7 Millionaire Myths

[Rickster71]

Found this story interesting:
http://finance.yahoo.com/banking-budgeting/article/110333/millionaire-myths?mod=bb-budgeting

We all have are preconceptions about millionaires: they're tax evaders who just inherited their money from rich Aunt Flo, and they hang around the golf course all day with their snobby, elitist friends. So what's the average millionaire really like? Here are seven millionaire myths, and the real facts about the ones who seem to have it all.

 

[Alex2507]

If the stuff about driving an old Ford has much weight I should be a millionaire any day now.

 

[highfigh]

Here are seven millionaire myths, and the real facts about the ones who seem to have it all.

And a whole lot of people who want to go on, complaining about things they don't understand.

One universal truth about rich people- they don't stay rich if they spend all of their money. People complain about the rich being cheap- it's not that they're all cheap, they just know where to spend money to get the most out of it. The saying "Never borrow, unless it costs less than what you'll make on that money" is just as true now as it was when it was coined. People biatching about the rich not paying their fair share don't know, or care, that the top 10% pay over 50% of all personal income tax. Those same people who complain often don't make enough to pay a single dollar in taxes and get to use the Earned Income Credit, Homestead Tax Credit and are often on Welfare of some kind.

Rich is one thing and wealth is another. $1M in 1960 is the same as $7,365,236.49 in 2010.

 

[MatthewB.]

If Millionares have the same issues as I do, I'd be more than willing to trade places with them any day of the week.

 

[GO-NAD!]

I read a book a few years ago, titled The Millionaire Next Door and what it boiled down to, is that the typical millionaire does not look like one. They tend to live in working class neighbourhoods and drink beer, not single malts and fine wine. They work hard to get where they are.

 

[lsiberian]

If you invested like 100 dollars a month for 40 years you'd be millionare. But most of us just want to have fun now.

 

[Stereodude]

If you invested like 100 dollars a month for 40 years you'd be millionare. But most of us just want to have fun now.

But in 40 years being a millionaire won't mean squat thanks to inflation.

 

[GO-NAD!]

If you invested like 100 dollars a month for 40 years you'd be millionare. But most of us just want to have fun now.

That's just what it comes to - one must decide on his life's priorities. If you're wealthy, but live like a pauper, what's the point? If you have a healthy income, but spend every dime, you're just one unexpected financial crisis away from bankruptcy. There has to be a balance between financial security and enjoying the fruits of your labours.

 

[highfigh]

That's just what it comes to - one must decide on his life's priorities. If you're wealthy, but live like a pauper, what's the point? If you have a healthy income, but spend every dime, you're just one unexpected financial crisis away from bankruptcy. There has to be a balance between financial security and enjoying the fruits of your labours.

The one thing that makes it absolutely impossible for many people to reach any level of wealth is human nature. People want what they don't have when they see others enjoying it, they want things they can't have and they want things they shouldn't have. Keeping up with the Jones' drives more people to bankruptcy and desperation than anything else that I can think of. People have to realize that if they can't afford it, they shouldn't buy it. Since so many people have come to replace the word 'want' with 'need' and don't want to be seen as not having the cool things everyone else has, they look at the short-term and go so far into debt that they have almost no chance of digging out of it. The lending practices of the mortgage industry just preyed on this and when so many went too far in arrears, the collapse occurred. Zero-down with an adjustable rate mortgage is just a bad idea. If they can't afford the down payment, there's no way they'll be able to pay the increasing property taxes, utility bills, energy costs, fuel & food prices and increases in lifestyle costs unless their financial position at the time of signing is temporary and they're certain that their income will increase over time.

 

[Nemo128]

If you invested like 100 dollars a month for 40 years you'd be millionare. But most of us just want to have fun now.

I save 10x that amount per month and certainly will not be a millionaire in 40 years. Cost of living doesn't stay fixed every year and home ownership in this area would cut that million in half for a decent house. Fact is, being a "millionaire" results in far less economic power today than it did even 10 years ago. For all intents and purposes, a millionaire in this area can be considered comfortable, not rich or wealthy by any stretch of the imagination.

I did recently see 9000 sq ft homes in the DFW area for under $200k. Money goes a lot farther in other regions of the country. For $200k I can't even get a 300 sq ft studio in a crime-ridden cesspool here. Parking in NYC can cost more than that (upwards of $500/month).

 

[GirgleMirt]

If you invested like 100 dollars a month for 40 years you'd be millionare. But most of us just want to have fun now.

That's ridiculous. With the low interest rates and rather uncertainty/poor average return on investments, you wouldn't be close to a million dollars in 40 years, and you'd have a good chance of actually losing money.

I save 10x that amount per month and certainly will not be a millionaire in 40 years. Cost of living doesn't stay fixed every year and home ownership in this area would cut that million in half for a decent house. Fact is, being a "millionaire" results in far less economic power today than it did even 10 years ago. For all intents and purposes, a millionaire in this area can be considered comfortable, not rich or wealthy by any stretch of the imagination.

I did recently see 9000 sq ft homes in the DFW area for under $200k. Money goes a lot farther in other regions of the country. For $200k I can't even get a 300 sq ft studio in a crime-ridden cesspool here. Parking in NYC can cost more than that (upwards of $500/month).

Same in Montreal, a 100 year old duplex/triplex close to downtown, is about half a million dollars. A very small condo downtown will start at like $300k. Hell, cheapest parking downtown is 150$ per month. So according to Isiberian, if you park downtown in Montreal for 40 years, that's gonna cost you over 1.5 million dollars...

 

[Rickster71]

Often wonder why people with the least life experience, and little knowledge of a subject (demonstrated by their posts)
have such strong opinions on those very subjects.

Investing in weak market is a matter of knowing how, why and when to move money in and out of different investment sectors.
It's a matter of adapting, and adjusting; when one sectors down, another is up.

 

[Pyrrho]

A couple of points.

First, "those in the top 1% of earners, pay about 40 percent of all taxes", tells us nothing about whether or not, on average, they are paying their fair share. If their income is more than 40 percent of all income, they are getting off light and not paying their fair share, and if it is less, they are seemingly paying more than their fair share from a pure percentage standpoint. However, the more one has, the higher percentage of one's income one can afford to pay. If, for example, one has only enough money to buy the minimum necessary of food and shelter and clothing for survival, then one has no money that one can afford to pay in taxes, whereas anyone making more than that can afford to pay some money on taxes or something else. And the more one makes, the higher the percentage of one's income there will be that is surplus.

(To make this clearer, let us pretend that it takes $10k to barely live [the number selected is purely arbitrary; pick any number you want, and adjust the following incomes by the same percentage]. Anyone making $10k can afford to pay nothing extra, so they can afford to pay 0% of their income in taxes or anything nonessential. Anyone making $20k can afford to pay 50% of their income in taxes and nonessential items, since they, too, only need $10k to live. Anyone making $100k can afford to pay 90% of their income in taxes and nonessential items, since they, too, only need $10k to live. See the pattern? The more one makes, the higher the percentage of one's income that one can afford to pay in taxes and other such things.)

So looking at the matter from a pure percentage standpoint is unfair from the start, as the lowest income earners cannot afford to pay anything at all. (The simplistic use of percentages, by the way, is typical of the kind of fast one rich bastards try to pull on people to con them into thinking the rich are not really the cheating bastards that they are.)

Second, what the "average" of a group of people does tells you practically nothing about any individual in the group, so the whole thing is somewhat pointless and silly. This is true of other things as well: If you know what the average height of a man is, what does that tell you about the height of a particular man? Whether the average millionaire is a cheating bastard or not will not tell you anything about whether or not a particular millionaire is a cheating bastard.

 

[GirgleMirt]

Often wonder why people with the least life experience, and little knowledge of a subject (demonstrated by their posts)
have such strong opinions on those very subjects.

Investing in weak market is a matter of knowing how, why and when to move money in and out of different investment sectors.
It's a matter of adapting, and adjusting; when one sectors down, another is up.

Right, it's so simple, you just buy stuff for little money and sell it for a lot, wham, instant profit, easy to do, just takes a little bit of knowledge and in a couple of years you can make a bajillion dollars. So easy and simple! The so called experts don't do any better the the indices, so yeah, some schmuck with 0 experience will make a million dollars by saving 100$ per month and investing... Laff

It's a matter of adapting, and adjusting; when one sectors down, another is up.

Let's see your investment portfolio for the last 15 years, and let's compare it to some guy who puts his savings in a guaranteed interest account. Do you know how many investors went bankrupt in the last couple of years? People who see the stock market as an easy way to become millionaires are fools and will most likely end up broke.

The people making money with stocks is pretty much limited to the brokers, those with inside info and/or can control it, those who sell books about it, or teach, make conferences, etc. For the little people, it's not a good way to "make money".

http://25yearsofprogramming.com/blog/20070411.htm

AVOID The Stock Market!!!

I also avoid the stock market, it is a man-made invention designed to take away the public's wealth...it is a scam. This has been documented (if you'll read beyond the newspaper). Read the following article from Richard Ney's book titled, "The Wall Street Gang."

"The hard-hitting market critic, Richard Ney, has written three books that I know of. His first, and probably most famous, is The Wall Street Jungle, written in 1970. He next wrote The Wall Street Gang, published in 1974 by Praeger Publishers. Chapter 2 of the latter book opens as follows:

It is no accident that most investors lose money in the stock market. Their losses are an inevitable by-product of their ignorance of how little they know about the invisible world of the Stock Exchange. Like machines dominated by external influences, they are capable only of mechanical action.

Regrettably, the arrangements that exist to preserve the traditions and legalize the frauds of the security industry are inseparable from the general organization of a society controlled by the financial establishment, a society whose laws and principal customs have been contrived to serve the special interests of the financial community. Thus, although the Stock Exchange's most profitable practices clearly compromise the freedoms granted others by the constitution, Exchange Insiders are granted immunity from the legal obligations and penalties that should be imposed on them."

Anyhow, you're free to disagree, invest, maybe you'll get lucky, maybe not. Saying that someone who has "least life experience, and little knowledge of a subject" and then validating with a moronic statement like: "Investing in weak market is a matter of knowing how, why and when to move money in and out of different investment sectors. It's a matter of adapting, and adjusting; when one sectors down, another is up." just shows that they have no clue about what they're talking about.


So Rickster, you're an investor? Why don't you run us through your investments in the last couple of years and your current investment plans? Let's see how someone with "the most life experience" and "the most knowledge of a subject" makes money... So you're a guru right? You beat all the experts and made a killing investing?

 

[MDS]

If you invested like 100 dollars a month for 40 years you'd be millionare. But most of us just want to have fun now.

You would have to earn an average annual interest rate just shy of 11.5% to have a million dollars in 40 years.

 

[Rickster71]

Right, it's so simple, you just buy stuff for little money and sell it for a lot, wham, instant profit, easy to do, just takes a little bit of knowledge and in a couple of years you can make a bajillion dollars. So easy and simple! The so called experts don't do any better the the indices, so yeah, some schmuck with 0 experience will make a million dollars by saving 100$ per month and investing... Laff

Often wonder why people with the least life experience, and little knowledge of a subject (demonstrated by their posts)
have such strong opinions on those very subjects.

Wow, you really are good at this kinda thing.

The OP was done as an upbeat, positive kind of subject.
I just realized something. It's in direct collision course with the preconceived notion that some have of Class Warfare.
Good at derailing a threads they don't like.

 

[GirgleMirt]

Often wonder why people with the least life experience, and little knowledge of a subject (demonstrated by their posts)
have such strong opinions on those very subjects.

Investing in weak market is a matter of knowing how, why and when to move money in and out of different investment sectors.
It's a matter of adapting, and adjusting; when one sectors down, another is up.

Let's see your investment portfolio for the last 15 years,

So Rickster, you're an investor? Why don't you run us through your investments in the last couple of years and your current investment plans? Let's see how someone with "the most life experience" and "the most knowledge of a subject" makes money... So you're a guru right? You beat all the experts and made a killing investing?

So what's your experience on the subject? What makes you think you know more than others? Why won't you shine your light of knowledge on us all? Can't answer simple questions?

 

[GO-NAD!]

A couple of points.

First, "those in the top 1% of earners, pay about 40 percent of all taxes", tells us nothing about whether or not, on average, they are paying their fair share. If their income is more than 40 percent of all income, they are getting off light and not paying their fair share, and if it is less, they are seemingly paying more than their fair share from a pure percentage standpoint. However, the more one has, the higher percentage of one's income one can afford to pay. If, for example, one has only enough money to buy the minimum necessary of food and shelter and clothing for survival, then one has no money that one can afford to pay in taxes, whereas anyone making more than that can afford to pay some money on taxes or something else. And the more one makes, the higher the percentage of one's income there will be that is surplus.

(To make this clearer, let us pretend that it takes $10k to barely live [the number selected is purely arbitrary; pick any number you want, and adjust the following incomes by the same percentage]. Anyone making $10k can afford to pay nothing extra, so they can afford to pay 0% of their income in taxes or anything nonessential. Anyone making $20k can afford to pay 50% of their income in taxes and nonessential items, since they, too, only need $10k to live. Anyone making $100k can afford to pay 90% of their income in taxes and nonessential items, since they, too, only need $10k to live. See the pattern? The more one makes, the higher the percentage of one's income that one can afford to pay in taxes and other such things.)

So looking at the matter from a pure percentage standpoint is unfair from the start, as the lowest income earners cannot afford to pay anything at all. (The simplistic use of percentages, by the way, is typical of the kind of fast one rich bastards try to pull on people to con them into thinking the rich are not really the cheating bastards that they are.)

Second, what the "average" of a group of people does tells you practically nothing about any individual in the group, so the whole thing is somewhat pointless and silly. This is true of other things as well: If you know what the average height of a man is, what does that tell you about the height of a particular man? Whether the average millionaire is a cheating bastard or not will not tell you anything about whether or not a particular millionaire is a cheating bastard.

The 1% of earners paying 40% of taxes statistic is just that - a statistic. Nobody is trying to say that millionaires are allshining examples to society. The only point being made is that millionaires, as a group, pay the vast majority of taxes. Whether or not the rates they are taxed at are fair is another question altogether. People in lower incomes/tax brackets can and do cheat on their taxes as well as rich people.

Well, I'm glad you aren't responsible for setting tax rates! If you tax people so that everyone ends up with the same amount in his pocket, there will be no incentive to earn a higher income. They tried that in the USSR - "from each according to his abilities, to each according to his needs", or words to that effect. As I recall, it didn't work very well....

 

[Rickster71]

So what's your experience on the subject? What makes you think you know more than others? Why won't you shine your light of knowledge on us all? Can't answer simple questions?

My personal finances are non of your business.
Likewise, your lack of knowledge and limited, one sided views of the subjects, are non of mine.

You're trying to derail this thread because you don't like the subject.

Come to think of it; I'm hard pressed to find any helpful posts of yours in this entire forum.
Why are you really here?

 

[Pyrrho]

The 1% of earners paying 40% of taxes statistic is just that - a statistic. Nobody is trying to say that millionaires are allshining examples to society. The only point being made is that millionaires, as a group, pay the vast majority of taxes. Whether or not the rates they are taxed at are fair is another question altogether. People in lower incomes/tax brackets can and do cheat on their taxes as well as rich people.

Well, I'm glad you aren't responsible for setting tax rates! If you tax people so that everyone ends up with the same amount in his pocket, there will be no incentive to earn a higher income. They tried that in the USSR - "from each according to his abilities, to each according to his needs", or words to that effect. As I recall, it didn't work very well....

I did NOT say that that is how much people should be taxed; I said that they had that much more that was available for taxes and other things. The point being, everyone paying the same percentage of income in taxes is not appropriate or even possible.