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Are super-rich people just better at making money?

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Re: Are super-rich people just better at making money?

#541

Post by Jensson »

mrguyorama wrote: post #470
Beldin wrote: post #146

Earlier quoted context omitted.

> but rich folks are good at creating capital and governments are notorious for wasting it. There is more than a little nuance here: - governments are notorious for being called out on supposed inefficiencies. Too often, it turns out that there were very good reasons for those inefficiencies, but the criticasters forgot the lesson. - "rich folks are good..." I wouldn't know. Superrich folks are good at manipulating t…

I've never understood the argument. I've worked in several different private companies, and calling them "Efficient" is so off base as to be laughable. Remember, a private company will happily let an import engineer go instead of giving them a small raise.

Go work for the government then? Or wait, the government is way stingier with raises than private companies are! Engineers fight over jobs at private companies and shun government jobs because governments don't reward good work.

Re: Are super-rich people just better at making money?

#542

Post by serverholic »

chii wrote: post #532
serverholic wrote: post #326

Earlier quoted context omitted.

Do billionaires really create enough value to warrant obscene wealth? Sure they deserve some wealth, but do they really deserve a billion dollars? Are you forgetting the thousands of employees that are enabling them to become obscenely wealthy? And I don’t buy the “deterrent effect” argument. IMO discouraging billionaires from acquiring more is a good thing and opens the door for other people to step up.

> do they really deserve a billion dollars? yes, as long as they did not undertake an illegal action to obtain that wealth. The employees that enabled the wealth creation is surely paid, and not coerced into the deal.

I hope this is sarcasm.

Re: Are super-rich people just better at making money?

#543

Post by nmfisher »

WalterBright wrote: post #448
nmfisher wrote: post #117

Earlier quoted context omitted.

No, but it is an avoidance mechanism specifically designed to avoid tax on income. If an independent third party has deemed your stock sufficiently valuable (and stable) to lend money against, then you should be taxed on that loan. You can get a credit when you repay the loan (to offset tax on the income you used to repay).

You'll have to realize the gain eventually, and pay the tax.

1) You wouldn’t work for payment of an unspecified amount at an indeterminate future date. “Eventual tax” is not the same as “tax now”.

2) Likewise, paying a 2022 debt in 2027 dollars makes their effective tax rate even lower.

3) I don’t get to defer my income tax payments until a favourable year of my choosing, neither should the rich

4) that’s what the credit is for.

Re: Are super-rich people just better at making money?

#544

Post by gjulianm »

WalterBright wrote: post #451
gjulianm wrote: post #229

Earlier quoted context omitted.

There are several things here. One is that you're only considering direct monetary risk. For example, imagine a person that starts a business with X dollars, which will usually be a percentage of their wealth. This person hires an employee at a salary that's barely above their living expenses, but with the idea to ascend as the company grows. If the company goes bust, who loses more? The owner still has money, the pe…

Losing your job is not nearly the same as losing millions of dollars. You can just get another job. Those millions will be very hard to replace. Even if you get a 6 figure job, how are you going to get those millions back? > If I have a hundred dollars in the bank I cannot really access any investment opportunity robinhood.com says hello! > not all people have the same relative expenses Right. But that's their proble…

> Losing your job is not nearly the same as losing millions of dollars. You can just get another job. Those millions will be very hard to replace. Even if you get a 6 figure job, how are you going to get those millions back?

"You can just get another job" not that easy for quite a lot of people. Some people lose their job and that leads to losing their homes. If I had to choose, I'd prefer to lose millions of dollars than to lose my house in a vulnerable situation.

> robinhood.com says hello!

Yeah, and the casino exists too, and I bet the casino is safer. What I said is that with less money you don't have the same investment opportunities with the same risk/benefit ratios. Yeah, you can invest in stock and not do any of the crazy options stuff, but that's not really going to give you a lot of profit.

> Right. But that's their problem, not the company's problem.

Never said it's the problem of the company, just that the same amount of dollars has different value to different people. That's one of the mechanisms that makes it easier for people with more money to get even more money for no reason other than having more money: the more you have, the less it matters to lose a certain fixed amount. A $20k investment does not actually have the same risk for someone that has $30k in their account than for someone that has $10M.

Re: Are super-rich people just better at making money?

#545

Post by neilwilson »

TheOtherHobbes wrote: post #159
neilwilson wrote: post #151

Earlier quoted context omitted.

Or alternatively realise that there isn't a fixed amount of money and therefore if 'rich people' want to count their coins let them do so. (i) it solves the capital accumulation problem (ii) you can accommodate the hoarding by guaranteeing people a job at the living wage, which then injects the right amount of new money, both temporally and spatially, to offset the hoarding. Tax has nothing to do with raising money.…

There isn't a fixed amount of money. And taxes are only incidentally about public sector hiring. There is (more or less) a fixed amount of power. Taxes doesn't raise money, but they do redistribute and decentralise power, making it harder for the very rich to dominate economic and social strategy for their own ends.

Except that if you have power, then by definition you can stop people redistributing it.

Otherwise you don't actually have power.

That concept is another fallacy of composition.

Taxes are there to reduce the capacity of the private sector to hire by reducing monetary flow. Without that you will get inflation.

Re: Are super-rich people just better at making money?

#546

Post by foldr »

impossiblefork wrote: post #486
foldr wrote: post #341

Earlier quoted context omitted.

It's entirely true, and England was not unusual in that respect compared to the rest of Europe. See e.g. here: https://ourworldindata.org/literacy . Or here: https://www.researchgate.net/figure/Literacy-rates-in-Europe...

The data you've cited is wrong though. It lists Sweden's literacy rate in 1800 at 21%. People were interviewed by their local priests to see whether they could read and the results were noted down. From this we know that in the middle of the 1700eds the 70-90% of all people could read. The law was also clear. You couldn't get married unless you could read. To be married you had to be confirmed, and to be confirmed yo…

I don’t particularly care about the specific case of Sweden. Every source I can find for England or Europe in general shows low literacy rates in around 1800. Do you have any sources that disagree? (Note that the map I linked to shows a higher rate for Sweden, if that’s important to you, but still around 50% for England and many other European countries.)

Re: Are super-rich people just better at making money?

#547

Post by gnull »

astrange wrote: post #501
gnull wrote: post #491

Earlier quoted context omitted.

> If we made it much much easier to build housing then then rental housing market would be like the used car market: viable but not an easy place to sit back and make passive income. You're overthinking it. Sweden made renting out apartments unattractive without all this sophistication, they just regulate the prices and keep them low.

Don’t Swedes just rent them out on the black market instead? They also can’t seem to get a sufficient supply of washing machines and instead have a laundry bureaucracy.

> Don’t Swedes just rent them out on the black market instead?

They do (with obvious drawbacks of anything illegal). And the black market prices are awfully high.

Re: Are super-rich people just better at making money?

#548

Post by orcanwe »

mrguyorama wrote: post #472
orcanwe wrote: post #262

Earlier quoted context omitted.

Who said anything about people being infallible? Amusing to nitpick market failures when planned economies have all led to mass poverty and famine. And market economies have created, in the last 200 years, unparalleled prosperity.

Meanwhile every single one of these private companies you put up on a pedestal is LITERALLY a top down planned economy.

And if they’re poorly run, the company goes bankrupt or gets bought out by a stronger company. The government isn’t subject to that kind of check, except in the most catastrophic case.

Re: Are super-rich people just better at making money?

#549

Post by dismantlethesun »

tzmudzin wrote: post #103
dismantlethesun wrote: post #73

Earlier quoted context omitted.

If you are wealthy and refuse to earn an income, then your savings will eventually deplete and you’ll become bankrupt. Additionally they wealth already taxed in a previous era, and is currently taxed in this era any time they spend it via sales tax. If of course you are spending all your money on personal groceries as a billionaire, then I’m 100% fine with not taxing you.

> If you are wealthy and refuse to earn an income, then your savings will eventually deplete and you’ll become bankrupt. Please look up "rent", "dividend" and "capital gains".

Rent, dividend and capital gains are all income. I’m not sure what your point is.

Re: Are super-rich people just better at making money?

#550

Post by nickpp »

int_19h wrote: post #492
WalterBright wrote: post #467

Earlier quoted context omitted.

The wealth that wealthy people have isn't "concentrated", it's created. I.e. they didn't take it from you.

It's not created by those people. It's created by some worker somewhere, and those people collect most of that created wealth as economic rent, solely because they own the capital used in the process.

Without their capital the whole organization where workers are creating would not exist in the first place. So the market is rightly rewarding capital owners for risking it in the first place.

Do you think that is easy and just "collecting rent"? What is your experience investing?

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