View Full Version : WJust who are these "MILLIONAIRES" we keep hearing

02-16-2012, 09:57 AM
This is in response to a ridiculous statement made in another thread:

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Soflasnapper</div><div class="ubbcode-body">What middle class earner is able to save $1.6 million dollars by retirement? To simplify numbers, assume a 40 year work time. $1.6 million in savings over 40 years = $40,000 a year.

Ok, so it's impossible, for any middle class person. Obviously, no question.</div></div>

Now, let me begin by saying that the way the question is phrased:

- Never work overtime.

- Never earn more than $40K per year.

- Never take an investment risk.

- Never take an employment risk.

- Amassing a fortune large enough to generate $80K in retirement ... which would be twice what they made while working.

The goal becomes about as likely as winning the lottery.

That being said, is becoming a millionaire really a pipe dream for an American willing to work hard and take risk(s)?

Let's review, as reported by the reich wing NEW YORK TIMES: (http://www.nytimes.com/books/first/s/stanley-millionaire.html)

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">PORTRAIT Of A MILLIONAIRE

Who is the prototypical American millionaire? What would he tell you about himself?(*)

* I am a fifty-seven-year-old male, married with three children. About 70 percent of us earn 80 percent or more of our household's income.

* About one in five of us is retired. <span style='font-size: 11pt'>About two-thirds of us who are working are self-employed. Interestingly, self-employed people make up less than 20 percent of the workers in America but account for two-thirds of the millionaires. Also, three out of four of us who are self-employed consider ourselves to be entrepreneurs.</span> Most of the others are self-employed professionals, such as doctors and accountants.

* Many of the types of businesses we are in could be classified as dullnormal. We are welding contractors, auctioneers, rice farmers, owners of mobile-home parks, pest controllers, coin and stamp dealers, and paving contractors.

* About half of our wives do not work outside the home. The number-one occupation for those wives who do work is teacher.

* <span style='font-size: 11pt'>Our household's total annual realized (taxable) income is $131,000</span> (median, or 50th percentile), while our average income is $247,000. Note that those of us who have incomes in the $500,000 to $999,999 category (8 percent) and the $1 million or more category (5 percent) skew the average upward.

* <span style='font-size: 11pt'>We have an average household net worth of $3.7 million.</span> Of course, some of our cohorts have accumulated much more. Nearly 6 percent have a net worth of over $10 million. Again, these people skew our average upward. <span style='font-size: 11pt'>The typical (median, or 50th percentile) millionaire household has a net worth of $1.6 million.</span> <span style="color: #3366FF">Note to readers, this is the exact level that we were assured was "IMPOSSIBLE" to attain.</span>

* On average, our total annual realized income is less than 7 percent of our wealth. In other words, we live on less than 7 percent of our wealth.

* Most of us (97 percent) are homeowners. We live in homes currently valued at an average of $320,000. About half of us have occupied the same home for more than twenty years. Thus, we have enjoyed significant increases in the value of our homes.

* Most of us have never felt at a disadvantage because we did not receive any inheritance. <span style='font-size: 14pt'>About 80 percent of us are first-generation affluent.</span>

* <span style='font-size: 14pt'>We live well below our means.</span> <span style='font-size: 11pt'>We wear inexpensive suits and drive American-made cars. Only a minority of us drive the current-model-year automobile.</span> Only a minority ever lease our motor vehicles.

* Most of our wives are planners and meticulous budgeters. In fact, <span style='font-size: 14pt'>only 18 percent of us disagreed with the statement "Charity begins at home."</span> Most of us will tell you that our wives are a lot more conservative with money than we are.

* We have a "go-to-hell fund." In other words, we have accumulated enough wealth to live without working for ten or more years. Thus, those of us with a net worth of $1.6 million could live comfortably for more than twelve years. Actually, we could live longer than that, since <span style='font-size: 11pt'>we save at least 15 percent of our earned income.</span>

* <span style='font-size: 11pt'>We have more than six and one-half times the level of wealth of our nonmillionaire neighbors</span>, but, in our neighborhood, these nonmillionaires outnumber us better than three to one. <span style='font-size: 14pt'>Could it be that they have chosen to trade wealth for acquiring high-status material possessions?</span>

* As a group, we are fairly well educated. Only about <span style='font-size: 14pt'>one in five are not college graduates</span>. Many of us hold advanced degrees. Eighteen percent have master's degrees, 8 percent law degrees, 6 percent medical degrees, and 6 percent Ph.D.s.

* Only 17 percent of us or our spouses ever attended a private elementary or private high school. But 55 percent of our children are currently attending or have attended private schools.

* <span style='font-size: 11pt'>As a group, we believe that education is extremely important for ourselves, our children, and our grandchildren. We spend heavily for the educations of our offspring.</span>

* About two-thirds of us work between forty-five and fifty-five hours per week.

* <span style='font-size: 11pt'>We are fastidious investors. On average, we invest nearly 20 percent of our household realized income each year. Most of us invest at least 15 percent. Seventy-nine percent of us have at least one account with a brokerage company. But we make our own investment decisions.</span>

* We hold nearly 20 percent of our household's wealth in transaction securities such as publicly traded stocks and mutual funds. But we rarely sell our equity investments. We hold even more in our pension plans. On average, 21 percent of our household's wealth is in our private businesses.

* As a group, we feel that our daughters are financially handicapped in comparison to our sons. Men seem to make much more money even within the same occupational categories. That is why most of us would not hesitate to share some of our wealth with our daughters. Our sons, and men in general, have the deck of economic cards stacked in their favor. They should not need subsidies from their parents.

* What would be the ideal occupations for our sons and daughters? There are about 3.5 millionaire households like ours. Our numbers are growing much faster than the general population. Our kids should consider providing affluent people with some valuable service. Overall, our most trusted financial advisors are our accountants. Our attorneys are also very important. So we recommend accounting and law to our children. Tax advisors and estate-planning experts will be in big demand over the next fifteen years.

* I am a tightwad. That's one of the main reasons I completed a long questionnaire for a crispy $1 bill. Why else would I spend two or three hours being personally interviewed by these authors? They paid me $100, $200, or $250. Oh, they made me another offer--to donate in my name the money I earned for my interview to my favorite charity. But I told them, "I am my favorite charity." </div></div>

In closing, it is far from impossible and quite doable.

What it requires is:

- A willingness to work harder than most.

- A willingness to take on more risk than most.

- A willingness to delay gratification.

- A willingness to live below, as opposed to beyond, one's means.

- A refusal to become a ward of the state.

That our government would ever see fit to declare a jihad against such people is, IMHO, a national disgrace ... and those who participate in said jihad are, also IMHO, little more than willing tools of a tyrannical oligarchy.

02-16-2012, 11:32 AM
The book called The Millionaire Next Door was a fantastic eye opening read.


02-16-2012, 12:07 PM
Ridiculous. Nowhere does anything mentioned say that these were people earning middle income wages (median household income about $56,000 now), who accumulated these sums by shrewd regular saving and investing from middle class level earnings.

Typically, the small-scale, (low single digit) millionaire has a successful small business. Guess what the failure rate is for small businesses? (90%+ failure over a 5-year time frame-- BEFORE THESE BAD TIMES have likely raised that failure rate even higher). Small companies with long histories of profitable success (5, 10, even 20 or more years) have gone out in this economy. What does the failure of these businesses do to their owners' finances?

What do you imagine is the financial condition, and capital holding level for a future small business startup, for someone who has invested in his own small business, that fails?

02-17-2012, 04:15 AM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Soflasnapper</div><div class="ubbcode-body">Ridiculous. </div></div>

I love how you cry foul ... and then make my case for me.

No, if someone takes the comfort of a 40 hour work week ... never takes a risk ... never saves regularly ... never continues their education ... their chances of achieving wealth are quite slim.

Now, where does any of this back up your claim that it is impossible for the a person to achieve it?

What's that?

You made it up?

But ... I already knew that.

02-17-2012, 04:22 AM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Soflasnapper</div><div class="ubbcode-body">Typically, the small-scale, (low single digit) millionaire has a successful small business. </div></div>

Although technically true ... it's a total false flag argument.

Most businesses fail because owners naively buy into the class warfare idea that all they need do is save enough to start a business and by virtue of "BEING THE BOSS" they can kick back and watch the money roll in.

Your entire ideology, which is normal of statists, is that the individual must always remain dependent and is completely incapable of improving their lot in life.

02-17-2012, 12:48 PM
Most businesses fail because owners naively buy into the class warfare idea that all they need do is save enough to start a business and by virtue of "BEING THE BOSS" they can kick back and watch the money roll in.

That's not a bad point, and I would agree that back in more normal economic times, this was among the reasons that people trying to have their own businesses would fail. A boss syndrome, as you say.

But the more typical reason was insufficient capitalization, to allow the business to grow to profitability over a couple of years of not making it on its limited cash flow. Just getting open doesn't keep you open, if you cannot make an instant profit, and many companies take several years to become profitable. People either don't realize that typical situation, or are too optimistic and think it won't be the case for their business.

Personally, when we opened business here again in 2001 with 5 locations growing now to 16 locations, I took no wages or any compensation (except joining the group medical plan we set up) for about 3 years. We ploughed all cash flow in excess back into growing the business and inventories.

Can Joe Average, middle-class earner, support himself for YEARS of no profitability, if it takes that long (and it used to take 2 years at least for profitability, in general, probably longer now)?

Those are not normal economic times we're in now. What I see all around me, and I've lived here for 29 years, is many businesses that were successful, and had been here ever since I arrived, shuttering their businesses and going out.

02-17-2012, 05:33 PM

02-17-2012, 06:27 PM
And the conditions today are entirely dissimilar from those under which those now who are millionaires in their later 50s prospered.

Starting with the far larger inflation-adjusted cost of the college that most of them had.

Continuing with the deleveraging households are experiencing and have only partially accomplished, meaning demand is further lowered than even the high unemployment rate would otherwise entail by itself. (Even people with money or secure jobs are less willing to spend, let alone go further into debt, if they even have spare credit facilities left them.)

This marketplace is very weak compared to back in the day, which harms all prospects for all companies, but a very few.

02-17-2012, 08:27 PM
Most grads karnt get a grad job.
Most grads karnt pay back their loans.
Most kids karnt get permanent jobs.
etcetcetcetcetcetcetcetcetcetcetcetcetcetcetcetcet cetcetcetcetcetcetcetcetcetcetc.

But wait, here kums the krappynomicysts with their medicine.
horayhorayhorayhorayhorayhorayhorayhorayhorayhoray horayhorayhorayhorayhorayhorayhorayhoray.

02-18-2012, 05:03 AM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Soflasnapper</div><div class="ubbcode-body">And the conditions today are entirely dissimilar from those under which those now who are millionaires in their later 50s prospered.</div></div>

There actually is some truth to that?

And why are things dissimilar?

Because of the gradual institution of a fascist economy by your beloved state.

You seriously need a wake up call on this. If you seriously want to benefit the middle class in America ... dismantle the majority of state mandated insanity cripples the economy.

It ain't rocket science.

02-18-2012, 05:20 AM
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">But the more typical reason was <u>insufficient capitalization, to allow the business to grow to profitability over a couple of years </u>of not making it on its limited cash flow. </div></div>

This is the biggest cause of new businesses going bust. They just don't have the money to compensate for losses in the first few years.

Q..but they tried.

02-18-2012, 06:34 AM