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 Posted: Fri Nov 18, 2005 10:41 am |
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On Thu, 17 Nov 2005 15:32:35 -0600, "Jim Blair" <jeb@wisc.edu> wrote:
[quote:bb6fdbfc25]royls@telus.net> wrote in message
news:437b7626.21864798@news1.qc.sympatico.ca...
On Tue, 15 Nov 2005 15:18:14 -0600, "Jim Blair" <jeb@wisc.edu> wrote:
royls@telus.net> wrote in message
news:43795812.56762493@news1.qc.sympatico.ca...
On Mon, 14 Nov 2005 12:53:53 -0600, "Jim Blair" <jeb@wisc.edu> wrote:
I suggest that when people read about Bill Gates or any of the
millions
of
"not rich" who became rich,
You misspelled "thousands."
I still think that millionaires are "rich", and there are now about 8.9
million of them in the USA.
Note that there were 1.5 million of them in 1988.
http://oregonstate.edu/Dept/pol_sci/fac/sahr/nummil.htm
The income from $1M, invested conservatively, does not buy an affluent
lifestyle, so that's not enough to make you rich.
That income gets you about $50,000 a year. Perhaps not "affulent', but I say
comfortable.
[/quote:bb6fdbfc25]
?? It is completely average. If you are comparing it to a two-earner
household's income, it is _below_ average. Furthermore, that 5%
return is _before_ inflation. The real return is more like 2%.
Give it up, Jim; I have demolished you on all these claims too many
times before.
[quote:bb6fdbfc25]And of course you have the option of spending some of that
million.
[/quote:bb6fdbfc25]
Irrelevant.
[quote:bb6fdbfc25]....You're rich if you
can afford a distinctly more affluent than average lifestyle
(including at least one full-time-equivalent servant),
None of my "rich friends" have a full-time servant.
[/quote:bb6fdbfc25]
Then either they aren't rich (most likely), or you are not counting
all their part-time help.
[quote:bb6fdbfc25]Even those with several
homes--one in Wisconsin for summer and one in Florida or Arizona for winter.
[/quote:bb6fdbfc25]
Owning more than one dwelling does not make one rich.
[quote:bb6fdbfc25].....after taxes and
inflation, without either working or dipping into your assets. $5M is
probably about the lower limit.
Mason Clark once said that today it takes $20M to be a "millionaire".
[/quote:bb6fdbfc25]
IMO that is an exaggeration, but certainly having $1M does not make
one rich, even though it still sounds nice. I read somewhere that
anything over $50M makes no real difference in lifestyle. Beyond that
point, it's only about status.
[quote:bb6fdbfc25]But
OK maybe one million is just middle class. By US standards.
[/quote:bb6fdbfc25]
And the standards of dozens of other OECD countries.
[quote:bb6fdbfc25]The subjects in the study averaged several million in assets.
[/quote:bb6fdbfc25]
The median respondent had just a few million. So, if you obtain a
sample with a few billionaires who inherited and a thousand $1M-aires
who did not, on that basis you can claim the rich earned all their
money, even though most of the money is in the hands of those who did
not earn it?
Jim, is that sort of claim different, in your mind, from lying?
[quote:bb6fdbfc25]And according to Stanley and Danko, 80% of them were born to families
that
were "not rich".
http://www.geocities.com/capitolhill/4834/106.txt
As you know, I've already refuted that claim. But of course, that has
never stopped you from repeating it.
You have criticized it, but not refuted it.
[/quote:bb6fdbfc25]
No, I have completely demolished it, as you know very well.
[quote:bb6fdbfc25]Firtsly, the respondents were generally not born into rich families
only in the sense that when they were born, their parents were still
in their 20s or 30s, and had not yet inherited.
??? Sure my parents were a lot richer when they retired than when I was
growing up.
[/quote:bb6fdbfc25]
I'm not talking about your parents, Jim. Why are you trying to change
the subject?
As if we both don't know...
[quote:bb6fdbfc25]And I am richer now than when my kids left home for college.
But so what?
[/quote:bb6fdbfc25]
So your claims are garbage.
[quote:bb6fdbfc25]Secondly, Stanley and Danko's "research" was totally unscientific: the
sample was self-selected, ....
As is any survey.
[/quote:bb6fdbfc25]
Garbage. It is not difficult to use known population characteristics
to improve the representativeness of a sample. Stanley and Danko
simply chose not to, because they did not want their sample to be
representative.
[quote:bb6fdbfc25]But do you know of a better study of the habits of the
rich?
[/quote:bb6fdbfc25]
The rich have no intention of letting Stanley and Danko or anyone else
study their habits. But you can start here:
http://www.osjspm.org/101_wealth.htm
[quote:bb6fdbfc25]....the great majority of the respondents were
not really rich (see above), ...
Several million compared to your 5 million?
[/quote:bb6fdbfc25]
<yawn> No, median compared to mean. See above re lying. Really Jim,
we have been through all this before.
[quote:bb6fdbfc25]....and the source of their wealth was
self-described, and never checked:
Name a better study. You assume that their answers are not reliable?
[/quote:bb6fdbfc25]
I am certain that they lied, even if primarily to themselves.
[quote:bb6fdbfc25]"OK, next question: 'Did you earn all your money, or are you a
privileged, idle parasite?'"
"What are you talking about, 'parasite'?!? I earned every penny!"
"Uh-huh. Sure. What about the college education your parents paid
for, including your room and board?"
Note that most went to public schools, and I would assume that means state
colleges as well.
[/quote:bb6fdbfc25]
Of course it doesn't. Private colleges are a much larger fraction of
the total than private grade schools.
[quote:bb6fdbfc25]"That didn't increase my assets one cent! And I worked my butt off to
get into Skull and Bones!"
Er, Yale is a private school.
[/quote:bb6fdbfc25]
Hehe. How many of its students work their way through?
[quote:bb6fdbfc25]"What about the house your wife's parents gave you when you got
married?"
"That was only worth about $50K! Today I'm a millionaire!"
"But you sold that house 30 years later for $750K...."
But the value of the primary residence is not included.
[/quote:bb6fdbfc25]
Too bad that is irrelevant. _All_ the (_untaxed_!!!) capital gains
from the sale of _all_ their previous primary residences are included,
unless spent on the current one. So if the majority of the sample
sold their houses for unearned millions in land value gains and moved
to a cheaper place in Arizona, you claim they earned all their money?
I repeat: is this sort of claim somehow different, in your mind, from
lying?
[quote:bb6fdbfc25]And if you sell one
house for a lot, chances are the gain is eaten up when you buy the next
house.
[/quote:bb6fdbfc25]
?? You are ignoring the fact that this sample may well consist
primarily of exactly the small minority of people for whom the gain
was _not_ eaten up!!
[quote:bb6fdbfc25]"If you make a good investment, you've earned your profits!"
"But it was actually your wife's parents that made that good
investment, wasn't it?"
You are assuming that most millionaires were given a house--if not by their
"not-rich" (OK at the time not-rich) parents, then by the also
not-rich-at-the-time parents of their wife?
[/quote:bb6fdbfc25]
Your claim is that _none_ of them were?
And just from the people I know of my own (baby-boomer) generation, I
can tell you that almost _all_ of them who now own houses had
significant help from their parents.
[quote:bb6fdbfc25]"I made my money in my own business, working 12-hour days!"
"More accurately, you bought land with a business on it through family
contacts so you didn't have to pay interest, kept the business going
for 30 years while drawing a modest salary and making minimal profits,
then went out of business and sold the land for a larger capital gain
than all the profits and salary you took out in those 30 years. Isn't
that about it?"
You claim that most who start a business do so with family help and
contacts?
[/quote:bb6fdbfc25]
You claim none do?
[quote:bb6fdbfc25]Any evidence for that assertion?
[/quote:bb6fdbfc25]
Any evidence for yours?
[quote:bb6fdbfc25]And suppose that most businesses in the US don't make money from sales but
gain value mostly because of the land under them. If if that were the case
(and I doubt it--look at how many of them start up in rented space),
[/quote:bb6fdbfc25]
Very, very few of the businesses that make their owners wealthy do not
own either the land under their premises or other rent collection
privileges.
[quote:bb6fdbfc25]that
would not invalidate the claim that the best way to get rich is to start
your own company.
[/quote:bb6fdbfc25]
Of course not. It just refutes your claim that the rich earn all --
or even most -- of their money.
[quote:bb6fdbfc25]instead of resentment and wanting to punish them
and stop that sort of thing from happening, they instead see them as
examples to follow.
Ignoring the fact that they are and always will be unable to follow.
???? Always? How about those 8.9 million?
Refuted above.
They don't exist? They aren't really rich? They got rich because of their
not yet rich parents? They got rich because of the land under their
marginal business?
[/quote:bb6fdbfc25]
That probably accounts for 90%, and other sources of unearned wealth
such as non-premises real estate deals and rent collection privileges
account for 90% of the rest.
I remember the first really rich man I ever met, one of my professors
at university, a man probably in his mid-50s. He freely admitted that
he had made his money ("a great deal of money") on real estate deals,
and that it was unearned. I know he was rich because he invited
students to his very expensive house to see his astonishingly
expensive art collection, and owned a few "hobby" businesses. Why did
he choose to be a university professor? As far as I could tell, it
was the abundant, constantly renewed supply of easily impressed coeds.
That pattern has not changed a lot with the other rich people I have
met.
[quote:bb6fdbfc25]People want to keep the opportunities for getting rich
open so maybe they too can do it someday.
Yes, it's the same inability to do arithmetic that leads them to buy
lottery tickets, frequent the track or casino, etc.
Er, yes, people do that also. Which supports my point that many people
desire that which they are statistically unlikely to obtain. But it is
their desires that govern their behavior.
Right. And the desires and beliefs of the masses are easily altered
to serve the interests of the elite.
Because the masses (or at least some of them) want to BECOME elite.
[/quote:bb6fdbfc25]
Yes, well, when you are shown the alternatives of either riding the
escalator or toiling on the treadmill that powers it, it doesn't take
a great deal of brains to figure out which situation is better. The
big problem is _getting_ from the treadmill to the escalator.
But somehow, it does seem to take a very great deal of brains to
understand that it is indeed the treadmill that powers the escalator.
-- Roy L |
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| Jim Blair |
| Posted: Mon Nov 21, 2005 3:09 pm |
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<royls@telus.net> wrote in message
news:437de5e6.9447951@news1.qc.sympatico.ca...
[quote:9af44f031a]On Thu, 17 Nov 2005 15:32:35 -0600, "Jim Blair" <jeb@wisc.edu> wrote:
royls@telus.net> wrote in message
news:437b7626.21864798@news1.qc.sympatico.ca...
On Tue, 15 Nov 2005 15:18:14 -0600, "Jim Blair" <jeb@wisc.edu> wrote:
royls@telus.net> wrote in message
news:43795812.56762493@news1.qc.sympatico.ca...
On Mon, 14 Nov 2005 12:53:53 -0600, "Jim Blair" <jeb@wisc.edu
wrote:
I suggest that when people read about Bill Gates or any of the
millions
of
"not rich" who became rich,
You misspelled "thousands."
I still think that millionaires are "rich", and there are now about
8.9
million of them in the USA.
Note that there were 1.5 million of them in 1988.
http://oregonstate.edu/Dept/pol_sci/fac/sahr/nummil.htm
The income from $1M, invested conservatively, does not buy an affluent
lifestyle, so that's not enough to make you rich.
That income gets you about $50,000 a year. Perhaps not "affulent', but I
say
comfortable.
?? It is completely average. If you are comparing it to a two-earner
household's income, it is _below_ average. Furthermore, that 5%
return is _before_ inflation. The real return is more like 2%.
Give it up, Jim; I have demolished you on all these claims too many
times before.
And of course you have the option of spending some of that
million.
Irrelevant.
[/quote:9af44f031a]
Hi,
So you claim that the typical millionaire in the US is "completely average"
while the median wealth in 1998 was $60,700. But having that extra million
to spend is "irrelevant"?
I bet most people would not consider an extra million dollars to be
irrelevant to their material wellbeing.
.......
[quote:9af44f031a]Owning more than one dwelling does not make one rich.
.....after taxes and
inflation, without either working or dipping into your assets. $5M is
probably about the lower limit.
Mason Clark once said that today it takes $20M to be a "millionaire".
IMO that is an exaggeration, but certainly having $1M does not make
one rich, even though it still sounds nice. I read somewhere that
anything over $50M makes no real difference in lifestyle. Beyond that
point, it's only about status.
[/quote:9af44f031a]
[quote:9af44f031a]
But
OK maybe one million is just middle class. By US standards.
And the standards of dozens of other OECD countries.
The subjects in the study averaged several million in assets.
The median respondent had just a few million. So, if you obtain a
sample with a few billionaires who inherited and a thousand $1M-aires
who did not, on that basis you can claim the rich earned all their
money, even though most of the money is in the hands of those who did
not earn it?
[/quote:9af44f031a]
In a world where half of the population lives on a few dollars a day, and
half don't have access to clean water, you say a millionaire in the US is
not rich, but "just average?
[quote:9af44f031a]
Jim, is that sort of claim different, in your mind, from lying?
And according to Stanley and Danko, 80% of them were born to families
that
were "not rich".
http://www.geocities.com/capitolhill/4834/106.txt
As you know, I've already refuted that claim. But of course, that has
never stopped you from repeating it.
You have criticized it, but not refuted it.
No, I have completely demolished it, as you know very well.
Firtsly, the respondents were generally not born into rich families
only in the sense that when they were born, their parents were still
in their 20s or 30s, and had not yet inherited.
??? Sure my parents were a lot richer when they retired than when I was
growing up.
I'm not talking about your parents, Jim. Why are you trying to change
the subject?
[/quote:9af44f031a]
??? I was giving an example that supports your claim. Sure "most people"
increase their wealth as they get older. Perhaps one reason why most
millionaires are born to families that were "not rich"--at the time.
Even if EVERYONE eventually became a millionaire, they could all have been
born to "not-rich" families.
[quote:9af44f031a]As if we both don't know...
And I am richer now than when my kids left home for college.
But so what?
So your claims are garbage.
Secondly, Stanley and Danko's "research" was totally unscientific: the
sample was self-selected, ....
As is any survey.
Garbage. It is not difficult to use known population characteristics
to improve the representativeness of a sample. Stanley and Danko
simply chose not to, because they did not want their sample to be
representative.
[/quote:9af44f031a]
So cite a study that does? How would you study millionaires? Or the "rich"
however defined?
[quote:9af44f031a]
But do you know of a better study of the habits of the
rich?
The rich have no intention of letting Stanley and Danko or anyone else
study their habits. But you can start here:
http://www.osjspm.org/101_wealth.htm
[/quote:9af44f031a]
This says nothing about how people get their wealth. Or anything about
their habits.
Also its numbers are different. 2.22 million millionaires in the US in 1998
is lower that the other web pages cited.
http://oregonstate.edu/Dept/pol_sci/fac/sahr/nummil.htm
and
http://money.cnn.com/2005/09/28/news/economy/millionaire_survey/?cnn=yes
But you claim to "refute" Stanley and Danko by assuming that their subjects
made their millions by having their parents buy them a house which they
then they sold decades later--but didn't spend the gain on another house.
[quote:9af44f031a]
....and the source of their wealth was
self-described, and never checked:
Name a better study. You assume that their answers are not reliable?
I am certain that they lied, even if primarily to themselves.
"OK, next question: 'Did you earn all your money, or are you a
privileged, idle parasite?'"
"What are you talking about, 'parasite'?!? I earned every penny!"
[/quote:9af44f031a]
......
[quote:9af44f031a]
"What about the house your wife's parents gave you when you got
married?"
"That was only worth about $50K! Today I'm a millionaire!"
"But you sold that house 30 years later for $750K...."
But the value of the primary residence is not included.
Too bad that is irrelevant. _All_ the (_untaxed_!!!) capital gains
from the sale of _all_ their previous primary residences are included,
unless spent on the current one. So if the majority of the sample
sold their houses for unearned millions in land value gains and moved
to a cheaper place in Arizona, you claim they earned all their money?
-- Roy L
[/quote:9af44f031a]
I agree that if all (or even most) of the subjects in Stanley and Danko's
study had just sold a house given to them by their parents 40 years ago, and
moved into a tent, or a cheap house anywhere (are there cheap houses
anywhere these days?), THEN the claim that they made their million by
founding a company would be deceptive.
Any evidence that this is the case? Or do you "refute" them by assumption?
,,,,,,,
_______________ooo___(_O O_)___ooo_______________
(_)
jim blair (jeblair@wisc.edu) Madison Wisconsin USA.
This message was brought to you using biodegradable
binary bits, and 100% recycled bandwidth. For a good
time call: http://www.geocities.com/capitolhill/4834
No animals were harmed in making this post |
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| Guest |
| Posted: Fri Dec 02, 2005 12:46 am |
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On Mon, 21 Nov 2005 14:09:53 -0600, "Jim Blair" <jeb@wisc.edu> wrote:
[quote:57a93dd194]royls@telus.net> wrote in message
news:437de5e6.9447951@news1.qc.sympatico.ca...
On Thu, 17 Nov 2005 15:32:35 -0600, "Jim Blair" <jeb@wisc.edu> wrote:
royls@telus.net> wrote in message
news:437b7626.21864798@news1.qc.sympatico.ca...
On Tue, 15 Nov 2005 15:18:14 -0600, "Jim Blair" <jeb@wisc.edu> wrote:
royls@telus.net> wrote in message
news:43795812.56762493@news1.qc.sympatico.ca...
On Mon, 14 Nov 2005 12:53:53 -0600, "Jim Blair" <jeb@wisc.edu
wrote:
I suggest that when people read about Bill Gates or any of the
millions
of
"not rich" who became rich,
You misspelled "thousands."
I still think that millionaires are "rich", and there are now about
8.9
million of them in the USA.
Note that there were 1.5 million of them in 1988.
http://oregonstate.edu/Dept/pol_sci/fac/sahr/nummil.htm
The income from $1M, invested conservatively, does not buy an affluent
lifestyle, so that's not enough to make you rich.
That income gets you about $50,000 a year. Perhaps not "affulent', but I
say
comfortable.
?? It is completely average. If you are comparing it to a two-earner
household's income, it is _below_ average. Furthermore, that 5%
return is _before_ inflation. The real return is more like 2%.
Give it up, Jim; I have demolished you on all these claims too many
times before.
And of course you have the option of spending some of that
million.
Irrelevant.
So you claim that the typical millionaire in the US is "completely average"
while the median wealth in 1998 was $60,700.
[/quote:57a93dd194]
No, as you know very well, I claim -- correctly, of course -- that the
income from $1M is equivalent to a completely average wage.
[quote:57a93dd194]But having that extra million
to spend is "irrelevant"?
[/quote:57a93dd194]
It's irrelevant in the sense that if he spends it to finance an
affluent lifestyle, it is no longer available to yield income to
support that lifestyle in the future. My original definition of
"rich" was the ability to finance a distinctly affluent lifestyle
without either working or dipping into capital.
[quote:57a93dd194]I bet most people would not consider an extra million dollars to be
irrelevant to their material wellbeing.
[/quote:57a93dd194]
Most people would not consider $10K irrelevant, either. But it sure
is irrelevant to the rich.
[quote:57a93dd194]The subjects in the study averaged several million in assets.
The median respondent had just a few million. So, if you obtain a
sample with a few billionaires who inherited and a thousand $1M-aires
who did not, on that basis you can claim the rich earned all their
money, even though most of the money is in the hands of those who did
not earn it?
In a world where half of the population lives on a few dollars a day, and
half don't have access to clean water, you say a millionaire in the US is
not rich, but "just average?
[/quote:57a93dd194]
Right, because the standard of living is so high in the USA. Most
working people are going to make well over $1M in their careers, so
it's just not that notable. Take the same amount of money to
Bangladesh and it will make you rich.
[quote:57a93dd194]Secondly, Stanley and Danko's "research" was totally unscientific: the
sample was self-selected, ....
As is any survey.
Garbage. It is not difficult to use known population characteristics
to improve the representativeness of a sample. Stanley and Danko
simply chose not to, because they did not want their sample to be
representative.
So cite a study that does? How would you study millionaires? Or the "rich"
however defined?
[/quote:57a93dd194]
I would use the known population characteristics. For example, wealth
is distributed according to an inverse exponential function, so it is
possible to find the exponent, and then edit the sample to match the
upper tail of the distribution in wealth.
[quote:57a93dd194]But you claim to "refute" Stanley and Danko by assuming that their subjects
made their millions by having their parents buy them a house which they
then they sold decades later--but didn't spend the gain on another house.
[/quote:57a93dd194]
It refutes them because there is nothing in their research to say the
case is otherwise.
[quote:57a93dd194]"What about the house your wife's parents gave you when you got
married?"
"That was only worth about $50K! Today I'm a millionaire!"
"But you sold that house 30 years later for $750K...."
But the value of the primary residence is not included.
Too bad that is irrelevant. _All_ the (_untaxed_!!!) capital gains
from the sale of _all_ their previous primary residences are included,
unless spent on the current one. So if the majority of the sample
sold their houses for unearned millions in land value gains and moved
to a cheaper place in Arizona, you claim they earned all their money?
I agree that if all (or even most) of the subjects in Stanley and Danko's
study had just sold a house given to them by their parents 40 years ago, and
moved into a tent, or a cheap house anywhere (are there cheap houses
anywhere these days?), THEN the claim that they made their million by
founding a company would be deceptive.
Any evidence that this is the case? Or do you "refute" them by assumption?
[/quote:57a93dd194]
That is the fallacy of High Redefinition, basically a strawman
argument.
-- Roy L |
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