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Old 03-05-2015, 02:16 PM
 
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Quote:
Originally Posted by rruff View Post
This is the economics forum. Economics is a science.
Economics is not a science in the way that physics or chemistry is a science. It doesn't meet the definition. It doesn't follow the scientific method. Economics is not, and will never be, at the stage where models can precisely predict the day on which a financial crisis will start, but this is not due to the lack of legitimacy of the field; instead, it is due to the inherently unpredictable sphere of study in which economics operates. Human behavior is not predictable like gravity.

All that being sad, Economics is probably one of the top 3 most difficult degrees to get.
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Old 03-05-2015, 02:22 PM
 
13,089 posts, read 10,443,228 times
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Quote:
Originally Posted by SOON2BNSURPRISE View Post
Not sure how it is in your state but Police, Firefighters and Teachers will amass a retirement account worth on average over $1million. Lets say that you become a firefighter at age 21. You work 30 years and then you retire. You are 51 years of age. You will get at least 80% of your pay for the rest of your life. Some even get more than that. I know of one guy getting 105% of his pay in retirement. In California public service pays big. Lets say that the Police Officer retires with an income of $65,000 a year when they are 51. They live another 21 years getting the $65,000 pay, not including cost of living increases. They also get health insurance benefits to go along with that. Oh and many of them take on a second career after they retire. Lets figure that they just got the $65,000 a year for the next 21 years, that comes out to $1,365,000. Not a bad deal if you ask me. Many people are living much longer than that. If you figure the interest on that kind of investment they have the equivalent of at least a million in the bank.
Ok, fair point. But this does not address the growing income gap between the working class, middle class and the upper class. There may be pensions, but they are not growing as fast as, for example, CEO pay. What justifies this growing gap? And what of the fact that the pensions will need to be cut soon to balance state budgets? Doesn't this kind of weaken the use of pensions as a defense for low public employee pay?

Quote:
Originally Posted by SOON2BNSURPRISE View Post
Lets talk about the Rich. With your comments you seem to be thinking is that the rich got that way because they ripped someone off, or they poluted the environement. That is far from the case.
Oh really? The banks that crashed the economy did not hurt anyone? The oil companies don't pollute? Give me a break!

Quote:
Originally Posted by SOON2BNSURPRISE View Post
The majority of the wealthy got that way because they built something of value or in my case saved and invested in others that have built something of value. The game is not rigged. Anyone can build a net worth over time. I don't want you to think that I am rich. We are working on building our net worth. Our financial planner has shown us that if we continue in the path we are going we have 80% chance of hitting our goal of building a net worth of $5million or more. Reduce the amount and the percentage goes way up. we will have no problem building a net worth of at least $2 million.
You are again ignoring the increasing gap between the median income and the top 1%. Why do you refuse to address this issue?

Quote:
Originally Posted by SOON2BNSURPRISE View Post

The richest .01% are an interesting bunch. Many of them plan on giving their wealth away. That is how things have been happening for a couple hundred years now in this nation of ours. we have a Museum in our city that at one time was a Library. It was built in 1908 and the money was donated from the Carnegie family. I doubt that they have ever been in Oxnard but the Carnegie fortune built libraries all over the nation. Today Bill and Melinda Gates are funding their foundation where they plan to give more of their money to that foundation so they can give it away. Many other billionaires have decided to do the same thing.

Another thought, the richest people do have fortunes that are so massive that they don't even know what else to invest in. These people are willing to invest in the right idea though. Not sure if you ever watched Shark Tank or not but their are many more people willing to invest in an idea than just the half dozen on that show. Their is more opportunity for people now than in the history of the world and you can make the money quicker. I know one guy that built wealth creating an app. I don't think that he poluted the environment when he created that app. He did create a nice 7 figure net worth though.
And what of the Koch Brothers nearly buying out the government and pouring hundreds of millions of dollars into oil company deregulation?

Quote:
Originally Posted by SOON2BNSURPRISE View Post
Another friend sold knit caps, what we used to call beanies. He put his last name on them and now here it is 14 years later and his company is valued at over $400million. I am pretty sure he didn't polute any rivers, although he may have torn up a few snow board runs. Another friend, well more a friend of my parents, but i know him as well. He started growing Poinsettas and selling them to supermarkets. That business is valued at over $60million. I have no idea if growing plants polutes the environment or not. I could go on and on. When he started his business he did not have the money to start it. He had gone thru a bankrupsi and had lost everything. All he had was an idea. He was able to sell that idea to other people and got the money needed to build his company. The investors that he had all made money. Him and his family made money. Everyone was happy.
You keep bringing in these anecdotes or single data points. The things is, both sides of the issue can play that game. You can bring in examples of philanthropic billionaires, no doubt. But I can equally point to examples of billionaires whose companies are lobbying the government to represent their interest rather than those of the public.

The way to deal with an impasse such as "whose examples are more representative?" is to look at statistical data which is taken from an aggregate, not any set of carefully chosen examples. When we do this, what we find is that income inequality has been growing at a rapid pace for several decades in the US.
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Old 03-05-2015, 02:30 PM
 
Location: Living on the Coast in Oxnard CA
16,242 posts, read 27,528,309 times
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Quote:
Originally Posted by ncole1 View Post
No. There is not enough net wealth in the world for everyone to have $1 million. Try again.
Why not? Wealth keeps growing. This is not a zero sum game. You make it sound like the rich have all the wealth and won't give any of it away. The problem with that kind of thinking is that a majority of the nations wealthy are self made. They didn't take their money from someone, they earned it by creating value.

Just because someone makes a million does not mean that they took that million from someone else.

Look at raw land. You can buy a lot at the beach near me and build a home on that lot. An ocean front lot may set you back $1million. Many people end up putting a 3 story home with maybe around 5,000 square feet on that lot. To build a very nice 5,000 square foot home lets say it cost you $500 a sqaure foot to build that home. I am thinking you could do it for less but still lets see how the numbers work out. Now you have $2,500,000 in construction cost and a $1,000,000 lot. So we are up to $3,500,000 for that home. In todays market an Ocean front home will get you over $5,000,000 on the low end for new modern construction. Bingo you just created $1,500,000 in new wealth without taking any away anyone's money. Chances are that person could sell that place for even more later on.
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Old 03-05-2015, 02:33 PM
 
13,089 posts, read 10,443,228 times
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Quote:
Originally Posted by SOON2BNSURPRISE View Post
Why not? Wealth keeps growing. This is not a zero sum game. You make it sound like the rich have all the wealth and won't give any of it away. The problem with that kind of thinking is that a majority of the nations wealthy are self made. They didn't take their money from someone, they earned it by creating value.

Just because someone makes a million does not mean that they took that million from someone else.

Look at raw land. You can buy a lot at the beach near me and build a home on that lot. An ocean front lot may set you back $1million. Many people end up putting a 3 story home with maybe around 5,000 square feet on that lot. To build a very nice 5,000 square foot home lets say it cost you $500 a sqaure foot to build that home. I am thinking you could do it for less but still lets see how the numbers work out. Now you have $2,500,000 in construction cost and a $1,000,000 lot. So we are up to $3,500,000 for that home. In todays market an Ocean front home will get you over $5,000,000 on the low end for new modern construction. Bingo you just created $1,500,000 in new wealth without taking any away anyone's money. Chances are that person could sell that place for even more later on.
It would take a long time. In the meantime, we need to address inequality. You need to think both short term and long term. For example, the mere fact that spring will eventually arrive does not mean that you do not need to shovel snow off your driveway to get out in the morning!
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Old 03-05-2015, 02:36 PM
 
Location: Living on the Coast in Oxnard CA
16,242 posts, read 27,528,309 times
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Income inequality is growing because the majority want to complain about it and not do anything to change their situations. You can complain all you want. You can also take action and build a net worth of your own. You can do it the slow way by investing in a 401K, 403B, IRA, or you can invest in other peoples ideas, or you can create an idea and sell that idea to others, much like they do on Shark Tank. Many ways to get rich.
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Old 03-05-2015, 02:38 PM
 
13,089 posts, read 10,443,228 times
Reputation: 10162
Quote:
Originally Posted by SOON2BNSURPRISE View Post
Income inequality is growing because the majority want to complain about it and not do anything to change their situations.
Right, because I have control over how much a CEO makes.

Quote:
Originally Posted by SOON2BNSURPRISE View Post
You can complain all you want. You can also take action and build a net worth of your own. You can do it the slow way by investing in a 401K, 403B, IRA, or you can invest in other peoples ideas, or you can create an idea and sell that idea to others, much like they do on Shark Tank. Many ways to get rich.
$1 million, or $5 million is not rich any more. It's really just enough to provide a middle-class lifestyle at a safe withdrawal rate. Big difference.
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Old 03-05-2015, 02:41 PM
 
Location: Living on the Coast in Oxnard CA
16,242 posts, read 27,528,309 times
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Quote:
Originally Posted by ncole1 View Post
It would take a long time. In the meantime, we need to address inequality. You need to think both short term and long term. For example, the mere fact that spring will eventually arrive does not mean that you do not need to shovel snow off your driveway to get out in the morning!
The only way to address it is to decide to build more wealth. You have to do something. I don't like where I am at right now. I want to make $200,000 a year. To do that I need to realize I will have to change how I am making money. I doubt that my employer is going to hand over the $200,000. My wife and I are in the 6 figure club but I want to make $200,000 all on my own. I am on track to do that. Just sitting here and talking about it though is not helping.

The world will give you what ever you ask of it. stop asking for $50,000 when you need more to make your dreams come true.
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Old 03-05-2015, 02:43 PM
 
13,089 posts, read 10,443,228 times
Reputation: 10162
Quote:
Originally Posted by SOON2BNSURPRISE View Post
The only way to address it is to decide to build more wealth. You have to do something. I don't like where I am at right now. I want to make $200,000 a year. To do that I need to realize I will have to change how I am making money. I doubt that my employer is going to hand over the $200,000. My wife and I are in the 6 figure club but I want to make $200,000 all on my own. I am on track to do that. Just sitting here and talking about it though is not helping.

The world will give you what ever you ask of it. stop asking for $50,000 when you need more to make your dreams come true.
Oh, really? So everyone should chase $200K. We'd have no police, no teachers, no firefighters. They do not make $200k annually in most cases, even counting the present value of their pensions.
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Old 03-05-2015, 02:48 PM
 
Location: Living on the Coast in Oxnard CA
16,242 posts, read 27,528,309 times
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Quote:
Originally Posted by ncole1 View Post
Right, because I have control over how much a CEO makes.



$1 million, or $5 million is not rich any more. It's really just enough to provide a middle-class lifestyle at a safe withdrawal rate. Big difference.
Who cares how much your CEO makes. If you don't like it become the CEO or start your own company and compete. Like it or not CEO's bring value to the table. The owners or the board pays the CEO what they think he or she is worth. It has nothing to do with what the employees think that person is worth. The employees generally don't have an ownership stake in the company. They have no say so without an ownership stake. If you want to complain then buy the stock of that company.

True a million or $5million is not a lot today nor will it be when I retire. For us that is our plan B. We are working on building wealth in other areas. Still lets say we work all our life and don't make it big, we will have a paid off home and $5million to retire with.
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Old 03-05-2015, 02:50 PM
 
Location: Living on the Coast in Oxnard CA
16,242 posts, read 27,528,309 times
Reputation: 21547
Quote:
Originally Posted by ncole1 View Post
Oh, really? So everyone should chase $200K. We'd have no police, no teachers, no firefighters. They do not make $200k annually in most cases, even counting the present value of their pensions.
You can chase what ever paycheck works for you. In my area $200,000 is the magic number. Everyone has a differant situation. Realize that many firefighters do make money doing other things on the side.
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