Retiring Early

Sunday, May 06, 2007

Have's and Have-not's

Some of you saw it reported last week that King County, Washington (where I live) now has over 68,000 millionaire households (excluding primary residence), making it the 10th largest concentration of millionaires in the country. While I am not surprised by this given the companies located here (Microsoft, Amazon, Starbucks, Boeing, Nordstrom, etc), I am absolutely shocked by the fall-out of comments posted on the SeattlePI website. There must be 100+ comments on this story! ...and they're entertaining as heck!

While there is a LOT of commentary and heated discussion, following is a random selection that hopefully captures the spirit of the debate:

The immediate reaction was "Tax them all" to pay for all of our problems, like schools and our massive transportation issues. Since we have a higher sales tax in Washington to offset our lack of income tax, a renewed interest in a state income tax was being discussed.

Then there was talk of the "obligation" to give back. I firmly believe in giving back, but as I've discussed in the past, I don't buy into the fact that I need to give back financially, especially not right now as I'm on a push to hit financial freedom. I give back with my time, and that's my choice. The "obligation" word bothers me because it implies that someone else is "entitled" to it.

And then someone chimed in with an IRS stat about "45% of wage earners paying no tax at all" -- suggesting that, perhaps low-income folks were getting a pretty good deal already (that stat is pretty shocking if it's true). And then, finally, several people posted about "The Millionaire Next Door", claiming that more people should be living below their means, instead of making questionable lifestyle choices, choosing jobs knowing they don't pay well, and keeping up with the Joneses.

Of course, then the conversation moved on to the topic of native Seattlites being pushed out of their homes (real estate prices have been high for a long time). Someone even made the comment that all of these "nouveau riche", who moved to Washington, should move back to where they came from. These are real comments from some pretty passionate sounding folks. I was starting to wonder if I'm part of the problem here -- really. To be fair, I'm not one of the 68,000 households because my liquid assets are well below $1M.

Then, the conversation shifted back to: "HARD work got me to where I am -- stop complaining and do something productive." "Why do you think you're entitled to my hard earned money?", one guy wrote. Another one chimed in with a "you're not entitled to anything" argument. If you want it, you need to work for it, which is an attitude that has driven me all my life. I really hate that entitlement attitude.

...and then finally, someone chimed in, saying that a million dollars is not worth nearly as much as it was in the 70's and 80's, where one was really, really rich with a million dollars. One word: inflation. His point was: these people are well off, but they are not rich -- and clearly some of the less than financially savvy folks out there don't understand the concept of inflation and decreased buying power, given their comments.

Bottom line: It's clear that having money and showing that you have money is a recipe for pretty harsh criticism in this town (and probably most places). I had no idea there were such deep feelings and also mis-understandings about money, simple things like tax percentages, and how wealth is created. It's scary because people like this have the potential to drive important public policy (votes on state income taxes, etc), some of which will negatively impact even lower income households! We really need to start financial education in schools and possibly even requiring students to read books like "The Millionaire Next Door" so people understand this stuff. Hard work (not just working hard at your job) and LBYM really can make all the difference in creating wealth.

(Image courtesy of 4x4jeepchick)



  • At 5/06/2007 11:22 AM, Blogger mOOm said…

    The discussion looks much more like the discussion I typically see on BBC website discussion boards than on typical US discussion boards. Maybe there is something about having the smae climate as England which makes that so :P

    BTW King County has the 12th highest population of any US county so it isn't so surprising it would have the 10th highest number of millionaires!

  • At 5/06/2007 8:12 PM, Blogger StealthBucks said…

    I read the thread. How about a simple wow!!! There appear to be a lot of dumb and angry people out in blogland. I particularly take offense to the inheritance crap. Most Americans become multi millionaires through planning, hard work, good decisions and sometimes but rarely a little luck. I got $10 in coins to, as my dad said "Go play a few video games on me", as I packed for college. I love my dad but that's about all I or my wife expect in inheritance or life time gifting.

  • At 5/08/2007 6:31 AM, Blogger fin_indie said…

    Moom: Good catch. I wasn't aware of the population ranking.

    Stealth: Dumb and angry pretty much captures it. Entertaining nonetheless. I still don't know where the claim about most wealthy folks inheriting their wealth comes from. It's a pretty well known fact that most families destroy their wealth in a few generations, so it's highly unlikely that claim is true. I know that I don't stand to inherit anything, so hard work and discipline it is.


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