The rich get richer for 2 simple reasons. Half is because they are better with money management, they think about incentives and trends constantly and financially position themselves appropriately. The other half is that our money doesn't achieve its foremost goal of a store of value, leading to the monetization of assets like real estate and stocks; since rich people have a higher fraction of income/wealth towards investment, they capitalize on inflation that redistributes wealth towards assets; compared to lower income/wealth people who have a higher fraction towards consumer spending. The idea that the average income earner doesn't yeild the same as the rich is partly true, they have better access to advanced financial instruments, but its also that they are better at analyzing the incentives.
People don't like to talk a out that first point. Something like 70% of rich people in America weren't born rich. The fact that they're rich in the first place shows a filter they got through, they're good at getting rich which isn't easy. Of course saying "the rich get richer faster than the poor" after acknowledging this becomes nothing more than selection bias.
That second point, the monetization of non money assets due to debasement of our currency and how that creates a pressure imbalance that moves real wealth from dollar holders to asset holders, I'd say most people discussing this topic don't get. I get it, but before reading this I wouldn't have been able to articulate it so clearly. The mental model you have to have about finance and economics in order to even formulate that understanding is almost too big for one person's head.
Only sith deal in absolutes. Objectively the poor have money to manage, there is not likely to be a single person in the US that doesn't have money of some kind. Start an llc to avoid taxes, take on long term low interest debt to build credit and acquire wealth, don't have a kid out of wedlock. There are a variety of tips and tricks that almost anyone can engage in. I know a lot of rich people, and I know a lot of poor people, its a product of marrying someone born to a different economic class; the rich are always talking about how they are rotating their investments and ways they are finding to save money, the poor have their second baby (dad in jail) wearing the newest jordans. There is no comparison.
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The rich get richer for 2 simple reasons. Half is because they are better with money management, they think about incentives and trends constantly and financially position themselves appropriately. The other half is that our money doesn't achieve its foremost goal of a store of value, leading to the monetization of assets like real estate and stocks; since rich people have a higher fraction of income/wealth towards investment, they capitalize on inflation that redistributes wealth towards assets; compared to lower income/wealth people who have a higher fraction towards consumer spending. The idea that the average income earner doesn't yeild the same as the rich is partly true, they have better access to advanced financial instruments, but its also that they are better at analyzing the incentives.
People don't like to talk a out that first point. Something like 70% of rich people in America weren't born rich. The fact that they're rich in the first place shows a filter they got through, they're good at getting rich which isn't easy. Of course saying "the rich get richer faster than the poor" after acknowledging this becomes nothing more than selection bias.
That second point, the monetization of non money assets due to debasement of our currency and how that creates a pressure imbalance that moves real wealth from dollar holders to asset holders, I'd say most people discussing this topic don't get. I get it, but before reading this I wouldn't have been able to articulate it so clearly. The mental model you have to have about finance and economics in order to even formulate that understanding is almost too big for one person's head.
Doubtful. More likely they can simply afford to have people who ARE better with money management manage their money.
The poor, they don't have any money to manage. Stop assuming they're shit at it. If anything they have to be a damn sight more clever about it.
Only sith deal in absolutes. Objectively the poor have money to manage, there is not likely to be a single person in the US that doesn't have money of some kind. Start an llc to avoid taxes, take on long term low interest debt to build credit and acquire wealth, don't have a kid out of wedlock. There are a variety of tips and tricks that almost anyone can engage in. I know a lot of rich people, and I know a lot of poor people, its a product of marrying someone born to a different economic class; the rich are always talking about how they are rotating their investments and ways they are finding to save money, the poor have their second baby (dad in jail) wearing the newest jordans. There is no comparison.