Tactics of the rich

By Philip Brewer on 12 April 2009 (Updated 24 April 2009) 42 comments
Photo: Philip Brewer

There are things the rich do that working class and middle class folks don't. Some of them--living off the return on capital rather than wages or salary--are only available to the rich. Others--seeking a first-rate education for your kids, working for yourself rather than others--are things that ordinary folks do to the extent that they can, but their ability is limited. Even so, it's worth learning the tactics of the rich and applying them where possible.

Some of the tactics of the wealthy are unsavory. One key tactic is to share as little as possible of the profits of the enterprise. This is why working for yourself is such an important tactic--the owners and managers are in a position to grab the lion's share. Put your suppliers in the position of competing with one another for the lowest price, put your workers in the position of competing with the unemployed for the lowest wage, and pocket the savings (via dividends if you're an owner, via bonuses if you're a manager).

Others, though--tactics like frugality, living within your means, avoiding debt (except to invest in a money-earning enterprise), and working hard--are positive virtues, or at least neutral. (And they're generally the ones that lead to wealth creation. The others are largely about wealth preservation.)

These tactics are not kept secret, exactly, but various factors keep them largely out of view from ordinary folks. The biggest is simply that consumption is interesting while frugality is dull. So, buying a yacht makes the news, whereas driving a 10-year-old car one more year doesn't get noticed. The result is that popular culture shows the excesses of super-wealthy but not the ordinary lifestyles of the ordinary wealthy. But there are way more of the latter than there are of the former.

Not a level playing field

There are a lot of ways in which the deck is stacked in favor of the rich. The advantage I mentioned at the beginning--owners and managers being able to skim off an outsized share of the profits--is a huge one, but there are others:

  • The legal system heavily favors the rich.
  • The financial system offers high quality services to the wealthy (often for free), while the poor make do with expensive check-cashing services and payday lenders.
  • The rich are in a much better position to wait for a good deal--which gets them lower interest rates on loans, lower rents, lower insurance rates, and better prices on just about everything.
  • And then there are simple social realities--affluent neighborhoods are safer, stores that cater to the affluent have more and better choices (and often cheaper ones as well), schools in affluent neighborhoods are better and safer.

Knowledge can help level it

If you know enough, though, most of these advantages of the wealthy are available to the poor as well:

  • Anybody can start a small business. The internet has vastly increased the range of options that require almost no capital (and has made a wide range of formerly expensive services available cheap or free). This mean that anybody can work for themselves rather than others.
  • Anybody can be frugal and live within their means, as long as they don't assume that they're entitled to some particular standard of living.
  • Anybody can avoid debt. More important, anybody can understand the difference between productive debt (invested to earn the money to pay itself off) and unproductive debt (spent on consumption).
  • Anybody can do the research to find the good public schools. The affluent have a lot more choices, but you only need to find one affordable place to live in a safe neighborhood with good schools.
  • Anyone (even people with garnishments) can open a bank account and quit using the check-chasing places.
  • Anyone can be patient and refuse to take a bad deal--which will, over time, get you the same good prices that the rich get.

It takes time and effort to learn the tricks and pitfalls, and this is where the children of the affluent get their biggest leg up: They learn these things from their parents and their friends' parents, from their classmates and teachers and neighbors. They also generally reach adulthood with at least a little capital (instead of student loan debts). But you can learn these things too. It's one reason for reading Wise Bread.

 

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No longer sure of this strategy

My wife and I have done all these things. We work for ourselves, we save, we have zero debt (including owning our home free and clear), and we invest rather than consume (for example, we drive an almost 20 year old-car and pocket/invest the savings).

And yet, with what I've learned over the last 10 years I can safely predict that we will retire poor...or even destitute. Such is the extent of the stacking of the deck by the super-rich during the last 3 decades. I have come to understand that unless you have the ability to generate large amounts of income, moderate wealth is not safe with such greedy psychopaths controlling the society. In effect, you must be able to join their group or suffer the consequences.

So, the friends that I used to look down on. The ones that lived for today. The ones that took money out of their 401K to buy a boat or a shiny new car. The ones that owe money on the house and to the CC. I am starting to wonder if they had the right idea all along. I don't know if they did, but I would certainly not advise anyone in my position to count on anything. Not as long as the Joseph Cassanos run the world and I see no reason to believe they will not.

Guest's picture
lucille

I grew up in a fairly affluent area. People who really had money, multiple homes, annual trips to Europe and country club memberships don't throw money around on bling type consumer items. Most live fairly understated lives, they might have expensive items but they are not the in your face look i'm rich items.

That is how they stay rich, not wasting huge sums of money on every tacky overpriced item that comes along.

I would rather live in an apartment or tiny house in an affluent area than a larger home in a not so great area. You get better services, better (and cheaper) shopping, and lots of things that are basically free. Schools are better, parks are better, those communities usually have more community amenities all basically for free. Your insurance will be quite a bit cheaper too. We moved from an urban lower income zip code to one that was mostly higher end homes and our insurance rates dropped about 30% over night.

Guest's picture

Comment #2 hit the nail on the head. Comment #1 needs a beer.

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Guest

+1 ...this article needs a beer.

Guest's picture
Kelja

Oh, Philip ... the rich do unsavory things? Let's not discriminate - the poor do many unsavory things.

You say, "One key tactic is to share as little as possible of the profits of the enterprise."

Perhaps you've never been in business for yourself, so I will chalk this comment up to ignorance. The quickest way to wealth is to help others become more successful and to reach their potential. Certainly there are businesses that don't share the wealth, but the successful businesses do reward producers extremely well. It makes sense.

There are many in this country today that are screaming for the heads of the rich. Parallels the thinking of the French Revolution.

J. Paul Getty once pointed out that you could divide all the wealth up and distribute in equal portions to everybody. In one week's time, the same people as before would be the wealthy ones.

Human nature isn't about to change any time soon.

Guest's picture
Vlatro

Well stated. I'm not sure if the article was "showing us how to become rich", or simply villifying the rich.

If readers will take one lesson to heart, let it be this:

Time is the only real currency and the only real investment.

The wealthy understand this and use time to their advantage. Months, years and even decades are fertile ground in which to grow your assets. Time is your friend, but it requires patience and a "never panic" attitude.

The poor see time in a different light. They associate dates with when they'll get their next paycheck or when bills are due. They regret the past and dread tomorrow.

Look at the Dollar. One dollar today is not worth as much as it was yesterday, and it's value will change tomorrow. The number printed on it is arbitrary. What is important is how much of your time was invested in acquiring that dollar.

You want to buy a new plasma TV. The cost is $5000. You can get the money easily, or perhaps you even have it saved already. Now let's say you make $20/Hr. Your take-home is likely closer to $15/Hr after taxes. That purchase will cost you 333 Hours and 20 Minutes of your time. That's just over 8 weeks of 40 hour shifts. Before asking "Is it worth my money?", ask "Is it worth my time?"

If you instead took that money and invested it, you could easily get a 6% annual rate. At the end of that term, you still have your $5000, but with a bonus of $300 that you spent no time on at all. That's like having 2½ payed days vacation at work. You're not actually working, but you're still receiving income for it.

Ideally, you want to reinvest this money. However, If you absolutely need the TV, buy it from the time-free interest. You'll have a greater appreciation for money and eventually a lot more of it.

Once people learn to start thinking of money as time instead of paper, they tend to do much better. Live cheaply for 10 years and bank every spare penny you have. All of a sudden, the interest alone becomes a second income. You can easily use it to pay your bills.

So, you have your new TV and you want a premium HD cable or satellite package that costs $70/month. That's 5 hours a month of your job you're basically working for free. Instead, figure $70/Month is $840/year. Put away $14,000 in savings at that 6% rate and the interest will cover that bill for you. Just hanging on to that money until retirement will continue you fund you $70/Month that can be used to better the quality of your life.

Every time you want a service that incurs another bill, ask "How much do I have to invest at my current interest rate to pay for this without touching my income?" Save that much money and start living off of your interest one bill at a time.

Guest's picture
Phedre

I have to second Kelja. Idiot middle managers and spoiled 20-somethings think that hoarding profits makes you rich.

The rich business owners would tell you that rewarding the hard workers with bonuses and raises is the best way to get rich and grow your business. The richest would also mention getting rid of negative-nancy's, lazy kids who try to get by doing as little as possible and the bad-mood-mongers helps tenfold.

I encourage everyone with something to offer to start a business, but keep in mind that your staff *are* your business. They are the only way you'll succeed.

Guest's picture

I really liked this article.. I agree that there are lot of ways in which one can get rich and frugality is the most imprtant of it. Working for oneself, paying yourself first are some of other ways . But most importantly spending less than what you earn alongwith living below ones means are the virtues of rich as is very nicely elaborated in The millionaire next door book.

Guest's picture
Common Sense Will Not Kill You

>>>I have to second Kelja. Idiot middle managers and spoiled 20-somethings think that hoarding profits makes you rich.<<<

Hoarding is different than keeping them to yourself. You can keep profits to yourself and reinvest them in "stuff" that will make you more profits--all the time sharing as little as possible with your workers and society (the tax man).

For example, southern plantation owners became rich by exploiting slave labor and keeping the profits from their "workers"? When a company moves a plant to an underdeveloped country where labor is a fraction of what it is here, don't they get richer by sharing less of the profits with labor? Your view of how to succeed in business is naive. The only time you reward employees is when you have no other choice--when they are uniquely trained and educated for a particular job, for example. Even then, a business will look to change that situation because labor is the first cost they seek to reduce.

>>>J. Paul Getty once pointed out that you could divide all the wealth up and distribute in equal portions to everybody. In one week's time, the same people as before would be the wealthy ones.<<<

And we should believe this why? Because it was Getty who said it? You realize he could have easily proved his hypothesis had he cared to, but I don't think he believed it any more than he believed in Santa Claus. The uniquely American idea that rich people are all geniuses who contribute mightily to our society is what has us now giving hundreds of billions to the same people who ruined our economy, in order that they might now fix it. "If anyone knows how, it's the geniuses who ruined it," the thinking goes.

The fact is, rich people are a cross-segment of the general population. They hold no special powers--other than their money, which brings them influence and worldly power. They are not any smarter than anybody else (see Madoff investors) and once the money gets into the 3rd generation, they are usually considerably dumber and less motivated than the average citizen.

Guest's picture
wildgift

Kelja - do you know math? Phil is correct about sharing the wealth. Paying as little as possible for labor is what every business does -- they hire from the labor market, at the lowest price possible. That is equivalent to "share as little as possible."

Businesses always have some people who are paid well -- those who contribute to the productive assets of the company, and after them, those who contribute to the income. Then there are those who are paid poorly. That's generally those who perform services or routine maintenance for the above. Those paid worst are those who do maintenance on depreciating assets, like buildings.

Guest's picture
Henry

Not all wealthy people are crooks. Instead of "Some of the tactics of the wealthy are unsavory", it should say "The tactics of some of the wealthy are unsavory".

Also, some 'advantages' are simply natural consequences of having more. I am recently laid off, but thanks to my good financial habits while working, I can take my time to look for a job I will enjoy, and not have to accept whatever available just to make ends meet. So yeah, I am "in a much better position to wait for a good deal."

Fred Lee's picture
Fred Lee

You state many obvious points, as well as ones we don't give enough thought to. Very thorough and informative, not to mention thought provoking, as we're seeing firsthand. Thanks for the advice.

Philip Brewer's picture

Everybody sometimes does unsavory things--rich and poor alike.  I didn't mean to suggest otherwise.

The idea that owners and managers jump at the chance to share the profits of the enterprise with their workers, though, I think is provably false.  More important, the degree to which the profits of the enterprise are shared with the workers has undergone clear shifts over the past hundred years--moving sharply in favor of owners in the 1920, shifting back to workers from the 1930s through the 1950s, and then moving back in favor of the owners and managers in the 1980s and 1990s.

Of course, everyone is an individual.  Some owners and managers don't try to squeeze every penny out of every business.  Unfortunately, the pressures of the market win out over good intentions:  A business that pays above-market wages will quickly be driven out of business by its competitors.

All of which, I think, is beside the point that a lot of the advantages that rich people have come from knowledge rather than wealth, and that even poor people can acquire the knowledge.

Guest's picture
MJB

In a sense we are all in business for ourselves. We accept a payment from an entity in exchange for the perceived value of the services we provide. We compete (sometimes globally) with others for this work and that competition factors into the price we can command and the compensation we enjoy. Typically the more unique/irreplaceable your abilities are, the higher your compensation. It's not perfect, but it's basically the way it works.

Being a solopreneur offers one very little leverage when it comes to effort. The person who is self-employed with no leverage is basically Now if they focus on providing greater value (maybe through specialization or deeper skill sets), more highly compensated services (movie stars make obscene money as solopreneurs) or seek to expand their reach through a leveraged mechanism (ie- writing a book, giving seminars or hiring employees), they can go beyond the solo level.

Last week I was talking to the owner of a new restaurant in my home town. He took money from his 401k and used it to create this establishment. He works a regular job AND he manages the restaurant. This place employs roughly 20 people.

From what I can ascertain, this owner is taking all the risk and working extremely hard to achieve a dream. In my mind... if he succeeds, he deserves to earn much more than anyone he employs. And, he has every right to pay the dishwasher what is market rate. Now, because his focus is on Wine, then maybe he'll pay above market rate for his dishwasher but expect that dishwasher to put our spotless glasses.

The bottom line is, you can focus OUT THERE; on other people, what you perceive is wrongfully acquired wealth, etc, or you can focus on building, living and achieving your dream by providing high value to the world around you. Maybe you are discouraged and think you will be poor. Watch Slumdog Millionaire and gain both perspective and hope. Read "Unique Ability" from www.strategiccoach.com and discover what you were meant to do.

And, as Philip states... stop being a consumer and become a provider. Aside from the questionable "Elite" or Large Enterprise wealth acquired in "unsavory" ways, it's still true that most of the wealthy in this country are small business owners who earned their wealth through risk, hard work, determination and providing jobs for others.

Or, go to work today and realize it's your choice. It's still a free country with tremendous opportunity.

MJB

Guest's picture
AnnJo

Thank you, MJB, for pointing out what Philip Brewer seems to have forgotten. Mr. Brewer, I'm afraid you've been swept up in the 'class envy/hatred' some of our politicians are fomenting to divert voters from concentrating on the real problem - economy-killing government policies.

What, exactly, is the difference between an 'unsavory tactic' and frugality? If I shop carefully for the best deal, as you recommend, wouldn't that include shopping for the best deal in suppliers and employees, if I'm a business owner? Do you share your own profits and offer to pay extra at the grocery store or to the plumber who fixes your pipes? If not, why call a business owner 'unsavory' for behaving exactly as you urge us to - frugally?

The biggest unsavory tactic I see business owners engaging in today is going hat in hand to the government to absorb their losses and minimize their risks. But at the same time, it's hard to blame them for doing that, since government has sucked up so much of the wealth of the country into its own coffers, and regulated the rest of it so vigorously, that it is hard to manage a big business without being at the mercy of the politicians.

If having control over vast wealth is the source of great power, who is more wealthy: Bill Gates, who controls about $40 Billion (with a B) IN TOTAL WEALTH, or the team of Barack Obama, Nancy Pelosi and Harry Reid, who control about $3.5 Trillion (with a T) PER YEAR? Obama/Pelois/Reid burn through the equivalent Bill Gates's AND Warren Buffett's total fortunes roughly EVERY WEEK.

@CommonSenseWillNotKillYou, 'society' is not the same as the tax man. Society is not the same as the government. The government is a PART of society, but not the only part. The frequent confusion of community/society/country with government is proof positive that our schools have abandoned teaching anything about the philosophies of our country's founders. I cringe every time I hear someone talk about the President and/or Congress 'running the country'; that idea, commonly accepted today, is so contrary to our Constitution that the document might just as well be put through the paper shredder.

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Edgar A.

"J. Paul Getty once pointed out that you could divide all the wealth up and distribute in equal portions to everybody. In one week's time, the same people as before would be the wealthy ones."

I suspect that the same thought has been stated by others. It's the familiar idea of the meritocracy applied strictly to wealth accumulation. Looked at from the opposite end, it's the idea that the poor deserve to be poor.

But do people actually believe that redistributing wealth would have no lasting effect since the same meritorious people would get it all back in no time? If so, why is the proposition resisted so strongly? I suspect it's because people don't actually believe any such thing. They've got the money and they want to hang onto it because they think that depending on the way things shake out, somebody else will end up with it next time.

I suspect that poor people tend not to like the idea, paradoxically for much the same reason. They expect to get rich by winning the lottery and know that if their wealth is redistributed, it's unlikely they'll win the lottery again.

I don't know of any real tests of the idea, but the movie Trading Places examined it. The general conclusion, as far as I remember, was that the poor guy when switched with the privileged guy did fine, while the formerly privileged guy sank. Later, by joining forces, the two of them triumphed over the old, rich guys that set up the test.

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Common Sense Will Not Kill You

@AnnJo: You've been reading too much Ayn Rand and listening to too many talking points. If you look at the revolving door of politics and big biz, you might realize that there is no difference between our government and the monied interests. Hating on one and admiring the other is schizoid.

Also, did you really write this???

>>>The biggest unsavory tactic I see business owners engaging in today is going hat in hand to the government to absorb their losses and minimize their risks. But at the same time, it's hard to blame them for doing that, since government has sucked up so much of the wealth of the country into its own coffers, and regulated the rest of it so vigorously, that it is hard to manage a big business without being at the mercy of the politicians.<<<

Just wow! Cognitive dissonance cubed.

Guest's picture
Guest

AnnJo appears on other boards, with the same far-right talking points each and every time. She adds the wealth of three democrats to make a point, as if all republcians are regular "Joes." The RNC has paid posters. I am not sure if she is one, but it is odd that she admitted to only having to work 10 hours a week on another board.

I cancelled everything from Wisebread except for Brewer's blog wanting to escape such far-right talking points.

Guest's picture
Kelja

wildgif -

Yes, a business has to pay as little as possible for it's resources, including its employees. I don't disagree. My point is that businesses have to pay the going rate for their employees. The more valuable the person's skill and work ethic is to the organization, the more that employee can demand. You get to sell your services to the highest bidder. If your skill is sweeping the floor and one business is willing to pay minimum wage and another will pay an extra few dollars and benefits - where will you go?

common sense -

I quoted Getty because he is using common sense. Some, a few, in society have the skills and motivation to rise to the top. They are the 'creatives', the producers, the doers. They represent a small percentage of the population. Without these people, society would be stagnant. Witness what happens when they are wiped out as happened in the Soviet Republic.

I don't believe the rich are necessarily geniuses. High intellect isn't the main indicator of success. The biggest determinant for success in business, or life in general, is a growth mindset. And, that's something that can be developed in every person.

Don't blame your success or failure on others!!!

Guest's picture
Kelja

I find it sad that the present administration is stoking the fires of class envy.

Unfortunately, I believe our society is headed for another Revolution. It won't be like our first American Revolution but, alas, more along the lines of the French or Russian Revolutions.

Guest's picture
Guest

Glen Beck, commentators on CNBC, O'Reilly are the ones that have been stocking class warfare for time. Calling people who are behind on their mortgages losers is class warfare. Reagan also played the game of class warfare with terms such as "welfare queen."

Guest's picture
AnnJo

@CommonSenseEtc., I haven't read Ayn Rand in decades (and can't claim to have ever read John Galt's speech in full), but I do re-read the Constitution and Declaration every year, and various of the Federalist Papers every few years. I commend them to you.

Curious how you automatically assume that those who disagree with you can't think for themselves! Or is that projection?

There is one big difference between government and monied interests. The former has a monopoly on the legal use of force. If I choose not to give any of my money to Bill Gates, there's absolutely nothing he can do about it except refuse to give me the latest Office package. If I choose not to give my money to the government, it will seize my property, put me in jail, and shoot me if I resist.

As for your psychiatric diagnosis of me, you rely on unwarranted assumptions. I neither hate government nor admire big business as a whole. They are both collections of people acting in their own self-interests, just like everybody else. For the reason stated above, though, I do have more trepidation about the ability of a massive government to harm me than any particular big business.

Guest's picture

Too bad MJB isn't right. He says, "Typically the more unique/irreplaceable your abilities are, the higher your compensation. It's not perfect, but it's basically the way it works."

I'm arguably one of the best Esperanto-speakers in the country. And I'm almost certainly the best Esperanto-speaking Macintosh Unix sysadmin-capable professor of science education in the world. And yet my compensation has not kept pace with my uniqueness.

Dean Baker argues regularly that a big part of leveraging big compensation under the current regulatory framework has been the ability of the privileged to restrict competition in some fields (white-collar work) while allowing others (labor) to compete globally. He wrote a good rant recently in the Boston Review: Free Market Myth: Regulation is everywhere. Let’s choose who benefits.

Guest's picture
Olivia

I've known three wealthy people. All started with nothing, worked very hard all their lives, reinvested profits, and took care of others. The first, an uncle, took enormous, calculated to be sure, business risks. Not many of us trust our judgement or think as globally as that. He still painted his own garage at 92. We might look to him as one of the "wealthy" that people envy, but I would never put myself in those kinds of circles or under those kinds of pressures or even think on that kind of scale. He lived well, but well below his means.

The other was a house painter. He made it a point to finish a job or room before he cleaned his tools to go home. So if it took an extra hour on one house, he was fresh to go to a second one the next morning. He never really retired and lived in the same house he had purchased during WW2 on his soldier's pay for his parents. He lived very modestly, gave quietly and generously to many, had enough to cover his needs into old age and pass wealth onto his children. They live just as he had.

The third was our son's physical therapist. She is still seeing clients into her eighties and is as fit as a fifty year old. She was careful wih her money, packed her lunch, dressed simply, used simple exercise equipment in a modest rented space. She saved what she made and has enough for any contingency. On the weekends she lives in NYC and goes to the symphony.

The common threads are being self employed, working hard throughout life, and being wise with finances along the way. That's something many of us can do. More often than not though, our downfall is blowing our cash on piddling things along the way.

Guest's picture
Kelja

Steve Brewer, you said,

"I'm arguably one of the best Esperanto-speakers in the country. And I'm almost certainly the best Esperanto-speaking Macintosh Unix sysadmin-capable professor of science education in the world. And yet my compensation has not kept pace with my uniqueness."

Esperanto? You're joking, right? No one pays anyone for speaking a made-up language no one else speaks.

Perhaps you are unique, Steve, but your skills simply are not in demand. You might consider developing skills that people need and want - that is, if you want to be paid more.

Guest's picture
Kelja

I'm the best one-eared, mono-visioned,blue-eyed, sized 13 Wide footed, salesman on the planet!

Guest's picture
Guest

ouch!!!

Philip Brewer's picture

... I thought I ought to mention that Steve Brewer is my brother.  He does speak Esperanto better than I do, but I'm working on catching up. 

In any case, I think his point is well taken:  The uniqueness of your capabilities has little to do with the remuneration that you can expect.  However, before pointing at the "market" as the inevitable arbitrator of wages and salaries, be sure too observe just how much power relationships influence the matter.  It's well worth reading the Dean Baker article he links to, which persuasively lays out the case that all sorts of things that are thought of as property rights can be instructively analyzed as government regulation.

Guest's picture

@Kelja You might be surprised, but in 1989 I was actually offered the full-time, benefited job of Direktoro de la Centra Oficejo by the Esperanto League for North America (now Esperanto-USA) -- it's a non-profit educational organization that runs a book service and responds to information requests about Esperanto in the US. It didn't pay very well then (and still doesn't pay a lot) -- especially given that the office is in the San Francisco area -- but it isn't the only job for Esperanto speakers: the World Esperanto Association has several paid staff positions in the Netherlands and there are offices with paid staff doing Esperanto in other countries as well, including Belgium and Brazil.

And, of course, there are many jobs where you can get paid to write in some made-up languages (like C, Perl, PHP, and Java) that actually pay quite handsomely.

I didn't take the job, BTW, and instead went back to graduate school and got a PhD in science education. I do alright.

Guest's picture
Common Sense Will Not Kill You

Steven, very interesting article/link. Your polite response is the face of ridiculing comments is inspiring to me. I would not have handled it as well. I guess that since you are not a 'creative,' producer, or doer--like we have over at AIG and Goldman--you value to society is nil, according to some here.

Guest's picture
Common Sense Will Not Kill You

Above should read: "Your polite response IN the face of ridiculing comments is inspiring to me."

Guest's picture
KevinW

It seems that any WiseBread article that references wealth in any way gets a flurry of comments pushing spiteful right-wing rhetoric with a whole spectrum of logical fallacies, ad hominem in particular. What's up?

Guest's picture

It seems to me that several of the previous posters, while zealous in their assertions, lack one fact. That being - the rich by mere virture of that fact get better results with anything related to finance.

Is this wrong? I guess it depends on how you look at it. I would forward that it is at least unethical. However most advisors (insurance, stock, legal, etc.) get paid based on volume of dollars captured or saved for their clients. This means that they will out of necessity focus on wealthy client to ply their trade.

Again, is this wrong? Probably not, however the goal of a true "Financial Professional" should be to better the financial positions of everyone they come in contact with.

How is this possibe? The biggest way is through public education, service, and good advice. The only way to make it economically feasible in most cases is to make the advice somewhat generic, the education en mass, and the service cut rate.

However there are other options, especially today with the internet. Just about anyone who wants access to the internet can get it at their work, local library, or internet cafe.

The interent has a plethera of good resources that can help to educate them, inform them of other options, and provide excellet services. This is done by the scope and volume of the potential clients, the lower cost of client acqusition, and the removal in many cases of brick-and-mortar distrubution outlets.

I for one appreciate the free exchange of information and appluade all of the participants for doing just that. Hopefully we will all be better informed, and therefor more capable in dealing with our personal finances and those of our loved ones.

Guest's picture
AnnJo

Guest @28, you crack me up! Did you really think I was "adding up the wealth of three Democrats" when I said Obama, Pelosi and Reid controlled $3.5 trillion a year? I was talking about the federal budget, my friend, not their personal wealth! Sometimes I wonder whether left-wingers simply don't know the difference between a Billion and a Trillion. That would explain why it's so easy for them to throw the taxpayers' money around so freely!

I realize that, to some people, anybody to the right of Karl Marx, and especially anybody who respects the Constitution and principles of personal freedom, is "far right," and that's OK. We're all entitled to our own opinions, at least so far. But what, exactly, about my posts in this thread are "far-right" - just to give us a standard of measurement?

Or is your style of argument entirely ad hominem? I wonder if the Democratic Central Committee hires people to monitor blogs and accuse anybody who deviates from Obama's talking points of being in the hire of the Republican Central Committee? Did the DCC hire YOU to do that? Did the DCC hire CommonSenseEtc.? Are you and CommonSenseEtc. one and the same? Don't answer. I don't care.

Wouldn't it be more productive of intelligent discussion to tackle the arguments, whoever makes them, than engage in pointless paranoid ruminations about the motives of the arguers? Do you refuse to eat vegetables, just because Hitler said they were good for you? Or do you consider the value of vegetables on their own merits? An ad hominem argument is the last resort of someone who has no better one.

As for my work schedule, at this stage in my life, I work very efficiently, get paid a high hourly rate and spend modestly. That follows years, or rather, decades of working long hours and spending/saving with some (imperfect) self-discipline. To a left-winger, that makes me evil, I know. But this is a personal finance blog, and just maybe people who have done alright under our current economic system have some useful thoughts to share.

Guest's picture

AnnJo - great point! Most people have no ideaq how big 1 trillion is. To put it in perspective consider the following:

1 million seconds ago was 11.57 days ago

1 billion seconds ago was 31.70 years ago (or 1977)

and

1 trillion seconds ago was 31,709 years ago...think cave man without fire or the wheel.

That means if the government was only spending 1 trillion dollars we would only need to earn a dollar a second for 31,709 years to "earn" it back.

Yes, the math is correct and yes that is crazy!

Guest's picture
Kelja

some think life's unfair and figure how to still win

others

think life's unfair and blame others.

Which one are you?

Guest's picture
Guest

"some think life's unfair and figure how to still win

others

think life's unfair and blame others.

Which one are you?"

Neither and both. For most of us it isn't either/or. Both can and should be done. Make the best of your situation inspite of the obstacles, but also strive to make the world a fairer place for everyone. Doing just one or the other is quite foolish.

Nothing in the world is black and white the way some try to portray it.

Philip Brewer's picture

Thanks, Kelja!  Figuring out how to win--even if you don't have all the advantages that some other people have--is exactly the topic of this post.  (Aside from one off-topic sentence that seems to have gotten all the attention.)

Philip Brewer's picture

...but the writer is just about ready for one!

Guest's picture
Guest

Thanks Phil for writing an interesting and helpful article. I think it may have been helpful to mention how outsourcing to third-world countries has made it impossible for ethical businesses to pay their people a living wage and compete, but perhaps that is fodder for another article?

Methinks Wise Bread needs to start policing it's forums. Frugal living at About.com delays posting until the author screens it, while Dollar Stretcher checks every night and removes posts that are in that 10% fringe category (you can speak freely, but have to stay in the ballpark of what you could say in person before the other person would slug you in the face).

Philip Brewer's picture

@Guest:

Thanks for the kind words.

The way competitive pressures force everyone into to the low-wage, low-costs, maximize-profits model is the topic of Robert Reich's book Supercaitalism, that I reviewed a while back.  You might also find some stuff of interest in a post I wrote called Are poor folks and the middle-class on the same side, that looked at things like whether a poor person shopping at a big-box store is shooting himself in the foot.

As far as comments go, I'm fine with a free-spirited discussion.  I have the power to delete comments if I want to, but the only ones I've ever deleted so far were spam.  I can imagine deleting a comment that attacked one of the other commenters (and would certainly delete one that crossed the line into criminal behavior--death threats or the like).  But having people disagree with my ideas is part of the fun--it means they're taking them seriously.

Guest's picture

Great Post! Little guys can do this too!

Here are some of my ideas:
Flipping Burgers, Cars, and Houses . . . http://divorceddadfrugaldad.com/2009/02/06/flipping-burgers-cars-and-hou...
Creating Income Producing Assets http://divorceddadfrugaldad.com/2009/01/07/creating-income-producing-ass...
Wealth Creation and "Assets" http://divorceddadfrugaldad.com/2009/01/02/wealth-creation-and-assets.aspx