Americans are big on appearances. Gotta seem religious. Gotta seem rich. Gotta seem happy. Gotta seem free.
Seem
crazy how people in brazil used to look up to American living standards, but it turns out americans have more inequality, violence, worse education, health system, worse food, and the list goes on
I swear the biggest lie is that America is somehow a better country because it has houses that are expensive and fast food so that it can import what essentially accounts to slave labor when they finally come over excited to work for lower wages and live in cramped housing without their social networks other than the other slave laborers.
Its probably how we make it how people not climbing financially can still feel superior. No one has to pay the debt if you can keep getting new people on a lower rung.
Americans rarely have access to real bread
Propaganda of American exceptionalism.
Broke, poor, and in debt are three different things.
Broke just means no cash on hand. You can have tons of cash flow and assets but at the moment you are lacking liquidity to pay cash for things. You may or may not have debt. You might have just blown all your cash on a big purchase.
Poor means you have little and earn little and can do little. Debt is often a factor here but you can be poor and not in debt.
People in debt owe money. They might not be struggling at all. Sometimes rich people borrow money because it costs them less than the interest they receive on the cash they have. Or it could be the opposite, it could be crippling every aspect of their lives.
Americans carry a lot of debt on average. My only debit is my mortgage plus the last two weeks of credit card spending. I pay off my card in full every month. I only use the credit card because it offers purchase protection and I get rewards. Not all debt is bad debt, but a lot of it is.
I used to be comfortably poor with no debt. My income, expenses and living standards were low.
Now earning a little over minimum wage and fucking hell life is easy, but largely because I was poor and just got used to not having things. I continue that now.
Once you learn how to live on very little money out of necessity, living comfortably within your means as your wages increase doesn’t feel like such a bad thing.
And anyone who has been without a safety net understands that keeping a buffer in their bank account feels way better than splurging on impulsive luxuries.
My buffer started at treat £2k as zero. As my wages went up I quickly started going over £5k and then £10k, didn’t even know how to spend it. So I didn’t spend it.
Within a few years of saving like £5-10k a year I had enough for a pretty good deposit on a house, like 15% or so. The house we got wasn’t even at the higher end of what we could borrow. I don’t want to min/max wealth, I want to live comfortably, and there are allotments across the road from us.
The US is big on wealth inequality, like most third-world countries. Yeah, lots of people are broke, but lots of people are also making 200k/year. Overall we’re definitely struggling, but that doesn’t mean everyone is struggling.
Lemmy also leans both older and into the tech demographic, which tend to be higher paid.
Cries in near minimum wage UK tech work. The only upside is minimum wage is actually pretty good
Yeah, close to 6% of the population is making unfathomable amounts of money and the crazy thing is that just 6% of the population is still 20 Million people. You could replace the entire population of Tokyo with American millionaires and still have more to spare to claim New York too.
Tokyo metro area is more than 36 million people.
True but I think the rich are about 10% so I think that’s number should be closer to like 30-35m
Either way, US has a mega city or canada sized country of pure high income and or asset owner.
These people are true benefecies of the empire. They essentially enforce regime orthodoxy on political level while providing their professional services to the owner class. For this they are permitted to thrive, while the rest of working class is being driven into more poverty with each generation.
Yeah but the tokyo metro area is an insanely large sprawl only rivaled by the tristate area of New York, New Jersey, Pennsylvania, Connecticut.
I kinda meant just the dense city lines of both which is still an insane amount.
That entire tristate area is also 20 million people so its more people than that that are wealthy enough to think the empire as a truly good thing.
The US is big on wealth inequality
You misspelled “built”.
Debt, used properly, makes you wealthy. Every billionaire you know has debt because of the advantages.
I grew up middle class. To afford my prestigeous university, I took out debt (before grant only financial aid). The value of my education allowed me to earn a higher salary to pay it off in two years. I kept earning that salary and more after the debt was paid. It had a high present value.
I bought my latest house four years ago. Mortgage rates were so low I decided to finance part of it at 2% even though I had the cash. I now earn 4.5% in money markets. After taxes, I earn 0.72% every year not to pay off my mortgage. With $350,000 remaining, this is an extra $2,500/year right now.
I shop with credit cards that give me 2-5% back on purchases. I pay off my balance every month and have never paid one penny in interest or penalties in over a decade. My credit cards therefore pay ~$1,500/year tax free.
Larry Ellison likes controlling Oracle and being a billionaire. Rather than selling stock of Oracle to fund his lifestyle, he instead borrows against the value of the stock. As Oracle appreciated, he got to keep the gains he doesn’t trigger capital gains taxes.
Most Americans do live paycheck to paycheck. They live at the ragged edge of their means and remain ignorant of finance. However, this is a global phenomenon. The difference is that much of the United States tax code is set up to benefit the wealthy. Adopt their habits and your wealth starts to snowball.
Larry Ellison likes controlling Oracle and being a billionaire. Rather than selling stock of Oracle to fund his lifestyle, he instead borrows against the value of the stock. As Oracle appreciated, he got to keep the gains he doesn’t trigger capital gains taxes.
I never really understood this. He still has to pay the loan, and he isn’t doing that with his symbolic $1/year salary. What part am I missing?
Debt interest below investment yield means infinite money.
You’re missing the taxes they aren’t paying on the yield of the investment. That’s only taxed when sold. So if you borrow against investments tied up in the market then it never triggers the tax.
Theoretically their estate would get taxed on the value resulting in a nice cascade of tax triggers but they’re doing away with that asap.
You need to pay that loan with cash, right? I get that your assets secure the loan, but without another source of cash, how you pay back the loan and not sell your assets?
Just keep borrowing and pay with that. Debt interest lower than yield.
Can you provide an example? I’m not sure I get how that works out in their favor. In my view, paying debt with more debt is a terrible mistake and will get you in financial trouble. But I get that they have far more assets than I do. I just don’t quite see where it doesn’t go wrong.
Do they not have to pay the principle?
I borrow $1000, assuring you I can pay you back because I have $5000 worth of stock.
A few years later, I borrow $5000, assuring you I can pay you back because I have $10000 worth of stock (it’s not more stock, it’s just worth more now). I use that $5000 to pay off the $1000 debt plus interest, and then have some left over.
Few years later, I borrow $10000, assuring you I can pay you back because I have $50,000 worth of stock. I use that $10000 to pay off the $5000 debt plus interest and then have some leftover.
Repeat as necessary. The bank does eventually get their money (when you die or are for some reason forced to sell, paying off the debt with cash rather than promises). To the bank this is an investment. To you, it’s a way to get cash without having to actually sell your stocks, avoiding taxes, and letting your value continue to skyrocket.
Okay. Thanks. That makes sense.
I guess the cycle continues if you will the stock to your children. So it could be decades until anyone pays taxes.
And if the stock tanks, then I guess you declare bankruptcy.
Other reply was good.
To answer your question, you can borrow against equity tied up in assets without down payment. For example, if you have a house you can borrow against the value less any mortgage up to some percent of the total value. In my situation i can borrow up to 60% of the value of a house.
Down payments are for purchasing assets where the purchased asset will act as collateral. The idea is that the bank walks away with something if you immediately fail to pay on debts.
Stocks can act as equity assets in a similar way as the house. Equity loans generally have relatively low interest.
As a side note, this is all bullshit, interest is evil, and the system should be burnt to the ground and billionaires rotisseried over the coals for dinner.
As I understand it, one way is to just borrow again against similar stock. He borrows against stock bundle A for a while, and when that loan comes due, repays with a fresh loan against stock bundle B. A and B can be the same amount of stock, but as long as the line goes up, the loan against B more than repays the loan against stock A.
There’s intricacies and details in the process, but that’s how I understand the basic process goes.
I shop with credit cards that give me 2-5% back on purchases. I pay off my balance every month and have never paid one penny in interest or penalties in over a decade. My credit cards therefore pay ~$1,500/year tax free.
I don’t really have anything to add as this is pretty much all spot on to how the wealthy live, but on this one I’d like to point out that you’re not actually making money - you’re just taking back part of the money that you already paid. That money isn’t paid by the credit card companies, they’d never be dumb enough to leave money on the table like that. They pay it through increased transaction fees for the businesses, who eat the extra cost through higher prices. There are states that do something similar with their recycling programs. They give you 5 cents per bottle you recycle at the center, but you paid a 5 cent bottle deposit when you bought them at the store. You’re not making any money, or even making back some of what you paid the store. You’re just getting your deposit back.
Maybe you somehow reduce your taxes by cycling that money through a cash back program? I’m not well versed on finances, so I won’t even try to theorize on that, but it certainly isn’t free money or something.
Yes, the credit card spending is technically a rebate, hence why it is tax free. However, I am going to purchase an identical basket of goods and services whether or not I use credit, so it is functionally identical.
I’m guessing not admitting your finances are shit is pretty universal, no need to pick on 'Murica.
There is some truth to what you’re saying but the USA are special about it. It’s like, they try to (badly) act as if they had more than enough money but it’s obvious they’re struggling badly. Like a functional addict thinking he’s hiding it well but in fact everyone knows and there’s a shared social discomfort in the charade
Because being poor means you’re weak, and weakness makes you’re a piability to your friends, useless, and prey.
Ego
Bad education
Who’s pretending?
We’re all broke. Unless you’re a boomer trying to sell a $0.50 house you bought in the 50s you paid for on a gas station cashier salary. They’re ok for the moment. But even a lot of them are going broke now too. Highest demographic of newly homeless last I heard.
Because those boomers who are broke were attempting to keep up with those who actually had money. I know a few examples…
who’s pretending they aren’t broke?
Many US-americans.
It’s part of our culture. It dates back to when America was new. Plantation owners wanted to pretend we had a rich and powerful economy and history and culture. They made everything pristine and gaudy and exp wove looking but there was no substance. Look at the architectural decisions made in plantation houses and how the elements are still used in homes today.
We pretend we are better than we really are.
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And that you were never taught better was intentional.
I don’t know anyone pretending they aren’t broke in America…I know a lot of good people struggling paycheck to paycheck and that’s it. I love how Lemmy has become this echo chamber of hate for Americans when y’all are just as fucked in Europe and other countries too with so many similar or different issues. Imagine a little compassion for all people rather than assuming “America bad because America”. Just so incredibly sad and stupid to see how dumb so many people are… that kind of thought process is exactly the same type of people that vote for trump that have this same attitude about “insert race or country here”. Y’all need a reality check, yesterday…
I’m American
Speaking of “paycheck to paycheck”:
I certainly have compassion for people who live paycheck to paycheck because they’re struggling to make ends meet, but not those living “paycheck to paycheck” who have the ability to save, but choose not to. And, despite popular belief, the majority of people in the “living paycheck to paycheck” category are actually the latter. But it’s easy to assume the former meaning (it’s more intuitive, after all), so those two ‘subsets’ are almost always (basically everywhere other than within the depths of the methodology of the research that yields the figures) conflated, and so “living paycheck to paycheck” is often used to great effect in rhetoric as a result.
The fact is, on average, Americans have more of an overspending problem, than an underearning one. Did you know that 48% of consumers earning over $100,000 a year, and over a third earning over $200,000 are “living paycheck to paycheck”? Meanwhile, 25% of those earning less than $50k aren’t living paycheck to paycheck (a demo I was part of until I eclipsed $50k a few years ago)—maybe it’s time to more closely examine what those people are doing, and follow their example.
It’s absurd that anyone making less than $50k a year is saving more money than someone making $200k.
It’s absurd that anyone making less than $50k a year is saving more money than someone making $200k.
If they arent buying assets they arent actually saving, they are just building a buffer against drowning.
Also to simplify your percentages there of people living paycheck to paychecks.
- 75% under 50k a year
- 48% of people making 100k a year (only 21% of people are above this line)
- 33% of people making 200k+ a year
Seems like increasing pay does reduce that issue even if there is an issue of spending to your max budget in america but I’d actually rather have currency in circulation than sitting in accounts for the sake of collecting.
In previous centuries with colonialism Europe was the cause of much disgrace in the world.
After WWII with neo colonialism it was either us or ussr imposing their way of life and values over the media, but overly exploiting resources and weakening both local economy and healthy politicians and putting dictators everywhere.
us bad fame still didn’t catch up with all the bad stuff they did and are still doing.
when y’all are just as fucked in Europe
I’m sorry, is this some joke I’m too publicly health insured and 6 weeks of paid holidays by law and so on to understand?
Are you pretending that no one is broke in countries that have mandatory paid leave and “free” public health systems? As someone who lives in one of those countries myself I can, with 100% certainty, say you’re incredibly wrong.
America is a third world occupied country but everybody is in denial, obese and wearing nice clothes 😌
