Being wealthy unlocks the option to not be a rational actor with little or no real world consequences, enabling capricious urges and whim to be a significant factor in the decision making process. See: Elon musk.
Or take people who are super competent, with strong ethics and world class bravery, and catapult them into the truly heroic! Think for example, Elon Musk!
I also think Elon has done great and important things for humanity, but to call him super- competent, ultra courageous, and heroic might be a pretty significant stretch.
He seems to me to be an analytical thinker with 1st percentile intelligence, who struggles with emotional intelligence and impulse moderation. Probably a pretty fun guy to hang out with, but also an asshole more often than he should be. Nobody is even nearly perfect, and hero worship tends towards the delusional in most cases, so I tend to steer clear of thinking too good or poorly of anyone.
No house costing a million is just a bog standard house. It's a mansion; if not in size then at least in value.
In Hawaii my house is 870k for a three bedroom built in the 50s on a medium plot. I still agree with your argument other than that.
There are different things that make house/apartment above normal. One is of course size and age. But other things like location have big influence as well (check apartments in central Manhattan).
Instead of trying to analyze hundreds of different what-makes-house-above-bare-minimum aspects we can simply use the price as a good indicator of the underlying value.
And 1mil house is definitely not bare minimum. It is clearly above average.
In Hawaii my house is 870k for a three bedroom built in the 50s on a medium plot. I still agree with your argument other than that.
There are different things that make house/apartment above normal. One is of course size and age. But other things like location have big influence as well (check apartments in central Manhattan). Instead of trying to analyze hundreds of different what-makes-house-above-bare-minimum aspects we can simply use the price as a good indicator of the underlying value. And 1mil house is definitely not bare minimum. It is cl…
I'll hand it to you that a $1mm home is definitely valuable, however in my case, living on an island, it's not like I can trade it for anything much less valuable, so it's pretty much non-fungible if you assume I will move from a home I own to another home I own nearby. Sure, if I sell here and move to North Dakota I'll be a wealthy individual there, but I am not going to be doing that. Also, if I sold this and rented, I would have a payment that's 50-65% of what I have in this mortgage, but then even if I have a large equity gain from selling I still have to assume I'll use that money over time to rent, so I'm even again. Homes here are more of an impediment to financial success than in most places. People move away from Hawaii, where they grew up, because it's so unaffordable for normal folks. I am lucky that I am well-employed when I have a job (not right now) and can afford to pay this huge payment in order to secure my children's future housing. They will certainly be well-off with a paid-off home here, but that's rarer these days with a lot more people with new families renting here. I'm not really sure what your point is about the home value in this situation. On the mainland it's a little different because you can move 60 minutes away from most places and find cheaper housing, even if it isn't your favorite place. Here on the islands, you can't just move to a cheaper place, everything is expensive here unless you want to move into a literal shack.
It’s 0.5% plus a portion of the asset appreciation, not just 0.5%
Banks and investment firms are not allowed to loan money out privately for less than the AFS, which is 3.72% right now: https://www.investopedia.com/terms/a/applicablefederalrate.a...
>Inherited wealth is the least earned Let's be real. No wealth is 'earned'. It's almost entirely luck and social connections. No different from inheritance. Besides, inheritance can be hard work, psychologically. Your parents may be in a very different socioeconomic group than you for most of your adult life. Your baseline expectation for a 'normal' lifestyle is somewhat elevated (due to the lifestyle you experienced…
>No wealth is 'earned'. What about the crazy hours that doctors often work?
This is probably the fairest way to earn big money but it's still not fully earned. The number of spots available in universities to become a doctor are limited based on some arbitrary rules (math and physics test-taking ability?) that have nothing to do with what skills are actually necessary to be a good doctor. There are some significant political shenanigans at play here too.
If the system was fairer and doctors experienced close to 'free market' competition, then I would agree 100%, but it's not the case.
I'm sure it's very difficult but doctors have it really good compared to other professionals who also work late and have to compete on a global marketplace with no professional protections/regulatory constraints.
The numbers are all out there, behind 1 minutes of searching. And they speak decidedly against your claims: https://hdr.undp.org/system/files/documents/hdr2020.pdf Ukraine's development ranking is classed as 'High', while Namibia and Zambia are both classed as 'Medium'. My wife's side of the family is entirely Russian, so I have some basic knowledge on the subject I have direct knowledge of the country as well. Your…
A handy report crafted by biased people in some unproductive sinecures, but the numbers really do speak for themselves.
So you've never actually seen "the numbers", is what I'm hearing.
Yet you know they're out there somewhere, and that they speak for themselves.
That would depend on your definition, but I think that's unlikely
Only taxing wealth "at rest" makes it avoidable for those who have the means to pay accountants to keep it moving in productive ways and thereby non-taxable. You then end up only taxing the people who can't afford that, which is the middle class.
There are different things that make house/apartment above normal. One is of course size and age. But other things like location have big influence as well (check apartments in central Manhattan). Instead of trying to analyze hundreds of different what-makes-house-above-bare-minimum aspects we can simply use the price as a good indicator of the underlying value. And 1mil house is definitely not bare minimum. It is cl…
I'll hand it to you that a $1mm home is definitely valuable, however in my case, living on an island, it's not like I can trade it for anything much less valuable, so it's pretty much non-fungible if you assume I will move from a home I own to another home I own nearby. Sure, if I sell here and move to North Dakota I'll be a wealthy individual there, but I am not going to be doing that. Also, if I sold this and rente…
> I'm not really sure what your point is about the home value in this situation.
Everything started with another account saying "In my country our threshold [for inheritance tax] is significantly lower by the way - it's around a million, so bog standard houses get hit by it."
So my point is that 1mil house is not a "bog standard house", whether we look globally or in the USA-only.
Sure, there are some spots in the world in which the average price of the house is going to be higher. But that's irrelevant. It only means that the location is what making that house exceptional.
I understand your practical considerations/explanations about living in an extremely costly place where everything (housing, food, etc) is expensive. But the decision to stay there is on you. "if I sell here and move to North Dakota I'll be a wealthy individual there, but I am not going to be doing that" - is the crux of the issue.
That doesn't sound like the lifetime loans that the supposed $2,500 an hour "private wealth attorney at an international law firm" was talking about. In his story, the loans are at .5% - 3% and only payable decades later upon death (though the firm would supposedly also get a share of earnings increase). This sounds like normal SBLOC (Securities-Based Lines of Credit).
His story is BS. Banks and investment firms cannot loan money for less than the AFS, which is 3.72% right now: https://www.investopedia.com/terms/a/applicablefederalrate.a...
> If you take a loan out to live off of of 80 million you would at least need to pay 5% to make it a true loan. The IRS That is 40 million in interest over 10 years. You said .05% loans, that is not realistic because you would get hit with inputted interest and phantom income from the difference between your loan and the IRS AFR rate.
To which they answered as follows:
> To your third bullet point - that’s a great observation, but by law these products are actually securities, not “loans” as the term is used in Code § 7872. That’s why it’s important that the stock appreciation rights are the predominant means of profit from the transaction for the investment bank. Where the taxpayer and investment bank can’t come to an agreement that would result in these products being characterized as securities, the interest rate will be much higher - SOFR plus 1.5-5 basis points - but may be “paid-in-kind” (i.e., the interest is not required to be paid in cash currently but added to principal).