Ironic isn't it!
Tom
OT: Richest 2% own more than half the world
- Thread starter Thomas Rogers
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Ironic isn't it!
Tom
R Shek,
The people you mentioned did not get rich working for any boss. They were all self employed entrepeneurs. Nobody gets really rich in this world working for someone else. No matter what you make per hour, you were hired to make money for the company, to offset your salary.
Rich people make their money by making their money, ideas, or talents work for them. The old days of "Work hard and save your money and you will be rich" are long gone. Saving money in a bank that pays a measly 1-2% is a joke. You are losing money due to inflation. The problem we have is nobody teaches real finacial wisdom in the schools, and they never have. They only tell you to "Work hard and save your money".
To make money, and be wealthy/rich, you need to own your own business and take full control over your finances. Only a few people with educations can manage to do that, what chance does an someone without any education have??
The major racial problem in the US is finacially based, compounded by lack of education.
...Rich
The people you mentioned did not get rich working for any boss. They were all self employed entrepeneurs. Nobody gets really rich in this world working for someone else. No matter what you make per hour, you were hired to make money for the company, to offset your salary.
Rich people make their money by making their money, ideas, or talents work for them. The old days of "Work hard and save your money and you will be rich" are long gone. Saving money in a bank that pays a measly 1-2% is a joke. You are losing money due to inflation. The problem we have is nobody teaches real finacial wisdom in the schools, and they never have. They only tell you to "Work hard and save your money".
To make money, and be wealthy/rich, you need to own your own business and take full control over your finances. Only a few people with educations can manage to do that, what chance does an someone without any education have??
The major racial problem in the US is finacially based, compounded by lack of education.
...Rich
Thomas Rogers
Well-Known Member
RichardL, I agree with most everything you say, but the rich that R Shek talks about have another thing in common (besides being educated, coming from well-to-do roots, and running their own companies) and that is that they tooks RISKS.
Bill Gates left Harvard and a safe, conventional career track that would have allowed to to be "better than well off" like his dad, and risked that to be where he is today. He put in a lot of hard work those first few years, and with significant risk.
"Safe" is working hard, following the well trodden path, investing wisely to get your 8% to 10%, and it's what a lot of people do...some that many here would consider rich.
But that's not how you create wealth.
TJR
Bill Gates left Harvard and a safe, conventional career track that would have allowed to to be "better than well off" like his dad, and risked that to be where he is today. He put in a lot of hard work those first few years, and with significant risk.
"Safe" is working hard, following the well trodden path, investing wisely to get your 8% to 10%, and it's what a lot of people do...some that many here would consider rich.
But that's not how you create wealth.
TJR
Adam Smith 2
Active Member
Precisely! And this situation is exactly what the baby boomer generation don't understand. There are many in my generations (people now in their late 20's early 30's) who are working every bit as hard as their parents (baby boomer gen) and basically skimming the poverty line. My dad still seems to think that working hard and saving money is a sound idea, but he came out of college in the 60s with no student loans to an economy where ONE year's entry-level salary could get you a 2-bedroom suburban home. Here I am 30 years later with the same college degree, same level job out of college, but I've got $50k of loan debt and an economy where that exact same home in the burbs now costs 10 years salary. These are real numbers by the way--the house that I was born in cost my parents $25,000 and its appraisal value today is $550,000.
Thomas Rogers
Well-Known Member
Adam...Mass is a stink-hole when it comes to housing, IMHO. Too built out. People living in the same towns as their great-grandparents, often because the "family" home (often a cramped two-family) is being passed down from generation to generation. It sucks. Job market is good, but all things considered, there are better states to live in.
Gavin Allan
Well-Known Member
It probably could today too. I'll bet your Dad didn't have more than one car, and it was probably a very plain, stripped down old used Rambler car with a six-cylinder engine and three-speed on the tree, no air conditioning, no Sirrius, etc.
Dad never made any long-distance phone calls, didn't have a cell phone.
Dad might have had a small black and white TV, but no cable, DVD, sattellite, etc.
The little house had no air conditioning. No dishwasher. No fancy millwork, one bathroom, and a plain kitchen. no walk-in closet. No jacuzzi tub. No home theatre. No computer with broadband internet access.
Dad probably wore plain clothes, plain shoes (no Air Jordans, no I-pods, etc.)
Even the poor today have all of these things. Your dad worked hard and valued his family and what little recreation and amusement he had.
People today are lazy and greedy.
It all started about 1970-71 when President Richard M. Nixon took the USA off the gold standard and converted our money to plain currancy. This allows the government to print all the money they need when they need it.
US currency is design to decrease in value from $1 to about 5 cents over a period of 40 years. That's about 4 percent per year for inflation that is built in, yet the government will imply that inflation is in check....Ya, only if it's not over 4%.
There is also a myth that homes and real estate increase in value over time?? The truth is that the dollar is falling in value and it takes more dollars to buy the same home as it did 20-30 years ago.
...Rich
US currency is design to decrease in value from $1 to about 5 cents over a period of 40 years. That's about 4 percent per year for inflation that is built in, yet the government will imply that inflation is in check....Ya, only if it's not over 4%.
There is also a myth that homes and real estate increase in value over time?? The truth is that the dollar is falling in value and it takes more dollars to buy the same home as it did 20-30 years ago.
...Rich
Thomas Rogers
Well-Known Member
Re. the "myth that homes and real estate increase in value over time"....I guess my $420K house that I paid $255K 8 years ago hasn't kept up with inflation...right!
Gavin Allan
Well-Known Member
Housing bubble broke here. Houses that used to get $250k last year are begging a sale for $175k. Market is flooded with homes for sale. Home prices have dropped like a rock. Realtors are starving.
WXMotorSports DecalsPartsAccs
Well-Known Member
Holding steady here just taking a little longer to sell them. The avg home in our complex would only be on the market for a week. Now, it is taking 3 weeks to sell...LOL
The dollar is dropping. Look how it compares to the Euro.
The dollar is dropping. Look how it compares to the Euro.
Nelson Atwell
Well-Known Member
So what a few are proposing is that no one should be poor, and that the wealth of the rich should be redistributed to the poor to make the playing field more equal. Perhaps everyone should be guaranteed a job by the government too, so no one will be without work. The factory worker, street sweeper and medical doctor will all make the same amount of money.
Perhaps we should set up a different option. We all will work for the common good. All of the resources will be pooled together and then the resources will be used to provide for all. Everything will belong to everyone.
The first option above is "Socialism", and the second is called "Communism".
The U.S. likes to think they have a free-market Democracy. In fact, we go to war to force others to set up that very thing. However, what Social Security and welfare have done is to create a form of socialism in the U.S.
Perhaps we should set up a different option. We all will work for the common good. All of the resources will be pooled together and then the resources will be used to provide for all. Everything will belong to everyone.
The first option above is "Socialism", and the second is called "Communism".
The U.S. likes to think they have a free-market Democracy. In fact, we go to war to force others to set up that very thing. However, what Social Security and welfare have done is to create a form of socialism in the U.S.
Gavin Allan
Well-Known Member
If folks are poor and don't like it here, let them go somewhere else.
Lots of opportunity for those who try and work hard.
No one is "owed" anything, except maybe the sick, mentally ill, and disabled.
Lots of opportunity for those who try and work hard.
No one is "owed" anything, except maybe the sick, mentally ill, and disabled.
TJR,
Yes, that is the myth. You think your house nearly doubled in value, but the truth is it just takes more $$$ to buy the same house than it did 8 years ago. What your tax apraisial says your home is worth is not not real world. Until you sell it you have made no money. Much of the real estate was over-valued and the bubble burst a few months ago, so your home may be worth far less than you think now... Probably even less than it was worth a year ago.
How did your house go up in value when you lived in it for 8 years. While you may have maintained it very well, there is still small signs of wear, no more warranty, etc. If you added on to the house or remodeled, lanscaped, etc, then you increased the value by more expenditures. Even the most popular home remodeling upgrades like Kitchens and Baths only gets you about 20% of your money back when you sell. Not a good investment unless you plan on staying for another 5 years or so.
Even if you did sell it for $400K+, you still have to live somewhere and you will not be able to buy a similar home for only $255K. So your house did not go up in value! The value of the dollar diminished that it takes $400K+ to buy a $255 home. If the house was built 20 years earlier, you probably could have bought it for about $100K
That does not mean that a house is not a good investment, it's actually a very good tax shelter, and you do need a roof over your head. But if you consider what you pay for interest, taxes, repairs, maintenance and insurance on a home you will find your profit is not anywhere near what you think it is, and the dollars you get paid are not worth the same as what they were 8 years ago.
The only good investment in a house is to buy it below market value, fix it up, and sell it fast. You can also do OK by renting the house and depreciating the house as a tax write-off.
...Rich
Yes, that is the myth. You think your house nearly doubled in value, but the truth is it just takes more $$$ to buy the same house than it did 8 years ago. What your tax apraisial says your home is worth is not not real world. Until you sell it you have made no money. Much of the real estate was over-valued and the bubble burst a few months ago, so your home may be worth far less than you think now... Probably even less than it was worth a year ago.
How did your house go up in value when you lived in it for 8 years. While you may have maintained it very well, there is still small signs of wear, no more warranty, etc. If you added on to the house or remodeled, lanscaped, etc, then you increased the value by more expenditures. Even the most popular home remodeling upgrades like Kitchens and Baths only gets you about 20% of your money back when you sell. Not a good investment unless you plan on staying for another 5 years or so.
Even if you did sell it for $400K+, you still have to live somewhere and you will not be able to buy a similar home for only $255K. So your house did not go up in value! The value of the dollar diminished that it takes $400K+ to buy a $255 home. If the house was built 20 years earlier, you probably could have bought it for about $100K
That does not mean that a house is not a good investment, it's actually a very good tax shelter, and you do need a roof over your head. But if you consider what you pay for interest, taxes, repairs, maintenance and insurance on a home you will find your profit is not anywhere near what you think it is, and the dollars you get paid are not worth the same as what they were 8 years ago.
The only good investment in a house is to buy it below market value, fix it up, and sell it fast. You can also do OK by renting the house and depreciating the house as a tax write-off.
...Rich
Thomas Rogers
Well-Known Member
RichardL, I will agree that I couldn't sell then buy another similar home and see any income or profit. But that's not really the issue now is it. That's like saying you didn't actually make any money on a stock if you bought it at $20/share and sold it at $40/share because you then can't turn around and buy MORE for any less than $40/share...that is exactly what you are saying and clearly that's flawed logic. If Microsoft stock goes for $12 a share to $120 a share in 5 years, you can BET that has outstripped inflation by a far sight, and that the VALUE of the stock has clearly gone UP. Same is true with homes. When the average cost of homes goes up at a rate much higher than inflation and COL then home values increase...no matter how you look at it. Those that OWN homes are happy, those that DON'T are not.
Investment results are a factor of money invested vs money returned over time, and for my house, I invested $255K, I could sell today for $420K and the period of time is 8 years. The additional monies paid on the mortgage and maintenance were, IMHO, secondary and in line with what I would have paid to rent the same house so to my way of thinking are really part of the investement. So, for me, if I just look at paid, vs return, over time it's about 160K profit on 255K investment over 8 years. It's not GREAT investment results over 8 years, but not bad...beats most stocks during that same period.
And, when you say "the only good investment in a house...", then you can't possibly come up with the ONLY good scenario. Clearly there is at least ONE other scenario that is as good if not better. Hell, there were people buying building lots, holding them for two months and selling and making money. Others were buying old homes, raising the homes, and reselling them as improved building lots and making money. Some were doing nothing more than buying a home, living in it for 3 or 4 years, getting transfered and pocketing SWEET, SWEET equity.
I will agree that homes and real estate aren't as good as "investments" as people often think. But it is NOT a myth that they increase in value, and the longer the period the more likely and certain the increase. 255K to 400K in 8 years is increased value. The fact that other homes cost the same, just means that OTHER homes are increasing in value as well...which doesn't discount the increased value of the original home.
"High tides raise all boats"
RichardL said:
Typically homes are very poor investments, all things considered (including tax implications) when compared to other forms of investing. Almost all financial planners will tell you that. That doesn't mean that homes don't increase in value, they most assuredly do over a long period of time. The question is simply one of return.
Take my home for example: It currently has an annualized rate of return of around 6%. (255K start, 420K end, 8 year period). That's not very good...not very good at all. But most financial planners will say one other thing you said..."you had to live somewhere" during that time, and if I took most of that same money spent on mortgage and spent it on rent, I would have nothing for it. Along that line of thinking it is worth saying that I never really invested $255K. What I invested was $25K (10% down)...and that is now worth a profit of about $140K, and over 8 years that is a return of about 23% annualized...that beats the street any day of the week. That's real increased value and real investment potential.
TJR<script sr
Investment results are a factor of money invested vs money returned over time, and for my house, I invested $255K, I could sell today for $420K and the period of time is 8 years. The additional monies paid on the mortgage and maintenance were, IMHO, secondary and in line with what I would have paid to rent the same house so to my way of thinking are really part of the investement. So, for me, if I just look at paid, vs return, over time it's about 160K profit on 255K investment over 8 years. It's not GREAT investment results over 8 years, but not bad...beats most stocks during that same period.
And, when you say "the only good investment in a house...", then you can't possibly come up with the ONLY good scenario. Clearly there is at least ONE other scenario that is as good if not better. Hell, there were people buying building lots, holding them for two months and selling and making money. Others were buying old homes, raising the homes, and reselling them as improved building lots and making money. Some were doing nothing more than buying a home, living in it for 3 or 4 years, getting transfered and pocketing SWEET, SWEET equity.
I will agree that homes and real estate aren't as good as "investments" as people often think. But it is NOT a myth that they increase in value, and the longer the period the more likely and certain the increase. 255K to 400K in 8 years is increased value. The fact that other homes cost the same, just means that OTHER homes are increasing in value as well...which doesn't discount the increased value of the original home.
"High tides raise all boats"
RichardL said:
Typically homes are very poor investments, all things considered (including tax implications) when compared to other forms of investing. Almost all financial planners will tell you that. That doesn't mean that homes don't increase in value, they most assuredly do over a long period of time. The question is simply one of return.
Take my home for example: It currently has an annualized rate of return of around 6%. (255K start, 420K end, 8 year period). That's not very good...not very good at all. But most financial planners will say one other thing you said..."you had to live somewhere" during that time, and if I took most of that same money spent on mortgage and spent it on rent, I would have nothing for it. Along that line of thinking it is worth saying that I never really invested $255K. What I invested was $25K (10% down)...and that is now worth a profit of about $140K, and over 8 years that is a return of about 23% annualized...that beats the street any day of the week. That's real increased value and real investment potential.
TJR<script sr
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Ryan Schaecher
Well-Known Member
I guess I'm pretty lucky to live in a house that cost the equivalent of less than 2 years salary ($83K and my salary is ~$49K).
However, both my wife and I have student loans (totalling nearly $50K) and my wife stays at home.
My closest family is 4+ hours away. My grandparents (the only ones still around anyway) are more than 8 hours away. However, most of my dad's family all live within a 1 hour drive of my grandparents (the exception is my immediate family, all in the St Louis area except my wife and I, and I have an aunt that lives in Dallas). The notion of a "generational home" is one that very few people enjoy anymore. They are out there, but the occurance is becomming more and more rare everyday.
A house as a tax shelter? HAHAHA! Funny. Yeah, I get 40% of my INTEREST back in tax rebates, but when I pay 6% of my loan value to the bank.... where's the gain? I'd rather pay the $2000 in taxes than the $3000 in interest. The ONLY way that a house is a true tax shelter is if the interest earned is enough to drop your tax bracket. I can't even get close to that, so what's the use? I have enough tax incentives between kids and tithes/other donations to "get back" more than 96% of my "governmental loan" (not including FICA, etc).
Neither of which is a barrier that cannot be overcome. Today, an inner city kid can go to college easier and cheaper than a student who lives in an affluent neighborhood. I know that when I went to school, my family made too much money to qualify for grants and low-income scholarships, but were too rich to pay for it straight-up. There are all kinds of Goberment programs and social charities that help pay for college for low income families.
Education is not an impassible barrier IF SOMEONE WANTS TO OBTAIN IT! The problem is that most of the kids see the Goberment handing out everything to them, so if it gets handed to them, why do they want to work for it? They are indoctrinated into Socialism and hence why there is the mentality that I should get everything I want for free. Work? Yeah right.
However, both my wife and I have student loans (totalling nearly $50K) and my wife stays at home.
My closest family is 4+ hours away. My grandparents (the only ones still around anyway) are more than 8 hours away. However, most of my dad's family all live within a 1 hour drive of my grandparents (the exception is my immediate family, all in the St Louis area except my wife and I, and I have an aunt that lives in Dallas). The notion of a "generational home" is one that very few people enjoy anymore. They are out there, but the occurance is becomming more and more rare everyday.
A house as a tax shelter? HAHAHA! Funny. Yeah, I get 40% of my INTEREST back in tax rebates, but when I pay 6% of my loan value to the bank.... where's the gain? I'd rather pay the $2000 in taxes than the $3000 in interest. The ONLY way that a house is a true tax shelter is if the interest earned is enough to drop your tax bracket. I can't even get close to that, so what's the use? I have enough tax incentives between kids and tithes/other donations to "get back" more than 96% of my "governmental loan" (not including FICA, etc).
Neither of which is a barrier that cannot be overcome. Today, an inner city kid can go to college easier and cheaper than a student who lives in an affluent neighborhood. I know that when I went to school, my family made too much money to qualify for grants and low-income scholarships, but were too rich to pay for it straight-up. There are all kinds of Goberment programs and social charities that help pay for college for low income families.
Education is not an impassible barrier IF SOMEONE WANTS TO OBTAIN IT! The problem is that most of the kids see the Goberment handing out everything to them, so if it gets handed to them, why do they want to work for it? They are indoctrinated into Socialism and hence why there is the mentality that I should get everything I want for free. Work? Yeah right.
Nelson Atwell
Well-Known Member
RShek,
I'm with you. My house cost $68K. I'll make more than that next year.
I'm with you. My house cost $68K. I'll make more than that next year.
Thomas Rogers
Well-Known Member
R Shek, my house costs less than 2 years my salary.
Nelson Atwell
Well-Known Member
This is my $68K house. 1200 sq ft, 2 BR/2 Bath, separate two-car garage w/ full attic, newly remodeled, two blocks from the best Jr High in town, nice neighborhood, Home owner's association dues $26.50/mo and they mow the yard one a week in the summer, maintain the common areas to include two tennis courts, and a swimming pool. Life is good!
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