4961

Depends on what the threshold of being “rich” is I suppose. I don’t think I could have retired in 2001 and lived the lifestyle that most people I think would consider the “lifestyle of the rich/famous”. I did retire in 2010 sort of in the sense that I no longer get paid for working. But I can’t ever imagine not working anymore.

4962

I doubt it. Pyperkub’s tag says he is in Northern CA, so I would guess that is in the SF Bay area. Housing prices up there are insane. I’m farther south in Ventura County and my house is $690k according to Zillow. I would say that his statement is reflective of his environment.

4963

My threshhold for rich is pretty low compared to most folks. I’d say seven digits in assets at 40 or even 30 would be enough to retire. (having one-tenth of that puts you in like the top 20% it seems)

Then again, that wouldn’t hold true for Bay Area, Chicago or NYC, but it would hold true for most of the rest of America- and I’d take living how I want over living in a pair of overpriced areas.

4964

It’s not only true there. My father was probably over 1 Million in assets back when he sold his first business while I was still in high school. But he had 5 kids to raise, and send to college and some lean years in the interim combined with some brutal fluctuations in the stock of the purchasing company meant that didn’t last long. In fact, he had to file for bankruptcy a few years back. There’s a really big difference between having a liquid Million and having a bunch of things that together the market says is worth a Million. The market can very quickly change its mind about the latter.

4965

Happiness for humans is probably some type of “acceleration” and not some type of “speed”.

People that have everything is not happy. While people that have much less but is progressively getting more are happy.

People that have everything and lose one single thing are unhappy.

People will not notice if they are healthy, but will notice a lot if their health become better or become worse. Only the Delta matter or is even noticeable|notherwhorty.

Humans that have a lot of sex can get bored of sex. Humans with almost no sex can get bored (of not having sex). Only people that have been dry for a long time, and now have a lot of sex, feel the urge to tell everyone how fortunate they are.

Humans are build this way. They are a container that will look empty, except if is getting filled, or a leak.

So I tally buy the idea of rich people not feeling any happy, or even scared of losing the money they have.

Also theres the rich and the megarich. You can always compare yourself to somebody that have one more luxury car than you, not to the guy that live with their parents, have a debt of 140.000 in the bank, and they have no prospect of getting any job at all. You don’t compare yourself to people without a house if you are rich. You don’t compare yourself to people that have to sell their car to pay this month rent.

I also think being rich is awesome. I don’t have the talent for it, but I would love to make every human in the planet rich in some way or form. Not because I love humanity (humanity have huge flaws), but because I love awesomeness itself :D

postdata:
Sorry for using so many words for something so simple.

4966

I read the book, but I can´t remember the precise statistics. However, I think what you are referring is that people in the top 1% income are mostly earners in the US. That is, people in the top 1% by income tend to earn more through work than through rent/interestest related income. This is obviously a good data point that points towards a somewhat meritocratic society.

However, I think the statistic was different when looking at the top 1% by owned wealth, not at income. That is, I think the top 1% (or was it the 0.1% percent?) by personal wealth accrued (instead of by yearly income, which counts earned income and return on the capital, but does not take into account total wealth) is still mostly dominated by inheritance and not earned income. That is, most big fortunes have been accumulated through inheritance. those people earn less through their interests than top managers through their work (which are most of the top 1%), but they have more saved.

The whole point of Piketty´s book is that with returns from capital rising as much as they are and growth stagnating, thus implying lower growths on those earned incomes, (and capital naturally accumulating), soon the top 1% income, now meritocratic to an extent and an stabilizing force against rentiers, will again be dominated by returns of capital/rents (edit, this can be seen on the graph below, where the difference between the red and green line is again aproximating the height of the red line, and when the difference is wider than the red line, that´s the point when most income at the top 1% will again be due to rents). Both by current fortune holders´ interests overtaking earned income by top managers and by those manager´s fortunes accumulating and generating more interests than earned income).

I might be remembering wrong though (about the 1% by wealth and not income statistic), and I can´t find it online. Just raising the question here…

4967

You can see how the income from inherited fortunes or previously owned capital (the difference between the red and the green line) has been increasing since the 80s. While the 50s-80s where extremely meritocratic. It is still far from being higher than the red line, as it was at the beginning of the century and what would signify rents and interests overtaking earned income, but it’s tending in that direction.

Europe’s data is far worse, btw, USA’s situtation is more meritocratic by far, even if it is still problematic.

4968

You can see how the income from inherited fortunes or previously owned capital (the difference between the red and the green line) has been increasing since the 80s

Juan, not sure I understand your chart - does it presume that all capital gains are inherited?

4969

99.9% of my income is from capital gains. Considering I grew up below the poverty line I feel comfortable in saying I didn’t inherit it.

4970

I suspect your income is structured that way for tax purposes however.

4971

Not sarcasm at all. The house I grew up in (maybe 2800 Sq ft on a small lot with a lawn but no pool 4br/2ba) was going for $1.6 million about 10 years ago (my folks paid about $72k in the early 70’s). I’d guess that it would go on the market for about 2.2m now.

I still live in Marin County, but we have a condo further north. We earn more than the median for what is one of the richest counties in the state/country (and could maybe scrape together a million in assets) but there’s no way we could afford to buy the house I grew up in. It would even be tough to scrape together the property taxes (1% plus local fees, etc) on an annual basis.

4972

What does that even mean? His income is likely primarily from capital gains because he made prior investments with previously earned salary and other income, and now has a sufficiently large income from those investments to support his lifestyle so that he doesn’t feel the need to take a salary from his business.

Safe to say that 0.0% of my capital gains were inherited.

4973

Not sure what you think we’re disagreeing on, because it isn’t the statement you wrote above.

4974

It means he suspects Brad was paid with stock options, rather than income, in order to reduce his tax liability.

4975

Well, but if you bought that house now, you would most definitely be rich. Or hell, even if your family merely still owned it, having purchased it for only $70k… you would be rich.

That’s how real estate works… it’s not valued based on square footage. It’s valued heavily based on location. That location is prime real-estate… Owning it is the same as owning a big as truckload of cash.

4976

That’s not what stock options are for, and stock options do not produce capital gains, although tax treatment is similar if the company increases in value after options are granted (which is certainly not guaranteed) and the options are subsequently sold or exercised for shares that are sold if, and only if, the Company has increased in value after the date the options were granted and have retained that value when sold.

Stock options are not for tax planning (and often have no value at all) - they’re to align the interests of management with the interests of the owners, to allow employees to participate in any increases in value of the company that they helped to create, and to incent employee retention (since they vest over time, typically 4 years after grant date)

4977

Which would be hard as there is no Stardock stock.

4978

No, not at all.

But that income (between the red and greenline) are still rents (income that comes from capital, not from current work/current productivity). It can be earned rent (gains and income from capital accrued through past work) or inherited rent.

It’s more meritocratic if it’s earned rent (it’s earned through work, after all) but it’s still non-productive income (income that comes regardless of an individual current productivity, which can be zero or not, depending on whether the individual in question, like Brad, still works for no compensation -though I think we can all agree this is an exception-).

Remember we are talking about income, not wealth. It’s obvious that accumulating wealth through labor is meritocratic. The issue is not that previous exceptional productivity gave the top earner a lot of capital, it’s that that wealth is still generating income although no work is being put into it. It’s equally unproductive to society in general as inherited rent income. The wealth is generating more wealth, thus increasing the percentage of income in a society that is not generated through labor (which is what creates inequality and social mobility, since if this happens -much more wealth accumulated than earned- social mobility then becomes obviously much harder and unequality rises).

Also remember that capital gains are the difference between the yellow and the green line. The difference between the red and the yellow are not capital gains, but pure rents (that is, not changes in valuation of capital, like house prices or stock onwership, but money outright paid as either rents or interests on deposits -and other kind of rents-). Overall, capital gains are a very small part of the top 1% income.

Also, accumulated wealth (and it’s associated capital gains) does become inherited after a generation unless the owner gives most of it away (like Buffet or Gates…). It is not usually done, since the income from it and it accumulation is rising (statistically speaking), so savers do outweight spenders/donors.

Edit: also, according to the analisys I’ve read on this and similar graphs, this is far from an apocalyptic graph (it shows a worsening trend but only a bad but not totally nuts current situation, where the society it’s losing in equality and meritocracy, but only recently (and thus people around 45-50 still enjoyed the good times)- although for Europe it’s worse-). It is, though, a warning sign.

On equality and meritocracy. The lower the green line the more equality in income (less percentage of income going to the top 1%. The less difference between yellow and red (or green and red) the more meritocratic (the easier it’s to access wealth through work, as oppossed to through accrued capital). You can see that from the 50s to the 80s the USA was the most equalitarian, while around the early 80s the society was the most meritocratic (at least when talking about the top 1%). It’s also obvious that it is a very different country than during the 50s-80s period now, and that wealth and income (this is about income but wealth graphs are similar) resembles more the pre-war era although it’s not still as bas as the pre-Depression era (even though the tendency is in that direction).

4979

Just because a company is privately held does not mean that there are no stocks/shares. As founder and CEO, Brad can pretty much structure his income as he wants - he could pay himself a huge salary, and pay taxes on that, or he can pay himself a minimal salary and let that money accrue to the company and take that money as capital gains as the owner of the company.

Brad - I’m pretty much hypothesizing here, and I’m going to stop now, as it can be incredibly unfair to you, and I value your conversation here. Please don’t feel like you need to answer.

4980

BAck to the sexist fans (futbol, in this case) memes:

While Hunt was attempting to conduct a post-game interview, a fan came up and shouted the vulgar phrase.

Hunt then turned the mic on a group of snickering TFC fans that admitted they were waiting to do the same thing.

“I get this every single day, 10 times a day, by rude guys like you,” Hunt explained to the fans. “When you talk into my microphone and say that into my camera to viewers at the station I work at, it’s disrespectful and degrading to me.”

When asked to explain themselves, the fans wouldn’t show remorse.

“You’re lucky there’s not a f------ vibrator in your ear like in England because it happens all the time,” a fan responded.