Tag Archives: wealth

Thank You

Posted on by
5

Most bloggers, like most people, are motivated by social status and wealth. I get contacted all the time by bloggers who want to teach me how to monetize my blog in three easy steps.

I write because we are social beings and writing is one especially beautiful way to deepen relationships and create lasting community. Like the wannabe Stoic that I am, I try to write twice a week immune to the humble blog’s statistics. But I’m only partially successful. I like peeking at the changing number of visitors  and where all over the world readers live. Truth be told, even worse, my blogging enthusiasm ebbs and flows in part based on the vagaries of your reading preferences.

Thank you for visiting this calendar year. I wish it didn’t matter, but it does. Thanks to everyone that took time to comment through the year. And thanks to Don for being my editor extraordinaire. And most importantly, thanks to everyone who is able to tell me in person that they have read a recent post. That’s the most positive encouragement I receive. It’s one thing to look at a bar graph with “page views”, it’s a whole different thing to see individuals behind the numbers. I wish my motivation was completely intrinsic, but I imagine that will remain an elusive ideal. Your participation matters, so thank you.

My goal for 2014 is to stay the course, by which I mean share insights about families, schools, and communities that illuminate and inspire. I hope you achieve whatever is most important to you and yours in 2014.

I was going to recreate this vid, but I couldn’t find a tutu that would fit or a white horse. God bless the carnies.

http://www.youtube.com/watch?v=rdG618TMc5E

Newsflash—Missy Franklin Forgoes $6m to Swim in College

Posted on by
2

Seventeen year-old amateur swimming phenom Missy Franklin’s countercultural decision isn’t getting nearly as much ink as it deserves. I’ve lauded her parents’, coach, and her before. I’ll have to plead guilty if accused of putting a 17 year-old athlete on a pedestal.

If Franklin turned pro sports marketing experts agree she’d earn about $2m a year through product endorsements. Instead, she’s decided to swim at the University of California for a few years and then turn pro in 2015, one year before the Rio Summer Olympics.

Here’s the conventional wisdom on her decision:

While the opportunity to earn money from endorsement deals will not completely evaporate should Franklin delay becoming a pro-swimmer by competing at the NCAA-level, it will drastically impact the amount of money she will earn from endorsements. Not only will she miss out on a lot of money in some prime earning years for what are normally short Olympic careers, but she will likely also miss out on the chance to build her brand on a larger stage by way of the promotion and visibility that would come from advertisers using her in campaigns.

Another sports marketer adds, “I think it’s hard not to justify waving her amateurism.  If I was an objective advisor to her and her family, I would advise this way:  Her window to reap the rewards of her life’s work is relatively limited when you consider it over a traditional working career.  As such, her potential earnings in the next four years will be five-times greater than what she’ll be able to make in the subsequent 30 years.”

My brother, who I may have been a tad too hard on the last several months, weighed in more creatively, “Missy-stake! Shoulda took the money.”

She’s rolling the dice on avoiding injury, finishing third in 2016 Olympic Trial races, and having Michael Phelps pressure her into a bong hit.

All you have to do for an alternative perspective, is turn to Franklin herself:

“Someday, I would love more than anything to be a professional swimmer, but right now I just want to do it because I love it. Being part of a college team is something that’s so special. I went on my recruiting trip, and the team was so amazing. Just being with those girls, I really felt like I belonged there. The campus itself is gorgeous. Everything about it was just perfect.”

Borrowing from the linked article above, Franklin said the opportunity to compete with close friends to earn points toward a team total, rather than simply attending school with them, was an allure stronger than the potential millions of dollars she could earn in endorsements. She actually wanted to commit to a full four seasons of swimming for Cal, but her parents told her “that would probably be the biggest financial mistake” she “could ever make.” Franklin acknowledged, “This can pay for your future family. This can pay for your kids’ school, things that I really have to think about. So that’s been the hard part.”

The materially minded majority will lament, “She’s paying about $6m for the opportunity to ride on busses and stand in security lines in airports with her college teammates in order to score points in college meets.” The assumption being she’d be two and half times happier with $10m in 2016 than $4m. What’s lost in that calculus is the fact that her parents are professionals and she’s grown up economically secure. She’s comfortable, she’s a good student, and with her family’s resources and a Cal degree, odds are she’ll continue to be comfortable.

And if comfort was her primary goal, she’d cash in now. She’s saying you can’t put a price tag on some things like memories of close friendships strengthened through athletic competition. She’s wise beyond her years. She probably knows that multimillionaires tend to get caught on an ever speedier treadmill, and as a result, never pause long enough to ask, how much is enough? Franklin, who I suspect is extremely confident she can swim as fast or faster in Rio, is saying $4m is enough.

And what if somewhere in the world right now there’s a 12 year old girl who out touches Franklin in Rio?

I have no doubt she’ll handle it with grace and dignity. “Honestly anything can happen,” she recently reflected. “You can’t predict the future, so whatever God has in store for me I’ll just go along with it.”

A Paradoxical, Pervasive Prejudice

Posted on by
1

Most people want to be far wealthier, but dislike the wealthy.

What do you know about the wealthy? Do you know many well-to-do people? Know enough, well enough, to generalize about them?

Like old age, the notion of “wealth” is of course relative. Since 1970, Boston College’s Center on Wealth and Philanthropy has conducted several studies of the wealthy. Mostly recently, they asked 165 households with at least $25 million in assets to write freely about how prosperity has shaped their lives and those of their children. Their average net worth was $78m, with two being billionaires.

The results of the study are not yet public, but The Atlantic was granted access to portions of the research which form the basis of Graeme Wood’s April essay titled, “Secret Fears of the Super-Rich“.

Fascinating read. The bottom line, to paraphrase Woods, the respondents turn out to be a generally dissatisfied lot, whose money has contributed to deep anxieties including a sense of isolation, worries about work and love, and fears for their children.

A few excerpts:

• A vast body of psychological evidence shows that the pleasures of consumption wear off through time and depend heavily on one’s frame of evidence. Most of us, for instance occasionally spoil ourselves with outbursts of deliberate and perhaps excessive consumption: a fancy spa treatment, dinner at an expensive restaurant, a shopping spree. In the case of the very wealthy, such forms of consumption can become so commonplace as to lose all psychological benefit: constant luxury is, in a sense, no luxury at all.

• Among other woes, the survey respondents report feeling that they have lost the right to complain about anything, for fear of sounding—or being—ungrateful.

• The poor-little-rich-kid retort is so obvious—and seemingly so sensible—that the rich themselves often internalize it, and as a result become uncomfortable in their interactions with the non-wealthy. Once people cross a certain financial threshold, they have a tendency to hang out with one another, to enjoy the company of other people who know that money relieves some burdens but not others.

Interesting how clearly the poor-little-rich-kid retort shapes the comments at the end of Wood’s essay.

Our church has recently updated its “welcoming” statement which reads: We welcome all people—the poor and the rich; the young and the old; people who are single, married, blessed, divorced, separated, partnered, or widowed; people of all abilities; people of all sexual orientations and gender identities; and people of all nations and ethnic backgrounds.

Some probably assume the rich may not need as warm a welcome as the other referenced people and groups. But Boston College’s “The Joys and Dilemmas of Wealth” study suggests they do.

Understanding, care, and empathy shouldn’t be rationed out as zero-sum qualities.

Save or Spend?

Posted on by
2

There are three types of people in the material world: savers; spenders; and somewhere, someone, who perfectly balances the two. Too bad young lovers rarely get around to asking, “Saver or spender?” because mismatched partners no doubt deal with more than normal stress and conflict.

A consummate saver, I’m a distinct minority. News outlets have been churning out report after report about Baby Boomers not having saved nearly enough for their impending retirements. Look for older and older employees in the workforce.

Recently, a Wall Street Journal writer (article link—Want to Retire Wealthier?) asked, “Why is it so difficult for people to set aside money for the long-term future?”

Then answered, “Low earnings and high temptations are obvious reasons. But perhaps the most basic cause is a fundamental human frailty: We view our future selves as strangers.”

The intriguing article continued:

Estimating with any precision what you will want 30 or 40 years from now is almost impossible. You don’t know your future desires, because you don’t know your future self. What will you want or need when you are 65 or 70 or 80 or older? Who knows?

Viewed this way, it isn’t surprising that the young typically don’t want to save for their retirement, since that stage of life feels as if it will be lived by someone else. And when you save money today on behalf of your remote future self, you deprive your immediate present self of cash you could use right now.

Of course, if you spend tomorrow’s savings today, you won’t have cash when you need it in the future—but that day of reckoning is decades off. That is true for those of all ages, but the lost opportunity is greatest for young people, because money set aside at an early age has more years to grow.

Yet it is highly unusual for people to think more vividly about their future selves than about their present selves, say psychologists.

The project underway at Stanford seeks to close this gap between the present self and the future self, without turning young people into misers. By enabling the young to see themselves as they will be when they are old, virtual-reality technology can transform their urge to spend for today into a willingness to save for tomorrow.

Interesting finding. Pictures of people’s future elder selves inspire them to save more.

Reminds me of the “marshmellow study” described here.

In that study, researchers learned that young children who couldn’t wait to eat one marshmellow (“low delayers”) and thereby sacrificed receiving a second one, seemed more likely to have behavioral problems, both in school and at home. They got lower S.A.T. scores. They struggled in stressful situations, often had trouble paying attention, and found it difficult to maintain friendships. The child who could wait fifteen minutes for a second marshmellow had an S.A.T. score that was, on average, two hundred and ten points higher than that of the kid who could wait only thirty seconds.

You and I know S.A.T scores are inconsequential in the bigger picture, but it’s hard to underestimate the importance of delaying gratification.

I wonder, what’s the secret to striking the best possible saving-spending balance? Put differently, how should one balance living in the present on one hand and in the probable future on the other? And if virtual-reality technology holds promise for helping spenders save more, what might help hyper-savers strike a better balance?

Rolling the Dice

Posted on by
Reply

As noted Monday, in the U.S. today, the top 20% most wealthy citizens own 84% of the wealth and the top 1% own 50%.

Is that sustainable?

I wouldn’t think so, but the “have-nots” haven’t taken to the streets yet and serious crime is down in most major metropolitan areas. And curiously, quite a few of the eighty percenters are opposed to increasing the taxes of the top twenty percenters. In fact, I’m guessing a lot of the TEA Party is made up of bottom eighty percenters.

Maybe they see themselves joining the top twenty percenters sometime soon. Recent research would suggest they’re delusional because social mobility is extremely low in the U.S. right now, even lower than in most other developed countries in Western Europe. Our perception of our country as a bastion of social mobility is not even close to reality.

Maybe the top twenty percenters have cast some sort of Nancy Grace, sports, reality-television based spell on the bottom eighty percenters that keep them from asking questions about equality of opportunity let alone agitating for a saner redistribution of wealth. Just keep watching Survivor Nicaragua, Monday Night football, and wondering whether Lindsey Lohan is in or out of jail and don’t worry about our proportion of wealth.

How else can you explain a situation where four people say to sixteen, we’ll take 8.4 of every 10 units of housing, health care, vacations, dining out, cars, insurance, savings, etc. and the sixteen of you figure out how to divide up the remaining 1.6 units.

How long can this go on? What eventual ripple effects can we anticipate from this growing gap between the “haves” and “have-nots”?

What’s Your SSQ?

Posted on by
Reply

Social science quotient.

Probably not as high as it could or should be because we’re shaped by Ron and Don.

The “Ron and Don Show”  is a popular Seattle-area radio program on 97.3 FM that I occasionally tune into during NPR fundraising campaigns and sports talk commercial breaks.

Their success isn’t accidental, it rests on great names, radio voices, personalities, energy, chemistry, and pacing, all topped off with a laser-like programming focus on whichever individual is deemed most interesting each particular day: the barefoot bandit from Whidbey Island, the Bellevue City Council person who got mauled by a black bear, the police officer charged with deadly force, the college student that committed suicide.

Ron and Don hammer away at each individual’s story for hours on end and we eat it up because we always have been and always will be suckers for detailed stories well told. Even better when the stories are somewhat sordid and make us feel better about our lives.

But we’re out of touch with the effect of the Ron and Don-like media shining its spotlight so continuously and narrowly on individuals.

The cumulative effect is we’re utterly unable to think sociologically about pervasive patterns and themes among groups. Put differently, we can’t take stories of individuals and extrapolate about what they do and don’t represent in terms of larger social scientific trends.

We’re intellectual weaklings.

Here’s two non-Ron and Don stories from last week that I offer as a social science quotient quiz. Determine your “SSQ” by using a scale of 1 to 10. Assign yourself a “1” if these findings completely surprise you, a “10” if you were already familiar with the studies and the findings, and “2’s” through “9’s” for points in between.

Story one is available here. An excerpt:

Harvard and Duke Biz school professors Michael Norton and Dan Ariely asked over 5,000 Americans about US wealth distribution and how it should look if things could be changed.

“Respondents vastly underestimated the actual level of wealth inequality in the United States, believing that the wealthiest quintile (20 percent) held about 59 percent of the wealth when the actual number is closer to 84 percent.” Studies show current US wealth inequality is near record highs, with the top one percent of Americans estimated to hold around 50 percent of the nation’s wealth.

Story two—available at Slate.com.

The U.S. imprisons more people in absolute numbers and per capita than any other country on earth. With 5 percent of the world population, the U.S. hosts upward of 20 percent of its prisoners. The country’s incarceration rate has roughly quintupled since the early 1970s. In 1980, one in 10 black high-school dropouts were incarcerated. By 2008, that number was 37 percent.

For extra credit, submit your score via the comment section.

If our scores are low, as I presume they will be, it’s not Ron’s and Don’s fault. They don’t have a dog in the “individual versus collective thinking” fight I’m outlining. All they care about is that more listeners tune into them than NPR and sports talk. And their winning formula elevates the individual at the expense of social scientific understanding because we tune in and don’t demand any more from them.

Why the Rich Don’t Feel Rich

Posted on by
Reply

The title of a great article by Laura Rowley on Yahoo’s Personal Finance page last week.

In short, Todd Henderson, a U of Chicago lawyer who makes $300k/year with his doctor wife, got hammered by his blog readers for arguing that he wasn’t rich and couldn’t afford a tax increase.

The blowback took two forms. First, people understandably took him to task for his questionable logic. After reading his post, I was stunned by his lack of perspective. I guess he doesn’t know many regular folk. And I guess he didn’t read the recent WSJ article that detailed how many poor people go shopping at Wal-mart at 11:50p.m. the last day of every month so that by the time they hit the check-out registers with their baby formula, diapers, and food, their new food stamps have kicked in. Or I guess he hasn’t traveled in a developing country.

Second, people questioned his sanity for daring to write the post, intimating that he would have been better off not writing it at all. This is where I disagree. While I have no sympathy for his argument, I admire his courage for honestly stating his views. As a blogger, and person I suppose, I probably self-censor myself way too much. Henderson didn’t get hung up on “what might other people think”, instead he chose authenticity. Questionable arguments honestly communicated deepen our civil discourse and strengthen our democracy.

Class Differences in Tampa

Posted on by
Reply

The scene. Having coffee and toast at a Cuban diner in the Ybor City section of Tampa Florida Saturday with my mom and three of her friends. Wonderful Saturday ritual. The topic, class differences in Tampa. One friend, a former nun for 11 years, and now a kindergarten teacher smiles and says to me, “Since you’re staying in South Tampa, you may have noticed your shit doesn’t stink.”

At least on the surface, there’s lots of well-to-do people in South Tampa, Derek Jeter among them. I work out at a swanky athletic club with unlimited shaving cream, razors, shampoo, towels, mouthwash, and q-tips. The car of choice appears to be a Lexus, Porsche, or BMW.

Walking into the club Monday morning I overheard (remember I’m eavesdropping on you) a woman in tennis whites tell her friends, “I don’t get down here (Tampa) very often, but for tax purposes it’s where they think I live. It’s the only address I have.”

No one chats me up (maybe because I look like death warmed over having just run in the Dante’s Inferno that is Tampa’s August weather). Are wealthy people less friendly?

In the four lane pool, one is marked “open swim” and three “lap swimming”. I’m the only one lap swimming, but that doesn’t keep a few of the four kids playing in the pool from jumping into my lane two and a half times while their parents silently watch. What the hell? They leave with their noodles all over the place, but why should that be a surprise when adults walk away from their ellipticals without wiping them down and the showers are strewn with wet towels. Guess that’s what the workers are for.

I confess, I’m a bit conflicted. I like the plushness, the outdoor 25m pool, the carpeted locker room, the showers that stay on all by themselves (at my “Y” you have to punch a knob every minute), and of course the q-tips, but really dislike the general unfriendly/entitled/disconnected vibe.

Yet, I have to guard against painting with too broad a brush. My mom is a member and she is extremely friendly, appreciative of everything she has, and socially aware. I’m sure there’s at least one other member like her.

Dear Conservative Christians

Posted on by
2

Dear Conservative Christians,

I remember watching the African-American community in Southern California explode in applause when O.J. was acquitted. I went from angry to inquisitive almost immediately. It was clear I didn’t understand their day-to-day experience in South Central Los Angeles. Overtime, I learned they weren’t celebrating anyone’s death, instead they were celebrating the high profile defeat of what they perceived to be an oppressive police department.

Maybe I’m misunderstanding you too because I just don’t get why you believe McCain-Palin are the obvious choice for real Christians in real America.

Where to begin? Let’s start with McCain’s mid-summer visit with Rick Warren at his SoCal church. Recall that when Warren asked McCain who is rich, McCain said anyone who makes $5m/year. Later he said he was joking, but his point was clear, why label anyone as rich, let’s just celebrate whatever degree of wealth anyone is able to acquire. You cheered lustily.

What if Warren had asked different follow up questions such as if we use the New Testament as a guide, didn’t Jesus time after time identify with the poor and downtrodden? And didn’t he challenge the wealthy over and over to rearrange their priorities and identify with the poor themselves?

Disappointingly to me, Obama-Biden have ignored the poor in this campaign, focusing exclusively on the middle class. That hasn’t stopped McCain-Palin from charging Obama-Biden with class warfare. Do you, like me, wonder what chance do the poor have for entering into the public’s consciousness when Obama-Biden are busy responding to attacks that they’re siding with the middle class at the expense of the upper class?

I know there is a prosperity doctrine that’s alive and well, but I have to confess I don’t know how you believe in biblical infallibility and inerrancy and sidestep Jesus’s words and actions concerning the poor. When reading the New Testament, what do you do when you get to the Sermon on the Mount? 

Your ticket of choice continues to criticize Obama and Biden for being socialists for even suggesting raising taxes on those who make over $250k/year. Why try to slander others as socialist when the early Christians seemed awfully socialist themselves?

For example, take Paul from the book of Acts, Chapter Four, verses 32-35. “The community of believers was of one heart and mind, and no one claimed that any of his possessions was his own, but they had everything in common. With great power the apostles bore witness to the resurrection of the Lord Jesus, and great favor was accorded them all. There was no needy person among them, for those who owned property or houses would sell them, bring the proceeds of the sale, and put them at the feet of the apostles, and they were distributed to each according to need.”

How do you interpret that? Help me understand why socialist is being used by your candidates as a pejorative when at least some early Christians were acting like socialists.

And I’m confused about gender. In many of your churches, based on your literal, infallible, and inerrant interpretation of the bible, women can’t serve in leadership positions. And men are the distinct heads of your households. How you can hold those views and simultaneously be so excited for a woman to potentially serve as our nation’s Chief Executive?

And why don’t your candidates of choice ever challenge the wealthy to pay all of their existing taxes? According to the Wall Street Journal (thanks to Robert Franks), a new study using I.R.S. data shows that wealthy taxpayers probably hide more of their income than lower- and middle-income taxpayers. The study on wealthy tax cheats, reported by Janet Novack at Forbes, concludes that taxpayers with income of $500,000 to $1 million a year understated their adjusted gross income 21% in 2001. That compares with an 8% underreporting rate for those earning $50,000 to $100,000 and even lower rates for those earning less.

Why is increasing the top tax rate 3-4% considered class warfare, but when the super wealthy hire really good tax attorneys to help them shelter income from their private businesses, holding companies, S-corporations, partnerships, and rental income, it’s not?

Sincerely,

A Confused Christian Brother