City Desk

Rich People Optimistic About Their Wealth

The Hilltop reports CEOs Steve Forbes (of Forbes, Inc.) and John Schlifske (of Northwestern Mutual Life Insurance) paid a visit to Howard University and had some positive things to say about the future of being rich.

"This stuff happens. It's happened before, and it will happen again. But the good news is that we're gonna get out of it. There's reason for optimism," Forbes told the audience of b-school students.

Schlifske's advice to the students was to build wealth by putting away five dollars from every paycheck. Which would certainly be useful advice...if we weren't living in an time where students are graduating with more debt than ever and hoping to pay off that debt with salaries from jobs that are no longer available. Savings go pretty quickly when loans come due and they can't be charged off with bankruptcy (something Megan McArdle recently argued for).

Plus, black families—and by extension black students—have 1/20 of the wealth and are far closer to poverty than their white counterparts. Even middle class black folks are more likely than whites to have relatives in poverty who need financial assistance. So even if savings are accrued, they can dissolve pretty quickly.

But hey, thank you, multi-millionaires, for the advice.

Photo by AMagill via Flickr / Creative Commons Attribution 2.0 Generic License

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  • Mike

    Oh quit being such pussies and go get a job. Once you get a job do well at it and get promoted. Before you know it you will be able to quit relying on everybody else and stop fucking whining about how the system is set up against you.

  • Mrs. D

    Yeah, $5/paycheck for 40 years at 8% rate of return, compounded daily, will give you a sweet $38K. MAKE IT RAIN, $38K! Hey, if your employer is so generous as to offer a 100% match on that $5, you'll have a cool $77K! If retirement was so cheap, why did companies do away with pensions?

    I'm so sick of hearing about how we're all lazy worthless slugs who can't even do the "little things" that will make us rich. For someone in their 20's or 30's getting rich in their lifetime is mostly a function of birthright or incredible luck.

  • Mike

    Or hard work or innovation but we wouldn't want to talk about that here. I am sure most rich people just won the lottery and are stupid or had parents who won the lottery and are also stupid.

  • dave r

    Well it does help to not have tardo parents so they pay for college. So yeah I guess it was my birthright. Mrs d let me guess you are a teacher?

  • Mrs. D

    Not even close. I'm an economist. I have 3 college degrees that I paid for with student loans, and I don't have any trouble paying my student loans back. I live lean and contribute a lot of money to savings. I bought a cheap house (they do exist, but they come with space and neighborhood sacrifices) so that I could get out from under the crazy rent increases in DC.

    I'm still worried if I'm going to be able to pay for retirement. And short of winning the lottery, I'll never be "rich" or "wealthy." People who have a million bucks to pay for their retirement are not "rich" in our system (that'll net you maybe $50-60K/year, just slightly below the median household income in the U.S.), and probably came by that money through lots of sacrifice. Meanwhile, the savings they scraped up through their hard work can be decimated in the blink of an eye through unprecedented greed by wealthy corporate masters who will never face consequences for their actions.

    Facts are facts. The average joe earns less than he has in 40 years. College is obscenely expensive. Basic necessities like housing are less and less affordable. The middle class keeps shrinking. The level of income inequality in this country is typically only seen in corrupt, developing nations. And then some uberwealthy scum who is part and parcel of the problem goes and makes a snide remark about "saving $5 a paycheck," as if the average American was SO lazy, that they couldn't even be bothered to do that. Do I know people who don't save for retirement? Sure. But I also know a lot of people who worked hard, sacrificed, saved aggressively, and are still very pessimistic about their future. My grandfather spent his life working 60-70 hours a week in a mill only to be booted at 57 when the company went bankrupt and find out that the pension he was promised would be "settled" for $53/month. Fortunately, they had saved a good nest egg as well, but that was the beginning of the collapse, and now we're getting close to the end. Without a broad middle-class with purchasing power, our economy CANNOT survive.

  • Mrs. D

    Oh, and my grandfather also died for lack of healthcare. He was supposed to get retiree healthcare from his employer, but that went down the tubes with the settlement. While waiting to become eligible for Medicare, he died of a heart attack. He had known that he needed a bypass, but couldn't afford it without insurance or Medicare, but because he had savings and a house (insufficient to pay for the surgery), couldn't get any other assistance to pay for it.

    Pull your heads out of your asses. The petty bourgeois are the biggest threat to this country. You do the bidding of those who don't CARE if they destroy the country (I won't argue they're actively trying to, just that they don't care if that's the result of their actions), thinking that they care about you, but you know what: you're next. You're their useful idiot. But when they don't need you any more, well...don't let the door hit you in the ass on your way out, I hope you enjoy your accommodations in the only run-down apartment you can afford after you watch what you've worked hard for slip away.

  • Ben Miner

    Where to begin. If you are taking the average of $60k for annual retirement, that was all contributed tax free. being eligible for retirement you would use that $60k in full vs that being the median income and the take home being more in the range of $40. I will take that $60. That is not counting the SSI that for now exists, and if you were making that much per year will likely be over $1,000 a month. Now all of a sudden we make $72k. Neat.

    No on to broke companies. You state that the overzealous union demanded to much and made the company go bankrupt. Clearly the executives and rich investors made out like bandits on that bankruptcy. Yes it sucks that the pension was reduced, but that is what happens in bankruptcy. When a company is forced to take out loans to pay retirement benefits it couldn't afford in the first place, those lienholders come first.

    I am sure there will be more...

  • Andy

    Mrs. D no offense but you don't sound like a very good economist. "Rich" by winning the lottery? "A million bucks?" "Facts are facts" followed by the incorrect facts?Three degrees and "Economist" is all you call yourself? Here's what I am going to call, that bluff!

  • frank reynolds

    Not to sound mean here but you can go get another job at age 57. I'm sure that would have helped retirement

  • dave r

    Is the company using me when I get paid and have received 20 percent rises the past 5 years? Yes if you work hard you can get paid. Oh and I own my own house and out away way more than 5 a week. I'm just sooooo greedy!

  • Mike

    Don't say that too loud. The age discrimination group will be here soon making excuses why grandpa couldn't work.

  • dave r

    Too bad you didn't get that degree in economics before those other two degrees. You should have debt, what on earth do you need three degrees for when you couldn't afford them?

  • Andy

    Just ordered a new bumper sticker because that's my ball-less liberal way of getting my point across. It says "Not my economist" and then there's a picture of Mrs. D with a red circled X.

  • Mike

    Andy you are such a useful idiot to the automotive industry for driving a car. Get a bike already!

  • Mrs. D

    Who the fuck are these tools posting on the City Paper? What conservative blog did you piss off to get on their blogroll? Fucking teabaggers. Deny reality all you want, tools, but you'll find out what's going on soon. So many issues to take here. If you contributed tax-free, you're paying taxes on the withdrawals. ROTH contributions, made after tax, are tax-free on withdrawal, NEAT, HUH? I never said anything about the amount of Social Security someone might be eligible for. However, if you managed to save enough to have $60K in retirement income from your own investments, you'd be paying tax on half or more of your Social Security income as well. I never stated anything about unions, even though you correctly deduced that my grandfather's employer was a union shop for most (not all) of his adult life. Instead, I made a point about corporations being able to break their contracts consequence-free, without damaging the profits and wealth of those supposedly "managing" the corporation, and while prioritizing things like supplier contracts over employee compensation contrats, while the people who those contracts were promised to suffered ALL the consequences. But that's what teabaggers want, privatize profits and socialize risks. I have many shelves of books that would help you understand how you're getting screwed, but you seem to like it, so bend over and take it.

    This all makes me want to join them in saying "fuck you, I got mine," because I make enough money that I'll never really hurt for things I need, or even things I want. But I actually care about fucking human beings that work hard and get screwed while we race to the bottom. I've BEEN in a Chinese factory. If you care to see your future, you can join me the next time.

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