Class, Behavior, and Just Dessert
About 11 years ago, now, Gene Marks wrote an essay called “If I Were A Poor Black Kid“. (This essay is no longer officially readable. It gives a note that says “This page is no longer active”. But if you do a ctrl-a and paste the outcome into a notepad file, you can still read the text.)
Here’s a representative paragraph:
If I was a poor black kid I would first and most importantly work to make sure I got the best grades possible. I would make it my #1 priority to be able to read sufficiently. I wouldn’t care if I was a student at the worst public middle school in the worst inner city. Even the worst have their best. And the very best students, even at the worst schools, have more opportunities. Getting good grades is the key to having more options. With good grades you can choose different, better paths. If you do poorly in school, particularly in a lousy school, you’re severely limiting the limited opportunities you have.
There were a bunch of responses to this essay and many of them were strongly felt. A lot of them pointed out the whole issue of how everybody thinks that they are extraordinary when, really, they’re probably in the middle of their own pack. Here’s Ta-Nahesi Coates:
When I read this piece I was immediately called back, as I so often am, to my days at Howard and the courses I took looking at slavery. Whenever we discussed the back-breaking conditions, the labor, the sale of family members, etc., there was always someone who asserted, roughly, “I couldn’t been no slave. They’d a had to kill me!” I occasionally see a similar response here where someone will assert, with less ego, “Why didn’t the slaves rebel?” More commonly you get people presiding from on high insisting that if they had lived in the antebellum South, they would have freed all of their slaves.
What all these responses have in common is a benevolent, and surely unintentional, self-aggrandizement. These are not bad people (much as I am sure Mr. Marks isn’t a bad person), but they are people speaking from a gut feeling, a kind of revulsion at a situation that offends our modern morals. In the case of the observer of slavery, it is the chaining and marketing of human flesh. In the case of Mr. Marks, it’s the astonishingly high levels of black poverty.
—
Still, we are — in the main — ordinary people living in plush times. We are smart enough to get by, responsible enough to raise a couple of kids, thrifty to sock away for a vacation, and industrious enough to keep the lights on. We like our cars. We love a good cheeseburger. We’d die without air-conditioning. In the great mass of humanity that’s ever lived, we are distinguished only by our creature comforts, and we are, on the whole, mediocre.
That mediocrity is oft-exemplified by the claim that though we are unremarkable in this easy world, something about enslavement, degradation and poverty would make us exemplary. We can barely throw a left hook–but surely we would have beaten Mike Tyson.
I spent years chewing on that. Finally, Kazzy brought to my attention “A Framework for Understanding Poverty” by Ruby Payne:
A Framework for Understanding Poverty by Ruby Payne pic.twitter.com/VtIq34KHPv
— Rahul Gupta (@RahulGupta0013) March 8, 2016
Let’s get a bigger version of that (click on it if you want to get a more readable version):
In there, the argument is that the difference between the classes is stuff like the relationship of the member to food, to money, to time horizons. Going back and looking at the “If I Were A Poor Black Kid” essay, you see that it’s just hammering on “I wouldn’t act like a member of the class in poverty. I would act like a member of the *MIDDLE CLASS*!!!”
Heck, if you look at any of the “grind mindset” twitter accounts out there, you’ll see that they’re doing a lot of the same stuff. “Don’t act like a member of the class in poverty… act like a member of the *MIDDLE CLASS*!!!” (and, occasional bursts into “act like the *WEALTHY*!!!”). And you can see people evolve (or devolve) from one to the other. This person has grown and now sees the point of social emphasis on social exclusion instead of self-governance and self-sufficiency. That person is doing the opposite of growing and talking about shifting from managing money to spending, spending, spending.
One of the interesting parts isn’t merely that each group has behaviors that reinforce one’s own staying in the group to which one has become accustomed, it helps everybody reinforce everybody else staying. So, like, if the “poor Black kid” tried to jump from the one to the next, this kid would find that there are punishments for obviously trying to leave in addition to the rewards for fitting in and staying.
This also helps explain how someone raised solidly middle-class in values can make more money, more money, and then even more money and then say something like “Sure, my household makes $200,000… but after the mortgage payment and after the car payments and the food budget and vacations and putting money aside for the college fund and the money we put into the 401k (that we don’t even *SEE*), you only have but so much money left and $200,000 a year just isn’t that much, really.”
In any definition of “rich”, there are usually numbers thrown around. “Somebody who makes $X is officially ‘rich’. They don’t get to call themselves ‘middle class’ anymore!” is a conversation that shows up from time to time and most people probably have a number for X that would make them agree with that statement. And, of course, numbers that will make them say “You know, $X isn’t *THAT* much.”
Even now. Think of a number that would get you to agree with the statement of where you cross over to “rich”. Got it in your head? Okay, well, I found a site that broke down income by percentile and here’s where the interesting numbers are (as of 2021, anyway):
Top 1%? $504,420
Top 5%? $273,850
Top 10%? $201,052
Top 20%? $141,100
Top 25%? $122,500
Top 33%? $100,236
The 50% mark? $67,463
We’ve all been part of the conversations where people explained that $200,000 a year just isn’t that much, really. I mean, after the mortgage payment and after the car payments and… well, it isn’t that much, really. Not where *I* live, anyway. I could see how it might be a lot of money where you live.
I was lucky enough to be linked to a couple of essays about the whole middle class thing recently. One essay on being poor, another essay (from the same guy) on not being poor anymore.
Here’s how the “poor” essay opens:
A few years back, my wife was at a baby shower hosted by a friend by a mutual acquaintance. In a conversation with the hostess, my wife learned they were in a tough financial position – they were always broke, and no amount of budgeting seemed to help them get ahead; they had cut every cost they could and things were just getting worse and worse. She admitted to my wife that she just felt like she was sinking further and further underwater, and didn’t see any way out for her or her family.
Note: The hostess and her husband were both doctors. They had a combined income somewhere upwards of $200,000 a year, and as the conversation developed my wife learned that their problems started and stopped with the hostess not being able to save quite as much as she’d like once the payments on their very nice house and current-year cars were made. At the time she leaned on my wife for emotional support over finances, our family of four’s income was less than $30,000 a year.
The rich essay gets into the whole “how could someone possibly think like this?” issue and figures it out. Here’s a representative paragraph:
Food is huge here. When we were broke, there were constant economic sacrifices in terms of what we bought to eat. We bought more ramen and beans. We restocked less often, and with more restrictions on individual shopping trips. We’d get more rice, and less cheese (an enormous amount of money is spent on cheese once one has the option). We watched for sales pretty closely.
Even now, as I think of the fridge upstairs, we have more than a half dozen kinds of cheese in there. We have two different kinds of sandwich slices (sharp cheddar for Maribou, pepper jack for me). We have two different kinds of shredded cheese (shredded Mexican blend for the stuff that requires cheese sprinkled on top, shredded Italian blend for doctoring up frozen pizzas). We have cracker slices for snacks. And we have a container of feta. Oh! And a tub of shaved parmesan for pizzas and salads and whatnot. Sometimes we have bleu cheese in there too. Sometimes we have goat cheese in there. And I completely forgot about the string cheese!
And then, once you get a little bit more into the essay:
You go to social events you might otherwise have skipped, and you accept invitations to go on trips to visit family you otherwise couldn’t have come near affording. You stop being the only person who doesn’t bring a decent gift to your friend’s kid’s birthday party.
It’s all great, but you look down at the end of the month and find you’ve spent all your money, or at least enough of it that you feel strapped. It went just as fast. You start telling poor people that you and them are the same.
The part of the essay that moved me to write this one says simply:
If you have money, most of your problems just go away. They take money with them, but they leave.
And I go back and look at the median household income again. $67,463.
Let’s face it, $67,463 just isn’t that much.
But if you were making $68,000 a year last year, you were making more money than half the country. $100,000? You’re in the top third. $200,000? You’re a hair’s breadth away from the top decile in the country.
It probably doesn’t *FEEL* like that, though. Even if you start bringing in a lot more, you’re still going to feel like a member of the old class.
And I can’t even imagine what it would take to set up a set of incentives to get someone to move from a mindset of the old one to a mindset of the new one. Well, up, anyway.
It’s probably pretty easy to incent going down.
I followed the link to the income chart, but I got a 404.
I would be curious about the source of that data and what is meant by income. Is it based on reported income for taxes or something else? When I think of rich, I don’t think of “high income,” I think of “high wealth.” If you have a lot of wealth, it can keep growing, even if your actual reportable income is low. Think of CEOs who don’t take a salary. They are still getting richer, even if they don’t have a paycheck. Somebody making $200,000 with a lot of debt is not as rich as somebody earning $100,000 with a lot of investments and minimal debt.Report
Ah, jeez. It worked when I wrote it!
Gimme a sec.
Okay. I found the site that he lifted the numbers from.
It’s just that his picture of the data was sooooo pretty and the website he lifted it from is sooooo ugly!Report
I know I keep talking about Burt Likko’s Three Classes essay but seriously, any discussion like this needs to cite Burt Likko’s Three Classes essay.
(also, please fix the graphic in that post!)Report
I think we’ll have to go to Burt himself to fix the graphic. There was a point where the site purged a bunch of graphics and… well, it looks like that was one of them.Report
Indeed that would be a decent annual income in many places, if it were wide spread. But not so. In Mississippi, the median income (which is what this number is) happens to be – $25,261. Down here on the coast, a two bedroom apartment will run you $13,956 annually. Up in the state capitol, its slightly less at $11, 400 a year. But stop and think about that – if you make median income in Mississippi, you have to use 55% of it just to put a roof over your head (and the general rule is housing should only be 33% of your income). So right there, a median income person – who again is smack in the middle of the income distribution – can’t really afford housing.
While class and culture are intertwined in that, its also an economic system issue that the median income person lacks resources to overcome.Report
The paragraph that goes:
I was lucky enough to be linked to a couple of essays about the whole middle class thing recently. One essay on being poor, another essay (from the same guy) on not being poor anymore.
Read the one about being poor. It really gets into this.Report
He and I don’t disagree.Report
I just want to say that the CDC is responsible for this, and that you were cheering them on.
Average house price in Mississippi is about ten times the price you’re citing for a two bedroom.
(and who gets a 2 bedroom without a roommate? You get an efficiency, and you count yourself lucky.)
This means that the median person does have the income to afford a house. Now, they may not have the wealth…
Using 50% of your income on housing is imminently doable. Talking the loan officer through your budget, though, is an extensive process. “Yes, I really can walk to Costco and buy groceries.”Report
I cited rent not purchase. apples and ice cubes. Also, reading comprehension.
I picked that because a lot of what Jaybird discusses is around families and while they CAN live in a one bedroom or an efficiency, its not actually always a practical solution – to say nothing of the eviction when the landlord finds out. As of 2019, 33% of residents of the state rent.
Its great that you can live in a city without a car. The only store I can walk to for basics, including food, is Walmart. Our nearest Costco is 58 miles away in New Orleans.Report
I’ve been thinking about this some more.
I’m guessing that, down there, someone with a household income of $40k/year is doing pretty good. Sure, *NATIONALLY* you’re in the 30th percentile, but, locally, you’re in the upper half.
But if we get local and hyper-local enough, we find ourselves saying that someone making $40k/year down there is doing better off, relatively, than someone making $80k (or whatever number) in San Francisco.
Which strikes me as perverse.Report
Median Household Income of San Francisco is $119,136.
Apples to apples: Making $25,261 in your part of Mississippi is the equivalent of making $119,136 in San Francisco.
And to say that they’re more or less equal because they are both making the median strikes me as perverse.Report
I am not sure I agree with that chart from Ruby Payne, it seems a bit out-dated (it would make sense in the Victorian and Edwardian era) and it also seems reductionist and flat.
I am not sure I can quite put this into words but the current socio-political-economic system has people of all economic levels across class divides. The middle-class column feels stuck in the 1950s-80s perhaps. Or with a very petit bourgeois variant of middle-class.Report
Much of it rings true to me because I’m middle class surrounded by people who are middle class and some of them are middle class who make half of what I make and some are middle class who make three or four times what I make and, wouldn’t you know it, they all talk about middle class stuff.
The handful of people who I know that fit into the “poverty” category fought their way out of it to get, yep, smack dab into the middle of the middle class. When they talk about such things (rarely), they talk about either adopting middle class values and abandoning the old ones or they talk about how they had the middle class values instilled. (Dave Chappelle has a bit where he talks about his father yelling at him “YOU ARE NOT POOR! YOU ARE BROKE!”)
I don’t really hang around people in poverty. Or people who have a great deal of wealth, for that matter.Report
Wanna seize the opportunity to agree with Saul here. The left column seems relatively solid, perhaps because poverty is rather similar no matter who it is who’s suffering it (in this country at least) but the right most column is ludicrous, as if all wealthy people are Vanderbilt-sox-gothas from Humptullips. Wealthy people strike me as being enormously more varied than that. Heck, old money like what this column is based on, probably is a minority within the spectrum of wealthy people now days.Report
I think this ties into the old observation that Shaq is rich. The guy who signs Shaq’s checks is wealthy.Report
Cool, so what part of that chart does Shaq get slotted into?Report
Wealth is a stock. Poor vs. rich is about income, a flow. My parents’ generation was full of retirees who were “middle-class wealthy”: sufficient assets (or claims on assets like pension funds) to generate a middle-class income for the rest of their lives. My generation, not so many. In my kids’ generation, probably even rarer.Report
As much as the list is reductive, there are parts of it which seem “true enough.” The thing is I can see the “upper-middle class” or whatever you want to call well-to-do professionals exhibiting behaviors from the middle class and wealthy columns to a certain degree or “true enough” way.Report
I don’t disagree at all. But I still don’t see where Shaq fits onto that chart and, as it seems to me that new money like Shaq undoubtedly outweighs old money both in dollar terms and numbers of individuals terms, the absence of a category for them strikes me as a critical failure.Report
I don’t see where a well-to-do lawyer or consultant fit into the chart.Report
On the right side, but only if they have proper breeding. If they’re self made or middle class background then there’s just nowhere for them.Report
The really wealthy people is where I think Burt’s old post nails it, more than the chart does. I live in a neighborhood that measured by income is full of rich people by the national standard. In metro DC? It’s very much upper middle class, especially in terms of values, and everyone has a job of some kind. Maybe it’s white collar, maybe it’s some kind of small business or they’re a skilled craftsman, but everyone goes to work every day.
I compare this to a friend of mine who married into a (very) minor branch of one of the wealthiest families in the area. When I visit him I at times find myself in a very different social circle, but none of them I’ve ever met are Thurston Howell III or whatever. What does distinguish them, per Burt’s column, is none of them seem to do anything for a living yet have endless resources either through trusts or connections or what have you.Report
I agree, but that means there’s probably a very important column missing from the chart.Report
I think even the middle-class is variable based on whether you are talking about blue America vs. red America. The problem with a lot of these labels is that they are vague and malleable and show the prejudices of the writer:
For example clothing: “Clothing valued for its quality and acceptance into norm of middle class. Label important.”
This feels a bit too throwback but even given “label important” as a rule, different groups of middle-class people find different labels important. This is not a 1950s monoculture anymore.
I also wonder why a middle class family is likely patriarchial in 2022 America. A middle class family now likely has two working, professional parents who at least make some attempt to split the chores and child-rearing responsibilities. It is no longer dad goes to work and mom stays home in most places.
The education tab seems to ignore that there are still lots of people who value education for the sake of education. Yes, there are lots of people who are study practical things for the reasons mentioned or do the maintenance of connections but there are still plenty of people who study whatever because they find it fascinating and enriching. I would say the bottom categories are way too reductive for all groups. The love category is just insulting to everyone.Report
I agree that the chart seems excessively reductive. I mean any chart purporting to represent millions of people will necessarily be reductive but this one strikes me as especially badly failing. It’s just a thinly veiled pean to the poor which is unsurprising considering that it’s from twitter.Report
Even here there is so much slicing and dicing you can do. On the surface, most people would see my wife and I as remarkably similar. I.e., both upper-middle class professionals with upper-middle class backgrounds. However, I attended a semi-elite undergrad (hard to get into and known but not an Ivy that opens up doors to Wall Street) and a second-tier regional law school (not scrapping the bottom of the barrel but not getting into big law either). My wife attended more brass ring schools for her undergrad and grad experiences and I can tell you this can lead to dramatically different door openings.Report
I believe it.Report
Lots of good stuff here so i’ll go off on a tangent. I think using income figures (family or ind) leads to part of the problem we have with talking about class, social services and community. This isn’t a criticism since it’s a common thing to do.
Income matters obviously relates directly to material comfort and safety. But it misses all the various services provided by government at every level and privately delivered services. Those can mean a person is doing great or terrible depending on how much is out there. Focusing on income is, imho, a symptom of the hyper individualism that pervades and in many ways hurts americans. If you make 100k and have good health insurance( or gov provided health care) you are far far more stable and safe from poverty then the person making 100k w/o HI. This gets far more serious the less money you have.
What people need is life feeling much less precarious or on the edge of doom then it often is in the US. Income only takes care of that really well once you start making really good money. So income as the key variable is useful but misses a lot and also points at why many people with so many material goods feel unsafe.
How that feeling of life being precarious and how fears are used is a separate topic.Report
Glad you liked it!
When it comes to services, one of the big problems over and over again is… I forget what it’s called. “Managerial Competence”? Something like that.
You know how you can sit down with a video game and know immediately which buttons to press to jump, which to shoot, which to open the menus?
There are people who have to play who need the manual open on their lap as they play and they never get open the menu on the first try. Oh, you have to press X and not select. I always forget.
Anyway, there’s a lot of that when it comes to working with some of the services provided by the government. Just sitting down and being able to work with a phone tree is a skill that comes naturally to some people. Easy peasy.Report
Whenever school discussions come up this kind of thing is one big thing school do. Teach kids how to work in systems and with people. Even up to Uni , this kind of knowledge/skill is really useful to learn. I know the 3 R’s of education crap but whatever you want to call it, learning how to operate the world is a vital skill. Most parents teach at least some of that. One problem though is that while Parents Know All their info is often out of date by a decade or three. So schools, hopefully, do this.
It’s been a long time since i worked with a lot poor folks. I would regularly talk them about using the library or how to call for information. It was often hard from them given their very different experiences to feel comfy in a library. Operating the generic middle class world takes some skills that most of us have. Even people who grew up poor often have those skills but for those that don’t the world is a PITA.
It’s not just gov services that need a certain set of skills to work. How to work doctors offices, hospitals, medical records, banks have the same or worse hurdles then govs do. And its not like all the various places have similar OS’s or all the same skills. Our world is not user friendly for many people. Heck it’s not user friendly for any of us sometimes even when we can throw money at it. Which leads to poor people often have good coping skills for their environment which work really poorly in the wider generic middle class world.
The court i work in does a metric crapton of work to make things easier for people to use the court. Which doesn’t make it easy or clean to argue a court case or the court less imposing. But there a lot of simple things we can do to make things smoother. Lots of this doesn’t always lead to easy or politically coherent conclusions. Like immigrants sure as hell should learn english as fast as they can. Most do. The ones that don’t are set up to be victims sadly.Report
It seems to me that “feeling rich” is somewhat less about the actual amount of money, and more about “do I feel like I can do all the things I’m supposed to be doing, and if I needed to do an unplanned thing would I be able to do that”.
Like, the person in the linked essay, making $200k-plus a year and still feeling like they were in a precarious position; it’s probably because they were! They’d established what life looked like, and they were realizing that they couldn’t quite make that work with the income they had, and thus they didn’t “feel” rich.Report
This is not a “well if they weren’t so STUCK UP and SNOTTY they’d feel FINE,” the point is that it’s entirely rational for someone making nine times your income to honestly feel that they’re living paycheck-to-paycheck, barely getting ahead, and would be in serious trouble if something went wrong in their lives. (It’s similar to the way that everyone honestly believes they’re an above-average driver.)Report
I believe there are various cliches about living below your means when you can.Report
Eh. Read the second essay, where he talks about how someone can make entirely reasonable, rational, within-your-means decisions about spending, and still end up with no money at the end of the month.Report
I’m experiencing (somewhat) what that guy did in reverse. Since my wife’s death, the household income is just me. I’m not hurting by any means, but I do pay attention to money a lot more than I ever did while I was married.
You get used to buying stuff when you have money, and there is so much convenience in shopping or eating these days that the leftover money can easily disappear.Report
I make quite a bit more than my wife, and we could certainly live on my salary alone. However our lifestyle and all the little conveniences we barely think about are completely dependent on her, and that extra bump she provides. Not to mention she has the job with the good health insurance which is invaluable in itself.Report
When Maribou and I were first married, there was a bit of a disconnect when we went to the grocery store. I would tend to throw stuff in the cart and she would point out that I got the expensive thing instead of the cheap thing without even looking at the price.
As time went on, that (slowly) went away. It was nice to just throw a can of Pringles in the cart. Throw a bag of baby carrots in there. Maybe the organic ones! Hey, we should get some cheese!Report
When my wife and I were first married, for three months we wrote down every single thing we bought. We could afford it — a pair of Bell Labs’ MTS salaries does that — but we were curious. The two things that jumped out were that she had a quite expensive coffee habit, and I had a serious paperback fiction jones. I don’t remember whether that was when she kicked her coffee habit or not (she doesn’t have one now). I found the local public library and got a card.Report
My husband automatically and instinctively goes for the most expensive item on a shelf. He also instinctively gravitates to the most expensive item in a store, even if prices aren’t listed! He looks at me, when I root in a sales bin, like I’m about to dig out a festering rat corpse. I swear to God(ess?) he’s instinctively averse to things that appear price conscious. I attribute this, uncharitably perhaps, to his coming from a background of absolutely crushing poverty. He just hates behavior he mentally attributes to being “cheap”. I keep trying to explain to him that you’ll never find cheaper, more bargain allured people than middle class people but he just doesn’t listen.Report
In fact, the guy’s second essay covers this when he says “[n]othing is a catastrophe if you have money in the bank”. That matches really well with my own experience, that the only plan you can ever count on is “have money, preferably cash”. Nothing else is ever going to go the way you think, but if you have cash, you can usually buy your way out of anything that doesn’t kill you straight off; or, at least, blunt the impact of it.Report
This is why the inflation over the last year was really, really bad. We have moved from “hey, we can do whatever we want, if we are smart about what we want” to “holy crap, eggs are expensive… holy crap, did berries used to cost this much? holy crap you need a second mortgage to get goat cheese!”Report
Yeah, we had a water intrusion event that was just awful in our ol’ condo and it was an absolute clusterfish. But we could immediately afford all the attendant costs so outside the mental anguish of those costs we were, materially, pretty much fine. The line “If you have money, most of your problems just go away. They take money with them, but they leave” is pure gold.Report
Americans don’t have a good way to talk about class since it officially doesn’t exist.
Yet the human weakness is to sort ourselves into classes so we invent a myriad of subtle cues to denote our claimed position, or to assign others to a position.
It is useful to note how our classes are only tangentially related to money but are marked by other things like race and culture.Report
I don’t know who the “officials” would be but we do have official definitions of “poverty”.
When it comes to “middle class” and “wealth”, there’s a lot more blur, of course… but there does seem to be unofficial distinctions (that may vary from region to region).Report
That’s not very meaningful when the definitions of class are only tangentially related to income.Report
I think that class is only tangential to income. It’s closer to life-cycle income, but even then the lower-earning college professor and the higher-earning body shop owner probably don’t fit their designated categories. This is one of the reasons I’ve criticized the Payne framework before.Report
Only on the upper end.
On the lower end? We have definitions. Official ones. Made by officials.Report
What I think is interesting about serious wealth is that it largely becomes an abstraction, just numbers on a page entirely disconnected from any material effect on your life.
Like, you may hear some entrepreneur or investor talking about a business deal gone bad and they often will laugh about it ruefully, like, “Boy, I really took a bath on that one!” they’ll say with a chuckle.
But, it’s just an abstraction without consequences. Did he have move out of his house? Drive a different car? Take a different vacation or forgo one? Put off buying clothes or going out to dinner?
In my experience talking to wealthy people it never has any sort of tangible effect on their day to day life.
Which I guess would be my marker for the divide between middle class and rich.Report
I don’t think that’s true at all, beyond the short term. A businessman dealing in tens of millions might be cavalier about a couple of million, but he knows that’s not sustainable. I think high wealth seems like an abstraction to the people who don’t have it, because the people who do have it are talking about numbers that seem abstract to us.
There are people who inherit wealth and burn through it as if they don’t understand it, because they don’t understand it. They end up broke, or close enough to broke that they’re getting by on a several-thousand-per-month trust fund. I guess it’s possible that there are rich people who look after them, but I suspect that’s more anecdotal or a misunderstanding on the outsiders’ part of how their wealth is structured. But post-Madoff I think everyone knows it’s possible to lose nearly everything.Report
I remember an old political cartoon of a guy who was in front of a pop machine that ate his quarter and he was screaming and kicking and in the next panel he was explaining a one-day 2% portfolio loss by saying that it was a slight correction.Report
May we all be so intellectually healthy, to understand fairness and risk.Report
From CNBC:
When I have a long time horizon, I think “oh, I should probably up my contributions”.
When I have a short one, I think “OH MY GOSH THIS IS IT AND IT IS 1929!!!”Report
Trust funds exist and are big business because of this phenomena. In our era anyone who obtains wealth has an abundance of cautionary tale to read about descendants of wealthy people and the only real solution to that (from their point of view) is to fence up the money in a trust (of go the Buffet/gates route and give most of it away).Report
Trust fund does a lot of heavy lifting. I had a small trust because my grandparents were products of the Depression and saved, saved, saved. This allowed me get a debt-free education. This is something to be very grateful for.
I also know quite a few people and know of people who can afford to be “independently employed in the arts” levels of Trustfund wealthy. These people live in relative levels of extravagance and frugality and it often depends on various personality quirks. I can think of a bunch of people whose housing stock does not correspond to their income. Some of these people have other fancy tastes, others care not for fancy stuff at all.
I’m also not sure I fully believe the old cliche of “shirtsleeves to shirtsleeves in three generations.” I can see why it can be true enough at times but I have very few facts in evidence for it. I think it is more something people want to be true than is actually true. It is one of those just so stories we tell ourselves.Report
It’s been a while since I’ve looked at it, but the evidence seems to support the three generations idea. It’s hard to preserve intergenerational wealth. You need zero-risk investments that have an after-tax return that beats inflation, and one heir. Anything else is a gamble. Even 2% inflation will reduce wealth by 70% over 60 years, which is the percentage often given for the loss of wealth over two generations. You’re more likely to help your kids by giving them the education and drive to make their own fortunes.Report
That is the entire point Saul. Trust funds pen up the money and then trickle it out in a controlled manner which helps insulate the pile of money from the whims and idiocies of individual heirs. An idiot with no sense of money or business (and, it seems, few things cultivate these negative traits quite as well as being born into vast sums of money) can obliterate an utterly astonishing amount of wealth, not merely through consumption but also bad business ventures, property purchased or tax disadvantageous decision and, of course, lawsuits from various idiotic or criminal behaviors. Trusts bar them access to the dough and generally mandate that the larger money pile is invested not by a single individual of dubious capabilities and motivations but by a committee of professionals with a fiduciary obligation and reputations to maintain.
Trusts can be big, they can be small, but even with trusts in place large fortunes can dwindle away pretty steadily as heirs proliferate and returns on conservative trust governed investments hold steady.Report
I’m comparing a one time million dollar loss to a one time event like a blown radiator in terms of consequences.
One of the benefits of wealth, in fact one of the principal reasons people crave it, is its ability to insulate one from shocks and catastrophes.Report
Fun fact: It’s actually “just desert,” desert being a thing which is deserved. It’s a somewhat redundant expression, since a desert is just by definition.
Knowing this, you might guess that dessert is called that because it’s a thing you deserve after eating your vegetables, but although both are ultimately derived from Latin servio via French, “dessert” is more closely related to a French term for clearing away (i.e. it’s served after the dishes from the main course are cleared away).Report
And a food desert is quite different from a food dessert.Report
I find the thing about styles of humor… well, funny. Especially since it was posted on Twitter, where the humor tends to be 99% based on “social faux pas”. What else is “call out culture” most of the time? I would not be entirely surprised though it Twitter users skewed rich.Report
Occasionally I wander out of my corner of twitter and into strange and weird corners. Horror movie twitter. College football twitter. Clown twitter.
Things work differently there.Report
“Don’t act like a member of the class in poverty… act like a member of the *MIDDLE CLASS*!!!
This reminded me of the discussion of Black English (AKA Ebonics). Even though linguistically, it’s simply a slightly different dialect of English, it conjures bad associations for many people, including lots of potential employers, so speaking it has genuine disadvantages. But the answer to this is not trying to teach “Don’t talk like all the people you know… talk like *WHITE PEOPLE*!!!”,Report
It all depends on what the ultimate goal is.
Have you ever read Daniel Foster Wallace’s “Tense Present“? I’m sure it would have gotten him cancelled in the current year.Report
“No sir, Mayor Daley no longer dines here. (pause) He’s dead, sir.”Report
A wonderful essay that I’m always glad for an excuse to re-read. On re-reading it, I think it may be the source of or inspiration for my own often-used pants analogy. (On reading that sentence, I saw I had to insert a hyphen between “often” and “used.”)Report
In other words… Culture matters… a lot?
If I was to offer a counter, it is that studies of adopted vs genetic kids tends to reveal that the the genes mean even more than the culture. Adopted kids raised in another culture/environment tend to be more like their biological parents. Twins raised apart tend to come out rather similar.
I guess my take on it is that biology and culture both matter a lot. We can’t do much about biology, so we should focus on culture. Though that isn’t easy either.Report
And yet, the difficulty in preserving wealth intergenerationally suggests that the impact of genetics is overstated.Report
Nature, nurture and probability. Statistically speaking, kids will be more like their parents, the dominant characteristics of the local population significantly determines the culture and the two either reinforce each other or contradict. The results are messy. I think the culture of the wealthy might very well work against the perpetuation of large fortunes. Yeah… messy.Report
I just now saw this article:
‘I’m paycheck to paycheck.’ I make $350K a year, but have $88K in student loans, $170K in car loans and a mortgage I pay $4,500 a month on. Do I need professional help?
Lemme just say: $170K in car loans? That’s more than I paid for my house!!!!!Report
Financial or psychological?Report
Remarkably bad money management (the car loans are utterly inexcusable), but people in that earnings range wrongly think of themselves as actually rich, rather than comfortably well-off, and, since they usually make that kind of money working in proximity of people rich enough to pay them that kind of money, they think they are entitled to live more like their clients or paymasters than their income or wealth will support.
Politicians have a similar issue, always being courted by people with real money and beginning to think they ought to be able to live more like these people.Report
And yet:
https://money.com/new-car-prices-average-50000/#:~:text=While%20gas%20prices%20and%20used,valuation%20company%20Kelley%20Blue%20Book.
Depending on brand, vehicle type and features, its not actually that hard . . . .throw in a boat or an RV of some kind . . . and bingo.Report
Buy *ONE* of those Teslas and then, for your second car, buy a used Prius.
Get that down to $120k in car loans.Report
That’s 85K per car in loans. Assuming he put down a down payment, the price of one vehicle is 90-100K for EACH CAR.
THE F?
Maybe not buy a 100K electric vehicle TWICE until your student loans are gone? Rolls eyes.Report
Or even one of these
https://www.jeep.com/bmo.grand_cherokee_wl.2023.html#/models/2023/grand_cherokee_wlReport
QFT brother.Report
I have family who are disciples of Dave Ramsey and whenever anyone mentions money issues they start evangelizing about Ramsey and his cult (I may have opinions about him).
The thing is…they aren’t wrong. I did, on my own without knowing anything at all about Ramsey or his cult, exactly what he perscribes to get rid of my debt and it works.
But, as one of the essays you linked to states, it’s also easier to do if you make a lot of money to begin with. Even easier if you also have a spouse who makes a lot of money.
tl;dr a lot of discourse around poverty tends to boil down to “just stop being poor.” Not saying that’s what you’re doing, to be clear.Report
From what I understand, the problem with DR is not the stuff that is easily condensed down to a list.
Like, if someone made a “TOP FIVE THINGS YOU NEED TO DO” and put Ramsey’s top five things in a list, everybody here would nod and say “that’s pretty good advice, I really only have issue with number four and it’s most a yes/and instead of a no/but.”
It’s all of the stuff that gets put into paragraphs and paragraphs after the stuff that makes a good chapter title that gets peoples’ danders up.Report