4 ms·

Yeah, it was a big con to get folks to think that what seemed to them a huge amount of money meant that they were participating in a meaningful fashion. I've n

Yeah, it was a big con to get folks to think that what seemed to them a huge amount of money meant that they were participating in a meaningful fashion. I've never gotten anyone who is educated in economy/finance to provide a reasonable answer to the questions: "Is the world economy large enough to support a meaningful number of people regularly investing in it, arriving at an amount able to support a comfortable retirement, and then draw said money out on a regular basis? What percentage of the population can be supported thus? What is to be said to that percentage whose participation would exceed the capacity of existing financial markets?"

ericmay 7mo ago
Well, in part you are asking about the world economy. Most of the world doesn’t have 401k retirement vehicles, good access to financial markets, or the spare funds to save at all, whether it’s in stocks, bonds, or other investment vehicles. So the reason you haven’t gotten an answer is because your question doesn’t make much sense.
- bilekas 7mo ago
  A 401K is just an investment in indexes linked to your pension, there's nothing stopping everyone putting their own money into an index themselves. The question makes sense, how many people could the market support if everyone was investing and not spending.
  - lotsofpulp 7mo ago
    >how many people could the market support if everyone was investing and not spending. I think the more salient question is how many people could the market support if everyone was consuming and not producing. Not producing as in the goods and services that people want such as clean toilets and food and nursing home care. Or not producing the kids who will go on to produce the aforementioned goods and services.
  - mothballed 7mo ago
    An overabundance of investment without an outlet would just decrease yields. Hypothetically the yield could go negative. It is a self correcting problem. If the yields are too low people can spend it on hookers and blow before dropping it into a money shredder. The yield shouldn't drop much below the premium for the time preference of money.
  - ericmay 7mo ago
    > A 401K is just an investment in indexes linked to your pension, there's nothing stopping everyone putting their own money into an index themselves This is mostly incorrect. A 401k in the United States is a tax-advantaged investment account. You can buy shares of individual companies, you can purchase index funds, you can leave it there as cash, buy gold, or just about anything you want or you'd expect to be able to purchase using a brokerage account. Depending on the route you take (Roth or Traditional) you can realize tax savings now or at a later point. 401k Accounts are programs offered by your employer as well [1]. One of the many reasons the OP's question doesn't make sense is because not every country in the world has a 401k program. [1] There are other programs for individual owners or for those who have an employer that does not offer a 401k.
    - thunky 7mo ago
      People can invest in markets without a 401k with more options (plans commonly have only a handful of funds available) and less fees (both admin fees and inflated fund expense ratios). And you may pay more taxes with a 401k than otherwise depending on your future tax rate (which is unknowable). The only pure advantage is employer matching if you have it and stay employed long enough for it to vest. So not exactly a necessity to build wealth.
Underqualified 7mo ago
The market is partly a Ponzi scheme where more people buying inflates the price, regardless of the underlying value. The modern stock market is not focused on dividends (anything but), so there is no'real' return from the actual companies to the shareholders. (Buybacks could be considered similar to dividends). There is still an element of real economic growth underlying the stock market, but passive investing, derivatives and market manipulation have largely decoupled the stock market from the actual economy. At least that's my opinion. I think the answer to your question would be yes IF: * The world economy keeps growing * There is a fair distribution of the return on the world economy (which there isn't)
- WillAdams 7mo ago
  The problem is that many countries are now steady-state, or even negative for population forecasts, no?
  - Ekaros 7mo ago
    Yes. Fundamentally goods and services at time you retire must be produced by someone. If there is less people producing that means that labour will get more expensive. Or then you must really kick down that population. And well if they don't take it well you might have no retirement...
seanmcdirmid 7mo ago
Investment for retirement…in theory at least, should go to projects that will create more goods and services in the future to actually support that retirement. It isn’t about the economy being large enough today, but growth so that it is larger enough tomorrow when you do actually retire. Any investment alternative, like a private or public pension, works under the same principle. Even traditional retirement plans depended on investing in having lots of kids to take care of you in old age.
- WillAdams 7mo ago
  The problem is, in the past, the on-going increase in payouts was covered by increasing populations --- much of the world is now at a stable, or even negative population change state for the foreseeable future, so that well is going dry --- the passing away of the Baby Boomers in the U.S. represents the larges transfer of personal wealth in human history, and a lot of it is going into geriatrics/nursing homes --- what happens as the nursing homes empty out and there aren't sufficient folks to keep them operational?
  - seanmcdirmid 7mo ago
    Thats the old fashioned plan: have lots of kids to fund your retirement. Today, we are investing in AI, automation, and robots, which is similar if you think about. We don’t need a population increase if robots are doing the work instead. China is a good example of making these investments aggressively right now to deal with their demographic cliff.
    - WillAdams 7mo ago
      That's a nice idea, and if such devices aren't used to further concentrate wealth for their owners, that would work --- the problem is, LLMs and the robotics which they facilitate look to be the first major technological advance where the enlarging of the economy which they afford does not bring about a commensurate increase in the number of jobs.
      - 7mo ago
DonnyV 7mo ago
The stock market is a very large Ponzi scheme. 401Ks are indexed Ponzi schemes. Once the ultra wealthy can disconnect their wealth from any one country, using crypto tokens. The stock market and 401Ks will probably crash. You usually want to do this on a generation that has no real voting block. So it will probably happen when GenX starts retiring.
WarmWash 7mo ago
It's impossible to answer because the language is too imprecise. Poor people in the US live like gods compared to people living in 3rd world jungles, but they complain just as much if not more. So you quickly realize that "comfortable" is a relative term, and envy poisons any honest measure of "comfort".
- WillAdams 7mo ago
  I've traveled quite a bit, and I'm well aware of both poverty in the U.S. and in other countries --- that's part of what informed my query --- what is the end-game for capitalism as many countries of the world go into steady state or even negative population changes in the future?
  - WarmWash 7mo ago
    Are you asking what the living baseline would be if there was some kind of global socialist government, and everyone was cut an equal slice of the global income and global resource pie? It would be pretty hard to dial that in because there are so many intertwined factors. But we could be pretty confident it wouldn't land near current first world standards. No one knows what the end game of capitalism looks like, because we landed on the system because it is largely self-regulating and has worked well for carrying society forwards for the last 400ish years. Everything else has done poorly and kind of sucked.
    - johnnyanmac 7mo ago
      I disagree. We've seen the endgame of capitalism a few times, and every country decided that was not right. Hence we introduced socialist policies. Like antitrust policies, social security, and nationalized Healthcare (among other necessities). Meanwhile, I'm not sure if we've truly seen an endgame socialist policy. Captialism seems to turn into imperialism and break that up before seeing the endgame there.
  - the_doctah 7mo ago
    It's better than the endgame of Communism.
KellyCriterion 7mo ago
At least a counteroriented theory, not that far off: https://de.wikipedia.org/wiki/Mackenroth-These https://de.wikipedia.org/wiki/Mackenroth-These

ericmay 7mo ago

Well, in part you are asking about the world economy. Most of the world doesn’t have 401k retirement vehicles, good access to financial markets, or the spare funds to save at all, whether it’s in stocks, bonds, or other investment vehicles. So the reason you haven’t gotten an answer is because your question doesn’t make much sense.

bilekas 7mo ago
A 401K is just an investment in indexes linked to your pension, there's nothing stopping everyone putting their own money into an index themselves. The question makes sense, how many people could the market support if everyone was investing and not spending.
- lotsofpulp 7mo ago
  >how many people could the market support if everyone was investing and not spending. I think the more salient question is how many people could the market support if everyone was consuming and not producing. Not producing as in the goods and services that people want such as clean toilets and food and nursing home care. Or not producing the kids who will go on to produce the aforementioned goods and services.
- mothballed 7mo ago
  An overabundance of investment without an outlet would just decrease yields. Hypothetically the yield could go negative. It is a self correcting problem. If the yields are too low people can spend it on hookers and blow before dropping it into a money shredder. The yield shouldn't drop much below the premium for the time preference of money.
- ericmay 7mo ago
  > A 401K is just an investment in indexes linked to your pension, there's nothing stopping everyone putting their own money into an index themselves This is mostly incorrect. A 401k in the United States is a tax-advantaged investment account. You can buy shares of individual companies, you can purchase index funds, you can leave it there as cash, buy gold, or just about anything you want or you'd expect to be able to purchase using a brokerage account. Depending on the route you take (Roth or Traditional) you can realize tax savings now or at a later point. 401k Accounts are programs offered by your employer as well [1]. One of the many reasons the OP's question doesn't make sense is because not every country in the world has a 401k program. [1] There are other programs for individual owners or for those who have an employer that does not offer a 401k.
  - thunky 7mo ago
    People can invest in markets without a 401k with more options (plans commonly have only a handful of funds available) and less fees (both admin fees and inflated fund expense ratios). And you may pay more taxes with a 401k than otherwise depending on your future tax rate (which is unknowable). The only pure advantage is employer matching if you have it and stay employed long enough for it to vest. So not exactly a necessity to build wealth.

Underqualified 7mo ago

The market is partly a Ponzi scheme where more people buying inflates the price, regardless of the underlying value. The modern stock market is not focused on dividends (anything but), so there is no'real' return from the actual companies to the shareholders. (Buybacks could be considered similar to dividends). There is still an element of real economic growth underlying the stock market, but passive investing, derivatives and market manipulation have largely decoupled the stock market from the actual economy. At least that's my opinion. I think the answer to your question would be yes IF: * The world economy keeps growing * There is a fair distribution of the return on the world economy (which there isn't)

WillAdams 7mo ago
The problem is that many countries are now steady-state, or even negative for population forecasts, no?
- Ekaros 7mo ago
  Yes. Fundamentally goods and services at time you retire must be produced by someone. If there is less people producing that means that labour will get more expensive. Or then you must really kick down that population. And well if they don't take it well you might have no retirement...

seanmcdirmid 7mo ago

Investment for retirement…in theory at least, should go to projects that will create more goods and services in the future to actually support that retirement. It isn’t about the economy being large enough today, but growth so that it is larger enough tomorrow when you do actually retire. Any investment alternative, like a private or public pension, works under the same principle. Even traditional retirement plans depended on investing in having lots of kids to take care of you in old age.

WillAdams 7mo ago
The problem is, in the past, the on-going increase in payouts was covered by increasing populations --- much of the world is now at a stable, or even negative population change state for the foreseeable future, so that well is going dry --- the passing away of the Baby Boomers in the U.S. represents the larges transfer of personal wealth in human history, and a lot of it is going into geriatrics/nursing homes --- what happens as the nursing homes empty out and there aren't sufficient folks to keep them operational?
- seanmcdirmid 7mo ago
  Thats the old fashioned plan: have lots of kids to fund your retirement. Today, we are investing in AI, automation, and robots, which is similar if you think about. We don’t need a population increase if robots are doing the work instead. China is a good example of making these investments aggressively right now to deal with their demographic cliff.
  - WillAdams 7mo ago
    That's a nice idea, and if such devices aren't used to further concentrate wealth for their owners, that would work --- the problem is, LLMs and the robotics which they facilitate look to be the first major technological advance where the enlarging of the economy which they afford does not bring about a commensurate increase in the number of jobs.
    - 7mo ago

DonnyV 7mo ago

The stock market is a very large Ponzi scheme. 401Ks are indexed Ponzi schemes. Once the ultra wealthy can disconnect their wealth from any one country, using crypto tokens. The stock market and 401Ks will probably crash. You usually want to do this on a generation that has no real voting block. So it will probably happen when GenX starts retiring.

WarmWash 7mo ago

It's impossible to answer because the language is too imprecise. Poor people in the US live like gods compared to people living in 3rd world jungles, but they complain just as much if not more. So you quickly realize that "comfortable" is a relative term, and envy poisons any honest measure of "comfort".

WillAdams 7mo ago
I've traveled quite a bit, and I'm well aware of both poverty in the U.S. and in other countries --- that's part of what informed my query --- what is the end-game for capitalism as many countries of the world go into steady state or even negative population changes in the future?
- WarmWash 7mo ago
  Are you asking what the living baseline would be if there was some kind of global socialist government, and everyone was cut an equal slice of the global income and global resource pie? It would be pretty hard to dial that in because there are so many intertwined factors. But we could be pretty confident it wouldn't land near current first world standards. No one knows what the end game of capitalism looks like, because we landed on the system because it is largely self-regulating and has worked well for carrying society forwards for the last 400ish years. Everything else has done poorly and kind of sucked.
  - johnnyanmac 7mo ago
    I disagree. We've seen the endgame of capitalism a few times, and every country decided that was not right. Hence we introduced socialist policies. Like antitrust policies, social security, and nationalized Healthcare (among other necessities). Meanwhile, I'm not sure if we've truly seen an endgame socialist policy. Captialism seems to turn into imperialism and break that up before seeing the endgame there.
- the_doctah 7mo ago
  It's better than the endgame of Communism.

KellyCriterion 7mo ago

At least a counteroriented theory, not that far off: https://de.wikipedia.org/wiki/Mackenroth-These https://de.wikipedia.org/wiki/Mackenroth-These