The Rich Get Richer, AGAIN

[VJW]

It’s been more than 60 years since the wealthiest Americans have held such a large concentration of the total income of the nation:

[cschin4]

The rich are always going to get richer. Obviously, they know how to make their money work for them and will continue to do so. And, all of us would do the same as well.
But, so what? We all can only work with what we have and try to make it grow and work for us too.

[Harrison]

I totally agree the fact that rich get richer. They simply have more money to invest, more money to start business and a proven money management system in their personal finance. If not I bet they won't be rich :-)

[jmjj215]

I believe a big factor in the rich getting richer is that they can afford risk. So in the long run, their returns are much, much greater.

[sweeps]

Excellent point, Jesse.

[slimcustomer]

It would be interesting to see if baby boomers being in their prime earning years has any affect on the results for this chart.

[b4freedom]

I think the larger problem is that the poor are become poorer and the middle class is slowly disappearing. This leads to other long term problems such as an increase in crime.

[sweeps]

This is somewhat off-topic, but I read an interesting suggestion in the latest issue of Business 2.0 (in the letters to the editor). Allow companies to deduct employee pay only up to 20 times the average worker at the company. So if the average worker gets $30,000, any compensation an executive gets over $600,000 that year is not tax-deductible by the company.

[Dixiechick]

Here's a good article to see what other people's definition of "rich" is...

http://articles.moneycentral.msn.com...ichReally.aspx

Also, here's a link to see how "rich" you are compared to others in this world...

http://www.globalrichlist.com/

According to this site, I'm in the top 0.72% of the world's population in "richness". I'm the 43,497,897 richest person in the world!

But I don't feel that way most times... I'm just a single working mother of 2 (one in college).

Dixiechick

[VJW]

Originally Posted by b4freedom

I think the larger problem is that the poor are become poorer and the middle class is slowly disappearing. This leads to other long term problems such as an increase in crime.

Exactly.

It’s not just that the rich are getting richer, but that that the income of our nation gets concentrated at the top, which thereby means everyone else gets poorer. We’ve seen this happen in other countries, where it develops oligarchies living behind high walls and tinted windows and everybody else on the other side.

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[PRICEPLUS]

I only worry about my wealth and not that of others. The definition of wealth is also very subjective. I am sure some Bangladeshi farmer would see my living standard as fairly opulent!

[SuzeOFan]

It’s not just that the rich are getting richer, but that that the income of our nation gets concentrated at the top, which thereby means everyone else gets poorer. We’ve seen this happen in other countries, where it develops oligarchies living behind high walls and tinted windows and everybody else on the other side.

Well, there are some big differences when comparing the U.S. (assuming that's where your from) and other countries. Education, opportunity and a free democracy.

In the U.S. you have every opportunity to become wealthy. And poor countries well know it. Why else would you have so many trying to get into the U.S.? What makes America so desirable is that ANYONE can succeed here if they're willing to work hard enough at it.

[DivaJen]

Originally Posted by jmjj215

I believe a big factor in the rich getting richer is that they can afford risk. So in the long run, their returns are much, much greater.

So true. It's easy to take risks when you have millions to your name. It's also easier to invest in properties and businesses when you have capital and collateral at your disposal.

[jmjj215]

Originally Posted by DivaJen

So true. It's easy to take risks when you have millions to your name. It's also easier to invest in properties and businesses when you have capital and collateral at your disposal.

The great thing about America though is that you really don't need "millions to your name"! As long as you commit yourself to living beneath your means, you will open up the doors to being able to afford the risk necessary to generate wealth. True, you maybe can't jump on the board of being a principal in the development of a new shopping center, but you maybe could partner with someone and purchase a duplex, or fourplex and start from there.

[jmjj215]

Originally Posted by Sweepsplayer

This is somewhat off-topic, but I read an interesting suggestion in the latest issue of Business 2.0 (in the letters to the editor). Allow companies to deduct employee pay only up to 20 times the average worker at the company. So if the average worker gets $30,000, any compensation an executive gets over $600,000 that year is not tax-deductible by the company.

Sweeps, right now I believe the cap for deductible salaries is $1 million - though that's arbitrarily set. The idea you mentioned above is pretty interesting.

[sweeps]

Originally Posted by jmjj215

Sweeps, right now I believe the cap for deductible salaries is $1 million - though that's arbitrarily set. The idea you mentioned above is pretty interesting.

Good point, Jesse. But as usual, there are loopholes.

[jmjj215]

Originally Posted by Sweepsplayer

Good point, Jesse. But as usual, there are loopholes.

I was going to bring that up, but didn't want to muddy the water

[VJW]

Originally Posted by SuzeOFan

In the U.S. you have every opportunity to become wealthy.

Actually, I previously posted (somewhere in this forum) the study recently released by the Federal Reserve that indicated that income mobility has been falling. Sadly, more than ever before, most children of rich parents stay rich, and most children of poor parents stay poor.

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[VJW]

Originally Posted by jmjj215

The great thing about America though is that you really don't need "millions to your name"! As long as you commit yourself to living beneath your means, you will open up the doors to being able to afford the risk necessary to generate wealth.

That is just more of the “Millionaire Next Door” theory, which has been shown to be a rigged study.

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[sweeps]

Originally Posted by VJW

Sadly, more than ever before, most children of rich parents stay rich, and most children of poor parents stay poor.

I won't disagree with that, but I'm interested as to why. Is it really because the tax laws are rigged or is it due to a host of other reasons?

One thing that comes to mind is that rich kids have not just the money but also the time to participate in activities, travel to many places, enjoy college, etc. Meanwhile poor kids often have to go straight to work or worse get involved in crime to make ends meet.