4 ms·

This seems to be arguing that since sudden windfalls don't make people better off, money is not the deciding factor in various markers of high quality outcomes

by SamBam 10y ago

This seems to be arguing that since sudden windfalls don't make people better off, money is not the deciding factor in various markers of high quality outcomes in life. Yet there is a huge difference between someone who was born to "wealth" and someone who won, our whose parents won, a lottery. And many of those differences specifically relate to safeguards that protect and grow a wealthy-person's wealth. Various differences between the "wealthy"and those who just happened to come upon a large windfall of money: * The wealthy usually have an (often inherited) network of financial advisors, people investing their money, and lawyers, all of whom stand between them and bad decisions * The wealthy are typically surrounded by a culture that has always been rich, so has always been able to afford universities and good health, and so can afford to value these highly * The wealthy are usually surrounded by other wealthy people, who are not usually expecting (justly or not) financial favors (e.g. a brother who needs medical debt paid off) * The psychological difference between growing up rich or working for a high salary, versus a sudden unexpected windfall our of the blue, must be immense. Clearly there are differences between lottery winners and those who are wealth by other means, so you can't take the former, see that their life outcomes don't improve, and conclude that money over all doesn't have an effect on these measures. Just that lottery money doesn't.

aab0 10y ago
I think you've badly misunderstood the paper and its results and are taking some sort of Occupy Wall Street mindset... The 'gradients' the paper is talking about are not exotic gradients which apply only to the general population vs the 1% of the 1% who get into an accident in their Lamborghini and call their dad in the Bahamas who deploys a crack team of white-shoe lawyers to ensure he never appears in court; it's talking about the health gradients you see when you compare the first decile of income nationally to the second decile, the second decile to the third, the fourth decile to the fifth, and so on. (AFAIK, the Swedish administrative data doesn't even give access to the 1% as they topcode or withhold access to their data.) You see health differences no matter who you define as 'richer' or 'poorer', throughout the general population, in ordinary people. Yes, in the normal people you pass on the street, who have no 'financial advisors' other than their uncle who has some hot stock tips (although I suppose he would count as 'inherited'), who have no 'people investing their money' unless they are unusually prudent and have some Vanguard savings, who are not 'able to afford universities and good health', and so on. The person making $5k a year is less healthy than the person making $20k a year is less healthy than the person making $50k a year, and so on. Where are the monocles and secret cultural rituals there? None of these people 'grew up rich', so you should still see benefits when the $20k person wins a few thousand bucks in the lottery, if the causal effect here is through the money. But you don't.
nugget 10y ago
You think there's a wizard behind the curtain but there isn't. Some counterpoints from my own experiences as a once broke, now financially successful entrepreneur: << The wealthy usually have an (often inherited) network of financial advisors, people investing their money, and lawyers, all of whom stand between them and bad decisions >> More often than not these advisors and lawyers are experts at extracting outrageous annual fees in return for mediocre advice. All you need is a Fidelity account and a few index funds. If you read this book (https://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Larimore/dp/0470067365 https://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Lar...) then you will be a more successful investor than the majority of wealthy white collar professionals. << The wealthy are typically surrounded by a culture that has always been rich, so has always been able to afford universities and good health, and so can afford to value these highly >> Thanks to the point above, wealth (with rare exceptions) doesn't survive more than one or two generations, which would present some headwind to this second argument. I spent my childhood split between Manhattan and San Diego. Most of my friends from Manhattan are the descedants of Jews who emigated either immediately before or immediately after the holocaust, very few with any substantial assets. If by rich culture you mean a focus on education, ambition, and professional achievement, then yes, I agree with you. Most of my friends who lived in California had parents who moved there from the midwest in the 60s and 70s and struck it rich as the state was developing, and so much money was made over the next few decades that it didn't seem to matter how much you started with. << The wealthy are usually surrounded by other wealthy people, who are not usually expecting (justly or not) financial favors (e.g. a brother who needs medical debt paid off) >> A wealthy social circle can trap you into a lifestyle that is extremely expensive to maintain. Only my wealthy friends call and invite me on trips that cost $10k+ per person or to fundraising dinners at several thousand dollars a plate. My ''median income'' friends are ecstatic if I pick up a couple hundred dollar bar tab. Assuming you don't allow your family to blatantly take advantage of your wealth to fuel their unnecessary consuming spending, I actually think blue collar millionaires have it ''easier'' here. << The psychological difference between growing up rich or working for a high salary, versus a sudden unexpected windfall our of the blue, must be immense. >> Here I agree with you 100%. Easy come, easy go. It's hard to appreciate what you didn't work really hard for. I see this attitude among lottery winners and heirs alike.

by SamBam 10y ago

aab0 10y ago

I think you've badly misunderstood the paper and its results and are taking some sort of Occupy Wall Street mindset... The 'gradients' the paper is talking about are not exotic gradients which apply only to the general population vs the 1% of the 1% who get into an accident in their Lamborghini and call their dad in the Bahamas who deploys a crack team of white-shoe lawyers to ensure he never appears in court; it's talking about the health gradients you see when you compare the first decile of income nationally to the second decile, the second decile to the third, the fourth decile to the fifth, and so on. (AFAIK, the Swedish administrative data doesn't even give access to the 1% as they topcode or withhold access to their data.) You see health differences no matter who you define as 'richer' or 'poorer', throughout the general population, in ordinary people. Yes, in the normal people you pass on the street, who have no 'financial advisors' other than their uncle who has some hot stock tips (although I suppose he would count as 'inherited'), who have no 'people investing their money' unless they are unusually prudent and have some Vanguard savings, who are not 'able to afford universities and good health', and so on. The person making $5k a year is less healthy than the person making $20k a year is less healthy than the person making $50k a year, and so on. Where are the monocles and secret cultural rituals there? None of these people 'grew up rich', so you should still see benefits when the $20k person wins a few thousand bucks in the lottery, if the causal effect here is through the money. But you don't.

nugget 10y ago

You think there's a wizard behind the curtain but there isn't. Some counterpoints from my own experiences as a once broke, now financially successful entrepreneur: << The wealthy usually have an (often inherited) network of financial advisors, people investing their money, and lawyers, all of whom stand between them and bad decisions >> More often than not these advisors and lawyers are experts at extracting outrageous annual fees in return for mediocre advice. All you need is a Fidelity account and a few index funds. If you read this book (https://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Larimore/dp/0470067365 https://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Lar...) then you will be a more successful investor than the majority of wealthy white collar professionals. << The wealthy are typically surrounded by a culture that has always been rich, so has always been able to afford universities and good health, and so can afford to value these highly >> Thanks to the point above, wealth (with rare exceptions) doesn't survive more than one or two generations, which would present some headwind to this second argument. I spent my childhood split between Manhattan and San Diego. Most of my friends from Manhattan are the descedants of Jews who emigated either immediately before or immediately after the holocaust, very few with any substantial assets. If by rich culture you mean a focus on education, ambition, and professional achievement, then yes, I agree with you. Most of my friends who lived in California had parents who moved there from the midwest in the 60s and 70s and struck it rich as the state was developing, and so much money was made over the next few decades that it didn't seem to matter how much you started with. << The wealthy are usually surrounded by other wealthy people, who are not usually expecting (justly or not) financial favors (e.g. a brother who needs medical debt paid off) >> A wealthy social circle can trap you into a lifestyle that is extremely expensive to maintain. Only my wealthy friends call and invite me on trips that cost $10k+ per person or to fundraising dinners at several thousand dollars a plate. My ''median income'' friends are ecstatic if I pick up a couple hundred dollar bar tab. Assuming you don't allow your family to blatantly take advantage of your wealth to fuel their unnecessary consuming spending, I actually think blue collar millionaires have it ''easier'' here. << The psychological difference between growing up rich or working for a high salary, versus a sudden unexpected windfall our of the blue, must be immense. >> Here I agree with you 100%. Easy come, easy go. It's hard to appreciate what you didn't work really hard for. I see this attitude among lottery winners and heirs alike.