4 ms·

It seems to me you're painting everything black or everything white, no shades in between. I never said anyone must rely only on investment income. I also neve

It seems to me you're painting everything black or everything white, no shades in between. I never said anyone must rely only on investment income. I also never said that everybody should stop working and live off of investments (of course it's unsustainable). But outright refusing to combine salary and investment income just because investments "don't compound fast enough" is like saying you don't want to ride a bicycle because BMW 750i is faster than bicycle, so you'd rather walk. Look long term. I'm fairly and squarely in middle class. Yet, my family net worth went from -$11,000 to +$50,000 in less than 4 years. Was it luck? Inheritance? Heck no! We changed our habits, cut spending, got rid of debt, worked hard to increase income and then invested everything we could afford. I'm aware that my wife and me would still probably never be millionaires. But my kid? No doubt! If he ends with less than $5,000,000 net worth I would be disappointed.

neonological 6y ago
I consider myself middle class. And I make what you made in 5 months what took you 4 years without any penny pinching schemes. Not to mention I invest what I make. So yeah when I say it doesn't compound fast enough for poor people, I'm being honest. You don't even stand a chance catching up to me with just investing. Not to mention I'm still considered middle class. Don't get me wrong. I'm not saying you won't make this kind of money ever. You could approach and likely surpass this income in the future. What I'm saying is investing won't get you anywhere at your stage. Not when baseline living costs are too high and compounding interest is too low. Also I NEVER said to not invest. I'm saying investing doesn't close the gap nor does it alleviate hardship. It doesn't address the problem head on. To poor people investment is worth much less than it is to rich people, much much much less. So much less that a wage increase effects lifestyle more than gains on investment. See this: https://www.investopedia.com/financial-edge/0211/why-the-first-1-million-is-the-hardest.aspx https://www.investopedia.com/financial-edge/0211/why-the-fir... Wishing your kid will be worth 5 million is a pipe dream. First consider inflation. Second consider that every generation will have it harder than the last. Your kid will absolutely 100% have to rely on inheritance to get ahead. Both me and you didn't rely on inheritance but I doubt our kids will have any chance if they don't.
- ivanche 6y ago
  Well, then I can only say we revisit this thread in year 2081. I started investing when I was 40. My son started investing when he was 5. He has 60 more years of compounding ahead of him. Even if the rate of return drops to 7% instead of historical (around) 10.3%, he'll be good. Also, I wasn't referring to $5,000,000 in today's money, but in year 2081 money. I know it will be much less than today but heck, it will probably be much more than what is $50,000 today.
  - neonological 6y ago
    You're not getting it. 60 years compounding is a pipe dream. It can happen, but there are many issues with what you just said. First of all 60 years. Basically you're dreaming about the next life. This is how they justified the caste system in India. Second off, while your shit is compounding so are all my assets as well. So are the assets of rich people. The growth of stocks this century will be entirely different from the last century based solely off the fact that everybody is basically executing your exact same investment strategy. Also keep in mind getting salary raises at where you are in the wealth equation is going to be maximally better than your investments for a long time to come. Even 10% of 1 million is much less than what I make. Either way like I said, your kid is relying on your help (inheritance) to achieve this when he's 60 which is also near the end of his lifetime.
    - ivanche 6y ago
      Please don't limit lifetimes of other people's children. Please read and apply advice from "How to Win Friends and Influence People" by Dale Carnegie, it will improve your life. O&O.
      - neonological 6y ago
        > Please don't limit lifetimes of other people's children. assuming your kid lives to 100, which he won't. 60 years is already past half of his life time meaning he's nearer to the end than the beginning at the point in time he hits your aforementioned 5 million dollar goal. >Please read and apply advice from "How to Win Friends and Influence People" by Dale Carnegie, it will improve your life. I read the book and guess what it literally says. It says never criticize anyone. If everyone around you takes that advice, you'd never receive any criticism. You'd blindly live in a world of lies an illusions. The advice you give when taken by me is good for me, but when given to me the effect on you is self harming. The good thing about the internet is that you can use this avenue as an opportunity to get real opinions as No one, and I mean absolutely no one will say what I am saying to you now in real life. The fact of the matter is, my argument is for you, I'm saying you are being treated unfairly under the current system. Your argument is just saying that you're not being treated unfairly and that most of what you experience is just a symptom of bad saving/investing habits. You think anyone making more money than you in real life is ever going to tell you to your face and say the system is unfair and I am reaping the benefits by stepping on your head? No they lie to you. I'm not lying. I can say more then likely I make more money than you simply because I navigated the system better, not because I contributed more gdp to the economy. Arguably I alone contribute even less gdp than both you and your wife together yet I make much more. The argument goes further, because there are plenty of people above me who do the same to me. As you go higher and higher up, you find people who do essentially nothing for the economy and just benefit off of economic growth. People on the bottom are the ones getting screwed, the closer you are to the bottom the more screwed you are. I can assure you 100% it is not a spending habit/investing problem. It is genuinely a wealth inequality problem where rich people live off the labor of others. The ability for someone to purchase human capital as an "investment" is what enables this kind of thing. I literally own a house where people pay me rent and I do nothing. I sit on my ass while they work and transfer the fruits of their labor to me. And this is all because I have enough money to own property. It's not fair, and absolutely you're never going to find someone in my position that will admit this to you.

neonological 6y ago

I consider myself middle class. And I make what you made in 5 months what took you 4 years without any penny pinching schemes. Not to mention I invest what I make. So yeah when I say it doesn't compound fast enough for poor people, I'm being honest. You don't even stand a chance catching up to me with just investing. Not to mention I'm still considered middle class. Don't get me wrong. I'm not saying you won't make this kind of money ever. You could approach and likely surpass this income in the future. What I'm saying is investing won't get you anywhere at your stage. Not when baseline living costs are too high and compounding interest is too low. Also I NEVER said to not invest. I'm saying investing doesn't close the gap nor does it alleviate hardship. It doesn't address the problem head on. To poor people investment is worth much less than it is to rich people, much much much less. So much less that a wage increase effects lifestyle more than gains on investment. See this: https://www.investopedia.com/financial-edge/0211/why-the-first-1-million-is-the-hardest.aspx https://www.investopedia.com/financial-edge/0211/why-the-fir... Wishing your kid will be worth 5 million is a pipe dream. First consider inflation. Second consider that every generation will have it harder than the last. Your kid will absolutely 100% have to rely on inheritance to get ahead. Both me and you didn't rely on inheritance but I doubt our kids will have any chance if they don't.

ivanche 6y ago
Well, then I can only say we revisit this thread in year 2081. I started investing when I was 40. My son started investing when he was 5. He has 60 more years of compounding ahead of him. Even if the rate of return drops to 7% instead of historical (around) 10.3%, he'll be good. Also, I wasn't referring to $5,000,000 in today's money, but in year 2081 money. I know it will be much less than today but heck, it will probably be much more than what is $50,000 today.
- neonological 6y ago
  You're not getting it. 60 years compounding is a pipe dream. It can happen, but there are many issues with what you just said. First of all 60 years. Basically you're dreaming about the next life. This is how they justified the caste system in India. Second off, while your shit is compounding so are all my assets as well. So are the assets of rich people. The growth of stocks this century will be entirely different from the last century based solely off the fact that everybody is basically executing your exact same investment strategy. Also keep in mind getting salary raises at where you are in the wealth equation is going to be maximally better than your investments for a long time to come. Even 10% of 1 million is much less than what I make. Either way like I said, your kid is relying on your help (inheritance) to achieve this when he's 60 which is also near the end of his lifetime.
  - ivanche 6y ago
    Please don't limit lifetimes of other people's children. Please read and apply advice from "How to Win Friends and Influence People" by Dale Carnegie, it will improve your life. O&O.
    - neonological 6y ago
      > Please don't limit lifetimes of other people's children. assuming your kid lives to 100, which he won't. 60 years is already past half of his life time meaning he's nearer to the end than the beginning at the point in time he hits your aforementioned 5 million dollar goal. >Please read and apply advice from "How to Win Friends and Influence People" by Dale Carnegie, it will improve your life. I read the book and guess what it literally says. It says never criticize anyone. If everyone around you takes that advice, you'd never receive any criticism. You'd blindly live in a world of lies an illusions. The advice you give when taken by me is good for me, but when given to me the effect on you is self harming. The good thing about the internet is that you can use this avenue as an opportunity to get real opinions as No one, and I mean absolutely no one will say what I am saying to you now in real life. The fact of the matter is, my argument is for you, I'm saying you are being treated unfairly under the current system. Your argument is just saying that you're not being treated unfairly and that most of what you experience is just a symptom of bad saving/investing habits. You think anyone making more money than you in real life is ever going to tell you to your face and say the system is unfair and I am reaping the benefits by stepping on your head? No they lie to you. I'm not lying. I can say more then likely I make more money than you simply because I navigated the system better, not because I contributed more gdp to the economy. Arguably I alone contribute even less gdp than both you and your wife together yet I make much more. The argument goes further, because there are plenty of people above me who do the same to me. As you go higher and higher up, you find people who do essentially nothing for the economy and just benefit off of economic growth. People on the bottom are the ones getting screwed, the closer you are to the bottom the more screwed you are. I can assure you 100% it is not a spending habit/investing problem. It is genuinely a wealth inequality problem where rich people live off the labor of others. The ability for someone to purchase human capital as an "investment" is what enables this kind of thing. I literally own a house where people pay me rent and I do nothing. I sit on my ass while they work and transfer the fruits of their labor to me. And this is all because I have enough money to own property. It's not fair, and absolutely you're never going to find someone in my position that will admit this to you.