages since then? To the cost of living? To the cost of homes?

FIRE is still a thing even today; for example Mr. Money Mustache talks about this all the time:

https://www.mrmoneymustache.com

Your point about wages stands, but even in the 50s there was no way the lower strata would have been able to retire early -- let alone retire at all -- or accumulate great wealth.

> To the cost of living? To the cost of homes?

COL and housing prices are not uniform. FIRE is going to be hard in San Fran even as a full-time Dev, but if you're making $85k in Des Moines it might be well within reason.

Re: Climbing the Wealth Ladder

#242

Post by jdashg »

greedo wrote: post #160
ben7799 wrote: post #55

I think this kind of article is helpful. The thing I notice most is a lot of people buy cars (and replace them frequently) that are way above their "level" and represent hugely irresponsible decisions. E.x. you should be way into 7 figures of wealth accumulation before you start leasing/buying $50-70k luxury cars. You never know what someone's stock portfolio/401k/IRA whatever looks like but it's always an eyebrow-ra…

A mortgage for a $1M property is roughly $4-$5k depending on credit etc etc.

$5100 for $1M borrowed (a low) 3%, excluding down payment, property taxes, and likely PMI, given how onerous saving 20% of seven figures is.

Re: Climbing the Wealth Ladder

#243

Post by brailsafe »

opportune wrote: post #232
bronco21016 wrote: post #63

Earlier quoted context omitted.

It bothers me when people use the phrase living paycheck to paycheck to describe both someone who literally doesn’t make enough money to cover the essential bills of living as well as someone making $200k+. These people are not in the same boat whatsoever. The doctor, or any professional making that much, simply needs to turn in the lease on the luxury car, or downsize their house, or cancel their vacation to materia…

They are in the same boat in that they face potential financial ruin if they don’t get their next paycheck for whatever reason. There is already a separate terms to describe people who live paycheck to paycheck to cover essential living expenses, it is called poverty.

I think one is trying to get out of ruin in general, whereas the other potentially risks financial ruin

Re: Climbing the Wealth Ladder

#244

Post by hultner »

slowhand09 wrote: post #221
AlexanderNull wrote: post #136

Earlier quoted context omitted.

No family? Also if we were talking about the US (which the article was) then you have to factor in healthcare, average of $200 a month for the insurance IF it's sponsored (mostly covered) by their employer. If the grocery worker is living in any major city then rent is bare minimum of $600 a month for the privilege of living with at least 2 other flatmates or around $1000 for a pretty small apartment. So this person'…

Thats a terrible best case. With a beater car you can deliver pizza and make $1500 a month in most metropolitan areas. Put aside a small emergency fund. Pay off debts, smallest to largest to build psychological momentum. Once debts are paid, start saving for home if you want. And put 15% in a retirement plan. People go to college paying their way while doing this. They live frugally now and benefit later. They major…

It wasn't supposed to be best or worst cases, it was just supposed to show that living under your means do matter and that someone with a fraction of the disposable income of a high earner can still earn more in the long run by saving regularly, obviously a high salaried person with the same mindset will earn even more but that's beside the point. The point was that cash flow management do matter.

I could have made a case with a even higher earner living even more lavish, racking up credit card debt and payday loans, buying stuff on installment ending up even worse with debt interest eating up much of the cash flow, here I simply compared someone living under their means with a higher salaried person living at their means (never beyond).

Re: Climbing the Wealth Ladder

#245

Post by slothtrop »

CPLX wrote: post #29
disintegore wrote: post #8

I understand this isn't the point of the article, but it seems like a roundabout way of saying "don't overspend". This part in particular bothers me : > More importantly though, the best way to climb the wealth ladder is to spend money according to your level. As far as I (a non-economist) can personally tell, any notion of climbing up some abstract wealth ladder is synonym with a salary increase for the vast majorit…

Yup. I see this kind of logic in personal finance discussions all the time but it's bullshit. There simply aren't any spending decisions you can make that will change you from not wealthy to really wealthy. Those things can just move you from poor to middle class at best, or to a better level of middle class. Outside of real outlier status where you're paid really, really large amounts of money for your services (lik…

Exactly, we can't even save our way to retirement (we need to invest), let alone expect frugality to translate to wealth. If you aren't in business for yourself, pay raise is the way up.

Re: Climbing the Wealth Ladder

#246

Post by blaser-waffle »

knightofmars wrote: post #223
pathseeker wrote: post #154

Earlier quoted context omitted.

>* It sounds like she lived more frugally than most people would find tolerable. Sounds like an issue with most people. >* She lived in a rent controlled apartment, meaning her rent was probably closer to free than to market rates for much of her life. Needless to say, this subsidy isn't available to young people today. The subsidy is available via home purchase. Fixed-rate mortgage payments don't increase over time.

Property taxes do.

So does property value. Occasionally one, or both, of those goes down, too.

Re: Climbing the Wealth Ladder

#247

Post by icedchai »

BeetleB wrote: post #169
pathseeker wrote: post #147

Earlier quoted context omitted.

>A bit confused by this - you're now not actually buying anything that produces anything. I suggest you look up what stock ownership means. Most wealthy people only own non-controlling interest in most of their investments as well. If you own a share of stock, you own part of the means of production.

> I suggest you look up what stock ownership means. Stock ownership traditionally means partial ownership of a business. Except that you almost have no decision making power unless you own a lot of stocks, and that's not going to happen while working a simple middle class job. It also doesn't mean that the company will pay you a portion of their profits. It is entirely up to the company whether they want to pay you a…

My portfolio works for me 24x7, doesn't complain, doesn't send annoying emails, bother me after hours with an "emergency", or cause loss of sleep. I am highly diversified with index funds. You want to "own a lot of stocks"? Start a small business. Your stock starts off worth nothing, and probably stays that way.

Re: Climbing the Wealth Ladder

#248

Post by blaser-waffle »

yellowstuff wrote: post #93
hello_1234 wrote: post #52

Earlier quoted context omitted.

You are completely discounting the power of compounding. Saving every penny won't make you rich in a year or even in 10 years. But think about 20 years in the future. Think about retirement. Every extra dollar that you put into your 401K will make a meaningful difference on how you retire in 20-40 years. Here's one real example for you: 96-Year-Old Secretary Quietly Amasses Fortune, Then Donates $8.2 Million - https:…

Yes, it's a really good idea to live within your means and start saving early for retirement. No, most people who are young today will not be able to save anything like $8M doing that. Some things that are exceptional about the woman in this story: * She worked 67 years at the same job. * She invested in individual stocks, mostly during a period when index funds weren't available. This lack of diversification is almo…

Aside from working the same job for decades, it wasn't just any job; she wasn't a secretary at a dentist's office:

> In 1947, she joined Cleary Gottlieb Steen & Hamilton, a Wall Street law firm, where she worked as a legal secretary for 67 years and observed the investment strategies of the lawyers.

> “She was a secretary in an era when they ran their boss’ lives, including their personal investments,” Lockshin tells the Times. “So when the boss would buy a stock, she would make the purchase for him, and then buy the same stock for herself, but in a smaller amount because she was on a secretary’s salary.”

So she was likely a reasonably well paid secretary at a wall street legal firm that would have access to the best financial advice available.

Also, as far as I can tell from the article, she was married but didn't have any kids.

Re: Climbing the Wealth Ladder

#250

Post by oblio »

Andhurati wrote: post #150
baud147258 wrote: post #95

Earlier quoted context omitted.

> "not everyone can afford to take a week off work" Being in a country where vacation time is paid by the company (currently 7 weeks / year, even if I usually don't use up all of it), the idea that taking a day off work means less money at the end of the month is mind boggling.

What has this offered to your country? Why doesn't it have it's Amazon or SpaceX? Why is the Linux Foundation here? Why are the salaries in the most unregulated or frontier markets the best in the US and not in Europe? Mandating a week off for everyone doesn't seem to give the space needed for poorer people to become as wealthy as they might deserve. What can be done?

Those are ridiculous claims. Do you have any evidence do back up your claims that having no minimum number of legal days off is related in any way to prosperity? Proof from almost every other OECD country says no.
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