Tuesday, March 12, 2019

The Real Reason The Rich Get Richer: You're Dumb and Impulsive, They Are Not

Part of my morning ritual is scanning the Yahoo Finance main page and reading the news and opinion pieces there. I came across this article detailing the dims' plans for stealing more from producers: Bill Gates Spells Out Democrats' Tax Plans as a Capital Gains Hike.

The details of their plan are not what interest me right now. It's basically the same thing they always say, that they'll go after "the rich" because of "fairness," which they promise will be coupled with big new spending programs. Of course they leave out the part that because the rich are so few, the real money is with the middle class collectively, which is who will ultimately get raided to pay for all the new "free shit."

It was this part of the article that piqued my interest:
"The very wealthiest of taxpayers derive the bulk of their riches not from wages or salaries but from capital gains profits on investments in stocks, property or other assets. Unlike labor income, which is taxed at a top rate of 37 percent, profits on assets held for at least a year before being sold bear a top rate of 20 percent.
In 2018, nearly 69 percent, or more than $584 billion, of all long-term capital gains went to the top 1 percent of of the 1.1 million wealthiest US filers, according to the Urban-Brookings Tax Policy Center. The richest Americans got the lion’s share, with the top 0.1 percent of the 110,000 wealthiest filers scoring more than three quarters of that total.
“Most of the wealth gap is due to capital gains,” said Mark Spiegel, who runs a small hedge fund at Stanphyl Capital Management. “Nobody’s earning $50 million in labor income.”
The guy quoted here, Spiegel, skipped a step: if most of the wealth gap is due to capital gains, then something had to come before the realization of the gain in order for there to have been one: an investment!

When you acquire some money, be that by labor, dividends, cap gains, lottery, inheritance, whatever, you then basically have three choices. You can spend it, save it, or invest it.

Most of you spend it.

Some of you save it.

Very few of you invest it.

If you spend it, do you become richer? No.

If you save it, do you become richer? Again, no, because inflation will eat your savings alive.

If you invest it, do you become richer? Maybe! It's not guaranteed, in fact you could lose your entire investment (which is why investments are subject to lower taxes in the first place...), but out of the three options it's the only one that goes in the direction of "yes!"

So since most people do the first thing, and a small number do the second, leaving a comparatively tiny portion of the population who do the third, and everyone tends do repeat these habits over and over, is it any surprise that a relatively small portion of the population gets richer? It shouldn't be!

It boils down to a basic division of consumption choices that people can make:

Those who think like rich people, whether they are rich now or will be tomorrow, live within their means, delay gratification, and acquire assets that cash flow and appreciate  in value along with inflation.

Those who think like poor people, whether they are poor now or will be tomorrow, live beyond their means, frequently indulge whims, and buy dumb, depreciating shit on credit. 

And here's a key thing about that difference: the rich invest in the things that the poors blow their money on! Think about it...

That's really all there is to it. This stuff isn't rocket science, it's all very basic and very easy. It's more about discipline and patience than smarts, which is why if you're failing at it, then you're undisciplined and impulsive. That's your fault, not anyone else's. "The rich" didn't do anything wrong, they just did/do what you have not and do not. Many of the opportunities they avail themselves of are right at your fingertips, too, the difference is that they prepared themselves to take those opportunities while you bought junk food, dumb shit to bling out your car, vacations you couldn't really afford, etc. It's not their fault that you're poor. IT'S YOURS.

Bill Gates, Bernie Sanders, and Elizabeth Warren don't give a fuck about you. It's not out of an abundance of concern for the "plight" of the poor that they propose this shit. In Bill's case, he's just hoping to deflect support away from Warren's unconstitutional "wealth tax," because he won't get hit with a capital gains tax bill if he doesn't realize any gains (same with Warren Buffett, which is why I laugh at you fools every time you fawn over him whenever he tells you pretty lies about raising income taxes... which he'll never pay). Warren just wants more power, so she'll scapegoat a minority and encourage you to continue lying to yourself about your own fuck ups being their fault. Bernie wants much the same thing, and ironically, you idiots that support him are pretty much just trying to get him into his fourth luxurious house. Ultimately, none of them will do anything meaningful about inflation...

Anyway, if you're short on means and long on wants and finding the siren call of these socialists/communists appealing, you need to take an honest look at yourself in the mirror, start inventorying your belongings, and start cataloging your spending. If it turns out that you own a pile of junk that goes down in value and your spending leaves you with "more month than money," then your reflection in the mirror should start to look like an idiot to you. And if you think that justifies taking something from someone else for what you perceive to be your benefit, then guess what? You're scum, nothing more than a common thief.

The good news is, you can reverse all of that.

If you don't, no "rich person" will be there compelling you to continue being an over-consuming dead ender.

It's only a stupid poor that is doing that.

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