Years ago, a friend of the family said "You're so smart. Everyone thought you would be a millionaire by age thirty. What happened?"
I pointed at my kids and said "They happened. And they take all my time."
I was a full-time wife and mom. This is not a career known to lead to great wealth.
So, for starters, not all interests or career paths have equal potential to lead to wealth. Intelligence in no way guarantees that your interests will happen to nicely line up with things that lead to wealth.
Everything I've read suggests that being born into the right family plays a huge role in wealth, a la the joke "He made his money the old fashioned way: He inherited it."
Health issues are another thing. Miracles of modern medicine can be very expensive and come directly out of your pocket if you live in the wrong country. At the same time, you typically will be less productive and less competent while enduring serious health issues.
Personal relationships are another biggie. My mother used to work for an heiress whose husband ran through her money. After the divorce, she had to get a job to support herself.
Divorce, scandal, drug addiction and various other personal issues can all be financially ruinous.
Even if you are good at earning it, that doesn't mean you are good at keeping it or growing it, a la some tagline from some magazine "How money becomes wealth."
I've always wondered why we devalue parenthood and make people feel like they aren't contributing when they choose to raise kids over having a career. As a parent, I don't see how much of any work I do could be more important than my child. It's just twisted to me, that we devalue something so important and meaningful.
For Americans, getting rich should be the top priority. There's not much of a safety net if you fall ill and can't work. You have to use your healthy/productive years to build up wealth so you won't be homeless later.
This is a great point. It's not (necessarily) that Americans are just inherently money-hungry; we just have to be because we live in a system that is really callous and unmerciful compared to other places in the world.
There are plenty of people in America who continue to chase money long after their safe retirement is assured.
I don't know if I'm qualified to compare Americans to Europeans, but many Americans really are enamored with money and judge material wealth as the be all and end all goal of life.
When you live without a real safety net, no amount of money is ever enough to guarantee anything whatsoever. Plus decades of doing what you have to do to survive at all and not end up being a victim of such a system powerfully shapes your psychology. It's hard to just put it down one day after your net worth hits $X.
> There are plenty of people in America who continue to chase money long after their safe retirement is assured.
That's probably because, over time, you become what you practice. So, even if you were not obsessed with money and work at 20, you might be at 40, after 20 years of chasing money and success to stave off potential disasters.
As an American I can say that we value human character over wealth. Most true wealthy Americans, those who have more than what they owe and still have a lot left over to to live comfortably are not enamored by money. They are enamored with survival, leaving money behind to their family, and philanthropy. And of course nice experiences (like a good meal and at good restaurant) and a few toys (typically centered around one or two hobbies, way of life). I might be way biased though with my assessment.
The US is #15 on the debt relative to GDP country list according to [1,2]. So you are saying in the US "spending is unsustainably high" AND "life is really callous and unmerciful" at once?
Well let's be generous and also include Portugal and Spain for good measure, both of which have seen an entire generation's prospects suffer massive harm due to EU (eurozone) policy. It's always funny to me how blithely the destruction of millions of people's lives and potential is waved away when it doesn't fit the narrative.
And then lets take a look at the North: Germany employs the Euro to support its economy by decreasing the true cost of its exports, resulting in the impoverishment of the southern European countries already mentioned. France's economy has been facing calls for major reform for decades now and - not sure if you've missed it - the latest economy related political problems have led to a minor civil war. Both economies also now face the prospect of integrating millions of low-skilled, penniless new arrivals. Those are the two biggest economies by far in the EU (if UK leaves). And then there's no shortage of other economies snapping at Europe's heels, all perfectly capable of manufacturing products that are equal if not superior to what comes out of Europe. Many think that German automotive engineering dropped off a cliff in terms of quality in the early 2000s and never really recovered, as a consequence of superior quality from Japan and Korea. And now China are just starting to penetrate Western markets with cars that are plenty good enough.
Also don't forget the Euro does not have the privilege of being the world's reserve currency. This gives the US a massive advantage and lessens the impact of deficits.
I live in one of these high benefit economies and having been taxed for years feel I'm owed something in return. But I don't expect it. Given the trends afoot I think anyone below 50 in Europe that thinks the welfare state will continue to be like it is now over their lifetime is utterly delusional.
Well, that's one way of looking at it. Another way would be think that it's smarter to have a social safety net and cooperate with other people to that end.
Don't confuse smart for the individual with smart for the society. Of course a good social safety net would be great. We don't have it. Nothing in my short life tells me this political system or culture can produce it.
I am not putting my bets on a change in culture or government. I see what's happening to people who counted on Social Security/Medicare and discovered too late that it wasn't enough.
I’ve been surprised at how uncomfortable people are with capitalism in various parts of Europe
Talk about my fintech venture or trading and young people are visible apprehensive
Very distinct from the general awe and congratulations and “wow but you're so young!” that comes with completely misunderstanding what personal and liquid monetary wealth is
Outside of Monaco and Zug I just started telling people I was a student studying communications
I really appreciate the business climate of the US, the tax and accounting rules are so complex that even communists likely wouldn't achieve much if they gained representation. they'll focus on "income tax" and "wealth tax" because its all they know, and their state planning would never gain consensus.
Mark to Market elections on securities transactions at arbitrary prices causing Net Operating Losses forever no matter what the income tax rate is? 60/40 rule on futures trades? Its unlikely they would ever notice.
If I’m remembering your previous posts correctly, you’re quite aware that mental health is absolutely a part of this. It’s a very big part for some people.
I’ve never felt that I’ve lack “smart”. What I lack is passion, willpower, and consistency. From where I sit, I expect that I’d be much better off both financially and emotionally if my situation were reversed.
If I’m remembering your previous posts correctly, you’re quite aware that mental health is absolutely a part of this.
Yes. I do a poor job of making that clear because I feel so strongly that physical health and mental health cannot be neatly separated. "A sound mind in a sound body."
To me, (a lack of) "passion, willpower, and consistency" really sounds like someone with low energy due to a hidden health issue.
I was called lazy until I got diagnosed with a genetic disorder in my thirties. I've often joked that life got a lot better "after they found a better name for my condition than lazy and crazy".
> To me, (a lack of) "passion, willpower, and consistency" really sounds like someone with low energy due to a hidden health issue.
Oh, without question it is. The problem has been identifying and treating it appropriately. I’m seeing help, but it’s slow going. It will pass - I’ve beaten it before and will do so again.
Wow, that sounds like me! Do you mind sharing what the genetic disorder was? Or how you get tested for it in the first place? I have a feeling that if I asked my doctor about laziness, they would refer me to a therapist instead.
My children nursed me back to health after doctor's wrote me off for dead. It's supposed to cost about $100k-$250k annually to treat my condition conventionally.
My oldest has the same condition. Between the two of us, that's up to a half million dollars per year.
We were diagnosed over 18 years ago. You can conservatively guess that my kids have been worth at least $1.5 million to me, and potentially more than $9 million.
(That's just the dollar value saved on treatment. You can put no price on the improvement in quality of life that I got out of it.)
Right. Once you figure out there are more columns in the life-ledger than cash, decisions change. To the bafflement of folks that haven't figured it out yet.
It is the same for men, too. I had everything set up to retire at 35... then I married. Sure, I am a more socially productive person now. My kid will someday pay taxes that will finance the retirement of people that didn't bother to have kids.
We were on track to retire comfortably by 55 without even trying very hard, 45-50 with some effort, without even FAANG money or any sudden jumps in income. Three kids starting just before age 30 and now retirement ever is... iffy, and it's probably not going to be very comfortable if it does happen. They're really expensive. Mostly healthcare, child care, and housing (more space, but also need good schools, so pricier houses, unless you wanna pay for a good private school which is even more expensive). Probably food next, way under those three. Everything else negligible compared to those.
Good schools are more about the parents than location. We opted our kid into the poorest school in the city: the one where many of the students speak Spanish at home so they made it a dual language immersion school. The school administrators were shocked when we said we didn't want to waste our time applying for the subsidized lunch program (It would probably be cheaper to give every kid a free lunch than process the paper work for those who qualify)
Those poor kids are just like every other kid in the world - other than they lack money. Their parents love them, and the best for them. What they define as best might not match my definition, but they want the best for them. And my son is well on his way to a second language, something that will be useful - in our opinion.
It depends on the city, hehe :) In my childhood kids from "bad" families would easily convince you that you're risking your kids every day they visit that school :) My parents were convinced when one of my schoolmates broke 4 fingers of his arm while was beating the face of my another schoolmate - half of my schoolmates had police records.
Wouldn't it make sense to "retire", start a business and teach your children how to take over and run it instead of worry and invest in their "education"? If it is profitable and succeeds they can get their education in whatever they wish without breaking your bank or going to college before they are sure what they enjoy.
> My kid will someday pay taxes that will finance the retirement of people that didn't bother to have kids.
That's an unnecessarily reductio characterization. That kid might, say, end up working for a business started by someone without kids.
New people are only an element of a diverse, functioning economy.
For the record I'm a parent myself, and glad to be, but it's not right for everyone, and, I believe, not right for a significant percentage (>10%?) of those who do have them.
>My kid will someday pay taxes that will finance the retirement of people that didn't bother to have kids.
All things considered, that is definitely not a given.
Social security for instances is tied to one's lifetime earnings, throw in the correlation between life time earnings and longevity and it smooths out to getting what you put in (roughly).
There are also a lot of benefits, both employer funded and tax payer funded that goes to people with children.
And parents likely have lower lifetime earnings than non-parents. So its possible they're not only funding the future of social security, but also getting less for themselves...
It would be great if someone had a source if parents are net recipients of benefits beyond the societal benefit of having children.
> So its possible they're not only funding the future of social security, but also getting less for themselves...
Social Security payouts relative to withholdings are strongly progressive, such that the less that you pay into social security, the greater percentage you take out once you start receiving benefits. Absent a difference in mortality (or to a much lesser degree, the age at which you start drawing), the less you contribute, the greater percentage of what you contributed will be paid out to you.
There's a plethora of tax breaks and deductions related to children that you can claim. Besides that, the people who don't have kids are subsidizing the education of yours through their taxes.
Regarding social security, I'm fairly confident the system will collapse before I see a penny of what I'm paying in.
You could also say that society subsidised your education and will do the same for other, future citizens.
Also, most families who were eligible, maybe even your own, got the benefits of the tax breaks available to parents.
For some reason many people seem to have a blind spot where they believe that benefits for "parents" or "children" aren't relevant to them if they aren't parents right now. But every adult was a child! ... "like, sure, but what have you done for me lately?".
Why? How old are you? Current forecast is that 80% of benefits are funded, as of 2035. Even if the funding ration continues to decline, as long seniors don't vote themselves out of Social Security, there will still be a pot of revenue from younger working people.
Assuming I retire at 65, which is pretty much guaranteed not to happen based on economic factors as well as rising retirement age it will be around 2060, 30 years after people are projected to lose 25% of their benefits.
Those kids will be paying taxes the rest of their lives which go to fund education. Either directly (through property taxes on their home), or indirectly (the landlord has to pay property taxes, which comes from rent money).
So in a way everybody pays for their own education after the fact.
Many parents are supported by their children when they get older (especially in cultures where parents and older people are still valued and respected).
I've got no kids and no retirement savings. No one's going to support me when I get old. If I had kids there'd be a chance that they would.
These benefits are largely theoretical, I don't get any of them. Here (Brazil), unless you are a public servant, regular jobs with such benefits are all low-pay. I have been working as a consultant for my whole life.
Or not. Society might just as well support adults who are a net net loss and expense. There is no telling if the future generation would be productive.
Making progeny is not a ‘virtue’. Willing to procreate should not be considered a speculative way to raise monies for taxes.
> Divorce, scandal, drug addiction and various other personal issues can all be financially ruinous.
This is well-said. James Hughes advocates families account their balance sheets on human, intellectual, financial, and social capital. For very-long-term (50-100+ years and >3 generations), the human, social, and intellectual components are arguably more important than the financial one, and it is essential to mitigate liabilities like divorce etc.
Microeconomics classes in America teach undergrads that 'rational' people only care about increases in wealth and do not care about non-wealth-increasing activities. It is such a wrong model about human behavior but it gets repeated like gospel every year at most schools in the country. So it's no wonder that people are out there, suggesting that we're all idiots for not focusing exclusively on wealth accumulation through our 20s as they were taught that is what 'rational' people do.
It's a tactless question, sure, but it should also be expected from a society that idolizes wealth the way ours does.
"Microeconomics classes in America teach undergrads that 'rational' people only care about increases in wealth and do not care about non-wealth-increasing activities."
This is not true, (or if it is being taught, the professor doesn't understand what he is supposed to be teaching.) What first year economics courses do teach--what is meant by the term 'homoeconomicus'--is that in aggregate, people rationally pursue their own self interest. 'Self-interest' is defined here as a subjective utility threshold. So, for example, if someone cares about their children, they will work hard and make a lot of sacrifices to support their children. The idea is that the market follows the aggregate self interest of people and so we don't have to worry about the miss-pricing of goods because the market will take care of that.
The difficulty with this idea isn't that people have wrong values--modern economics presupposes that values are inherently subjective and thus cannot be judged--it's that people are capable of making consistently rational decisions in pursuit of their subjective goals despite information disparities and cognitive biases.
This was an extremely good friend of the family whom I called "tante" (German for aunt) from the age of seven, though she wasn't related to me.
You could more charitably think of it as a compliment and an attempt at awkward social critique of how life works. An attempt to ask someone whose intelligence she admired to try to explain why life doesn't work like she thought it was supposed to.
Your ability to get back on track is hugely determined by your circumstances. If you're the child of a wealthy white family, you probably have the connections to get a decent job even with some gaps on your resume and a couple of drug convictions. If you're a poor black kid? Forget about it. Recovering from a mental health crisis is vastly easier if you have the financial resources and the family support to avoid homelessness and access prompt and effective treatment.
Wealth and privilege buy you (and your children) a lot of safety nets and a lot of second chances. People without those advantages are often in an incredibly precarious situation, just one tough break or one bad decision away from total ruin.
> Wealth and privilege buy you (and your children) a lot of safety nets and a lot of second chances. People without those advantages are often in an incredibly precarious situation, just one tough break or one bad decision away from total ruin.
People without those advantages have to build them. That is what smart people do. That is what I (a poor black kid) did with an old used computer that my father left behind after leaving my mother alone with 3 kids to raise. That is what I tell the young-lings from my poor neighborhood (that I don't live anymore so to not be hold by past circumstances). They get much more motivated by that than by reading that they are going to be stuck there forever because circumstances. Most of them will.
Yeah, I think you want to tell different people different things.
You want to tell poor people to take responsibility for their own success, because that's the best way to motivate them.
But you also want to tell those running things that they have a huge impact on poor people's success, and things like better public schools would go a long way. Because if the people running things shrug and say "those poor people are responsible for their own success" then systemic inequalities will persist way longer than they do in places like, say, Finland that have widespread, high quality public education.
> But you also want to tell those running things that they have a huge impact on poor people's success,
They already know it. They know that it would make sense to raise corporate taxes to offer free and good education to everybody. But in most of the countries, the people in power were not elected to do that but to lower the corporate rates.
That is why I focus on the individual side, although I'm ideologically communist. To hack capitalism and live well coming from a violent/poor background is one of the most revolutionary acts we can do and teach how to do currently.
I have not found this to be generally true. A PhD in physics confers zero ability to pick good romantic partners. They are entirely different domains of expertise.
The world is full of brilliant people who can't figure out how to handily resolve their personal issues.
I pointed at my kids and said "They happened. And they take all my time."
I was a full-time wife and mom. This is not a career known to lead to great wealth.
So, for starters, not all interests or career paths have equal potential to lead to wealth. Intelligence in no way guarantees that your interests will happen to nicely line up with things that lead to wealth.
Everything I've read suggests that being born into the right family plays a huge role in wealth, a la the joke "He made his money the old fashioned way: He inherited it."
Health issues are another thing. Miracles of modern medicine can be very expensive and come directly out of your pocket if you live in the wrong country. At the same time, you typically will be less productive and less competent while enduring serious health issues.
Personal relationships are another biggie. My mother used to work for an heiress whose husband ran through her money. After the divorce, she had to get a job to support herself.
Divorce, scandal, drug addiction and various other personal issues can all be financially ruinous.
Even if you are good at earning it, that doesn't mean you are good at keeping it or growing it, a la some tagline from some magazine "How money becomes wealth."