pageok
pageok
pageok
20 Reasons Why You're Not Rich.

Over at the Street.com, Jeffrey Strain has added 10 more reasons why you're not rich to a list he published last year. Here were the 10 original reasons:

1. You Care What Your Neighbors Think:

2. You Aren't Patient:

3. You Have Bad Habits:

4. You Have No Goals:

5. You Haven't Prepared:

6. You Try to Make a Quick Buck:

7. You Rely on Others to Take Care of Your Money:

8. You Invest in Things You Don't Understand:

9. You're Financially Afraid:

10. You Ignore Your Finances:

Here's Strain's new list:

Many people assume they aren't rich because they don't earn enough money. If I only earned a little more, I could save and invest better, they say. The problem with that theory is they were probably making exactly the same argument before their last several raises. Becoming a millionaire has less to do with how much you make, it's how you treat money in your daily life. . . .

Here are 10 more possible reasons you aren't rich:

1. You care what your car looks like:

2. You feel entitlement:

3. You lack diversification:

4. You started too late:

5. You don't do what you enjoy:

6. You don't like to learn:

7. You buy things you don't use:

8. You don't understand value:

9. Your house is too big:

10. You fail to take advantage of opportunities:

Read the original posts for the explanations of each point.

The question the articles answered was variously presented as why you're not rich and why you're not a millionaire. These are not the same question. If you have a million dollars in liquid assets at retirement, that would usually generate about $50,000 - $90,000 a year, enough to live comfortably in many areas of the country, but not enough to be rich. And if half of that million dollars is tied up in your house, then you can expect an income of about $25,000 - $45,000, which would generate a smaller income than the average working family.

To be a millionaire is a goal that many working families aspire to -- amd most do not reach -- but it is no longer enough to make one rich enough to own a median house in a fairly expensive city and an income stream in retirement significamtly larger than the median family income for working families.

David Warner:
Given the annoying second person, I'll assume the equally annoying royal we:

We're not rich because:

We pissed away trillions on Great Society social engineering

We pissed away even more trillions playing world policeman

We pissed away untold trillions trying to fend off mortality with open-ended medical expenditures

We pissed away several trillion riding a real-estate bubble


Frugality - its the new audacity. Forget rich, I'd settle for solvent.
10.12.2008 1:54pm
trad and anon (mail):
This seems more like a list of "why you don't have more savings than you actually do." The way to become rich is to:

1) Be a financial genius;
2) Take advantage of government corruption and monopoly profits;
3) Start a company that becomes fantastically successful;
4) Inherit from someone rich;
5) Marry someone rich.

Strain's suggestions are not going to be terribly helpful in achieving these goals.
10.12.2008 2:05pm
Cenrand:
21) Take unnecessary risks with other peoples money
22) Wait for government bailout
23) Rinse/Repeat
10.12.2008 2:08pm
Cornellian (mail):
How much money do you need per year to live on when you are retired, assuming you own your house? To me, $50,000 per year seems like a comfortable retirement, assuming no sudden, catastrophic expenses. So why do retirement advisors always insist on phrasing things as a percentage of your pre-retirement income?

A person who earned $150,000 per year before retirement isn't necessarily going to live a lot more lavishly than someone who earned only $50,000 before retirement, so why does the former person "need" 3 times the retirement income?
10.12.2008 2:16pm
A. Zarkov (mail):
One of the biggest reasons you're not rich: you have a low to average IQ. IQ correlates with income both on an individual basis and among nations. Of course a high IQ is a necessary but not sufficient condition. Lots of high IQ people are not rich, but very few low IQ people are. Of course this notion is not popular in the US where supposedly anyone with the right habits and the will to work hard should be able to become rich.
10.12.2008 2:36pm
trad and anon:
So why do retirement advisors always insist on phrasing things as a percentage of your pre-retirement income?
The more you "need" in retirement, the harder it is to manage it. The harder it is to manage it, the more retirement advice you need.
A person who earned $150,000 per year before retirement isn't necessarily going to live a lot more lavishly than someone who earned only $50,000 before retirement, so why does the former person "need" 3 times the retirement income?
Most people don't want to see a sudden precipitous drop in their standard of living when they retire.
10.12.2008 2:43pm
NI:
There's a huge assumption that rich is the be-all and end-all. I'm never going to be rich because I enjoy world travel and would rather spend time with my family than work more than 40 hours per week.

But I'm willing to bet that I enjoy my life far more than someone who works a 70 hour week and carefully pinches evey dime. OK, so I'll never be rich. So what?
10.12.2008 2:53pm
SailorDave (www):
0. You're not fantastically lucky.
0.5 you didn't inherit it.

I'm a libertarianish conservative, and even free marketers have to admit that it is mostly luck. IMHO the reason the government needs to stay away from picking winners and losers is precisely that no one can predict what idea "should" win accurately. It's better to let 1,000 entrepreneurs try and only 1 win than to force all 1,000 to do ok regardless of which ones bet on the right ideas.

IMHO the "we" wasted trillions above is even more wrong. By any measure we as a nation are rich. But rich is mostly relative. If 299,999,999 Americans were billionaires and one was a trillionaire, the billionaires would all consider themselves middle class if not poor.
10.12.2008 2:59pm
David Warner:
SailorDave,

"By any measure we as a nation are rich"

That sound you hear is Hu Jintao chuckling. He, for one, knows how to read a balance sheet.
10.12.2008 3:19pm
A. Zarkov (mail):
If you're going to marry rich, do it right.
10.12.2008 3:32pm
Hoosier:
Hoosier's Corollary: You are not rich because--

1) You have a PHD;

2) It is in the Humanities;

3) Your wife has a PhD in the Humanities;

4) Your most marketable skill in today's economy is selling your plasma;

and

5) You have kids.
10.12.2008 3:38pm
Mevans (mail):
"In a community regulated only by laws of demand and supply, but protected from open violence, the persons who become rich are, generally speaking, industrious, resolute, proud, covetous, prompt, methodical, sensible, unimaginative, insensitive, and ignorant. The persons who remain poor are the entirely foolish, the entirely wise, the idle, the reckless, the humble, the thoughtful, the dull, the imaginative, the sensitive, the well-informed, the improvident, the irregularly and impulsively wicked, the clumsy knave, the open thief, and the entirely merciful, just, and godly person."
- John Ruskin, 1967, Unto This Last
10.12.2008 3:39pm
Hoosier:
A. Zarkov--Keep in mind how Teresa Heinz got rich. If she can do it that way, no reason hubby number 2 shouldn't.

Let me be quite honest: I adore my wife, who is both beautiful and erudite. But if she had been the daughter of a multi-multi-millionaire instead of a classicist, I would not be complaining. Or employed.
10.12.2008 3:40pm
theobromophile (www):
Cornellian,

A lot of it is a function of your standard of living. If a retiring couple wants to put their kids through private colleges and grad schools, take vacations, and live in a nice part of town, they'll spend more money than another couple who does not have that lifestyle.

You are correct in that there is some base cost to living after retirement, above which everything is extra, but the retirement advisors (sensibly, IMHO) take into account how people are used to living.
10.12.2008 3:45pm
I Know It All:
I thought it was because the evil BusHitler has given us The Great Depression 2.0.
10.12.2008 3:51pm
Hoosier:
theobromophile

You have hit on the stupidest thating that could-be rich retirees often do, to wit, spend their retirement money on overpriced colleges for their kids.
10.12.2008 3:53pm
Dave N (mail):
I enjoy what I do. There are many professions where you will never get rich though you certainly will be comfortable: teaching, prosecuting, and the military all come immediately to mind in that respect.

I work for the government because I choose to work for the government. My house will be paid off the year before I retire--and unless my state retirement program becomes insolvent, I will actually have more disposible income in retirement than I do now.

Do I look at the people in BigLaw or those who are successful PI attorneys who make more money than me with any kind of envy? Not really. The money would be nice but since we all get only one ride on this thing we call life--I would rather enjoy it than worry about money.
10.12.2008 3:59pm
Sean O'Hara (mail) (www):
You're not rich because you're concerned with how much money you have and not how you use it.
10.12.2008 4:03pm
LN (mail):
You're not rich because you never got paid that much money.
10.12.2008 4:31pm
LN (mail):
Oh wait, I missed this devastating rebuttal: "The problem with that theory is they were probably making exactly the same argument before their last several raises."

Yeah, if you think you're not rich because you have a middling salary, and then you get a raise, BAM! Where's your excuse now?
10.12.2008 4:41pm
A. Zarkov (mail):
Hoosier:

Teresa is rich wife number 2. Julia Thorne was rich wife number 1. Why earn money when you can marry it? I should follow my own advice.
10.12.2008 4:58pm
LN (mail):
Necessary partisan blather: Cindy McCain.
10.12.2008 5:16pm
Malvolio:
Did anyone read TFA? Puritanism in advice drag:

"You Care What Your Neighbors Think" -- why is it inherently better to be "rich" in the sense that you get to drink Cristal instead of beer, to be "rich" in the sense that your neighbors envy you? Yes, if you don't waste money on ostentation, you have more money left to waste on indulgences. So?

"You Aren't Patient" -- what he means here is you are willing to borrow. Is it really a good idea to slave your youth away to buy a solid-gold tombstone with cash? There's are reason that time has value -- and its value runs both ways: just as a dollar saves this year is worth $1.05 by next year, a pleasure taken this year gives you a year of pleasant memories.

"You Rely on Others to Take Care of Your Money" and "You Invest in Things You Don't Understand". Well, which is it? Unless you happen to understand well some area that good to invest in, your choices are rely on someone else, invest in an area you don't understand, invest in an area you know to be a poor choice, and not invest at all.

And at the end of the article, there's a come-on to invest in some get-rich-quick scheme!

Given all this, I did not read the follow-up.
10.12.2008 5:20pm
William D. Tanksley, Jr:
trad and anon says:
The way to become rich is to:
1) Be a financial genius;
2) Take advantage of government corruption and monopoly profits;
3) Start a company that becomes fantastically successful;
4) Inherit from someone rich;
5) Marry someone rich.
Strain's suggestions are not going to be terribly helpful in achieving these goals.


Those are indeed ways to become rich. There's a problem with them, though, and it's tied to why they seem so unfair: they're extremely rare (even compared to the number of rich folks), and (except for the financial genius) they're unrelated to remaining rich.

The rarity means that most wealth is NOT explained by your "explanation". The other problem means that although you can become wealthy that way, you usually won't keep it; thus not only do few people ever experience becoming wealthy that way, the few who do have a higher than average chance of slipping back into non-wealth.
10.12.2008 5:51pm
Cornellian (mail):
1. Why earn money when you can marry it?

Unfortunately if you're a man, the supply of rich women is miniscule compare to the supply of rich men. Hence marrying money is more of an option for women than for men.
10.12.2008 5:57pm
Dave N (mail):
Hence marrying money is more of an option for women than for men.
And yet the last two Presidential elections have included nominees who arguably did.
10.12.2008 6:03pm
William D. Tanksley, Jr:
"You Care What Your Neighbors Think" -- why is it inherently better to be "rich" in the sense that you get to drink Cristal instead of beer, to be "rich" in the sense that your neighbors envy you? Yes, if you don't waste money on ostentation, you have more money left to waste on indulgences. So?


By itself, this is a great point; it's also worth saying that much of the good feeling of wealth is actually caused by relative wealth; i.e. comparing myself to my neighbor.

But it doesn't rebut the original article's point. If your goal is to make your neighbors think you're rich (or at least keeping up with them), you're missing the point; a better goal would be to actually be that rich.

Ostentation is a possible motivation, yes. Ostentation for its own sake is even possible. But it's not ever sustainable, so it's really bad advice to give; and it's enormously stupid policy.

"You Aren't Patient" -- what he means here is you are willing to borrow. Is it really a good idea to slave your youth away to buy a solid-gold tombstone with cash? There's are reason that time has value -- and its value runs both ways: just as a dollar saves this year is worth $1.05 by next year, a pleasure taken this year gives you a year of pleasant memories.


Once again, you're dead-on right here, and I'm glad to see the money-advice people publishing some wisdom on this point. But this isn't advice that the vast majority of people need to hear; they need to be slapped up the side of the head and told to consider the beauty of deferred expenditures.

"You Rely on Others to Take Care of Your Money" and "You Invest in Things You Don't Understand". Well, which is it? Unless you happen to understand well some area that good to invest in, your choices are rely on someone else, invest in an area you don't understand, invest in an area you know to be a poor choice, and not invest at all.


But you DO understand an area very well -- your own career. Buffet has spoken very well on this topic: it's uneconomic to try to pick stocks unless you have time and knowledge to do so. If you can profitably invest money into your own career, you'll get much better control over your returns. And with the money you can't invest in your career, you can get almost all of the same gains by just dollar-cost-averaging into a low-overhead index fund.

And at the end of the article, there's a come-on to invest in some get-rich-quick scheme!


Shocking -- until I looked and found the obvious ad (for investment advice) you were talking about. Give me a break. If you're going to ignore the article, you should have obeyed the ad.

-Wm
10.12.2008 6:40pm
Arkady:
You're not rich because you're not a politician:


I learned too late that you need just as good a brain to make a crooked million as an honest million. These days you apply for a license to steal from the public. If I had my time again, I'd make sure I got that license first.


Lucky Luciano, 1960
10.12.2008 6:44pm
Hoosier:
Reason Number 20--"You waste too much of your productive time posting your dumbass opinions on some blog."
10.12.2008 6:54pm
wfjag:

Cornellian:
1. Why earn money when you can marry it?

Unfortunately if you're a man, the supply of rich women is miniscule compare to the supply of rich men. Hence marrying money is more of an option for women than for men.

Move to Connecticut. It'll equalize your chances.
10.12.2008 7:47pm
Thales (mail) (www):
1) You were born into urban poverty and surrounded by crime, with no access to anything resembling a quality public education, which is perversely funded almost exclusively from local property taxes--happily there are programs to help elevate you, such as legacy admissions at Ivy League schools and . . . oh wait

2) You work at a socially productive but relatively unremunerative job, such as school teacher or nonspecialist doctor

3) You invested in companies run by executives aimed at enriching themselves rather than obeying their fiduciary duty and enriching the company as a whole--3a) diversification, even in passive index funds, did not protect you from this, since such behavior is widespread and relatively unregulated--3b) you can't even hire a good lawyer to get some of these gains back, since the government indicted the only competent (though corrupt) plaintiffs' securities firm--3c) the federal courts have chipped away your investor protections anyway, so said lawyer wouldn't really help

4) You (or your fellow numbskull citizens) elected a single party to run a country that claimed to stand for economic and national security competence, but instead frittered away the public treasury on people and companies who were already rich, and on a fun adventure in a pitiful country which has given us a 51st state (one running a budget surplus that we don't get to share).

5) Other rich people made huge bets, at ridiculous leverage ratios, and wove a web of hidden, systemic risk through credit derivatives, between an oligopoly of financial institutions, which came crashing down when the nimrods who wrote models for the behavior of these finances turned out to be spectacularly wrong

6) You believed in the "ownership society" promoted by politicians and the people outlined in #5 and in the "wisdom" that owning your home is a smart financial move, because prices *never* go down, and look at all the tax benefits! The more interest you pay, the more your tax deduction is worth!

7) You did or experienced none of these things, but were just affected by the behavior of those who did--it really sucks to be you!
10.12.2008 8:23pm
Mark H.:
Eh, I'm not sure what rich is anymore. I'm not entirely sure that an appreciable number of people aspire to wealth beyond their wildest dreams either.

Spending less than you earn and enjoying your life from day to day, be it in a tract home in Levittown or a mansion in Greenwich is not all that different. Indeed, the guy in Levittown is far more likely to be living within his means and happier in an overall sense -- assuming he's not fallen into the "material things matter" trap.

I for one, am sure I'm just as happy with my 19" LCD HDTV 3' from me as the guy with a 60" Plasma 30' from him is; indeed I may even be considered "green" as much as I hate those hypocrites :-)
10.12.2008 8:38pm
Perseus (mail):
You were born into urban poverty and surrounded by crime, with no access to anything resembling a quality public education, which is perversely funded almost exclusively from local property taxes

Because we all know that more spending equals better education and that public schools (which in many cases pay teachers more than private or religious schools do) attract the best teachers. Right.
10.12.2008 9:21pm
Perseus (mail):
4) Inherit from someone rich;
5) Marry someone rich.


That's what I call making money the old-fashioned way.
10.12.2008 9:37pm
Alcyoneus (mail):
Basically, if you aren't extremely lucky or you aren't a crook, you can't get rich in America anymore. Our's is a society that redistributes wealth from middle class taxpayers to extremely wealthy corporations and hugely inefficient government agencies.

It's a socialist country. The government picks the winners. The bailout proved it.
10.12.2008 9:43pm
Big E:
5) You have kids.

Ding ding ding we have a winner
10.12.2008 10:04pm
Mac (mail):

Isn't it unpatriotic to not work your ass off to be rich so you can pay a lot more taxes and not be so rich, after all?
10.12.2008 10:32pm
Mac (mail):
A story,

An Iranian immigrant comes to this country in 1991. He speaks no English.

He marries an immigrant from Russia who speaks no English.

They both learn English, although never lose the accent.

He goes to college during the day and sends wife to college.

He starts night commercial janitorial business to support family and pay for college. He also hires other people. They get mama from old country and support her, too.
They have 2 children while going to college. She becomes a nurse with a 2 year RN degree and goes to work. He gets BSN while working nights and puts younger brother through pharmacology school to become a pharmacist.

They get other sides papa from old country to support.

He becomes BSN after 4 tries at passing the boards due to the fact that it is a timed test and English is still his second language. He never gives up.

He gets a job and works full time as BSN, i,.e. 12 hour plus shifts 3 days per week. He gets prn jobs and works 12 hour plus shifts the other 3-4 days of the week. He buys houses and remodels and rents them out or sells them in his "spare" time well before the real estate boom. He makes money.

He buy apartment house and makes money. He continues to work 6-7 days a week.
Wife has 3rd child and quit working full time. Another brother needs to be put through school. He does this.

He gets identity stolen and spends a year getting it straightened out and doesn't buy any property for that year. He gets his credit back on track and buys more houses and fixes them up, etc.

He ends up rich. Property is in Kansas City, not one of the high flying markets and he is into it and rich well before the excessive real estate boom, so that is not how he made it.

He gets sick. He is not worried as he has plenty of money to take it easy while he gets better. He does and get big promotion and works 5 8-9 hour days per week. He stops working 7 days a week and starts to enjoy life.

Other nurses, born in America and having English as their first language, work 3 12 hour shifts per week and rest the other 4 days and are very, very jealous of him.

He is my friend and this is a true story. From nothing, not even English, to rich in 12 years.

Guess Obama will be seeing him soon and making him regret his hard work.
10.12.2008 10:56pm
American Psikhushka (mail):
Mac-

Great story about your friend. More power to him.

It's a good thing no one defrauded him and stold all his assets to "give" away to charity. Or sabotaged his career multiple times as a "security precaution". Or filed fraudulent and false claims against him to have him falsely imprisoned. Or similar unacceptable and intolerable acts. The "success story" would be quite different, in fact it probably wouldn't even be worth sharing in a thread about wealth and success.

In any case it was a great story. It illustrates the value of rights, especially property rights. Because if your friend's property rights weren't honored he'd basically be a slave.
10.13.2008 12:34am
MikeS (mail):

Unfortunately if you're a man, the supply of rich women is miniscule compare to the supply of rich men. Hence marrying money is more of an option for women than for men.



Yes another reason that same-sex marriage is a simple matter of fairness.
10.13.2008 12:42am
Mac (mail):
Well, the CIA did want to hire him. He was interested until he learned that they wanted him to go BACK to Iran, undercover. As he said, "In Iran, there is no trial, they just hang you" No, no interest in going back to Iran at all.
10.13.2008 12:42am
genob:
If you know how to generate $90,000 a year from a million, can you please give me a call and clue me in?
10.13.2008 12:46am
Sagar (mail):
the common proposition that anyone can become rich by saving a part of his earnings is BS. if a person is not making a lot to begin with, no amount of saving will make him rich. also $1 million total networth =/= rich.

Try to improve marketable job skills and move up the career ladder so you can increase the earnings. Then whether you save a lot or (judiciously) spend to enjoy life is an individual choice.
10.13.2008 12:55am
Brian G (mail) (www):
The only reason I am not rich: Bush. When Obama is elected, I'll be rich, because his tax increases for the "rich" mean everyone that has half a decent job.
10.13.2008 1:01am
Mac (mail):
I can tell you how to be comfortable.

Get an education, be it college or technical (technical may be better than college these days).

Don't have kids until you are married. Make sure your prospective spouse does not have a taste for fast cars or rubies.

Stay married.

Live beneath your means.

Save money or as a smart, rich guy I know said, "Pay yourself first". As he explained, people pay everyone else first and live on what is left over. Pay yourself first, then other obligations and then live on what is left over. (He started out dirt poor.)

As soon as you can, don't buy anything on credit that you don't have cash, in some form, to pay for outright, including cars, except your house.

Never put more on your credit card than you can pay off when the bill comes due. Never carry a balance.

Buy cars at the change of season around Oct. You will get a cheaper price on a new car than a late model used one at that point. But, drive the old car as long as you can or until it is going to cost you more to keep it than it is worth. Understand, a car is to get you from one spot to another. A 15,000 dollar car will get you there just the same as a 30,000 and up car will. So will a 3 to 5 year old used car.

There is nothing wrong with shopping at garage sales and thrift stores, including for clothes and toys for your kids as long as you don't buy a bunch of crap you don't need because it is cheep.

Buy books for your kids and don't forget the classics. Reading is cheap and a book doesn't need a battery or electricity.

Your kids will not die if they don't get the latest, greatest, most stylish anything even if "everyone" else has it. Tell your kids that you will pay x dollars (say 30.00) for a pair of tennis shoes and they can earn the remaining 100.00 to buy the pair they will "die" if they don't get. (When it is "their" money, it is amazing how often the desired object loses it's luster.)

Don't buy anything unless it is on sale.

Don't buy anything because it is on sale if you don't need it.

Don't buy anything you if don't have a place to put it and an immediate use for it.

Never invest in anything your don't understand. If you can't explain it to your grandmother in 5 minutes or less, don't buy it. You should be able to explain it to your 10 year old in 3 minutes or less.

Understand that stock brokers are sales people. They do NOT have your best interest at heart. They know how to sell. They don't know any more about what the market or a stock is going to do than you do, or your dog does.

Unless you are already stinking rich, NEVER, EVER buy an IPO. If they get around to your lowly personage and still have stock left to sell, IT IS A DOG and will go due South the day or day after you buy it. No stock broker is EVER going to do you a BIG favor and get your lowly behind into a great deal, especially not into an IPO. Not ever.

Never believe any book that says the end of the world is coming and you need to buy ________ or you will be sorry. Silver and gold comes to mind. Stay away from a frenzy.


Give to charity and teach your kids to do the same. If you "cast your bread upon the waters" know that it does indeed come back to you ten fold.

Involve your kids in projects to help "the poor", Christmas in October comes to mind, so they will know that, no matter how hard or bad they think they have it, someone else really is a lot worse off.

Plan on no one being there to bail you out if you lose your job or get into a jam. Plan on bailing yourself out.

Don't think you are stupid because you prefer boring municipal bonds or CD's that are safe, insured and secure. The power of compound interest is an awesome thing. You would be far richer today than all those smart ones in the market.

Understand if you pay a load for a mutual fund or a fee to a broker, say 5 or 8%, you have to earn that same amount just to get back to zero earnings. Figure out what you lost on the compounding interest and you'll probably think Vanguard, etc. sounds just fine and that maybe you can do the paperwork yourself.

Refinance your mortgage anytime you can get a lower 30 fixed rate without paying too much in fees.

Never call for pizza. How hard is it to stick a frozen pizza in the oven? Pay yourself the tip. Better yet, make a fresh pizza from scratch with your kids.


Don't buy 10 cheap things that you don't like or fall apart because you don't want to spend the money on the really, really nice thing you really, really want. Wait until you have saved the money for what you want, then go buy it.

It's fine to take a risk if you know what you are doing and don't leverage yourself. If you have the cash to back up your investment you will be OK even if it does go south.

Now, if you want to get rich, you can do most of what I said, but it you will probably have to be a risk taker and wiling to work 80 or more hours a week.

A passion to not have any boss buy yourself, and a passion for what you are doing and a willingness to work your butt off will probably get you rich.

i never met a rich man, and I have met quite a few, who didn't love what he was doing. The money was only a measure, if you will, of his success. I never met a rich man who got rich because he wanted to be rich.


And, yes, I have made all of the above mistakes and have learned the hard way.

And, lastly, if you want to be rich or even just comfortable,

NEVER, EVER, EVER, BUY YOUR KID A HORSE.



Unless you think it is the only way to get your daughter through her teenage years without getting pregnant or doing other assorted stupid things or the only way to keep your son from turning into a juvenile delinquent. But, realize that while it may be worth it if it means your kid turns out OK, you will have BLOWN your chance to get rich and will have put comfortable into doubt.
10.13.2008 2:04am
Mac (mail):
Three more things:

1. The house always wins.

2. Never buy stock on an "inside tip".

3. One buck on a lottery ticket will buy you the same dreams as 50.00 bucks, and give you about the same odds. Put the 49 bucks into a savings account or mutual fund and you may have something in 20 years. Put 49 bucks into a lottery ticket and you will have nothing now and even less in 20 years.
10.13.2008 2:22am
David M. Nieporent (www):
Don't get divorced.
10.13.2008 2:29am
American Psikhushka (mail):
Mac-

Know all that. And more.

But that doesn't matter if your property rights aren't honored. Which is why you don't tolerate someone violating your property rights.

Someone without property rights is essentially a slave.
10.13.2008 4:35am
American Psikhushka (mail):
Cornellian-

...so why does the former person "need" 3 times the retirement income?

I assume you went to Cornell. Why did you "need" to go to a college that costs five or so times what the average state school costs? Should we see whether you drive a nice imported luxury car to determine whether you "need" to drive a car that costs ten times what the average good used car costs? Then we'll investigate your house, entertainment expenses, etc...

Other parties deciding what someone "needs" always degenerates into communism, kleptocracy, and similar nightmares. That's why it's one of the tenets of communism/socialism - "from each according to their means, to each according to their needs". But it always results in stagnation, declining living standards, and often starvation.

That's why we have a capitalist system where no one decides what anyone else "needs". Your property rights are honored, period. Anything else is theft and fraud.
10.13.2008 4:47am
Ricardo (mail):
The only reason I am not rich: Bush. When Obama is elected, I'll be rich, because his tax increases for the "rich" mean everyone that has half a decent job.

Are you referring to his proposal to eliminate the earnings cap on Social Security taxes? If so, isn't is slightly, well, elitist, to say you need to earn at least $102,000 to be considered to have "half a decent job"? What do you need to earn in order to have just a "decent job" without qualifier? $200,000?

And of course, more on topic, you can save plenty of money even if you are earning much less than $100,000 per year. If you are single and don't have kids, $30,000 is enough to live a basic life just about everywhere except New York City. Taxes on people in the $30,000-$70,000 range do mean though you need to make serious lifestyle sacrifices to stash money away.
10.13.2008 5:27am
rmark (mail):
Invest and insure first, spending your remaining income mostly as you desire.
10.13.2008 11:04am
autolykos:
Mac - You're friend's just lucky he wasn't stuck in an inner city public school.
10.13.2008 12:15pm
American Psikhushka (mail):
autolykos-

It wouldn't matter if his friend went to the finest boarding school in the country, if his property rights weren't honored he wouldn't get anywhere. Property rights are fundamental to success. In fact they are fundamental to society.

Someone without property rights is a slave.
10.13.2008 12:40pm