Money follows money

Shelflife · 23-07-2017 02:33PM

Drumpot wrote: »

Would you say the people with the highest IQs are the richest in the world or those who made their wealth manipulating the system? I don't think you need high IQ to be a good manipulator.

A lot of the time it's basic money management that will result in people building up a decent nest egg.

People with high IQs may not be good at money management.

Simple stuff like avoiding bank charges and interest goes a long way. Putting off a purchase and saving for a car rather than getting a loan will put you in a much better position over time.

A friend of mine spent all his wages every month and then when he needed to do stuff around the house would top up his mortgage. Net result is that 20 years later he still has a large mortgage but I've cleared mine.

He would max out his CC and I would clear mine every month, he would pay €1200 to €1500 a year in fees/interest and I would pay none.

20 years after college with similar jobs , his financial position is totally different to mine. Totally down to bad money management.

Avatar MIA · 23-07-2017 02:37PM

Shelflife wrote: »

A lot of the time it's basic money management that will result in people building up a decent nest egg.

People with high IQs may not be good at money management.

Simple stuff like avoiding bank charges and interest goes a long way. Putting off a purchase and saving for a car rather than getting a loan will put you in a much better position over time.

A friend of mine spent all his wages every month and then when he needed to do stuff around the house would top up his mortgage. Net result is that 20 years later he still has a large mortgage but I've cleared mine.

He would max out his CC and I would clear mine every month, he would pay €1200 to €1500 a year in fees/interest and I would pay none.

20 years after college with similar jobs , his financial position is totally different to mine. Totally down to bad money management.

Unless you're saying you're dumb, not sure why this is relevant

Solomon Pleasant · 23-07-2017 02:37PM

Avatar MIA wrote: »

And I always quietly smile at those that those that always quietly smile like the above. But, to be fair, a chip on the shoulder attitude can be a strong motivator.

I have seen it recently where a member of the "merchant prince class" got a better treatment than Joe Soap would. A strange phenomenon as I could not see any benefit to the person offering the preferential treatment, other than possible repeat business, which would as likely happen if it were Joe Soap.

I don't have a chip in my shoulder, apologies if it came across that way. I don't work in construction so I'm not biased, I'm actually in college but I was just indicating that construction is a sector where less academic inidividuals tend to gravitate towards and that it can be considerably more lucrative than the average college degree.

KyussBeeshop · 23-07-2017 02:38PM

Avatar MIA wrote: »

That would be a case of 'and others may also become wealthy', not a reason why wealth and intelligence are not correlated. Besides, intelligence is, I would argue, also inherited, and I'd wager further that most people that gain inheritances are related to the person that has died.

And if you have a high income I'm pretty sure that'd have a correlation to wealth generation. It's hard to have one without the other.

If you have a lot of money to start with, you have far greater educational opportunities, can have a lot more specialized talent put into your education, and have far less to worry about in life outside of education - you also, very importantly, have far more opportunity to end up in the right social circles in wealthy education facilities, that grant you critical access for generating/expanding your ability to gain money when you enter industry - and are far less likely to have to worry, about having to just make ends meet when you enter the workforce.

The myth that is peddled, is that it's always a case of self-made meritocratic effort - and that it should be assumed to be this way - except these myths aren't justified, it's not that simple - and those myths serve to protect the advantage, that those starting out with a ton of money have over everyone else, from scrutiny.

Avatar MIA · 23-07-2017 02:39PM

Solomon Pleasant wrote: »

I don't have a chip in my shoulder, apologies if it came across that way. I don't work in construction so I'm not biased, I'm actually in college but I was just indicating that construction is a sector where less academic inidividuals tend to gravitate towards and that it can be considerably more lucrative than the average college degree.

It's also very cyclical and prone to boom and bust. Can you imagine the reaction you would have got if you posted your post 5 years ago?

manonboard · 23-07-2017 02:39PM

Permabear wrote: »

This post had been deleted.

Permabear. Would you mind, for my own personal curiosity and that alone, offer your thoughts on the value/usefulness/ and logic behind those platitudes.
I would be one of those people you describe. I make money, I have a higher tendency to spend it, for those reasons above. I don't feel i am being financially responsible, yet when i have much saved money and i am continuing to save/invest more.. It seems such a silly thing to be doing. I could be dead next year for instance. I also do not have much fear of being poor in the future, as realistically, I'm in a better position than most, and anything big enough to shock that, will likely shock anything i use to protect myself.

No argument from me about your reasoning, I have an emotive fear you may indeed be right, so would like to hear more.

Avatar MIA · 23-07-2017 02:40PM

KyussBeeshop wrote: »

If you have a lot of money to start with, you have far greater educational opportunities, can have a lot more specialized talent put into your education, and have far less to worry about in life outside of education - you also, very importantly, have far more opportunity to end up in the right social circles in wealthy education facilities, that grant you critical access for generating/expanding your ability to gain money when you enter industry - and are far less likely to have to worry, about having to just make ends meet when you enter the workforce.

Undeniably so, but which came first chicken or the egg?

KyussBeeshop · 23-07-2017 02:43PM

diomed wrote: »

We are in a boom now and nobody mentions it.
Sell what you can and have the cash ready for the stock market bargains that will be on sale in a few years.

DJIA (Dow Jones Industrial Average)
9th March 2009 ........... 6,547
23rd July 2017 ........... 21,580
An increase of 230%
The index should go back to 10,000 or less.

And as I said earlier, the average person is very stupid about investments...

If it sounds like an easy 'get rich quick' scheme, or otherwise too good to be true - then it probably is.

Why not just put all your assets in the next cryptocurrency boom crash?

Appropriately from a mod of the Horse Racing forum.

kupus · 23-07-2017 02:44PM

I often heard in business that making the first million was the hardest million of all, often times the people that say this neglect to say that they may have started with ten million in the first place.

Solomon Pleasant · 23-07-2017 02:46PM

Avatar MIA wrote: »

It's also very cyclical and prone to boom and bust. Can you imagine the reaction you would have got if you posted your post 5 years ago?

That's completely true, but isn't every sector prone to boom and bust? Isn't that the nature of the economy? Whenever there is a boom, there will most certainly be a bust. Every sector suffered as a result of the recession although construction probably more than most. I'm not a proponent of the construction sector, but I realise that it is more lucrative than a lot of college degrees which generally lead to dead end jobs and poor working conditions (not that those are absent from construction aswell).

manonboard · 23-07-2017 02:46PM

KyussBeeshop wrote: »

The problem with any supposed correlation between intelligence and money, is that the more intelligent someone is, the more they're likely to realize that the entire system is extremely gameable/rigged at parts, and overall is not very meritocratic - and is more likely to see all of the ethical faults (and lack of useful contribution/production to society) inherent in many of the most lucrative ways of gaining large amounts of money - such that they may be more likely to be turned off the most lucrative areas of gaining extreme amounts of money in the first place.

Some people actually do give a toss about ethics, and would forego massive money making opportunities due to the ethical problems inherent in them...

Thats a very astute point i believe. Thank you for sharing it.
I would agree that as intelligence tends to grow, so does the requirement for that intelligence to gravitate towards sustainable and more ethical solutions. There are many exceptions and different types of intelligence, but overall. Smart people tend to become nice people, because it feels better, and a huge benefit of being smart, is the ability to direct that towards learning to be happy. Happiness in any non sustainable way, or in a way that does not include the interdependence of those around us, is a non smart solution.

23-07-2017 02:46PM

Shelflife wrote: »

A lot of the time it's basic money management that will result in people building up a decent nest egg.

People with high IQs may not be good at money management.

Simple stuff like avoiding bank charges and interest goes a long way. Putting off a purchase and saving for a car rather than getting a loan will put you in a much better position over time.

A friend of mine spent all his wages every month and then when he needed to do stuff around the house would top up his mortgage. Net result is that 20 years later he still has a large mortgage but I've cleared mine.

He would max out his CC and I would clear mine every month, he would pay €1200 to €1500 a year in fees/interest and I would pay none.

20 years after college with similar jobs , his financial position is totally different to mine. Totally down to bad money management.

There should be WAY more emphasis on life skills like money management in school. Not that there won't always be people with poor financial impulse control or poor judgement, but I think it can only help people look to the future if they're educated about the long term implications of decisions they make on a day to day basis.

Shelflife · 23-07-2017 02:48PM

Avatar MIA wrote: »

Unless you're saying you're dumb, not sure why this is relevant

I'm not sure what you are getting at or maybe you missed my point altogether.

Basically two people , similar backgrounds,education remuneration. One managed his money well, the other didn't are now in polar opposite financial situations.

Not sure how I look dumb in this situation.

I was answering the posters question re IQs.

Avatar MIA · 23-07-2017 02:51PM

Solomon Pleasant wrote: »

That's completely true, but isn't every sector prone to boom and bust? Isn't that the nature of the economy? Whenever there is a boom, there will most certainly be a bust. Every sector suffered as a result of the recession although construction probably more than most. I'm not a proponent of the construction sector, but I realise that it is more lucrative than a lot of college degrees which generally lead to dead end jobs and poor working conditions (not that those are absent from construction aswell).

That's key, it undoubtedly did. I'm way too lazy to get actual facts, but that particular sector collapsed. And many of those tied to it became unemployed or emigrated. Some of course re-skilled, but very many took massive pay cuts.

Other industries suffered, but nowhere near the same extent.

KyussBeeshop · 23-07-2017 02:53PM

Personal finances and money management skills are important. Placing the blame on these skills (or a lack of) is also a handy scapegoat for the simple fact that people with less money are being squeezed harder now than in a long time, and have a much greater cost of living than before.

Better money management is all good - but not much of a factor when you get less money than previous generations, and have to spend more of it on basic costs of living.

The average person would do better, being politically/economically active enough to expand their share of the gains made in society/the-economy - but by and large people are not active like this (unless they have a lot of money....), and do not care for the topic much - and as a result, are worse off.

Avatar MIA · 23-07-2017 02:53PM

Shelflife wrote: »

I'm not sure what you are getting at or maybe you missed my point altogether.

Basically two people , similar backgrounds,education remuneration. One managed his money well, the other didn't are now in polar opposite financial situations.

Not sure how I look dumb in this situation.

I was answering the posters question re IQs.

Was only joking.

Solomon Pleasant · 23-07-2017 02:57PM

Avatar MIA wrote: »

That's key, it undoubtedly did. I'm way too lazy to get actual facts, but that particular sector collapsed. And many of those tied to it became unemployed or emigrated. Some of course re-skilled, but very many took massive pay cuts.

Other industries suffered, but nowhere near the same extent.

I'm not sure what your argument really is, apart from the strange claim that I supposedly have a chip on my shoulder.

The construction sector collapse was an exception which was a very rare happening, to the extent to which it happened. No sector is immune to the effects of economics, which is my point alongside the fact that the construction sector can be much more lucrative than a 4 year college degree.

Avatar MIA · 23-07-2017 02:59PM

Solomon Pleasant wrote: »

I'm not sure what your argument really is

Okay.

steddyeddy · 23-07-2017 03:16PM

Avatar MIA wrote: »

Or, to look at it another way. Do you think people with below average intelligence, say 10 or 20 points are more or less likely to accumulate "lots of money"?

Depends on the mode of accumulation.

Permabear · 23-07-2017 03:16PM

This post has been deleted.

vegetables · 23-07-2017 03:56PM

a compound interest calculator reveals the following. (cant link - new user)

rich person -

€200,000 at 4% interest over 5 years: €243,330.58. Gain: €43,330.58

average shmuck -

€10,000 at 4% interest over 5 years: €12,166.53. Gain: 2,166.53

A good illustration of my earlier perfect analogy of swinging a weight on a rope.

Money grants access to further money making.

The fact that Brian cowen once lost it on the dogs, someone from westlife lost it on magic beans or a scientist measuring marshmallows doesn't change this.

Wesser · 23-07-2017 04:03PM

If you already have money...then you have a lump sum to invest in a new business....and make more money.....

If you are starting g from scratch them you're on the back foot aren't you......

vegetables · 23-07-2017 04:05PM

Wesser wrote: »

If you already have money...then you have a lump sum to invest in a new business....and make more money.....

If you are starting g from scratch them you're on the back foot aren't you......

yeah but there was a scientist who measured brian cowens kids resistance to marshmallows so no, the opposite is true.

ytpe2r5bxkn0c1 · 23-07-2017 04:09PM

Wesser wrote: »

If you already have money...then you have a lump sum to invest in a new business....and make more money.....

You already have money.... you invest in a new business... and lose it all.

It happens often.

Solomon Pleasant · 23-07-2017 04:12PM

Faye Flat Bolt wrote: »

You already have money.... you invest in a new business... and lose it all.

It happens often.

Yes, but I think the poster was indicating that the wealthier individual actually has the money and may be able to afford a loss whereas the poorer individual probably doesn't even have it, never mind the risk analysis aspect of it.

The difference is the opportunity afforded to both individuals.

Permabear · 23-07-2017 04:19PM

This post has been deleted.

Pat Mustard · 23-07-2017 04:23PM

Permabear wrote: »

This post had been deleted.

And where is this knowledge, the correct knowledge, to be got?

From US based hedge fund managers? :cool:

I can go out and buy twenty books or look at two hundred youtube clips on fitness. Some of them will be rubbish but what works will become apparent, fairly readily. You can discard what doesn't work.

It's not the same thing with money. If it doesn't work, unless you've been working within entirely theoretical parameters, you've either lost money or lost the opportunity to make it elsewhere. It's not quite the same. Developing that knowledge can be a costly experience in itself.

KyussBeeshop · 23-07-2017 04:26PM

Permabear wrote: »

This post had been deleted.

Except that's the meritocracy myth - and it ignores that, when you look at the big picture of society overall, things are stacked in the favour of those who already have a lot of money, and increasingly against those who do not.

The focus shouldn't be on individual action to better your personal/individual lot (even if this should still be a factor), it should be on collective action to better your lot economically and politically - because it's the latter which has the best chances of raising the lot, of people without a great deal of money.

Society and the economy has been stacked so hard against people today, compared to previous generations, that the only way to overturn it is through better collective political/economic awareness. The 'pull yourself up by your bootstraps' mythology, is one of the best ways to keep people ignorant of this, by keeping them busy seeking to be one of the increasingly-few who make it big...

vegetables · 23-07-2017 04:32PM

Permabear wrote: »

This post had been deleted.

So you can get rich through discipline, knowledge and patience.
All round good money management can render the average person wealthy over a lifetime.

But, what if you're already wealthy and do the same as the average person as regards discipline, knowledge and patience over a lifetime.

Won't you still be significantly richer.

Since you've had access to more money relative to the average guy the whole time.

Instead of comparing a silly undisciplined hare with a wise turtle, why not compare a wise turtle with another wise turtle who happens to be a few dozen meters ahead.

Permabear · 23-07-2017 04:34PM

This post has been deleted.

Money follows money

Comments