http://www.businessinsider.com/bigge...onaires-2014-2
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Eagle2, you and I disagree from time to time ... but on this particular topic we are in 100% agreement. Down here way south of the border I tend to run into a whole bunch of guys who are 'millionaires'. Adding some comments to expand on your article.
A. 'A million dollars ain't what it used to be' ! Compared to 20 years ago, one million of today's US dollars buys what $663,000 US dollars bought 20 years ago ( by official CPI measure )
B. Outside of the tiny segment of 'uber-rich' who tend to show off their millions, most millionaire guys I have met are actually rather 'frugal'. They expect value in exchange for their money ... both in business deals and on vacation !
C. again, outside the tiny segment of 'uber-rich' who inherited much of their wealth, most millionaire guys I have met have an unstoppable work ethic. Being on vacation means 'only' spending 4 hours a day conducting business ... as opposed to their normal 12 hours a day.
Interesting article. I'm curious which metric is being used to define/qualify a millionaire: 1) Net worth 2) Investable assets ( defined as net worth LESS the value of ones primary residence, and retirement accounts [IRA, 401K, etc.]) 3) Other
Based on the context, I'd vote #3 ... investable assets plus gov't sanctioned retirement account assets, all of which can be liquidated to finance retirement.
BF has made a similar comment several times. Usually what he says is "for someone with so much money, you sure are cheap." I always remind him that I am frugal, not cheap.
Yet another thing BF doesn't really get. When we go on vacation, I still spend time on work. For one thing, I like running a business. I find it relaxing. For another, I really get bored very quickly when I am doing nothing. BF can spend a whole day fishing. Me, I need more stimulation. The last time I went fishing with BF, I ended up badgering the Captain about the fishing boat business. Turns out, it's a very lousy business if you own the boat. Not a terrible way to make a living if you are the boat's Captain. A really bad way to make a living if you are the boat's First Mate.Quote:
C. again, outside the tiny segment of 'uber-rich' who inherited much of their wealth, most millionaire guys I have met have an unstoppable work ethic. Being on vacation means 'only' spending 4 hours a day conducting business ... as opposed to their normal 12 hours a day.
Z
re 'frugal' ... yeah I've skirted the 'you sure are cheap' issue with a lot of guys. Hey, as long as they're not 'cheap' where I'm concerned !!! And like you I tend to be rather 'frugal' myself ... with the occasional glaring exception.
Re the boat business, indeed down here 'way south of the border' I see the intersection of 'milionaires' and boats all the time. The 'uber-rich' guys tend to be boat owners ... complete with custom built ostentation. The 'millionaires' almost always charter. The local boat owners are often one tank of diesel / one charter cruise away from bankruptcy ! A few of the 'millionaires' DO own their own 'not to ostentatious' boats ... but those guys also tend to 'live' on their boats for a good portion of the year, moving from port to port with the seasons while avoiding the tax man.
If you're in Sydney, Australia, a million dollars won't even buy you a house. If you're looking for people with money to throw around, millionaires won't cut it anymore ;) What an economy.
^^^ same is arguably true of Manhattan, San Francisco etc. Too damn many Chinese multimillionaires wishing to 'buy' citizenship these days ... not to mention the 'corporate landlord' hedge funds.
I just finished reading USA Today Sports Section article on the recent death of Detroit Lions owner William Clay Ford. According to the article, Mr. Ford bought the Detroit Lions in 1963 for $4.5M. Today, half the starters on the team probably make that, or more for annual salary.
^^^ no surprise there ...
http://inflationdata.com/Inflation/i..._inflation.jpg
Indeed in 1963 one could purchase a very nice new car for $2,000. A gallon of gasoline cost $0.25 . And a person with $1 million in the bank in 1963 was arguably 'set for life'. Today, thanks to cumulative inflation ( = loss of US dollar 'purchasing power' ), you can multiply 1963 prices by 10-15 times.
This also provides one of those so-called 'teachable moments'. Carefully notice 1971 on the above chart. That year was a 'watershed' for the US dollar's 'purchasing power'. In a nutshell, from the mid 1940's up until the mid 1960's, America enjoyed a near worldwide monopoly on manufactured goods ... thanks to the WW2 killing off an entire generation of German, Japanese and other foreign skilled workers, as well as WW2 bombing German, Japanese and other foreign factories into rubble. However, by the mid 1960's a new generation of foreign skilled workers was entering the workforce, and new foreign factories had been built. What followed was the 'invasion' of Volkswagens, Sony's, Honda's etc. ... which quickly grabbed market share away from American manufacturers, and which also flipped the status of the USA from a net exporter to a net importer. Net 'spending' for imports, combined with high US gov't spending ( of then 'newly' printed money ) on the Vietnam war and the ( then ) new Great Society social welfare programs, quickly ran the US Treasury 'dry' ( in terms of gold reserves anyhow ).
At that point the US gov't faced a dilemma. They could either reduce the actual number of dollars in American worker's paychecks to restore competitiveness with workers in Germany, Japan and other foreign countries ( not a realistic option for a number of obvious reasons ), or they could reduce the 'purchasing power' of the dollars in American worker's paychecks to ( hopefully ) achieve the same result without American workers taking much notice. Choosing the latter, the US dollar was 'cut loose' from its last ties to gold, and allowed to 'float' in value. Obviously, as can be seen from the chart, 'float' was a big time misnomer - with the purchasing power of the US dollar 'sinking' rapidly ever since.
(snip)"Under the gold standard, a government is limited – both legally and practically – as to how much paper money it can print. As recently as the Lyndon Johnson administration, the U.S. could print paper dollars equal only to four times the value of the nation’s gold reserves.
Under the gold standard, governments that print too much paper money risk runs on their gold reserves. Runs occur as holders of the paper seek to convert to gold before the vaults are empty. A run on the dollar is what happened in the late 1960s, which culminated in President Richard Nixon closing the gold window in 1971.
"Closing the gold window" is a euphemism for the U.S. defaulting on its promise to other countries to redeem dollars for gold. As an alternative, Nixon could have devalued the dollar and continued to redeem. In effect, he chose a one hundred percent devaluation, a de facto default on the promise to redeem.
In the 34 years before Nixon closed the gold window, the money supply in the U.S. grew less than two fold. In the 34 years after Nixon’s action, the money supply expanded 13 fold and the Fed Reserve has taken the US gold. "(snip)
Circling back on topic, prior to 1971, one million US dollars was a 'lot of money'. Today, $US 1 million is the typical contents of the retirement funds of several million Americans. I'm reluctant to guess what $US 1 million will be able to buy another 10 years from now.