6 ms·

Yes, we all have bills that need to be paid. But many people (especially those who aren't making great money) continually and stupidly buy stuff they don't need

by kdamken 11y ago

Yes, we all have bills that need to be paid. But many people (especially those who aren't making great money) continually and stupidly buy stuff they don't need, not even realizing they can't afford it. You make 35k a year? Then you really shouldn't be buying a brand new iPhone with a large data plan, or a new car with monthly payments that eat away at your already limited income. Or maybe instead of going out for lunch everyday for work, you should pack something. People love to complain about not having money without taking any responsibility for their spending habits. Also, if you've read more of his stuff you'd know he worked for a decade before he retired, saving up a significant portion of his income by staying frugal. He didn't just magically have two houses to rent out. I'm not sure where the insane hatred towards renting out a property is coming from. A lot of the time the landlord doesn't actually make much money off of it. Even if the rent covers their mortgage payment (which it often doesn't), if something serious breaks or needs to be repaired, they're on the hook for that and may end up losing money on it that year.

ghaff 11y ago
I'm really not sure how this thread turned into a honeypot for "Kill the landlord" types. Especially given how things turned out the last time public policy decided to make it relatively easy to get mortgages even for people who were a bit shaky on being able to make regular payments and cover upkeep.
- branchless 11y ago
  Again this is totally the wrong end of the stick. We have loose credit, that's what rentiers love. Credit is a claim on your labour and they can issue it with zero effort. Sub-prime hurt the poor, since 2008 with QE we've seen the gap widen as more banker credit is created and flows into land prices.
lmm 11y ago
You're right that I don't know MMMs specifics. But I think at this stage I'm justified in being skeptical of anyone who claims to be self-made - far too many people gloss over their inherited advantages. It's possible he's one of the exceptions. No doubt much of his advice is correct, and all of it well-intended. But one has to be careful about advice from people in very different circumstances. They can get it disasterously wrong. Landlords absolutely do make large, unearned amounts of money. Think about it for a minute: MMM is a finance expert, why would he put his money there if it didn't generate the best return. The idle rich (rentiers) in general are hated, but landlords in particular make additional money through sharp practices. The profession inherently involves (legal) tax avoidance, because a landlord makes a lot of their money through appreciation of their properties which is not taxed, and their rental income is usually taxed at a lower rate than ordinary earnings. Finally, while it's unfair to pin this on MMM, many landlords take advantage (wittingly or not) of their tenants' ignorance of their rights. Finally, when a rich person says "it's easy to make money", it's a very small step from there to "the reason I have more money than you is that I'm smarter/more self-controlled/etc." Which is often a lie; often inherited privilege has a much bigger impact than personal qualities.
- JoeAltmaier 11y ago
  We're all embedded in an economic infrastructure, that's unavoidable. Its not black/white. Everything from the internet to traffic lights helps speed commerce, and all of us inherit benefits from society. So circumstances are everything, that part rings true. We're born into a good bit of that, and trained into the rest. From accent, to attitudes about race and religion we spend our lives accumulating advantages and albatrosses.
- adebtlawyer 11y ago
  > their rental income is usually taxed at a lower rate than ordinary earnings. Not in the US. Rental income is income. I think you may be referring to deductions, which exist, but are not nearly as advantageous as taxing rental income at a lower rate outright.

by kdamken 11y ago

ghaff 11y ago

I'm really not sure how this thread turned into a honeypot for "Kill the landlord" types. Especially given how things turned out the last time public policy decided to make it relatively easy to get mortgages even for people who were a bit shaky on being able to make regular payments and cover upkeep.

branchless 11y ago
Again this is totally the wrong end of the stick. We have loose credit, that's what rentiers love. Credit is a claim on your labour and they can issue it with zero effort. Sub-prime hurt the poor, since 2008 with QE we've seen the gap widen as more banker credit is created and flows into land prices.

lmm 11y ago

You're right that I don't know MMMs specifics. But I think at this stage I'm justified in being skeptical of anyone who claims to be self-made - far too many people gloss over their inherited advantages. It's possible he's one of the exceptions. No doubt much of his advice is correct, and all of it well-intended. But one has to be careful about advice from people in very different circumstances. They can get it disasterously wrong. Landlords absolutely do make large, unearned amounts of money. Think about it for a minute: MMM is a finance expert, why would he put his money there if it didn't generate the best return. The idle rich (rentiers) in general are hated, but landlords in particular make additional money through sharp practices. The profession inherently involves (legal) tax avoidance, because a landlord makes a lot of their money through appreciation of their properties which is not taxed, and their rental income is usually taxed at a lower rate than ordinary earnings. Finally, while it's unfair to pin this on MMM, many landlords take advantage (wittingly or not) of their tenants' ignorance of their rights. Finally, when a rich person says "it's easy to make money", it's a very small step from there to "the reason I have more money than you is that I'm smarter/more self-controlled/etc." Which is often a lie; often inherited privilege has a much bigger impact than personal qualities.

JoeAltmaier 11y ago
We're all embedded in an economic infrastructure, that's unavoidable. Its not black/white. Everything from the internet to traffic lights helps speed commerce, and all of us inherit benefits from society. So circumstances are everything, that part rings true. We're born into a good bit of that, and trained into the rest. From accent, to attitudes about race and religion we spend our lives accumulating advantages and albatrosses.
adebtlawyer 11y ago
> their rental income is usually taxed at a lower rate than ordinary earnings. Not in the US. Rental income is income. I think you may be referring to deductions, which exist, but are not nearly as advantageous as taxing rental income at a lower rate outright.