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Old 02-09-2013, 03:28 PM
 
9,825 posts, read 13,918,311 times
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This is a true person of wealth, both financial and spiritual:

Life's Work
With little more than a ninth grade education and a commitment to hard work, forklift operator Matel "Mat" Dawson Jr. managed to amass a small fortune by working 80-plus hours a week and investing heavily in the stock of his employer, the Ford Motor Company. He maintained his grueling work schedule into his eighties, well past retirement age. Meanwhile he lived simply in a dingy one-bedroom apartment in a rough suburb of Detroit, Michigan and drove a used car without hubcaps--thanks to neighborhood thieves. He once explained to Jet why his frugal lifestyle and hard work was necessary. "I need money to make me happy. It makes me happy to give money away. It gives me a good feeling." In 1991 Dawson had begun donating heavily to educational programs and universities and by the time of his death in 2002, had given away over one million dollars. Having had to drop out of school at a young age in order to work, Dawson was committed to seeing that no one be denied an education because of lack of money. "I advise kids to get a good education," he told Ebony. "I have more than what I need, and I'm sharing it with them." He funded two scholarship programs and donated extensively to the United Negro College Fund. His generosity brought him fame and recognition, yet with a modesty that was one of his hallmarks, he once told the Detroit Free Press, "I'm not trying to impress anybody.... I just want to help people, leave a legacy and be remembered."
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Read more: Matel Dawson, Jr.: Biography from Answers.com
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Old 02-09-2013, 03:48 PM
 
Location: The Triad (NC)
26,871 posts, read 57,924,091 times
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Quote:
Originally Posted by AllenSJC View Post
How strong is the correlation between income and wealth (net worth) in the United States...
Yet another red herring question.

Wealth is about **managing** what income we have.
Harnessing that cash and directing it's use along with what other other abilities we have.

Then of course there is also those who have a grandfather who did all that.
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Old 02-09-2013, 04:55 PM
 
24,738 posts, read 26,810,935 times
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Quote:
Originally Posted by cdelena View Post
According to a Minneapolis Fed Study, Table 4, Updated Facts on the U.S. Distributions of Earnings, Income, and Wealth - Quarterly Review 2631 - Publications & Papers | The Federal Reserve Bank of Minneapolis), wealth and labor income have a 0.27 correlation coefficient, i.e. income explains about 7 percent (0.27 squared) of wealth and vice versa.
Wow, I've always known one can become wealthy on a lowish income, but this is surprising even to me. It's good news for people with moderate incomes. It can show people what's possible. Unfortunately, the people who believe becoming wealthy on a moderate income is impossible will not be swayed by studies like this.
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Old 02-10-2013, 10:10 AM
 
Location: Chicago area
13,043 posts, read 7,205,994 times
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I think any one with good common sense and a strong work ethic can become wealthy, but very few will become Bill Gates wealthy. That's a special breed there. It all depends on how hard you're willing to work and how disciplined you are. You really have to have a workaholic mentality.
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Old 02-10-2013, 09:19 PM
 
621 posts, read 547,452 times
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1 in 100 people are in the top 1%.

Ford created Real Wealth. He made something everyone could use. He made it cheap enough for everyone to buy. And he made a lot of them.

You can either do what Ford did or you can find someone doing what Ford did. Trading money doesn't create Real Wealth. It may help someone make Real Wealth but it doesn't make it by itself.
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Old 02-11-2013, 02:58 AM
 
64,681 posts, read 66,183,819 times
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wrong , i am a wholsealer. i make nothing. i buy a box ,i sell a box . the same as a trader buys a stock and sells a stock.

i sell factory automation products ,the trader sells pieces of companies.

thats what we do to earn a living. so if you are saying wealth is only created by producing something then that is wrong logic.

without car salesman selling those ford created cars there would be no ford today. in fact there would be little of anyting because that is what investors do.
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Old 02-11-2013, 08:35 AM
 
Location: Beavercreek, OH
2,194 posts, read 3,014,610 times
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Hi all--

There's only three kinds of people - rich, broke, and poor.

"Rich" and "poor" are mindsets more than anything else. You don't see many pawn shops and payday lenders in the high rent districts, and that's because rich people don't do that stuff very often - if they did, they'd quickly go broke due to finance charges and fees.

"Broke" is bad, but it can be a temporary condition - all things equal, a broke person who does rich people things will often become rich before long.

Think about it - if you get out of college at 22 and make $50,000 a year, resolve to live on $25,000 a year - which is doable especially if you're single. In six years you'll have $150,000 - which is enough to buy a starter home in most cities. You'll be 28, 29 and own your home outright while all your friends are stuck with 30 year notes and probably upside down on said loan due to the uncertain market.

And $50,000 a year for an educated man isn't exactly banging down doors. But he's probably set for life by the time he reaches 30 if he keeps living frugally and saving for the future. So, no, wealth and income are poorly correlated.

Although, to be fair, extremely low income (at or below subsistence level - say, below $15,000 a year for a single person) can be strongly correlated to low wealth.
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Old 02-11-2013, 09:50 AM
 
621 posts, read 547,452 times
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Quote:
Originally Posted by mathjak107 View Post
wrong , i am a wholsealer. i make nothing. i buy a box ,i sell a box . the same as a trader buys a stock and sells a stock.
Selling is very important to the economy.


Here is a little snippet about the value of a sales person.
The farmer had 20 tons of cow dung, requiring disposal.
He higher-ed a sales person and instantly had 20 tons of fertilizer.
Quote:
Originally Posted by mathjak107 View Post

i sell factory automation products ,the trader sells pieces of companies.

thats what we do to earn a living. so if you are saying wealth is only created by producing something then that is wrong logic.
You take a box from someone that has too many and trade them to someone with too few. This adds value to the contents of the box. It adds the most value for the least amount of work. But without the box there is no value to add.
Quote:
Originally Posted by mathjak107 View Post

without car salesman selling those ford created cars there would be no ford today. in fact there would be little of anyting because that is what investors do.

Quote:
You can either do what Ford did or you can find someone doing what Ford did. Trading money doesn't create Real Wealth. It may help someone make Real Wealth but it doesn't make it by itself.
What part of this was wrong? Selling something multiplies wealth. Selling something doesn't create wealth. 10 times zero is still zero.
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Old 02-11-2013, 11:30 AM
 
2,893 posts, read 3,401,517 times
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I'm glad that nobody beat me to this, 'cause I want to say it:

"Big hat, no cattle"

from The Millionaire Next Door.
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Old 02-11-2013, 12:02 PM
 
24,738 posts, read 26,810,935 times
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Quote:
Originally Posted by hensleya1 View Post
Hi all--

There's only three kinds of people - rich, broke, and poor.

"Rich" and "poor" are mindsets more than anything else. You don't see many pawn shops and payday lenders in the high rent districts, and that's because rich people don't do that stuff very often - if they did, they'd quickly go broke due to finance charges and fees.

"Broke" is bad, but it can be a temporary condition - all things equal, a broke person who does rich people things will often become rich before long.
This is very similar to what Jean Chatzky said in her book The Difference, except she added a 4th category called "financially comfortable", which is between "rich" and "broke" (which she calls "paycheck to paycheck"). She refers to "poor" as "further in debtors"...although some further in debtors may actually have good incomes and many poor may not have debts, but the idea is the same.

She said the same thing you did...rich people have different habits/traits. She broke it down to 20 different things. She found the rich usually had at least 12 out of 20. The financially comfortable usually only had about 10, The paycheck to paycheck and further in debtor crowds had far fewer than 10. The more broke or in debt you were, the fewer the number of traits you had.

Quote:
Originally Posted by hensleya1 View Post
Think about it - if you get out of college at 22 and make $50,000 a year, resolve to live on $25,000 a year - which is doable especially if you're single. In six years you'll have $150,000 - which is enough to buy a starter home in most cities. You'll be 28, 29 and own your home outright while all your friends are stuck with 30 year notes and probably upside down on said loan due to the uncertain market.

And $50,000 a year for an educated man isn't exactly banging down doors. But he's probably set for life by the time he reaches 30 if he keeps living frugally and saving for the future. So, no, wealth and income are poorly correlated.
Well, I think 50K is a bit more difficult to earn in lower cost real estate markets than high cost ones. And I wouldn't say owning your home outright makes you set for life....but I totally get what you're saying. Having your house paid for or mostly paid for by age 30 means if you get laid off from a good paying job, you aren't going to end up on the street. In a moderate cost area, you can almost get by on a minimum wage job (at least for a while) if you don't have to worry about a mortgage payment.

Quote:
Originally Posted by hensleya1 View Post
Although, to be fair, extremely low income (at or below subsistence level - say, below $15,000 a year for a single person) can be strongly correlated to low wealth.
Yep, at some point, you really do need to earn more income.

Good post
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