Here's How Bored Rich People Are Spending Their Extra Cash
nytimes.com
nytimes.com
I’m sure it’s awesome for a lot of people in HN that have seen massive market gains in the last year, but it freaks me out. I worry about my parents who are very close to retirement since they’re the tail end of the last generation that had defined benefit pension plans. They’re not indexed at rates that can withstand a ton of inflation.
Are wages going to increase when the inflation starts to trickle down to the goods and services the working class rely on?
They did no such thing. Most money being "printed" is used as a swap for bonds held privately in banks, and that makes banks more willing to lend out money. So a lowered interest rate makes it more profitable to invest in stocks, and kept the financial system liquid enough to not collapse.
Then the gov't borrowed a bunch of money to send to all the low income people (the $1200 stimulus cheque), which is the opposite of stuffing it into rich people's pockets.
> Are wages going to increase when the inflation starts to trickle down to the goods and services
it's more likely that wage increases would trigger said inflation, rather than the other way around.
And who, exactly, do you think they're lending that zero interest money to? People and businesses with collateral, i.e. the wealthy.
It sure seems like someone gave the rich a big bag of money to me.
I'm a bit suspicious of these stats. People seem to pick a period that starts at the bottom of the stock market.
Consider a hypothetical single person, living in Oregon, who lost his or her job during the pandemic, and is still looking for work. That person has received $3,200 in direct cash, and somewhere around $40-55,000 in unemployment checks.
Plus other benefits such as food and medical.
How much is enough?
> So, under the new legislation, a typical worker could expect $985 a week for four months ($600 in extra relief plus state benefits), followed by up to 23 weeks of $385 a week in standard state benefits. Unemployment benefits are taxable.
So their normal insurance (which they paid for) covers everything but 600x24 = $14,400 in federal benefits they’re not normally entitled to.
Based on they above quote it sounds like $32.5k would be the upper end. Where do you get $55k? And remember they PAID into state level insurance programs for the majority of that and they’re entitled to everything but the extra $14.4K.
Why would you subtract state unemployment? These people also paid federal taxes, so should we just subtract the federal unemployment, too?
And again, that’s just the cash. There was also Medicaid for health insurance, numerous state and federal programs for food, programs for housing, internet, etc.
How is this not enough?
* The $1200 was scaled down if you made over a certain amount the previous year (50k? 60k? I forget exactly), based on your tax return. I think I got about half of this one.
* The $600 and $1400 went to fewer people than the other; I don't know the criteria but I received neither of these.
* For the extra $600/month for unemployment, that topped out around 14-15% (which excludes a lot of people from the denominator, so it's not 14% of the population).
The government gave all owners of labor up to $22,000 per employee. If you were a partner at a law firm making $500,000, you qualified for a $22,000 check right from the government because, as a partner, you're technically paying yourself.
There were also tax changes in the 1st bill that benefited the wealthy.
Thanks. I hadn’t even considered “just make more money” as an option. Any tips and tricks for my 62 year old father?
This sort of hubris was heard often before the first internet crash. This time around instead of the most amazing technological shift perhaps ever witnessed it's about sneakers and baseball cards.
> Benjamin Clymer, the editor of the watch site Hodinkee
> John Demsey, the executive group president of the Estée Lauder Companies
> Clement Kwan, the former president of Yoox Net-a-Porter and a founder of Beboe (he bought physical collectibles, not NFTs)
The people missing is the people that spend 8 figures on NFTs. The best I could find is Pablo Rodriguez-Fraile, who spent ~$67,000 and sold it for $6.6 million
I don't doubt that the sales are happening, especially since large institutions like Christie's auctions are involved. But it may be just an elaborate pump and dump by those with interests in these NFT markets. It just seems odd that people are spending absurd amounts on vanity products without coming out and owning it. Or maybe I'm just not in the right circles to know about them.
Another classic indicator is when your cab driver gives you stock tips.
But I figure now it's Uber driver giving crypto tips.
They're doing the opposite.
Is this level of idiotic consumption and speculation even widespread amongst the rich, or do we glorify a pompous minority in the media as fantasy for poor people?
I grew up with money. From day one my mother berated me for turning on more lights than I needed in the house, or wasting the last bit of butter on the packet. Our cars were always economy models and I drive a 17 year old car right now - fully bought and paid for by my dad 17 years ago for $15K. It's not a "beater". Why would I invest wealth-creating money on a depreciating asset to replace a perfectly good tool? I would never dream of spending over $100 on a pair of shoes, and they better last forever. My luxuries are working less hours, eating more takeout than I should, treating people to small gifts and spending money on gas to go to the beach.
All of this conspicuous consumption just feels like people who should know better are being taken for a ride. I'll make an exception for people like baseball-card-man who are taking others for the ride, he's just an opportunist. But I can't read about it all without feeling disgust at the lifestyle being sold to us readers. Skip the new BMW, save your money and put it towards anything that will make you free and do some good for the world.
I've never berated anyone for spending their money, mind you, and hopefully I never do. But I can feel the pull of this behaviour on aggregate. I get snide comments half the times I go surfing on my car or my board from people wit literally ten times less yearly income than me who blow it all on leasing new Mercedes station wagons every 3 years. Going to dinner with some friends feels like a game of who can blow the most money nonchalantly. No thanks.
I don't how your part of the world is, but living in Lisbon in your mid-30s you can feel how people are spreading themselves thin financially to keep up with the Joneses. I've started taking a public posture against it because I feel someone has to. I've seen this movie play out and it ended with a lot of people giving their homes back to the bank.
240 months later you don't feel any safer that you have $125000 in savings...meanwhile, you've upgraded your house 3 or 4 times, have upgraded the car 3 or 4 times, bought all the food and clothes and vacations...but you're still the same scared little rabbit you were when you had $200 extra.
People may or may not contribute to a greater cause with the extra money, but that's not the only factor into how people think about money.
Additionally, money does NOT follow value. That guy that IPO'd and his net worth went from $25,000 to $130M? It really wasn't from anything he did, it's lottery money. Is it fair? Meh, I dunno, I'm just pointing out the trope. But if you suddenly found yourself there, why WOULDN'T you buy the most expensive $item? It doesn't affect the number in your checkbook any.
We have the same brains our ancestors had...all it needed to do then was learn how to find the next meal.
Owning the wealth gives you the ability to allocate labor and the current wealth owners aren’t doing a good job. Redistribute the wealth IMO.
US$ 100K watches are generally built by hand by a craftsman (usually Swiss or German) and may take more than a year to build:
* https://www.alange-soehne.com/en/timepieces/1815-tourbillon/...
* https://www.chrono24.com/alangesoehne/lange-1-rose-gold-tour...
What makes the work of the electricians, carpenters, plumbers, etc, any better or worse than that of a fine machinist?
You're not wrong, it's just understand that you are making a value judgement, and not everyone has the same values as you.
And here's a Canadian watch maker:
* https://www.hodinkee.com/articles/canadian-comeback-kid-one-...
* https://www.bradleytaylor.ca
> It’s just that the work that could be done would be for poor people and no one is going to pay for it.
Which is why we have taxes and social safety nets (which was added to by CERB).
You’re right that it’s a value judgement. A tradesman might be able to fix problems that impact essentials (electricity, water, shelter) for 100 people in a year while a fine machinist makes a single watch for a rich person.
I think it’s shameful to be spending resources on frivolous luxury goods when such a huge chunk of society lacks the essentials required for a reasonable standard of living.
If you think you (or the government/society) can spend their money in a way that is "better" than they themselves can, take it from them (e.g., taxes).
In large swathes of the world, the computer you're typing on, the phone you have, and that ice cream you enjoyed the other night would be considered "frivolous luxury goods."
Be careful what you wish for.
My problem with conspicuous consumption isn't the relative utility being bought, it's the values that it signals to waste money for the luxury of wasting it. Making it desirable as a society to set money on fire instead of using it to better your situation is the real damage.
It's very rarely the craftsman who makes the real margin. That's left to the conglomerate who owns the brand.
One person buying one jet for $20M (plus operating costs), is probably a lot less money velocity that a whole bunch of folks getting $20M in (e.g.) stimulus checks and deciding to buy $20M worth of economy class airline tickets.
Or put another in a different transportation sector: only so many folks that can afford Ferraris, and pay to maintain them.
Whereas if money were less concentrated / more distributed, more folks could buy Fords (or Fiats). The amount of money stimulating things with 10 (or 100) Ferraris is much less than 1000 or 10'000 Ford/Fiats. More workers, more mechanics, etc.
You're right in that the rich person can stimulate the economy, but would a bunch of less well-off folks spending the same quantity have a larger multiplier? I'd hazard to guess that the answer is yes, they would.
The article is about watches, cars, and baseball cards. As entirely optional/luxury goods, there is no "exploitation" involved.
If it was about food, medicine, or other essentials, I might agree with you.
This, with more yachts.
This leads to you mimic the surface characteristics of the working class. Old car, old clothes, fashionably unfashionable, hobbies that involve working with your hands, etc. I think this is admirable but I also think that people generally have to go through an immature phase where they buy dumb shit to signal their status before they get to the situation you were raised in.
I don't like the article. It's just bourgeois-bashing and the people who get turned on by that old pastime tend to be somewhat venal themselves.
Case in point, Trump.
My boys are experiencing they first stead incomes at 18 with their first non-home-chore jobs.
They're spending some of that money on Hotwheels, and personally, I'm happy letting them experience that, they save a little, they spend a little, they get hooked on getting things they want...because it incentivizes them to be successful.
I don’t like the defense of the booj class by proles such as yourself when such kowtowing is effectively putting the boot on the necks of the masses.
Best not upset them or you might not get paid yourself, right? Talk about venal. “Let the rich be! I need to make my paper!”
What I hope to convey is that luxury is a trap if you're not already independently wealthy. And if you are financially free, you can still be sucked back into wage-slavery by wanting too much stuff. And even if you transcend that level of wealth, you can still find more fulfilment by spending your money on things that improve someone else's situation. Stop being fleeced by people exploiting your psychology for their enrichment.
It makes me feel better to buy a burrito from a family restaurant than a Hermès bag. Could we status-signal in that direction? Will it make a difference?
Is this behavior representative of the most successful? This article appears to have been compiled by looking for some of the most egregious examples of ridiculous things to buy, a real get-out-the-pitchforks kind of work, but surely there are those who are merely buying things like real estate and US equities. I can only imagine that if the coverage is broadly characteristic of this class, it would be almost accidental that it is so.
I hope the people portrayed in this article aren't representative but I do know there are two possible reactions to the piece: Being grossed out by the lifestyle or thinking it's a good idea to emulate it. Since the NYT chose to not portray anyone taking a bath on a speculative sneaker purchase, I can only assume their intention is to glorify this behaviour. So I choose to be outraged by it publicly as a counter balance.
On the other hand I really hate mandatory gift-giving: Christmas, father's day, valentine's, birthdays. I make the minimum effort I can get away with then.
this isn't an example of being enlightened, frugal, eschewing conspicuous consumption, etc. it's exactly what people mean by the phrase "penny wise, pound foolish". you drive yourself (and presumably others) around in a 17-year-old car when the cost of a brand new one that meets modern crash-safety standards would be nothing to you. the risk/cost tradeoff makes no sense for someone of your (or your family's) means. I would also critique your dad's paying cash for a car when he presumably had great credit, but that's a more debatable point.
My point is that worshipping frugality, independence and wealth-building is less likely to mess up my life than yearning for a $30M Porsche collection. Sorry if I didn't make my point very well.
Only those with a superiority complex or or the ones indoctrinated with with certain ideologies that preach hatred against people of different class or race. Everybody else couldn't care less what they do with their own money.
the problem isn't bored rich people