It is a totally different world. Once you have a certain amount of money, it almost becomes impossible not to make more. One situation I'm thinking of is that I'm in the multi-year process to do a renovation on a house. An acquaintance (our kids are in school together) also had a renovation done. However, what they were able to do was to simply buy another home, renovate that, move into it, and then renovate their main home over the course of two years (huge renovation in a major city). When the main home was done, they sold the "new" home with a large enough profit to pay for both renovations.
I'm doing well, but not rich, so I'll end up saving some of the money and paying interest on the rest of the renovation. At some point in the future, I'll hopefully get some of that back when I sell my home. Meanwhile, the acquaintance managed to make short-term money on the process.
What's the best way for someone who doesn't have a finace degree from Harvard or computer science degree from Sanford do to make it to that certain amount of money you speak of- if someone has a high school education? What are the best odds, given someone's limited abilities?
There has been a decade plus housing boom. Historically home prices are stagnant. This anecdote is akin to the Great Gatsby and says little about how the future will play out.
I get really annoyed about branded clothes, the logos usually put me off, why do I have to pay extra to advertise a brand? Real class isn't walking around like a billboard, good clothes should be well made and not show a label
Something I've noticed is that entry level designer items have large and prominent logos, while more expensive ones have smaller logos. The brands being recognizable only by their patterns or colors but not a big logo.
I think it targets people for whom it's not an either/or question. They can buy designer clothes and still travel. Probably to a place to wear those designer clothes.
Personally, my own answer is there is no income bracket to buy designer clothing and all that. Why would one want to? Low self-esteem and wants everyone to see that they have money?
This is the problem for many people - called lifestyle creep. People buy more and more junk - crap - as they make more money. If I won the lottery for $1 billion, I'd keep driving my 10-year-old Honda Civic. Why would I need a Ferrari? They both go the exact same speed - 25 miles per hour in the suburban streets, 65 miles per hour (or whatever local speed limit is) on the freeway. People give dumb excuses like "It's a wonderfully engineered car." Uh-huh. Right. Short-something syndrome.
Warren Buffett, buys a USA made Cadillac and doesn't trade it in every 2 years - his daughter just takes it after 10 years and buys him a new one because he won't. Lived in the same house all his life, doesn't need a $150 million home with high-end architects and designer furniture.
We all read about the professional athletes and lottery winners who go broke bing-bang-boom, despite earning $50 million or $100 million. All have one sentence in common - "I deserve it" and just buy anything they want. That's the most toxic sentence there is in all of humanity as far as wealth accumulation goes.
One should never go get designer clothes, never get all that fancy pants stuff. Maybe if someone is in a business that requires it, like an attorney for high-end clients, then yes. Otherwise - no.
You can have someone get rich off of $80K per year, and someone continually going broke earning $500,000 per year.
Johnny Depp has earned $750 million and almost went broke. Mike Tyson won $350 million and declared bankruptcy. Nicholas Cage almost went broke buying stuff like dinosaur skeletons.
One always has to keep a tight lid on spending. Don't buy to impress others, and that means don't say that you are not buying to impress others, when you actually, in fact, are. Some will say, "What's the point if you don't enjoy?" Well, that is the fast track to bankruptcy for many. The point is that you can start a lot of non-profits to help other less fortunate. The point is to help society, not to indulge stupid passions, if one wants to spend it. Do a wiki lookup on Chuck Feeney. THAT'S what you do with your money. I read a story once about a woman who had so much money that she bought a $300,000 purse. That would have housed a family. And she spent it on a purse. How gross, how vain, how disgusting, how low-rent. And I read on a few sentences and read that she had bought a total of 10 of the purses so she could have the entire collection.
I am not sure how this comment relates to the linked article. Are you saying, in your example, that there was $2M of luxury "purchases" to report, but they aren't really economically meaningful transactions?
It is not as simple as this. In most cases, capital gain tax is involved; however, very wealthy people usually have access to a number of tools to defer, or to completely avoid, certain taxes such as these.
In addition to taxes, the transaction most likely won't be frictionless, there are always accountants, bankers, and government registration fees to deal with, not to mention finder's fees.
One of the main ways to defer taxes for wealthy people is to borrow against appreciated assets (unrecognized income, not taxable) instead of selling the asset (recognized and taxable). The boat and car in the example are probably not owned free and clear.
I'm doing well, but not rich, so I'll end up saving some of the money and paying interest on the rest of the renovation. At some point in the future, I'll hopefully get some of that back when I sell my home. Meanwhile, the acquaintance managed to make short-term money on the process.