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What people normally mean by wealth is easy access to cash. Someone that owns a $15M house and has very little other liquid assets is not poor, but they defini

by e40 1y ago

What people normally mean by wealth is easy access to cash. Someone that owns a $15M house and has very little other liquid assets is not poor, but they definitely don't qualify as wealthy. Many, many people in CA that live in expensive homes are in this situation. It's what Prop 13 wrought. Variously, in my neighborhood, old people are paying a small fraction of the property tax that I do, and their house is worth a lot of money, but they have almost nothing, living on their social security check, month to month. I'm not saying Lynch was living on SSI, but given his movies and what we know of how much they made, the story told by his daughter is very plausible.

cjrp 1y ago
> Someone that owns a $15M house and has very little other liquid assets is not poor, but they definitely don't qualify as wealthy. Assuming they own the house outright, that absolutely does qualify as wealthy.
- e40 1y ago
  I didn't say it wouldn't. I said it didn't qualify as ready cash.
  - JadeNB 1y ago
    > > Assuming they own the house outright, that absolutely does qualify as wealthy. > I didn't say it wouldn't. I said it didn't qualify as ready cash. I think you did say it didn't qualify as wealthy (https://news.ycombinator.com/item?id=45301176 https://news.ycombinator.com/item?id=45301176): > What people normally mean by wealth is easy access to cash. Someone that owns a $15M house and has very little other liquid assets is not poor, but they definitely don't qualify as wealthy. Anyway, whatever it is, I think litigating Lynch's level of wealth on HN is probably not the most useful direction for this comment thread.
  - WalterBright 1y ago
    You can borrow against the house, and spend the cash.
supportengineer 1y ago
Wealthy people don't spend their own cash.
- WalterBright 1y ago
  Wealthy people do not hoard cash, unlike what many people imagine. Their money is all invested. They also borrow money to invest. Anyone who gets a mortgage on a house is also investing other peoples' money. Using a credit card is spending other peoples' money. Buying a car on time is spending other peoples' money.
  - yndoendo 1y ago
    Let say you are given 1 million dollars. You decided to buy a new home. Do you pay in cash or get a mortgage? When I ask people this question most will respond with pay in cash so you don't lose money paying a mortgage. The real answer it exploit loop holes in the laws with your gain financial position. 1) Open a trust with the money. 2) Use that trust for banking and make it your mortgage lender. 3) Gain tax deductions for having a mortgage and put tax dollars in your own pocket just by shifting money around in a legal creative accounting method. The wealthy use loop holes that can be exploited only with money to maximize the hoarding. How does one accumulate wealth with hoarding it?
    - WalterBright 1y ago
      Loaning money out is not hoarding it. You also still paid out the money to the seller. > The wealthy use loop holes that can be exploited only with money to maximize the hoarding. You'll have to be more specific about that. Most deductions and credits phase out with increasing income.
      - yndoendo 1y ago
        > Loaning money out is not hoarding it. You also still paid out the money to the seller. You do realize that the rich loan out to themselves via shell corporations or trusts. The only mobility of money is putting tax dollars into the wealth hands. Just because a wealth person bought it does not mean someone else wouldn't. The wealthy can also use their buying power to reduce the value of the sale and harm the seller. Kroger has around 40% market share to throw their weight around a reduce the selling power of the farmer and increase cost to the consumer. So the farmer makes less all because of threat to not buy from in a market that keeps having less and less competition. Have you had to give free labor in millions of dollars so your company could gain access to one of the big name companies on Wall-street. I have and it just highlight the inequality in wealth at a personal and corporate level. Even Steve Jobs used his wealth of Apple to buy up companies cheap at discounted rates. I cannot find a the video any more but it talks about how a company was being bought by Apple. Steve Jobs, at the meeting, asked the company's CEO why am I buying your company for $XXX,XXX. I think it should only cost $50,000 less. CEO said there is an agreement again. Jobs, I could just not buy it. How about the art scam loop hole. 1) Pay an artist $1000 to create a piece via trust or another organization you own. 2) Sell the at auction and buy it for yourself for $30,000. 3) Donate the art work to charity. 4) Turn a $1000 into a $30,000 tax deductible with more creative accounting. This is not the only artwork scam. [1] There are loop holes that wealth people pay lawyers, accounts, full time staff to do full time as a job. Exploit the laws for personal gain to hoard wealth. [0] Panama Papers even had their methods leaked and the names of their shell companies. Another great use of a shell company is the ability remove liability from the wealth onto a corporate entity that can easily dissolve in bankruptcy and shed the liability. Laws often are designed to ease the burden of liability from companies while keeping on individuals. Again how do you gain wealth with out hording it? Are stocks wealth, is property wealth, are bonds wealth? Let say you own 40% of an industry and work to gain 70%. Have you not increased your industrial hoarding by 30%? Even though it is an investment it is till hoarding. How about stocks, can you hoard those to consolidate and hoard wealth? [0] https://en.wikipedia.org/wiki/Panama_Papers https://en.wikipedia.org/wiki/Panama_Papers [1] https://naturalist.gallery/blogs/journal/understanding-the-fine-art-market-how-the-wealthy-use-art-for-tax-evasion https://naturalist.gallery/blogs/journal/understanding-the-f...

by e40 1y ago

cjrp 1y ago

> Someone that owns a $15M house and has very little other liquid assets is not poor, but they definitely don't qualify as wealthy. Assuming they own the house outright, that absolutely does qualify as wealthy.

e40 1y ago
I didn't say it wouldn't. I said it didn't qualify as ready cash.
- JadeNB 1y ago
  > > Assuming they own the house outright, that absolutely does qualify as wealthy. > I didn't say it wouldn't. I said it didn't qualify as ready cash. I think you did say it didn't qualify as wealthy (https://news.ycombinator.com/item?id=45301176 https://news.ycombinator.com/item?id=45301176): > What people normally mean by wealth is easy access to cash. Someone that owns a $15M house and has very little other liquid assets is not poor, but they definitely don't qualify as wealthy. Anyway, whatever it is, I think litigating Lynch's level of wealth on HN is probably not the most useful direction for this comment thread.
- WalterBright 1y ago
  You can borrow against the house, and spend the cash.

supportengineer 1y ago

Wealthy people don't spend their own cash.

WalterBright 1y ago
Wealthy people do not hoard cash, unlike what many people imagine. Their money is all invested. They also borrow money to invest. Anyone who gets a mortgage on a house is also investing other peoples' money. Using a credit card is spending other peoples' money. Buying a car on time is spending other peoples' money.
- yndoendo 1y ago
  Let say you are given 1 million dollars. You decided to buy a new home. Do you pay in cash or get a mortgage? When I ask people this question most will respond with pay in cash so you don't lose money paying a mortgage. The real answer it exploit loop holes in the laws with your gain financial position. 1) Open a trust with the money. 2) Use that trust for banking and make it your mortgage lender. 3) Gain tax deductions for having a mortgage and put tax dollars in your own pocket just by shifting money around in a legal creative accounting method. The wealthy use loop holes that can be exploited only with money to maximize the hoarding. How does one accumulate wealth with hoarding it?
  - WalterBright 1y ago
    Loaning money out is not hoarding it. You also still paid out the money to the seller. > The wealthy use loop holes that can be exploited only with money to maximize the hoarding. You'll have to be more specific about that. Most deductions and credits phase out with increasing income.
    - yndoendo 1y ago
      > Loaning money out is not hoarding it. You also still paid out the money to the seller. You do realize that the rich loan out to themselves via shell corporations or trusts. The only mobility of money is putting tax dollars into the wealth hands. Just because a wealth person bought it does not mean someone else wouldn't. The wealthy can also use their buying power to reduce the value of the sale and harm the seller. Kroger has around 40% market share to throw their weight around a reduce the selling power of the farmer and increase cost to the consumer. So the farmer makes less all because of threat to not buy from in a market that keeps having less and less competition. Have you had to give free labor in millions of dollars so your company could gain access to one of the big name companies on Wall-street. I have and it just highlight the inequality in wealth at a personal and corporate level. Even Steve Jobs used his wealth of Apple to buy up companies cheap at discounted rates. I cannot find a the video any more but it talks about how a company was being bought by Apple. Steve Jobs, at the meeting, asked the company's CEO why am I buying your company for $XXX,XXX. I think it should only cost $50,000 less. CEO said there is an agreement again. Jobs, I could just not buy it. How about the art scam loop hole. 1) Pay an artist $1000 to create a piece via trust or another organization you own. 2) Sell the at auction and buy it for yourself for $30,000. 3) Donate the art work to charity. 4) Turn a $1000 into a $30,000 tax deductible with more creative accounting. This is not the only artwork scam. [1] There are loop holes that wealth people pay lawyers, accounts, full time staff to do full time as a job. Exploit the laws for personal gain to hoard wealth. [0] Panama Papers even had their methods leaked and the names of their shell companies. Another great use of a shell company is the ability remove liability from the wealth onto a corporate entity that can easily dissolve in bankruptcy and shed the liability. Laws often are designed to ease the burden of liability from companies while keeping on individuals. Again how do you gain wealth with out hording it? Are stocks wealth, is property wealth, are bonds wealth? Let say you own 40% of an industry and work to gain 70%. Have you not increased your industrial hoarding by 30%? Even though it is an investment it is till hoarding. How about stocks, can you hoard those to consolidate and hoard wealth? [0] https://en.wikipedia.org/wiki/Panama_Papers https://en.wikipedia.org/wiki/Panama_Papers [1] https://naturalist.gallery/blogs/journal/understanding-the-fine-art-market-how-the-wealthy-use-art-for-tax-evasion https://naturalist.gallery/blogs/journal/understanding-the-f...