A weekly thread to discuss financial matters - from personal all the way up to global.
Ground Rules
- Remember that we're all just Internet randos. Don't bet your life savings on a hot tip from this thread.
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- Be kind. Remember that everyone here comes from different circumstances. We all have different resources available and different risk tolerances.
- Don't let the perfect be the enemy of the good. Better is better. Celebrate people when they take a step up and work to move their finances in the right direction. Don't flame out because they haven't followed what you consider the optimal path. Everybody has to start somewhere.
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Notes -
Success story/total brag/I'm an asshole:
I got a somewhat panicked call from my broker about 3 weeks ago. He periodically (like every 3 years or so) goes through the accounts of the people he serves with a fine-toothed comb to see if there are diversification issues and noticed boy did I have a shitload of money tied up in Nvidia. This was total serendipity, luck, and completely careless financial negligence on my part.
In mid-2017 my beloved aunt died and left me 200k that I was not expecting. She had two kids, one with kids of her own who aren't exactly doing well, so I figured maybe she'd give me a token amount for old time's sake not big money. Apparently, though, my mom and her sisters are/were extraordinarily frugal investors; my other aunt died this year and she left behind 4 million to my mom and two cousins on a college admin's salary. Mentally, I treated it as monopoly money so I figured I'd build a gaming PC and put the rest in my kids' college fund. In the process of researching parts I thought the graphics cards were imo too pricy and the buzz on reddit was that cryptomining was fucking up the market. So I took a risk betting on crypto and told my broker to put 100k in Nvidia ("...are you sure wsgy?" "yeah I got a feeling") and took what was left and bought bitcoin in 4 instalments in the last 4 months of 2017. I printed out my wallet number and stashed it in our safety deposit box at the bank. I largely, but not completely, forgot about both of these investments because I am an idiot, but again, my mindset was "monopoly money".
So yeah the two of those put together as of last week was like 5.5 million dollarydoos and I sold the bitcoins, almost all of the Nvidia, bought 1.3 mil in T-bills (anticipating that would be my cap gains taxes this year) and put the rest in an S&P 500 index fund, and then took my wife out for champagne and oysters to tell her after everything was stitched up.
I'm on the threshold of being a 1%er now. I'm done putting money in the kids' education funds. If the 4 of them go to 4 years of private high school, 4 years of private university, and 4 years of private medical school (though that last one isn't likely to happen), we'll still have money left over for each of them to take a gap year to find themselves in Thailand. All the better since the oldest kid is 10. My in-laws (who are loaded) have said they will keep sending us 15k checks per kid for their college accounts and hell I don't think that's necessary anymore. We're at a point where there's too much money.
I feel guilty about this. We're financially secure enough that I can just drop 200k on some insanely risky investments and not think about it, meanwhile tons of people are living paycheck to paycheck. I guess I could have lost all of it fairly easily but man it does seem like the universe is extraordinarily unfair.
It's amazing how those huge investment successes still doesn't put you in the top 1%. It's like there is a lot of hidden wealth in the US.
""When I think of a really rich man," says a Boston blue-collar, "I think of one of those estates where you can't see the house from the road." Hence the name of the top class, which could just as well be called "the class in hiding." Their houses are never seen from the street or road. They like to hide away deep in the hills or way off on Greek or Caribbean islands (which they tend to own), safe, for the moment, from envy and its ultimate attendants, confiscatory taxation and finally expropriation. It was the Great Depression, Vance Packard speculates, that badly frightened the very rich, teaching them to be "discreet, almost reticent, in exhibiting their wealth." From the 1930s dates the flight of money from such exhibitionistic venues as the mansions of upper Fifth Avenue to hideways in Virginia, upper New York State, Connecticut, Long Island, and New Jersey. The situation now is very different from the one in the 1890s satirized by Thorstein Veblen in The Theory of the Leisure Class. In his day the rich delighted to exhibit themselves conspicuously, with costly retainers and attendants much in evidence. Now they hide, not merely from envy and revenge but from expose journalism, much advanced in cunning and ferocity since Veblen's time, and from an even worse threat, virtually unknown to Veblen, foundation mendicancy, with its hordes of beggars in threepiece suits constantly badgering the well-to-do. Showing off used to be the main satisfaction of being very rich in America. Now the rich must skulk and hide."
Paul Fussell, "Class: A Guide through the American Status System", 1983
I wonder how much of this is ignoring the effect of changing crime rates. The NYC homicide rate nearly doubled during the Great Depression, and although it came down again, any families scared out of their Fifth Avenue mansions could have felt pretty smug when homicide nearly quintupled in the 60s.
Other crimes you might have wanted to hide from, if you could afford it:
"Efforts to address the increase in prostitution, especially by juveniles, were derailed by the arrival of crack cocaine to Times Square in 1986. As a result, crime rates spiked and continued to increase through 1989. The addictiveness of crack made it an especially insidious drug, as users focused their energy and resources on scoring the next ‘hit’. Crack dealers, junkies, and the cardboard encampments of the homeless took over the streets."
(from the Times Square Official Website - imagine how an anti-NYC-biased description looks!)
I also wonder how much of Fussell's analysis has now been obsoleted by further changing crime rates. NYC homicide rates plummeted rapidly, back to "at least no worse than the Great Depression" levels, in the 90s, and then dropped back to the previous baseline in the 2010s. I've never been acquainted with more than a couple high-paid New Yorkers, but I get the impression that having a second home out in the countryside is now just a way to better enjoy days off with the kids, not a desperate attempt to hide wealth out of sight.
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