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Topic: There aren't as many rich people as you think
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Doug
rabble-rouser
Babbler # 44
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posted 24 June 2008 04:29 PM
Their numbers are rapidly growing, but perhaps surprisingly, only 10.1 million people in the world are worth more than $1 million US.http://news.bbc.co.uk/2/hi/business/7472436.stm quote: Their combined wealth also rose, by 9.4% to $40.7 trillion, according to Merrill Lynch and Cap Gemini. The fast-growing economies of India, China and Brazil saw the biggest rises in the number of wealthy individuals. The number worth more than $30m increased by 8.8%, while their total wealth grew by 14.5%.
From: Toronto, Canada | Registered: Apr 2001
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Sven
rabble-rouser
Babbler # 9972
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posted 25 June 2008 08:03 AM
quote: Originally posted by abnormal: And after adjusting for inflation, by the time that 25 years had gone by, you might be able to buy a good dinner with that much money.
That is, of course, an excellent point. For example, if inflation is running at an annual rate of 3.5%, that $70,500 in the twenty-fifth year will have the purchasing power (in today’s dollars) of a mere $29,800. And some people would classify that as being “rich”.
From: Eleutherophobics of the World...Unite!!!!! | Registered: Jul 2005
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Sven
rabble-rouser
Babbler # 9972
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posted 25 June 2008 08:36 AM
quote: Originally posted by Michelle: That's nice and all, but it's really not on topic.It would be really nice if we could have a discussion about income disparity without all the classic derailing about how everyone is rich if they have love, or everyone is rich because what they pay for dinner now would have bought them a house 50 years ago or whatever.
Being "rich" in love is a bit off-topic. But, understanding what "rich" means is quite another (the term is used in the title of the thread, after all). What does it mean to retire with, and to live off of, $1 million? It means, for example, that at a 5% return with a 3.5% inflation rate, that retiree will have (in real 2008 dollars) about $29,000...and then nothing...in the twenty-fifth year of living off of that money. Now, some people would say that person is “rich”. I would not.
From: Eleutherophobics of the World...Unite!!!!! | Registered: Jul 2005
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abnormal
rabble-rouser
Babbler # 1245
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posted 25 June 2008 09:18 AM
I found the original report.http://www.ml.com/media/100502.pdf Forty pages that really doesn't say huge amounts. The number of HNWI (High Net Worth Individuals) is apparently calculated by applying theoretical wealth distribution tables to the total wealth of the country and those wealth distribution tables are in turn based on a theoretical link between income and wealth. I suspect the margin of error in the conclusions is significantly in excess of the percentage changes in the numbers of HNWI's the publication is actually discussing. One thing that is important. Wealth, as used in the paper does not include the individual's principal residence or a number of other things.
From: far, far away | Registered: Aug 2001
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bruce_the_vii
rabble-rouser
Babbler # 13710
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posted 25 June 2008 03:48 PM
quote: Originally posted by Michelle: The fact that there aren't as many rich people as we think is actually not a GOOD thing. It's a bad thing. When a very small percentage of people are rich and the rest of us are not (especially considering that the majority of the world's wealth is "owned" by that very small minority of people), that's a bad thing.[ 25 June 2008: Message edited by: Michelle ]
I don't have statistics at my finger tips but I don't think the worlds wealth is concentrated in capitalists any more. In the modern situation the broad middle class saves for retirement especially through corporate pension plans and there's a lot of money in that. Old age is really what propels savings. However, I've repeatedly read that in the USA the bottom 100m or something are worth less than Bill Gates alone. In the USA there's a steep death tax whereas in Canada the rich's offspring have no such tax. In the emerging economies the savings rate is very high, average people save, such that China is financing the US deficits.
[ 25 June 2008: Message edited by: bruce_the_vii ]
From: Toronto | Registered: Dec 2006
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Doug
rabble-rouser
Babbler # 44
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posted 26 June 2008 05:41 PM
quote: Originally posted by Sven:
What does it mean to retire with, and to live off of, $1 million? It means, for example, that at a 5% return with a 3.5% inflation rate, that retiree will have (in real 2008 dollars) about $29,000...and then nothing...in the twenty-fifth year of living off of that money.Now, some people would say that person is “rich”. I would not.
By global standards they are. As mentioned above, only a little over ten million people own at least that much. Divide that into, oh, roughly 5 billion adults and you can appreciate what a tiny proportion of people that is.
From: Toronto, Canada | Registered: Apr 2001
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Sven
rabble-rouser
Babbler # 9972
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posted 26 June 2008 07:52 PM
quote: Originally posted by Doug: By global standards they are.
That's true. And, by global standards, most of the North American poor are "rich" (when considering that 2+ billion people in the world live on $2 per day (or less). Clearly, by global standards, everyone on babble reading these words is "rich".
From: Eleutherophobics of the World...Unite!!!!! | Registered: Jul 2005
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Lard Tunderin' Jeezus
rabble-rouser
Babbler # 1275
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posted 27 June 2008 04:31 AM
quote: Originally posted by Sven: Being "rich" in love is a bit off-topic. But, understanding what "rich" means is quite another (the term is used in the title of the thread, after all).What does it mean to retire with, and to live off of, $1 million? It means, for example, that at a 5% return with a 3.5% inflation rate, that retiree will have (in real 2008 dollars) about $29,000...and then nothing...in the twenty-fifth year of living off of that money. Now, some people would say that person is “rich”. I would not.
The disconnect here is incredible. what incredibly tiny fraction of the world has the option of retiring? Even in N. America, it is a matter of class and privilege, Sven. You would do well to try to recognize the privilege you enjoy.
From: ... | Registered: Aug 2001
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Sven
rabble-rouser
Babbler # 9972
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posted 27 June 2008 05:44 AM
quote: Originally posted by Lard Tunderin' Jeezus: The disconnect here is incredible. what incredibly tiny fraction of the world has the option of retiring?
And to that, I would respond as I did above: quote: Originally posted by Sven: That's true.And, by global standards, most of the North American poor are "rich" (when considering that 2+ billion people in the world live on $2 per day (or less).
quote: Originally posted by Lard Tunderin' Jeezus: Even in N. America, it is a matter of class and privilege, Sven.
Yeah, for people like janitors with an 8th grade education (Ms. Sven's father), file clerks (Ms. Sven's older half-sister), shoe-store salespeople (like my Uncle), and many other "privileged" folks... ...and, now that I think about it, we should have taxed the hell out them so they couldn't retire (that way, they wouldn't enjoy their "privilege" and everyone would be "equal"). Of course there are people who cannot, for a variety of reasons, retire. But, it's a tiny minority.
From: Eleutherophobics of the World...Unite!!!!! | Registered: Jul 2005
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Doug
rabble-rouser
Babbler # 44
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posted 10 July 2008 09:35 AM
Oh yes, poor people can save for retirement too: quote: When 60-year-old Laxmi Das recently deposited her earnings in an Indian bank in Calcutta, it was a bit more than the usual mundane money transfer.Ms Das handed over 91kg (200lb) of coins - the produce of 44 years of hard begging - enabling her to open an account and qualify for a credit card. Laxmi began begging near Hatibagan, a busy road junction in northern Calcutta, at the age of 16. Officials say she could have saved as much as 30,000 rupees ($692).
http://news.bbc.co.uk/2/hi/south_asia/7495478.stm
From: Toronto, Canada | Registered: Apr 2001
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Sven
rabble-rouser
Babbler # 9972
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posted 10 July 2008 12:48 PM
quote: Originally posted by St. Paul's Progressive: Certainly in a major North American city like Toronto, being worth $1 million does not make you all that rich, though you can certainly live a comfortable, upper middle class life.
I’m not so sure that the “upper” adjective applies. Let’s say you retire at age 65 and plan on living off of $1 million for 25 years. At 5% interest, you would exhaust your full savings by age 80 by living off of $71,000 per year. But, remember, assuming a 3.5% inflation rate, that last $71,000 would only be worth, in today’s dollars, $30,000. Can a person survive on $30,000? Of course. Is it “upper middle class” living? Not so much. quote: Originally posted by St. Paul's Progressive: Remember the term millionaire was coined during the Guilded Age, when a million dollars was worth [it].
In 1913, which was a couple of decades after the “Gilded Age”, the consumer price index was created. In 1913, a million dollars would be worth $22 million in today’s dollars. I would guesstimate that $1 million in the Gilded Age would be worth somewhere around $30 million to $40 million in today’s dollars. So, yeah, being a “millionaire” today ain’t what it used to be...not by a long shot. [ 10 July 2008: Message edited by: Sven ]
From: Eleutherophobics of the World...Unite!!!!! | Registered: Jul 2005
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Fidel
rabble-rouser
Babbler # 5594
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posted 10 July 2008 11:29 PM
quote: Originally posted by Sven: By the way, with regard to taxpayers "paying" for CEO's compensation: If a CEO is paid $1 million, then the company that paid that money deducts that as an expense (so, let’s say that the taxes otherwise payable by the company are reduced by about $300,000). But, the $1 million is taxable income to the CEO (probably in the neighborhood of $300,000). So, I don’t see how the taxpayers are "paying for" any of the CEO's compensation.
I'm not sure what the upper limit is for writing off a CEO's pay in either country. What they are suggesting in the CSMonitor article is an upper limit for deductability be defined as "excessive pay" ie. 25 times lowest salary on the company's payroll. I presume there is no excessive pay plateau defined now for which to apply any sort of rule. CEO's are often paid bonuses, and by stock options, preferred shares paying dividends etc, for which income tax is deferred or paid upon cashing out. Sometimes CEO's have been known to cash out at "opportune times" and usually just before the stock takes a swan dive. In other instances, CEO's and upper management have downsized workers and channelled workers salaries no longer paid out into their own upper management bonus structures. AT&T was a bad example. And taxpayers pay for that through benefits paid to newly unemployed workers, and when other workers are laid off in local economies as a domino effect.
From: Viva La Revolución | Registered: Apr 2004
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Sven
rabble-rouser
Babbler # 9972
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posted 18 July 2008 10:02 AM
quote: Originally posted by St. Paul's Progressive: I should have made my point clearer. My point was that a net worth of $1 million or so is typical of an upper middle class professional. Surely you aren't arguing that there are lots of working class people with net worths like that.
No, there are not a lot of working class people with a $1 million net worth. At one time, a “millionaire” was someone with unreachable wealth (like a Bill Gates or a Warren Buffet). But, today, if a person has $1 million, it’s not like they are vastly wealthy. Like I said above: quote: Originally posted by St. Paul's Progressive: Let’s say you retire at age 65 and plan on living off of $1 million for 25 years. At 5% interest, you would exhaust your full savings by age 80 by living off of $71,000 per year. But, remember, assuming a 3.5% inflation rate, that last $71,000 would only be worth, in today’s dollars, $30,000. Can a person survive on $30,000? Of course. Is it “upper middle class” living? Not so much.
From: Eleutherophobics of the World...Unite!!!!! | Registered: Jul 2005
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