The rich have money -- and passion

[Al_Masetti]

Uhhh… no, not exactly.

The 20% is homeowner equity (meaning the value of a home net of debt); the other 80% is other investments (IRAs, 401k’s and etc… mostly invested in stocks) and also direct ownership of businesses.

You got it! 20% is homeowner equity thus 80% debt on the house. These people have debt, a lot of debt it simply was not their choice. That is why the do not use cash (checking accounts, time deposits, and money market funds) based financing they can’t! The US is structured to heavy debt to higher risk asset. They have to return 10% on their investment because they have 6-7% debt against the investment (asset) Remember their college loan is 60k at 5-6% their house mortgage 150-250k @6-7%, add 10-20k in credit card @ 12%, throw in some car loans. Wow, a record number of people are carrying over $300,000 in debt. This is often, or approach, 10 times the base personal income, a typical college educated person starts at $45k and will stay under $60k for several years. The bottom line is they have no choice unless there is extreme parent involvement in resources as paying for the college, and giving them Grandma’s house. Many college graduates renting a tiny apartment to save $1,000 a month (that is a lot) would need **21 years to save for their house purchase!!! **They would be 54 years old before they start to house shopping!!! Additionally as the debt loads are so high conventional loans will not work(classical capped at twice the income level). That means the government will either be directly lending(as college loans), or underwriting (as FHA), or paying through taxes (as k-12) more and more. And yes more bankruptcies as the income simply can not support the loans, only asset appreciation can pay-off these debt levels. Net result more government involvement.

 

[Texas_Roofer]

Uhhh… no, not exactly.

The 20% is homeowner equity (meaning the value of a home net of debt); the other 80% is other investments (IRAs, 401k’s and etc… mostly invested in stocks) and also direct ownership of businesses.

Fair enough, however if they own their home(no mortgage) the average person would be a millionaire + (20%=avg house $240,000), if they own 50% of the house (50% mortgage) then the average person is worth ~$625,000. If they own abut 20%, then their financial worth is roughly ~$125,000. I think you will find the last scenario much close to what studies find?

 

[Al_Masetti]

Fair enough, however if they own their home(no mortgage) the average person would be a millionaire + (20%=avg house $240,000), if they own 50% of the house (50% mortgage) then the average person is worth ~$625,000. If they own abut 20%, then their financial worth is roughly ~$125,000. I think you will find the last scenario much close to what studies find?

The problem with these numbers is that there is a vast amount of net worth in the United States in the aggregate. $55 trillion.

The historic ways of stating what people are worth does not account for the $55 trillion figure.

How would you back into that $55 trillion figure?

In your comment, you refer to some studies. Specifically, which studies are those?

 

[Al_Masetti]

If anyone is seriously interested in learing about various aspects of this topic, they should visit Amazon and get this book:

“The Politically Incorrect Guide to Capitalism” by Robert Murphy

amazon.com/Politically-Incorrect-Guide-Capitalism-Guides/dp/1596985046/ref=pd_bbs_sr_1/002-6132929-2180025?ie=UTF8&s=books&qid=1180709398&sr=1-1

It provides some basic information on how the American version of Capitalism works.

 

[Texas_Roofer]

The problem with these numbers is that there is a vast amount of net worth in the United States in the aggregate. $55 trillion.

The historic ways of stating what people are worth does not account for the $55 trillion figure.

How would you back into that $55 trillion figure?

In your comment, you refer to some studies. Specifically, which studies are those?

You can get any number of reports often the regional federal reserve offices are more than you would ever read. however I will cut some from the old census, and high-lite some keys notes

census.gov/prod/2003pubs/p70-88.pdf.

*• Median household net worth increased from $49,932 in 1998 to $55,000 in 2000.

• Median household asset values of stocks, rental property and Individual Retirement Accounts (IRA and Keogh accounts) also experienced significant increases between 1998 and 2000.

• The median household value of other financial investments fell during the same period from $24,367 to $22,000. Other financial investments include mortgages held for sale of real estate and amount due from sale of business or property.

• Median home equity for households was $59,000 in 2000, significantly higher than the
1998 median household home equity of $55,263.

• In 2000, median household net worth varied from $7,396 for households in the lowest
income quintile to $185,500 for households in the highest income quintile.

• In 2000, median household net worth generally increased with the age of the householder, rising from $7,240 for householders under the age of 35, to $108,885 for householders 65 and older.

• In 2000, the household median net worth was $79,400 for households with a non-Hispanic White householder, $7,500 for households with a Black householder, and $9,750 for households with a Hispanic householder.6 Hispanic households and Black households had significantly lower net worth than non-Hispanic White households, but the difference between Hispanic and Black households was not statistically significant.

• Married-couple households, the majority of households, had the highest median net worth in 2000: $91,218. Significantly lower net worth characterized male householders
($24,659) and female householders ($23,028).

• In 2000, households with householders having a job for the entire 4-month reference
period had a median household net worth of $51,050, compared with $28,543 for those with householders having no labor force activity during this time.*

So when you add 7 years of inflation plus growth you can see the mortgage must exist and must be large. As per the previous post (lets assume the $55k has grown to $100k) the earlier reference is 20% of the 100k is home equity so that means $20,000 equity while the average value is ~$250k so your looking at ~$230k in mortgage on the average house. This mortgage alone is >4 times the household income! That is before you look at other debt ( school loans, cars, credit cards, etc).

 

[vern_humphrey]

Fair enough, however if they own their home(no mortgage) the average person would be a millionaire + (20%=avg house $240,000), if they own 50% of the house (50% mortgage) then the average person is worth ~$625,000. If they own abut 20%, then their financial worth is roughly ~$125,000. I think you will find the last scenario much close to what studies find?

And if you simply live into your late 50s, you will have the mortgate paid off, and own the home free and clear.

If you have been saving and investing a little as you go, you will have a substantial amount to live on.

 

[cynic]

I like verns posts because they’re always built on the idea that everyone can and should be self-employed. An economy of employers with no employees. When it comes down to it, isn’t it really about having a go at people who aren’t millionares, rather than defending those that are?

 

[jman507]

I like verns posts because they’re always built on the idea that everyone can and should be self-employed. An economy of employers with no employees. When it comes down to it, isn’t it really about having a go at people who aren’t millionares, rather than defending those that are?

To a point this is where Levi, socialist, and Vern, capitalist, start to pararrel. The people, if able, need to start to learn how to take control over capital and manage it, and not rely on others to do it for them. It is much the same as doing conservation in your home with the 3 Rs, it’s reduce waste of goods, and look for ways to reuse and recycle capital. If you have a goose that lays golden eggs, you better make sure you preserve it by keeping it alive. (Granted if possible, given the Law of Conservation of Matter, chances are you’d have to feed that goose as much gold as it gives as output, or else that goose has some crazy physiology ) Even with Levi’s idealism, if the people are not careful and work hard, the socialist system will just collapse on itself.

I say Vern is probably a bit more optimistic about people’s ability as a whole to carry it out, people can have areas of weakness, and some in this area; but I doubt if pressed he’d back away too. One does need to have that spirit though if they are able to carry it out, in order to actually do it. One thing about empowerment is you need to have someone to tell you, plus you need to actually think you can do it. You will doubt yourself enough on your way to actually doing it. How many times did the Israelites wished they had gone back to being slaves on exile, while trying to get to the promised land?

One problem is when you make any broad national system is it’s cannot address the needs for everyone. Some poor do not have the ability to lift themselves out of the situation. They themselves need the help. Some poor need help and have someone come along side to help show them and challenge them lift themselves up, along with some temporary assistance for their basic needs. Some just need the challenge. Broad programs do not have the agility and flexibility to help out for individual situations, this is where it comes real important for families and schools to step in teach values and mentor people. This is where Vern, really pins his attention. If anything, it’s where effort is most effective.

 

[Texas_Roofer]

I like verns posts because they’re always built on the idea that everyone can and should be self-employed. An economy of employers with no employees. When it comes down to it, isn’t it really about having a go at people who aren’t millionares, rather than defending those that are?

There is certainly alot to what you say, and we are moving that way. In a free society the word “employee” is often misunderstood, it means there is a contract allowing one to act on the behalf of another. An employee is an agent. We installed all types of tax breaks to encourage employers to offer benefits to employees. Today the problems out weigh the those benefits and now both employees and employers want to break up the old system however the government wants to stop this break up. The government does not want everybody acting as a independent businesses. The more this transition occurs the more government will have to change the tax laws.

 

[vern_humphrey]

I like verns posts because they’re always built on the idea that everyone can and should be self-employed. An economy of employers with no employees.

I believe it’s a violation of the rules to state someone else’s position for him.

When it comes down to it, isn’t it really about having a go at people who aren’t millionares, rather than defending those that are?

Yes – we should encourage people to become self-supporting, and finally affluent. We do that by providing children a good education and inculcating in them the values of hard work, saving and investing.

 

[LCMS_No_More]

I believe it’s a violation of the rules to state someone else’s position for him.

I read that as an analysis of what you post, not someone speaking for you. It’s a pretty dead-on accurate analysis in my book.

Yes – we should encourage people to become self-supporting, and finally affluent. We do that by providing children a good education and inculcating in them the values of hard work, saving and investing.

I don’t think anyone disagrees with that. I think at issue is how much one recognizes the extent of the role of the society in which one lives has to play. No matter what anyone says, no one makes it alone. We all rely on our government for certain essential services in the society.

The roads you drive on are provided by the government. Police and fire are provided by the government. The food you eat and the water you drink is reasonably safe because of government regulations. The gas you put in your car will not ruin your car because the government regulates what goes into the gas…and so on and so forth.

And let’s not forget that in our democratic republic, the government isn’t some “thing out there” (waves hand mysteriously in the ether), it is We the People acting in common cause so that everyone can have the opportunity to benefit.

 

[vern_humphrey]

I read that as an analysis of what you post, not someone speaking for you. It’s a pretty dead-on accurate analysis in my book.

So you will have no complaints when I analyze your posts.

I don’t think anyone disagrees with that. I think at issue is how much one recognizes the extent of the role of the society in which one lives has to play. No matter what anyone says, no one makes it alone. We all rely on our government for certain essential services in the society.

Well, duh! <Smak!>

Did I not say we should educate the children and inculcate in them the values of hard work, saving and investing?

What is missing is the social component – not the econonmic component. We aren’t doing our job.

The roads you drive on are provided by the government.

Except for the 3/4s of a mile of private road I built and maintain.

Police and fire are provided by the government.

Except for the arms I keep for protection, and the fire hydrant I put in, and the hose, alarms and so on I maintain.

The food you eat and the water you drink is reasonably safe because of government regulations.

Except for what I grow in my garden and the critters I raise for slaughter or hunt.

The gas you put in your car will not ruin your car because the government regulates what goes into the gas…and so on and so forth.

Actually, if you hae an older car, it will ruin your engine – unless you buy special addiives.

And let’s not forget that in our democratic republic, the government isn’t some “thing out there” (waves hand mysteriously in the ether), it is We the People acting in common cause so that everyone can have the opportunity to benefit.

Except for the children that go to substandard schools.

 

[jman507]

I read that as an analysis of what you post, not someone speaking for you. It’s a pretty dead-on accurate analysis in my book.

I don’t think anyone disagrees with that. I think at issue is how much one recognizes the extent of the role of the society in which one lives has to play. No matter what anyone says, no one makes it alone. We all rely on our government for certain essential services in the society.

The roads you drive on are provided by the government. Police and fire are provided by the government. The food you eat and the water you drink is reasonably safe because of government regulations. The gas you put in your car will not ruin your car because the government regulates what goes into the gas…and so on and so forth.

And let’s not forget that in our democratic republic, the government isn’t some “thing out there” (waves hand mysteriously in the ether), it is We the People acting in common cause so that everyone can have the opportunity to benefit.

The one thing that could collapse the whole system is if people as a whole are not productive enough to give the government what it wants to provide. If the government is effecient it will give aid to only those who really do not have the ability to do what it needs and to help provide regulation and infastructure to help produce and move goods and services. There will always be ineffeciencies with government due to it’s broad scope, but what is important is to what degree.

Families and schools are so vital for the system to maintain itself. There is always the economics, but to really get to the soul of a kid and to motivate him isn’t money, it really takes a relationship. On one hand economics always plays a role, at the same time, if a parent tells a kid, “I don’t care if you go to school or not,” that can be a blow to the core, that money cannot solve, it’s going to take another who caughts the kid at the right time saying, “you really have a gift for this subject, if you really put some effort into it, you can do something special.” That comment could just spark a fire in the kid, if even not bound to the top of the field, give him a decent job to be a bigger assest to a community than a liability.

 

[LCMS_No_More]

So you will have no complaints when I analyze your posts.

If the analysis is accurate, then that’s fine. If it’s not, then I will respond accordingly.

Well, duh! <Smak!>

How cute.

Did I not say we should educate the children and inculcate in them the values of hard work, saving and investing?

Yes, but I believe that it only a piece of the puzzle, not the whole picture.

What is missing is the social component – not the econonmic component. We aren’t doing our job.

Considering not everything is economic in nature, I agree with that. We aren’t doing our job as individuals and as a society.

Except for the 3/4s of a mile of private road I built and maintain.

Except for the arms I keep for protection, and the fire hydrant I put in, and the hose, alarms and so on I maintain.

Except for what I grow in my garden and the critters I raise for slaughter or hunt.

Actually, if you hae an older car, it will ruin your engine – unless you buy special addiives.

Except for the children that go to substandard schools.

Exceptions don’t make the rule. Let’s talk about the how things work for most people, not your little exception. You may live in the country and CAN do those things. Our country is pretty urbanized, so most of us don’t have gardens and 3/4 mile long driveways, etc.

Older cars…meh. Reductio ad absurdum. GENERALLY SPEAKING, what i said was true.

As to substandard schools, when they are so underfunded that teachers and students have to buy chalk or whiteboard pens or the textbooks are old, worn out and/or out of date, then it’s an issue of funding. When kids are taught how to pass a test but not how to reason in a way that will make them successful citizens, that’s a major problem. When kids aren’t taught basic civics, so as to be rendered politically ignorant, it’s an issue of not making informed citizens who can make rational decisions about their own government.

 

[LCMS_No_More]

The one thing that could collapse the whole system is if people as a whole are not productive enough to give the government what it wants to provide. If the government is effecient it will give aid to only those who really do not have the ability to do what it needs and to help provide regulation and infastructure to help produce and move goods and services. There will always be ineffeciencies with government due to it’s broad scope, but what is important is to what degree.

You don’t get much of an argument from me there.

Families and schools are so vital for the system to maintain itself. There is always the economics, but to really get to the soul of a kid and to motivate him isn’t money, it really takes a relationship. On one hand economics always plays a role, at the same time, if a parent tells a kid, “I don’t care if you go to school or not,” that can be a blow to the core, that money cannot solve, it’s going to take another who caughts the kid at the right time saying, “you really have a gift for this subject, if you really put some effort into it, you can do something special.” That comment could just spark a fire in the kid, if even not bound to the top of the field, give him a decent job to be a bigger assest to a community than a liability.

Generally speaking (admitting that there are exceptions here, okay?), parents do care that their kids go to school. Unfortunately, our current economic climate is that both parents have to work full time just to put food on the table and have little or not time to check in on what their kids are up to. It’s truly sad.

And I agree. If kids are given the right push at the right age, they can and will do what they can to meet that expectation. I’ve seen it. I look at my own life and think about what potential has been lost because no one really pushed me the right way so I be more successful. Now I have to do it the hard way…slowly, one college course at a time while barely hanging on financially.

 

[cynic]

Yes – we should encourage people to become self-supporting, and finally affluent. We do that by providing children a good education and inculcating in them the values of hard work, saving and investing.

…from this are we suppposed to get that people who work as employees in low to middle income jobs are not self sufficient enough and not hard working… leverage to say that such people are lucky to get paid at all doing what they do (because they aren’t acheiving their potential) and don’t deserve government protection in the form of labour laws (a minimum wage, gauranteed half hour lunchbreak, overtime pay etc). Is this not the point of view of someone who employs and wants to minimise labour costs, or someone who is completely self-sufficient (farmers or a self-employed tradesman) and has little sympathy for those who work standard 8:00-5:00 jobs?

 

[LCMS_No_More]

…from this are we suppposed to get that people who work as employees in low to middle income jobs are not self sufficient enough and not hard working… leverage to say that such people are lucky to get paid at all doing what they do (because they aren’t acheiving their potential) and don’t deserve government protection in the form of labour laws (a minimum wage, gauranteed half hour lunchbreak, overtime pay etc). Is this not the point of view of someone who employs and wants to minimise labour costs, or someone who is completely self-sufficient (farmers or a self-employed tradesman) and has little sympathy for those who work standard 8:00-5:00 jobs?

Well said. Interesting how the fact that there will always be a need for people who need to take out the trash, wash the dishes and change/clean bedbans. If those who are doing those jobs right now received Ph.D. and the like, someone would have to do those jobs. Those people need to be protected, just like Bl. John XXIII said in Mater et Magistra, paragraph 20.

 

[anthony022071]

A society composed of affluent people,without there being even more lower-class and poor people that they can distinguish themselves from,cannot exist.The existence of a middle class pre-supposes and necessitates the existence of a lower class which is at least as large. Wealth and poverty are defined against each other. Somebody has to do the grunt work,the manual labor,factory,farming,and manufacturing jobs. Since we don’t have a slave class or a large proportion of lower class legal citizens like we used to , American companies resort to global out-sourceing and illegal immigration. The more middle-class and affluent Americans become, the more heavily we must rely upon
the labor of poor people in other countries. Economic structures are subject to the law of gravity just like architectural structures.
You can’t have a middle-class hovering above the poverty line unsupported by an even greater proportion,at home or abroad,of lower-class and poor people underneath. That would be like a second-storey building hovering above ground unsupported by a first storey and a foundation. Also, if it were possible for everyone to make a middle-class salary,like $50,000 a year, then making that amount of money would become inadequate to maintain a middle-class life-style. The dollar would be that much more depreciated in value. The more people that crowd into the middle-class, the more the buying-power of the dollar goes down,since so many of us are making so much money. It’s like 20 people trying to get into a life-boat made for 10. The whole thing is going to sink.

 

[cynic]

Lets talk about a “living wage” for a minute…
Well there’s a minute and in this day and age I can honestly say we don’t have one.
Let me make myself clear by saying I’m not speaking for myself as I have been blessed to have a good trade with a union that has a long history of holding up a good wage, safe working conditions, intergrity and helping the community prosper by spending that hard earned money locally for the most part.
You can thank the gov’t and greedy corporations for taking there money and jobs overseas. In some cases it can’t be helped if a company is to survive in a “cut throat” economics world also known as globalization.
North America prospered on manufacturing and now its all but gone. It’s very,very easy to tell someone to retrain but in the real world that is not always possable. What makes it worse even is that many retrained personel have nowhere to utilise there skills.
There’s something very wrong when a person must work two jobs to keep his head above water. That’s not living it’s poverty and now more so than ever we have a new class of people to add to society “the working poor”.
The catechism I believe states the moral and ethical responsability an employer has to provide a “living wage” to its employees.
We need an uprising in organised labor like there was 100 yrs ago.
We need hefty tariffs and protection legislation just like China and India have.
We need people with a little backbone to say enough is enough and do something about it.
grapes

Isn’t this what it’s really about, extreme individualist philosophies as the smokescreen to hide the real agenda of the right, the narrrow interests of CEO’s and shareholders. They want a large pool of semi-skilled labour that can employed at $2, $1, 50 cents an hour. They want no overtime so they can force people to work 14 hours a day, 7 days a week. An easily employable mass of non beings who can be shifted around and dropped at will. And how do we justify this? create a set of ideals that states that if you’re not a self-made, self-employed millionare or some upwardly mobile professional that can negotiate a salary, then you’re a loser, and deserve whatever bed you’ve made for yourself.

 

[jman507]

You don’t get much of an argument from me there.

Generally speaking (admitting that there are exceptions here, okay?), parents do care that their kids go to school. Unfortunately, our current economic climate is that both parents have to work full time just to put food on the table and have little or not time to check in on what their kids are up to. It’s truly sad.

And I agree. If kids are given the right push at the right age, they can and will do what they can to meet that expectation. I’ve seen it. I look at my own life and think about what potential has been lost because no one really pushed me the right way so I be more successful. Now I have to do it the hard way…slowly, one college course at a time while barely hanging on financially.

I think you ought not assume there are two parents.

Children in single-parent families, by Race: Percent:
United States Non-Hispanic White 23% Black or African American 65% American Indian 49% Asian and Pacific Islander 17% Hispanic or Latino 36% Total 32%

kidscount.org/sld/compare_results.jsp?i=722

One third of children are in single parent households. It can be true that single parents can make great and encouraging parents, and two parent households can be poisonous to a child’s future, but a single parent has more constraints on their time and resources, than a two-parent family. Two parents can play off of each other and help check each other. There is some wisdom in putting God first, spouse second, and children third. God will keep you on the right direction, a good synergy with your spouse helps make the time more effecient and productive with the third priority your children.

Some of those split ups were probably for the better, but you must remember with any split up, it’s a net loser for mother, father, and child, all except for the lawyers. While I’m sure the services by lawyers go down as GDP, I doubt that it’s the best use of preservation of capital. It would go a lot further for the couple to be better prepped for marriage and family life and stay together, than putting a nice down payment on a home and giving it to the lawyer. Plus now they have to go and find two more smaller places to live. If they both wanted to work they could play off of each other’s schedule to make sure the children are cared for, and can be available to work.

Plus I’d have to wonder, if having a broken home, might not give a good example of married life to the children, thus causing them to be even more unprepared for marriage.

In the end, it’s probably far more common for the people really struggling to put food on the table, especially for most of a child’s life, are more likely going to be single parent households, and not the double parent households, unless one parent has a long-term injury or illness. If assistance is going to be given, it’s going to be far better, to prevent the cases where it can be prevented, and give assistance to those who would be unable otherwise.