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posted by
martyb
on Saturday January 27 2018, @12:43PM
from the I-got-mine!-And-Yours.-And-Yours.-Annnnnd-yours,-too. dept.
from the I-got-mine!-And-Yours.-And-Yours.-Annnnnd-yours,-too. dept.
The 1% grabbed 82% of all wealth created in 2017
More than $8 of every $10 of wealth created last year went to the richest 1%.
That's according to a new report from Oxfam International, which estimates that the bottom 50% of the world's population saw no increase in wealth.
Oxfam says the trend shows that the global economy is skewed in favor of the rich, rewarding wealth instead of work.
"The billionaire boom is not a sign of a thriving economy but a symptom of a failing economic system," said Winnie Byanyima, executive director of Oxfam International.
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Only 1% of World's Population Grabbed 82% of all 2017 Wealth
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To be a kind of moral Unix, he touched the hem of Nature's shift.
-- Shelley
(Score: 4, Informative) by therainingmonkey on Saturday January 27 2018, @04:27PM (22 children)
We'd all like this to be true, but it really isn't.
The richest families in the UK 800 years ago are still the elite today[1]. The richest families in Florence 600 years ago are still the elite today[2].
The world's youngest billionaire inherited his wealth (and avoided paying tax on it), which originally came from the Norman conquest of England 951 years ago[3].
Trump got started with a "small" million dollar loan from his father.
I'd like to see an analysis of what proportion of the world's wealth is inherited, but these examples aren't exactly uncommon.
[1] https://link.springer.com/article/10.1007/s12110-014-9219-y/fulltext.html [springer.com]
[2] https://voxeu.org/article/what-s-your-surname-intergenerational-mobility-over-six-centuries [voxeu.org]
[3] http://fortune.com/2016/08/11/hugh-grosvenor-worlds-youngest-billionaire/ [fortune.com]
(Score: 3, Informative) by The Mighty Buzzard on Saturday January 27 2018, @04:49PM (20 children)
A valiant attempt. Those rich people are indeed still rich. That in no way implies that all or even most rich families remain rich beyond two or three generations. That they are at the top of the list only proves that they are extremely good at making money. I'd try to pass that ability down to my children, wouldn't you? If their children want to remain rich though, they have to be as well; or at least hire someone who is.
Given a billion-dollar fortune, inflation alone assures that living a billionaire's lifestyle off of the interest will be insufficient for even a single descendant. For four equally compensated descendants at zero estate tax, they have to increase their inheritance by three hundred percent to even start living a billionaire's lifestyle. Well, unless they want to rapidly discover that they are not in fact a billionaire.
My rights don't end where your fear begins.
(Score: 2) by mmcmonster on Saturday January 27 2018, @05:00PM (17 children)
On average, the stock market (for the last century) doubles your investments every 6 years.
So if you want to quadruple that $1Billion dollars, just put it in an S&P index fund for 12 years.
Doesn't take much effort.
(Score: 1) by khallow on Saturday January 27 2018, @05:19PM (14 children)
Hasn't doubled in the last ten years, let us note. And you aren't taking inflation into account.
(Score: 3, Informative) by mmcmonster on Saturday January 27 2018, @08:15PM (13 children)
I'm not sure what source you are using.
VFIAX (S&P 500 Mutual Fund) shows an increase of 2.6 fold over the past 10 years when you have dividends re-invested.
Source: http://quotes.morningstar.com/chart/fund/chart?t=VFIAX®ion=usa&culture=en_US [morningstar.com]
A $10,000 investment 10 years ago would now be worth $26,781.
(Score: 1) by khallow on Sunday January 28 2018, @03:03AM (12 children)
(Score: 2) by sjames on Sunday January 28 2018, @06:36AM (10 children)
You just countered your own claim. 2.1 is greater than 2.
(Score: 1) by khallow on Sunday January 28 2018, @12:00PM (9 children)
My point, such as it is, is that US stocks have yielded significantly lower returns since 2000, than they have before that time. Even your quoted index has only improved by less than a factor of three since its peak in early 2000. But if we went a similar amount of time back to say, 1983, it's a jump of more than an order of magnitude from then to 2000.
(Score: 2) by mmcmonster on Sunday January 28 2018, @01:50PM
WFIVX is a Wilshire 5000 index fund. From 10 years ago it has increased 2.5 fold.
Reference: http://quotes.morningstar.com/chart/fund/chart?t=WFIVX®ion=usa&culture=en_US [morningstar.com]
I personally keep most of money in a total stock market index fund, VTSAX, which increased 2.7 fold over the past 10 years.
(Score: 2) by mmcmonster on Sunday January 28 2018, @02:04PM
Using DIA (Dow Jones Index ETF), with dividends re-invested...
Since 2000, DIA has increased 3.2 fold.
Since 1985, DIA has increased 4.1 fold. (Sorry, the backtest portfolio visualizer tool doesn't go back to 1983.)
Reference 1: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2000&firstMonth=1&endYear=2017&lastMonth=12&endDate=01%2F27%2F2018&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&showYield=false&reinvestDividends=true&symbol1=DIA&allocation1_1=100 [portfoliovisualizer.com]
Reference 2: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2017&lastMonth=12&endDate=01%2F27%2F2018&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&showYield=false&reinvestDividends=true&symbol1=DIA&allocation1_1=100 [portfoliovisualizer.com]
(Score: 2) by mmcmonster on Sunday January 28 2018, @02:12PM (4 children)
A couple notes:
The price quoted on the exchanges is the current price available for trading.
Comparing it to the price from the past is almost never accurate because most funds give out dividends on a regular basis, either monthly or quarterly.
If you have the dividends re-invested (which every single investment house would offer/recommend), the increased value of these funds goes up dramatically. This is the "miracle" of compounding.
This is also why you show a quote price for Wilshire 5000 which looks almost flat but the value has gone up dramatically. They give out all the value in dividends.
(Score: 1) by khallow on Sunday January 28 2018, @07:13PM (3 children)
(Score: 2) by mmcmonster on Monday January 29 2018, @12:27AM
Thanks for at least keeping an open mind. My hope is to educate some people on using index funds to invest.
The fact of the matter is, while any particular year can be fantastically good or horrible, over the long term the market gets over 6% return per year.
The key to making that yourself is to use low cost index funds and to keep your money in the funds and not take it out when the going gets rough, because the market WILL go bad for years at a time. But time in the market is more important than money in the market.
Read a good forum, such as https://www.bogleheads.org/forum/index.php [bogleheads.org] or read a short primer such as If You can by Bernstein: https://www.etf.com/docs/IfYouCan.pdf [etf.com]
(Score: 2) by mmcmonster on Monday January 29 2018, @12:36AM (1 child)
The other thing to remember:
If you are using a fund manager, remember that (by definition) the average fund manager does as well as the total market, prior to taking out his fees (also known as the Expense Ratio).
Which means that the average fund manager does worse than the market when you consider his fees.
You may think that you have an above average fund manager. It may be true ... but... would you bet that he will be above average for the life of you investing with him? And if he retires, would you bet that the person replacing him would be above average as well? Better to use an index fund with a very low Expense Ratio.
(Score: 1) by khallow on Monday January 29 2018, @02:20AM
First time I invested in a fund, I found that out. They had a great year and then several subpar ones right after I joined. I've since learned that even for relatively competent funds a great predictor for a bad year is having an extremely high year or two before due both to investments tending to rise in bursts and the "me too!" effect from new people piling on the train.
(Score: 2) by sjames on Sunday January 28 2018, @07:06PM (1 child)
I haven't quoted any index, that was you! I just noted that you claimed:
And then for some reason followed up with documentation that is HAS.
Please quit muddying up discussions with falsehoods. Just admit you were talking out your ass and move on.
(Score: 1) by khallow on Sunday January 28 2018, @07:11PM
Indeed. I see now how I was in error. Indices don't include reinvestment of dividends. As I should have realized, the Dow components (and apparently most of the stocks that make up the Wilshire 5000) have significant dividends.
(Score: 2) by mmcmonster on Sunday January 28 2018, @01:58PM
DJIA is not a normal index fund. It's based on the market price of the included stocks and is not market cap weighted. Most other index funds are market cap weighted.
I can't even find a mutual fund that tracks it. Only thing I can find are a couple ETFs.
DIA increased 2.6 fold over the past 10 years with dividends re-invested.
Reference: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2007&firstMonth=1&endYear=2017&lastMonth=12&endDate=01%2F27%2F2018&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&showYield=false&reinvestDividends=true&symbol1=DIA&allocation1_1=100 [portfoliovisualizer.com]
(Sorry for using a different website. Morningstar doesn't give good chart data for ETFs)
(Score: 2) by The Mighty Buzzard on Saturday January 27 2018, @06:34PM (1 child)
Eighteen but yes. If it were reliable and accounted for inflation, an index fund would be a good way to do so.
My rights don't end where your fear begins.
(Score: 2) by mmcmonster on Saturday January 27 2018, @08:22PM
Index year = $10k
Index year + 6 = $20k
Index year + 12 = $40k
Index year + 18 = $80k
There's a doubling every 6 years (when you invest dividends and put the money in a low cost index fund such as VFIAX or VTSAX).
That's the magic of compounding interest.
This will dramatically overcome any inflation rates visible in the U.S.
(Score: 0) by Anonymous Coward on Saturday January 27 2018, @06:40PM (1 child)
Clueless person applies anecdotal evidence across entire spectrum, ignores evidence that undermines his anecdotal experience, thinks everyone else is stupid. Next up: Dementia, how to tell if your loved one is at risk or just a narcissistic idiot.
(Score: 2, Informative) by Azuma Hazuki on Saturday January 27 2018, @08:08PM
Objection: no one loves Uzzard. Even Jesus thinks he's a prick :D
I am "that girl" your mother warned you about...
(Score: 2, Insightful) by khallow on Sunday January 28 2018, @03:29PM
That's a fairly tenuous connection which ignores both peoples' ability to game that system (say by adopting better surnames or marrying into a surname), the differences in social mobility in past and present (social mobility two centuries ago is not social mobility today, the two countries you mentioned were significantly less socially mobile three generations ago, for example), and perhaps a bit of p-hacking too (this would not be the first time some researchers swore there was statistical significance at such low levels when there was not).