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Japher
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Ook! Ook! Ack! Ack! Ack!
Jun 2002
time: 05:28
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quote:
Who ever said deficits are always a bad thing? |
I am going to die in debt, just to make my kids mad
quote:
Actually, if you truly understood how wealth is created and looked at the back stories of those 5% you would realize that the way to create a billion is to start your own corporation or real estate empire.
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Yup. The Millionaire Next Door only discussed spending habits of the rich, it didn't really go into how these people go that way. Not many books do, that is a secret. However, I think it is a rather ironic trend that most of these people are "financially savy", have "high salaries", and are somewhat "frugal".
Yet, what was missed is how these are all interrelated. Start frugal so you can save your money to become financially savy (buisness owner, real estate investor, etc.) so that you can have a high salary.
These traits are not something that just happened to them, or that the inherited in a trust, it is something they worked for and demanded of themselves. Then, once they got those nice salaries they were unable to shake those traits... I remember the average salary was around $400,000/year. That's nothing compared to some of these guys out there! Why were they only paid that much? Because they were paying themselves, the rest went into their buisness to make more money and to avoid taxes... I guess being financially savy also means being buiness savy, and with that comes a lot of power.
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JohnT
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Capitalist
Mar 1999
time: 00:28
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quote:
Originally posted by gsmoove23
If we're talking about the wealthiest 5% in the US we're not talking about millionaires and I think its quite clear that most of them are born wealthy. |
Another "fact" that isn't.
US Population: 280,000,000
5% of that: 14,000,000
Lowest income (US 1040 AGI) one needs to be in the "richest" 5%, 2000: $128,000
Lowest income (US 1040 AGI) one needs to be in the "richest" 1%, 2000: $313,500
6.4 million people filed a tax return that put them in the top 5%. These people paid a total of $553,670,000,000 in personal income taxes, or 56.7% of all personal income taxes paid in the USA (a little less than $1 trillion.)
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Oerdin
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of Internet Music.
Sep 2001
time: 21:28
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quote:
Originally posted by Odin
Most rich people are either lucky or inherit the money. The American dream is a bunch of capitalist propaganda, if it was true my parents would be millionares, we make $25,000 per year. it's all luck, Bush Jr. wouldn't of went to Yale if his daddy wasn't rich, he wasn't good enough in school to normally go to Yale.  If an idiot like him gets to go to yale I should too!  |
To add to everyone elses' denunciation of this post I'd like to share my family's story. My grandparents emigrated to the US from Scotland with my father and aunt in 1947 (my mother's family has been here since before the revolution) and they literally didn't have two nickels to rub together in their pockets. Luckily my grandmother's older brother had come over the year before and so my dad's uncle helped them out for the first few months.
Back in Scotland my grandfather's family had been quite poor (it was the depression when he was growing up) so the day he graduated from high school in the morning he attended the ceremony and by lunch time they sent him down into the coal mine to help earn money for the family. After he got married he decided he didn't want his sons to have to be coal miners like he (and all the other males in his family) was so he packed everything up and moved to America. He got lucky and landed a job as an aircraft painter at Convair's Long Beach, CA plant. He worked there for twenty years, retired with a full pension, then decided at the age of 43 to start his own painting contracting business. He ran that business for 18 years at which time he sold it.
He's pay never amounted to more then a normal middle class amount but through hard work and thrift they were able to not only buy their own home but also two apartment complexes and a rental home. My grandparent's saved and invested so at 61 he was able to retire comfortably wealthy and never had to worry about cash again. They were able to spend a good four months a year traveling to different parts of the world (mostly Europe but also Asia, Australia, Latin America, and once to South Africa).
If that's not the American dream then I don't know what is. Everyone should have an opportunity to go from growing up poor to having the financial freedom to travel whenever they like. 
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MRT144
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Seattle Washington
Oct 2002
time: 21:28
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cut military by 50%
eliminate corporate welfare
end the drug war
tax churches
churches chicken that is
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MichaeltheGreat
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Apolyton Grand Executioner
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mooning the house that Ruth built.
Oct 1999
time: 21:28
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quote:
Originally posted by Kidicious
I'm not sure how you started up your business, but starting up a business that could possibly make you a millionaire takes a lot of resources. If you can pour those resources into your business and still hedge against your business failing you are already rich. |
I still have a day job - my normal consultancy work. Depending on how you assess value, (intellectual property rights sale, vs. potential market and market penetration), the software/system product I'm currently developing on should have a net realizable value between 10 and 50 million. 10 being the relatively quick sale of rights and moving on to something else, 50 being about the potential market penetration.
The two initial installations I'll have in the next 9 months are contracted at $200,000 each, and $5,000 a month for the project life (ten years plus right to renew in one case, seven years in the other). About 40% of that is hardware and hard external costs, the rest is development cost (my pay, but I'm still working the day job, so it's really retained earnings to be used for forward development, marketing, etc.), overhead and profit. On the monthly side, about 30% will be fixed out the door expenses, plus another 30% allowed for replacements and outside services.
My borrowed capital is zero, my outside venture capital is zero, and my operating capital so far has been out of pocket, a little here, a little there.
My initial "sweat capital" is about nine years of on and off effort, learning about the target market, the needs that aren't being met, the technology required to adequately meet those needs, regulatory and marketing strategy issues, etc. Nine years. In 1994, the hardware and software tools weren't there. SCADA existed before that, but it's all pretty much halfassed, and only addresses engineering type operating issues, not commercial issues.
In that nine years, other people (existing controls companies, etc.) adapted SCADA for small power plant operations, but they never thought beyond SCADA to the entire business operation, and they've mostly saddled themselves with an early 90's codebase on early 80's hardware standards. Rather than try to compete head up with that crap (it's crap, but they have big advertising staffs, relationships with equipment manufacturers, and lots of mediocre ANSI C programmers), I looked at what they didn't provide, and how they didn't provide it. I also spent a lot of time looking at the customer perspective firsthand - something you can't do with studies or consultants, and something which most would be businesspeople ignore). After getting the customer's view of what would be nice in a perfect world, I mixed in the views of related parties - the customer's end users, lenders, auditors, regulatory authorities, etc., to see what would be useful to both sides in their relationships with the customers of my product. (Herein lies the marketing strategy).
From all that, I refined the target market to third-party developers of cogeneration and small independent power plants. Why? Larger cogenerators (whether end user or third party owned) have an economy of scale such that you can afford to have an on-site operating staff, while the smaller ones don't. Most industries with one to six or so megawatt electrical loads don't want to invest the capital in having their own cogen plants, since it's ancillary to their line of business. Most third party developers either starve and die if they do those small plants, because there's a lot of overhead in operating them (or contracting operations), so they avoid that market and all look for the bigger fish, or they suffer with the inefficiencies. In any case, there's literally a few thousand potential sites in California where that type of generation (~500 kw to ~6MW) project could be done, but large developers don't want to bother, and small ones bog down on operating cost and infrastructure.
Provide that infrastructure and a way to virtually operate and monitor everything, and I mean everything, from billing, to spare parts pools, to maintenance scheduling, to lender's audits, purchase orders, permit renewals, monitoring plant status, etc. - the whole commercial and technical side of operating the plant, and you make several hundred of these generation projects feasible that wouldn't be feasible, otherwise.
The main lesson here is that there's intellectual and sweat capital you can invest, as well as monetary capital.  You may not be able to save tons of money, but you can educate yourself and look to create market opportunities.
What I've described so far isn't the be all and end all, either. It's marketing initially into a niche that nobody else is looking at, but one which I've researched and established is a good potential market. So I get off the ground in a relatively protected marketplace, to prove and fine tune the technology. The real kick is that what I'm doing is (a) almost infinitely scalable, you could literally run an entire utility system off of it; (b) almost infinitely adaptable to other industries, particularly once I author the configurations tools, report writers, and all the second generation stuff that I'll be working on between the prototypes and getting any real industry attention (and wakeup calls to pseudocompetitors); (c) on average, a decade or so ahead of the hardware and code base of prospective competitors; (d) nothing of it's kind exists yet, so a huge number of intellectual property rights can be secured (several are already in process).
When I get to the point of wanting/needing outside capital, I'll have about two and half years of self-sustaining, profitable operating history, a fairly mature product with a lot of locked up IP rights, a scripting language and toolset so it is completely adaptable and portable, and next to no visibility to prospective competition.
Other than deferring toys and nonessential purchases, this hasn't affected my other investments at all, and it will produce enough income that the effort through the end of 2005 will be self-sustaining, and pay me enough extra money that my outside unrelated investment portfolio should increase substantially in that time period, rather than get sucked into supporting the core business.
So there's a hell of a lot more ways to go about it than being born with a silver spoon in your hand, or getting lucky with your life savings.
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Cruddy
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MichealtheGreat, having worked in environments with those SCADA scrap systems, all I can say is, thank you and well done. You derserve every success for your efforts.
Anytime you want to see about a UK subsidiary, send me a PM.
As for reducing the US budget deficit, how about cutting back the airforce side of the National Guard? It's not like the Mexicans are going to bomb you tomorrow, and the new airline security seems plenty tight enough to prevent another 9/11.
Alternatively, scrap "son of Star Wars". It might just stop a couple of Korean ICBMs - but seeing as how you'd retaliate anyway, what's the point?
And if the Bushies do get their ABM system, it's just going to encourage others to do the same.
Last edited by Cruddy on 29-05-2003 at 10:48
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MichaeltheGreat
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Apolyton Grand Executioner
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mooning the house that Ruth built.
Oct 1999
time: 21:28
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quote:
Originally posted by Oerdin
To add to everyone elses' denunciation of this post I'd like to share my family's story. |
My late uncle Boris Ilyin (yep, a Russkie in the family ) was another immigrant example. He was my Aunt Lucy's husband (Lucy is the one who's the official embodiment of the family southern Democrat dynasty), and left Russia some years after the revolution as a 15 year old kid. He was in Vladivostok, due to his dad having been a representative of the Tsarist government, and over a couple of years, he walked, hitched, boated, etc. his way out in 1928. (his dad and most of the rest of the family didn't make it) through Manchuria into Korea, then Japan. He'd been told that an uncle of his (former field grade officer in Tsarist army, turned car mechanice in Detroit) was in the US in Detroit. He managed to get onto a freighter, worked his way over to the US, and got here when he was 17. He hooked up with his uncle, worked sporadically as a car mechanic, (with the depression on) and taught himself enough of everything (starting with English) to get into college and get a four year engineering degree in the late thirties. World War 2 came along, he got drafted into the Army as a private, got assigned to the Corps of Engineers (amazing, the Army did something smart and didn't make him a rifleman ), got field commissioned almost straight away, and left the Army in 1946 with a temporary grade commission as a full Colonel in the Army reserves.
He got into aviation engineering right at the begining of the jet era , and ended up with patents for the first all-attitude, all-flow range, high pressure fuel pumps that were used on the first generation of US production jet aircraft. He retired early, he and Lucy got to see a lot of the world before he died, and they were comfortably well off - nice house, investments, some extra property, early retirement and travel.
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MichaeltheGreat
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Apolyton Grand Executioner
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mooning the house that Ruth built.
Oct 1999
time: 21:28
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quote:
Originally posted by Cruddy
MichealtheGreat, having worked in environments with those SCADA scrap systems, all I can say is, thank you and well done. You derserve every success for your efforts.
Anytime you want to see about a UK subsidiary, send me a PM.
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By 1-September (very close to completion of the prototype system, with the second following in the first half of 2004), I should have published technical and marketing white papers and a live full-scale demonstrator online. Most of that's done now, or nearly done, but I'm waiting on the lawyers to give me the green light on having secured IP rights before I publish anything in depth.
Another cute feature is that the product is designed to be dynamically multilingual and metric/english, so any client user in any location can get the language and measurement units they want, without using a different client version of the program.
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MichaeltheGreat
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Apolyton Grand Executioner
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mooning the house that Ruth built.
Oct 1999
time: 21:28
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quote:
Originally posted by Kidicious
MtG,
Your success story is fascinating. How did you educate yourself, and figure out that this was what kind of work you wanted to do? In other words, how did you find your direction? Is electricity generaion just a great interest for you? |
Kidicious - self-education is fairly simple. For business, a lot of it is simply training yourself to listen and observe in as great a detail as you can, because you learn more (both good and bad, both of which you need to know) from watching people attempt to do whatever it is you want to do. How they market, the types of social interaction, what they say and how and how it impacts the listening party, listening in on technical back-chatter in meetings, etc. Constantly ask yourself "what are these people doing wrong? What are they doing right?"
If you run into anyone who seems to know what they're about, try to make yourself useful and learn something from them. That doesn't necessarily mean people who are experts at something - two of the guys I learned a lot from was one of the greasiest ****** I ever worked for in my early IT days - one a greasy ladder climber at IBM, the other a USDA Prime bullshitter who had small business built off milking the state of Nevada for employee training subsidies for the disabled. Obviously, the lessons learned there were how not to do things, but beyond that, getting an insight into the mentality of those types and how and why they succeeded to the extent they succeeded is useful. (hint: All marketing is marketing, whether it's fraudulent BS for a lemon product, or wonderful marketing for the best thing to hit the human race. The only question is: "Is it effective in achieving it's desired goal?" The rest of it - the ethics and what you're marketing, is up to you, but effective marketing is generic, because it's all about psychology and meeting someone's perceived wants and needs.)
Electricity generation (actually, utilities and infrastructure in general, I did a lot of water and gas work in the mid-late 90's) was where I landed after scab construction, office work for a construction manager/engineering firm, IT work and the Army. It was the first thing that came along. I don't necessarily like it (it's sure as hell not a life-long dream), but it's technically interesting enough to have a lot of analytical problems, and it pays better than most applied science, etc. It also gets you exposed to a lot of things - the physical construction side has exposed me to large-scale finance, environmental laws and issues, construction and construction management. The contractual side has given me a lot of exposure to risk management, contract law, business regulation, etc.
The software side is my ticket out of electricity generation and utilities, but it would be silly to venture off into developing for something I don't know as well, bypassing something I do know well. (Another lesson: Start a business you may not like that much, if you know it has a better probability of success than what you really want to do. You can (a) learn from it; (b) start a track record that will help you with later financing and venture cap; and (c) sell it at a profit, so you have more capital to start what you really want.
The intermediate result with the current software/systems product is I get a good server infrastructure to play with, lots of reusable software components that are commercially proven, money up front and on an on-going basis, and a good set of books and track record. From that, I can branch off into more esoteric fun stuff like creating the technology for virtual interferometric astronomy, running with the UAV project I'm working on, small payload - high suborbital lift rocketry, virtual ecosystem management for high end aquariums (science, breeding, etc.) and all sorts of odds and ends problems that haven't been solved really well.
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Oerdin
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of Internet Music.
Sep 2001
time: 21:28
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I'd disagree about cutting NPR. They haven't really been left since the every early 1990s when Congress eliminated the automatic yearly grants and now only provides matching funds to go go with money private donors give. This forced NPR playing more of what local listeners wanted to hear instead of what NPR-elitists wanted to play. Besides NPRs budget is a tiny, tiny item compared to the big expenses which are social security, medicare, military expenditures, infastructure (roads, bridges, airports, ports, etc), and education.
If you want to balance a budget which is project to rise to $44,000bn with in four years then you are going to have to either raise taxes, cut the total national budget by 20%, or a combination of cuts and tax increases.
Lastly, BBC has an excellent article about how Bush buried a Treasury Department report which stated the current Tax and spend attitude of the Bush Administration was completely unsustainable and that the US would be unable to meet its social obligations to baby boomers (who are already beginning to retire) due to the record deficits. This tax cut was absolutely criminal. 
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29-05-2003 03:47
Life is not fair
....
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