The rich get richer... again

[disneysteve]

https://www.forbes.com/sites/tommybeer/2020/10/08/top-1-of-us-households-hold-15-times-more-wealth-than-bottom-50-combined/#245654825179

According to the latest Fed data, the top 1% of Americans hold 30.4% of all household wealth while the bottom 50% of Americans hold just 1.9% of wealth.

A critical factor in that growing inequality is access and exposure to the stock market. The top 10% of Americans hold 88% of all equity in corporations and mutual fund shares. The top 1% alone hold more than twice as much equity as the bottom 50% combined.

The pandemic has had a huge negative impact on the lower end of the scale while those at the top have grown richer than ever.

[corn18]

This happened in the late 20's as well. That fixed itself in a nasty way.

[bjl584]

It's more than just the stock market. It's all investments.
An accredited investor has access to a wide range of investment classes not afforded to the average person.
Money leads to more and more opportunity which leads to even more money.

The poorer and middle class segments of society don't have this opportunity.

There is also the argument that money is a mindset and that rich people got rich for a reason.
Most of them didn't hit the lottery.
It's probably more a combination of hard work, dedication, a leadership mentality, and smart decisions with money and in life.

[Snicks]

The forced lockdowns have been VERY good for Billionaires. Squashing commerce and capitalism in the name of "saving us" has resulted in the biggest wealth transfer ever to the uber rich. So, who do the lockdowns benefit? Them. And there is a lot of political pressure by these Billionaires to maintain us all in a state of permanent lockdown. "15 days to slow the spread". Uh huh. Now 7 months and counting. This all about CONTROL.

[amarowsky]

Corporate Socialism assures the wealthy (in this case, wealthy = ownership class, or that 10% who owns 88% of the stock market wealth, of course 1% getting the lions share) profits are secured before any surplus can trickle down int he form of: Corporate perks 1st bonuses/trips/meals/etc.. (all can be written off so spent haphazardly), company profits as stock value, and seemingly the last stakeholders to benefit are the increase in labor pay.

It's not spreading around the money properly, which I'd imagine is slowing down/retarding the country's marginal propensity to spend.

For business, the lockdowns seemed to almost hit private industry with laser precision. More specifically, smaller family owned , service & retail based private business. Because they're not conglomerates, they didn't sell "enough range" of merch or services to qualify as "essential".

Overall I think the bar for opportunity needs to be lowered.... I think there are a lot of people who are willing to work, but not willing to make the sacrifices to enable Worthy opportunity. I'm sure there is a team of smarter people out there who can craft a path to reduce the barriers to opportunity. I been trying to think of stuff.... with my friends. But it's hard to get this ball rolling.

(anyone have suggestions @ how to lower the barrier to opportunity for folks to earn good wages? I think our folks here have a good a chance as any bull**** gov't committee to manifest a effective proposal!)

Just crazy how much people like the FAANG primary owners have made.... I'm part time photographer making less than 25k a year for my primary work these days. And just because I had the luxury of having a (very very unsatisfying) but reasonably high paying corporate automotive job for a while. WHile doing that, + my good fortunes, + my savings & financial research, I put myself in the position, that my net worth increase by something to the tune of $120,000 overall from 3/2020 --> 9/2020. And I'm part time employee with limited assets, and in my opinion a strong Distaste for Greed.... If one were greedy, had a larger inheritance, or merely was already wealthy.... goodness It makes me shudder to think of how much wealth has appreciated for them during this massive corporate socialism giveaway to the ownership class.

Seems like trickle up would work better. But we've never tried it here. Merely rugged individualism is the prescription.

[Singuy]

Lol I love how they use Elon as an example. He is the only Ceo who has a compensation of 100% stock options based on hitting market cap valuation and ebita goals. He can't cash these options out until 5 years after he gets it. So basically his compensation is out of his control as it's controlled by the stock market in two of the riskiest business ventures in the world. His wealth is also 100% shares and vowed to be the last to sell, and so far after 8 years he have held to this promise, selling just a few shares for charity.

So yeah his chances of going bankrupt was at about 95% in 2008 and now that he made it..he is the poster boy of rich getting richer. You wouldn't sign up for his compensation package at gun point because it's ridiculously risky with zero salary. But hind sight is 20/20.

Now there are many hedge fund managers getting rich off stock market volitality and brings nothing productive to the world. Those people should be taxed hard.

[Fishindude77]

As someone who has employed a lot of people, we worked out tails off to try and provide good profit sharing and retirement plans for employees at all levels so they could build wealth and retire comfortably.
Had a system where everyone went into the 401k plan at the basic matching level unless they made effort to opt out, offered numerous financial training sessions, one on ones with private financial planners, etc., etc.

Kind of came to the conclusion that no amount of effort was going to change some of them after seeing; 401k's cashed in and borrowed against for stupid stuff, folks saying "I can't afford to participate in the 401k", wouldn't take time for any financial training, etc.
There is a certain percentage of the population that won't do anything to improve their lot in life and seem to be content living paycheck to paycheck, making silly money decisions all the time.

I think there is a lot of truth to the old adage that if you were to create income equality overnight and give everyone the same amount of $$, the money will rather quickly work its way right back into the hands of a small percentage of people who know how to make and hold on to money.

[Singuy]

As someone who has employed a lot of people, we worked out tails off to try and provide good profit sharing and retirement plans for employees at all levels so they could build wealth and retire comfortably.
Had a system where everyone went into the 401k plan at the basic matching level unless they made effort to opt out, offered numerous financial training sessions, one on ones with private financial planners, etc., etc.

Kind of came to the conclusion that no amount of effort was going to change some of them after seeing; 401k's cashed in and borrowed against for stupid stuff, folks saying "I can't afford to participate in the 401k", wouldn't take time for any financial training, etc.
There is a certain percentage of the population that won't do anything to improve their lot in life and seem to be content living paycheck to paycheck, making silly money decisions all the time.

I think there is a lot of truth to the old adage that if you were to create income equality overnight and give everyone the same amount of $$, the money will rather quickly work its way right back into the hands of a small percentage of people who know how to make and hold on to money.

I am 100% convinced that companies like Huawei wouldn't exist if China didn't go the capitalism route. Huge amount of income inequality in China today vs when I was there back in the 80s. However everyone is living a much better life due to the drive in some people.

So I don't agree with demonizing CEO billionaires. I don't mind higher taxes and funnel that money into healthcare, infrastructure, and education.

However I don't think there is an incentive in the US or anywhere to help people financially educated as it reduces the velocity of money. So I am okay with increasing taxes on the wealthy while decreasing taxes for the poor to increase the velocity of money in which the rich that create value will end up getting it eventually anyways.

It is difficult however to tax wealthy billionaires who own these megacorps as their money is paper gains from shares which is not taxable unless they sell. Taxing the market however results in less investments and growth. Very tricky situation which requires a lot of good brain storming to fix. It's really not just one solution to fix it all without consequences.

[disneysteve]

For business, the lockdowns seemed to almost hit private industry with laser precision. More specifically, smaller family owned , service & retail based private business. Because they're not conglomerates, they didn't sell "enough range" of merch or services to qualify as "essential".

The Covid situation hit businesses large and small. Look at all of the corporate bankruptcies so far this year. Just yesterday, Ruby Tuesday filed. Brooks Brothers, Neiman Marcus, Sweet Tomatoes/Soup Plantation, JCPenney. The list goes on and on. And yes, plenty of small family-owned places too. The difference is the big companies have some reserves and some standing in the world to attract investors that Joe's Coffee Shop doesn't have. Nobody is going to swoop in and save him.

A big problem with the Covid shutdowns is that they disproportionately affected lower income workers. When a restaurant shut down in-person dining and went to take out only, they no longer needed most of their servers and bus staff. When a retail store switched to curbside pick up only, they didn't need twenty cashiers and salespeople on the floor. They just needed a skeleton crew to process orders.

A great many middle and upper class folks have jobs that either continued uninterrupted (like my job) or could be done remotely. Lower class workers are more likely to have jobs that got shut down and they were done. They do stuff that can't happen remotely - retail, restaurants, construction, etc.

[Singuy]

The Covid situation hit businesses large and small. Look at all of the corporate bankruptcies so far this year. Just yesterday, Ruby Tuesday filed. Brooks Brothers, Neiman Marcus, Sweet Tomatoes/Soup Plantation, JCPenney. The list goes on and on. And yes, plenty of small family-owned places too. The difference is the big companies have some reserves and some standing in the world to attract investors that Joe's Coffee Shop doesn't have. Nobody is going to swoop in and save him.

A big problem with the Covid shutdowns is that they disproportionately affected lower income workers. When a restaurant shut down in-person dining and went to take out only, they no longer needed most of their servers and bus staff. When a retail store switched to curbside pick up only, they didn't need twenty cashiers and salespeople on the floor. They just needed a skeleton crew to process orders.

A great many middle and upper class folks have jobs that either continued uninterrupted (like my job) or could be done remotely. Lower class workers are more likely to have jobs that got shut down and they were done. They do stuff that can't happen remotely - retail, restaurants, construction, etc.

Yes, shut down is affecting them and a stricter shut down will just devastate low income workers.

Our adminstration got only half of this right and the other half so very wrong for political reasons. We should have very strict protocols for reopen and have everyone do their part to not screw themselves like what it is today. If only our president pleaded everyone to wear a mask, even shipping them out via USPS weekly. But instead this "don't live in fear" crap just destroyed low income workers and those same people cheer him on and blame China for whatever reason. The stupidity is absurd and finally shined through. I always wondered how half of my elementary class would make America the way it is..and now realized nope those people are out among us loud and proud. Can't wait to move out of this country.

[disneysteve]

We should have very strict protocols for reopen and have everyone do their part to not screw themselves like what it is today. If only our president pleaded everyone to wear a mask, even shipping them out via USPS weekly. But instead this "don't live in fear" crap just destroyed low income workers and those same people cheer him on and blame China for whatever reason.

Yep. Ignore the science, tell people to go on with their lives, damn the consequences. And when it all goes to hell, blame somebody else.

[Singuy]

Yep. Ignore the science, tell people to go on with their lives, damn the consequences. And when it all goes to hell, blame somebody else.

It's his double and triple down nature. I have never seen anyone successful who has never admitted a mistake and learn from it.

Let's just pretend Covid is as bad as the flu and people make it a huge deal, 79% of the voters in fact thinks it's a big deal. How is it a good idea to spend 6 months trying to convince people it's not a big deal by shaming them? Everyone who has a significant other knows that's like the root of all fights, belittling the other person's concerns.

[Thrif-t]

As someone who has employed a lot of people, we worked out tails off to try and provide good profit sharing and retirement plans for employees at all levels so they could build wealth and retire comfortably.
Had a system where everyone went into the 401k plan at the basic matching level unless they made effort to opt out, offered numerous financial training sessions, one on ones with private financial planners, etc., etc.

Kind of came to the conclusion that no amount of effort was going to change some of them after seeing; 401k's cashed in and borrowed against for stupid stuff, folks saying "I can't afford to participate in the 401k", wouldn't take time for any financial training, etc.
There is a certain percentage of the population that won't do anything to improve their lot in life and seem to be content living paycheck to paycheck, making silly money decisions all the time.

I think there is a lot of truth to the old adage that if you were to create income equality overnight and give everyone the same amount of $$, the money will rather quickly work its way right back into the hands of a small percentage of people who know how to make and hold on to money.

I so agree with you Fishindude77!

I think the key is educating our young, get them on the right track from the beginning and I'm trying my darndest to get all the kids in my life set up on the right path!

My 20 nephew works a factory job. I've been harping on my sister to get him to open a Roth IRA. She's one of those people who thinks he's a kid let him work and spend his money. I keep trying to tell her if he'd just get in the habit of saving a little bit now while he's young it will really compound into something by his retirement. Today I got an email from Schwab that I could send a bonus link to friends and family that open new accounts. I sent it to her and said if you'd research the Savers Credit, he could put 2k in that IRA and get a 2K credit on his 2020 taxes, take that 2k credit use it for a 2021 Ira, take the credit again open a 2022 Ira. FREE MONEY PEOPLE!! Told her rinse and repeat until he makes up to the income limit of I think?30k; which will be awhile for him!

It's so freaking maddening how lazy people are. They just can't be bothered with this stuff. He lives at home has no bills, they don't make him pay rent, but see no reason for him to worry about retirement at 20, he's just a kid.

So I think the government is trying to get people to save but most don't have the discipline. And yes, I know there are those who don't make enough to save, but I bet more people do make enough that just don't.

[myrdale]

I've always like the line from the movie The Village. The father asks his daughter what she knows of her grandfather. She states he was the richest man in town. The father replies:

"That he was, he had a gift for that. If he was given one dollar, in less than a fortnight, he would have turned it into five."

Regardless of your religious persuasion, it's biblical. Look at the parable of the talents. Two servants took what they were given and doubled it, while the third servant did nothing.

Also keep in mind, about 80% of millionaires in the USA are first generation rich. They have worked their butts off. Persistence, hard work, and sacrifice are how they achieved it.

The stockmarket and retirement savings are just tools which when used properly will put people ahead. Anyone can open an IRA.

Financial education is a huge part of it. Self control, maturity and lifestyle too. I can accept the argument that IQ plays a major role. But to say the poor don't have access to the stock market and point the finger as covid is disingenuous.

There is not a single "normal" 8 year old alive today who in the next 12 years, can't avoid getting pregnant, graduate high school, avoid drugs, attend a community college, find a job, live within their means, avoid debt, invest, and succeed in life. If they choose otherwise, then their financial outcome will be a reflection of their decisions.

[LivingAlmostLarge]

I so agree with you Fishindude77!

I think the key is educating our young, get them on the right track from the beginning and I'm trying my darndest to get all the kids in my life set up on the right path!

My 20 nephew works a factory job. I've been harping on my sister to get him to open a Roth IRA. She's one of those people who thinks he's a kid let him work and spend his money. I keep trying to tell her if he'd just get in the habit of saving a little bit now while he's young it will really compound into something by his retirement. Today I got an email from Schwab that I could send a bonus link to friends and family that open new accounts. I sent it to her and said if you'd research the Savers Credit, he could put 2k in that IRA and get a 2K credit on his 2020 taxes, take that 2k credit use it for a 2021 Ira, take the credit again open a 2022 Ira. FREE MONEY PEOPLE!! Told her rinse and repeat until he makes up to the income limit of I think?30k; which will be awhile for him!

It's so freaking maddening how lazy people are. They just can't be bothered with this stuff. He lives at home has no bills, they don't make him pay rent, but see no reason for him to worry about retirement at 20, he's just a kid.

So I think the government is trying to get people to save but most don't have the discipline. And yes, I know there are those who don't make enough to save, but I bet more people do make enough that just don't.

I can't believe that this is the norm. That people keep being so financially inept.