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So, to sum up you guys who love the current system, all the people in the bottom 50% are there because they buy i-phones and sodas.
If you think those things amount to jack squat in the big picture, you're an absolute liar or idiot. And by the way, I'm in the top 5% of earners. Don't know where I stand in terms of wealth but I'm sure it's in the top 25% at least.
When you talk about subjects like this, it is not about sodas flat panel TV's and i phones..it's about financial and social stability and security now vs some time in the past.
The simple fact is that financial security has decreased for most Americans over the last 30 years, and it has little or nothing to do with consumer goods that are remarkably cheap relative to where they were decades ago. Go check an old Sears catalog or something. Even if someone has a $90 cell phone plan and a $1000 TV, what does that have to do with 1% holding most of the wealth anyway?
I'm sure this won't stop most of you from patting yourself on the back about being such a financial geniuses, but if you want to have an honest discussion about the OP, by all means, at least consider it.
By the way, I own 2 cars that are 8 years old and paid off, have no CC debt and bought a house that is priced at 2X my yearly household income, so please don't tell me how smart you are.
Actually no. I read the article. Most middle class Americans invested all of their disposable income into RE while most wealthy invested in the stock market.
The stock market not only recovered but surpassed itself.
RE has only sunk further.
So the wealth, which was on paper, went *poof* for all those homeowners.
As far as financial and social stability...the average American has 5 CCs and 13 debt obligations.
The majority of middle class Americans are as bad as the government..going into debt and spending beyond their means while saving little to nothing for the future. A mere 40% of Americans save less than 6% of their salaries for the future and/or emergencies.
Every dollar I must pay in inflated rent is a dollar I cannot save and invest.
Actually this is a very important point. Those of you who live in the highly taxed blue states and are complaining about how expensive rent is need to understand that your landlord has high ownership expenses in part because of their very high property tax bill. Those high costs are passed on to you, the renter.
So... in essence... your rent is high because you're getting exactly what you voted for: a bloated, costly government that provides expensive social services.
Personally, I don't ask much of life and don't feel entitled to much. But as an American living under the Constitution I believe I am entitled to the property rights intended by the Framers, as opposed to having to pay inflated rents because government has regulated affordable home purchase out of the market. Every dollar I must pay in inflated rent is a dollar I cannot save and invest.
And every dollar I spend on my mortgage and my property taxes is a dolllar that I cannot save and invest. Every dollar that I spend on utilities and groceries is a dollar that I cannot save and invest. Every dollar that I spend on gas and on clothing as well.
So where we headed? Plutocracy? Banana republic? Collapse? When do we get the guillotines out?
If Romney wins, we will continue towards complete plutocracy. The American right-wing has proven in Wisconsin that enough money will convince enough people to vote against themselves and for the economic and political destruction of the middle class. We've seen this in history before with the rise of Nazi Germany (the effectiveness of propaganda especially).
Jim Jones convinced people to kill themselves. So did the Japanese during WWII.
As you note, there is a danger to the plutarchs of an 'American Spring'/rebellion, plus the election of Obama, Warren, and others could blunt their attack and save the country. I think this is the likeliest outcome and the one that I am working towards.
I'm always amazed at the disparity between retired people of my age who have accumulated wealth and their children. We have relatives in their late 30's who simply couldn't survive economically without the ongoing financial support of their parents.
These folks have modest incomes but have to have large homes, new cars and all the latest electronic gadgets for themselves and their kids. Mom and Dad provided large down payments for their homes and cars.
My brother and sister in law, both in the 60's have had to assist with overdue mortgage payments, surgery for a family dog and even for repairs to a dishwasher. When their out of state kids come to visit they pay for airfares and meals. Talk about entitlement.
The basic structure of the federal reserve system and its select number of "primary dealers" who skim off the top by design, is what I was referring to.
But skimming off the topic is an endemic problem within our financial system, e.g. the housing bubble, the 2008 financial bailouts and the recent LIBOR scandal. You ask for "links and proof" as if this is some new idea that hasn't been discussed ad nauseum.
Is this another opportunity for you to step up on your soapbox, and talk about the life decisions you've made, and admonish the life decisions of others?
Or are we still talking about wealth inequality in society, and explanations of why the average is so much greater than the median?
government taxation and spending is peanuts compared to the volume of money in the financial system.
You act like some people are born and automatically become billionaires when in fact, statiscally, most very wealthy did not inherity their money, they earned it on their own.
I find it very comical that just because someone doesn't dig ditches or work 9-5 laying bricks, that they aren't 'working hard'. Most wealthy people put in more hours because they're motivated and are willing to put in that extra effort to make more money to live a more comfortable life.
Net worth is assets - liabilities.
With a consumer nation that spends and doesn't save there's not much in the way of wealth for many Americans.
I posted this in another thread but personal savings has been on a decline since the mid-80's when we moved to a consumer based economy and Americans started spending more than they were saving.
Buying the latest iPhone is not investing in an asset and won't add to your wealth.
While my friends and peers bought their new cars, McMansions and designer clothes, I bought stocks, bonds and land.
You know how many "poor" people I see with iPads and iPhones. It is disgusting. I love the tenants I have who are poor yet they are leasing a Lincoln SUV and have four children.(I never meet my tenants, the leasing agency has told me. I make sure they can't track me down. Those people are always looking for a frivolous lawsuit.)
Agree we have the all flash no cash epidemic here in Atlanta bad. The exurban areas with all of the mcmansions have been hit so bad but intown areas have not been hit nearly as bad. In Atlanta the higher net worth homes tend to be intown and the low net worth high income are in the exurbs. (people in the Atlanta forum get so mad when I say it but, it is the truth.)
There were many two million dollar homes(well they were in 2006) in the Atlanta exurbs that were 10% down, three-four leased cars, minimum payments on the CCs, etc. But all of these people thought they were rich. Now they are renting something. I have many rental properties and many have tenants who are "victims" of foreclosure.
I actually had been waiting for the crash. It has allowed me to grow my rental portfolio.
I'm always amazed at the disparity between retired people of my age who have accumulated wealth and their children. We have relatives in their late 30's who simply couldn't survive economically without the ongoing financial support of their parents.
These folks have modest incomes but have to have large homes, new cars and all the latest electronic gadgets for themselves and their kids. Mom and Dad provided large down payments for their homes and cars.
My brother and sister in law, both in the 60's have had to assist with overdue mortgage payments, surgery for a family dog and even for repairs to a dishwasher. When their out of state kids come to visit they pay for airfares and meals. Talk about entitlement.
I've seen this behavior quite a bit myself. It's shocking.
A few years ago my daughter called me. She and her husband were looking at a vehicle to purchase, but they needed $500 more dollars to put down to qualify for the loan. She was asking if they could "borrow" this cash.
It hurt me to tell her no, but here was my train of thought: If she couldn't qualify for that loan herself, then she couldn't afford the vehicle. Another point - they were buying a brand new car (or trying to). Meanwhile, here I was at age 45 and had NEVER bought a brand new car in my life!
I told her no. She and her husband found another vehicle and were able to buy it on their own - and we didn't have the angst of her owing me $500 that I was likely never to see again. I don't want that sort of issue between us.
I am 50 years old, and my parents are affluent, and I have NEVER asked them for a PENNY. I can't imagine doing so! I mean, not for anything like a down payment or mortgage payment or anything having to do with daily life. Let alone MOVING BACK IN WITH THEM. What gets me is these grown kids who move back in with mom and dad, pay no rent, have mom doing their laundry, while they have a cell phone, a nicer car than their parents, and eat out most of the time. Oh, and don't forget the weekend partying and trips with their significant others.
OMG. Not in my house. No way, no how.
Recently my oldest son was considering a career change. He's about to get married and is considering moving back to Texas. He called and asked if he and his new wife could move in with me if they needed to "for a little while." Apparently, even though I raised him with tough love, he has forgotten some of the lessons I taught him and has been listening to his friends instead (he's 25). I told him that yes, if he showed up at my house with at least $6000 saved up, he and his new wife could stay with us for one month. With his savings, I would help them get an apartment and get it furnished during that one month. Then I would help them move OUT of my house and into their own house.
He got MAD AT ME! The NERVE of me expecting him to curtail his lifestyle (which involves lots of partying and weekend trips hiking, exploring, eating out, etc) and save money and actually have a PLAN for a transition when he shows up at my door with a new wife! He actually told me, "None of my friends' moms are this hard on THEM!"
WHAT!!!!!! Too bad, buddy. This is the deal, take it or leave it.
After a couple of weeks, he got over being so mad. Seems like Mom's idea isn't such a bad one after all.
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