OT: Goodbye to the American Dream

On Sun, 30 Aug 2015 08:10:42 -0700, John Larkin Gave us:

You are an idiot under a self imposed illusion that you are a leader.

When I file for a grant, several levels of approval are required.

Your achievement assessment criteria are also f***ed up, child.

I got my daughter fully funding her 401K and Roth starting at 23 yrs old.

Nah, that's better for determining how long you live, doesn't necessarily have anything to do with getting rich.

e

luck, but mostly just recognizing what companies seemed to have their act t ogether and buying their stock. I bought Texas Instruments, John Fluke, IB M, Hexcel, and others. And bought S & P 500 index funds in my 401K . I al so bought a little Nucor stock when it was Nuclear Corp of America. Should have lost my ass on that, but it turned out okay.

People do use it that way, but the idea is to invest in a company that's do ing something profitable, and collect dividends and some capital appreciati on as they keep on doing it. My mother got very cross when my father refuse d to sell stocks in companies that looked as if they'd lost their grasp of making their activities profitable. His argument was that he didn't want to be taxed as a speculator, but what he lost of the duff companies was more than the Australian Tax Office could ever have ripped off him.

If you work for one of the blue chip companies - as he did for much of his career - the idea that a company management could lose its way was a bit ha rd to take on board, but he should have been quicker to see it when it did happen.

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Bill Sloman, Sydney

On Sun, 30 Aug 2015 08:35:46 -0700 (PDT), " snipped-for-privacy@krl.org" Gave us:

Yet another failure to hear those helicopter blades whooshing overhead.

Must be because they were MILES over your head.

Not sure how successful I will be, but I funded my niece's Roth IRA last year. She made almost $400 baby sitting , so I funded a Roth IRA for her in that amount. So far it seems to have had no effect. But what do you expect from a 13 year old.

Dan

On Sunday, August 30, 2015 at 12:08:55 PM UTC-4, DecadentLinuxUserNumeroUno

I think it was because they were over your head.

Dan

t even richer at everybody else's expense is roughly what you'd expect from somebody who managed to get rich enough to retire at 34, but it doesn't se em to be a good way to generate persistent economic growth.

e

t

What you snipped - without marking the snip - was

most_Always_Do_Better

ey are richer than the rest of us, and this makes all the social gradients steeper, which doesn't seem to do anything good for the rest of us.

Then you'd better read the book.

The authors - Richard G. Wilkinson and Kate Pickett - are medical epidemio logists, who apply the same statistical approach as every other serious epi demiologist.

Your list of anecdotes - which I've snipped - isn't evidence. Technically s peaking, I'm a millionaire and so is my wife, and we don't go around making sociali gradients steeper either . Intellectual gradients are another stor y, but nobody has done any stats on them yet.

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Bill Sloman, Sydney

That depends which country you live in. In the USA wealth is now more heritable than height. In places like Scandinavia and Germany, less so.

The statistic have been done.

Figure 12.2 in their book is plot of how much of an American son's income is explained by his father's income, on a decade-by-decade basis.

In 1950 it was about 15% and dropped progressively to about 11% in 1980, but it was up to about 21% in 1990, and 33% in 2000.

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Bill Sloman, Sydney

Dan

Sorry John, on this one I need you need to get educated.

In my lifetime (1955) the S&P 500 has went from 50 to 2100. A 42* multiple, inflation is only a 9 multiple. Just Dollar Cost Average into a low cost total stock market index, and hold it until you near retirement, Then you need to back off on the percentage of stocks**. Rule #1 You can't time the market. Rule #2 Don't panic and sell at the bottom of a market correction.

Mikek

• Doesn't include dividends.

** You need to reduce stock exposure at retirement because the market does go down and you don't want to withdraw living expenses from a portfolio that has dropped 35%. You then with draw from bonds or other fixed income assets.

Here's a neat program that uses historical stock market returns to see if your portfolio will have money until you die. It starts with your portfolio, spending rate and inflation, (other data can be included*) Then, it makes, say a 30 year run from 1900 to

1930. Then repeats that from 1901 to 1931, On and on until it runs 1985 to 2015. If your money goes below zero dollars on any 30 year run, you need more money. Of course, previous returns have no bearing on the future, but, unless you think the stock market will change it's return during your retirement, it's a neat test of your portfolio.

• you can add when and how much SS income, any pension income, spending can increase with inflation and several other options can be included.

I do not agree with you about needing a Dutch Uncle.

When I graduated from college , I got married , and moved across country. I borrowed some money from a college friend for a down payment on a house , and then my wife and I both worked but lived on my salary and saved hers.

A couple of years later , it looked to me as if there were going to be layo ffs, so I got a job in Alaska for a year, and got some incentive pay for do ing that.

Then when the big tech slump in the early 70's ,I got work at a manufacture d house company. And then when I realized that was not going to be good fi nancially, I moved back to Washington State. And lived in an apartment for a year while I worked an engineering job and also built a house evenings a nd weekends.

Then since I had no mortgage, I saved 12% of my salary in my 401k plan for the next twenty years. A Dutch Uncle would have been nice, but it is not a requirement.

I did stay married and had one child. When he was one , I started a colle ge fund for him with $1,000. And every year I contributed another $1,000. But after about four or five years , I started only putting in enough mone y so that the amount in the fund was the same in thousands as his age. And in another year or so , I did not have to contribute anything. When he w ent to college, I paid what I could out current income, and used money from his college account for the rest. When he graduated , he still had $65,0

00 in his account.

Dan

I wonder what rich means. Using the 4% withdrawal rule, a $1 Million portfolio will generate $40,000 for the rest of your life. Is that rich?

Mikek

I paid $83K in 1994, during the 2006 boom, homes in my neighborhood were going $250 to $270K. Now, If I got $140K I'd be very lucky, if, I was selling, I'm not. Ok, I exaggerated the 1/2, a little.

Mikek

Almost_Always_Do_Better

they are richer than the rest of us, and this makes all the social gradient s steeper, which doesn't seem to do anything good for the rest of us.

If you look at my past posts , you will see that I seldom emphasize my wea lth and certainly do not say I am richer than the rest of us. For one thin g, I worked in the Seattle area and know several of Microsoft people. And w hile they do not emphasize their wealth, I am sure it is more than mine. I do try to point out that one can become rich without too much effort and without needing a silver spoon.

Dan

A salaried person can become a millionaire by careful saving and investment, but not likely to become a billionaire.

Someone said that the best way to wind up with a million dollars is to inherit a billion dollars. The really rich people, these days, made it themselves somehow. Some actually did something useful.

I interpret that response as "zero."

So, you're at the very bottom of a big heap.

A genius and his money are soon parted.

Cheers, James Arthur

The system is a gamble, basically a casino with a house cut. Stocks have value because other investors think they have value. Most stocks are morally equivalent to investing in Beanie Babies.

IPOs and later rounds of new investment help companies grow. Trading established shares don't, at least not directly.

I'd rather invest in my own company, where I can try to make sure it's going to be productive, create products and IP and jobs.

No, there are indirect benefits, like running up the market price of shares, which inspires employees and such.

True. That's a by-product of the way the system works. But there are dangers, too.

Recycling some earnings into charitable causes is good. We do that in our company.

Certainly agree with the above.

I do not agree with this. If you have enough you may not want to withdraw living expenses from a portfolio that has dropped 35%, but you can.

Dan

I know a guy who co-founded a laser company that was recently sold for over two billion dollars. He still goes into the lab every day, trying to make the things better. He also designs circuits and builds them at home while he watches TV. He's a mediocre circuit designer, but doesn't resent better ideas.

Yup. Crashes happen that way.