Within a year or two? I think you mean "after your first paycheck". The ability to have a grand or two 'cushion' money in the bank is an incredible difference between the haves and have-nots. And I don't mean "money in my day-to-day account", I mean emergency money of any kind.
It's bizarre that a 300k/yr household can even contemplate being similar to a 30k/yr one.
So, if you lived as a $30k/year household you'd be able to save 3.5 years worth of expenses every year, ignoring any kind of tax efficient ways of doing so. In your first pay packet you'd have a spare seven and a half thousand dollars.
At a 3% withdrawal rate you'd want to have $860k in investments, meaning you could expect to work for ~8-9 years then retire forever. Less if you can invest in a more tax efficient way, are OK with just cutting down to part time or taking on a bit more risk. Oh, and if you're comparing yourself to a $30k household that can afford to save anything, all these numbers just go up and up.
So, comparing a $30k/year household who are able to save literally nothing, you could have the same life but only have to work for less than ten years rather than 40+.
Quick numbers, but I'd be surprised if the various simplifications change the overall result particularly drastically.
2 Beds 1 Bath -- 650 Jackson MO or 7800 a year or 25% of the income gross
$4940 - $5160 /mo 2 beds / 2 bath 979 sqft say 5000 a month or 60000 a year or 20% of the income
add the huge differences in effective tax rate of CA to MO combined with the jump in federal tax rates and it is arguable that 30k in MO would actually be better off
Groceries may be more expensive in the big city, but not 10x more expensive. You're not paying 10x more for a car, or a plane flight. And insurance premiums / deductibles sure aren't 10x cheaper in a less expensive part of the country.
Plus, the "$300K in expensive place" household has the option of moving to the less expensive place. The reverse is hardly true.
> it is arguable that 30k in MO would actually be better off
1. No. 2. Even if we were to accept that $30K in one place went just as far as $300K in another, "better off" ignores that higher property costs are likely to indicate a more desirable place to live. (For whatever reason: access to jobs, lower crime rates, pleasant to live in, what-have-you.)
Anyway, there's no such thing as perfectly impervious to risk - even ultra-wealthy families sometimes topple. That doesn't change the fact that with careful management, a $300k/year income can rapidly feather a rather nice, rather secure nest. $30k/year cannot.
And it costs quite a lot to get that level of care.
https://www.nytimes.com/2017/06/03/business/economy/high-end...
If you talk to someone with significant health issues, it rapidly becomes, "The doctors don't have the answer".
Nobody wants to spend longer with the doctor - they want healthy, productive life outside the doctor's office.
That's not right.
How do you feel about kids born in Africa?
If it's the former: Suffering isn't a contest, just because you aren't the MOST impoverished person on the face of the planet does not make your problems less real, nor does it make you less deserving of help when you do need it.
If it's the latter, I'm all for getting those kids healthcare (and food) and whatever else they might need. That's a damn sight better use of my tax dollars than numerous Government programs currently sucking up actual trillions of dollars here in the States.
Considering that a lot of people are in that situation, I was wondering if you were advocating taking money from the rich to give it to the poor.
Personally, I don't believe in free healthcare. I accept that people who are unlucky or demonstrate poor judgement will suffer and die. However, I also believe that the market should be deregulated so that more affordable options become available.
Oof. That’s quite an admission.
I thank you for stating it though. I think our politics would be in a better place if people would admit things like this more.
I suspect that a lot of Republicans have the opinion that the poor don’t _deserve_ to be taken care of by society, because they believe that they are poor because of their own inaction. But it’s impossible to debate this - and change minds either way - because we don’t admit that point of view in discussion.
Can we please not generalize Africa? It's the biggest continent of the world, not a giant 3rd world country plagued by famine and poverty. Some countries are, but if you mean those, please name them specifically.
(I dislike phrases like "asians" and "europeans" too, much as Americans should dislike the moniker "American")
The problem isn't people not saving or investing the problem is an insane system kept afloat by greed, ignorance and fear. "Security"? what good is having paper when no one wants to buy it? October 29, 1929 is a day my grandmother remembers well and one I dread we will see again.
Government is the only insurance scheme large enough to protect us from ourselves.
Gambling on debt sounds like a sure-fire way to end up with even more debt. And that's what most investment boils down to: A gamble
Profit isn't generated out of thin air, somebody has to be the sucker and pay for it, those are usually the losers of aforementioned gambles.
Dating? Hell, you can't even get to know someone properly in 6+ months. Taking a job? It's all rainbows and unicorns unless you work there for a 6-12 months, etc.
You act as if investing is bad. You're never going to make any meaningful amount of money if you don't invest (in the broadest sense, this could be in yourself, in your business, in the stock market, in alternative assets, etc).
Debt magnifies the result of your investment. Whether you make a good or bad investment is ultimately up to you. Moderate debt isn't a real issue. The interest is often also tax deductible. It sure as hell makes more sense taking on debt for investing than it does taking on debt to (excessively) spend (as most Americans do).
Indeed, it's all about risk-management and in that regard gambling on debt represents a way higher risk, one I would not take, than gambling on savings you actually own.
With the latter, you at least have some control over the worst case scenario, while gambling on debt throws any control like that straight out of the window as debt can spiral out of control very quickly that way.
> The interest is often also tax deductible. It sure as hell makes more sense taking on debt for investing than it does taking on debt to (excessively) spend (as most Americans do).
Sure, it does make more sense but consumer credits are mostly short-term and as such somewhat more manageable for debtors with no real income security. Long-term investment credits, which usually have way better interest rates, are simply out of reach for many of these people because they lack the secure long-term income and/or can't make the required deposit.
Also, say you can acquire a plot of land you want to hold for a long time, and you can acquire it with 10% cash down + pay < 1% annual interest on a secured loan, you'd be an idiot not to take on the debt. Take the remaining cash and invest it somewhere with a higher yield.
It depends, is probably the correct answer here. :)
Disclaimer: this is not investment advice. Do not take investment advice from Internet comments.
Unless you're talking short term, put it in a total stock market index fund and forget about it.
Maybe the culture you come from is very new.
When there systems fall, only those with either high enough walls around them with ability to sustain independently within those walls, or at least the ability to escape to another currently stable situation will be secure.
When a Gotham'esque hell breaks loose, where is your security then?
This autonomy is the line.
It doesn't have to be total anarchy or civil war either. Imagine food shortages or media propaganda or government policy changes.
Again, all very fragile. The distinction is what controls you, and what autonomy you retain.
Categories: every day is a living fuck all, I depends on the systems around me, I have autonomy myself, I have autonomy over others as well.
Can you see the line?
One man’s apocalypse is another man’s civil war. I will let the more knowledgable reference history here.
On what we’re speaking about:
korrachs> I was wondering how long it would take for the attack on the solidarity of the precariat:
korrachs> The rich cannot be ruined. I can.
taneq> within a year or two you would have far more security than the $30k household will ever have.
Although you could argue that I’m cherry picking to make my point, I will so bold as to allude that perhaps we are missing the larger argument here.
The solidarity of the precariat under fire is an excellent way to consolidate power amongst the influential. A little something called divide and rule.