My wife was always asking me to retire, but after a year or so she’d say “it would be good for you to have a job”. Then repeat. Retiring isn’t that fun when you’re in your 30s.
So I suspect a bunch of them will be back in the job market eventually.
If you've any experience with Argentina, or other hyper-inflationary events, there comes a point where your labor is more valuable to you than what others are willing to pay you for.
When the store of value is degrading rapidly, and wages in general always lag, those with options will do something else.
Most companies I know simply are unwilling to adjust their wages for inflation. When we were in a 2% inflationary environment, and that 2% could be counted on year after year as being stable, it was more reasonable.
With inflation in the double digits, with real inflation according to previous more accurate methods showing roughly a ~33% loss in value YOY, and the corresponding increase in taxes (as inflation increases your taxes increase as you enter higher tax brackets for the same value), it makes a lot more sense to use your efforts for yourself instead of being on the open market.
Factor markets and producers decide what they are willing to accept, and with a moving goal post in terms of a currency store, it makes more sense to wait in sheltered assets and produce goods you'll use.
People in general won't accept doing $1,000 in work and by the time they can spend it only having $700, or worse for example $1.
Do you think they will continue doing that work moving forward if they have no expectation of getting anything comparable in value in return?
Your point is probably applicable in less developed economies/low paid positions. For highly specialized well paid positions if this was the case you'd probably have a societal collapse.
So the question now is: what can we do and invest in as part of our survival motivated escape from the failing society?
Also, not everyone makes that much, and you seem to think that's a lot but its really not, especially if inflation is eating away at your stores regularly (over a greater time period than a year).
So, here comes the basic math available from looking up some publicly available figures. I only say this because some people have past trauma associated with math in general, but its really critical to make any kind of rational comparison.
The Federal tax rate above 89K is $15,213.50 in taxes plus 24% of the amount over $89,075 for Federal up to ~170k, and then you also have State taxes which may be as high as 13.3%; more if you own property (% based on fixed value), plus its counted as ordinary income so social security and medicare take off another 15.3%. Anything you buy has sales tax so another ~7%, and fuel/vehicle taxes.
Overall, at 89K ordinary income, 15213 = ~17% +15.3%+13.3% = ~45.6%, nearly half of what you get paid on goes to the government. Now comes along 20% inflation, and this is a tax because they printed too much money and couldn't balance a budget.
So 65.6%, assuming inflation is at 20% and not much higher, then there's taxes on various goods you have to purchase such as fuel and general sales tax, property taxes, it varies, but we'll say 7% or more on any dollar you spend, and depending how much you have to drive, that could be about 3% (to make it round), since vehicle costs and taxes are non-deductible.
So factoring in all taxes on that income you receive, somewhere between 65 and 75.6% with 20% inflation goes to government. If you are self employed, you have more options to make certain costs deductible, and if you are not its about half of that 15.3% less so there's some leeway.
So, you can work 80 hour weeks, stressful job, making that 89K/year or more, and only take home ballpark around 30,616 after factoring in inflation, and taxes. If you don't reinvest in an asset that sheltered from inflation you lose that much or more of your surplus/stores the following year and each subsequent year thereafter whereas business simply passes it through to you in higher costs.
Alternatively, you can grow your own food, produce your own products, work less, and keep 100% of what you produce and use, and if you have surplus sell some of it if the price is right and they'll tax you on that small amount.
Should you trade 4160 hours of your life for 89K, when, by the time you get it and can spend it, you only take home about 30K and the prices may have risen just as quickly during that time to net 0 or negative.
That's part of the horror of hyper-inflation, and while it hasn't by definition hit 50%/month yet, nothing fundamentally has changed to stop inflation despite what the news may be saying.
Those that have lived through similar situations know they have to invest their efforts in producing their own goods such as raising chickens, goats, milk and cheese. Without food security and having people who have specialized labor that can help out, you are at the mercy of creditors and the producers you depend on for daily necessities and they will pass inflation costs on.
> We are talking about people making above >150k/year
People in general won't accept doing $1,000 in work and by the time they can spend it only having $700, or worse for example $1.
Most companies I know simply are unwilling to adjust their wages for inflation
With inflation in the double digits, with real inflation according to previous more accurate methods showing roughly a ~33% loss in value YOY, and the corresponding increase in taxes
I ended up doing a lot of research during my college years. By definition hyper-inflationary is >50%/month, but it always lags and government isn't incentivized to keep it accurate.
Year over year stateside is relatively tame in comparison except its not going to taper off as long as they keep printing increasing amounts of money.
The Fed also broke banking when they departed from fractional banking in 2020 by setting the required deposits to 0% and went with capital requirements which use Basel III (counting capitalization on the stock market as backing deposits), which as we've seen with FRC, stock market exposure for banks in general is a bad idea.
So far managed to install 5kW solar panel arrays at two family properties connecting that to the grid and figuring out a way to get reimbursed by government and so lowering final costs around 2500 euro for each installation. Now I have an excess electricity so I invested in a sawmill and hopefully soon will slice a timber for a joy of doing so. Being able to build my own sauna and get some wood for roofing could potentially break it even.
Also investing time and attention into my open source project gives me the basic fulfilment for purpose and creativity urgently needed after experiencing academia. Learning a lot of new stuff - HTTP, onion architecture, QML, public key cryptography and zero knowledge proofs - among many other things. While also being able to express myself creatively in software development than I ever could be in academia. Does not matter much if the developed idea fails, I just really want to know how.
Please elaborate
Ethics are individual, but I can totally agree with this sentiment.
To effectively make money in up, down, or sideways markets you need to be able to trade options. Options are risky, but you can structure them in combinations to reduce risk, but those positions are handled differently depending on whether you are a primary dealer, or an individual investor.
When certain options are coupled in certain structures, they form synthetic shares at the broker dealer level which can exceed the amount of shares in the float, and the market maker assumes the risk because they delta hedge to facilitate selling and clearing contracts.
As a result, with sufficient capital you can manipulate the market price down since a synthetic share is counted indistinguishable from a real share and with sufficient capital this can be an arbitrary amount.
The basic mechanics of the market are when there are more sellers than buyers the price goes down, the opposite causes the market to go up.
Algorithmic trading capitalizes on volumes/churn, and can trigger intentional volatility halts with sufficient churn which almost seemed targeted when it might go against a short seller (i.e. moving up).
Overall the markets today from what I've seen are just a very clever way to fleece people's retirement money. For someone to gain, someone must lose. Ethically, its quite tainted, but other avenues for capital investment are generally not easily accessible to accounts less than 100k.
Additionally, while individual investors may be fined for breaking SEC laws, the fines for broker-dealers and hedgefunds almost never come close to the profits (fraud is baked in) at least in any action taken in the last two decades that I've seen.
You have dark pools also that don't have to register the sales with an exchange sometimes until end of day (which isn't reflected in the exchanges market price, at least afaik).
It is also possible to fix prices with two colluding parties through opposite ended contract legs for prices based on volume/active futures/contracts by creating a net zero position between those parties (spot price gold/silver; eligible vs registered), yes, its against the law but the SEC is toothless against the major players doing this, and they can't force the visibility needed to go after them. They lose in court(https://www.youtube.com/watch?v=-Eyo0u4_sYI&ab_channel=ThePr...).
In short, its on their honor as broker dealers that their numbers at the COMEX are accurate, and there has never been an independent audit.
JPM manipulated the silver market for decades and got off free and clear with only a small fine, moved operations overseas and continued doing more of the same in the London Exchange (from what I've heard, though that's strictly rumor so take that for what it is).
Gamestop was another where they were testing gamma with contracts forcing the market maker to induce a short squeeze to cover, The regional bank FRC most recently with a well timed media package (inducing a bank run) after two other bank failures which were known well in advance. Was just criminal.
I saw a completely fake video show up on youtube about that time with people lined up outside a building on a Sunday to get their money with the video headline showing "FRC bank run in progress". Driving down the street filming a building where storefront windows with the reflected text in the wrong direction and a line outside (it was a sunday, banks aren't open).
What was done with the media coverage looked totally criminal for a bank that was on solid foundations and practices (as a model of good banking). With the exception of aggregated indebtedness requirements for a publicly traded company which was caused by the shorting and subsequent drop in share price which forces the bank to have liquidity issues.
If there was not some level of tacit approval for additional consolidation of an already consolidated business sector, where they mention the risks in the previous FOMC meeting for regional banks. Its pretty clear there should have been much more action taken after the third bank failed(Credit Suisse), which didn't happen.
Standard SEC Disclaimer, I hold a long position on FRC which will probably expire worthless at a loss.
Also, no small investment makes a difference in the trajectory of how the corporation proceeds. A vision can not emerge on the shareholder’s side when the voting power is highly distributed, and the knowledge of how the company operates is secondary to the stock owners. Thus only a profit-seeking motive survives, and with that, practices of maintaining monopoly power by buying out competitors, ridiculous patent lawfare and restraining the ability to fix things you buy. F** that.
I would kill to retire. All I want to do is make art, music, cook, hike, kayak, and travel on the cheap. I have about.... 1/20th of the savings needed.
I get that impulse, but that is like saying that most of our current jobs are reasonable and for the greater good cause?
Most of the real value providing and necessary jobs are currently underpaid, while on the other spectrums end few people can reap automations fruits that actually should be shared by society, or somehow like that.. ( I know, opinionated can derail into endless discussion topic and other's may express better).
Also, why isn't seen making music and art as a contribution to society while some of the current jobs are hurting society?
I ask because as I first read your comment I was unable to see the selfishness, since GP outlined that they lacked the financial means to support that lifestyle (also implying that taxes would still be paid and money would flow through the system all the same). It took me writing out a reply to you, asking how you thought it selfish, before my brain came up with the potential answer I outlined in the first paragraph.
Rather, I would imagine the "not-selfish" version of this would be to spend your life doing those things, and finding ways to help others get to where you're lucky to be.
I just find the "I'll get mine and fuck off" attitude to be less than ideal.
I see it completely the opposite. If someone has already made all the millions they'll ever need, it's better for society to free up that job for someone else who needs the income instead of keeping amassing more and more millions to one single person. Paying it forward here is opening up the opportunity for the next person.
A life of "leisure" still contributes to society. I would of course still pay bills and buy things, supporting business. I'd still pay my taxes, supporting the government. I'd still volunteer, like I do now outside my job. I'd like to teach, write, and create more (I like to sing, make music, art, furniture, etc). And I'd really like to start an informal class for underprivileged youth to learn computer skills and get a job without going to college, like I did.
If I didn't have to work, I'd have a hell of a lot more time to make the world a better place. In addition to the selfish kayaking, cooking, traveling, etc, that I already do with a job.
b) What about it is selfish?
A lit more than any investor class are rich by any historical or global standard.
The picture does not change substantially if you look at measures of income adjusted for purchasing power parity. The West is far richer than the Rest and the latter much more populous.
> You may be making much more raw money than a 17th century monarch was, but that doesn't mean a hill of beans if everything costs more and you aren't afforded the same liberties that they had.
I eat better, fresher, cleaner food than they did most of the year, have far more variety in it, have access to vastly more cultural artefacts, and I have access to modern healthcare. I’d be dead but for antibiotics. The same is probably true of one of my children. My housekeeper lost a sister to illness at 21. More than likely she’d have survived if she’d had access to even the level of care standard in Shanghai twenty years ago. Being rich is in fact better than being poor and living in a rich country better than living in a poor one for the large majority of people.
I think you much overlook how great it is to have (somewhat) functional law enforcement, infrastructure, and access to goods and services and healthcare. This is what makes us rich, not the ability to buy cheap things.
Like most things, the grass is greener on the other side.
I think we need to redefine retirement as “financial independence and free to do what you want”. I could honestly fill several hundred years of retirement with things I want to do. The people who get bored really puzzle me.
I thought the same as you and as an avid game, tech enthusiasts, electronics enthusiast, outdoorser reader and social person, I thought I'd be fine.
Unfortunately (or fortunately?) I find these things hold no intrensic meaning beyond the enjoyment of the moment - which I love, but isn't enough to satiate. None of these things bring fulfillment or accomplish any goal beyond thr arbitrary ones I set myself.
I suppose all goals are arbitrary at some level, but in my years retired I'm yet to work out how to bring that sense of real accomplishment back in my passtimes.
As such, I moved back from retirement to semi retirement after about 3 years. I still live on my own schedule, but I run a number of small businesses designed to do but not take over my life. I also volunteer and raise a family. I can't imagine ever fully "retiring" again, and I can see why a lot of older people give up on life after they do.
That doesn't mean I won't be programming and doing work-y type things, but just doing the ones I want to do.
It amazes me when I travel the world how many people live in places with absolutely stunning backdrops they take for granted because they've lived there so long. They forget and seem confused at first when you mention it. Anything becomes normalised and less exciting when it's your day to day.
That is one strategy: you'll have a place to stay and three meals a day for the rest of your life!