So if I worked as a doctor for 20 years, invested most of my income in that 20 years in to dividend paying stocks, then at age 45 or so retire to live off my dividends that my hard work paid of, I did not earn any of that?
How would you say that money used to support them and grow their wealth was "earned" if they didnt work?
The truth is it was earned. Just not by them. It's glaringly obvious if you think about it for just one second but we maintain a polite fiction all the same.
Throwing the money at your preferred wall street instrument of choice is the same thing but with half a million layers of abstraction and redirection all of which involve middle men who either take cuts or otherwise get paid for sorting and bundling, matchmaking, providing liquidity, etc, etc.
No. Why would it be?
Those layers of abstraction cut out the risk such that in many cases cash is the riskier instrument.
Because the doctor had to evaluate the investment opportunity and risk what they invested.
>Those layers of abstraction cut out the risk
And that's why you only make pennies on the dollar doing it that way vs the risky way of picking specific things with high growth potential to invest in.
Unless it's the doctor's hobby somebody usually does this on the doctor's behalf in exchange for a %. This is one of the functions of a well oiled financial industry.
If nobody was willing to do this for < expected rate of return then yes, that suggests all the money is earned.
>And that's why you only make pennies on the dollar doing it
Can you guess the average yearly S&P return over the last 30 years?
If the doctor et al - the investing public - don’t own the dividend-paying companies, who will? If you say “a broader base of people” I agree. If you say “the state”, I’d urge you to read some history books.
Ownership is an economic concept that is fundamentally misunderstood. It’s a skill you can be good at, and a good owner has a massive positive impact on society. It’s not a golden ticket to sit on your ass and switch off your brain like some others imply.
When you own something, you have to look out for everything that can go wrong with your property and have strategies in place to deal with it. You have to consider every possible use of it and decide on the one that adds the most value. You have to consider the long-term flow of resources needed for various projects and invest either your own or borrow someone else’s. You have to hire good managers and then manage them.
Owning something is a LOT of work if you do it right because you own the entire outcome, no matter what it is or who’s fault it is.
Buy $5 mil in S&P and that's exactly what you can do. Comfortably.
The fact that you can mix work with wealth and earn a higher return is proof of little more than you can mix work with wealth.
If you have wealth that is.
The PE ratio’s in the 500 S&P co’s have been heading ever upward (https://www.multpl.com/shiller-pe) indicating some sort of self-reinforcing effect.
With a basic income/free housing your comment would be valid though.
>> A doctor's wage is earned.
Your wage is earned.
> invested most of my income in that 20 years in to dividend paying stocks
Whether that one is 'earned' is debatable. From a neoliberal economists perspective you probably 'earned' it by risking your income. Although I always have to chuckle a bit of someone says that speculation is 'investment'. Investment is buying machinery, investment is specialization training of workers, investment is research and development. Playing roulette on the stock market is hardly 'investment'.
From a moral perspective you probably didn't 'earn' it. You didn't work for it and - since you were able to put it aside for a later use - you didn't actually 'need' it. So from a moral and societal point of view, that money should have rather gone to pay for teachers wages, for infrastructure or anything else that was of immediate necessity. By investing in the stock market, it probably just went to some banker's bank account.
>>You didn't work for it and - since you were able to put it aside for a later use - you didn't actually 'need' it. So from a moral and societal point of view, that money should have rather gone to pay for teachers wages
wow. just wow. So morally a person should only be paid what the need to live
that is your honest position.. If so I certainly hope people that think like you never attain any real power
Do you want me to hold that strawman while you give it a real good bashing? It can be satisfying, strawman bashing. It would however be more productive it you honestly tried to understand the argument I'm making. What do you think, do you want to give it a try? [0]
> If so I certainly hope people that think like you never attain any real power
Well, don't worry. The con-artists, faudsters and moochers from the swamp have everything under control and from what I see the populace-at-large is not interested in mitigating the pain and suffering and damage that crony-capitalism is brought upon us in or in correcting the course towards societal collapse which that entails. The hucksters meanwhile will continue to squeeze every last dollar of profit everyone else while their bought-and-paid-for politicians make sure that nurses and teachers and - well, everyone else, there a theme for you - pays a higher share of their income in taxes than their masters, while they themselves gorge on the ill-gotten gains their corruption, leaving behind the soiled and despoiled corpses of land and people.
The only alternative is raising taxes, the horror.
But hey, all power to you.
GP isn't saying that the good and upstanding thing is be paid only what you need to live. GP is saying that if we're looking at the moral essence of what "earning money" means, then investing in stocks is not "earning money".