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I'm a foreigner that's lived in the US since college. Half of my friends and family are american and the rest foreign. There's a huge cultural difference betwee

I'm a foreigner that's lived in the US since college. Half of my friends and family are american and the rest foreign. There's a huge cultural difference between both sides' approach to wealth. My american f&f (outside of silicon valley) think of wealth in terms of "saving for retirement." 401ks, tax strategies, etfs, stocks etc. It's very passive, probably "correct", and very unambitious. The foreign side is totally different. They have very little interest in saving for retirement--they think in terms of investing in businesses. They don't buy etfs or stocks. They buy (small, then larger) businesses. It's very active and after age 40 or so takes up most of their time. The goal is to never retire, but rather to build a series of cash producing entities for ever. Part of this is certainly cultural. In lots of the world, being a boss is higher status that being an *employee", regardless of the actual income each activity generates. The owner of a business with 200k in revenue is higher status than a McKinsey employee with a 500k salary. This cultural difference is reflected in a desire to escape "wages" as soon as possible, not necessarily "save for retirement".

darkerside 6y ago
> The owner of a business with 200k in revenue is higher status than a McKinsey employee with a 500k salary. What makes you say that?
- yeetman21 6y ago
  He can sell the business or still run it in retirement, McKinsey employee works 25 hours a day and is a slave to his boss
  - icedchai 6y ago
    A small business like that is likely very, very dependent on its owner. The owner may be a slave to his customers. The employee can just walk away.
    - darkerside 6y ago
      Exactly. You don't make money without having a boss (or many bosses).
      - marketgod 6y ago
        You can fire customers easier than quitting jobs. I fire customers daily. If you are reliant on 1 customer then it's not a business, it's a hobby. Edit: Also you can be ethical.
        darkerside 6y ago
        This is more a function of your successfulness and competence than whether you happen to have an incorporated business wrapping your daily operations. A successful and competent employee has built relationships with colleagues, supervisors, and reports. He knows them, and they know him. He won't be asked to subjugate his principles to the company in an inappropriate way, in part because others know that he will go above and beyond within his principles to do well for the company. For a business owner, the exact same thing, just replace colleagues et al with customers, suppliers, shareholders, and other partners. On the other hand, a weak business and/or business owner will be very vulnerable to principle-based compromise. Out of the need to keep customers, suppliers, et al happy, he is subject to whim and every demand. Walking away from his business means the collapse of his reputation, failing his employees, and failing his family. He is no more free than your average entry level employee.
        marketgod 6y ago
        >He won't be asked to subjugate his principles to the company in an inappropriate way, in part because others know that he will go above and beyond within his principles to do well for the company. I respectfully disagree. Your team may not, your direct reports won't and your management hierarchy may not, however, your business will. If you have certain principles such as support for LBGTQ+, anti-military contracts, or a conservative in tech for example, and your company signs a contract to work with another organization that doesn't care about the cause or are completely against it, what happens? I know CEO's who can't fire bad clients because they don't own their own company. >Walking away from his business means the collapse of his reputation, failing his employees, and failing his family. Walking away from bad business can make you so much money it's hard to imagine. I've had conversations about doing business with shady people, which resulted in me making a deal with the person who had the same experience with the other individual. >On the other hand, a weak business and/or business owner will be very vulnerable to principle-based compromise. Growing pains, but an employee who is competent or incompetent will face the same dilemma because of what I suggested earlier. I call it being a slave earlier, to intentionally raise alarm. I don't know of a way to define it but you don't have to go to sleep at night thinking, well, I didn't like that decision and now I need to change my entire life or deal with it. I.e. find a new job, change my commute, change my schedule, acquaint yourself with a new environment, meet new people and so on. An owner, is doing this on a daily basis already.
- el_nahual 6y ago
  Status is weird like that. Different cultures assign status differently. In many parts of the world--certainly in LatAm--status is about power and independence more than it is about money.
  - darkerside 6y ago
    If it wasn't clear, I'm not disagreeing, I'm looking for examples, or other reasons for that belief Edit: The note I think about it, the more I'm inclined to disagree after all. A $500K McKinsey employee is not an entry level consultant. They are likely leading a large team and working regularly with C-level executives at enterprise businesses. They are going to have presence and gravitas because credibility is a huge part of their job. What kind of business does $200K in revenue per year? It's very likely to be a sole proprietorship, maybe 1-2 employees at most. I realize that there may be cultures and subcultures that truly believe the independence of the business owner makes them more respectable (although I personally believe that independence is a bit of an illusion), but I think more people would subconsciously assign a higher status to the first person and that it probably wouldn't be close.
- marketgod 6y ago
  Because one is a slave and the other is a man/woman.
  - darkerside 6y ago
    Disagree, see my other posts on this thread.
skybrian 6y ago
Interesting. In what countries would you say that being a boss is a common ambition, and what kinds of businesses do you mean?
- el_nahual 6y ago
  In my experience, this is true in all of LatAm.
akiselev 6y ago
> This cultural difference is reflected in a desire to escape "wages" as soon as possible, not necessarily "save for retirement". I don't think it has to do with that necessarily (at least in my cohort), it's just that many immigrants come from nations who haven't had stability in their financial systems, if they even had one to begin with. A business has tangible roots in a community and can generate revenue when there's a monetary collapse, which is much easier for someone to trust if they haven't grown up in a stable economy. My old country doesn't even have 30 year mortgages, for example. If it did, mortgages expiring now would have been signed right as the iron curtain was coming down, which drastically changed the Eastern bloc's financial systems almost over night.
refurb 6y ago
This isn't that unusual and is sometimes driven by available opportunities. If you live in a developing economy, the number of $500k equivalent jobs is likely not high, and at least for the countries I've visited, they are often roles at multi-nationals with foreigners at the top (and not all that accessible to locals). Similarly, your potential investments for retirement savings can be quite limited. We're quite spoiled in the west to have massive stock markets with tens of thousands of stable, profitable companies. And a regulatory framework which means the chance you buy a stock and find out the entire company is a fraud is relatively low. I've heard from folks in some developing countries that they'd never put money in their own stock market - the chance of losing everything is way too high. For developing countries, you often have a young, expanding population, and 7% GDP growth in one year wouldn't be seen as abnormal. Small businesses become a great way to get in on the growth (the market is often highly fragmented, so competition isn't that fierce) and businesses are a much more accessible way to wealth than any corporate job. The other avenue I've seen is real estate. In the SE Asian countries I've been in (the ones growing quickly), real estate is even more of a ticket to wealth than in the US. Seems like they can never build enough and in the big cities, prices aren't that different than non-coastal US ($100k+ USD), which is shocking considering the median salary is 1/10th that of the US.

darkerside 6y ago

> The owner of a business with 200k in revenue is higher status than a McKinsey employee with a 500k salary. What makes you say that?

yeetman21 6y ago
He can sell the business or still run it in retirement, McKinsey employee works 25 hours a day and is a slave to his boss
- icedchai 6y ago
  A small business like that is likely very, very dependent on its owner. The owner may be a slave to his customers. The employee can just walk away.
  - darkerside 6y ago
    Exactly. You don't make money without having a boss (or many bosses).
    - marketgod 6y ago
      You can fire customers easier than quitting jobs. I fire customers daily. If you are reliant on 1 customer then it's not a business, it's a hobby. Edit: Also you can be ethical.
      - darkerside 6y ago
        This is more a function of your successfulness and competence than whether you happen to have an incorporated business wrapping your daily operations. A successful and competent employee has built relationships with colleagues, supervisors, and reports. He knows them, and they know him. He won't be asked to subjugate his principles to the company in an inappropriate way, in part because others know that he will go above and beyond within his principles to do well for the company. For a business owner, the exact same thing, just replace colleagues et al with customers, suppliers, shareholders, and other partners. On the other hand, a weak business and/or business owner will be very vulnerable to principle-based compromise. Out of the need to keep customers, suppliers, et al happy, he is subject to whim and every demand. Walking away from his business means the collapse of his reputation, failing his employees, and failing his family. He is no more free than your average entry level employee.
        marketgod 6y ago
        >He won't be asked to subjugate his principles to the company in an inappropriate way, in part because others know that he will go above and beyond within his principles to do well for the company. I respectfully disagree. Your team may not, your direct reports won't and your management hierarchy may not, however, your business will. If you have certain principles such as support for LBGTQ+, anti-military contracts, or a conservative in tech for example, and your company signs a contract to work with another organization that doesn't care about the cause or are completely against it, what happens? I know CEO's who can't fire bad clients because they don't own their own company. >Walking away from his business means the collapse of his reputation, failing his employees, and failing his family. Walking away from bad business can make you so much money it's hard to imagine. I've had conversations about doing business with shady people, which resulted in me making a deal with the person who had the same experience with the other individual. >On the other hand, a weak business and/or business owner will be very vulnerable to principle-based compromise. Growing pains, but an employee who is competent or incompetent will face the same dilemma because of what I suggested earlier. I call it being a slave earlier, to intentionally raise alarm. I don't know of a way to define it but you don't have to go to sleep at night thinking, well, I didn't like that decision and now I need to change my entire life or deal with it. I.e. find a new job, change my commute, change my schedule, acquaint yourself with a new environment, meet new people and so on. An owner, is doing this on a daily basis already.
el_nahual 6y ago
Status is weird like that. Different cultures assign status differently. In many parts of the world--certainly in LatAm--status is about power and independence more than it is about money.
- darkerside 6y ago
  If it wasn't clear, I'm not disagreeing, I'm looking for examples, or other reasons for that belief Edit: The note I think about it, the more I'm inclined to disagree after all. A $500K McKinsey employee is not an entry level consultant. They are likely leading a large team and working regularly with C-level executives at enterprise businesses. They are going to have presence and gravitas because credibility is a huge part of their job. What kind of business does $200K in revenue per year? It's very likely to be a sole proprietorship, maybe 1-2 employees at most. I realize that there may be cultures and subcultures that truly believe the independence of the business owner makes them more respectable (although I personally believe that independence is a bit of an illusion), but I think more people would subconsciously assign a higher status to the first person and that it probably wouldn't be close.
marketgod 6y ago
Because one is a slave and the other is a man/woman.
- darkerside 6y ago
  Disagree, see my other posts on this thread.

skybrian 6y ago

Interesting. In what countries would you say that being a boss is a common ambition, and what kinds of businesses do you mean?

el_nahual 6y ago
In my experience, this is true in all of LatAm.

akiselev 6y ago

> This cultural difference is reflected in a desire to escape "wages" as soon as possible, not necessarily "save for retirement". I don't think it has to do with that necessarily (at least in my cohort), it's just that many immigrants come from nations who haven't had stability in their financial systems, if they even had one to begin with. A business has tangible roots in a community and can generate revenue when there's a monetary collapse, which is much easier for someone to trust if they haven't grown up in a stable economy. My old country doesn't even have 30 year mortgages, for example. If it did, mortgages expiring now would have been signed right as the iron curtain was coming down, which drastically changed the Eastern bloc's financial systems almost over night.

refurb 6y ago

This isn't that unusual and is sometimes driven by available opportunities. If you live in a developing economy, the number of $500k equivalent jobs is likely not high, and at least for the countries I've visited, they are often roles at multi-nationals with foreigners at the top (and not all that accessible to locals). Similarly, your potential investments for retirement savings can be quite limited. We're quite spoiled in the west to have massive stock markets with tens of thousands of stable, profitable companies. And a regulatory framework which means the chance you buy a stock and find out the entire company is a fraud is relatively low. I've heard from folks in some developing countries that they'd never put money in their own stock market - the chance of losing everything is way too high. For developing countries, you often have a young, expanding population, and 7% GDP growth in one year wouldn't be seen as abnormal. Small businesses become a great way to get in on the growth (the market is often highly fragmented, so competition isn't that fierce) and businesses are a much more accessible way to wealth than any corporate job. The other avenue I've seen is real estate. In the SE Asian countries I've been in (the ones growing quickly), real estate is even more of a ticket to wealth than in the US. Seems like they can never build enough and in the big cities, prices aren't that different than non-coastal US ($100k+ USD), which is shocking considering the median salary is 1/10th that of the US.