4 ms·

Advice for the 'Poor Rich'

11 points by jedwhite 16y ago

Unseelie 16y ago
College students are an amazing representation of our culture of conspicuous consumption. People move off campus because (at my school) its much cheaper...and then eat out every night. Why? Because no one ever taught them that wealth isn't a function of your spending, its a function of retention. For that matter, so is learning...
- yalurker 16y ago
  I don't think eating out is really "conspicuous consumption" (unless maybe you're dealing with very-high end, trendy "see and be seen" destinations). What you've presented seems like a perfectly rational choice: by moving to a lower-rent apartment they have more money to allocate towards their food budget. If a $5 burrito saves me 30 minutes of cooking, that's a great trade for my time/cash budgeting.
  - petervandijck 16y ago
    My parents treated eating out as an event, to be had a few times a year, maximum. Of course they didn't have fast food, then. ps: Making a burrito takes 5 minutes with leftovers, not 30.
  - InclinedPlane 16y ago
    Eating out is definitely conspicuous consumption if done on a regular basis. Consider a perfectly ordinary example: a couple eats at a restaurant twice a week (call it at least $15 per person), they both have their starbucks coffee morning ritual (call it $4 per person per day), and one of them regularly eats out for lunch at work (call it $8 a day). These are all very low estimates, and they are not at all unusual examples. However, all of this money adds up. How much does it add up to you ask? Over 7,000 dollars a year. That's a decent used car, every year, or a new car every 2 years. An iPad every month. A laptop every 2 months. A trip for 2 to Hawaii (or the Bahamas) every season. Or buying one or two albums on iTunes or Amazon MP3 every single day, even weekends. If you had a coworker who spent $600 a month on consumer electronics you would definitely consider that conspicuous consumption.
rick888 16y ago
"According to the CBO, families in the top 20% pay average federal taxes of 25.1%. The figure in President Reagan's final year in office: 25.6%. " This doesn't include city, state, and any other number of taxes a person pays. Most people pay upwards of 40% in taxes. I feel like this was intentionally left out. "Mr. Henderson and his wife, an oncologist, make more than $250,000 a year, and apparently they're struggling to get by" Chicago has a very high tax rate and housing isn't cheap either. According to Wikipedia, the sales tax in Chicago is 9.75% (this has been reduced from over 10%). It's the highest in the country.
- akeefer 16y ago
  The point was less the absolute number and more the historical comparison; taxes on upper income brackets are nearer the lower end of post WW2 historical norms than the higher end, but from hearing people complain about it you'd think that taxes right now were close to historical highs.
aresant 16y ago
In case you missed reading Todd Henderson's response to the thrasing he's taken: http://truthonthemarket.com/2010/09/20/im-sorry/ http://truthonthemarket.com/2010/09/20/im-sorry/
eru 16y ago
If you want a country that does not espouse conspicuous consumption and has an industrial base, you should move to Germany. (Of course, in Germany politicians talk about how to boost "domestic consumption", and a few years ago there was the "Standardortdebatte", basically whining about how Germany is still an industrial economy and hadn't ascended to service economy, yet.)
adamtj 16y ago
Degrees in law and medicine are relatively easy to get. It's basically memorization and pattern recognition, with a little bit of reasoning. An overclocked monkey could do it. Unforced introspection, self-criticism, and change in the face of perceived peer pressure to the contrary? Now that's hard.
StavrosK 16y ago
Someone should tell people that if you make $250k and spend $300k, you're going to be poor.

11 points by jedwhite 16y ago

College students are an amazing representation of our culture of conspicuous consumption. People move off campus because (at my school) its much cheaper...and then eat out every night. Why? Because no one ever taught them that wealth isn't a function of your spending, its a function of retention. For that matter, so is learning...

yalurker 16y ago
I don't think eating out is really "conspicuous consumption" (unless maybe you're dealing with very-high end, trendy "see and be seen" destinations). What you've presented seems like a perfectly rational choice: by moving to a lower-rent apartment they have more money to allocate towards their food budget. If a $5 burrito saves me 30 minutes of cooking, that's a great trade for my time/cash budgeting.
- petervandijck 16y ago
  My parents treated eating out as an event, to be had a few times a year, maximum. Of course they didn't have fast food, then. ps: Making a burrito takes 5 minutes with leftovers, not 30.
- InclinedPlane 16y ago
  Eating out is definitely conspicuous consumption if done on a regular basis. Consider a perfectly ordinary example: a couple eats at a restaurant twice a week (call it at least $15 per person), they both have their starbucks coffee morning ritual (call it $4 per person per day), and one of them regularly eats out for lunch at work (call it $8 a day). These are all very low estimates, and they are not at all unusual examples. However, all of this money adds up. How much does it add up to you ask? Over 7,000 dollars a year. That's a decent used car, every year, or a new car every 2 years. An iPad every month. A laptop every 2 months. A trip for 2 to Hawaii (or the Bahamas) every season. Or buying one or two albums on iTunes or Amazon MP3 every single day, even weekends. If you had a coworker who spent $600 a month on consumer electronics you would definitely consider that conspicuous consumption.

rick888 16y ago

"According to the CBO, families in the top 20% pay average federal taxes of 25.1%. The figure in President Reagan's final year in office: 25.6%. " This doesn't include city, state, and any other number of taxes a person pays. Most people pay upwards of 40% in taxes. I feel like this was intentionally left out. "Mr. Henderson and his wife, an oncologist, make more than $250,000 a year, and apparently they're struggling to get by" Chicago has a very high tax rate and housing isn't cheap either. According to Wikipedia, the sales tax in Chicago is 9.75% (this has been reduced from over 10%). It's the highest in the country.

akeefer 16y ago
The point was less the absolute number and more the historical comparison; taxes on upper income brackets are nearer the lower end of post WW2 historical norms than the higher end, but from hearing people complain about it you'd think that taxes right now were close to historical highs.

aresant 16y ago

In case you missed reading Todd Henderson's response to the thrasing he's taken: http://truthonthemarket.com/2010/09/20/im-sorry/ http://truthonthemarket.com/2010/09/20/im-sorry/

eru 16y ago

If you want a country that does not espouse conspicuous consumption and has an industrial base, you should move to Germany. (Of course, in Germany politicians talk about how to boost "domestic consumption", and a few years ago there was the "Standardortdebatte", basically whining about how Germany is still an industrial economy and hadn't ascended to service economy, yet.)

adamtj 16y ago

Degrees in law and medicine are relatively easy to get. It's basically memorization and pattern recognition, with a little bit of reasoning. An overclocked monkey could do it. Unforced introspection, self-criticism, and change in the face of perceived peer pressure to the contrary? Now that's hard.

StavrosK 16y ago

Someone should tell people that if you make $250k and spend $300k, you're going to be poor.