Investment Manager Explains Why 99.5% Of Americans Can Never Win (bond, mutual funds, calls)

[homebeyer2013]

The difference between a dream and a goal is a deadline. Without hard work, a dream is just that.

[stan4]

I was not aware that the American dream was to strike it rich.

[BigCityDreamer]

Originally Posted by mysticaltyger

But OhioPeasant isn't talking about merely living well. He's talking about power. The world is run not by the 1%...but by the .00001%...that's the point he's trying to make.

I hope that is not supposed to be some startling revelation.

What I disagree with is that the power of a few hundred people affects how the rest of the rich and affluent lives in the U.S. It makes for a cool story line though.

[Malloric]

The American Dream isn't really about striking it rich. It's about striking it comfortable. A house, white picket fence, new Dodge in the driveway... I mean, the dream always changes as time goes on but it's usually not 10,000 square foot penthouse apartment in Manhattan, private jet, chauffeured around in a Rolls Royce. Most people really don't care about being rich. I mean, it'd be great if it happened. I like Ferraris as much as the next guy... but that isn't my American Dream to have a stable of Ferraris. That's your win the lottery pipedream that's fun to fantasize about but not really realistic.

[mysticaltyger]

Originally Posted by BigCityDreamer

I hope that is not supposed to be some startling revelation.

What I disagree with is that the power of a few hundred people affects how the rest of the rich and affluent lives in the U.S. It makes for a cool story line though.

I beg to differ with your assertion.

[texdav]

Originally Posted by EmeraldCityWanderer

Well, the American Dream is not real...pretty well known since the American Dream was put onto paper. "That's why it's called the American Dream, because you have to be asleep to believe it" - George Carlin...Plus critiques of it like Death of a Salesman.

The reason people get paid in stocks and financial instruments is the taxes are lower on them, put on to keep people invested in the market to encourage businesses to grow. It has found not to really be a factor though. However, they are leveraging the best tax strategies for them.

The thing is that money talks in politics. Politicians need money to campaign, advertise, and run their brand. They are more likely to help a donor that gives a large amount of money then one that gives a small amount. We need to get big money out of politics, or else we will continue to have the same issues. We might as well call ourselves The Banana Republic of America.

Dreams are not themselves real.Most of the wealthy gain influence after the fact. But after all who would government be dependent on other than those who provide more revenues by basic logic.

[11thHour]

Originally Posted by Tekkie

An Investment Manager's View - Business Insider

"In my view, the American dream of striking it rich is merely a well-marketed fantasy that keeps the bottom 99.5% hoping for better and prevents social and political instability," the manager wrote in an email to Professor G. William Domhoff of the University of California at Santa Cruz.

Also, it serves to get the masses to vote against their own best interest, and instead vote for what's best for those who already have everything.

[11thHour]

Originally Posted by oregonwoodsmoke

While coal miners might do some hard physical work, that is usually all they do, and when the quitting bell rings, they are done. They are perfectly content to work for their paycheck and no more.

If coal miners want to get ahead, they go home and study all about how money works and how to make investments. They spend time considering how they can improve their life and their income. Once they get it figured out, they take the risk and act on the information they have gathered.

Swinging an ax for 8 hours a day is not what people mean when they say you have to put in hard work to be successful.

Which is not meant as a criticism of the coal miner. If what he wants out of life is to have a job where he doesn't have to think and to go home and do nothing in the evening, then more power to him. With lots of people, that is all they want out of life.

Just accept that you are doing what you want to do and stop complaining that you are poor because you haven't had any luck when you are not doing anything to move yourself forward.

Oh ok. Hard work only counts if it's certain kinds of hard work. Such as being a corporate raider or a walmart exec. That's real hard workGotcha. But..I get what you are saying. It's not hard work that makes success, as so many parrot about. It's knowing how to game the system, who you know, luck, and timing. Hard work actually has very little to do with being successful. There are tons of very, very hard working people with amazing work ethics who will never 'make it.'

[crone]

The is a big difference between working hard and working smart.

[jm1982]

Interesting article. If anyone is interested in learning more about the super rich this .01 percent you should read the book Plutocrats Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else: Chrystia Freeland: 9780143124061: Amazon.com: Books

I don't feel bad for those that have only $5million at retirement.

This article is pretty sad : Article stating many Americans expect to never retire.
Many Americans don't expect to ever retire

It's not surprising that most people don't save in the U.S with consumerism and the pressure to spend money.

I think there are many issues with retirement. One big one is that it's focused on the stock market. If you study the rich the vast majority did not become rich investing in the stock market.

Owning a business or real estate (which is also a type of business .ie a real estate investment company) is the most common path.

People can actually convert their retirements funds into Self Directed IRA and invest in whatever they want. Including their own business or investment property.

Of course the brokerage firms or your employer will most likely not tell you about this option because they don't make money selling those items.. They make money selling you funds.

The article in the OP makes it seem like the American Dream is becoming a plutocrat so you have the power to influence politics,etc. I don't think many people really want this. Just like there aren't that many people that would really WANT to be President of the U.S . There are a lot that want it, but it's not something the majority want.

The other thing is if you have a networth of 5million and have the money invested in the RIGHT opportunities that someone will that amount of money can take advantage of, you can get much better returns than the average investor.

There are ways to make good returns that aren't totally passive but also don't require you to work full time.

One example is being a hard money lender ---loaning money to real estate investors. Investors will pay generally 12-15% a year PLUS 3-5 points or so to get a hard money loan..and thats usually 65-70% loan to value.

This is a safer bet and higher return than investing in stocks in my opinion..

Also owning investment property ,buying the right property one can make good returns even without taking appreciation or leverage into account.

Rentals are also mostly passive investments especially if you have property management.

You always hear stories about the person or couple that bought rentals when they were younger and now they are able to retire comfortably off them.

I hear less stories of people that bought that one stock like Microsoft and made a fortune. Even Warren Buffet didn't become wealthy just trading his own account. He got investors to invest in him and turned it into a BUSINESS.
This is the point that people seem to miss with the "Invest like Warren Buffet" type articles. Buffet also owns several entire businesses outright rather than just being a stock holder.

Leverage plays a big role too. Being able to buy property with 20% or less down.

Bottom line as others said one must have a plan and take action. Most people are dreamers, they might work hard but they are probably not saving enough or investing in the right things or they don't have the right mindset.

I still think Luck plays a role, but not as much of a role as most people think.

The guy or girl that took action and started a business or put their money and time and effort on the line to research and invest in certain things rather than working a 'safe secure' job took action. That's a fact.

It is possible to become wealthy working a job , but it seems pretty unlikely statistically speaking.

I once heard the idea that the rich leverage other people's time and money. Borrowing money at one interest rate and making more is leveraging money. Employing people to work for your business and making more off their efforts is leveraging their time.

Working a job is usually not scalable in the way a business is. In most professions there is a ceiling. In a business there is no ceiling to how much can be made.

I think this information is starting to come out and there seem to be a huge trend towards entrepreneurship . More people are realizing that starting a business is where the money is . Especially with the financial crisis , outsourcing ,etc.