
Bloomberg: In an era of hyper-wealth, economy-class rich starts at $25M - colinhb
https://www.bloomberg.com/news/articles/2018-05-23/bankers-don-t-think-you-re-rich-unless-you-have-25-million
======
cleansy
I am quite honestly sick of articles like this.

The original title is: "Here’s How Much Money You Need for Bankers to Think
You’re Rich"

First of all: who gives a damn what Bankers think about anyone? I entered the
labor market around 2007 and since the meltdown not much of the general
"Bankers Mindset" has changed. Living in London for 2 years it was quite
painful listening to some young bankers on parties or other occasions. Their
second question usually starts with something indicating your income. 80/20
principle applies but "character shallowness" was a widely spread phenomenon.

SV or the tech scene in general should be more forward thinking and measure a
persons stance in society by "how many people does your work effectively help"
with "monetary net worth" purely as the result of your actual "value added for
society".

~~~
pmlnr
We need fundamental changes in the generic message that "value added for
society" is better for you, for everyone.

Wealth is passing, wealth is relative; once your real, true needs (not the
ones you think you need) are covered, we, indeed, should be focusing on moving
humanity ahead, and not on personal hoarding.

When my wifes replies to questions like what is your dream house like? as a
tiny, self-sustaning house, so I don't have to do housework, she regularly
meets confused looks, because "but what about space and and large space
and...".

Focus on what you really need, not on what society tells you to believe.

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CompelTechnic
Sometimes I feel like these sorts of articles are written as a sort of
indulgence to the aspirational class of people who will continue striving for
more and more money. For those on a high-net-worth track, but under $25m, this
article teases them, and motivates them. But for those over $25m it provides a
bit of self satisfaction.

~~~
csomar
It is not article but the social settings you live in. The article certainly
influences but that would be very minimal.

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matte_black
A million dollars was worth the equivalent of $25M today when the term
millionaire was first coined so I’m not surprised.

I passed a million dollar net worth last year and I hardly consider myself a
true millionaire. Just a working class developer.

~~~
pc86
I think first and foremost "working class" and "developer" are mutually
exclusive, maybe even diametrically opposed terms.

We are not working class, full stop. Nobody here is being crippled by
arthritis at the tender age of 40, nobody risks physical injury at their job,
nobody is risking a permanent end to their ability to earn a living by someone
pressing a button on a machine at the wrong time. Even ignoring the lack of
any real _danger_ , don't try to tell me that sitting at a desk for 8 hours a
day is even a tenth as physically demanding as welding, plumbing, carpentry,
or general contracting is for 10-12.

To imply the people here getting paid $180k a year plus RSUs to type is an
insult to real working class people who struggle to make rent every month.

~~~
ekianjo
> real working class people who struggle to make rent every month.

I agree with the overall feeling of your reply, but let's not fall in the
opposite trap to paint a proletarian view of the working class either. The
amount of iPhones out there in developed countries is a good indication that a
good chunk of the working class has no problem shelling hundreds of dollars on
expensive hardware on top of paying their rent.

~~~
cm2012
Even the newest iphone cost is a drop in the bucket compared to rent,
healthcare, schooling (all of which have vastly outpaced inflation).

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dcosson
This is a silly framing. The real story seems to be that below $25 million,
it’s not that you aren’t rich, just that you don’t really need customized,
private asset management these days. Wonder if that’s due simply to inflation,
compared to what absolute values we used to consider rich 50 years ago, or
improvement in money management options that are available to everyone, or
both. It seems like it could be part of the same trend of etfs growing in
popularity over active money managers these days.

And I’m completely speculating here but I imagine over that much wealth and
you start having some new lucrative (but perhaps ethically dubious) options
available that you need a private wealth manager for. Things like being able
to exert control on asset prices, getting in on deals that involve some sort
of insider info or successful lobbying of the government for special favors,
other transactions involving shell corporations and offshore accounts, etc. Or
maybe I just watch too many movies.

~~~
pitt1980
Yeah, the better line of inquiry might be, is customized, private asset
management a good deal for someone w/ a $25 million net worth?

Honestly that article didn't cause me any envy, if anything it caused me
imaginary anxiety.

Seems like $25 million is when you start to look like a juicy target for
people trying to rip you off.

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spking
One of the best books I ever read was "Stop Acting Rich" by Thomas Stanley. It
was the follow up book to Millionaire Next Door.

The main argument is that almost anyone can become a "simple" millionaire
through frugality and--most importantly--avoiding trying to emulate the
consumption patterns of the "glittering rich" (e.g. decamillionaires and those
described in the article).

Combine living below your means with an in-demand skill, a healthy stoic
outlook (learn to love what you already have), and you'll have a great shot at
financial independence.

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kolbe
>Placing investable assets of at least $25 million with a wealth manager—and
clients with that amount or more tend to work with a few firms—can bring
access to initial public offerings, and having at least $5 million in
investments moves a client past one regulatory hurdle to taking part in
private offerings.

That's the crux of their argument. It's not about being 'rich' in any social
sense, and I think the article was written pretty shamelessly to imply
otherwise.

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kevingadd
The cost of living a reasonable low-risk life certainly goes up every year. If
you want to send a kid to college, be able to pay for any emergency medical
expenses (like cancer), and retire - you probably need to have a lot more than
a million dollars in the bank (along with good health insurance, etc). And if
you're not also earning a lot every year, just the cost to live in a non-rural
area will probably eat that money up in the span of a few years by itself.

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kome
I wish I could have $25k per year, or $20k really... $25m would be such a
dream. What people do with all this money?

~~~
snarf21
Not being attacking or sarcastic. Once you hit $25K, you likely wish you could
get to $40K because you could finally buy a nice.... etc., etc. It is the rare
individual that can stop the chase. With a 7 figure salary, you just have a
nicer and bigger house. Your vacations are to Europe and first class instead
of driving to the beach, etc.

The one thing that most studies have shown is that (in today's dollars) once
you get above about $80K household income, any more income doesn't make you
any happier. If you think about it that makes sense, since at the level and
above you can have some financial security and not be paycheck to paycheck (in
most areas), have a small house and decent cars which greatly reduces your
stress and leaving room for contentment. Of course, each person's goals are
different and the amount of Jonesing they can control is too.

~~~
pc86
Not to be nitpicky but you can do a European vacation with first class airfare
when you make much less than a million dollars a year in income. Two people
NYC to London 6/18-25 is $10,200 for airfare. Assume that everything else you
do costs 2x that much if you're going all out (the few times I've purchased
first class tickets, that cost has ended up being 50% or more of the entire
trip). You're still at $30k for a vacation, which is an astounding amount of
money to spend on a week for sure. But at the same time, if you make $250k a
year and this is a special event, 10th/20th/30th anniversary, big birthday
event, etc, it's not outside the realm of possibilities to spend 2 months
salary on something like that.

Obviously you still need to save and plan it, and if you're making $1 million
a year you can probably spend $30k without thinking about it. But just wanted
to point out that it's doable.

As for the $80k study you're mentioning I've seen numbers all over the place,
from $70k up to $105k, but I've definitely noticed the satisfaction from each
raise has decreased even while the raw dollar amounts have gone up. The last
raise I got only served to go toward paying down debts faster, which I can
attest makes me very happy.

~~~
ryanwaggoner
I just want to point out that if you live in NYC, that $30k vacation will cost
you about $50k in pre-tax income. And no one I know in NYC who makes $250k is
going to spend 20% of their annual income on a vacation. And ironically, those
who _could_ are disciplined and frugal enough that they probably never would.

~~~
pc86
Well nobody calculates the cost of their vacation based on pre-tax income. And
someone making $250k in NYC is doing much worse off than someone making $200k
within a few hours drive of major NYC airports. I just picked NYC because
there are a lot of one-way flights to London.

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aisengard
The true measure of wealth should be, are you financially independent?
Meaning, could you never do wage work again in your life and never have to
worry about money? By my calculations that would be in the area of a few
million dollars, invested in some bonds, living purely off the interest
forever.

~~~
pmlnr
> The true measure of wealth

Are you happy? Do you have goals? Do you have/serve a purpose?

You know, the real questions.

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arbuge
Misleading title and article premise.

As mentioned in the article itself, $25M is currently an approximate treshold
where certain bankers define you as "ultra-high net worth". Which sounds
reasonable to me.

That is not economy-class anything by any common definition of the term.

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throwaway77384
I hate this shit. It's kind of unbelievable that this kind of wealth
concentrated with such few people is allowed to exist.

If it could realistically be capped at, say, $10mil or something, why not?

Nobody needs more than that. Yes, you could say the same for one million or a
hundred, but you have to start somewhere. It makes me sick that this is the
society we live in.

This pathetic striving for maximum wealth, in an eternal competition over who
has a bigger ficitious number attached to their family emblem, no matter what
the societal, ethical and global consequences, is close to the root of all
evil in my opinion.

~~~
lend000
What system do you suggest that has a track record of lifting more people out
of poverty than capitalism? On average, people tend to efficiently manage
their productive capacities in the pursuit of wealth.

~~~
throwaway77384
Actually, that is an excellent point. I do not suggest another system.

I guess there is this strange notion that Capitalism is this "all or nothing"
system, where you either get a free market with its invisible hand or nothing.
This sort of "Everything else is communism" thinking.

We all know that this is not true. Capitalist societies have all sorts of
schemes that are "un-capitalistic". Take public healthcare. In some ways
that's a very socialist idea. At the same time, you could argue it supports
the capitalist system by taking various burdens off the workforce, enabling
them to spend more time generating more money than it cost to implement the
socialist health care.

My theory is that concentration of wealth is incredibly dangerous to society
because it gives disproportionate power to very few individuals. The control
these people exert over policy, their workers, our entire culture leaves us at
their whim. This results in things like Brexit and the insane clusterfuck
that's the current US government and the populist right-wing uprising in
Europe.

I don't care whether someone has tons of money so they can wank themselves to
sleep over their financial portfolio. I do care when society as a whole, human
progress, everyone's actions are filtered through the lens of a few rich
people's actions and desires.

I hate this notion that the population-at-large is just a sideshow on this
rich-people's playground we call earth. It is sickening. The wealth that these
people amass does not trickle down and is not used for more useful things than
it would be if this wealth was somehow capped and re-distributed for the
benefit of society. (And believe me, I know that on the flipside this would be
a breeding ground for bloated institution wasting money with their
inefficiency. This would also not be a 'perfect' system by any means, but I do
believe it would be better than whatever it is we are currently steering
towards.)

To quickly touch on people being lifted out of poverty. I am all for it. But
under what conditions? Is a Foxconn factory worker someone who was lifted out
of poverty? Is a quasi-slave working on the Qatari football stadium lifted out
of poverty? In exchange for what?

Is the ever-decreasing quality of life people on disability benefits in the
UK, being harassed by the DWP 24/7 and stripped of all agency and freedom
worth it, because they are not considered "below the red line poor"?

Would the reinvigoration of public services by capping wealth (or introducing
profit sharing in companies, or 20:1 pay ratios / stock option ratios for
companies) be so devastating to all of society that it would indeed be worse
than the current destruction of democracy by your Murdochs, Kochs,
Zuckerbergs, Bezoses, Rothchilds and whomever else super-rich acting in their
own interests?

~~~
lend000
I also agree for progressive measures to prevent huge wealth inequality, which
is not the sign of a healthy free market economy. The wealth distribution of
the mid 20th century is much more in line with what I and some economists
believe to be 'optimal inequality.'

Interesting link here: [http://nautil.us/issue/52/the-hive/is-there-an-ideal-
amount-...](http://nautil.us/issue/52/the-hive/is-there-an-ideal-amount-of-
income-inequality)

However, I have very different ideas about why it exists and how to fix it. In
my opinion, over-regulation, taxes, and nanny-state-ism have caused both
financial problems and culture problems. Our heavy handed government continues
to further disincentivize risk-taking, a hallmark of a free society, it
entrenches wealth (both private individuals and big companies) by preventing
average folks from taking risks in the financial system in the name of
protecting them, and by adding thousands of pages of regulations to big
industries (be it cable, credit reporting, banking, and soon social media)
making them inaccessible to startups without both deep pockets and
connections. We also have a government that prefers an inflationary currency
for the illusion of growth and questionable long-term benefits, even though
the poorest are least able to translate their cash into cash-flow producing
assets and the wealthiest have capital gains taxes capped at a lower rate than
a relatively low-income earner's taxes, which is indeed a regressive system.
Not to mention all of this is done with a nearly regressive tax system (on top
of the existing inflation tax, which hits low income earners hardest).

> Is a Foxconn factory worker someone who was lifted out of poverty? Is a
> quasi-slave working on the Qatari football stadium lifted out of poverty? In
> exchange for what?

I would counter by asking whether these workers living in free market
societies? Clearly not, both are working in dictatorships and are not free at
all. Even the US is far from a free market system due to many points, some of
which I touch on in this thread.

> Would the reinvigoration of public services by capping wealth (or
> introducing profit sharing in companies, or 20:1 pay ratios / stock option
> ratios for companies) be so devastating to all of society that it would
> indeed be worse than the current destruction of democracy by your Murdochs,
> Kochs, Zuckerbergs, Bezoses, Rothchilds and whomever else super-rich acting
> in their own interests?

Yes I think that's the wrong way to go about it. I don't believe in forceful,
direct wealth distribution against people who committed no crimes, nor hard,
arbitrary caps determined by bureaucrats. Ask questions about how it happened
and how to make it better. How about we start with updated income tax brackets
for the super-rich or a negative income tax? Right now the highest brackets
hit people who are really not that rich (making 470k as the top bracket pays
the same rate as someone who made 50m, and probably more considering higher
amounts are usually capital gains), where really these brackets should be
spread out way further up to 100 million, and perhaps there should be
discounts for wealth factored into the income tax -- e.g. if you sold your
first startup for 5 million you should pay a bit less than a CEO worth 100m
who makes 5m every year. Combining that with a graduated capital gains system
that is updated for the modern world (where 470k isn't considered the 'richest
class') would go a long way, especially if rates are reduced for people making
less than 400k in the current system.

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tw1010
I don't like it, but I don't understand why reading this article makes me feel
good.

