Sometimes I lay under the moon and thank God I'm breathing! Are you happy?

I believe most people in general spend everything they earn and end up living paycheck to paycheck! Your SF friend is among the 10-20% of the population who are able to save. CNBC had an article back in the day about people’s savings habits and surprisingly the inability to save for the future spans all wealth classes. If I remember correctly, about 50% of people couldn’t afford a 400 buck emergency! That’s insane.

This is true…up to a point. Sure, the more you earn, the more you spend, but here’s the thing… If you were smart with money making very little money, often times you will also be smart with money making a hell of a lot more money. The point is, having more money is better than having less money. I would think that this would be fairly obvious on a forum catering to investment professionals…

lol that article along with substantial amount of books out there say there is low correlation for the general population. the outliers you talk about is a small percentage. a simple google search would teach you this. but lets cut the bs. whats the net worth. whats your age. i simply ask. because even if you did clear real money. your net worth is still going to be stifled via tax.there’s a reason why you couldnt fathom a person having 5m at 48. and thats because you are nowhere close even with your “real money”. and this has more to do with your age and your past mistakes.
here’s a key excerpt"
At first, the relationship between income and wealth may seem simple: as income increases, so too should wealth. Indeed, many assume that these indicators are strongly and positively correlated. In reality, the correlation between income and wealth is positive but relatively low, and there is no single, simple explanation for what happens to wealth when income rises.

The correlation between total household income and total net worth among US households is .50 and varies depending on the definition used (Table 1).

For instance, the correlation between wage/salary income and net worth is .21. That means that when we remove investment-derived income (e.g., interest, dividends) from the calculation, the correlation between income and wealth drops further.

Your reliance on flawed research is no surprise to me from the belief pattern demonstrated by your posts; I hope you have better advice to offer the paying clients at your firm. You are determined to make it big, and I hope that you are successful. But your overconfidence in the results from lazy thinking is comical, particularly how righteous you are in the belief that your way is the only way. Open your mind.

Are you telling me, that because some random “research piece” shows these correlation-but-not-causality results, that it is a total coin flip in terms of wealth accumulation outcomes between someone earning $50,000 a year and someone earning $500,000 a year over long time periods?

well with that scenario, its not likely.
50k is too low. that will barely cover minimum living expenses in hcol area. the saving comparison net of taxes and minimal living expense of 50k will be 0 vs 250k. there is no savings essentially. your tax benefits to save is minimal as well. every dollar past 55k is when you start to get minimum 30% marginal tax benefits for every dollar saved. and yearly you can shelter about 30k through 401k, ira, hsa. if you own a home your mortgage capped at 750k can shelter another 22k in income. so about 100k is really what you need for optimization assuming you live off 50k.
comparison becomes 50k vs 250k. so there is a fighting chance.
but people who make 500k are not spending only 50k in after tax on themselves. more likely they are spending closer to 200k. which closes the game to 50k savings vs 100k.
its crazy that you say i need to open my mind. when this is literally every book and research piece out there. at the end building net worth is all a game. the rules are set. you just gotta play it the right way given the cards you are dealt.

If arguing about income vs wealth on AF is what brings you happiness, then go on with your bad self.

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also another fun fact. for the top 1 percent. net worth peaks at around 15m. they reach it around their 50s. implies thats when the majority of the 1% quit the rate race. everybody quits at some point once they have enough. so as TI in kanye’s hit song drive slow says:
Life about who make it, not about who make it the fastest
Drive slow homie

:broken_heart: :hocho:

lol well it makes sense for this forum though no?

Listen, we can argue the specifics all day of what textbook examples will lead to what results. But that’s actually not my argument. My argument is that you are implying that there is no connection between people who make more money and people that have higher net worth. And I’m saying, there absolutely is a connection. Do you deny that if you have more money in hand, you can invest more? If you do, next, let’s argue about the color of the sky.

We can look at psychological data suggesting that some people earning more will spend more than they should, which might be relevant for a subset of people. But it sounds like you’re saying, someone that makes $100k is inherently smarter and a better investor than someone making far more than that. And that’s just silly. It sounds like the classic defense mechanism of rationalizing where you are in life by downplaying others’ success.

Would you turn down an offer to make two, three, or even four times what you’re earning now? Would that somehow dull your sharp investment abilities?

if you make more, you have more opportunities to invest more. but thats not what happens as shown by the data.
nowhere did i say that a small amount of income will make you a better investor. that would be ridiculous. i think my primary focus was that the high taxation eliminated a majority of the income gap. and lifestyle creep took it down more. at the end willingness to take risk can close that gap and lead to the low correlation between income and net worth. not downplaying anyone’s success. its just pure math to rationalize the actual data.
and lastly, i would not turn down more money right now. im too poor! more money will not make you a bad investor at that level.
having said that many billionaires have complained that once their asset base got too big (20b+ range for rentech), that their returns starts to fall towards the market return. but that is billions away from a 500k salary.

Took the words out of my mouth.

my sister literally just texted me if she should get an mba. because she is in a leadership conference saying shes the only one wihtout cpa/cfa/mba. i told her no. cuz she makes 185k/year has 2 kids and is 35. with my step bro they are clearing close to 350k. i told her not to. anyways she is 4 years older, makes more, but guess what, we still have same exact net worth.

Making a mental note to comment here. Some quick observations include: DOW is one of the more cynical online personalities I’ve come across, with a keen sense of humour shaded with dark undertones - which may or may not be intended humour; Nerdy severely underestimating the cost of children in his net worth Vs sister calculation; although I think he’s on to something re income to net worth ratios. But overall, a terrible debate with an over abundance of personal attacks. I’ll add a few more unwanted cents eventually. Cheers.

Making a mental note to respond — nobody asked.

Hence I’ll add a few more unwanted cents when I get around to it.

Honestly we won’t know until we get there. But I think I’ll be fine with the cost of kids and keep it under 5k a head. They have a 2k tax benefit. So I’m guess net cost of 3k each. What is the biggest cost of a kid? I always thought it was a nanny, a Montessori, and healthcare. 2 of those I won’t need. And the healthcare is heavily subsidized for me. Everything else like food, toys, clothes is cheap plus i got a ■■■■ ton of hand me downs from my sisters. I got it stock piled in my office already lol.
Lastly I’m thinking dow just hates that I have rosy expectations that borderlines hubris. And he has a point. Old age does give you more wisdom when you experience more trials and tribulations, but it also makes you more jaded and pessimistic. I on the other hand have not experienced such sorrows. As I’ve always said, my life is lit and i don’t give a ■■■■. But a job loss, a divorce, or a disability, can easily destroy everything I’ve built. The foundations are not yet finished and i still have at least 10 years more to negate those risks!!!

I don’t know mang. You seem a little light in your estimate. I have 8 nieces and nephews so I have some indication. I’d put it more in the 10k/year range for the first few years and increasing from there (travel, sports, etc). They’re expensive little buggers.

And how old is dow? I doubt he’s an old man. Probably early mid 40s, which isn’t far off me.

DOW is wise beyond his years, but he still has a few years under his belt.

Too bad child labor is not kosher anymore. Back in the day kiddos were NPV positive investments!