Our Dirty Little Secret: Who's Really Poor in America? (bankrupt, capitalism, percentage)
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"The problem today for most isn't this recession, it's that except for the top 10 percent, average household income hasn't changed a bit for 10 to 20 years."
"The problem today for most isn't this recession, it's that except for the top 10 percent, average household income hasn't changed a bit for 10 to 20 years."
Capitalism is the best system this world has ever seen. You're comment about capitalism being designed to filter the wealth to the top (implying the "rich get richer") is just simply not true. Nearly 80% of millionaires in this country are self-made (from Thomas J. Stanleys book "the millionaire next door"). That means just over 20% inherited their money...thats all! The great thing about our system is that anybody can become rich, you just have to know how to invest (or start your own business) and how to live within your means. According to this book the average millionaire drives a 6 yr old car and buys USED. Also, over 80% of people that drive luxury vehicles....aren't millionaires. It really makes you stop and think when you see that mercedes, or range rover driving down the street.
I'm currently a senior in college, and my friend works at a car wash when he goes home for the summers. He told me once that the older guys that drive Hondas sometimes give him a $20+ tip just for the car wash, and he said the people that came in with ferraris and porsches never tipped. He tried telling me it's because the people driving the rich cars are stingy. I had to quickly reply and tell him...no it's because those people driving the Hondas actually have money, own their cars (i.e. don't have a car payment), own their houses outright, etc. and they are in a position to help out other people rather than worry about their next multi-thousand dollar house payment or $1,000 car payment.
Having said all that...if you are living on min. wage, and don't have a high school diploma then you have made life really hard for yourself. No matter how you look at it, there aren't enough jobs out there. No matter how easy a class is (even if most people get A's)...there is still somebody that fails. To make sure that person isn't you, however, you just can't accept no for an answer and have to accept nothing less than success. I view life as a game, the government sets the rules, and you must find a way to win the game within those rules (i.e. doing things the right way, don't cheat, don't cheat the IRS etc.). I plan on finding a way to blow out the competition, but I just have a competitive spirit. Complaining gets you nowhere in life, and at the end of the day you have to make a better life for yourself. You can't expect handouts. Living frugal and within your means is the best way to get ahead in life, but most people that make a lot of money fail to see that (this is why we have former pro players that are bankrupt, former CEO's losing their houses, etc).
Last edited by hskrfan2187; 03-10-2010 at 01:58 PM..
Capitalism is the best system this world has ever seen.
Debateable
Quote:
Originally Posted by hskrfan2187
You're comment about capitalism being designed to filter the wealth to the top (implying the "rich get richer") is just simply not true. Nearly 80% of millionaires in this country are self-made (from Thomas J. Stanleys book "the millionaire next door").
Wealth is finite. In order to become richer, someone must become poorer. Period. The reason we have so many "millionaires", is largely because the lower classes of the US are poorer then theyve ever been, relatively. The "millionaire next door", is in that condition, because 25 other people watched their incomes not keep pace with inflation because he was busy scraping it off the top.
Quote:
Originally Posted by hskrfan2187
That means just over 20% inherited their money...thats all!
The millionaires of generations X and Y will show significantly different statistics. In addition, this "fact" probably blissfully ignores LLCs and S-Corps that generate huge amounts of income, that are "passed" to next of kin.
Quote:
Originally Posted by hskrfan2187
The great thing about our system is that anybody can become rich, you just have to know how to invest (or start your own business) and how to live within your means.
Investing and starting a business BOTH require capital. If you do not have significant assets, you must borrow other peoples assets, and pay for the priviledge of their usage (this is read as "paying a rich person because he is rich, and you arent").
Quote:
Originally Posted by hskrfan2187
According to this book the average millionaire drives a 6 yr old car and buys USED. Also, over 80% of people that drive luxury vehicles....aren't millionaires. It really makes you stop and think when you see that mercedes, or range rover driving down the street.
Really? Because this guy interviewed every millionaire. I personally know three millionaires. One drives a 100k Mercedes, 1 has 10 cars, including a Corvette he drives about once a year, and none of them buy "used" I can promise you that. They all live in mansions way too big for any purpose theyd ever have, go on expensive trips, etc.
Quote:
Originally Posted by hskrfan2187
I'm currently a senior in college,
That explains it. A senior in college with little to no life experience.
Quote:
Originally Posted by hskrfan2187
and my friend works at a car wash when he goes home for the summers. He told me once that the older guys that drive Hondas sometimes give him a $20+ tip just for the car wash, and he said the people that came in with ferraris and porsches never tipped. He tried telling me it's because the people driving the rich cars are stingy.
A person driving a Ferrari has money. Its very hard to get exotic cars unless you have significant assets and income.
Quote:
Originally Posted by hskrfan2187
I had to quickly reply and tell him...no it's because those people driving the Hondas actually have money, own their cars (i.e. don't have a car payment), own their houses outright, etc. and they are in a position to help out other people rather than worry about their next multi-thousand dollar house payment or $1,000 car payment.
Obviously it is because the old guy in the Honda is a millionaire that he tips. It could have absolutely nothing to do with manners, ethics, or the era he was brought up.
Quote:
Originally Posted by hskrfan2187
Because no matter how you look at it, there aren't enough jobs out there. If everybody in this country had a college degree, then you would need Phd's and masters degrees just to find decent jobs because of the percentages.
At least you realized this fact, however, the problem with that is that the never ending demand of degrees is adding to the personal debt of people at record amounts. Thats not something 80 year old guy in a Honda ever worried about. You figure that one out.
Wealth is finite. In order to become richer, someone must become poorer. Period. The reason we have so many "millionaires", is largely because the lower classes of the US are poorer then theyve ever been, relatively. The "millionaire next door", is in that condition, because 25 other people watched their incomes not keep pace with inflation because he was busy scraping it off the top.
The millionaires of generations X and Y will show significantly different statistics. In addition, this "fact" probably blissfully ignores LLCs and S-Corps that generate huge amounts of income, that are "passed" to next of kin.
Investing and starting a business BOTH require capital. If you do not have significant assets, you must borrow other peoples assets, and pay for the priviledge of their usage (this is read as "paying a rich person because he is rich, and you arent").
Really? Because this guy interviewed every millionaire. I personally know three millionaires. One drives a 100k Mercedes, 1 has 10 cars, including a Corvette he drives about once a year, and none of them buy "used" I can promise you that. They all live in mansions way too big for any purpose theyd ever have, go on expensive trips, etc.
That explains it. A senior in college with little to no life experience.
A person driving a Ferrari has money. Its very hard to get exotic cars unless you have significant assets and income.
Obviously it is because the old guy in the Honda is a millionaire that he tips. It could have absolutely nothing to do with manners, ethics, or the era he was brought up.
At least you realized this fact, however, the problem with that is that the never ending demand of degrees is adding to the personal debt of people at record amounts. Thats not something 80 year old guy in a Honda ever worried about. You figure that one out.
I don't disagree with a lot of what you said. These people have money but can they live without their job? That's the point. If you make a million a yr but you go out and buy a 250,000 car, then have a multimillion dollar home..well you don't have much left over. This books focuses more on those that are financially independent. I also know people that are millionaires but they don't live within their means. For example, say they make 1,000,000/yr but their worth is only 2 million. Well if they lose their job they can live for 2 yrs, max before needing another job because they were too busy living the high life. I do agree with a lot of what you said, but the problem is this isn't a utopia we live in. We either try to perfect the system we have, or expect the government to pick up all the pieces, which will ultimately lead to no economic growth and our government defaulting on their debt (if this happens the entire population is screwed instead of a small percentage).
You mention how I have no real life experience (very true to an extent), but I have already put in place the basic principles of how I will live my life. I live as frugally as possible, invest every dollar I can get my hands on, and spend a substantial amount of time investing or looking for my next investment. Although I'm not worth very much when you start comparing me to someone that has had 10+ yrs to accumulate wealth, I have no doubt in my mind that I will be an economic success because I refuse to fail.
Again, I do agree with a lot of what you said I just don't think their is an economic answer to a lot of it because this isn't a utopia. We have to try and make the world suitable for as many people as possible without bankrupting the country.
I don't disagree with a lot of what you said. These people have money but can they live without their job? That's the point.
I agree that wealth and income are not the same thing, however, income is the best path to wealth of past generations. For generation X and especially Y, they will be standing around, largely underemployed, swimming in student debt, waiting to inheret their parents assets.
Quote:
Originally Posted by hskrfan2187
If you make a million a yr but you go out and buy a 250,000 car, then have a multimillion dollar home..well you don't have much left over.
Thats true, but most people who have large wage incomes are fairly bright (doctors, lawyers, corporate officers), and do not spend above their elevated means. Obviously you have the basketball player who can barely read who falls in to a multi million dollar NBA contract and pisses it away in a few years, but thats more of an exception then a rule.
Quote:
Originally Posted by hskrfan2187
We either try to perfect the system we have, or expect the government to pick up all the pieces, which will ultimately lead to no economic growth and our government defaulting on their debt (if this happens the entire population is screwed instead of a small percentage).
Actually, there are other alternatives. In addition, the only people who will ever affect the system through political process are members of the oligarchic plutocracy. They bend the system to help them out.
Quote:
Originally Posted by hskrfan2187
You mention how I have no real life experience (very true to an extent), but I have already put in place the basic principles of how I will live my life. I live as frugally as possible, invest every dollar I can get my hands on, and spend a substantial amount of time investing or looking for my next investment. Although I'm not worth very much when you start comparing me to someone that has had 10+ yrs to accumulate wealth,
Well, that is a good start, and hopefully it pays off for you. I hope you dont have insurmountable student debt to contend with either.
Quote:
Originally Posted by hskrfan2187
I have no doubt in my mind that I will be an economic success because I refuse to fail.
Thats a great attitude, and I think most college students have that attitude. I really hope you are able to retain it for more then a few months after launching in to the world. That would be an admirable feat.
Quote:
Originally Posted by hskrfan2187
Again, I do agree with a lot of what you said I just don't think their is an economic answer to a lot of it because this isn't a utopia. We have to try and make the world suitable for as many people as possible without bankrupting the country.
A system that redistributes wealth, equalizes access to training and education, and puts all capital assets in to public ownership would be one that makes the world suitable for as many people as possible. Capitalism is only suitable for about 35% of the country. The rest are either disgruntled, on welfare, or are hopelessly brainwashed by the "work harder, get more training/schooling" mantra that is doing nothing but making people die of stress related illness and go in to boatloads of debt, ironically, held by the same wealthy people demanding the increased education in the first place.
I agree that wealth and income are not the same thing, however, income is the best path to wealth of past generations. For generation X and especially Y, they will be standing around, largely underemployed, swimming in student debt, waiting to inheret their parents assets.
Thats true, but most people who have large wage incomes are fairly bright (doctors, lawyers, corporate officers), and do not spend above their elevated means. Obviously you have the basketball player who can barely read who falls in to a multi million dollar NBA contract and pisses it away in a few years, but thats more of an exception then a rule.
Actually, there are other alternatives. In addition, the only people who will ever affect the system through political process are members of the oligarchic plutocracy. They bend the system to help them out.
Well, that is a good start, and hopefully it pays off for you. I hope you dont have insurmountable student debt to contend with either.
Thats a great attitude, and I think most college students have that attitude. I really hope you are able to retain it for more then a few months after launching in to the world. That would be an admirable feat.
A system that redistributes wealth, equalizes access to training and education, and puts all capital assets in to public ownership would be one that makes the world suitable for as many people as possible. Capitalism is only suitable for about 35% of the country. The rest are either disgruntled, on welfare, or are hopelessly brainwashed by the "work harder, get more training/schooling" mantra that is doing nothing but making people die of stress related illness and go in to boatloads of debt, ironically, held by the same wealthy people demanding the increased education in the first place.
Relating to your last response, I would really like to know what the answer is (in your opinion). I mean that with all honesty. Usually people that discuss this sort of thing have very strict views and won't deviate from those views, but I'm usually more of a listener than someone who tries to pretend I know everything. So honestly I would be interested in knowing exactly what you would do instead of the capitalistic system. I've heard of a lot of other systems that provide more of a safety net for the lower class but all the systems I've heard of (at least in my opinion) seem like they wouldn't be able to sustain economic growth. Which seems to be what has made America so great. We have developed a lot of things that the whole world now uses due to our capitalistic system.
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