The New Rich

[Midpack]

Quote:

Originally Posted by Lsbcal Sometimes I wonder ... why we like to rank ourselves in the herd? Why does it matter so much?

Not everyone does by any means - based on The Millionaire Next Door among other evidence. However, it does seem to have become more common over my lifetime (associates with materialism?).

I'd guess those who do worry about "rankings" are certainly more vocal/visible that those who don't - so the phenomena seems more common than it really is.

And % of "rich" and wage inequality aren't exactly one in the same IMO. But that's another thread...

[daylatedollarshort]

If you want to feel wealthy on a global scale, check out where you stand in terms of wealth and income -

Global Rich List

For grins just enter your household SS income alone and see where that gets you, which explains the popularity of retiring outside the U.S.

Or compared to just OECD countries -

OECD Better Life Index

Average household disposable income is 23K and net worth $40.5K.

One thing we have realized is middle class has a different meaning in the U.S. and many countries in the E.U. Our relatives there who would consider themselves middle class have in general much smaller houses, cars and appliances.

[ERD50]

Quote:

Originally Posted by Lsbcal Sometimes I wonder ... why we like to rank ourselves in the herd? Why does it matter so much?

Do we? Does it? Or is it just a discussion topic, fueled by articles like this?

In a similar vein, it seems that 'everyone' has to put a label on music types. I don't care what you call it, I think Duke said "There are only two kinds of music, good music and the other kind" (or was that Country and Western?)

But that doesn't stop people from discussing it.

-ERD50

[Hamlet]

This reminds me of the intro to Bogle's book--

"At a party given by a billionaire on Shelter Island, Kurt Vonnegut informs his pal, Joseph Heller, that their host, a hedge fund manager, had made more money in a single day than Heller had earned from his wildly popular novel Catch 22 over its whole history. Heller responds, "Yes, but I have something he will never have . . . Enough.."

- From Introduction, Enough, by John C. Bogle.

Quote:

Originally Posted by W2R And especially, why we like to rank ourselves in terms of dollars income! I consider myself to be rich, in a sense, but my idea of what it takes to be rich has almost nothing to do with income. Having oceans of free time, more than the bare necessities, and feeling completely content with every aspect of life is where it's at IMO. I have that, and let the Donald Trumps of the world eat their hearts out.

[2soon2tell]

W2R,

Well said. Being rich is a state of mind that has little to do with annual income. Maybe we need a satisfaction index rather than an income scale to compare ourselves to others.

[Lsbcal]

Quote:

Originally Posted by W2R And especially, why we like to rank ourselves in terms of dollars income! I consider myself to be rich, in a sense, but my idea of what it takes to be rich has almost nothing to do with income. Having oceans of free time, more than the bare necessities, and feeling completely content with every aspect of life is where it's at IMO. I have that, and let the Donald Trumps of the world eat their hearts out.

I know I have a complicated relationship with my money. As I get older I find the ranking is less important but the "I" in FIRE is the most important to me. Of course, the $'s really do help to give me a good feeling of independence. And let's not forget about the security aspect of having enough money. It can be a cold world out there.

Then there are the "Whee! ..." moments.

[Birchwood]

250K compared to 60K is a lot of disparity.
250K vs 200K vs 150K, there is not much difference, and who has more wealth depends on how any of them save and invest.

[marko]

I find it interesting that the article refers to these people as "barriers" to income inequality as if these are somehow bad people.

What interests me even more is how the phrase "income inequality" has come into the lexicon over only the past few months. Another boogeyman?

[Danmar]

Income inequality is getting bigger in the US over time, I think. Certainly the amount of money I made in my career was much higher than my predecessor in the same job. CEO's make way more today in the US than they do anywhere else or in the past. Maybe globalization? I don't know. As a beneficiary of the trend who achieved FI sooner and bigger than I ever thought, I say the craziness has to stop now that I have "made it".

[Midpack]

Quote:

Originally Posted by marko What interests me even more is how the phrase "income inequality" has come into the lexicon over only the past few months. Another boogeyman?

It's not a new phrase, see the 1920's, where it played out like this.
Of course it's not that simple and I don't expect it to play out in the same way at all, but I also wouldn't assume we'll maintain the current status quo either...

[imoldernu]

Quote:

Originally Posted by Midpack It's not a new phrase, see the 1920's, where it played out like this. Of course it's not that simple and I don't expect it to play out in the same way at all, but I also wouldn't assume we'll maintain the current status quo either...

Thanks for the charts... It brings into focus (for me) some of the reasons why my generation may have a different view of the retirement planning process. One of the obvious disparities was that the tax rates...up to 90+% in the upper brackets, kept the ratio of pay for the CEO's and top level management (to the average pay) in single digits, rather than the "500 times" that we hear about today.
Not to make a judgement here, just an observation. for most of my career, the pay for top management (large corporation) was about 5 or 6 times my own pay... not hundreds of times.

[haha]

Quote:

Originally Posted by 2soon2tell W2R, Well said. Being rich is a state of mind that has little to do with annual income. Maybe we need a satisfaction index rather than an income scale to compare ourselves to others.

This post is priceless!

[samclem]

Most people reading this post is rich.
-- Wanna really sock it to those evil 1%ers? You are one if your income was $34,000 last year (Source)
-- The global median annual income per person is $1,225 (Source: UK Daily Mail)
-- The worldwide average annual income per person is approximately $10,000. (Source: BBC)

And that's looking at today, when the world is wealthier than it has ever been. If we look back across even recent history, the "richness" we all have is even more apparent. Royalty did not live as long or enjoy the products and services that a person living below the poverty line has available in the US today. A king could not save his child from the plague, have an ice cream in July, or have a home that was warm in all corners in the winter.

And, viewed from a global or historical level, the US has effectively zero poverty.

It is a positive sign that we keep raising the bar, we should not be content with the status quo. But neither should we lose sight of the world as it is and as it has been in the past. Our progress has been absolutely tremendous.

[Midpack]

Quote:

Originally Posted by imoldernu Thanks for the charts... It brings into focus (for me) some of the reasons why my generation may have a different view of the retirement planning process. One of the obvious disparities was that the tax rates...up to 90+% in the upper brackets, kept the ratio of pay for the CEO's and top level management (to the average pay) in single digits, rather than the "500 times" that we hear about today. Not to make a judgement here, just an observation. for most of my career, the pay for top management (large corporation) was about 5 or 6 times my own pay... not hundreds of times.

You might think so, but again it's not that simple. Top marginal rates assuage the masses, but almost no one pays them, then or now...

[Theduckguru]

Stanley Druckenmiller: An Unsustainable Financial Situation | Video | RealClearPolitics

mod edit

Quote:

Originally Posted by Theduckguru The link contains a video explaining the basic economics of funding retiree entitlements and the effect on future workers. Enjoy.

[samclem]

Quote:

Originally Posted by imoldernu One of the obvious disparities was that the tax rates...up to 90+% in the upper brackets, kept the ratio of pay for the CEO's and top level management (to the average pay) in single digits, rather than the "500 times" that we hear about today. .

Not so much, really. The early higher marginal tax rates are not very meaningful because almost no one paid them. There were many ways to shield income from taxes, and you can bet they were heavily used. With the reductions in the top tax rate came reforms that closed these loopholes.

Here's the picture since 1980:


Note that this is FIT, it doesn't include payroll taxes, sales taxes, etc.

Edited to add: Oops, I cross-posted with Midpack

[aim-high]

Speaking of taxes . . .

The bottom 40% received money (paid negative taxes.) It's a good thing they have a low rate. ;-)

http://cnsnews.com/news/article/tere...-average-18950

[MichaelB]

Quote:

Originally Posted by Theduckguru Stanley Druckenmiller: An Unsustainable Financial Situation | Video | RealClearPolitics

Please, a short snippet description of or summary from the linked site would be helpful to members.

[Theduckguru]

Quote:

Originally Posted by MichaelB Please, a short snippet description of or summary from the linked site would be helpful to members.

I really wanted to submit this without comment and let the members have some discussion about it. Basically, it could be titled the old making out at expense of the young.

So please watch and weigh in.

[MichaelB]

Quote:

Originally Posted by Theduckguru I really wanted to submit this without comment and let the members have some discussion about it. Basically, it could be titled the old making out at expense of the young. So please watch and weigh in.

It is a courtesy to members, that way they need not click on an unknown link and go to another site. It is also part of our posting guidelines, seen here.

Quote:

Please do not post “naked” links, defined as links posted without explanation, interpretation or context.