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Wealth is a stock measure, income is flow. You accumulate wealth out of what you can set aside out of the flow. Some of us immigrants do not come to this coun

• hn_throwaway_99 5y ago
  I think this is an excellent comment. What makes me very sad is that during the past 14 months the divide between those who own assets and those who don't has reached gargantuan proportions. I mean, in my raging inferno of a housing market, over the past couple of years home prices have easily doubled. So a 400k house from 2018 now sells for 800k. Yes, if I want to move to another house in my area I'll pay similarly astronomical prices, but that just means it's about a wash for me, and of course I have many more options like moving to a cheaper locale or a cash out refi. But if I (or my parents) don't already own a home, it means my chances of ever owning a home in my area just went to about zero. People made vastly more money just sitting around in their houses in the past couple years than I made in my job as an "essential" worker over the past decade. I just don't see how this ends well.
  • fortran77 5y ago
    Taxes even that out a bit. The person with an 800k house pays twice as much in property taxes. In many states, the amount that the state can raise taxes on someone whose house may have "increased" in value is limited.
    • ta988 5y ago
      They don't because houses don't produce income (unless you rent them). So if you had your house when you could afford it but cannot anymore you get made even less wealthy with the property taxes. Taxes should be proportional to income. There should be a more fair way to do that: to not tax main house when in use, tax only at the time of sale on benefit only (corrected by inflation).
      • pjc50 5y ago
        Only if renters are allowed to pay rent out of pre-tax income.
        • ta988 5y ago
          Good point. If it is for the main living place.
    • an_opabinia 5y ago
      You have a lot of reading to do about property taxes in California.
    • skeeter2020 5y ago
      That's rarely true. Property taxes are typically set by dividing the budget by the total value of all real estate to set the mill rate and then allocating it by the specific value of your property, so if the entire market increases the tax impact based on assessed value doesn't change much. You only see dramatic changes when certain areas in a taxed area increase or decrease significantly relative to others.
    • chasebank 5y ago
      Not in California. Prop 13 keeps property taxes at the value when you purchased your home. IMO this is a massive contributor to inflated property values, now leaking into other state economies.
      • adolph 5y ago
  • zpeti 5y ago
    I would love to see a parallel universe where in 2008 no one is bailed out and bankers are either on the hook for the risks they took or actually are sent to prison. Taking it further back, what if the tech bubble of the 90s is allowed to collapse, interests aren't set at almost 0, and a housing bubble isn't blown by exploiting minorities. And last year airlines, and other corporations who didn't account for black swan events, go bankrupt, and new management take them over (or employees), or they disappear altogether and new startups can fill the void. I am convinced the USA is in the place it is because since about 99, no rich person has been allowed to fail or lose money, not really. I'm not a leftie, but it really is capitalism for the poor, socialism for the rich right now. But I have to say, the problem is collusion between the rich who are close to politics, and the problem is the GOVERNMENT enabled all this. The problem is NOT all rich people. Only the ones who are part of this system. And this distinction needs to be made, otherwise the US is headed for a communist disaster of hating the rich. But the problem is the corrupt rich, not all rich.
    • dsr_ 5y ago
      The only wrong thing you've said here is "I'm not a leftie". Why do you reject that generally accurate label? There are decades of propaganda in US society equating the left with dictatorships and totalitarian states. Only in the last few years have large numbers of young people realized that all the good things coming from society working together are being labelled as socialist: libraries, schools, firefighters, even roads and water systems. The view of the far right has narrowed the acceptable scope of government to national defense, enforcing contracts, and enforcing the existing social order via police. If you want the US government to work on behalf of all the people, your natural allies are on the left.
      • NikolaNovak 5y ago
        I see what you are saying; coming from Europe, I'm frequently astonished how much "Socialist", "Leftie" or even "Liberal" in USA is a dirty word of political death.
        • throwaway3699 5y ago
  • throwaway6734 5y ago
    The solution is to move to an area with cheaper housing. Moving to opportunity is the American way
    • JKCalhoun 5y ago
      Hmmm.... I've been looking at real estate in the midwest — Kansas City, Omaha — and surprised by how much it has skyrocketed there as well. At the same time (as seen on HN recently) they're "giving away" land in small-town Kansas and Nebraska. No jobs. You are responsibly for building the house. Lots of other caveats. I think a real-estate collapse or a sustained wave of affordable housing starts is more likely.
      • bradleyjg 5y ago
        The government will not allow real estate to stay collapsed. Look what happened after 2008: https://fred.stlouisfed.org/graph/?g=EcTD https://fred.stlouisfed.org/graph/?g=EcTD
    • NikolaNovak 5y ago
      That worked for early movers at beginning of Covid. In Canada, 12 months later, previously "cheap" provinces have doubled in prices too. Still cheaper than Vancouver or Toronto of course; but given lower income in those areas, and the growing pains they're about to have in catching up their infrastructure etc, it's no longer a straightforward gain anymore.
    • pjc50 5y ago
      Cheaper housing => longer and more expensive commute. Or worse job opportunities. Then people tell you to move where the jobs are. Which has really expensive housing. The free market tends to flatten this stuff out
      • baq 5y ago
        The free market caused this situation in the first place.
  • bradleyjg 5y ago
    People made vastly more money just sitting around in their houses in the past couple years than I made in my job as an "essential" worker over the past decade. This is not an accident. It’s a result of deliberate policy choices. The incumbent homeowners voted themselves massive returns. And they felt self righteous while they were doing it to boot.
    • e40 5y ago
      What are you talking about?
      • mindslight 5y ago
        The Federal Reserve's overt mission is to dump new money into the economy to create inflation. But since they only pump it into the overgrown financial sector, we get asset inflation rather than general price inflation. Every time interest rates are lowered, land prices go up, because the monthly (financial) rent remains the same. Similarly with down payments (20% -> 5%). The next step will be lengthening mortgage terms past 30 years. Each of these steps is aimed at making it more affordable to buy a house, but economic feedback makes sure that is only temporary. Meanwhile as asset valuations go up, one's ability to ever pay off that mortgage goes down.
        • duped 5y ago
          Their dual mandate is to maximize employment and manage inflation. Their mission is exactly not to create inflation (or at least, too much of it).
          • mindslight 5y ago
            "Manage" inflation means to create it. An economy naturally tends towards price deflation, through optimization and technological progress. Business looking for ways to cut costs to compete is intrinsic to a market.
            • 5y ago
  • readams 5y ago
    Except you have to pay capital gains tax when you move after 250k or 500k for married. So it's not a wash. Especially if you're talking about more expensive markets.
    • selectodude 5y ago
      Only if you don't buy a new house within the year.
    • encoderer 5y ago
      Yes that’s true but the $500k goes pretty far. You add all previous home improvements to your cost basis and then deduct real estate agent fees. You can have a million of paper appreciation and not pay very much cap gains tax on it.
  • kingsuper20 5y ago
    >Yes, if I want to move to another house in my area I'll pay similarly astronomical prices, but that just means it's about a wash for me, In California you may well have doubled your annual property tax bill.
    • hn_throwaway_99 5y ago
      Yes, and prop 13 makes all kinds of ridiculous impacts whereby one person living in a 2 million dollar home pays a tenth of the property taxes of their neighbor also living in a 2 million dollar home.
  • tamiral 5y ago
    fellow Canadian here ?
  • skybrian 5y ago
    Tech stocks are a similar story.
  • jjav 5y ago
    > People made vastly more money just sitting around in their houses To be fair, that's not exactly making money. Value on paper, based on comparative sales nearby, has gone up in many places. But that's not money one can use to pay bills or buy food. It can also evaporate same way it showed up, just like the gains from early 2000s evaporated in 2008. Unless one gets lucky timing the market and buys low and cashes out at the peak, it's not real money.
    • hn_throwaway_99 5y ago
      > But that's not money one can use to pay bills or buy food. I know several people who have refinanced (a good idea in my opinion) and taken cash out (a bad idea in my opinion) to do things like remodel kitchens or and pay other bills.
• eplanit 5y ago
  I'm genuinely curious why you chose the USA to migrate to. Would you have been better off in the EU or Asia?
  • ta988 5y ago
    In EU, highly unlikely unless you go to Switzerland (which is not really EU but surrounded by EU).
    • carlmr 5y ago
      Switzerland, funny enough, is quite capitalistic and very big on generational wealth you will never participate in as an immigrant.
• deleted 5y ago
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• NikolaNovak 5y ago
  I understand what you mean; my parents, my sister & I came to Canada in late 90's. We went through normal "new immigrant" jobs - newspaper delivery, cleaning, etc; but eventually my dad got an IT job again. 5-7 years after arriving, our income was nominal. But having arrived to Canada with literally a suitcase of clothes each, the prospects, in particularly retirement, were substantially different. It works both ways sometimes though - not only is it difficult for those born here to understand the difference, we too have to mentally remind ourselves - just because I make as much money as my best friends, I should not indulge in quite the same lifestyle; when it comes to "wealth", they are WAY ahead (some got an apartment as gift from parents, others had their university education paid for, trusts and RESP/RRSPs, etc etc).
• globular-toast 5y ago
  The effect of multi-generational wealth cannot be overstated really. I live in the UK and earn a very good salary (£60k), but I'm far from being "rich". I do feel rich, which is great, but I can walk ten minutes down the road and see multi-million pound houses that, barring some extremely fortuitous event, someone like me will never, ever be able to own. It doesn't get my down, though. Those people with those houses rarely know what they have. It doesn't make them any happier. I'm happy knowing that everything I have has been earnt by me. I'm not sure I would be so happy if I didn't earn a very good salary, though.
  • godfreyantonell 5y ago
    Rich in the UK is rich indeed.
• kazinator 5y ago
  If you somehow have a high income which is guaranteed never to go away, you don't need to accumulate anything, yet live a wealthy lifestyle. In an electronic circuit, if you have an unlimited supply of current, you don't need to hoard electrons in big capacitors.
  • sangnoir 5y ago
    All things bwing equal, if you're wealthy, your income is guaranteed by the state and the law - it will take the collapse of civilization to wipe you out. Whereas if you have a salary, your income is a matter of your luck holding - not being in a major accident, or your employer/industry/ economy imploding for 18+ months
  • skybrian 5y ago
    Owning a reliable income stream is an asset, which is wealth. Either you’re working to get that income (in which case you’re probably saving for retirement) or you need to buy it.
• throw0101a 5y ago
  > Some of us immigrants do not come to this country with an existing stock of wealth either back home or here. We are also not in the favored group of immigrants. We have human capital which we are trying to convert to financial capital for the next generation. And this is where the idea (now myth?) of the American Dream came from. When America was young, no one really had much capital. Also true for periods of large scale immigration: most folks were 'equal' in the sense of not having much of anything. Over time wealth got concentrated, but with the Great Depression and the WW2 war economy, capital was generally became more equalized in the early- and mid-20th century. Of course in the last 50+ years there have been no 'equalization events', and so the concentration of wealth has managed to run for a while without interruption with the obvious results. Piketty has a lot of historical data that shows this process for number of countries: * https://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Century https://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Ce...
  • zpeti 5y ago
    See my comment above, but there could have been equalization events. The governments had three financial crises, in 99, 2008, and 2020 where it could have chosen not to intervene and save the rich. Yes it would have been hard on everyone, but it would have equalized wealth. A lot of companies would have gone bankrupt, but they could have been bought by new manaments, or employees, or could have been replaced by new startups. But the government, and society really, chose to keep the status quo and not create a true crises. The result of this is the world we live in now, where basically it’s normal to rescue any large business and not let it go bankrupt.
• christiansakai 5y ago
  This so much. Pretty much why I can never ever mingle peacefully with most of my US born friends. They are too woke for me.
• Juntu 5y ago
  Its a political refugees when the economy starts a business down poor mens the ones who will exceed maximum altitude in life until death in heaven mid people don’t make it anywhere and the rich starts to envy when it comes to wealth and stock measure the ability of taking risks is absolute zero in the mind of low poor people high power is always nice but their is no ending to legends that live its dreams that is why living in good financial state and poor income is good when the government judge itself so the rich suffers and the rich also in humility. It does not go 3 ways living the freedom and equity will consider a much better wave. Help/set no threads