Wealth and its acquisition

[YMI]

Hi, the following is a bit boring and perhaps off-topic. Sorry but I was asked to explain that better.

...If you have to resort to vicious personal insult in your resentment...

Seems like I caught your attention here Julia. I can take that back and claim the opposite if you are worried about the word ‘smart’. It may not be clearly understandable from my poor articulation, I don’t care about her body shape, what I wrote is more what I think of her character. Sure I don’t even know her but telling people simply work harder and don’t complain after everybody knows that she started from a totally different level than 99.9% of the rest of the population is actually a bit cheeky and she should know better than anyone else that it is not just hard work necessary for success. Nevertheless I should have left this bit out of my post, didn’t know she’s a friend of yours

This is the bit I hoped you'd expand on. Can you describe for us exactly how poverty is "intentionally boosted (maybe) to keep the system running"?

Again, I thought it’s easy understandable but because of my bad articulation probably not. It is like without light no darkness – this is easy to understand – or without sound no silence. I am not talking about anyone particular but in order to maintain their wealth well-heeled people are interested in a financial gap between poor and rich - easy. Okay, there are lots of wonderful people who support less fortunate ones but very few would continue the support if they were on the same financial level or lower than the one they are helping. So a gap between poor and rich is necessary. Is it intentionally boosted like a conspiracy? No, I don’t think so but our system, not only in Australia but everywhere, requires poverty and wealth.

Here is an example; give everybody on earth evenly 1 million dollar. What could you actually buy with your million? A nice house? I don’t think so. A car? Perhaps a cheap one – wealth and poverty wouldn’t exist anymore, no one would suffer from hunger just as no one could afford excessive luxury. Obviously some would save more, some would spend more and after some time the old order would be restored again.

Why is wealth and poverty necessary to keep the system running? I think it’s a psychological thing. We try to be better than others and accumulating wealth is a good way of proving that one is better. If everybody is forced to have the same, then there is no incentive for working harder or saving more. The idea of communism is a bit like that and we all know that it doesn’t really work. That is actually the main reason for the Euro crisis, some European countries work more efficiently than others and therefore can sell their products more competitive than others. Before they adjusted the lower efficiency by higher inflation in certain countries, but now they have the same currency and that could eventually lead to the fail of the system if they can’t find a solution. What are the options? They can make these countries intentionally poorer by reducing their wages – then they risk a national uprising. They could also raise the wages in the more efficient countries – then they lose competitiveness compared to the rest of the world.
And I also believe that rich people try to keep others down in order to retain or further increase their wealth. A well-known mega-example is Apple’s and Samsung’s patent war.

 

[DocK]

...snip.... Sure I don’t even know her but telling people simply work harder and don’t complain after everybody knows that she started from a totally different level than 99.9% of the rest of the population is actually a bit cheeky and she should know better than anyone else that it is not just hard work necessary for success.

That reminds me of a favourite quote re wealth: "The only thing I like about rich people is their money" - Nancy Astor.

The other is: " While money can't buy happiness, it certainly lets you choose your own form of misery" - Groucho Marx.

 

[tech/a]

With the 2 keys firmly in place
(1) recognising and taking opportunity
(2) risk mitigation

Time for the 3rd and possibly the most important element for those who are looking to acquire REAL wealth.

ALL OR NOTHING

Let me first define nothing----very little or No loss and no profit.

If you dont put all your eggs in the one opportunity you wont create real life changing wealth.

Have a read of Darvas.
"How I made 2 million"
In an era where 2 million was like $50 million today.

 

[ROE]

I'm with ROE.

But to ge t in a position where you have
Enough asset to generate passive income of
Any significance you need to understand that
Opportunity needs to be acted upon quickly
And decisively.
Many freeze and watch it slip straight by.

Eg gold boom $250 - $1750
Oil $25 to $140 a barrel
AUD $.50c to $1.04
The property boom 1996 - 2005
Business and opportunity 2000 to 2010
Bull Market 2001- 2008
Tech boom -- then bust.
Mining boom

Not really ... everyone can do it just the length of time it takes most people either dont stick to it
or abandon for something in scheme of get rich quick...

I always has a job, I always stack away part of my pay and invest, I haven't taken any extreme risk
apart from what I think is a reasonable investment.....the higher pay job I get, the more I stack away,
most people get decent pay rise in their life time so if you stack 20% of your pay away, it can easily be done..

my passive income wont come in 5 years or 10 years but 20-25 years which is 5-10 years before my retirement age you can generate substantial passive income that pay for your life style till the rest of your day....

if you stack away part of your pay regularly and invest catching the boom just automatically fall into it...

Most people dont need to make 20m or 50m to be wealthy, just live a simple life with a splash ever so often doesn't cost
a lot of money and if they can do it under their passive income it's the life to be envy...

 

[craft]

That reminds me of a favourite quote re wealth:

"I’m not wealthy, because I have everything I want but because I want everything I have."
??

Deep, but gets to the essence of what wealth really is.

 

[Julia]

It may not be clearly understandable from my poor articulation, I don’t care about her body shape, what I wrote is more what I think of her character. Sure I don’t even know her but telling people simply work harder and don’t complain after everybody knows that she started from a totally different level than 99.9% of the rest of the population is actually a bit cheeky and she should know better than anyone else that it is not just hard work necessary for success.

As far as I know, she has never denied her privileged start. Plenty of people have also had inherited affluence and have p****d it up against a wall.
I don't think her advice to people wanting to be successful to work hard, save and invest, rather than spending frivolously is any the less reasonable because it comes from her.

Nevertheless I should have left this bit out of my post, didn’t know she’s a friend of yours

As you would probably imagine, I've never met her. I'm just sick of people slagging off at her on the basis of her appearance. The world of mining is probably one of the toughest, and she has succeeded there when many women would quail at the thought.

Clive Palmer is extremely wealthy. He is also hardly one of the world's most physically attractive people.
He's also a greater media tart than Peter Beattie was. But no one slings off at his obesity or attention seeking behaviour.

Again, I thought it’s easy understandable but because of my bad articulation probably not. It is like without light no darkness – this is easy to understand – or without sound no silence. I am not talking about anyone particular but in order to maintain their wealth well-heeled people are interested in a financial gap between poor and rich - easy.

Imo you're perceiving something that, if it exists at all, certainly doesn't in any structured form.
In a country like Australia anyone can take advantage of the same opportunities. The fact that many don't is probably more due to inherited attitudes, behaviour modelled by parents and general social environment, than any mechanism in our society that holds anyone back.

However, "money makes money" has already been mentioned. So true. And one instance of how this does negatively affect those without available capital is with the recent high numbers of people taking advantage of government subsidies to put solar panels on the roof, deriving lower electricity prices or even a profit in the process. This is of course paid for across all consumers so that people without the means to install the panels are further disadvantaged when their bills increase to pay for the subsidy of this and other green schemes. There will be other similar instances of such disadvantage, so in that sense I agree with you.

Okay, there are lots of wonderful people who support less fortunate ones but very few would continue the support if they were on the same financial level or lower than the one they are helping.

Well, if they were on the same financial level, there wouldn't be any need for assistance.

Here is an example; give everybody on earth evenly 1 million dollar. What could you actually buy with your million? A nice house? I don’t think so. A car? Perhaps a cheap one

You couldn't buy a decent house for $1M??? or a car???
That's pretty silly.

– wealth and poverty wouldn’t exist anymore, no one would suffer from hunger just as no one could afford excessive luxury. Obviously some would save more, some would spend more and after some time the old order would be restored again.

Agreed in principle. But that's essentially due to the attitudes and capabilities of those receiving that windfall.
You see it all the time in lottery winners. Some invest wisely, but too often we hear about winners just spending it all then accessing government benefits.

It's a mindset rather than any social construct.

Why is wealth and poverty necessary to keep the system running? I think it’s a psychological thing. We try to be better than others and accumulating wealth is a good way of proving that one is better. If everybody is forced to have the same, then there is no incentive for working harder or saving more. The idea of communism is a bit like that and we all know that it doesn’t really work. That is actually the main reason for the Euro crisis, some European countries work more efficiently than others and therefore can sell their products more competitive than others. Before they adjusted the lower efficiency by higher inflation in certain countries, but now they have the same currency and that could eventually lead to the fail of the system if they can’t find a solution. What are the options? They can make these countries intentionally poorer by reducing their wages – then they risk a national uprising. They could also raise the wages in the more efficient countries – then they lose competitiveness compared to the rest of the world.

Again, it's largely a case imo of some countries (just like some individuals) being thoughtful and efficient with managing their finances.

And I also believe that rich people try to keep others down in order to retain or further increase their wealth.

In business, yes, of course you're going to work to do better than your competitors. We all benefit from healthy competition.
I don't see that also applying to most individuals, only perhaps some who are emotionally insecure and regard money as some sort of comparative status symbol rather than a means to ensure personal security and capacity to make choices.

 

[Mrmagoo]

started a job as an apprentice.

" I got lucky ect ect.."

Most trades people are rich. They start earning young and are able to invest. Had you gone to university, like most people, you'd be poor.

Never met a poor tradesman, met lots of poor office workers.

The basis of building wealth is having a good job, with a good income, that allows you to build wealth to invest and then getting lucky. It is also the will power to save.

Some get that good job early, for others it can take till they're nearly 30.

Many of my com sci mates won't hit 100k until they're 30. A carpenter more often than not can be on $50 an hour at 24. Huge difference to wealth creation that makes.

One has 4 years of apprentice income, the other has 4 years of zero income due to university and 4 years of university debts (i.e hecs). One is on 100k at 30 (and DAMNED lucky to be so) the other is on 100k at 24 with a virtual guarantee.

If I had my time again I know what I'd pick...

 

[Julia]

Question for Julia:

How much wealth is enough?

I won't be drawn on that, sorry burglar. It's going to be different for every individual.
I'd probably describe 'enough' as being a carefully calculated amount, considering life expectancy, inflation expectancy, likely future spending - discretionary and non-discretionary - which allows an individual to take a fairly passive approach to the management of capital. An amount which gives the individual a sense of security.
(And probably a huge sense of relief that the years of saving, investing and risk taking can be largely left behind.)

You don't get wealthy by working for an hourly rate.
That is income, not wealth!
To acquire wealth you need to make the money work harder.

Yes, but you have to start somewhere. Few of us have the advantage of being born into great wealth.
I've noticed amongst some people a pervasive attitude that they'll never be financially independent so it's just not worth trying. It's always worth trying.

So in summary it was all hard work in ordinary jobs, then investing in real estate and stocks. I am Looking for investment opportunities all the time, even now and there is plenty out there. It has all paid off and now I am retired and living off passive income from my investments. Some of my mates are still blowing their pay checks from week to week. Nothing is free, you alone have to make it happen. Good luck everyone.

Yep, agreed. And sometimes we have to start all over again. When I left my marriage at 33, I had no home, no job and no money. Thankful just to escape with my life. I'd been employed in the practice so that job was no more, and all I'd contributed financially had got caught up in massive debt run up by my husband totally against my protests. I borrowed money from my mother for the bond and first two weeks' rent on a flat, got the first job I could see that paid decently, and went back to studying so I could ultimately earn more money.

Saved hard, no new clothes, no holidays etc until there was enough for a deposit on a very modest house, cheaper because it was on leasehold land. Soon had that paid off, then into investment properties.

Was it easy? No, absolutely not for some years. But is it now worth it? Yes, definitely.
I was only poor for a relatively short time, but oh how it sucks.

Tech/A makes an excellent point about risk. This is where some people come badly unstuck.
Borrowing to invest in carefully considered assets makes sense. Borrowing, in fact double gearing by retirees mortgaging their homes, as offered by the Storm Financial 'strategy' does not.

I'd be interested in whether members consider parental influence and/or social environment made a strong contribution to their attitudes toward growing wealth.
For myself, it did. I saw my parents work extremely hard. They both gave up professional careers (accountant and music teacher) to go into 6 day/12 hour a day business. They did make considerable money buying, improving and turning over these businesses, but it was really demanding stuff in terms of hours and physical effort.

 

[Bill M]

Most trades people are rich.

Firstly magoo, you slipped the following into my quote and I don't appreciate you putting your own BS into my quotes without my permission.

" I got lucky ect ect.."

I never wrote that and I am starting to get the feeling that you hate people who have had a go in their life and have done well for themselves. How about sticking to the point and being more constructive in the future and refrain from Doctoring peoples posts.

Most trades people are rich. They start earning young and are able to invest. Had you gone to university, like most people, you'd be poor.

Nonsense, most trades people I know are not wealthy. I have mechanics living next door to me and they are working 6 days week struggling to make ends meet.

Never met a poor tradesman, met lots of poor office workers.

I have met many, some do not run businesses and do not work for themselves. There are plenty who work for bosses in factories, workshops or Government run enterprises on very ordinary $$ per hour.

The basis of building wealth is having a good job, with a good income, that allows you to build wealth to invest and then getting lucky. It is also the will power to save.

Wealth is not having a good job with good income. Although I did an apprenticeship I ended up quitting that job 2 years after I got my trades certificate. I then took on ordinary low paid jobs that anybody off the street could have done. As ROE has already mentioned, it is not how much you earn that makes the difference it is how much you save. Then when you have saved you make your investments, it has nothing to do with luck.

Many of my com sci mates won't hit 100k until they're 30. A carpenter more often than not can be on $50 an hour at 24. Huge difference to wealth creation that makes.

Nonsense again, I guess if you are running a business and working for yourself then perhaps that carpenter may need to charge $50 p/h. However the great majority of Carpenters on the tools working for somebody would more than likely be getting under $20 p/h. Check it out here if you don't believe me.
http://www.fairwork.gov.au/2007payscalesummaries/AN120089.pdf

If I had my time again I know what I'd pick...

I reckon if you picked the other way you would still come on this forum repeatedly using the words "lucky" and whining about other peoples achievements. Tell me, if you saw your local Dentist driving a brand new 200K BMW would he be "lucky" too? Or do you think that all those years of University, training and hard work had nothing to do with it?

It's all about spending less than you earn and then investing what you have saved wisely. Then your money will make money and you will accumulate wealth.

 

[Mrmagoo]

Firstly magoo, you slipped the following into my quote and I don't appreciate you putting your own BS into my quotes without my permission.

" I got lucky ect ect.."

I never wrote that and I am starting to get the feeling that you hate people who have had a go in their life and have done well for themselves. How about sticking to the point and being more constructive in the future and refrain from Doctoring peoples posts.




Nonsense, most trades people I know are not wealthy. I have mechanics living next door to me and they are working 6 days week struggling to make ends meet.



I have met many, some do not run businesses and do not work for themselves. There are plenty who work for bosses in factories, workshops or Government run enterprises on very ordinary $$ per hour.



Wealth is not having a good job with good income. Although I did an apprenticeship I ended up quitting that job 2 years after I got my trades certificate. I then took on ordinary low paid jobs that anybody off the street could have done. As ROE has already mentioned, it is not how much you earn that makes the difference it is how much you save. Then when you have saved you make your investments, it has nothing to do with luck.


Nonsense again, I guess if you are running a business and working for yourself then perhaps that carpenter may need to charge $50 p/h. However the great majority of Carpenters on the tools working for somebody would more than likely be getting under $20 p/h. Check it out here if you don't believe me.
http://www.fairwork.gov.au/2007payscalesummaries/AN120089.pdf


I reckon if you picked the other way you would still come on this forum repeatedly using the words "lucky" and whining about other peoples achievements. Tell me, if you saw your local Dentist driving a brand new 200K BMW would he be "lucky" too? Or do you think that all those years of University, training and hard work had nothing to do with it?

It's all about spending less than you earn and then investing what you have saved wisely. Then your money will make money and you will accumulate wealth.

To address your points.

1) Have a cry I was paraphrasing and summing up your "story". Which is nothing remarkable. You had money and invested it at the right time.

2) You're quoting award wages. Most carpenters do get about $50 an hour all considered.

3) Not going to indulge in your little episode of self gratification the tired old I did it therefore everyone must be the same as me so they can do it to and if they didn't then they're just crap is tired and over done. That is fine talk for down the pub with your rich old tradesman mates and in fact I encourage that kind of thing as it boosts confidence but it does not qualify as advice. The problem is when you start to use that level of personal arrogance (personal arrogance is good imo) to reflect negativity onto others and what they struggled to achieve in their lives.

4) If you have any actual investment tips I'd love to hear them.

5) It is not how much you make, the more you earn the more you spend but you need to have a decent income to have the opportunity to invest. People these days really struggle to make ends meet and I'm old enough to know that times now are different to what they used to be like. Most tradespeople around my age have done very well. Not to take away from their achievement but that is just the way things turned out.

6) Many people work their ass off in the blue collar job and end up with basically nothing. To suggest that people like that are "whingers" who don't work hard is just a load of crap. It is a matter of being in the right place at the right time for so many different things in life. You said it yourself with the mechanic example, interchange that with plumber or electrician and I'd love to hear that story played on a violin. I've also got mates who are ridiculously intelligent, went into engineering and software engineering who contribute massively to society who ended up with nothing. They're mid to late 20s on about 80k a year for all their hard work have basically nothing or enough for maybe a 15% deposit on a house. All of us just missed out on the housing boom where had this been happening 10 years ago, most would have bought a house plus investment properties and would have made profits. I have another mate who has bought a house with his wife, owns two investment properties and for all his work HAS LOST MONEY, he did the same as you and is losing money. Had this been ten years ago, in the 4 years since he purchased he'd be nearing double his money and would be on a forum bragging about it. TIMING DOES MATTER.

7) You don't know what kind of personal tragedies may have befallen a person preventing them from investing or what other needs affected their lives. Illness and injury can lead to unemployment or bankruptcy. Caring for a sick parent or sibling ? Cost of medical bills ? There is no distinct formula for generating wealth other than earning significantly more than you need to live (a well paying job) and the discipline to save and the LUCK to invest AT THE RIGHT TIME.

8) A dentist is basically a licensed thief.

 

[tech/a]

Geez Magoo
You type some rubbish.

 

[So_Cynical]

8) A dentist is basically a licensed thief.

Yep i whole heartedly agree on this point...im going to see a specialist doctor on Tuesday, 10 or 15 minutes for $200 bucks...also licensed thief IMO.

 

[MrBurns]

Salary doesn't make you wealthy in itself it's when your earnings are high enough that you can use them to invest in real estate or whatever else you may lean toward THAT'S where the
wealth is created
Having said that if you're happy with what you've got you're a wealthy person.

 

[TMC93]

The fact that you think every qualified tradesmen is well off is a clear indication you don't know many tradesmen. Yes there are wealthy trades, I know a few who I would classify as very well off, but they didn't make they're money necessarily doing their trade, they made money by running a business. I remember one of them telling me the only time I made any money was when I got my head out of the tool box and into the office. Once you take off tools, insurance, vehicles, etc etc they don't make a killing.

I think the same probably applies to a dentist, they have all of their expenses and plus years of uni debt, I agree they charge a swag of money for a short time but its not as if they don't work hard.

 

[DocK]

Geez Magoo
You type some rubbish.

+1

Magoo, maybe you should have a chat to a few tradies on the Gold Coast - they sure would love to know where they could get consistent work for $50/hr, not to mention having to provide their own super, annual leave, sick pay etc. I know quite a few that get good money when they have work - but then get no pay when they have no work or can't work due to weather etc. I also know quite a few 30 year olds who'd love to be on anywhere near $80k yet have still managed to live within their means and save a deposit on a modest home to start with. Maybe they spend less time complaining that the good times have passed them by and just get on with it!

Your posts read like a litany of poor me, it's not fair! Anyone doing better than you is evil, employers are evil, professionals are thieves etc. Get a grip! Or maybe just grow up.

 

[Bill M]

8) A dentist is basically a licensed thief.

With that comment I have nothing further to add to your ridiculous posts.

Geez Magoo
You type some rubbish.

You're not joking.

 

[Bill M]

Mitigation of risk is one of the most important investment topics there is.
I could---but wont prattle on infinitum
While identification of opportunity can be honed as a skill set------ the mitigation rather than the avoidance of risk needs to follow right behind the decisive action upon finding an opportunity.

If that risk is NOT CLEAR (Ie a developer wants your money in a property deal) or the risk is or could expose you to ruin or something like it.

THEN---NEXT!!

Good point tech/a, this is where I went wrong in 2007, lost a lot in the crash. It's a bit like that other thread, buying good investments is the easy part, knowing when to sell is the hard part. It is something I need to work on.

I'd be interested in whether members consider parental influence and/or social environment made a strong contribution to their attitudes toward growing wealth.
For myself, it did. I saw my parents work extremely hard. They both gave up professional careers (accountant and music teacher) to go into 6 day/12 hour a day business. They did make considerable money buying, improving and turning over these businesses, but it was really demanding stuff in terms of hours and physical effort.

My parents were a bit like Docks and her husbands. They worked hard and worked towards paying off the house, any investments in stocks or investment property was a real no no. But they did teach me to always put aside a portion of my pay each week and I took that advice on board. The rest I had to learn for myself, I was not content with just having my own home and a term deposit. Retirement costs a lot more money than that.

 

[Mrmagoo]

+1

Magoo, maybe you should have a chat to a few tradies on the Gold Coast - they sure would love to know where they could get consistent work for $50/hr, not to mention having to provide their own super, annual leave, sick pay etc. I know quite a few that get good money when they have work - but then get no pay when they have no work or can't work due to weather etc. I also know quite a few 30 year olds who'd love to be on anywhere near $80k yet have still managed to live within their means and save a deposit on a modest home to start with. Maybe they spend less time complaining that the good times have passed them by and just get on with it!

Your posts read like a litany of poor me, it's not fair! Anyone doing better than you is evil, employers are evil, professionals are thieves etc. Get a grip! Or maybe just grow up.

Or maybe timing matters. Anyway I agree. No point discussing this with people who clearly do not understand anything beyond their own egos.

Also 80k is peanuts, if they've bought a house on less than that, it was because of timing, that is they bought them when they were all 100-200k cheaper.

 

[tech/a]

No point discussing this with people who clearly do not understand anything beyond their own egos.
.

Well perhaps not everything!

 

[burglar]

...
8) A dentist is basically a licensed thief.

...
One has 4 years of apprentice income, the other has 4 years of zero income due to university and 4 years of university debts (i.e hecs). ...

A strange contradiction!