A key truth very few investors and executives want to admit...from The Business Insider.

Datsun, if one side can say that government is oppressive and keeping down the man, then the same can be said about private sectors manipulating things in their favor as well.

I'm not making excuses for myself, nor I am making excuses for others. I'm doing fairly well and our household income is solidly middle class. I still do not and will not advocate for making the rich more wealthy by doing no real work and creating no real jobs. Everyone I know is middle class, even the guy making $280,000+, they all work 40 hour weeks. My issues are with the people out there who haven't worked a day in years and making more in interest off their wealth than any of us will in a year.

The debate is always this;

One side wants constant change until they are satisfied (which is never), the other side wants yesterday's stability no matter how flawed.

And I'm sure someone will mention "life isn't fair" and life isn't all used sports cars and welders either, but we sure do discuss that often.

One of the things I find funny about all this. One of my friends is a German National living here in the US. His wife is from the US, so it is all legal.

Talking to him puts a lot of the "truths" we take for granted in a different light. He cannot get over how we in America "work work work" and get so little for it. I am not talking wages (ours are lower) but that the Germans and most of Europe get all those things that make life easier.. things we look at as luxuries, such as 6 or more weeks of vacation a year (mandated by law) and health care.

And Germany is an economic powerhouse..

Martin Winterkorn, the VAG CEO only brought home 17.5 million Euros.. he was Germany's highest paid Executive.. While according to Forbes, the top 60 CEOs in the US all made more than Mr. Winterkorn. VW also paid their workers a 7000 euro bonus this past year

What would you estimate is the net worth of your "middle class" guy making an individual income of 280K?

What is the definition of "middle class". Where on this chart is the line for "middle class".

I would never claim that where I am on that chart is "middle class" and it's at least a few spots to the left of the right end.

To me "middle class" is household income in the Middle 1/3 of the US population. So that would be household incomes 35K/yr to 72k/yr.

Look the "Average" American household makes 50K/year and has >120K in debt. This is INSANE. They are paying $6000/yr MINIMUM in INTEREST. Thats 12% of their income. What could you do with a 12% raise. Look at the opportunity cost for economic mobility that that alone costs. If the average American family had 12% more money to spend how much growth in the economy would that fuel, or how much more could they drive up their earnings by having that money alone to re-invest in themselves and take chances to make more money. Sadly giving most Americans $6000 would be like giving a child $5 at the county fair. To me that is the bigger problem that those 4% of households making >200K making more and more money. In Debted American households owe someone 12.9 Trillion dollars. Who do you think loaned it to them and who do you think is earning that 4% interest.

What portion of the Income growth of the top 1% you think is because of this? Who is to blame for that one?

PHeller wrote: My issues are with the people out there who haven't worked a day in years and making more in interest off their wealth than any of us will in a year.

I know a guy like that. Spends most of the year tooling around on his yacht. Lives in a 8000 square foot house on 400 acres of water front property and pretty much does what he wants when he wants and how he wants. He hasn't worked in 15 years and probably netted 5 times what I did last year, which isn't chump change.

He's my father. He grew up on a rural farm in SC in a run down house with no running water, other than the pitcher pump at the kitchen sink. His mother cooked on a wood stove. No heat other than fire places. He slopped pigs and split wood every morning before school and every evening before bed. His dad sacrificed to send him and his siblings to college. Dirt poor described him to a T. He worked his ass off, building a company from scratch. All based on an idea and blood, sweat, and tears. 50 years he put into that company before it was sold. He moved back to that same farm house, on that same farm, and fixed it up for his retirement.

Now you want to punish him because he is successful and smarter than the average idiot.

How about FO.

Try spending a little less time worrying about what other people have. Wealth isn't a finite resource. Just because someone else has more, doesn't mean you won't get any.

I'm done here. The socialists will still be socialist and the conservatives will still be conservative when all is said and done.

mad_machine wrote: Talking to him puts a lot of the "truths" we take for granted in a different light. He cannot get over how we in America "work work work" and get so little for it. I am not talking wages (ours are lower) but that the Germans and most of Europe get all those things that make life easier.. things we look at as luxuries, such as 6 or more weeks of vacation a year (mandated by law) and health care.

I've talked to some people who have confirmed similar for many European countries, South American and basically the entire rest of the developed world. I really think a lot of that has to do with the lack of economic freedom the average American has allowed themselves to gain. Most US households are in SIGNIFICANT debt and could not handle a loss of income for any length of time. This makes them unable to move around the economy seeking jobs that offer more benefits nor demand higher vacation/shorter work weeks of their jobs for fear of being shown the door. I wonder what a comparison of the average Germans finances to that of the average American would look like?

nocones wrote: I wonder what a comparison of the average Germans finances to that of the average American would look like?

In terms of debt or income distribution?

A few things I know about Germany: minimum wage is higher. Cost of living is higher, but not as much as you might think (going from Sacramento to Berlin; basically an equal number of Euro's as dollars). Pretty much all higher education is publicly funded, so you do not have the student loan debt of the U.S. Health care costs considerably less.

Germany also is BIG on technical vocational training. Manufacturing and production jobs are actually quite respected. Vocational training is not only free, but the last half is actually paid internship.

That said, there are other rules regarding independent contractors (which I don't really understand) that make it difficult and expensive to be a private innovator. Those vocational programs basically have people funneled into them at age 16 or 17, and you pretty much get stuck on a career path at that age.

...and I would totally learn German and move back to Berlin if my fiancee were able to get a job there.

the reason the "rich" are getting "richer" is because the "middle class" is giving large chunks of their disposable income to the "rich" in the form of cell phone and cable bills as well as payments on the shiny new cars, boats, rv's, and houses that are sold by the "rich" to the "middle class".

there are some "middle class" people that come between themselves and the "rich" in the form of making, transporting, selling, and servicing those things.

Toyman01 wrote:

PHeller wrote: My issues are with the people out there who haven't worked a day in years and making more in interest off their wealth than any of us will in a year.

I know a guy like that. He hasn't worked in 15 years and probably netted 5 times what I did last year, which isn't chump change. He's my father.

I wouldn't consider him the target of my animosity. He at least worked for his retirement.

There are people, lots of people in this country that inherit incredible amounts of wealth and have not worked for it.

PHeller wrote:

Toyman01 wrote:

PHeller wrote: My issues are with the people out there who haven't worked a day in years and making more in interest off their wealth than any of us will in a year.

I know a guy like that. He hasn't worked in 15 years and probably netted 5 times what I did last year, which isn't chump change. He's my father.

I wouldn't consider him the target of my animosity. He at least worked for his retirement. There are people, lots of people in this country that inherit incredible amounts of wealth and have not worked for it.

I wouldn't say lots. And so?

Datsun1500 wrote:

PHeller wrote: In reply to Rusnak_322: In the 70's you could still do that. That was still back before the "great degree debate" that now permeates our hiring climate.

I did it in the 90's with no degree. I know others that are doing it now. There are many wealthy people that were regular people tired of being poor and did something about it. Others make excuses.

Thank you, I did it in the last 7 years

RX Reven' wrote: Anyway, there’s no point in getting worked up over this, I can assure everyone that nothing will change. You’re just being placated with hope; again.

Oh things will definitely change within the next decade, the only question is how. There are multiple parameters in the world's economy that are each on an unsustainable trajectory that will lead to irrecoverable catastrophic failure. If not corrected, no amount of whistling and looking the other way can avoid the inevitable.

BIG change of some kind is coming.

In reply to GameboyRMH:

Which ones? What are the options for correction that you allude to?

The biggest ones are unemployment, wealth concentration and the requirement for infinite exponential growth in a finite world. National debts are also worth a mention. There are multiple options for correction (and some for "correction"), I have my favorites but I'd rather not derail the thread too much (and have most of you think I'm window-licking crazy).

Here are things I would do to make corrections to some of the issues I see in our society that can be achieved without blaming or really penalizing either the haves or the have-nots. Yes, these would cost public tax money, but would ultimately pay a significant return on investment by lowering major costs down the road (say 10-20 years):

1: Primary Education
More money into good primary education. If there is one thing that helps people better themselves later in life, it's education. Make pre-K schooling mandatory. Studies have shown huge improvements in the outlook of future life for kids who go to preschool.

Along with this, would be real, universal sex education from junior high on. Get the moral religious activists out of dictating sex-ed policy. "Abstinence only education" is b.s. that does not work. Teach people how to properly use birth control, then provide it for them.

2: Publicly funded higher/vocation training
Don't make people have a difficult choice between a subsistence paycheck and getting training that will lead to good paying employment. Yes, I know, it can be done. That doesn't mean it will be done if it is painful. Remove that pain. Pay people a stipend to attend approved 2-year vocational training.

3: European/Canadian style healthcare
We've already decided everyone in this country deserves access to health care. Now let's act like we have. Give people access to primary care rather than waiting until they have an emergency. Shift the burden of paying for health care off of employers. This will be really good for small businesses and entrepreneurs. Paying for health care is disproportionately harder for smaller companies. If they are relieved of that burden, it becomes much easier to operate a business and attract skilled workers. You also remove the issue of companies like Walmart keeping low-wage employees at part time to avoid paying for their health coverage. Those low wage workers could have health care, and their company would be more likely to employ them full time. This would make their lives easier because they could work the same number of hours at fewer jobs.

Beer Barron I agree with you premises (particularly healthcare). I worry though about 3 things.

1. How our inept government could be expected to successfully administer these things.

2. How our voting public with ever get past the partisanship that has been marketed so well to us creating such a divided electorate that simply votes for alternating sides of the same coin thinking their guys will fix the problems their guys where implicit in creating.

3. Who/how to pay for the necessary increase in government income required to pay for the programs you've suggested and maintain the commitments made by past governments (social security and debt)

Toyman01 wrote:

PHeller wrote: My issues are with the people out there who haven't worked a day in years and making more in interest off their wealth than any of us will in a year.

I know a guy like that. Spends most of the year tooling around on his yacht. Lives in a 8000 square foot house on 400 acres of water front property and pretty much does what he wants when he wants and how he wants. He hasn't worked in 15 years and probably netted 5 times what I did last year, which isn't chump change. He's my father. He grew up on a rural farm in SC in a run down house with no running water, other than the pitcher pump at the kitchen sink. His mother cooked on a wood stove. No heat other than fire places. He slopped pigs and split wood every morning before school and every evening before bed. His dad sacrificed to send him and his siblings to college. Dirt poor described him to a T. He worked his ass off, building a company from scratch. All based on an idea and blood, sweat, and tears. 50 years he put into that company before it was sold. He moved back to that same farm house, on that same farm, and fixed it up for his retirement. Now you want to punish him because he is successful and smarter than the average idiot. How about FO. Try spending a little less time worrying about what other people have. Wealth isn't a finite resource. Just because someone else has more, doesn't mean you won't get any. I'm done here. The socialists will still be socialist and the conservatives will still be conservative when all is said and done.

The only problem with your father is that it's quite likley that he pays only 15% tax on his income, whereas working people pay between 20-36%.

It would be nice if that were even. Why does your father get a tax break for being rich? IMHO, that's a problem.

Put it in a different way- Say Alan Mullaly makes the same money your father does, just as an example. But since he worked for his, he gets to pay 39% income tax on his salary. Whereas your dad can easily only pay 15%, so if the pay was $20M, Mullaly takes home $12.2M whereas your dad takes home $17M. How is that fair? You work hard running a company, employing many millions of hard working tax paying employees, producing a product that millions buy, really driving the economy and have to pay more taxes??

I don't get that.

Xceler8x wrote: I'd say the discussion isn't so much about being poor or indebt. The discussion is more along the lines of equity in progress. At this point the very wealthy to the wealthiest are consuming all the income growth. That means with inflation taken into account that on a long enough timeline all but the wealthiest end up poor. That is not good for our country. All citizens should benefit from increased productivity as that is what creates a healthy economy for the rich, poor, and middle class. All this talk of being debt free and making sound financial decisions doesn't account for how the majority of citizens are being left out of any financial growth. No one wants a handout. A good worker does deserve a raise just like the CEO and the stock investor has enjoyed.

Don't forget your original argument- that the financial divide is actually reducing the number of consumers or at least reducing the amount of money that people can use for consumption of stuff. And that slows the economy.

Beer Baron wrote: Here are things I would do to make corrections to some of the issues I see in our society that can be achieved without blaming or really penalizing either the haves or the have-nots. Yes, these would cost public tax money, but would ultimately pay a significant return on investment by lowering major costs down the road (say 10-20 years): 1: Primary Education More money into good primary education. If there is one thing that helps people better themselves later in life, it's education. Make pre-K schooling mandatory. Studies have shown huge improvements in the outlook of future life for kids who go to preschool. Along with this, would be real, universal sex education from junior high on. Get the moral religious activists out of dictating sex-ed policy. "Abstinence only education" is b.s. that does not work. Teach people how to properly use birth control, then provide it for them. 2: Publicly funded higher/vocation training Don't make people have a difficult choice between a subsistence paycheck and getting training that will lead to good paying employment. Yes, I know, it *can* be done. That doesn't mean it *will* be done if it is painful. Remove that pain. Pay people a stipend to attend approved 2-year vocational training.

These. I agree with. Our government spends plenty of money on IMHO wasteful things (I won't get into what) but our school systems are falling so far behind the rest of the world eventually that will bite us and this is one thing we as a country really should put our money towards. Sure there are successful people who did a lot without an education but I am willing to bet most people who are truly successful have an education including secondary education of some kind. Whether it is a company or a country, it is important to look at long term investments and your people are what will make you successful or not.

two things our government should fund.. Education and Healthcare. If you have an education and are healthy, you can do anything.

And I do with that Vocational Training was not so looked down upon in this country. We all can't be white collar workers

Some rambling thoughts:

1: That European 6 weeks of vacation thing? Yeah, I want that. I have considered going into teaching on and off for the last 8 years (I'm 24). The last time that I seriously considered it, the idea was started [again] by the idea of 3-12 weeks of vacation built in.

2: Compared to inflation, I'm making more than my Dad was when he started out. He is now on the upper end of middle class. He could probably retire today, and could definitely retire if he moved one town over.

3: My dad didn't pay for cable tv until he was 53. He also didn't have to pay for a cell phone. I don't have cable tv (I'm saving $80 a month), and I don't have a smart phone (I'm saving $30 a month). Between these two, invested for 30 years at 7%, I have saved $140,334. That is then an extra $5,613 a year for the rest of my life using the 4% withdrawal rule. These are luxuries, and I'll get them when I can afford a luxurious lifestyle--when I retire. (Figures drop to $130,979 and $5,239 when you take out Netflix).

3: Student loans are killing folks. Simple. I was lucky, I worked hard and payed for 75% of my own school and my parents picked up the rest. My friends are paying $300-600 a month on their student loans for 20 years. If invested, that would have been $150k to $300k.

4: Using napkin math, by my calculations it is easily possible to retire at 55, paying $600,000 for college for 2 kids (@$100k a year for 6 years), and making only $75,000 a year for the entire career. The income would go down in retirement to $60,000. By age 59, the income would $80,000, and it would go up every year. By age 64, you're over $100k, and if you died at age 90, you would leave behind an estate worth over $10,000,000. Obviously, this is not that realistic (in either direction) for quite a few reasons--see some notes below

• It requires living on 50% of your income (but hey, folks support a family on 35k without too much issue)
• I am using these calculations with a 28% tax rate. It is not that much in actuality (for a couple), but I am playing it safe.
• I am assuming a 7% return on investment
• After retirement at age 55, it assumes a 5% return on investment, and a 15% contribution to the nest egg.
• I am not taking inflation into account
• I am also not factoring in any salary increases, any pension, or social security.
• I am not factoring the cost of kids EXCEPT for college
• This is assuming paying $600,000 for college total for 2 kids. Will it be that high? Who knows!?!?

5: I live a relatively middle class life right now. I need nothing, have more than I need, and really all I want is more space and a Corvette. My income, a lot of folks would think is not a middle class income (most folks here would though). Why not? It affords me a pretty great life, IMHO. It just amazes me that people can't make due with what they have.

Sorry, that was rambling and without much point, except that maybe if some (not all) folks actually put pencil to paper to figure out where they are spending money, and how they could save more, then they could be wealthy by the time they retire.

PHeller wrote:

Toyman01 wrote:

PHeller wrote: My issues are with the people out there who haven't worked a day in years and making more in interest off their wealth than any of us will in a year.

I know a guy like that. He hasn't worked in 15 years and probably netted 5 times what I did last year, which isn't chump change. He's my father.

I wouldn't consider him the target of my animosity. He at least worked for his retirement. There are people, lots of people in this country that inherit incredible amounts of wealth and have not worked for it.

So your answer is that when a wealthy person dies, you take all his money and give it to other people who haven't worked for it either?

College debt is a choice pure and simple. It is killing people just as much as cable bills, cell phones, designer clothes, car loans and Mcmansions.

If you chose higher education you can attend an instate school for ~20k/year +living expenses. Have a roommate and work during school and you to can graduate with minimal if any debt. I know that is hard and you don't get to spend 4 years playing videogames, binge drinking, and trying to score with LAS students but instead have to manage your time, work, and be frugal.

Mtn you were not lucky to graduate with no debt you understood your situation and made good choices to give yourself the best chance of success.

spitfirebill wrote:

PHeller wrote:

Toyman01 wrote:

PHeller wrote: My issues are with the people out there who haven't worked a day in years and making more in interest off their wealth than any of us will in a year.

I know a guy like that. He hasn't worked in 15 years and probably netted 5 times what I did last year, which isn't chump change. He's my father.

I wouldn't consider him the target of my animosity. He at least worked for his retirement. There are people, lots of people in this country that inherit incredible amounts of wealth and have not worked for it.

So your answer is that when a wealthy person dies, you take all his money and give it to other people who haven't worked for it either?

Keeping in mind it is already taxed at a pretty high rate--if the estate is $1,000,000, $345,800 goes to the government, and 40% of every dollar over that one mil. So if my mom has some inherited land that is valued at $1 mil and nothing else, and I inherit it, I have to pay the government $345,800--even if it requires the sale of the land.

EDIT: This is wrong. Nevermind.

nocones wrote: Mtn you were not lucky to graduate with no debt you understood your situation and made good choices to give yourself the best chance of success.

I was lucky my parents were able and willing to pay what I couldn't, and I was lucky to have a job that I could make as much as I did. And I was lucky that I had been educated by my parents on what good choices were, and what my situation was.

But yes, you have a good point.