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Reply #32: Still too confusing. [View All]

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Samba Donating Member (13 posts) Send PM | Profile | Ignore Fri Dec-09-11 08:59 PM
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32. Still too confusing.
First link talking about income - and income itself is pretty vague.

If the 150K earner forgot about the 20k of health policy and 10k worth of pension and 10k worth of 401k-match and 10k worth of paid vacation that makes their actual income more like 200k - and compare that to 150k that includes no benefits.

You feel richer making 150k and having the time and flexibility to catch little league games, pursue hobbies and volunteer time to causes? Still feel rich when its 150k made thru such grind that theres no time or energy for anything?

Point is - the meaning of 'income' varies - and that job security and the lifestyle demands of the job matter a lot.

Second link is about wealth - they use net worth.

They're comparing 6 cousins to 'one american family'. I don't think most people would think of siblings and cousins when they think of their family's worth. Still even comparing one Walton to one american family is such a huge difference.

But then they too mix wealth with income. When a Walton's worth goes from $20B to $24B - it would be logical to think that represents an income of $4B since we're used to earned income. From a Walton's perspective tho its an 'unrealized gain' and not income at all.

When people calculate their own worth - I'd bet they include the current value of their 401k/IRA but assign no 'worth' to a pension. Hey that account is definitely 100K - I can see it, touch it, withdraw it. The pension is 10k a year from 65 till I die - so ... given life expectancy of 75 ... its - probably - 100K of future income also but it could be $0 or $200k if I die young or live long - its uncertain so its worthless?

Not to confuse that sort of uncertainty with the uncertainty that a promised, contracted pension that says 10k/yr could be underfunded or get looted and only pay $5k/yr.

Clearly it has some worth - then so must 'social insurance' like Social security and medicare.

So whats the 'worth' of safety nets? Hope you never need them but if you ever should they can really add up.

So the 99% is income? or wealth? Is the $1M/year ballplayer in the same bracket as the Heiress who arranges for $1M/year in 'income' to pay the staff but has $50M in assets making another $4M/year of 'gains'?

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