Investment Manager Explains Why 99.5% Of Americans Can Never Win

[orogenicman]

An Investment Manager's View - Business Insider

"In my view, the American dream of striking it rich is merely a well-marketed fantasy that keeps the bottom 99.5% hoping for better and prevents social and political instability," the manager wrote in an email to Professor G. William Domhoff of the University of California at Santa Cruz.

A lot more at the link.

 

[SteadyMercury]

Seems to be framing the word "win" into a really strange angle where you win only if you achieve elite rich person status.

The bar for "win" is set a heck of a lot lower for me... financial goals like being debt free, not living paycheck to paycheck, having an income stream that allows you to do things you enjoy, saving enough to retire early, etc. are the type of things I'd put on a checklist for winning.

Being in a certain arbitrary percentage of top money earners or wealth accumulators is nice, but I certainly don't use that classification to define winners and losers.

 

[iamwhatiseem]

Seems to be framing the word "win" into a really strange angle where you win only if you achieve elite rich person status.

The bar for "win" is set a heck of a lot lower for me... financial goals like being debt free, not living paycheck to paycheck, having an income stream that allows you to do things you enjoy, saving enough to retire early, etc. are the type of things I'd put on a checklist for winning.

Being in a certain arbitrary percentage of top money earners or wealth accumulators is nice, but I certainly don't use that classification to define winners and losers.

Well said. And I couldn't agree more.
I am not wealthy in the sense that I am not a millionaire.
However, my wife and I have enough cash flow to never have to worry about bills, can take care of those unannounced emergencies in life like a water heater busting - air conditioner quite etc. etc. And then we have enough money to do most of the things we enjoy including financing my craft beer hobby.
As well as be able to invest and save for retirement.
I have turned job offers down from recruiters to run businesses that would pay well into six figures, the last one was in San Antonio. But that kind of career choice requires you to put your job before your life....I am not willing to do that.

 

[Spiderman]

It's the classic false dichotomy.

You are either poor or vastly wealthy all the gradations in between don't matter to those who constantly whine about "the rich"

I do not aspire to the lifestyle mentioned in the article. I don't want a yacht or an opulent home or a new Lambo in the garage.

Here's a some simple math for you people who say you can't achieve financial freedom.

If you save 100 a week for 45 years with an average return of 7% you'll retire with 1.5 million dollars.

1.5 million dollars safely invested at a 5% return could pay you 5000 a month and in 30 years you'd have a million dollars more than you started with.

That's my definition of winning.

But people will come up with every excuse in the book why they can't save that money.

 

[orogenicman]

It's the classic false dichotomy.

You are either poor or vastly wealthy all the gradations in between don't matter to those who constantly whine about "the rich"

I do not aspire to the lifestyle mentioned in the article. I don't want a yacht or an opulent home or a new Lambo in the garage.

Here's a some simple math for you people who say you can't achieve financial freedom.

If you save 100 a week for 45 years with an average return of 7% you'll retire with 1.5 million dollars.

1.5 million dollars safely invested at a 5% return could pay you 5000 a month and in 30 years you'd have a million dollars more than you started with.

That's my definition of winning.

But people will come up with every excuse in the book why they can't save that money.

Oh, you mean like the fact that millions simply don't have the money to spare because despite working their arses off, they don't make enough money to think about saving it?

 

[expat_panama]

A lot more at the link.

Right, here's an example:

--and the writer burst into tears saying "Median household income has fallen around 7% since the recession, despite the stock market roaring back to new highs." (Read more: Charts On US Inequality - Business Insider Maybe we need to dry our tears and really look at this; here's the rest of the story...

Looks like incomes were growing just fine until 2009. Maybe the problem really is gov't economic policy:

 

[SteadyMercury]

Oh, you mean like the fact that millions simply don't have the money to spare because despite working their arses off, they don't make enough money to think about saving it?

I'm not sure where you are going with this.

I don't think anyone has suggested there aren't people who don't make enough to save despite working hard. I believe the sentiment was the author of the article is defining "winning" as being an elite rich, which implies everyone who isn't has loss, which isn't the case. There can be winners who aren't top 0.5% in wealth and others working hard for not enough, the existence of the latter doesn't disprove the existence of the former.

 

[expat_panama]

...millions simply don't have the money to spare because despite working their arses off, they don't make enough money to think about saving it?

I'm not sure where you are going with this...

Maybe I can help.

The article points out that since the recession real median incomes have fallen even while stock prices have grown. One possibility is that the rich have stolen from the poor, but if we look at more of this trend--

-- we see that the theft did not occur until 2009, and that was the year that power was taken from the rich and seized by the community activists.

 

[Spiderman]

It's the classic false dichotomy.

You are either poor or vastly wealthy all the gradations in between don't matter to those who constantly whine about "the rich"

I do not aspire to the lifestyle mentioned in the article. I don't want a yacht or an opulent home or a new Lambo in the garage.

Here's a some simple math for you people who say you can't achieve financial freedom.

If you save 100 a week for 45 years with an average return of 7% you'll retire with 1.5 million dollars.

1.5 million dollars safely invested at a 5% return could pay you 5000 a month and in 30 years you'd have a million dollars more than you started with.

That's my definition of winning.

But people will come up with every excuse in the book why they can't save that money.

Oh, you mean like the fact that millions simply don't have the money to spare because despite working their arses off, they don't make enough money to think about saving it?

And it's impossible for them to make a little extra money right?

That's your problem. You'll look for any excuse why your failures are someone else's fault.

$100 extra dollars a week can be earned by anyone if they want to. They just don't want to.

 

[SteadyMercury]

Maybe I can help.

You didn't.

I'm interested in how it proves or disproves the thread title, that 99.5% of Americans can never win. I don't subscribe to the notion that unless you fall into a half a percent at the top you didn't win, thus lost. I thought that was clear from my posts, sorry.

 

[Widdekind]

so, simplistically stated, "nobody" works their way into wealth (1%); instead, wealth = capital gains = owning companies = build your own or be given (some of) one (as by working, as part of [non-cash] compensation)

it is very difficult to create a net worth in excess of $10M from income alone... Those with a higher net worth tend to acquire most of their net worth from capital gains, not income that has been saved and invested. Large capital gains tend to come when private businesses are acquired ... or when executives are paid directly by options or stock.

 

[Spiderman]

so, simplistically stated, "nobody" works their way into wealth (1%); instead, wealth = capital gains = owning companies = build your own or be given (some of) one (as by working, as part of [non-cash] compensation)

it is very difficult to create a net worth in excess of $10M from income alone... Those with a higher net worth tend to acquire most of their net worth from capital gains, not income that has been saved and invested. Large capital gains tend to come when private businesses are acquired ... or when executives are paid directly by options or stock.

Where is it written that the definition of wealthy is a $10 M net worth?

This article is skewed towards the whiners and others who want to say that "the rich" are holding them back.

If one has no debt a rather small portfolio will allow them more than enough income to live.

Stop using the words rich and wealthy and think in terms of financial independence where no matter what your net worth is that it can provide income enough to live comfortably and securely.

That number will be different for everyone but it's easy to figure it out.

 

[orogenicman]

It's the classic false dichotomy.

You are either poor or vastly wealthy all the gradations in between don't matter to those who constantly whine about "the rich"

I do not aspire to the lifestyle mentioned in the article. I don't want a yacht or an opulent home or a new Lambo in the garage.

Here's a some simple math for you people who say you can't achieve financial freedom.

If you save 100 a week for 45 years with an average return of 7% you'll retire with 1.5 million dollars.

1.5 million dollars safely invested at a 5% return could pay you 5000 a month and in 30 years you'd have a million dollars more than you started with.

That's my definition of winning.

But people will come up with every excuse in the book why they can't save that money.

Oh, you mean like the fact that millions simply don't have the money to spare because despite working their arses off, they don't make enough money to think about saving it?

And it's impossible for them to make a little extra money right?

That's your problem. You'll look for any excuse why your failures are someone else's fault.

$100 extra dollars a week can be earned by anyone if they want to. They just don't want to.

Right, so your solution for people who work their arses off with little to show for it is for them to work their arses off even more. Wow, what a brilliant idea, particularly for poor single working mothers with all the time in the world <sarcasm>.

 

[Spiderman]

Oh, you mean like the fact that millions simply don't have the money to spare because despite working their arses off, they don't make enough money to think about saving it?

And it's impossible for them to make a little extra money right?

That's your problem. You'll look for any excuse why your failures are someone else's fault.

$100 extra dollars a week can be earned by anyone if they want to. They just don't want to.

Right, so your solution for people who work their arses off with little to show for it is for them to work their arses off even more. Wow, what a brilliant idea, particularly for poor single working mothers with all the time in the world <sarcasm>.

I don't define one 40 hour a week job as working your ass off..

And even a single mother can find a way to make 100 bucks a week.

But you'll always come up with an excuse as to why you or they can't. After all if you actually did something to improve your position then you'd have nothing to complain about then what would you do?

 

[Sallow]

so, simplistically stated, "nobody" works their way into wealth (1%); instead, wealth = capital gains = owning companies = build your own or be given (some of) one (as by working, as part of [non-cash] compensation)

it is very difficult to create a net worth in excess of $10M from income alone... Those with a higher net worth tend to acquire most of their net worth from capital gains, not income that has been saved and invested. Large capital gains tend to come when private businesses are acquired ... or when executives are paid directly by options or stock.

Where is it written that the definition of wealthy is a $10 M net worth?

This article is skewed towards the whiners and others who want to say that "the rich" are holding them back.

If one has no debt a rather small portfolio will allow them more than enough income to live.

Stop using the words rich and wealthy and think in terms of financial independence where no matter what your net worth is that it can provide income enough to live comfortably and securely.

That number will be different for everyone but it's easy to figure it out.

Basically you are supposing that wealth and power in this country are two separate things. They are not.

Well before "Citizen's United", the wealthy were involved in crafting legislation designed for the sole purpose of keeping themselves wealthy.

The median income of corporate CEO's is in the 9 Million dollar range in this country while the median income of most people in the service industry is about 15 thousand dollars a year.

That's a big problem. And it's not sustainable.

 

[Sallow]

And it's impossible for them to make a little extra money right?

That's your problem. You'll look for any excuse why your failures are someone else's fault.

$100 extra dollars a week can be earned by anyone if they want to. They just don't want to.

Right, so your solution for people who work their arses off with little to show for it is for them to work their arses off even more. Wow, what a brilliant idea, particularly for poor single working mothers with all the time in the world <sarcasm>.

I don't define one 40 hour a week job as working your ass off..

And even a single mother can find a way to make 100 bucks a week.

But you'll always come up with an excuse as to why you or they can't. After all if you actually did something to improve your position then you'd have nothing to complain about then what would you do?

It depends on the Job.

When I was working as a mover..and humping refrigerators on my back up walkups...that was pretty killer.

 

[Spiderman]

Right, so your solution for people who work their arses off with little to show for it is for them to work their arses off even more. Wow, what a brilliant idea, particularly for poor single working mothers with all the time in the world <sarcasm>.

I don't define one 40 hour a week job as working your ass off..

And even a single mother can find a way to make 100 bucks a week.

But you'll always come up with an excuse as to why you or they can't. After all if you actually did something to improve your position then you'd have nothing to complain about then what would you do?

It depends on the Job.

When I was working as a mover..and humping refrigerators on my back up walkups...that was pretty killer.

you still could have worked a few hours a night at a part time job to save extra money if you wanted to couldn't you?

 

[ABikerSailor]

It's the classic false dichotomy.

You are either poor or vastly wealthy all the gradations in between don't matter to those who constantly whine about "the rich"

I do not aspire to the lifestyle mentioned in the article. I don't want a yacht or an opulent home or a new Lambo in the garage.

Here's a some simple math for you people who say you can't achieve financial freedom.

If you save 100 a week for 45 years with an average return of 7% you'll retire with 1.5 million dollars.

1.5 million dollars safely invested at a 5% return could pay you 5000 a month and in 30 years you'd have a million dollars more than you started with.

That's my definition of winning.

But people will come up with every excuse in the book why they can't save that money.

Oh, you mean like the fact that millions simply don't have the money to spare because despite working their arses off, they don't make enough money to think about saving it?

And it's impossible for them to make a little extra money right?

That's your problem. You'll look for any excuse why your failures are someone else's fault.

$100 extra dollars a week can be earned by anyone if they want to. They just don't want to.

Really? 100 extra dollars a week can be earned by anyone if they want to?

Tell that to an E-1 through E-5 person living on what the government pays them while they're in in the military.

Sorry, but an E-1 through E-4 doesn't have the required amount of money to do what you say, look up the pay charts for the military and tell me they have 400 bucks to invest. Most of them are living paycheck to paycheck unless they have second jobs (which have to be approved by their command) or rich families helping them out.

As a matter of fact, most E-5's don't have that kind of money to invest, because they're looking at taking care of their families.

Sorry, but you right wing idiots keep saying that everyone can do it, without looking at what we pay the military (which a lot of you right wing idiots say they support), even when it is mathematically impossible.

As an E-6, I made around 3,000 dollars per month, and still had a family to support on that. Can I invest 400 bucks (your 100 dollars per week) per month to do that and still have a decent place to live as well as food on the table and clothes on my families back?

 

[Sallow]

I don't define one 40 hour a week job as working your ass off..

And even a single mother can find a way to make 100 bucks a week.

But you'll always come up with an excuse as to why you or they can't. After all if you actually did something to improve your position then you'd have nothing to complain about then what would you do?

It depends on the Job.

When I was working as a mover..and humping refrigerators on my back up walkups...that was pretty killer.

you still could have worked a few hours a night at a part time job to save extra money if you wanted to couldn't you?

I'm doing fine now.

I have a job in IT in the financial industry. I own an apartment in New York city which I sublet and I live in a fancy big ass duplex in Brooklyn. That along with a pretty sweet 401K is helping me to secure financial security in the future. I will also have a pension coming in from my former job at the NYSE once I hit 65.

But unlike conservatives who want to live for me myself and I, I, personally love this country and her people.

And that means keeping it going after I am dead and buried.

The huge disparity thing is ruinous. Always has been..and always will be.

 

[Spiderman]

Oh, you mean like the fact that millions simply don't have the money to spare because despite working their arses off, they don't make enough money to think about saving it?

And it's impossible for them to make a little extra money right?

That's your problem. You'll look for any excuse why your failures are someone else's fault.

$100 extra dollars a week can be earned by anyone if they want to. They just don't want to.

Really? 100 extra dollars a week can be earned by anyone if they want to?

Tell that to an E-1 through E-5 person living on what the government pays them while they're in in the military.

Sorry, but an E-1 through E-4 doesn't have the required amount of money to do what you say, look up the pay charts for the military and tell me they have 400 bucks to invest. Most of them are living paycheck to paycheck unless they have second jobs (which have to be approved by their command) or rich families helping them out.

As a matter of fact, most E-5's don't have that kind of money to invest, because they're looking at taking care of their families.

Sorry, but you right wing idiots keep saying that everyone can do it, without looking at what we pay the military (which a lot of you right wing idiots say they support), even when it is mathematically impossible.

As an E-6, I made around 3,000 dollars per month, and still had a family to support on that. Can I invest 400 bucks (your 100 dollars per week) per month to do that and still have a decent place to live as well as food on the table and clothes on my families back?

So then have your wife earn the extra hundred dollars. I knew a couple who both worked had 2 kids and lived off of one salary of 40K and saved every dime of the second income. They both retired at 50.

Tell me what was your car payment, your cable bill, etc. I guarantee you that I could have found extra money for you to save.

It can be done people just don't want to do it.

You all can find a thousand reasons why you can't do something and not one that you can.

That's the problem.