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I have always been convinced that the general numbers on how many rich people (> 10M networth and > 50M networth) there are is a total lie. Maybe its the bubble

I have always been convinced that the general numbers on how many rich people (> 10M networth and > 50M networth) there are is a total lie. Maybe its the bubble that I live in, but there are ALOT of very wealthy people on the coasts. The government numbers dont match my anecdata, I think they are missing a ton of income/capital gains, and thus our wealth distribution charts dont match reality

vorpalhex 3y ago
Just to be clear, you doubt a large federal entity that employs thousands of professionals because you see a lot of people who you think are rich?
- ldjkfkdsjnv 3y ago
  Yes. And I am a highly educated individual with a degree in statistics/CS
  - eep_social 3y ago
    Did that degree cover sample biases at all?
  - groby_b 3y ago
    I am so sorry your university fleeced you without giving you a decent education in your chosen field.
    - mrguyorama 3y ago
      You can lead a horse to water but sometimes that horse will do everything it can to indignantly die of dehydration while trying to kick you.
  - vorpalhex 3y ago
    So obviously you'd know that your sample size is so small as to be statistically insignificant, you can't actually measure wealth but may be guessing based on visible status symbols, and that the IRS taxes gains and not holdings. Obviously as someone highly educated you'd realize anecdotal data can't tell you about broad statistical trends and isn't actually a replacement for real sampling. And obviously with such a deep understanding of statistics, you'd never go off half cocked and attempt to suggest your vague gut feeling should beat out years and years of auditing, risk analysis and so on.
    - ldjkfkdsjnv 3y ago
      People can do things like take loans against their investment gains, use that money for other investing. It can absolutely be invisible to the IRS as they skirt tax laws.
game_the0ry 3y ago
> I have always been convinced that the general numbers on how many rich people (> 10M networth) there are is a total lie. Not really a lie, but most of that wealth is on paper. Those people do not have $10M cash, they $10M in investments at today's fair market value. Some amount of property appreciation is due to lower interest rates allowing home buyers to roll up their equity over time as they buy bigger, more expensive houses. That works when interest goes down, but the inverse...should be predictable.
- ldjkfkdsjnv 3y ago
  Commented this below, but: People can do things like take loans against their investment gains, use that money for other investing. It can absolutely be invisible to the IRS as they skirt tax laws. Another example, take the construction industry. Its estimated that half the money getting paid to construction contractors is under the table.
  - game_the0ry 3y ago
    > People can do things like take loans against their investment gains, use that money for other investing. True, and asset prices go up even more, but what happens when they can't get the financing or have to start selling to pay down the financing of other assets as prices go down?
    - ldjkfkdsjnv 3y ago
      The economy starts to crash and the government prints more money, causing inflation. Which is then a tax on regular americans.
jgalt212 3y ago
It's like dark matter. It's out there, just hard to pin down. In NYC private schools, average income for parents (non-scholarship) is in the seven figures. average.
gscott 3y ago
The ultra-rich go to different places, eat at private for pay clubs, you don't see the rich because the rest of us have not even heard the name of these places.
jandrewrogers 3y ago
A significant fraction of wealth is difficult to track because asset value isn't "real" until there is a transaction that places a value on it, which the government does track. Until those transactions happen, any estimates of asset value are notional and may not be remotely realizable in a real market.
- ldjkfkdsjnv 3y ago
  Exactly, people underestimate how high those asset values are. The owners of said asset are borrowing against them, not selling.
- dxbydt 3y ago
  when i took econ, there were a host of gva shenanigans that made it amply clear how asset values null out. canonical question - when you marry your cook, what happens to gdp ? accepted textbook answer - gdp goes down because cook was paid income to cook your food. now she is your wife. if your wife cooks food for you there is no transaction. no invoice. no line item. gross value added has gone to zero.therefore gdp goes down. but you are still eating! well, cause the person who’s doing the cooking now is your wife, not a paid cook.
  - selimthegrim 3y ago
    Kurt Gödel’s shade chuckles.
ChuckMcM 3y ago
If you feel it's a "total lie" (this suggests both false, and exaggerated was that your meaning?) have you thought about ways to figure this out through primary sources? In my experience the numbers are reasonably accurate. The dynamics of interacting with people who recognize that wealth levels in the group vary dramatically are a pretty Silicon Valley thing AFAICT.
detourdog 3y ago
The numbers can't possible capture the circumstances. People can look both privileged and destitute at the same time depending on the metrics used. This can be made even more murky with financial market swings and carried interest. Unfortunately debt for the individual is not as fungible as wealth.

vorpalhex 3y ago

Just to be clear, you doubt a large federal entity that employs thousands of professionals because you see a lot of people who you think are rich?

ldjkfkdsjnv 3y ago
Yes. And I am a highly educated individual with a degree in statistics/CS
- eep_social 3y ago
  Did that degree cover sample biases at all?
- groby_b 3y ago
  I am so sorry your university fleeced you without giving you a decent education in your chosen field.
  - mrguyorama 3y ago
    You can lead a horse to water but sometimes that horse will do everything it can to indignantly die of dehydration while trying to kick you.
- vorpalhex 3y ago
  So obviously you'd know that your sample size is so small as to be statistically insignificant, you can't actually measure wealth but may be guessing based on visible status symbols, and that the IRS taxes gains and not holdings. Obviously as someone highly educated you'd realize anecdotal data can't tell you about broad statistical trends and isn't actually a replacement for real sampling. And obviously with such a deep understanding of statistics, you'd never go off half cocked and attempt to suggest your vague gut feeling should beat out years and years of auditing, risk analysis and so on.
  - ldjkfkdsjnv 3y ago
    People can do things like take loans against their investment gains, use that money for other investing. It can absolutely be invisible to the IRS as they skirt tax laws.

game_the0ry 3y ago

> I have always been convinced that the general numbers on how many rich people (> 10M networth) there are is a total lie. Not really a lie, but most of that wealth is on paper. Those people do not have $10M cash, they $10M in investments at today's fair market value. Some amount of property appreciation is due to lower interest rates allowing home buyers to roll up their equity over time as they buy bigger, more expensive houses. That works when interest goes down, but the inverse...should be predictable.

ldjkfkdsjnv 3y ago
Commented this below, but: People can do things like take loans against their investment gains, use that money for other investing. It can absolutely be invisible to the IRS as they skirt tax laws. Another example, take the construction industry. Its estimated that half the money getting paid to construction contractors is under the table.
- game_the0ry 3y ago
  > People can do things like take loans against their investment gains, use that money for other investing. True, and asset prices go up even more, but what happens when they can't get the financing or have to start selling to pay down the financing of other assets as prices go down?
  - ldjkfkdsjnv 3y ago
    The economy starts to crash and the government prints more money, causing inflation. Which is then a tax on regular americans.

jgalt212 3y ago

It's like dark matter. It's out there, just hard to pin down. In NYC private schools, average income for parents (non-scholarship) is in the seven figures. average.

gscott 3y ago

The ultra-rich go to different places, eat at private for pay clubs, you don't see the rich because the rest of us have not even heard the name of these places.

jandrewrogers 3y ago

A significant fraction of wealth is difficult to track because asset value isn't "real" until there is a transaction that places a value on it, which the government does track. Until those transactions happen, any estimates of asset value are notional and may not be remotely realizable in a real market.

ldjkfkdsjnv 3y ago
Exactly, people underestimate how high those asset values are. The owners of said asset are borrowing against them, not selling.
dxbydt 3y ago
when i took econ, there were a host of gva shenanigans that made it amply clear how asset values null out. canonical question - when you marry your cook, what happens to gdp ? accepted textbook answer - gdp goes down because cook was paid income to cook your food. now she is your wife. if your wife cooks food for you there is no transaction. no invoice. no line item. gross value added has gone to zero.therefore gdp goes down. but you are still eating! well, cause the person who’s doing the cooking now is your wife, not a paid cook.
- selimthegrim 3y ago
  Kurt Gödel’s shade chuckles.

ChuckMcM 3y ago

If you feel it's a "total lie" (this suggests both false, and exaggerated was that your meaning?) have you thought about ways to figure this out through primary sources? In my experience the numbers are reasonably accurate. The dynamics of interacting with people who recognize that wealth levels in the group vary dramatically are a pretty Silicon Valley thing AFAICT.

detourdog 3y ago

The numbers can't possible capture the circumstances. People can look both privileged and destitute at the same time depending on the metrics used. This can be made even more murky with financial market swings and carried interest. Unfortunately debt for the individual is not as fungible as wealth.