I, for one, recommend "Clean Code". It did not "change my life" because I was already on the path the book describes. Nonetheless it was a good validation, it certainly coalesced in a good form many topics that were simply fluctuating in my mind, and is a good reference to have around for refreshing once in a while.
To put this in context: I keep it next to "Agile Software Development" (by the same Uncle Bob), "Working Effectively with Legacy Code" (by M. Feathers), and "Refactoring" (by M. Fowler).
HTH (no, I have no direct or indirect benefit from 'advertising' these books and their authors)
is it me or this (and it's not the only thing in recent Google design tweaks/refreshes) is quite "[formerly-known-as] Metro" ? Flatter, less colors, more minimal... (not complaining, just wondering)
Not to be polemic, but I agree that there's something in the current typographic settings that could be improved. I tried to disable the CSS rule from corporate.css::1 on body for font-family (making the font fallback from 'Myriad pro' to the Helvetica family from foundation.css::75) and I think the result is much more readable - although it still has space for improvement in line-height and contrast). HTH
when we see these reports/analysis it seems the answer is always the same: Capital Gain.
However, I think this whole line of inquiry is mis-titled: these reports always tell us how the rich people are making now their income. Which, I feel, is not a good hint as to how you can become rich.
For the greater public, the question of "how the rich people went from 0 to $1B" might more interesting than "how the rich people maintain their $1B+". Definitely I find the latter more interesting than the former (probably because I don't have $1B+)
I had the same exact reaction, but looking at the article again, it clearly says A total of over 3,800 taxpayers have made the top 400 since 1992, but only 27% appear more than once, and only 2% appear 10 or more times.
That means these are not people who are necessarily rich and are raking in the money. These are most likely people who have a company, have stock options, and are cashing out. Most of them never come back to the list. The point here is that grabbing on to a company could be like catching a rocket -- your ticket to the stars. Whereas working an hourly wage is likely never going to do much more than make you upper-middle-class.
I realize you could interpret these numbers differently, but that's what it looked like to me. You can't have big capital gains income without some kind of underlying company that's doing tremendously well.
There are ~400 Americans with > $1 billion in wealth, and 200 with >$2 billion. $77 million in return on $1 billion is 7.7%. On $2 billion it's a mere 3.85%.
Combined with the fact that only 27% appear more than once in the IRS's list, and the fact that people tend to stay billionaires for a long time, this suggests that once people get to this level of wealth they turn down the aggressiveness of their investing and become risk averse.
For if every billionaire earned a healthy return on their capital, the top 400 earners would stay roughly the same from year to year, and correspond closely to America's top wealthiest.
Furthermore, America would be generating a lot more wealth than it currently does.
The important thing to remember is that AGI (which the article discusses) and how much money you "make" are not very correlated once you make above, say, 200K a year. A key reason is unrealized capital gains - I guarantee you that if a billionaire makes $77 million, most of that isn't going to appear as AGI. In a sense, realizing capital gains means something went wrong, not to mention income which is very wrong. Other factors that keep money out of AGI include tax-exempt bonds, business expenses, and capital loss harvesting. (And these are just some of the legal ways.)
Please, when you read an article discussing AGI, keep in mind that it is a semi-random number. Unfortunately since it's the number available, it's what gets used.
No, he is saying that $1B in wealth (about 400 people) generates $77m (threshold to make list of highest earners) in income assuming a 7.7% rate of return (which seems unrealistically high to me).
Actually, I'm saying that if the 200+ Americans with >$2 billion in wealth consistently generated more than 4% return on capital, then at least 50% of the top 400 earners should stay relatively the same year after year (since those with >$2 billion usually stay billionaires). The fact that only 27% have appeared more than once suggests that those with more than $2 billion in net worth are reporting returns less than 4%.
Appreciating assets don't count as income. They very well may be minimizing income while still maintaining growth. When they sell those assets, they make the list.
The title to the article is "How the Rich got Rich". But "the list" doesn't deal with "the rich". It deals with "400 Individual Income Tax Returns Reporting the Largest Adjusted Gross Incomes".
It is entirely possible for someone to own an asset (which they could, for example, borrow against) that was passed down to them (or that they themselves bought in 1992) that makes them "rich" by generally accepted "de facto" standards of our society.
The Forbes list tries to come across as a list of the richest americans but it is obvious that there are quite a few people with considerable wealth who for one reason or another don't make that list until they have some kind of liquidity event. (Added: As you mentioned).
"Whereas working an hourly wage is likely never going to do much more than make you upper-middle-class."
While that would seem to be true I don't think it is to the degree you are implying in your statement. (By "hourly wage" I'm assuming you don't mean "hourly wage" you are including "salary" workers as well.) Someone in a nice corporate job making a stable salary that invests in the right assets at the right time can become wealthy. (An example might be a physician making $250,000 per year or an attorney, both in a stable situation (no fear of loss of job) that decides to invest in real estate or be a partner with someone else who manages a project. Or decides to be an angel investor (as if, ok..). The key here is that they make a stable income from a job and that they dedicate a portion of their income to investments. (I've personally seen this happen several times with attorneys and real estate they become the partner with the real estate person providing the legal work needed for projects as well as physicians who do a similar thing).
Here's the key though: stable job. My wife has a very stable job with a predictable income that will rise every year (healthcare). So she can afford to take a portion of her income that exceeds what she needs and invest it in something that could make her rich. Will she make "the list". No she won't. But she could become "rich" by the standards that most people care about.
