patrick.net

Unless you are already very well off, you won't benefit much from inflation, because your pay typically lags inflation, and gold has long gone off on a wild run, your after-tax money won't be able to buy much anyway.

Be it deflation or inflation or stagflation, only smart money on the top of the food chain will be able to benefit the most.

please unmoderate my comment.

My tree guy and my gutter/sheet metal guy both make over $200K a year and anyone with a basic skill like painting, plumbing or fencing can easily make over $100K a year with just basic smarts and a good work ethic

So why isn't the median HH income aover $200k a year then --not even in "rich" Kalifornia? A: it's not really so easy to make that kind of money. Most painters & plumbers don't make that kind of money unless they own an established and profitable business that employs other craftsmen (who earn a lot less $), which is --surprise, surprise -- not so easy.

What is worse? Being born in a poor family or being born into a poor mindset?

A: Being born poor. Mindset can easily be changed with experience. Acquiring wealth from zero (despite FAB's apocryphal "tree guy and "gutter/sheet metal guy" making VP-level salaries), not so easily changed. ;-)

and gold has long gone off on a wild run

Time will tell. Gee, I thought homes were expensive in 2000.

Gold is still way off its inflation-adjusted peak. When there is a gold bubble, you will feel it.

Mindset can easily be changed with experience.

It is harder than you think. It takes enlightenment and a temporary abandonment of "reality" to change one's mindset.

Many poor people are so bitter that adopting the idea of "abundance" is all but impossible.

Good trades persons are paid on CASH. That tells you why the "median" income is...low.

I have come across a few good contractors who do make quite a bit of money, perhaps not $200K, but certainly over $100K. They all accept cash only.

And all these salons and restaurants that accept cash only...

We go to this hair stylist whose place is always full with customers, her price is very good but accepts cash only. She told me she shows IRS $1K a month in profit, hehe. I don't mind, since she passes on the savings to me.

Median Salary by Years Experience - Job: Painter, Construction and Maintenance (United States)
10-19 years $45,009

http://www.payscale.com/research/US/Job=Painter,_Construction_and_Maintenance/Salary

HARM, 'job' and 'business' are very different concepts.

HARM,

such a payscale survey is valid for all salaried jobs like ours. Not the case with sole proprietors who interact directly with the customers and negotiate price and service.

I know quite a couple restaurant owners who all declare $70-80K income on their return. Let me be frank, no one will work that hard for a mere $80K annual income.

There is a very big underground cash economy in the US that is outside of the IRS system. Salaryman like ourselves are unfortunately trapped.

I like a zosialist system. Even a feudal aristocratic system isn’t as bad as a plutocracy. In the latter, men who should never procreate try very hard to make money and “succeed” in order to have a better shot at reproduction. Kapitalists are ruthless and mean. It’s because they were born with low level of testosterone to begin with. Men with high amount of T are dominant, but they are fair.

It’s not that I came from a poor and/or uneducated family. But I have to say, “Fxxk rich people.” They are all greedy cowards. Sooner or later, the military caste in this country will have enough of it and stage a coup to topple the rich and their clowns (Obama that is).

Salaryman like ourselves are unfortunately trapped.

Celerymen ought to be trapped. An economy should incentivize entrepreneurship over employment.

Many poor people are so bitter that adopting the idea of “abundance” is all but impossible.

The idea of "abundance" may be hard for a person to grasp when all they see around them is scarcity.

RE: cash economy, I agree the median figures may be misleading for some job categories (though interestingly enough, the I.R.S. seems to "know" this and tweaks the income stats accordingly), however, not all tradesmen make $100-200k/year, just the very best. The other thing to consider is that construction is a very cyclic feast/famine industry --in sync with housing. You need to save/invest a substantial portion of your boom-years income in order to survive the bust years.

The idea of “abundance” may be hard for a person to grasp when all they see around them is scarcity.

Exactly. I dare to speculate that most poor people stayed poor because of this mindset.

But God created all of us with a Free Mind. We are free to adopt ANY mindset.

IRS of course knows about this, it's just that these fish are too small to trifle with.

A restaurant owner I know went through an IRS audit before, they had to send out an agent to camp out at his restaurant 3 days out of a week, and then went through all his suppliers to triangulate the number. That's a lot of manpower. In the end, since he was careful not to leave trails, he got off clean.

In the past I've brought up the Pursuit of Happyness" guy Chris Gardner. I think he's a great example of what you can accomplish.

When they were interviewing Will Smith for the part Chris very specifically wanted to know if he thought the story would be about fast cars and easy money? It wasn't until Chris was comfortable that Will "got it" that they went ahead and made the movie.

For CG it was about "breaking the cycle" and being there for his son. (Unlike his own upbringing) The success he enjoyed later in life wasn't nearly as important to him as having a real relationship w/ his son.

THIS is what we should be striving to do. (Personally I cut-out any and all drinking during the week) So "my" contribution is that I'm "only" a weekend drunk. Something my children only saw when they were pretty much grown-up anyway. My brother-in-law (LA acctg. firm VP) made a promise to himself *not to abuse his wife (the way he grew up).

So it's about incremental changes and making self-improvements where and when you can. Not a pep talk but Rome wasn't built in a day and I definitely do better than my dad did. (I was lucky too) :)

Hey, don't get me wrong --I never said personal responsibility, PMA and refusing to give up *wasn't* an important component of 'success' (however you choose to define it). It's just that the material type of "success" is not as easy to come by as some here may think.

I clearly recall being an eager "willing an able" college grad in '91, sending out a mountain of resumes and pounding the pavement daily (this was pre-web), and getting... hardly a single call back.

Willingness to work is no guarantee of success. Willingness + opportunity works much better.

Willingness to work is no guarantee of success. Willingness + opportunity works much better.

Don't forget the luck factor. Just go watch The Secret. Seriously.

Note that luck needs not be random. It is definitely possible to attract luck.

Even more important is to grab any opportunity (i.e. "good luck") with both hands when you see it.

Even more important is to grab any opportunity (i.e. “good luck”) with both hands when you see it.

Yes. One must be ready to receive.

I WILL say those options weren't as readily available for our kids. Had it not been for paying off their college loans and... coming up with a down payment for their house they'd be in an apartment and languishing in debt.

I have confidence though they'll do better b/c they spent so much time w/ me being honest about the mistakes "I" made!

There's a lot of practical lessons we can take away from this very blog for instance? It was reassuring for me to see there were others that shared my attitude and values about debt. Without a counter-balance it's all too easy for young people to get very comfortable w/ huge amounts of debt!

"One must be ready to receive"

That's .... true but one must also be willing to .... play the hand they're dealt. My way out of lower-middle class was through salesmanship. Yeah, I know, sucks but it was the BEST thing being remotely "offered" to me?

At some point you just have to say, hey, this is it. Fall in love with whatever "it" is and run with "it" as hard as you can. Of course there's no guarantee but look at all the kids that grow up w/ every advantage in the world and STILL manage to f@ck it up? Why... just look at all the "legacy" kids that we're doing better than? (Primarily b/c we're still ALIVE, but you get my drift)

For every Chris Gardner, there are 100's in not 1000's of rats chasing this dream that never actually get there. It's in the hard statistics, an undeniable fact.

Its useful for corporate interests to hold out this "dream"; to keep the rats running on the treadmills, chasing that carrot in all likelihood that will never be tasted. Microcosm example typical Big 5 consulting firm or high end law firms, churning through people, using them up, all chasing a carrot that maybe only a few percent ever reach.

Bill Gates, Michael Dell, Sergey Brin etal are held out as examples of the mobility that is possible, not unlike the casinos that publicize the million dollar jackpot winner who represents less than .0000015% of gamblers.

Seriously ingrained in our belief system is this uniquely American concept of material achievement and success. IMHO, our society would be better served with a different set of values and priorities. Granite countertops do nothing to further our civilization.

Materialism is a dead end in and of itself, it will prove our undoing.

Greenspan's Latest: Oil Boom Will Likely 'Go on Forever'

I am reconsidering my position re: Peak Oil. If AG's convinced it's real, then it must be wrong.

What Peak Oil?

At $100/b, economically-feasible oil is abundant in many places.

On the other hand, oil prices can also collapse through demand destruction.

I have more faith in the food boom.

HARM Says:
February 25th, 2008 at 11:22 am
"As someone who grew up dirt poor (something Randy H and I have in common), I can attest that it’s a little of both. Bad personal choices may or may not have gotten your parents where they are, but children of poor parents must surmount incredible odds in order to rise above the muck of their upbringing –unlike their privileged elite peers, for whom success is all but guaranteed (think the Hiltons & Trumps)."

Harm, you deserved a response but I had to step out. Without even reading the other posts which followed I wanted to thank you for reminding me of that perspective, and I totally agree that starting out poor does stunt people's start in life. Although I never went without, my parents struggled and I can relate somewhat. I further think there is a nature/nurture angle to this as well. Thanks man.

So when are the US, Canada, and other such worthy contries going to form "OFEC": the organization of food exporting countries? Dirt-bag countries that piss us off will have their food supply curtailed. ;)

Dirt-bag countries that piss us off will have their food supply curtailed.

No pork bellies for them!

Oops.

Dirt-bag countries that piss us off will have their food supply curtailed.
Last I checked, we became net importers of food a couple of years back.

At $100/b, economically-feasible oil is abundant in many places.
Yeah, as long as you have a deep-water platform. We are already past peak EROEI for oil.
Speaking of energy, I am looking at a natural gas hedge. Anyboy want to sing the praises of tankless (NG) water heaters? Old reliable is starting to run out of hot water on occcasions...

My next water heater will be tankless unless someone here convinces me that it is a bad idea.

yeah, HARM, well put, I also had to step away for a while and some pretty good discussion got going about interesting topics.

Maybe I should ask Patrick if I can start to author a thread, so I don't just keep participating in derailing other people's threads (with inspiration from DennisN and NVR this time). But I should be careful what I wish for, I bet it is very hard work to come up with an original thread on demand. So maybe not :-).

Somehow I find it easier to be inspired by some pseudo-random musing that pops up along the way than I imagine it will be to sit down with a blank sheet of paper and be truly original.

Well, enough rambling....

I bet it is very hard work to come up with an original thread on demand. So maybe not :-).

Not at all.

http://patrick.net/wp/?p=108

T(h)ankless water heaters: I think this is more common elsewhere. I think I saw one in Hong Kong in 2004 or so. They also used to be much more common many years ago in Europe.

Does anyone have a good link?

http://www.greenlivingtips.com/articles/148/1/Tankless-water-heaters.html

justme Says:
February 25th, 2008 at 3:25 pm
"Maybe I should ask Patrick if I can start to author a thread, so I don’t just keep participating in derailing other people’s threads (with inspiration from DennisN and NVR this time). But I should be careful what I wish for, I bet it is very hard work to come up with an original thread on demand. So maybe not :-)."

I've thought the same thing but realize I prefer to comment than to create a topic. I have to admit I'm just not creative enough. I have a lot of respect for the thread authors here because they come up with really good material that is relevant to many people's lives.

LOL Peter. Jokingly this is a thread you would start:

Homelessness in America....
Who should pay for the funeral when a homeless person starves in America due to his own laziness?

I have been thinking about a new thread topic the past few days...on reform of Prop 13. To whom should I send it for posting? Patrick? HARM?

You can also just post it here and someone will put it up.