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This thread is about the relative value of money earned through capital gains vs earned income (wages/salary). How someone initially aquired their capital is irrelevant.
OR, like the upper 2% of the wealthiest Americans ...
you could just be BORN
and have aquired BILLIONS!!!!
Hard work, my Aunt Fanny!
It's obvious that you greatly overestimate the amount of wealth that places someone in the upper 2%, and it's also obvious you have no idea how many people worked to get there versus simply inherited it.
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This thread is about the relative value of money earned through capital gains vs earned income (wages/salary). How someone initially aquired their capital is irrelevant.
So because they made good decisions or worked hard for a time they don't anymore?
What about lotto winners that suddenly have more money than they've ever seen in their life....then 10 years later are dead broke? If it was easy to just keep your money, and required no work....what's the deal with them?
Exactly. Let's not even mention that anyone can flip burgers, dig ditches, or be a greeter at WalMart. That's why those jobs pay minimum wage. I'd like to see some of these "average workers" start a company like Microsoft and grow it to be a multi-billion dollar company. How many "average workers" have taken the time to work hard, study, get a scholarship, go to college, then get an advanced degree and become a doctor, lawyer, or MBA.
This is all being fed by this nonsense that people who use their brains and take risks with their money don't really "work" while mindless drones screwing armrests onto a piece of crap at a GM factory or flipping burgers are really "working."
Doctors cannot even be placed in the same category as the "rich" this topic is about. The median salary for a doctor with 20 YEARS of experience in the U.S is $176,382!
Please don't try and tell me you think a CEO making $8 million is actually working 45 times harder than a highly educated, highly skilled doctor....
Capitalism requires people or things to be capitalized on. As a drywall hanger you can lose your job for whatever reason and likely go to another company as the risk to an employer isn't all that much if he is not the greatest worker. Now a CEO takes over a large company (assuming large because not all that many businesses are very large or pay huge sums of money % wise) and summarily tumbles it to the ground (except GE for some reason) he/she will be fired and his/her reputation crushed. Do you think the next job he/she will be offered the same incentives or less? You sell yourself in this country to an employer in an interview and application process in general and you stand by your word that you will do what you said you could. If not you are out the door.
Side note: Now anyone see why unions these days can become a problem?
Doctors cannot even be placed in the same category as the "rich" this topic is about. The median salary for a doctor with 20 YEARS of experience in the U.S is $176,382!
Please don't try and tell me you think a CEO making $8 million is actually working 45 times harder than a highly educated, highly skilled doctor....
The obvious question for Georgie boy here is: what kind of job do you do, and how much do you make. If you make $100K, how do you justify earning five times as much as the average Wal-Mart worker? If you made $50K, did you work 2.5 times as hard as your average unskilled laboror?
I can assure you that under Obama's economic plans the gap between the rich and poor will grow even wider, and at a much greater pace. I can also assure you that the rich will benefit greatly in spite of Obama's stupid economic plans whereas the poor will remain just that - poor. I can also assure you that the working middle class will be less well off than they were before Obama's stupid economic plans compared to pre-Obama. The so-called rich have liquid assets ready to go to work for them to earn high gains during these troubling times and especially when the recovery takes place. On the other hand the working middle class and poor live paycheck-to-paycheck and will suffer not only during this economic downturn, but also will suffer even more-so when the economy recovers. Yes, the people that are unemployed now may get a job which means they will be better off than without a job...but those people will still be losing ground to the rich as the gap widens further because the rich not only have liquid assets to invest now as well as after the recovery but they know "how" to use their assets to make even more money when so many people don't have enough. Thus the gap will widen even further.
The old saying; "you have to have money to make money" is very true in almost every single case...unless you're a new-found rock star or sports star. Also, the old saying; "you've got to be in the right place at the right time" is also very true. And "you've got to be lucky" is also true. But you also have to be intelligent and have someone that knows the ropes to inform you and give you that push and drive we all need from time-to-time. Being competitive with a touch of greed also is desirable.
Getting the very best education from a tier 1 university with a degree in economics, and graduate school for JD or MBA from an Ivy school or tier 1 university, having a wide range of friends and business contacts in high levels of business and government, etc., etc., etc. are things you will find that are common among the rich. Have they worked hard to earn this - damn right they have! Have they done all the right things expected of them? Damn right they have! Have they been lucky at times? Damn right they have...but they will tell you they often put themselves in a position to make their own luck, which is the same as "being in the right place at the right time"!
Let's forget about the CEOs and select few others that get mega yearly compensation, and instead talk about the wealthy (or rich if you will) people that have accumulated over a number of years multiple millions of dollars reaching well into 7 figures or 8 figures.
Rich people learn to save and invest their money at a very early age. (This is usually taught them by their parents or a mentor.) They take advantage of their high earnings derived from their high paying jobs, which is derived from their great education, by saving a large portion of their salaries and investing their money wisely to make it grow. (The old saying; "you've got to have money to make money.") The rich usually start out having nothing...or even debt from student loans. But once they get started saving - it's easy to get on a roll. Before long they accumulate a sizable amount of money...and like a snowball rolling on the ground gathering more snow - it grows in size very quickly.
Once these [future rich] people with high paying jobs save enough money they will "conservatively" spend some of their money to buy a house and other things they need to move forward in their young lives. And they always stay well within their limits...unlike many people that are heavily in debt and living paycheck to paycheck mainly because of poor spending habits.
They will continue to save and invest and grow their net worth into a very sizable amount of money. After some point in time, oftentimes just a mere 10 or 20 years, they have accumulated many millions of dollars from their investments and savings. These assets almost always include tax deferred retirement assets such as 401(k) and IRA accounts, and tax deferred college savings for their children. But the biggest portion of their sizable assets are non-retirement taxable assets they will use for investing to grow their assets even more. Keep in mind these people never stop saving and are always striving to add to their net worth.
The problem with having a lot of money (being rich if you will) is first and foremost to protect the principle...and second to reduce as much as possible the tax liability on the gains earned from investments. Ah, the problems of having so much money!
Unless the rich person owns a business (where much of his assets are naturally invested and tied-up), and has become a victim of the sour recessionary economy like we're facing now, rich people almost always know how to [continue to] make their money grow even in troubling economic times like we're having now. But what is even more common is for the rich to widen the gap further between the so-called "haves" and the "have-nots". There are thousands of investing vehicles to earn a very nice return when times are bad, but you need liquid assets like the rich have successfully acquired...and the working middle class and poor don't have. (Again, the rich usually have a great education and earn high salaries, started saving early and spent conservatively well within their limits...whereas the poor are at polar opposites.) Some of the investments the rich invest in have more risks than others...and some require more expertise than others...and some require a rather significant amount of money. I'll give you one example of just one investment with little risk that pays multiple times the current interest rates available from CDs, A rated bonds, T-bills, etc...
A little upfront information first; There is a sizable market for non-conforming jumbo home loans for qualified people. Many of the banks are unwilling to loan on these non-conforming jumbo loans, instead only wanting to deal with government backed Fannie and Freddie under the jumbo loan threshold. Many home loan "brokers" however do lend money to qualified borrowers for jumbo loans. They offer a split mortgage using a combination of two loans; one a conventional loan for the majority of the amount borrowed currently at a rate of +/- 5% and the other a 2nd loan for the remainder of the amount borrowed at +/- 8%. (The blended rate of the combined 1st & 2nd loans are always closer to the 1st loan rate making the split mortgage desirable for people needing a non-conforming jumbo loan.) These brokers look for money from private investors to provide these 2nd lien loans. 2nd lien loans made by private investors are secured obligations by the borrower and are low risk with the borrower having a 20+% down payment.
One source for wealthy people looking for a handsome 6%-8% return on their money is to lend their money through a home loan broker. These investors can stipulate what period of time their money is to be used, e.g. 10 years, 15 years, 30 years. They can also stipulate other factors about how their money will be used. 6%-8% is not a bad return when times are bad and the best you can earn most anywhere else is close to 1%... If you are familiar with the "Rule of 72" you know that investing money earning a 7.2% interest rate doubles the principle amount in just 10 years, thus investing $1 million at 7.2% doubles to $2 million in 10 years excluding taxes. It takes money to make money...and once you get started investing it becomes a game of sorts...and you can never have enough money! Sadly, the poor and working middle class gets their hands on a little money and they spend it. The rich would invest it! Big difference...and this difference in philosophy is what prevents middle income average wage earners from becoming financially secure if not rich themselves.
The focus is to always have your money work for you and to use your money to make even more money. With most people it is just the opposite - when they get a little bit of money they spend it...and they almost always spend it on worthless junk. I suspect most middle class wage earners have virtually zero savings or investments outside of their company 401(k).
All that said (and this has gotten far more lengthy than I expected it to be...but I type fast), there is a lot that goes into the early grooming that allows people to become rich. And there is a lot of hard work and dedication all along the way. The gap distance between the rich and poor is almost always determined by the person's financial intelligence...and there is usually a huge gap between these two groups concerning financial matters and basic economics. But first and foremost you must get a great start to life...and that usually comes from parents and/or a mentor that understands what must be done all along the way.
I am not about to argue over who works hard and who doesn't. I will say that CEO's put their time in. I will say that most if not all worked their way up through the ranks. That means many many 18 plus hour days on a salary. That means no overtime. I am no fan of managment as a whole. But I can recognize that they put some serious hours in. Do I believe CEO's are worth what they are paid? NO.... Nor are pro athletes, professional politicians or many of my co workers who have spent the majority of their careers working at doing as little as possible to earn their pay.
can anyone say Barnet Franks is worthy of his pay? Dodd? The judges in Luzerne County Pa?
Ah, **** it...I am so tired of the hatred here against those who are "weaker". America will crash and burn because of greed, nothing else. The arrogance and the superiority complex of the "haves" is beyond disgusting here and trust me...the **** is going to hit the fan. To all those bashing the poor...guess what? You're about to get the short end of the **** stick, because karma's a *****. If the USA turns into a third world country and you people have to learn the hard way, so be it. Instead of preaching your "Christian" values, bashing the poor and preaching "personal responsibility" (which you don't have the first clue about), worry about learning Chinese, or some other foreign language that'll make your pathetic asses "marketable" when this self-absorbed society comes to an end (and good riddance).
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