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I am the prototypical American that has benefited greatly from capitalism.
My family was lower middle class growing up, but with hard work and some smarts and a lot of luck, I made something of myself.
I bought my first place in my mid 20's (not an easy feat for someone in the NE where real estate is very expensive) and continued to accumulate houses and wealth.
I now (in my 30s) have multiple properties, in addition to a very high paying day job, which affords me the ability to purchase even more wealth building assets.
I have stopped purchasing homes since covid, given the red hot, overpriced housing market (but did take advantage of low interest rates to refi a few), so I have more money than I know what to do with. It's a first world problem, but still a problem nonetheless, since I have very little faith in both the housing and stock markets ATM. Having it sit in a bank account where inflation is eating away at it kills me.
But focusing on real estate only... I have a few tenants that struggle to pay rent. Some are a few months behind and obviously are not doing well financially. Their chances of ever owning a home outright are slim to none.
My future children OTOH will inherit my wealth and properties and continue to benefit with a great headstart on life, and hopefully take full advantage of that and get ahead further on easy street.
Of course they could squander my wealth if I don't instill a strong work ethic in them, but compared to my tenants, they have a huge head start.
Fast forward a few generations and we have what is now the US - a huge divide between the rich and the poor, the haves and the have nots. We have what I'm doing with RE on a much grander scale (Blackrock). We have billionaires influencing politics to pass laws that benefit them even more. I am small potatoes compared to them, so I can't even begin to fathom what it's like to be them, but I can see how inherently destructive the system is.
What we have is rentier capitalism - we have a class of asset owners, and a lower class that rents from them, and it's getting increasingly hard to crossover as witnessed by a much lower percentage of millennials owning their homes when compared to their parents at the same age.
I see no other out other than a collapse caused by a revolution, an uprising, possibly a civil war.
Last edited by bluesclues5; 03-18-2022 at 05:37 PM..
I am the prototypical American that has benefited greatly from capitalism.
My family was lower middle class growing up, but with hard work and some smarts, I made something of myself.
I bought my first place in my mid 20's (not an easy feat for someone in the NE where real estate is very expensive) and continued to accumulate houses and wealth.
I now (in my 30s) have multiple properties, in addition to a very high paying day job, which affords me the ability to purchase even more wealth building assets.
I have stopped purchasing homes since covid, given the red hot, overpriced housing market (but did take advantage of low interest rates to refi a few), so I have more money than I know what to do with. It's a first world problem, but still a problem nonetheless, since I have very little faith in both the housing and stock markets ATM.
But focusing on real estate only... I have a few tenants that struggle to pay rent. Some are a few months behind and obviously are not doing well financially. Their chances of ever owning a home outright are slim to none.
My future children OTOH will inherit my wealth and properties and continue to benefit with a great headstart on life, and hopefully take full advantage of that and get ahead further on easy street.
Of course they could squander my wealth if I don't instill a strong work ethic in them, but compared to my tenants, they have a huge head start.
Fast forward a few generations and we have what is now the US - a huge divide between the rich and the poor, the haves and the have nots. We have what I'm doing with RE on a much grander scale (Blackrock). We have billionaires influencing politics to pass laws that benefit them even more. I am small potatoes compared to them, so I can't even begin to fathom what it's like to be them, but I can see how inherently destructive the system is.
What we have is rentier capitalism - we have a class of asset owners, and a lower class that rents from them, and it's getting increasingly hard to crossover as witnessed by a much lower percentage of millennials owning their homes when compared to their parents at the same age.
I see no other out other than a collapse caused by a revolution, an uprising, possibly a civil war.
That's exactly what they used to teach in Political Economics courses in universities across the country, back in the conservative 40'5, 50's, and 60's. Great disparities between rich and poor destabilize a country, causing the conditions for revolution from the bottom. Latin American countries were cited as Exhibits A, B, C and D.
If you want to read more about why repeated tax cuts to the wealthy are bad, and have a fun read at the same time, check out Lee Iacocca's book, "Where Have All The Leaders Gone?" Written during the W Bush administration, it's still highly relevant today. And Iacocca's hilarious when he's dead serious! A great writer. The Republican Party needs more members like him.
You say you have more money than you know what to do with and that you’re an owner renting to people who are struggling to keep up.
They are all paying below market rent and I rarely raise rent on them.
I also know my good fortune will run out soon one day given the trajectory of the country, so I am making "exit" plans which require capital. Obviously that statement was a bit of hyperbole. I'm not swimming in a vault full of gold coins like Scrooge McDuck.
You say you have more money than you know what to do with and that you’re an owner renting to people who are struggling to keep up.
Use those smarts to make a little corner of the world better off than you found it.
He also said he's been letting some of them skate on the rent. ...so far. Maybe the OP should consider being one of those guys who goes into an inner city high school, or a poor rural school, and offers a 4-year college scholarship to everyone who maintains a college-entrance-worthy GPA.
OP, I know some Native American scholarship funds you could contribute to.
You said you are in the 30s,have you ever travelled abroad,homeownership is not that common,in fact some rent all their life .
In some countries,there is no such 30 years mortgage,political and economical instability are 2 reasons,most homeowners either are rich to pay cash or borrow from their relatives or inherit from their parents.
There is nothing shameful to be a renter,their friends are in the same boat,and they put their money in banks,but then their rent does not increase that much,sometime not at all.
Children also do not have their own bedroom,usually 2 shares a bedroom and they have only one TV set in the living room.
some never take vacation,saturday and sunday off are considered vacations.
There is no desert with dinner or wine or appetizer.
They wear their clothese for a few days,they drink tap water or boil their water.
There are just things they dont have,if you dont know,you dont miss it.
When the CHinese first came to this country,they look at the car,the house and the lifestyle,they do not realise that car ,house,vacation etc are not fully paid for,they figure this is a great country,every one is rich and pay cash for car,house,furniture,vacation.,
Lee Iacocca's book, "Where Have All The Leaders Gone?"
Like the OP I have struggled with the relative ease with which I have navigated the world, and forged ahead of my peers. You could call it survivor's guilt, and indeed for many life is something merely survived.
You don't need to be wealthy to be a leader. Anyone can be a leader. But if you are wealthy, one way you can lead is by leaving money on the table. Whether that be through business practices like charging below-market rent, or dedicating your career towards a social good that doesn't pay as well, or donating money, the key is to know when you're satisfied and only keep enough to meet that level. That level is usually well below what you can earn, but at the same time you are probably a person of talent who has a lot to offer. Idling yourself isn't the answer; you should work towards a positive end.
Evil triumphs when good men do nothing. So if you are at a loss with what to do with your good fortune, at least don't give up. You can keep buying properties if you're a "real estate guy" and rent them out ethically. If you don't, someone else will and may be more mercenary.
Personally I only consider buying properties that are already built to be multifamily units. I don't buy single family homes to rent out. Those are for families to own. That's where I draw the line, but everyone is different.
Be aware that the life of noblesse oblige, or more accurately the obligations of the fortunate, is lived on a moral knife edge. It is incredibly easy to cut corners, cut yourself some slack, make compromises, and still entertain the idea that you are one of the "good guys" because of good intentions. You need to be willing to check yourself and say no to yourself. That's hard because humans have an incredible ability to justify themselves when money is on the line.
At the same time you have a lot of potential for doing good, more than most. The only part of this thread that gave me pause was when you described saving money in case of a collapse. Personally I don't think there will be a collapse, and I don't want there to be a collapse. Social collapse is incredibly wrenching and there's a lot of collateral damage. I prefer gradual change. I think you should engage with the world instead of trying to escape. The first step is figuring out some sort of life philosophy because you need a framework for making decisions. Once you have that grounding you can venture out.
A) If capitalism is defined as the private ownership of the means of production and the fruits thereof, there is no capitalism when the government takes part or all of it. And if absolute ownership is private property that cannot be taken for public use without just compensation, again, there has been no private property since 1933, since government is quite willing and able to tax and confiscate property without paying just compensation in lawful money (gold or silver coin).
B) So-called capitalists (banks, corporations, insurance companies, etc) are engaged in usury (charging and paying interest), and do not have a "right" to own, since they need government permission to exist. . . and pay a hefty tax for the privilege. Ironically, so-called capitalists prey upon the real capitalists - the owners of property.
Current aggregate tax rates run 39% - 44% (local, state, and federal).
The socialist taxes on American labor and industry are grinding us down, hurting Americans, with tax shift inflation. And thus subsidize untaxed foreign imports.
FYI - since 1933, no dollars (coin) have circulated. Dollar bills (Federal Reserve Notes) are IOUs (debt) denominated in dollars, but have a minus value until redeemed. In HJR 192, June 1933, Congress repudiated redeeming their notes, hence they are worthless - by law.
YES, They ARE legal tender on obligated parties.
Title 12 USC Sec. 411 declares that the US gubmint is an obligated party and must accept their own notes as tender in lieu of lawful money (gold or silver coin).
In case you were not informed, "voluntary" participation in FICA (Socialist Insecurity) makes one an obligated party ("contributor") on the public debt, thus making dollar bills into YOUR obligation.
Now, imagine what happens if a sizable portion of Americans decide to WITHDRAW FROM FICA?
Can you say "upside down" debt?
Billionaires become Zero-aires overnight.
A billion paper zeroes = zero.
Without 330 million "human resources" pledged as collateral, those paper notes are undercapitalized and nonfungible.
Fun-fun-fun.
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