The Middle Class Mind / The Wealthy Mind

Discussion in 'General Chat' started by Lighthouse, Jun 8, 2011.

  1. Freewheeler

    Freewheeler Well-Known Member

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    A former titan of my particular industry put it this way: "Nobody ever got rich off a salary. No matter how high the salary."

    If you want to get rich -- I mean fuck-you-money rich -- then you need to own something. That can be real property, it can be intellectual property, it can be a company, it can be a monetized idea, it can be patents, it can be a personal brand, it can be privileged access to something desirable and in short supply, or whatever the case may be. But ownership confers wealth. More specifically: ownership of something others want to buy* from you confers wealth.

    In this sense, no, trying to maximize a corporate salary and squirrel away as much money as you can save over 30+ years is not going to make you wealthy. If you want to become really wealthy, you need to take risk and work your ass off to realize the return on that risk.



    *Whether literally or figuratively.


    So how do you explain people who make many millions as part of their salary. Not rich enough for you?
     


  2. Don Carlos

    Don Carlos In Time Out

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    i'm assuming you mean "fuck you rich" ie. >$10M

    Correct. However high we want to peg the fuck-you point, that's what I am talking about.
     


  3. Don Carlos

    Don Carlos In Time Out

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    So how do you explain people who make many millions as part of their salary. Not rich enough for you?
    Making millions as part of your salary isn't going to make you fuck-you rich. It'll make you highly paid, and it'll make you rich by many people's standards. But it won't make you rich enough to be able to drop everything, go bum around the world and live a life of leisure for a few years, and come back without any financial concern whatsoever. Let's say you make $1MM a year. Including all taxes (federal, state, etc.), let's say 40-50% of that money goes away. So you've got $500,000. Let's say you have a wife and a few kids, no doubt going to expensive private schools and soon to be going to expensive private colleges. And you've got a nice car, a nice house, and so on and so forth. Then you've got living expenses. All said and done, you're lucky to be socking away $200k at the end of the year. At that rate, even with modest salary increases and compound interest, you're not getting fuck-you rich in your lifetime. Now, if we're talking about something like a $5MM or $10MM a year salary? I'd argue that that's the point at which you're not really making a "salary" per se anymore, but are in fact selling your personal brand / value. Professional athletes aren't really making salaries, for instance. They're selling their brands. They're selling their own effect on ticket sales and merch sales and TV ratings. As for corporate CEOs and other C-level officers? They're not getting rich off of their salaries; they're getting rich off of their stock and other ownership incentives.
     


  4. Manton

    Manton RINO Dubiously Honored

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    A former titan of my particular industry put it this way: "Nobody ever got rich off a salary. No matter how high the salary."

    If you want to get rich -- I mean fuck-you-money rich -- then you need to own something. That can be real property, it can be intellectual property, it can be a company, it can be a monetized idea, it can be patents, it can be a personal brand, it can be privileged access to something desirable and in short supply, or whatever the case may be. But ownership confers wealth. More specifically: ownership of something others want to buy* from you confers wealth.

    In this sense, no, trying to maximize a corporate salary and squirrel away as much money as you can save over 30+ years is not going to make you wealthy. If you want to become really wealthy, you need to take risk and work your ass off to realize the return on that risk.



    *Whether literally or figuratively.


    The distinction between wealth and a high income is true, of course, and often overlooked but I think the quote is wrong, or out of date. At the top end in corporate America--and I don't just mean CEOs but also the top tier of executives--it is quite possible to get rich on a salary (plus bonus plus stock grants). These people can make millions per year, live lavishly, and still have plenty left over to amass tens of millions over a career.

    In banking, the money is bigger and the number of people who earn big time are more.
     


  5. yjeezle

    yjeezle Senior member

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    please explain investment bankers as well :x
     


  6. otc

    otc Senior member

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    Is this thread intentional necro-deja-vu?
     


  7. mkarim

    mkarim Senior member

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    Yes. The lottery is the only way to get rich quickly.

    Even the "overnight success" stories you hear about involved many years of backbreaking work getting up to that fateful "night."


    +1.

    You have to pay your dues. Also the middle class needs to understand that everyone is trying to sell them the "American Dream" but are only benefittting their own bottom line.
     


  8. Don Carlos

    Don Carlos In Time Out

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    The distinction between wealth and a high income is true, of course, and often overlooked but I think the quote is wrong, or out of date. At the top end in corporate America--and I don't just mean CEOs but also the top tier of executives--it is quite possible to get rich on a salary (plus bonus plus stock grants). These people can make millions per year, live lavishly, and still have plenty left over to amass tens of millions over a career. In banking, the money is bigger and the number of people who earn big time are more.
    I think our disagreement is probably one of semantics more than anything else. A thread like this will always be fraught, for instance, with confusion over the definition of "rich" or "wealthy" or what have you. As for the corp exec argument, I've made a few comments about that a few posts back. These days, the best path to the C suite isn't putting in 30 years at the company and being a company man; it's creating a personal brand and leveraging it. In this sense, the "ownership" argument still applies. Banking/finance is slightly difficult to fit into this thread's framework. That's just a whole different ball of wax, and it tests the definitions and rules we can apply to any game we're discussing here. One thing I can say for certain is that banking does not embody the middle-class salaryman mentality the OP talked about. And even if we were discussing the realm of finance, the ones getting relatively rich compared to their peers aren't the bankers. They're the hedge fund managers and shop owners. So ownership still does trump salary, even when we're discussing the rarefied air of high finance.
     


  9. voxsartoria

    voxsartoria Goon member

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  10. Freewheeler

    Freewheeler Well-Known Member

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    Making millions as part of your salary isn't going to make you fuck-you rich. It'll make you highly paid, and it'll make you rich by many people's standards. But it won't make you rich enough to be able to drop everything, go bum around the world and live a life of leisure for a few years, and come back without any financial concern whatsoever.

    Let's say you make $1MM a year. Including all taxes (federal, state, etc.), let's say 40-50% of that money goes away. So you've got $500,000. Let's say you have a wife and a few kids, no doubt going to expensive private schools and soon to be going to expensive private colleges. And you've got a nice car, a nice house, and so on and so forth. Then you've got living expenses. All said and done, you're lucky to be socking away $200k at the end of the year. At that rate, even with modest salary increases and compound interest, you're not getting fuck-you rich in your lifetime.

    Now, if we're talking about something like a $5MM or $10MM a year salary? I'd argue that that's the point at which you're not really making a "salary" per se anymore, but are in fact selling your personal brand / value. Professional athletes aren't really making salaries, for instance. They're selling their brands. They're selling their own effect on ticket sales and merch sales and TV ratings.

    As for corporate CEOs and other C-level officers? They're not getting rich off of their salaries; they're getting rich off of their stock and other ownership incentives.


    Plenty of executives in media make 10M+ a year as part of a salary - not stock. You quoted "Nobody ever got rich off a salary. No matter how high the salary." That's bullshit obviously. You can't say "No matter how high the salary" and then change your tune when you learn that people are multi-millionaires strictly from the salary that they have earned over the years.
     


  11. Manton

    Manton RINO Dubiously Honored

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    I think our disagreement is probably one of semantics more than anything else. A thread like this will always be fraught, for instance, with confusion over the definition of "rich" or "wealthy" or what have you.

    As for the corp exec argument, I've made a few comments about that a few posts back. These days, the best path to the C suite isn't putting in 30 years at the company and being a company man; it's creating a personal brand and leveraging it. In this sense, the "ownership" argument still applies.

    Banking/finance is slightly difficult to fit into this thread's framework. That's just a whole different ball of wax, and it tests the definitions and rules we can apply to any game we're discussing here. One thing I can say for certain is that banking does not embody the middle-class salaryman mentality the OP talked about. And even if we were discussing the realm of finance, the ones getting relatively rich compared to their peers aren't the bankers. They're the hedge fund managers and shop owners. So ownership still does trump salary, even when we're discussing the rarefied air of high finance.


    I don't know enough about the path people take to get there (except that I never will), but I have seen plenty of people in their 40s and 50s who make several million a year and who can leave their jobs with eight digits in the bank. They don't seem like brands to me, they certainly are not well known outside their own companies and maybe the narrow community of people who hold similar jobs (CFO, GC, head of IR, etc.).

    In finance, I personally know a number of people who have never worked at hedge funds but always have been at big banks, publicly traded banks, who earn well into the millions and they started doing so at a younger age than (say) a CFO. Yes, hedge fund guys are much richer but when you have a place at the San Remo, a place in the Hamptons, are on the board of the AMNH and the Whitney, you have real money even if someone else has more.

    This is very anecdotal, I admit.
     


  12. Don Carlos

    Don Carlos In Time Out

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    Plenty of executives in media make 10M+ a year as part of a salary - not stock. You quoted "Nobody ever got rich off a salary. No matter how high the salary." That's bullshit obviously. You can't say "No matter how high the salary" and then change your tune when you learn that people are multi-millionaires strictly from the salary that they have earned over the years.

    See, now we're just playing a semantics game. I think it'll go nowhere productive.

    My argument is primarily concerned with "rich" as defined as "fuck-you" rich, and that involves more than earning a $10MM a year salary. You could argue that it demands quantification of precisely what I'd consider to be fuck-you money, and while you'd have a point, that's somewhat orthogonal to the illustrative use of my quote in the first place.

    The lesson of the quote is still valid, no matter what sort of semantic nitpicking we want to do on the word choices: ownership and risk-seeking is the best path to bigtime fortune. Not salary. Furthermore, I hardly think it's instructive to look at $10MM salaries and think that they are in any way representative of the salaries most people will ever make.
     


  13. Carlisle Blues

    Carlisle Blues Senior member

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    ownership and risk-seeking is the best path to bigtime fortune. Not salary. Furthermore, I hardly think it's instructive to look at $10MM salaries and think that they are in any way representative of the salaries most people will ever make.
    I agree, it is having the courage of your convictions regarding accumulation of wealth and trusting your instincts and talents. Striking out on your own, whether it is owning your own business or making investments taking the risk. A salary is provided to those who let others take the risk for them IMO.
     


  14. Lighthouse

    Lighthouse Senior member

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    I agree, it is having the courage of your convictions regarding accumulation of wealth and trusting your instincts and talents. Striking out on your own, whether it is owning your own business or making investments taking the risk. A salary is provided to those who let others take the risk for them IMO.

    By either Manton's or DonCarlos' standards, I'd be quite happy. I would assume that striking out on ones own requires a supportive spouse and nail biting over bills, perhaps eating ham sandwiches for a while. I made this leap several years ago, but my industry went to shit in late 2008 and, being a "Green Sprout," it didn't take long to destroy the dream.
     


  15. Freewheeler

    Freewheeler Well-Known Member

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    See, now we're just playing a semantics game. I think it'll go nowhere productive.

    My argument is primarily concerned with "rich" as defined as "fuck-you" rich, and that involves more than earning a $10MM a year salary. You could argue that it demands quantification of precisely what I'd consider to be fuck-you money, and while you'd have a point, that's somewhat orthogonal to the illustrative use of my quote in the first place.

    The lesson of the quote is still valid, no matter what sort of semantic nitpicking we want to do on the word choices: ownership and risk-seeking is the best path to bigtime fortune. Not salary. Furthermore, I hardly think it's instructive to look at $10MM salaries and think that they are in any way representative of the salaries most people will ever make.


    Then don't use a stupid and inaccurate quote about salaries, which uses the words "no matter how high". If you can add, then you know that someone who makes 10 million plus a year and has been doing that for a few years - then they obviously are worth more than 10 million dollars. 10 million a year for 10 years, minus the taxes and what do you get? Is that fuck you money?

    By the way, 10 million dollars is easily fuck you money for most people, when you consider the fact that you can live out the rest of your life very well with much less if you are smart with the money. Are you telling me the guy who lives on 40,000 a year for many years now, can't quit his job tomorrow and live a great life with his 10 million dollars minus taxes? I am quite sure he would be in a position to tell everyone to fuck off and die a very happy man who never had to work for money to live since.

    It sounds like fuck you money by your standards is to be able to blow millions of dollars on cocaine, hookers, cars and nice clothes or whatever you want to waste money on - but still have a huge chunk of change in the bank. I guess Bruce Wayne is fuck you money.
     


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