Financial Independence Redux

[ocmpoma]

Okay, I've re-posted, and here's a re-worded question (which hopefully does not elicit any intimations of anality from Choob):

Should one's parents' financial status be an accurate predictor of one's own financial status as an adult?
In other words, should we be able to predict a person's adult financial status by looking at the financial status of that person's parents?

[Choobus]

The question is still gay! Are you talking about a direct transfer of wealth? About access to priveleged institutions? A web of nepotism for the "elite" classes only? What the fuck are you on about?

[Professor Chaos]

I can't truly answer this question without bias. I grew up in poverty. So I'd answer with a resounding NO.

[Evil_Mage_Ra]

I say "Very Accurate". I'm not rich or anything, but if I were, I'd want my children to be as well off as I could afford, which means sending them to the best schools, hooking them up with high-paying jobs, and willing my property to them when I die. It's my selfish genes at work! :)

The reason I didn't vote "Almost Deterministic" is because while I'd want my children to be as well off as possible if I were rich, I wouldn't want them to turn into lazy, good-for-nothing mooches. I'll do my best for them, but I expect them to work, dammit! Remember, EMR helps those who help themselves! :D

[RenaissanceMan]

No, not accurate at all. The only relavent factor is how the children were TAUGHT. Rich people are perfectly capable of raising financially illiterate children, as are poor people perfectly capable of raising children of great financial accumen.

Note, though... that the actual SOURCE of the financial education will probably not come from the financially illiterate parents, their job is to instill the desire to find that education if they want their children to be independant.

[Zarathustra]

Totally innaccurate. I have it as Ayn Rand said it: "All the money in the world can't teach a man how to spend it wisely."

Parents may give their child a great education, but then again, they are also likely to spoil him and turn him into a dependant. Given my experience with so many retarded kids from rich families; I would say the latter greatly exceeds the former.

[Professor Chaos]

Totally innaccurate. I have it as Ayn Rand said it: "All the money in the world can't teach a man how to spend it wisely."

Parents may give their child a great education, but then again, they are also likely to spoil him and turn him into a dependant. Given my experience with so many retarded kids from rich families; I would say the latter greatly exceeds the former.
True, but look at the world today realistically. Wealthy people rarely emerge from slums, just as homeless people rarely emerge from the upper-class suburbs. It happens, but it's the exception to the rule.

[thenormalyears]

People from the lower ranks are usually demoralized to the whole process. Thats why generation after generation never gets too far ahead. When something is all you've known its hard to break free.

[antix]

Somewhat inaccurate. To a degree it could be accurate depending on the child and their ability to make intelligent decisions given their opportunities. But-- as stated by others-- the kid still has to go out and perform on their own. On the other side of the coin-- lower-class or even poverty-- the kid still has a chance to accel in life. But they generally have to work harder to create opportunities.

[Choobus]

come on, george W bush came from a wealthy family, sure, but he worked hard all his life, he got good grades in college, he served with distinction in the Army, he ran many successful businesses and by winning the hearts and minds of the american people with his honesty, integrity, intelligence and courage he earned the presidency of the united states.

I know this is all true because it was on fox news

[Professor Chaos]

come on, george W bush came from a wealthy family, sure, but he worked hard all his life, he got good grades in college, he served with distinction in the Army, he ran many successful businesses and by winning the hearts and minds of the american people with his honesty, integrity, intelligence and courage he earned the presidency of the united states.

I know this is all true because it was on fox news
:lol::lol::lol::lol::lol:

[ocmpoma]

Choob, I'm not talking about a transfer of wealth. What I'm asking is:
In your version of an ideal society, if a researcher were to look at the financial status of a 5-year old's parents and made a prediction of the 5-year old's future financial status as an adult?
That's it - that's the whole questiong. The role that a government should or should not play in controlling such a prediction is another question. I am just curious as to what the posters here think should be the case.

I answered the poll - very inaccurate - because I had to in order to see the results. I find them interesting. Personally, my ideal society is meritocratic, so that I feel that a person's financial status should be unrealated to their parents' status.

Also, for those who are keen on answering realistically, please keep in mind that this is a hypothetical - 'how should it be', not 'how is it?'.

[Professor Chaos]

Also, for those who are keen on answering realistically, please keep in mind that this is a hypothetical - 'how should it be', not 'how is it?'.
That probably should have been clarified when you originally asked the question. :)

[Choobus]

you're asking if there should be a correlation without any reference to the mechanism that drives it. Surely that should have some bearing on "the way things ought to be"

[atotalstranger]

Your question seems a bit odd to me. Do you really want to know whether we 'should' be able to predict a person's wealth based on their parents? Either there is a correlation or there isn't - there is no 'should' about it.

If you're asking whether a person's financial success should be limited by their parents socio-economic level/status, then no. Of course, most people end up not far from where they started, but I don't have any judgment on whether that's the way it 'should' be, as long as people have the freedom and opportunity to make their own success.

[Evil_Mage_Ra]

This is a difficult question, really. While I believe in principle that we should be judged on our own merits, I also believe that one of the rewards of hard work is the ability to give your children a "head start" in life. So a perfectly meritocratic society would remove what I see as one of the benefits of hard work, so I still vote "Very Accurate". However, my own personal "perfect society" would have fewer Paris Hiltons and more Charles Ketterings, this should perhaps be dulled to "Somewhat Accurate".

[RenaissanceMan]

Choob, I'm not talking about a transfer of wealth. What I'm asking is:
In your version of an ideal society, if a researcher were to look at the financial status of a 5-year old's parents and made a prediction of the 5-year old's future financial status as an adult?
That's it - that's the whole questiong. The role that a government should or should not play in controlling such a prediction is another question. I am just curious as to what the posters here think should be the case.

I answered the poll - very inaccurate - because I had to in order to see the results. I find them interesting. Personally, my ideal society is meritocratic, so that I feel that a person's financial status should be unrealated to their parents' status.

Also, for those who are keen on answering realistically, please keep in mind that this is a hypothetical - 'how should it be', not 'how is it?'.
Financial status has nothing to do with a person's status in a 'meritocracy', it has to do with a person's ability to manage finance. You can have the highest paying job in town and still be broke and swimming in debt, likewise, you can be a janitor and have a very solid financial position.

[ocmpoma]

"Financial status has nothing to do with a person's status in a 'meritocracy', it has to do with a person's ability to manage finance."
I think that the janitor would merit having a more stable financial status.
Also, I'm pretty sure that in the US, a doctor or lawer who is flirting with bankruptcy still has more financial clout than a janitor who is very sober with her finances.

[RenaissanceMan]

"Financial status has nothing to do with a person's status in a 'meritocracy', it has to do with a person's ability to manage finance."
I think that the janitor would merit having a more stable financial status.
Also, I'm pretty sure that in the US, a doctor or lawer who is flirting with bankruptcy still has more financial clout than a janitor who is very sober with her finances.
If by 'financial clout' you mean the ability to buy crap, then yes. Free from the stress of being totally out of control of your financial situation? Oh no. You would be suprised how many people are totally stressed out because they have no control over their finances... sure, they sign the checks, they earn the money, but forces beyond their comprehension are driving them to spend what they earn, thus staying one step from bankruptcy.

A Janitor, if they execute a modicrum of financial independance, can retire comfortably ('comfortably' is a relative term... obviously a Janitor is not going to retire in luxury unless they plan ahead with investments), On the other hand, a Doctor or Lawyer who spends it all keeping up an irresponsible lifestyle will be hard pressed once the ability to earn is gone.

Now, a high earner who manages their money well will be able to retire QUITE comfortably, earning more money is a clear advantage, but it's not the critical skill.

[Choobus]

......earning more money is a clear advantage, but it's not the critical skill.
It is, if you like luxury. Do you lilke luxury?

[James]

The Janitor and Doctor/Lawyer analogy almost suggests that the two earn comparable wages.

Janitor (GBP) = 13,000 a year max.
Doctor (GP) starting salary = 100,000 max
Lawyer = virtually boundless, depending on the role.

Financial independence requires money to begin with, and 13 grand, when taking into account tax and living expenses - that yearly holiday to compensate for the mind-numbing drudgery of the job (yes, and when rich cunting aristocrats criticise the poor for having holidays abroad, it makes me want to reach for the nearest kitchen-knife), this leaves virtually nothing. The more you earn, the more you can afford to have financial independence and chuck your money around like a dick. The Janitor, I am afraid, earns the subsistence living, with just enough cash-flow to survive. This is by design. If people became rich from doing shitty jobs, they wouldn't do the job anymore. It is almost oxymoronic to say that anyone in this position can have independence, when their salary, by design, removes independence.

A high earner will be able to retire comfortably, even if they have bought 2 homes, several cars, and have a round-the-world cruise a year.
A Janitor will scrape together the ominous 'life saving,' (10 grand at a maximum) to die at 55 from lung-cancer, or to spend their years, and money, having their piss wiped from around their ankles in an old-people's home.

Everyone likes luxury. Luxury costs money. Always.

[RenaissanceMan]

Heh, you guys are making the erroneous assumption that working at a JOB is the only way to make money.

It's certainly the most popular way. But not the only way. And yes, someone that starts as a Janitor and remains a Janitor with no other source of income is pretty much hosed, there simply isn't enough money to cut it there. But... what about the janitor that starts his own janitorial business? It's true that not EVERY Janitor can do that... life favors the bold, there simply is no system that allows EVERYONE to retire comfortably.

Or... the Janitor that was looking at the big picture and invested what little he had in rental property? Fimancial independance doesn't mean being rich, it means being secure.

A high earner will be able to retire comfortably, even if they have bought 2 homes, several cars, and have a round-the-world cruise a year.
A Janitor will scrape together the ominous 'life saving,' (10 grand at a maximum) to die at 55 from lung-cancer, or to spend their years, and money, having their piss wiped from around their ankles in an old-people's home.
That analogy is highly flawed. VERY FEW 'high earners' earn so much that they couldn't escape the pit falls of bad financial skills, and EVERYONE, not just Janitors, has the risk of spending their years, and money, having their piss wiped from around their ankles in an old-people's home.

[James]

But... what about the janitor that starts his own janitorial business? It's true that not EVERY Janitor can do that... life favors the bold
True, he can start his/her own business, very thatcherite, but there can only be a few 'janitorial businesses' (if such a thing could exist), so this prospect, the result of being 'bold' could serve only 1 in 1000.

Or... the Janitor that was looking at the big picture and invested what little he had in rental property? Fimancial independance doesn't mean being rich, it means being secure.
Rental property?! So the janitor, on his/her paltry earnings, could invest in a rental property, when property (particularly in the U.K), could cost 500-1000% of his annual earnings. It is the rich, or 'well-off' who have the financial security, the 'margin of error' (where, if their business or investment failed, they wouldn't be plunged into poverty,) to be able to invest. By design, the poorly-paid have little prospect of rising above it once they are secured in their career; so that do are anomalies.

That analogy is highly flawed. VERY FEW 'high earners' earn so much that they couldn't escape the pit falls of bad financial skills, and EVERYONE, not just Janitors, has the risk of spending their years, and money, having their piss wiped from around their ankles in an old-people's home.
'High earners' are far more likely to own property and, are DESIRED. The Janitor fucks up and he/she is looking for another janitorial job, the lawyer/doctor fucks up, he/she is likely to get another high paid job. Basically, in virtually every single-case, the poorly-paid die with no debts, but nothing else, or in debt (the latter, because of voracious loan-companies is likely to be more common). I know some rich people, some well-off people, and whilst there will always be the case of the 'millionaire who gambled it all away,' or the doctor who spent his salary on cars, it is rare.

If you are a high-earner, you have security, you have a 'wealth buffer.'

If you are a low-earner, you are on the bread-line, you fuck-up your investment, and you are fucked.

The piss thing was slightly tongue in cheek, but only just.

[RenaissanceMan]

I'll certainly agree that high earners have a MUCH better baseline for success than low earners.

I don' know it works in the UK, but in the United States it IS possible for people in low income strata to own property (We have a government sponsored body here that redirects debt, making it EASY to borrow money for real eastate), and most people are employed by small businesses. Forming a corporation in the states is trivial, and in most cases, starting a 'sole proprietor' type business is no harder than registering a ficticious name to do business under.

The original thrust of the thread was that it's possible to predict the success of the child by measuring the success of the parent, (At least I THINK it was). I don't think ANYONE says "I'm a Janitor, by dadddy was a Janitor as was his daddy before him, we come from a family of Janitors." At least I HOPE not, anyway.

[James]

I don't think that there is any body in the UK that allows debt redirection, other than private 500% interest-stylee 'debt consolidation' firms. Real estate in the UK is so incredibly expensive that it is always paid for by a mortgage in 99% of circumstances, but it is difficult, if not impossible, to get a mortgage if you are in-debt. Of course, you can 're-mortgage' your existing property if you are in an emergency.

Of course, there are, and always should be, exceptions to the rule, but without aid, it is very often the case that a child's future will be determined by that of his parents. I know people on either spectrum, some who I know will always be 'paid for' by their rich-parents, whatever happens to someone in life (I know someone, (through someone else) who has a flat in London, so he can pursue his 'musical career,' despite his music being shite - all paid for by his parents. His ugly brother had thousands of pounds worth of photos taken of him for a 'modelling portfolio' all paid for by his parents.

One of my closest friends wants to succeed in medicine, when his Dad drags him out every weekend to do odd-jobs for people.

Of course, in some cases, the poor career moves of a parent can inspire a child to outperform, or even inspire a parent to encourage their child to reach a better position in life.

And then there is the heriditary wealth (stolen from by the people through years of feudalism) of the aristocracy - the Royal Family e.t.c. That lot need to be shot.

[Metman07]

"Financial status has nothing to do with a person's status in a 'meritocracy', it has to do with a person's ability to manage finance."
I think that the janitor would merit having a more stable financial status.
Also, I'm pretty sure that in the US, a doctor or lawer who is flirting with bankruptcy still has more financial clout than a janitor who is very sober with her finances.
Agreed. The ability to manage money is a merit.

[RenaissanceMan]

You have to get a mortgage here, too... and the debt is always yours per se, what I meant by 'redirection' is the issuing body (generally a bank) sells the loan itself to a third party, thus absolving itself of the actual risk of the loan and not tying up it's capitol in the loan... for this reason, banks are very willing to loan money for real estate.

For this to work, a loan has to follow conformance rules set out by the FNMA (Federal National Mortgage Association, also called 'Fannie Mae' a federally chartered corporation that buys mortgages on the secondary market), those loan can then be bought and 'warehoused' either by FNMA itself or another company.

Personally, I think the government is using Fannie Mae to support the national debt... and will bankrupt the country with it. But that's just my opinion.