You work your butt off, and a rich dude does nothing and gets rich - how?

[RodeoX]

No it's terrible rhetoric.  You are taking two extreme opposites while ignoring the mainstream middle.  ...

I do understand your position...

haha. Like being born pre 1970 and buying property. The point is that today's generation don't have those same opportunities.

But they do. There has never been a better opportunity to buy land than the last several years. And back in the 70s people thought $200 per acre was high. It's all relative since no one is making more land the price is highly likely to go up in the future. Look at these: http://www.landwatch.com/default.aspx?ct=r&type=&r.PRIC=%2C35999&sort=PR_A

If you just drop your cable TV service for about a year, you could buy one of those properties for cash. Without financing you then own it outright for the best price you can get. If you watch TV instead, you have nothing to show for it. One need not be rich to own property in America, but you do need to work and sacrifice.

[Ozziecoin]

No it's terrible rhetoric.  You are taking two extreme opposites while ignoring the mainstream middle.  ...

I do understand your position...

haha. Like being born pre 1970 and buying property. The point is that today's generation don't have those same opportunities.

But they do. There has never been a better opportunity to buy land than the last several years. And back in the 70s people thought $200 per acre was high. It's all relative since no one is making more land the price is highly likely to go up in the future. Look at these: http://www.landwatch.com/default.aspx?ct=r&type=&r.PRIC=%2C35999&sort=PR_A

If you just drop your cable TV service for about a year, you could buy one of those properties for cash. Without financing you then own it outright for the best price you can get. If you watch TV instead, you have nothing to show for it. One need not be rich to own property in America, but you do need to work and sacrifice.

oh please, your financial system has been wealth regressive since the 80's. anyone buying now have little gains and much downside. Without fed intervention, property would be less than half current values. Now the fed is stuck. Massive wealth divide, and low GDP growth. Let's see how long the fed can fight the populace.

[johnyj]

Money is just a special kind of commodity, like any other commodity, its value should be close to its cost, money without any cost should worth nothing

Fiat money has value because they were backed by gold before, so even the gold standard was abolished, the old consensus is still there. But sooner or later people will realize that fiat money's value is an illusion since 1971

[RodeoX]

oh please, your financial system has been wealth regressive since the 80's. anyone buying now have little gains and much downside. Without fed intervention, property would be less than half current values. Now the fed is stuck. Massive wealth divide, and low GDP growth. Let's see how long the fed can fight the populace.

I'm not sure I know what you mean. I have made money this way. Most of the wealthy people I know made their money buying property for cash. It is as simple as buy low and sell high. Over time property accrues value better than anything; Better than gold, or stocks, anything. Real estate is real wealth. Far better than money, for example.

Despite the unholy work that has been done to keep the rich in power and the poor downtrodden, there is still more opportunity in the U.S. than most places.  I'm sure your not arguing that it would be better to have watched TV for a year?

Work hard, save hard, don't buy shit, don't do credit, don't buy depreciating assets, buy appreciating assets. You will be surprised how quickly it adds up.

[Ayers]

well some of them are already rich since birth, other i know become rich because of luck or talent, i think luck play a big role here

[Ozziecoin]

oh please, your financial system has been wealth regressive since the 80's. anyone buying now have little gains and much downside. Without fed intervention, property would be less than half current values. Now the fed is stuck. Massive wealth divide, and low GDP growth. Let's see how long the fed can fight the populace.

I'm not sure I know what you mean. I have made money this way. Most of the wealthy people I know made their money buying property for cash. It is as simple as buy low and sell high. Over time property accrues value better than anything; Better than gold, or stocks, anything. Real estate is real wealth. Far better than money, for example.

Despite the unholy work that has been done to keep the rich in power and the poor downtrodden, there is still more opportunity in the U.S. than most places.  I'm sure your not arguing that it would be better to have watched TV for a year?

Work hard, save hard, don't buy shit, don't do credit, don't buy depreciating assets, buy appreciating assets. You will be surprised how quickly it adds up.

I mean this: since the 80's property has increased at between 7% to 10% per annum, doubling every 7 to 10 years. The correct strategy was not buy and sell, incurring transaction costs in the process. Buy and just hold would've done as well if not better. So, A) you're not the genius you think you are B) in reality, you were just lucky to be born at the right time; and C) your opportunities were available to you but not the young people of today. Here's why:

Now the magic of compounding dictates that property doubles every say 10 years but wages growth are rising at 3.5% or less. Therefore, wages are effectively doubling at the rate of every 20 years.

So, after three decades you have property (and shares) rising by about 400% versus wage growth of maybe 150%.  So, maths is telling us that either property values must come down or wages must go up, otherwise no one will be able to own the average home. Therefore, you are near the limits of debt fuelled growth. Ergo, future growth is very limited, with limited upside and significant downside.

Of course, the population could split into rich and poor groups. And that is what you are seeing in America today. However, such divergences are unstable in democratic societies. Even authoritarian monarchies collapse when the social divide becomes too wide. Just ask the French and Chinese.

I think you are extrapolating the past into the future when making financial decisions based on your personal experiences. However, the divergence of property prices versus wages is not something that is going away; unless you are prepared to say that property will double again in the next 10 years (to 800% over 4 decades) whilst wages growth remain at 3 to 3.5% per annum. Therefore, yes - young people may in fact be better off watching TV rather than buying property - at this point in time.

Ask the Japanese post 1991.

[TaunSew]

It's too soon to make any definite conclusions on real estate prices.  I have a feeling when most of the boomers run out of money (as most people do not get defined pensions anymore) or die from old age, there'll be a lot of them dumping properties at the same time and nobody will be buying as most Generation X and Y are broke.  There isn't enough Starbucks sipping Yuppies to buy all the homes that'll flood the market.   That means a $500K equity becomes $100K overnight.

[Hiraga]

Intelligence is a big factor. Poor and simple people need to work hard for little money, if you can work hard and also be smart the payoff would be much greater. 

[Ozziecoin]

Intelligence is a big factor. Poor and simple people need to work hard for little money, if you can work hard and also be smart the payoff would be much greater. 

Sorry way off. Human productivity has been approximately 2% per year in real terms over 200 years. Working hard has nothing to do with it.

[Hiraga]

Intelligence is a big factor. Poor and simple people need to work hard for little money, if you can work hard and also be smart the payoff would be much greater. 

Sorry way off. Human productivity has been approximately 2% per year in real terms over 200 years. Working hard has nothing to do with it.

Your comment doesn't make any sense at all. Go to another thread.

[hodap]

No it's terrible rhetoric.  You are taking two extreme opposites while ignoring the mainstream middle.  You can't have anyone relate to the poor person as the average person does not consider the lottery to be an investment (actually a gamble) and not many people own beanie babies.  That must be one dumb rich person because that's called a false dichotomy, a logical fallacy.

There's many people in the middle who are suffering due to the decisions of the rich, such as clawing back on defined pensions for most Americans or the funds who are gambling away people's pensions.


Many people are playing by the "rules" of society, as in working hard through college, hard in their careers, having 2 to 4 kids to ensure the reproduction of the workforce, saving and investing for a later retirement.

How has society rewarded these people?  Sub prime made many middle class people lose their homes and pensions, while the rich people got a bail out.  Recent college graduates are being forced to work jobs that were a decade ago reserved for those who flunked highschool.  While the rich have seen no change in their lifestyle in comparison.



Becoming an educated professional is one of the hardest things to do in this world - a Doctor and a Lawyer is someone who I can respect.   Whereas many rich people got to where they are through familial inheritance or networking through relatives or getting lucky on investments (or even engaging in fraud such as Mark Karpeles who lives in one of the most expensive condominium buildings in Tokyo).

No one forcing anyone to accept sub prime loan and no one forcing anyone to elect crony politicians that bail out mega corporation. Again, if the population think the game is rigged, they can change the system by voting incumbent out and demand change.

[kerafym]

It's too soon to make any definite conclusions on real estate prices.  I have a feeling when most of the boomers run out of money (as most people do not get defined pensions anymore) or die from old age, there'll be a lot of them dumping properties at the same time and nobody will be buying as most Generation X and Y are broke.  There isn't enough Starbucks sipping Yuppies to buy all the homes that'll flood the market.   That means a $500K equity becomes $100K overnight.

You are forgetting the inflation that kick will eventually kick in because of printing press. Some of the paper money has to go somewhere.

[giveBTCpls]

well some of them are already rich since birth, other i know become rich because of luck or talent, i think luck play a big role here

And what is talent? Exactly, luck.

[leopard2]

Interest (and that includes appreciation of assets, rent, dividends etc) is a re-distribution mechanism from hard working people to rich people

It is natural because there is a tipping point where the growth of assets you own (minus living expenses) becomes positive.

Sure enough rich people benefit from a continuous inflation. Their real world assets are like a sail in the winds of inflation, so to speak.  

[Ozziecoin]

Intelligence is a big factor. Poor and simple people need to work hard for little money, if you can work hard and also be smart the payoff would be much greater. 

Sorry way off. Human productivity has been approximately 2% per year in real terms over 200 years. Working hard has nothing to do with it.

Your comment doesn't make any sense at all. Go to another thread.

Firstly, this is my thread. Secondly, you are not Einstein (no offence meant). If you worked hard it makes no appreciable difference to human productivity. It appears human productivity growth is a constant, with geniuses arising here and there throughout time making small differences as they develop new thinking.

[Ozziecoin]

Interest (and that includes appreciation of assets, rent, dividends etc) is a re-distribution mechanism from hard working people to rich people

It is natural because there is a tipping point where the growth of assets you own (minus living expenses) becomes positive.

Sure enough rich people benefit from a continuous inflation. Their real world assets are like a sail in the winds of inflation, so to speak.  

It's actually worse than what you say. M3 money growth is expanding at a rate of 10 to 11% per year. So, 2 to 3% is inflation (matching productivity growth) and the rest goes to increasing asset prices. So, that's why we see asset price growth of roughly 7% per year on average.

[Ozziecoin]

I am not a gold and silver buff because I believe Btc is better. With that in mind, watch this video explanation of how the US financial system actually works: https://m.youtube.com/watch?v=iFDe5kUUyT0

[TaunSew]

Interest (and that includes appreciation of assets, rent, dividends etc) is a re-distribution mechanism from hard working people to rich people

It is natural because there is a tipping point where the growth of assets you own (minus living expenses) becomes positive.

Sure enough rich people benefit from a continuous inflation. Their real world assets are like a sail in the winds of inflation, so to speak.  

It's actually worse than what you say. M3 money growth is expanding at a rate of 10 to 11% per year. So, 2 to 3% is inflation (matching productivity growth) and the rest goes to increasing asset prices. So, that's why we see asset price growth of roughly 7% per year on average.

Fractional reserve banking is also inflationary as the banks can print money out of thin air and assigned this out in the form of mortgages, student loans, et cetera - the system works until there is a bank run but bank runs can't happen anymore (Occupied Wallstreet tried to orchestrate a run on Bank of America and failed as banks can take indefinite banking holidays or blame "technical errors")

[cinder]

Interest (and that includes appreciation of assets, rent, dividends etc) is a re-distribution mechanism from hard working people to rich people

It is natural because there is a tipping point where the growth of assets you own (minus living expenses) becomes positive.

Sure enough rich people benefit from a continuous inflation. Their real world assets are like a sail in the winds of inflation, so to speak.  

It's actually worse than what you say. M3 money growth is expanding at a rate of 10 to 11% per year. So, 2 to 3% is inflation (matching productivity growth) and the rest goes to increasing asset prices. So, that's why we see asset price growth of roughly 7% per year on average.

Fractional reserve banking is also inflationary as the banks can print money out of thin air and assigned this out in the form of mortgages, student loans, et cetera - the system works until there is a bank run but bank runs can't happen anymore (Occupied Wallstreet tried to orchestrate a run on Bank of America and failed as banks can take indefinite banking holidays or blame "technical errors")

Bank run can still happen if there is no bail out from the government. That is assuming the country has the reserve currency status.

For the rest of the world, even government won't be able to stop bank run if the bank is badly managed.

[yunkie]

Thats the basic function of capitalism