An End to Class Warfare

An End to Class Warfare

There is a lot of talk about socialism in the United States—much of it coming from people who are pretty well-off, relatively speaking.

Don’t you think that’s weird? Take a family led by two white-collar workers who make about $75,000 a year. With $150,000 in income, you still have to mind your Ps and Qs. You find ways to scrimp and save, you don’t travel that much, and maxing out your 401(k) contributions are just a fantasy, especially if you have kids. Life isn’t hard, but resources aren’t unlimited.

It doesn’t seem like $150,000 goes very far. But a household income of $150,000 puts you in the top 15 percent of all households in this country. And it varies by state—a lot. If you earned $150,000 in South Carolina, it would put you in the top 8 percent, which most people would call borderline rich.

But $150,000 doesn’t feel very rich. $150,000 a year feels resource-constrained, actually. There is probably a section of your town where people who earn more than $150,000 a year live. Houses are bigger, they’re on more land, and the cars in the driveway are nicer.

I’ll let you in on a little secret—there is a good chance that the people in those houses feel resource-constrained, too. They are probably comparing themselves against people who have even bigger houses, and even better cars.

This is totally normal economic behavior. Everyone is always sizing people up. You go to a dinner party, you walk out afterwards to the car with your spouse: “I wonder how much their house is worth?” Now we have Zillow for that.

Certain aspects of this behavior are healthy. Envy isn’t always bad. It can be a motivator. I talked about Instagram in my last podcast with Tony Greer. I love Instagram—cars, suits, watches, models—it keeps me going. I can’t imagine what it would be like to feel resentful every time I logged into Instagram.

Apparently, a lot of people do.

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Be Like Mike

If you want more money (and most people do), a bad way to go about getting it is hating people who have it.

There is not a lot of introspection out there. Nobody likes to think of themselves as lazy, or lacking ambition, or incompetent. If you go up to a rich person and ask how they did it, you will probably be surprised at the amount of work that went into it. You might even question whether you are willing to make the same kinds of sacrifices.

Rich Dad Poor Dad, which I read last year when I was gearing up for the personal finance stuff, is an incredible book on two fronts. First of all, the passive income scheme Kiyosaki pushes on people is amazingly bad. But the first part of the book, where he talks about people’s attitudes towards money, and the psychological differences between his rich dad and poor dad, are absolutely brilliant.

Most people out there who are making high six figures and up are making a lot of sacrifices, or made sacrifices along the way. Money is a path that you can choose. Some people have different priorities.

These are not terribly politically correct things to say in 2019 America. You could say them in 1999, for sure, but not 2019.

One thing that gets on my nerves is that a lot of Fed critics (like myself, sometimes) like to say that quantitative easing and zero rates lifted financial asset prices, which helped a lot of rich people to get richer.

This is true, perhaps, but it’s not exactly like the Fed was writing checks. People had to be positively exposed to this phenomenon—they had to take the risk, and there was no guarantee that it would turn out. Plenty of rich people did not get any richer in the last decade because they were shy about taking risk (they were probably penalized for being too smart).

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You can get all the details here, but I will point out that right now, you can get a Virtual Pass for about 90% less than lots of people bought their conference tickets for. Plus, no hotel costs and plane tickets to consider. All the good stuff, none of the hassle.

It’s one way you can solve for x, where x is your financial success. The further we get along into this century, the further we get away from taking individual responsibility for one’s own actions. The Fed did it, the banks did it, Trump did it. How about: concentrating on yourself and ignoring all the noise. There is a much stronger correlation between your behavior and your bank account than anything anyone else does.

Mind Your Own Damn Business

People tell me that I am rich. I am not so sure. Like I said in the beginning of this piece, there is always someone with more.

I’ve never had someone come up to me and ask me what I did to get rich. You know what—I would be happy to tell them. I think most people would.

In the course of my business, I have met a lot of super-rich people. Most of them either managed money or started businesses or both. If I wanted to get super-rich like them, I know exactly what I would have to do. So far, I have been unwilling to do it. I have been unwilling to make the sacrifices or take the risk. That is a choice.

Some folks lately have been complaining about the perceived lack of class mobility. Especially with this college admissions scandal—super-rich jackasses are bribing their kids into college. What kind of chance does everyone else have?

You just have to work harder.

Having money confers advantages—that has always been true. But America is still the same country where you can work your way up from the mail room, metaphorically speaking.

I have a Horatio Alger story. I heard one better—a guy on Wall Street (someone who I actually disliked) honey badgered his way into Goldman Sachs from a non-target school and is now probably a centimillionaire after working on the buy side at a series of hedge funds. I have lots of stories like this.

I am the patron saint of the non-targets. There are politicians out there who will use words like “elite,” “billionaire,” and “rigged,” sometimes all in the same sentence. Tell your story walking. If I can do it, anyone can.


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William McCarthy
April 8, 2019, 12:48 a.m.

I am not sure I can agree on the lack of mobility in our society. I have worked for; and with too many who started with nothing or came out of less than fertile ground and done amazingly well. It takes work and time to happen but there are too many examples out there.

My last boss was the son of Mexican migrant farmworkers. His family was very very poor and humble. He served in Vietnam and parlayed his GI Bill and education into a great public sector career accomplishing great things for his community as a city manager. Effective salary put him well into the top 2-3% of income.

My grandchildren were delivered by a doctor whose parents were refugees from Vietnam. We have a lady in town who owns two restaurants. She and her family walked out of Cambodia over dead bodies to escape Pol Pot who was slaughtering Chinese Cambodians.

I have a friend whose family’s insurance agent bought food for the family they were so poor. Or, “Po” as he puts it. He laughs when he says their black neighbors gave them government cheese to help feed them. He parlayed a tour in Vietnam and the GI Bill into eventually being a top exec with one of America’s top clothing companies and one of its most iconic tech companies with all the rewards that go with that.

My last plumber collected a hundred bucks an hour from me. LOL I see young hispanics hustling all over the place. One guy is the go to guy to get rid of rats and mice. He just bought his first home. In California. Even my landscape guy somehow supports seven kids. He has been at my house in the dead of night fixing a broken sprinkler line. That is service.

We have a lot of Americans who have forgotten how to work hard and smart. Assume they should be an exec making six figures out of college. Or believe they need to drink beer, eat pizza and watch sports every weekend. And, then they wonder why they are left in the dust.

The 70’s and early 80’s were no picnic. I served in the Army and had numerous jobs. Always working hard. Had a negative net worth until mid-thirties after a failed business and the twelve year bachelors program LOL.  And, am now comfortably retired after a great and rewarding career. Way too much whining out there in my opinion. America is still the land of opportunity for those willing to work and do something useful for people.

There are 80 million boomers leaving the workforce. Should be an opportunity or two out there to fill some shoes. What is that old sales slogan? “Find a need and fill it.” Or, to quote my First Sergeant in the 82nd Airborne. People need to” Get their heads out of their *&%#.. duffle bags.” LOL
April 4, 2019, 2:10 p.m.


I disagree with your take on Kiyosaki’s passive income “scheme.”  It has worked amazingly well for me.  Remember, you know the financial markets and can easily spot an opportunity there.  Most of us can not.  However, I know the value of the house next door (or in a nearby town) and how much it would generate in rent. 

I saw you on Realvision and support your foray into radio.  I believe it would be valuable for majority of people.  I made it a point to read every personal finance book I could find since Andrew Tobias’ “The Only Investment Guide You Will Ever Need” back in the early 1980’s.  It seems as though getting wealthy is simple, but not easy:
1. Get a job / career that pays based on performance instead of time (e.g., sales).  If you write a newsletter for a living, you are paid based on the value to your subscribers, not the time you spent writing it.
2. Accumulate capital (save, or I believe you called it “be a CF.”)
3. Do Something (don’t just put money in the bank):  Buy or create appreciating assets that generate cash flow.  You are not a fan of Kiyosaki, but those of us in middle America could (can?) buy a rental property that generates a 16% cash on cash return and appreciates in value.
4. Avoid debt (at least debt that does not generate income).  My wife and I own 11 properties (mostly residential, but some commercial) with no debt.  We have property managers, so I never get a 2:00 AM call about plumbing issues.

Good luck on the radio show.  Let us know how to find you on the dial.

Don Braswell
April 4, 2019, 11:07 a.m.

Jared, I agree and disagree. 
Folks can work harder, lots of folks do.  But some of us get paid more to work more, and a lot of us don’t.  Some of my friends haven’t climbed the ladder - they’ve stagnated, or even slipped a rung or two.  That’s okay, and sometimes it was their choice.  My grandfather was like these guys.  He was an union employee after his small town grocery store went broke (he accepted too much credit.).  In his day, the pay for executives was probably 30 times his pay.  Now, guys working the same plant - doing far more technical work with robots, are still making about the same pay as my grandfather - while the executive is making 300 times their salary.  This is Out-Of-Whack. 
When this gap gets too far out of whack, people revolt, literally.  So, I encourage you to go read about the Gracchi brothers in the Roman Republic (who led to a string of wanna-be’s like Sulla, Pompey, Ceasar to Augustus), or you could read more about the French Revolution with the Jacobins and Robespierre.  That kind of “Out Of Whack” is what starts revolutions, and the folks on Wall Street should take a walk on Main Street, or even the back streets.  (It wouldn’t hurt if THEY should read their history books either.)  The Gracchi brothers were almost successful reformers; they were murdered by the Roman Senators.  Their crime?  They wanted to reform land ownership in Italy.  Why?  Because the Roman Senators were breaking the Roman law regarding land ownership in Italy.  The Senators literally clubbed them to death on the Senate floor for their attempt to bring things back in line. 
Fast forward to the USA circa 2009.  The guy delivering the Amazon packages is making less than his UPS counterpart - and that money goes to Jeff Bezos, so Jeff can launch rocket ships.  Hmmm, how do you think the delivery guy sees that? He sees it as a step down, and he might have to downsize.  Without a union… And he’s just trying to feed his family like he did when he worked for UPS.  And folks tell him “he should have studied harder.” 
When you have middle income and lower middle income pensions disappearing, and upper management gets a bonus to make the promised wages decrease and their pensions disappear, then things are farther Out-Of-Whack.  You can pick any number of examples, but let’s use the American Airlines of 2011.  Union guys are working for airlines.  Management only cries about the blue-collar wages and pensions.  The airline went broke and declared bankruptcy - they reduced the mechanics pay and pensions (average salary about $50,000).  But, the American Airlines CEO got a $17 million severance package, which is 340 times the mechanics salary.  .  Hmmm, I wonder why the unions are not happy with this arrangement.  Like I said, this doesn’t help the republic.  This is also not a function of these folks not working hard.  It would have been a LOT easier to stomach if the management bonuses for the last decade had been clawed back – after all, they were in charge.  The risk they took was with other people’s pay and other people’s pensions. 
Finally, most of us know that the tax system is also Out Of Whack.  When the 1% takes their pay in “capital gains” and in “carried interest” they are hiding their income.  My upper middle class brother cannot do that - and the tax burden falls disproportionately on him.  So, when these so-called loopholes disappear - then you can tell me how much the 1% actually made that year, and then you can tell me how much they paid in taxes.  Until then, let’s just agree to disagree. 
This doesn’t end well for republics.  Mind you, I’m a card carrying (they still send cards) member of the Republican Party – But I also read history.  Things go south very quickly – and it goes quicker when these things are Out Of Whack. 

John Perkins 08954321
April 4, 2019, 10:14 a.m.

“This is true, perhaps, but it’s not exactly like the Fed was writing checks. People had to be positively exposed to this phenomenon—they had to take the risk, and there was no guarantee that it would turn out. Plenty of rich people did not get any richer in the last decade because they were shy about taking risk (they were probably penalized for being too smart).”  Sing it, brother!

jack goldman
April 4, 2019, 9:55 a.m.

You are very confused about “money”. Debt is not money. Debt notes are not money. Promises to pay are not money. People who work for computer credits have no money. Money is gold and silver measured in ounces. Stamping a one, ten, one hundred on the same piece of paper is not money. Computer credits are worthless. Anyone working for computer credits or debt notes is a free slave in a computerized automated economy of illusion. The class distinction is an illusion created by computers, computer credits, and paper diplomas. Of course, everyone believes in this faith based illusion that debt and computer credits are “money” in the cities. We are all the same human beings breathing the same air. A rich man is a poor man with money, not credit, not debt, but money, gold and silver coins minted by the United States Treasury. The Fed has addicted people to debt, but the Fed has no money, no real gold or silver coins. Federal Reserve debt notes are debts, an illusion of wealth, yet to be paid. It’s a grand global illusion started on August 15th, 1971 and it’s my prediction at some time in the future this faith based class system based on debt will end badly.
April 4, 2019, 9:39 a.m.

“...but it’s not exactly like the Fed was writing checks.”
- BAH HA HA HA!!!  Yup, the Fed sure wasn’t writing anyone cheques.  I’d like to hear John’s opinion of that statement.

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