Here's How Bored Rich People Are Spending Their Extra Cash(nytimes.com)
nytimes.com
Here's How Bored Rich People Are Spending Their Extra Cash
https://www.nytimes.com/2021/03/20/style/spending-rich-people.html
92 comments
> stuffed it into rich peoples’ pockets
They did no such thing. Most money being "printed" is used as a swap for bonds held privately in banks, and that makes banks more willing to lend out money. So a lowered interest rate makes it more profitable to invest in stocks, and kept the financial system liquid enough to not collapse.
Then the gov't borrowed a bunch of money to send to all the low income people (the $1200 stimulus cheque), which is the opposite of stuffing it into rich people's pockets.
> Are wages going to increase when the inflation starts to trickle down to the goods and services
it's more likely that wage increases would trigger said inflation, rather than the other way around.
They did no such thing. Most money being "printed" is used as a swap for bonds held privately in banks, and that makes banks more willing to lend out money. So a lowered interest rate makes it more profitable to invest in stocks, and kept the financial system liquid enough to not collapse.
Then the gov't borrowed a bunch of money to send to all the low income people (the $1200 stimulus cheque), which is the opposite of stuffing it into rich people's pockets.
> Are wages going to increase when the inflation starts to trickle down to the goods and services
it's more likely that wage increases would trigger said inflation, rather than the other way around.
I’m aware of a business owner that was given 200k and said that they easily could’ve gotten more. They had to ask for it quickly so it wasn’t quite “stuffed” into their pockets but the impression I get is that the larger businesses had an even easier time.
In Canada it’s similar. Businesses getting 10s or 100s of thousands of dollars in COVID relief when they weren’t really impacted. It’s just extra free money for some of them. Meanwhile many actual small businesses have gone bankrupt because $10-50k isn’t enough for anyone that saw their cash flow disappear.
I thought the US printed something like 3 trillion dollars last year. How much do the $1200 cheques add up to? 200-400 billion? And the ultra rich gained 2 trillion in wealth over the same period.
It sure seems like someone gave the rich a big bag of money to me.
It sure seems like someone gave the rich a big bag of money to me.
> the ultra rich gained 2 trillion in wealth
I'm a bit suspicious of these stats. People seem to pick a period that starts at the bottom of the stock market.
I'm a bit suspicious of these stats. People seem to pick a period that starts at the bottom of the stock market.
$1,200 per person, and then $600 per person, and then $1,400 per person. Plus an additional $400-600 per week in unemployment benefits in addition to the amount states were already giving.
Consider a hypothetical single person, living in Oregon, who lost his or her job during the pandemic, and is still looking for work. That person has received $3,200 in direct cash, and somewhere around $40-55,000 in unemployment checks.
Plus other benefits such as food and medical.
How much is enough?
Consider a hypothetical single person, living in Oregon, who lost his or her job during the pandemic, and is still looking for work. That person has received $3,200 in direct cash, and somewhere around $40-55,000 in unemployment checks.
Plus other benefits such as food and medical.
How much is enough?
I’m not American, but
> So, under the new legislation, a typical worker could expect $985 a week for four months ($600 in extra relief plus state benefits), followed by up to 23 weeks of $385 a week in standard state benefits. Unemployment benefits are taxable.
So their normal insurance (which they paid for) covers everything but 600x24 = $14,400 in federal benefits they’re not normally entitled to.
Based on they above quote it sounds like $32.5k would be the upper end. Where do you get $55k? And remember they PAID into state level insurance programs for the majority of that and they’re entitled to everything but the extra $14.4K.
> So, under the new legislation, a typical worker could expect $985 a week for four months ($600 in extra relief plus state benefits), followed by up to 23 weeks of $385 a week in standard state benefits. Unemployment benefits are taxable.
So their normal insurance (which they paid for) covers everything but 600x24 = $14,400 in federal benefits they’re not normally entitled to.
Based on they above quote it sounds like $32.5k would be the upper end. Where do you get $55k? And remember they PAID into state level insurance programs for the majority of that and they’re entitled to everything but the extra $14.4K.
They amended the bills to continue paying $300 - $600 per week in additional unemployment on top of the state unemployment.
Why would you subtract state unemployment? These people also paid federal taxes, so should we just subtract the federal unemployment, too?
And again, that’s just the cash. There was also Medicaid for health insurance, numerous state and federal programs for food, programs for housing, internet, etc.
How is this not enough?
Why would you subtract state unemployment? These people also paid federal taxes, so should we just subtract the federal unemployment, too?
And again, that’s just the cash. There was also Medicaid for health insurance, numerous state and federal programs for food, programs for housing, internet, etc.
How is this not enough?
A couple things to keep in mind for the math when comparing to the total bill:
* The $1200 was scaled down if you made over a certain amount the previous year (50k? 60k? I forget exactly), based on your tax return. I think I got about half of this one.
* The $600 and $1400 went to fewer people than the other; I don't know the criteria but I received neither of these.
* For the extra $600/month for unemployment, that topped out around 14-15% (which excludes a lot of people from the denominator, so it's not 14% of the population).
* The $1200 was scaled down if you made over a certain amount the previous year (50k? 60k? I forget exactly), based on your tax return. I think I got about half of this one.
* The $600 and $1400 went to fewer people than the other; I don't know the criteria but I received neither of these.
* For the extra $600/month for unemployment, that topped out around 14-15% (which excludes a lot of people from the denominator, so it's not 14% of the population).
The stimulus checks were essentially prepaid tax credits. If you weren’t eligible based on 2019 income, but you were eligible based on 2020, you’ll get the credits when you file your 2020 taxes.
>"and that makes banks more willing to lend out money"
And who, exactly, do you think they're lending that zero interest money to? People and businesses with collateral, i.e. the wealthy.
And who, exactly, do you think they're lending that zero interest money to? People and businesses with collateral, i.e. the wealthy.
>Then the gov't borrowed a bunch of money to send to all the low income people (the $1200 stimulus cheque
The government gave all owners of labor up to $22,000 per employee. If you were a partner at a law firm making $500,000, you qualified for a $22,000 check right from the government because, as a partner, you're technically paying yourself.
There were also tax changes in the 1st bill that benefited the wealthy.
The government gave all owners of labor up to $22,000 per employee. If you were a partner at a law firm making $500,000, you qualified for a $22,000 check right from the government because, as a partner, you're technically paying yourself.
There were also tax changes in the 1st bill that benefited the wealthy.
The stimulus checks could have come from taxing the wealthy, they did not. They came in the form of money printing which will eventually result in inflation, and will disproportionately effect the less well off who hold their money in cash and do not know how to protect their wealth from said inflation.
This is how inflation takes effect, first investment instruments, then luxury goods, then basic goods, then rent, and finally, wages. Basically, from closest to the money source and spreading out.
So for anyone who missed out on the investment side, is there any way to mitigate it? Do you borrow money at a fixed rate and invest it in markets that provide basic goods and supply constrained resources?
Get a higher paying job, but wait to move to companies that are growing rapidly into new markets and absolutly need employees to deliver that new market product. Thats where you can take advantage of inflation to get a higher wage.
> Get a higher paying job
Thanks. I hadn’t even considered “just make more money” as an option. Any tips and tricks for my 62 year old father?
Thanks. I hadn’t even considered “just make more money” as an option. Any tips and tricks for my 62 year old father?
Are you mad at me or mad at the fed. I have a mid 60's father too who's trying to retire despite the macro economic situation. He's a retirement planner, maybe I could connect your father to him for some more specific advice.
Buy physical things which hold value.
Is it unusual for it to take this long to move through the chain after it's noticed?
>> “The equities space and the cryptocurrency space over the last couple years created really savvy investors who understand the dynamics of the market, so it’s a complement to their Coinbase accounts and their Robinhood accounts,” Mr. Petrozzo said.
This sort of hubris was heard often before the first internet crash. This time around instead of the most amazing technological shift perhaps ever witnessed it's about sneakers and baseball cards.
This sort of hubris was heard often before the first internet crash. This time around instead of the most amazing technological shift perhaps ever witnessed it's about sneakers and baseball cards.
Ah yes, those savvy investors who bought Hertz, GameStop, and the Cryptocurrency du jour…
There's also Brave. Blocking ads, new advertising model, and privacy by default. They have 25M MAU currently.
Who are these people buying NFTs? These are some people mentioned in the article:
> Benjamin Clymer, the editor of the watch site Hodinkee
> John Demsey, the executive group president of the Estée Lauder Companies
> Clement Kwan, the former president of Yoox Net-a-Porter and a founder of Beboe (he bought physical collectibles, not NFTs)
The people missing is the people that spend 8 figures on NFTs. The best I could find is Pablo Rodriguez-Fraile, who spent ~$67,000 and sold it for $6.6 million
I don't doubt that the sales are happening, especially since large institutions like Christie's auctions are involved. But it may be just an elaborate pump and dump by those with interests in these NFT markets. It just seems odd that people are spending absurd amounts on vanity products without coming out and owning it. Or maybe I'm just not in the right circles to know about them.
> Benjamin Clymer, the editor of the watch site Hodinkee
> John Demsey, the executive group president of the Estée Lauder Companies
> Clement Kwan, the former president of Yoox Net-a-Porter and a founder of Beboe (he bought physical collectibles, not NFTs)
The people missing is the people that spend 8 figures on NFTs. The best I could find is Pablo Rodriguez-Fraile, who spent ~$67,000 and sold it for $6.6 million
I don't doubt that the sales are happening, especially since large institutions like Christie's auctions are involved. But it may be just an elaborate pump and dump by those with interests in these NFT markets. It just seems odd that people are spending absurd amounts on vanity products without coming out and owning it. Or maybe I'm just not in the right circles to know about them.
The buyer of the $69M NFT was Vignesh Sundaresan, a "crypto entrepreneur": https://amycastor.com/2021/03/14/metakovan-the-mystery-beepl...
Money laundering? How else can you poof $60 million dollars of taxable money into existence?
I keep an eye on the annual Barrett-Jackson classic car auction (starts this week) to gauge things. Values got pretty stupid just before the crash in 2008 https://www.barrett-jackson.com/
That seems like a great leading indicator. For a while I’d follow a few levels of real estate but the activity has seemed pretty strange and not very aligned to many other trends. I think the very large apartment companies using fancy stat models for pricing that update almost daily have moved interestingly too in both directions.
That is a clever indicator, although the muscle-car generation is passing on, so less demand. Similar to the Model A/Model T crowd 30 years ago.
Another classic indicator is when your cab driver gives you stock tips.
But I figure now it's Uber driver giving crypto tips.
Another classic indicator is when your cab driver gives you stock tips.
But I figure now it's Uber driver giving crypto tips.
All that craving. If only they learned they could satisfy it best by acting in service of others. As one of my role models and Presidential Medal of Freedom honoree Frances Hesselbein says, "To serve is to live."
They're doing the opposite.
They're doing the opposite.
Well that explains the NFTs.
No wonder so many people are eager to bring out the pitchforks. Is this the behaviour we expect from our most successful? Is this what we'd do ourselves with money? Are you bored and rich? Go play in the sand. Go feed the homeless. Make a damn chair out of scrap wood.
Is this level of idiotic consumption and speculation even widespread amongst the rich, or do we glorify a pompous minority in the media as fantasy for poor people?
I grew up with money. From day one my mother berated me for turning on more lights than I needed in the house, or wasting the last bit of butter on the packet. Our cars were always economy models and I drive a 17 year old car right now - fully bought and paid for by my dad 17 years ago for $15K. It's not a "beater". Why would I invest wealth-creating money on a depreciating asset to replace a perfectly good tool? I would never dream of spending over $100 on a pair of shoes, and they better last forever. My luxuries are working less hours, eating more takeout than I should, treating people to small gifts and spending money on gas to go to the beach.
All of this conspicuous consumption just feels like people who should know better are being taken for a ride. I'll make an exception for people like baseball-card-man who are taking others for the ride, he's just an opportunist. But I can't read about it all without feeling disgust at the lifestyle being sold to us readers. Skip the new BMW, save your money and put it towards anything that will make you free and do some good for the world.
Is this level of idiotic consumption and speculation even widespread amongst the rich, or do we glorify a pompous minority in the media as fantasy for poor people?
I grew up with money. From day one my mother berated me for turning on more lights than I needed in the house, or wasting the last bit of butter on the packet. Our cars were always economy models and I drive a 17 year old car right now - fully bought and paid for by my dad 17 years ago for $15K. It's not a "beater". Why would I invest wealth-creating money on a depreciating asset to replace a perfectly good tool? I would never dream of spending over $100 on a pair of shoes, and they better last forever. My luxuries are working less hours, eating more takeout than I should, treating people to small gifts and spending money on gas to go to the beach.
All of this conspicuous consumption just feels like people who should know better are being taken for a ride. I'll make an exception for people like baseball-card-man who are taking others for the ride, he's just an opportunist. But I can't read about it all without feeling disgust at the lifestyle being sold to us readers. Skip the new BMW, save your money and put it towards anything that will make you free and do some good for the world.
You're signaling spiritual wealth/enlightenment instead of economic wealth.
This leads to you mimic the surface characteristics of the working class. Old car, old clothes, fashionably unfashionable, hobbies that involve working with your hands, etc. I think this is admirable but I also think that people generally have to go through an immature phase where they buy dumb shit to signal their status before they get to the situation you were raised in.
I don't like the article. It's just bourgeois-bashing and the people who get turned on by that old pastime tend to be somewhat venal themselves.
This leads to you mimic the surface characteristics of the working class. Old car, old clothes, fashionably unfashionable, hobbies that involve working with your hands, etc. I think this is admirable but I also think that people generally have to go through an immature phase where they buy dumb shit to signal their status before they get to the situation you were raised in.
I don't like the article. It's just bourgeois-bashing and the people who get turned on by that old pastime tend to be somewhat venal themselves.
You're right and I'm (to a point) aware that my values are a weird pastiche of an imagined working class. Before I turned 25 all I did was while away the day peacefully, now I don't feel ok if I'm not productive in some very immediate way like painting a door. I won't pretend that's not silly.
What I hope to convey is that luxury is a trap if you're not already independently wealthy. And if you are financially free, you can still be sucked back into wage-slavery by wanting too much stuff. And even if you transcend that level of wealth, you can still find more fulfilment by spending your money on things that improve someone else's situation. Stop being fleeced by people exploiting your psychology for their enrichment.
It makes me feel better to buy a burrito from a family restaurant than a Hermès bag. Could we status-signal in that direction? Will it make a difference?
What I hope to convey is that luxury is a trap if you're not already independently wealthy. And if you are financially free, you can still be sucked back into wage-slavery by wanting too much stuff. And even if you transcend that level of wealth, you can still find more fulfilment by spending your money on things that improve someone else's situation. Stop being fleeced by people exploiting your psychology for their enrichment.
It makes me feel better to buy a burrito from a family restaurant than a Hermès bag. Could we status-signal in that direction? Will it make a difference?
Buying dumb shit is the sort of experience the rich can afford that puts such a perspective on life that allows you to then shoot for more fufilling goals/works/community. All the fairy tales in the world arent going to teach you better than living the experience of excess.
Not everyone outgrows this though. I'd argue that most don't, even.
Case in point, Trump.
Case in point, Trump.
[deleted]
That's the things bout economics...there's dumb shit you can buy at EVERY LEVEL!
My boys are experiencing they first stead incomes at 18 with their first non-home-chore jobs.
They're spending some of that money on Hotwheels, and personally, I'm happy letting them experience that, they save a little, they spend a little, they get hooked on getting things they want...because it incentivizes them to be successful.
My boys are experiencing they first stead incomes at 18 with their first non-home-chore jobs.
They're spending some of that money on Hotwheels, and personally, I'm happy letting them experience that, they save a little, they spend a little, they get hooked on getting things they want...because it incentivizes them to be successful.
Let’s not pretend we live in a meritocracy when we can see via legislative acts a whole lot of wealth is owned due to political corruption.
I don’t like the defense of the booj class by proles such as yourself when such kowtowing is effectively putting the boot on the necks of the masses.
Best not upset them or you might not get paid yourself, right? Talk about venal. “Let the rich be! I need to make my paper!”
I don’t like the defense of the booj class by proles such as yourself when such kowtowing is effectively putting the boot on the necks of the masses.
Best not upset them or you might not get paid yourself, right? Talk about venal. “Let the rich be! I need to make my paper!”
> No wonder so many people are eager to bring out the pitchforks. Is this the behaviour we expect from our most successful?
Is this behavior representative of the most successful? This article appears to have been compiled by looking for some of the most egregious examples of ridiculous things to buy, a real get-out-the-pitchforks kind of work, but surely there are those who are merely buying things like real estate and US equities. I can only imagine that if the coverage is broadly characteristic of this class, it would be almost accidental that it is so.
Is this behavior representative of the most successful? This article appears to have been compiled by looking for some of the most egregious examples of ridiculous things to buy, a real get-out-the-pitchforks kind of work, but surely there are those who are merely buying things like real estate and US equities. I can only imagine that if the coverage is broadly characteristic of this class, it would be almost accidental that it is so.
"If you're reading it, it's for you."
I hope the people portrayed in this article aren't representative but I do know there are two possible reactions to the piece: Being grossed out by the lifestyle or thinking it's a good idea to emulate it. Since the NYT chose to not portray anyone taking a bath on a speculative sneaker purchase, I can only assume their intention is to glorify this behaviour. So I choose to be outraged by it publicly as a counter balance.
I hope the people portrayed in this article aren't representative but I do know there are two possible reactions to the piece: Being grossed out by the lifestyle or thinking it's a good idea to emulate it. Since the NYT chose to not portray anyone taking a bath on a speculative sneaker purchase, I can only assume their intention is to glorify this behaviour. So I choose to be outraged by it publicly as a counter balance.
The problem is that it doesn't convey the subtlety that occurs when your income starts to drastically outstretch your expenses. I can't speak for anyone else, but _my_ brain can't wrap itself around the additional income...You have $1000 in income, and you make sure you keep your expenses to $900. So you have $100 extra...and you scrimp and save, and eventually you have $200 extra.
240 months later you don't feel any safer that you have $125000 in savings...meanwhile, you've upgraded your house 3 or 4 times, have upgraded the car 3 or 4 times, bought all the food and clothes and vacations...but you're still the same scared little rabbit you were when you had $200 extra.
People may or may not contribute to a greater cause with the extra money, but that's not the only factor into how people think about money.
Additionally, money does NOT follow value. That guy that IPO'd and his net worth went from $25,000 to $130M? It really wasn't from anything he did, it's lottery money. Is it fair? Meh, I dunno, I'm just pointing out the trope. But if you suddenly found yourself there, why WOULDN'T you buy the most expensive $item? It doesn't affect the number in your checkbook any.
We have the same brains our ancestors had...all it needed to do then was learn how to find the next meal.
240 months later you don't feel any safer that you have $125000 in savings...meanwhile, you've upgraded your house 3 or 4 times, have upgraded the car 3 or 4 times, bought all the food and clothes and vacations...but you're still the same scared little rabbit you were when you had $200 extra.
People may or may not contribute to a greater cause with the extra money, but that's not the only factor into how people think about money.
Additionally, money does NOT follow value. That guy that IPO'd and his net worth went from $25,000 to $130M? It really wasn't from anything he did, it's lottery money. Is it fair? Meh, I dunno, I'm just pointing out the trope. But if you suddenly found yourself there, why WOULDN'T you buy the most expensive $item? It doesn't affect the number in your checkbook any.
We have the same brains our ancestors had...all it needed to do then was learn how to find the next meal.
I don’t think I could waste money like that. Compare a $100k watch to hiring an electrician for a year. In SK / AB Canada there are a lot of electricians out of work due to downturns in resource sectors, but there’s a lot of work they could be doing. It’s just that the work that could be done would be for poor people and no one is going to pay for it.
Owning the wealth gives you the ability to allocate labor and the current wealth owners aren’t doing a good job. Redistribute the wealth IMO.
Owning the wealth gives you the ability to allocate labor and the current wealth owners aren’t doing a good job. Redistribute the wealth IMO.
> Compare a $100k watch to hiring an electrician for a year.
US$ 100K watches are generally built by hand by a craftsman (usually Swiss or German) and may take more than a year to build:
* https://www.alange-soehne.com/en/timepieces/1815-tourbillon/...
* https://www.chrono24.com/alangesoehne/lange-1-rose-gold-tour...
What makes the work of the electricians, carpenters, plumbers, etc, any better or worse than that of a fine machinist?
You're not wrong, it's just understand that you are making a value judgement, and not everyone has the same values as you.
And here's a Canadian watch maker:
* https://www.hodinkee.com/articles/canadian-comeback-kid-one-...
* https://www.bradleytaylor.ca
> It’s just that the work that could be done would be for poor people and no one is going to pay for it.
Which is why we have taxes and social safety nets (which was added to by CERB).
US$ 100K watches are generally built by hand by a craftsman (usually Swiss or German) and may take more than a year to build:
* https://www.alange-soehne.com/en/timepieces/1815-tourbillon/...
* https://www.chrono24.com/alangesoehne/lange-1-rose-gold-tour...
What makes the work of the electricians, carpenters, plumbers, etc, any better or worse than that of a fine machinist?
You're not wrong, it's just understand that you are making a value judgement, and not everyone has the same values as you.
And here's a Canadian watch maker:
* https://www.hodinkee.com/articles/canadian-comeback-kid-one-...
* https://www.bradleytaylor.ca
> It’s just that the work that could be done would be for poor people and no one is going to pay for it.
Which is why we have taxes and social safety nets (which was added to by CERB).
> What makes the work of the electricians, carpenters, plumbers, etc, any better or worse than that of a fine machinist?
You’re right that it’s a value judgement. A tradesman might be able to fix problems that impact essentials (electricity, water, shelter) for 100 people in a year while a fine machinist makes a single watch for a rich person.
I think it’s shameful to be spending resources on frivolous luxury goods when such a huge chunk of society lacks the essentials required for a reasonable standard of living.
You’re right that it’s a value judgement. A tradesman might be able to fix problems that impact essentials (electricity, water, shelter) for 100 people in a year while a fine machinist makes a single watch for a rich person.
I think it’s shameful to be spending resources on frivolous luxury goods when such a huge chunk of society lacks the essentials required for a reasonable standard of living.
> I think it’s shameful to be spending resources on frivolous luxury goods when such a huge chunk of society lacks the essentials required for a reasonable standard of living.
In large swathes of the world, the computer you're typing on, the phone you have, and that ice cream you enjoyed the other night would be considered "frivolous luxury goods."
Be careful what you wish for.
In large swathes of the world, the computer you're typing on, the phone you have, and that ice cream you enjoyed the other night would be considered "frivolous luxury goods."
Be careful what you wish for.
People are free to spend their own money however they wish.
If you think you (or the government/society) can spend their money in a way that is "better" than they themselves can, take it from them (e.g., taxes).
If you think you (or the government/society) can spend their money in a way that is "better" than they themselves can, take it from them (e.g., taxes).
I am personally kind-of-ok with the watch purchase you describe. What I'm not ok with is the extra ~100K tacked onto the watch price by the brand going exclusively towards status.
My problem with conspicuous consumption isn't the relative utility being bought, it's the values that it signals to waste money for the luxury of wasting it. Making it desirable as a society to set money on fire instead of using it to better your situation is the real damage.
My problem with conspicuous consumption isn't the relative utility being bought, it's the values that it signals to waste money for the luxury of wasting it. Making it desirable as a society to set money on fire instead of using it to better your situation is the real damage.
You build a widget for a buck...but you can SELL the widget for ten. Are you going to leave $9 on the table?
Sometimes I do exactly that, but leaving money on the table is a privilege of wealth and not the point. What I certainly won't do unless my family is starving is buy the widget from someone else for a buck and then use exploitative tactics to convince people to buy it from me for twenty.
It's very rarely the craftsman who makes the real margin. That's left to the conglomerate who owns the brand.
It's very rarely the craftsman who makes the real margin. That's left to the conglomerate who owns the brand.
> use exploitative tactics to convince people to buy it from me for twenty
The article is about watches, cars, and baseball cards. As entirely optional/luxury goods, there is no "exploitation" involved.
If it was about food, medicine, or other essentials, I might agree with you.
The article is about watches, cars, and baseball cards. As entirely optional/luxury goods, there is no "exploitation" involved.
If it was about food, medicine, or other essentials, I might agree with you.
There's no coercion for sure, maybe I'm using the word "exploitative" badly. What I mean is that we've built an economic system to exploit certain flaws (vanity, need for status, etc) which we call luxury. I'm fine with building a better gadget, marketing its benefits and selling it at a profit. I'm not ok with preying on the insecurities of my clients. Which is what I think conspicuous consumption goods are 99% of the times.
That’s a logical fallacy, though...the guy that buys a $20M jet is employing the people that made the jet, advertised it, procured the fuel, built and maintained the airport, fabricated the raw materials that went into making it...the ‘rich guy conspicuously spending money on a jet’ is stimulating the economy in different ways.
You're not wrong, but there are diminishing returns. There are only so many people that can buy and maintain jets.
One person buying one jet for $20M (plus operating costs), is probably a lot less money velocity that a whole bunch of folks getting $20M in (e.g.) stimulus checks and deciding to buy $20M worth of economy class airline tickets.
Or put another in a different transportation sector: only so many folks that can afford Ferraris, and pay to maintain them.
Whereas if money were less concentrated / more distributed, more folks could buy Fords (or Fiats). The amount of money stimulating things with 10 (or 100) Ferraris is much less than 1000 or 10'000 Ford/Fiats. More workers, more mechanics, etc.
You're right in that the rich person can stimulate the economy, but would a bunch of less well-off folks spending the same quantity have a larger multiplier? I'd hazard to guess that the answer is yes, they would.
One person buying one jet for $20M (plus operating costs), is probably a lot less money velocity that a whole bunch of folks getting $20M in (e.g.) stimulus checks and deciding to buy $20M worth of economy class airline tickets.
Or put another in a different transportation sector: only so many folks that can afford Ferraris, and pay to maintain them.
Whereas if money were less concentrated / more distributed, more folks could buy Fords (or Fiats). The amount of money stimulating things with 10 (or 100) Ferraris is much less than 1000 or 10'000 Ford/Fiats. More workers, more mechanics, etc.
You're right in that the rich person can stimulate the economy, but would a bunch of less well-off folks spending the same quantity have a larger multiplier? I'd hazard to guess that the answer is yes, they would.
to some extent, it's a "don't hate the player, hate the game" situation. I think it's actually great that we have a system where craftspeople can continue to see returns on developing their skills way past the *good enough" point. what's not so great is when the value of a thing is dominated by the logo on it rather than its design. but it's hard to point to a specific person whose fault this is. if you can 10x something's value by putting your stamp on it, why not? and if you're the watchmaker, why not let them?
It's an increasing scale with no upper limit. Financially, I don't even register on the chart...but I'm already seeing things like "Do I buy the $600 laptop because it's all I can afford, or the $1299 one because I -Like- it and it won't affect my outcomes any."
This, with more yachts.
This, with more yachts.
a laptop is kinda like a shoe though. my friends that buy the cheapest possible laptop always end up replacing it after a couple years. not for performance, but because it broke and repairing it isn't much cheaper than a new throwaway machine. they think they're saving money, but they're really not. a good business laptop will feel slow 5-8 years later, but there's a much better chance that it still works.
> I grew up with money. From day one my mother berated me for turning on more lights than I needed in the house, or wasting the last bit of butter on the packet. Our cars were always economy models and I drive a 17 year old car right now - fully bought and paid for by my dad 17 years ago for $15K. It's not a "beater". Why would I invest wealth-creating money on a depreciating asset to replace a perfectly good tool?
this isn't an example of being enlightened, frugal, eschewing conspicuous consumption, etc. it's exactly what people mean by the phrase "penny wise, pound foolish". you drive yourself (and presumably others) around in a 17-year-old car when the cost of a brand new one that meets modern crash-safety standards would be nothing to you. the risk/cost tradeoff makes no sense for someone of your (or your family's) means. I would also critique your dad's paying cash for a car when he presumably had great credit, but that's a more debatable point.
this isn't an example of being enlightened, frugal, eschewing conspicuous consumption, etc. it's exactly what people mean by the phrase "penny wise, pound foolish". you drive yourself (and presumably others) around in a 17-year-old car when the cost of a brand new one that meets modern crash-safety standards would be nothing to you. the risk/cost tradeoff makes no sense for someone of your (or your family's) means. I would also critique your dad's paying cash for a car when he presumably had great credit, but that's a more debatable point.
You are 100% right. I don't mean to imply my family's values around money are in any way ideal. They're antiquated, way too conservative, inherited from hard times.
My point is that worshipping frugality, independence and wealth-building is less likely to mess up my life than yearning for a $30M Porsche collection. Sorry if I didn't make my point very well.
My point is that worshipping frugality, independence and wealth-building is less likely to mess up my life than yearning for a $30M Porsche collection. Sorry if I didn't make my point very well.
What kind of small gifts do you treat people to? I have trouble finding things that I don't consider to be positive for me (feels good giving) but negative for the recipient (more useless junk they'll pretend to appreciate, or unhealthy consumables).
I'm ok with unhealthy consumables if people enjoy them, but generally: Food, nice soaps, candles, shows, wine, anything they need from the shops while I'm there. Small loans without expecting the money back in some cases. It's hard that a day goes by that I don't get something for someone.
On the other hand I really hate mandatory gift-giving: Christmas, father's day, valentine's, birthdays. I make the minimum effort I can get away with then.
On the other hand I really hate mandatory gift-giving: Christmas, father's day, valentine's, birthdays. I make the minimum effort I can get away with then.
Not OP, but drunken me impulse-bought a perfume for my girlfriend yesterday. Hope it smells as good as I remember.. The weekend before I spent 3hrs in the kitchen treating my friends to a nice dinner.
If you have been financially unaffected by the coronavirus, give your stimulus money away to friends / family that were drastically affected, like restaurant workers.
Or, if you're not big on giving money for whatever reason, have all your meals come from delivery for a month or two! That will help a lot of people go back to working.
Why do you care what someone else does with their money?
This should only bother you if the economy is a zero sum game. It’s not.
You're right, it bothers me more than it should, maybe as an allergic reaction. I want to inoculate myself against this behaviour.
I've never berated anyone for spending their money, mind you, and hopefully I never do. But I can feel the pull of this behaviour on aggregate. I get snide comments half the times I go surfing on my car or my board from people wit literally ten times less yearly income than me who blow it all on leasing new Mercedes station wagons every 3 years. Going to dinner with some friends feels like a game of who can blow the most money nonchalantly. No thanks.
I don't how your part of the world is, but living in Lisbon in your mid-30s you can feel how people are spreading themselves thin financially to keep up with the Joneses. I've started taking a public posture against it because I feel someone has to. I've seen this movie play out and it ended with a lot of people giving their homes back to the bank.
I've never berated anyone for spending their money, mind you, and hopefully I never do. But I can feel the pull of this behaviour on aggregate. I get snide comments half the times I go surfing on my car or my board from people wit literally ten times less yearly income than me who blow it all on leasing new Mercedes station wagons every 3 years. Going to dinner with some friends feels like a game of who can blow the most money nonchalantly. No thanks.
I don't how your part of the world is, but living in Lisbon in your mid-30s you can feel how people are spreading themselves thin financially to keep up with the Joneses. I've started taking a public posture against it because I feel someone has to. I've seen this movie play out and it ended with a lot of people giving their homes back to the bank.
In fact, if the people with money are spending it, that’s GOOD for the economy and benefits you and I more than if they’re just sitting on it.
It is a zero sum game over short timescales. Over long timescales the situation is actually worse since the more money you have, the more you can make. So whoever starts with a small advantage ends up with a huge advantage, and whoever starts out behind might fall into poverty and end up with nothing. Wealth redistribution of various kinds- governmental and otherwise- is all that keeps the system stable at all.
The economy is a sum of its parts. Like the money could be spent in ways that are more impactful.
And you know how to spend it better, right? Just not enough to earn it yourself.
Why do you think I don’t know how to earn it myself?
> No wonder so many people are eager to bring out the pitchforks.
Only those with a superiority complex or or the ones indoctrinated with with certain ideologies that preach hatred against people of different class or race. Everybody else couldn't care less what they do with their own money.
Only those with a superiority complex or or the ones indoctrinated with with certain ideologies that preach hatred against people of different class or race. Everybody else couldn't care less what they do with their own money.
There's certainly an entire industry of people selling useless shit to rich people, but when I heard about it was from a friend who worked at a call center when they used to reach them via phone :D
[deleted]
Why do you think it's unfair or morally wrong? I mean, people buying stupid collectibles is just money moving from dumb people to smarter people, as it always does.
I think it signals the wrong values to the rest of society. We're all influenced by behaviours we see glorified or rewarded. There's damage being done collectively. But I don't think the person engaging in luxurious consumption is a bad person for it. I just think they're being suckers.
In fact, maybe these people are not even dumb. Maybe they are buying into this stupid shit just to be hated, and see it as a reward from society for their achievements? If society hates rich, why should the rich not try to compete in attracting the hate, just seeing it as a sign of recognition, and try to get the top bang for the buck (without going to jail)?
This is why governments need to raise taxes on the rich.
bored rich people gave us the renaissance
the problem isn't bored rich people
the problem isn't bored rich people
GPUs, probably...
They made a lot of money thanks to an entirely artificial fiat monetary scheme (which is nothing more charity for the socially connected). Then they refuse to pay it forward by investing in useful, transformational projects... Instead preferring to launder the money among themselves as a means of wealth preservation. Wealth which they don't deserve to begin with.
More like there are no useful transformational projects that everyone agrees on. So different groups do what they got to do. Just try an experiment with you own family. Find the richest members and get them to buy into "useful transformational projects". Come back and tell us how that goes.
Easy, real estate. Just build more housing. The idea that we have run out of things to do is laughable. The truth is all the profitable investments are illegal.
Exactly, if inflation arrives and the Fed were to raise interest rates, all that fake wealth would disappear. The problem is that the fake wealth is a big chunk of the economy so the Fed will not raise rates.
Stand up a useful, transformative project and I'm sure there will be no shortage of people looking to invest...
I vote for eradicating food insecurity in the USA. That would be pretty transformative IMO. How many ultra wealthy investors do you think will get on board?
Zero. But even if the project was good and for-profit, it would probably still be zero. It's 100% about personal connections of the founders. Nothing to do with the project. The project is just a vehicle for laundering money from one rich person to another... Artificially compounding existing wealth in the process without creating any new value.
[deleted]
I’m sure it’s awesome for a lot of people in HN that have seen massive market gains in the last year, but it freaks me out. I worry about my parents who are very close to retirement since they’re the tail end of the last generation that had defined benefit pension plans. They’re not indexed at rates that can withstand a ton of inflation.
Are wages going to increase when the inflation starts to trickle down to the goods and services the working class rely on?