I have friends who are US citizens and have corporations that they contract through. They’re doing pretty well.
That’s not exactly true. Well, it’s technically true, stipulating that “exceptional” means “to the specific people in that particular place and time”.
But every one of us, from the homeless man in jeans in an alley to the drunks at the bar, are “millionaires” compared to most people in history. I mean, denim is a strong, durable, long-lasting fabric. To most people in history who wore undyed, coarsely-woven canvas tunics, blue jeans would have been an impressive space-age material, and would have fetched a very high price. The access to medical care, clean water, shelter and food that even the poorest person today has is unprecedented. Even kings and emperors in the past lacked vaccines, antibiotics or water that was safe to drink.
So it is certainly possible, and indeed a realistic goal, for the majority of future Americans to live like millionaires do today, or have an even better lifestyle. It will take a lot of work, but it’s not economically impossible. In fact, it’s simply continuing the trend.
No its not because the two things that are not going to get cheaper is labor and physical space. There isn’t any more land being produced, real estate only gets more and more expensive as the population increases. Secondly automation can replace a lot of things, but it doesn’t replace being able to pay another person to do the shit things you don’t want to do, whether thats cleaning or accounting. Being rich nowadays should be defined as having a large amount of physical space that you own / control and having a staff to do all the unpleasant tasks you don’t want to do. No technology advance is going to make those things available to the majority of people.
Good point. Which is why my earlier post mentioned magic robots.
Sure and 100 percent realistic virtual reality might enable us all to have virtual mega mansions and a virtual harem of 1000 women / men depending on your gender and the way you swing. But there will still be an elite who genuinely have a physical mansion, space, and a staff they can command.
Most high executive positions aren’t going to pay THAT much. It’s not enough to be an executive; you’d have to be a chief executive, or at least a high ranking chief officer, in a very large company indeed.
Most company executives won’t make a million dollars a year. If you wanna make that kind of money you usually need to OWN the company.
Yep, a VP at Apple probably makes around $200K a year and doesn’t get much in stock options unless they joined very early. And companies like Apple have a shit load of VP’s. Its only the division heads or celebrities like Jony Ives that are making the really big money, and their salaries are very much tied to performance. If your department tanks you get fired… $200k a year in the SF Bay area makes you comfortable, it doesn’t make you rich.
I rather suspect it is more than that, given my non-VP salary. New PhDs in CS and engineering are getting over $100K these days.
They might not get stock options, since a change in the tax law makes them not as attractive, but I’m sure they do get stock grants that vest over time.
Now, Apple might be cheap, but I’ve heard lots of bad things about working there but never that.
Remember that recession thingy we had a few years ago? Lots of people lost a shitload of money on real estate, because it got cheaper. In fact, I’m not sure real estate prices are back to their 2006-ish peak yet.
In real terms the minimum wage has been going down for decades. In 1998, I got a job at McDonald’s as a high schooler after a five minute interview, starting at a quarter over minimum wage. Nowadays, McDonald’s requires personality tests, references, 24-hour availability, etc. And they pay exactly minimum wage, and lower where possible (for example, minimum wage in Missouri is $7.50 for the first six months, then they have to pay you $8).
Real estate can and does get cheaper. Labor can and does get cheaper. Oil can and does get cheaper. Energy can and does get cheaper.
Also, what is a smartphone but an assistant? Hell, before they had smartphones they had the same thing but without cell reception. They were called “Personal Digital Assistants”. What is plumbing and running water but an assistant? Used to be you had a servant fetch your water and empty your bedpan. Now you just flip a switch to do both. That’s extremely wealthy compared to almost anyone from the 18th century. And as technology progresses, we’ll get a lot more of these “assistants”.
That’s exactly what automation does. It replaces paying someone to do things you don’t want to do.
Also, the fact that labor is getting more expensive is evidence that I’m right. You think anyone in 1935 would have turned down a $7/hr job? People today have more skills, more luxuries and more wealth than almost anyone who wasn’t rich had in 1935. Americans today won’t settle for 50 cents per hour anymore, precisely because we’re “rich”. But someone in Bangladesh might be pretty happy with that wage. Just because we’re poor compared to Bill Gates doesn’t mean we aren’t rich compared to someone from Bangladesh or 1935. And I would hope my grandchildren laugh at how poorly I lived in the 80s compared to them. I don’t see this trend stopping, just speeding up and slowing down along with the economy.
That may or may not be true.
But that is kind of beside the point of the OP.
Get “rich” by getting a hard to get degree that pays well…:dubious:
First, most people can’t do it.
Second, if everybody could…they would…and it would pay like McDonalds would.
Third, even if the first two weren’t true in some strange universe, there would only be a limited number of slots available for the job anyway.
Perhaps it’s different in Australia, but in the US it’s tax avoidance that’s legal and tax evasion that’s illegal. Also, the US doesn’t have franked dividends. We do have the notion of carried interest, which is a means for wealthy funds to pay their managers in a way that gets taxed at preferential capital gains rates. But it pretty much only applies to fund managers.
How much tax reduction do they see?
For one thing, that’s not the condition stated by the OP, who was clearly asking why we don’t see most Americans earning and living like the wealthiest Americans. Which is intrinsically impossible, as I said.
For another, I question the hell out of the assertion that the homeless man in jeans in an alley necessarily has a fantastically superior existence compared to most people in history. Freezing your ass off in a dirty alley has never been considered a rich-person luxury lifestyle, and I don’t think the existence of denim or even cellphones and antibiotics is sufficient to offset that fact.
Yes, I agree with you that the average person today has access to amenities and technologies that yesterday’s aristocrats could only dream of. And I agree that, with continuing development and a proper social safety net, the average people of the future may have access to even more modern conveniences that today’s millionaires would envy.
But, absent some kind of draconian communist restructuring, the lifestyles of a small wealthy elite will always be much more luxurious than those of their non-wealthy contemporaries.
:dubious: Make up your mind: is labor getting cheaper or more expensive? Personally, I’m not seeing how the fact that a fast-food job is harder to get and less remunerative in real terms than it was a few decades ago is evidence that the average person is better off overall now than they were then.
Generally they can reduce from 30 percent to around 15 percent total tax liability but its only worth setting up if you earn a certain minimum amount because of the extra legal / accounting fees involved. Those would average 2000- 4000 a year with an initial one off setup fee around $5K.
Expecting a 7% return in an investment that’s safe (like in there’s no way your investment is going to suddenly lose half its value) doesn’t seem that reasonable to me. Besides, you have to deduce from it inflation, and then taxes on your return.
I would think that expecting a 3% return after inflation and taxes is more reasonable. Which means, at 60, assuming that you live this long, that the dollar you saved when you were 20 now turned into 3.26. Now, is it worth it? Especially given that people income *tends* to raise over their lifetime. You're usually making more at 60 than you were at 20. So, it's not even obvious that those 3 dollars at 60 will have a marginal utility higher than the 1 dollar you saved at 20. So, for instance, you could pay for a 3260 vacation at 60, but will this make your life better on the overall than a $ 1000 vacation when you were 20 would have?
You could live very modestly for 40 years, and then buy a mansion much bigger than your coworkers earning the same who have lived paycheck to paycheck, but it’s not obvious that their lives won’t have been better overall.
I know a few Apple VP’s personally. Judging from the cars they drive and their lifestyles ( and considering the enormous cost of living anywhere near Cupertino) they don’t seem that well off. Facebook, Google and all the other younger tech companies are the ones that pay lavish salaries and massive stock options.
Ok great, we’re seeing some actual number from you now. Are we talking S, C, or LLC? Are they following the “reasonable salary” rules?
My husband was in the running for a VP at Apple job. Salary is right on. We couldn’t afford to take the job since he made that much in Minnesota where it is way cheaper to live.
(Netflix and Amazon were similar stories. $200k a year for a VP job in the Midwest is a way better deal than the same salary in Bay or Seattle.)
OP is curious why people don’t accumulate wealth, and we have an example of attitudes that contribute to that:
7% is market CAGR after inflation since the 50s. We don’t know what will happen tomorrow, but it’s not an unreasonable number for someone retiring today. No, that’s not “an investment that’s safe”. That’s why people generally diversify, and derisk as they approach retirement. And if you’re only saving a piddling $5k, there are multiple tax-advantaged options. But I hope you already know all that.
Maybe they are good with money? You couldn’t tell my salary from the car I drive and my lifestyle either. And while Cupertino has always been ridiculously expensive, if they bought a while ago it was much less so. I don’t live in Cupertino but I do own a house that is worth a totally absurd amount.
I’m just down the hall from my VP. He is not a conspicuous consumer, and if he makes only $200K I’d be shocked.