Which suburb?

Mandor,

What exactly are you arguing other than some rambling anecdotal story? Of course the ranges would be skewed in expensive areas (NYC) vs rural areas (west texas). That doesn't mean the average is useless. If anything, it means some people earning far more will still be upper middle class because of their choice of locale. It goes back to my prior Uzbekistan/Angola example.

I thought we already did that earlier in the thread. Wealth basically - being able to retire at 40-ish to travel the world if you want - not poverty subsistence financial freedom. That's what I take it as, pretty sure that's what OP means, and I don't really care about getting into all the other acceptable definitions.

Ah sorry, I must have skipped that part. In any event, if that is the definition, then I would tend to think luck is going to be a pretty significant factor (unless that starting point was very high to begin with).

But this goes back to what was discussed earlier. If presented with a room full of young adults, I propose that to some degree the likely-to-be-successful kids will stand out, with very few surprises. Luck determines which of them ends up making $100 million before they are 30.

I think luck plays the same part that it does to a great poker player, and presents itself more so in the short term for most.

You can look at the luck issue the way you would in poker or some other form of gambling.

So you have your life EV which is your average lifetime earnings across infinite parallel but slightly different universes. You have your SD which measures the dispersion of your different outcomes around this EV.

Someone who takes a luck-centric view would say that our inherent EVs are fairly close but our average SDs are high, which is why incomes are so stratified.

The Henry view is that EVs vary widely but average SDs are relatively low.

My view is that EVs vary widely but SDs are rather high.

I think this is very good summary.

Doesn't this discussion go more to the shape of the curve than the SD?

Meh not really. I mean it clearly can't be a normal distribution but seems close enough for the purposes of pure analogy.

Ok lets say we have a highly-motivated, highly-intelligent, highly-ambitious, etc. etc. (name any skill you think matters) individual growing up with the right middle class US background (IE - no major impediments, decent education, but no seed money other than what he earns). I wouldn't be surprised if the odds of that person becoming independently wealthy ($3mil+ by age 45) are still > 100 to 1. If so then it's basically it's like one specific really good poker player winning a WPT event in one try.

But I dunno, if your only goal was to get rich seems like you'd just go into finance on Wall St. I know a ton of people who fit the description above but still would never want to work on Wall St. Maybe the Wall St. people are under 100 to 1 and the rest are higher. I don't know what it's really like on Wall St. But I'm sure everyone trying to get rich drastically over-estimates their chances. Just like every $100NL player who hopes to move up to nosebleeds someday.

I agree. Most people take safe routes and 3m+ by 45 doesn't occur in many safe routes san some WS/Big Law type paths where you're someone's slave for a few years

Btw I've heard people in Cali talk about needing $10M to me "free and clear" - meaning they can live in a nice house with a rich lifestyle and never have to work again if they don't want to. Definitely different ideas of financial freedom around the country. Of course this was also in the dotcom days when everyone thought they were going to be multi-millionaires when their POS company went IPO.

I don't understand. It seems to me that this is really an issue of fat tails (which is why I don't poker is a good analogy).

Bucks County.

I am arguing that 100k is very easily upper-middle class except in very high cost of living areas ( NYC, California etc ) I am also arguing that 50k is safely middle class in many parts of the country. Then again we never defined lower-middle class, which 50k is probably part of.

Okay, well you can continue with your made up definitions. Good luck.

I'm going to stick with whats on the wiki page.

I don't think $10M would be enough in Cali. It would be close to the minimum in Toronto and from what I've been told the nice parts of Cali are considerably more expensive.

Quoting from Wiki on the American Middle class.

Vernacular middle class

The term middle class in more colloquial language use may refer to all those individuals who might at one point or another be identified as middle class, as they occupy neither extreme of the socio-economic strata. Most of those with households income between $40,000 and $95,000 identify as "middle class."


Also Quoted from Wiki

The professional/managerial middle class

The "professional class", also called the "upper middle class", consists mostly of white collar professionals, most of whom are highly educated, salaried professionals whose work is largely self-directed. Many have graduate degrees, with educational attainment serving as the main distinguishing feature of this class. Typical occupations of the Professional Class would include University Professor, Physician, Lawyer, Accountant, Journalist, Architect, Physicist, Chemist, Engineer, Geologist, Actuary, Pharmacist, Dentist and Airline Pilot, and Policy Work. Household incomes commonly exceed $100,000, with some smaller one-income-earner households having incomes in the high 5-figure range.


Which means your original quote of

"Living a middle class lifestyle requires low six figures yearly. Shoe has this idea that poverty is rampant in society or that his miserliness exists in other people."

is wrong. Though correct if you meant upper-middle class.

Salary has nothing to do with wealth. Spending less than you earn does, however.

Also sorry on the 6% figure, I searched for households and misread the top few google results I had. Your incorrect numbers were obscenely high though.

I also get a kick out out how you continue to confuse frugal and cheap. There is a big difference. I only buy quality.

First it was not a scheme, but we have been over that. No it didn't turn out as hoped but saying it blew up in my face is far from true as well. My portfolio is still alive and kicking.

I love how you guys assume you know my views too. I have been one of the biggest proponents of renting, however, home ownership has its benefits that cannot always be obtained by renting. I do think renting until you can buy a place for cash is the best way to go about it if you decide you want to be become a homeowner.

Otherwise I think we have agreed that renting forever is often the best decision, from a strictly long-term financial perspective (obviously location dependent).

lul. I think I already acknowledge that I meant upper middle class by 100k+ incomes, though that figure is dated and likely no one making under 110k+ is in fact "upper middle class" if you want to argue that people in poor areas are... there is the opposite of more expensive areas. For every west Texas nub making 110 and being "rich" there is a guy living in Connecticut making 160k that can't send his kids to Exeter.

Regardless, the Shoe comments are ****ing ridiculous. Those are common definitions off the wikipedia page. The numbers now should be higher than before and scaled for inflation, current incomes from what they're posted. The easiest way is to use the % definitions rather than income figures as inflation exists. Not to mention I'm unaware of social structures that have restratified society recently.

Regardless, the income definitions are used as its a simple way to calibrate a scale. Having money or a high net worth does not make you any part of a social class anymore than spending a night in a barn makes you a horse. If you work in a factory, win the lottery, and still work in the factory and just leave the money in the bank, you are no more a member of the "rich class" than anyone else who works at the factory.

Can you show again why its better financially to buy a home after saving for 10 years rather than renting? I'm interested in:

1) Lowered quality of life at all points
2) Irresponsible use of money for "benefits of home ownership"
3) Absurd assumptions

CINCHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH HHHHHHHHHHHHHHHHHHHH-esque IMO

I think I could get by. $3mil house, $2mil worth of vacation houses, cars, boats, country club memberships, etc - then live off the $500k/year you should get from your $5 mil. If someone would like to give me $10M to prove my thesis, I will be happy to drop what I'm doing and participate.

lolololololololol at a 10% return. Try like 3% and that is generous. You're out of your damn mind.

Are you wil's gimmick or something? Are you seriously suggesting that Salary has nothing to do with wealth? Really?

Of course spending less than you earn also has something to do with wealth, but it doesn't mean that "Salary has nothing to do with wealth". False dichotomy FTL.

Can you explain how you intend to achieve this part?