Wednesday, September 08, 2010

Wealth Creation, Continued

So the left, while run by the wealthy, does not want poor people to create or accumulate wealth of their own. The answer to that is for people to ignore the wealthy leftists and create their own. Those wealthy enough to provide for their own needs do not need the left.

Wealth creation is actually pretty simple, even for the poor. Assume the kid who gets out of high school knowing how to read, write and do simple arithmetic. He's already ahead of those who dropped out or majored in real loud crappy "music" and wearing his belt four inches above the knees.

The smart kid goes on to college or gets a job. The college-bound kid then takes classes that actually stretches his mind, no I'm a victim studies for him. He takes classes that will teach him something useful, something an employer might actually find valuable. When (s)he graduates he's way ahead of the angry studies major. The kid does not get a humongous dept going through school, either. There are darned few people who really care if one's degree is from Haaavud or Slippery Rock. That kid with the English Major from Yale and a $300,000.00 school loan is way behind the Kid with the four year degree in engineering, two years of which came from the local community college and two years from North Texas State and $1.98 in school loans.

The kid who graduates high school without enough money for a University education? How about a two year community college degree in auto mechanics or an apprenticeship in pluming? Plumbers make a nice dollar. Or, how about a hitch in the Service? The Service will teach a kid a LOT of valuable things. A kid shows up with an Honorable Discharge the prospective boss already knows some important things, like being on time. Doing what he's told, the way he's told, when he's told. Do you have any idea how many kids don't know that?

The whole idea is to get out of "school" knowing something valuable to others. My education, such as it is, is thanks to my parents who taught me to read, before Kindergarten. Then the Service and the Public Library. True story: I have known a couple of bosses who asked each applicant if he could see their library card. No card, no job.

So, our kid is now working, with no drug habit and has neither born nor fathered a child before marriage. Now comes the wealth accumulation. Each payday the kid buys something that is not consumed immediately, then, if there is anything left, a few bucks into savings. Along will come Miss or Mr. Right, sooner or later. Here comes something really important. Divorce will set you back to below zero. It takes forever and a day to climb out of one divorce. Forever and a year if there are kids involved, to say nothing of the damage to the kids.

Now most all of our paychecks do not help us accumulate wealth. My supper did not create wealth. Funny, though, that extra can of Spam I bought that I won't eat this pay period is a form of wealth. In case of some kind of emergency, extra food that does not have to be kept refrigerated or need to be cooked is wealth. When there is no way to buy food in the stores, say after a hurricane, the guy with canned pork and beans, Spam is wealthier than the guy with ten thousand dollars cash and nothing to eat.

There are many forms of wealth, aside from money. Money, though important, is a constantly depreciating asset. That money in the savings account draws less in interest that the politicians take away by constantly inflating the currency. True story: In the 1880s, after Colt's Firearms finished filling the orders from the Army a Colt Single Action Army, a holster and belt and a box of cartridges could be bought for a twenty dollar gold piece. You can still buy a new Colt SAA, gunbelt and box of cartridges for a twenty dollar gold piece. Meanwhile a twenty dollar bill will not buy a box of .45s, and I don't even want to think of the tiny size of a piece of gold that a twenty dollar bill will buy.

I am old enough to remember a trip to the grocery store with forty dollars filling the hole back of that Mercury Station Wagon. Today? Two twenty dollar bulls buys not much. Two twenty dollar gold pieces? Get a trailer.

Rent is not wealth. Renting accumulates wealth for someone else. So, buy a house as soon as possible and then, stay there as long as you can. Do not take home equity loans. A few years back there was a book titled The Millionaire Next Door. One of the more striking things about that book was that ordinary people who became wealthy did so by not buying more house than they could afford when they were young and staying in that house, paying the loan down. They were also far more likely to drive a Buick than a Caddy or Rolls, even when they could afford the more expensive car. Flash is not wealth, nor is bling.

See that guy driving down the road with those fancy custom wheels on his car? He'll never have any real wealth. A share of stock can be wealth but one should be very careful about that. Stocks are an important investment for those who can afford to lose.

My parents loved to go to Reno, to the casinos. They had an iron rule, though: never gamble with anything you can't afford to lose and smile after losing saying, thanks, I had a good time. When you gamble with games or stocks, you take a risk. In 1899 stock in the Acme Buggy Whip Company was a good buy. Funny how by 1910 or so, not so good a buy, nor a good choice for your retirement money.

Today, more than ever, it's important to have a little something that the government doesn't know you have. From that old .38 revolver you bought from a newspaper ad, no paperwork needed to that little gold necklace you paid cash for at the jewelry store and walked out with them saying "I need your name and phone number".

And another thing! Information is wealth for someone. Never give any information you don't need to.The sales clerk that wants your phone number for a cash purchase? Don't give it. Same with the address so they can send you ads you don't want. We complain about Spam E-mails, my mailbox is always packed with catalogs from people with whom I have never done business, nor will I. Retailers sell your information! so don't give it away.

Anyhow, before buying a single share of stock you should have a big chunk of your house not paid off, plus have started building up some hard assets such as some gold, some silver, that sort of thing, plus a month or so worth of stored food. I'm not really one to talk a lot about stock seeing as how I own not a single share, although I have. Still, in the Age of Obama, I would not buy a single share of any stock. We know that the Obama Admin picks winners and losers according to some secret formula only Soros knows, if your life's savings are locked up in a company they pick to loot, well, that's your tough luck. As your life's savings disappears you can think of the wonderful Obamacare you'll get. Bend over, here it comes again!

Wealth is nothing more than being able to be self sufficient. This is why the left does not want you to accumulate wealth.There are many types of wealth, from the food you have stored to a shootin' arn and a box of ca'tridges to money. None will replace the other very well. A years supply of food will not stop a rapist, he's just go away satisfied on more than one level. That .38 that will stop a rapist? Won't feed you very well unless you live where you can hunt. That hundred grand worth of stock? Won't get you up and inland very well if your tank is empty and the gas stations are closed and that hurricane is bearing down.

Wealth? There are many ways to accumulate many different kinds of wealth. the left doesn't want us to have any of it, and does nothing to create it. I have my differences with the Ayn Rand types but she was very clear-eyed when she saw the left as what they are, looters.

Now I'm going to shut up about wealth. Our kids will inherit our half acre, a falling down house, books, shootin' irons and not much else. Oh, and they already have something. the ability to make their own way. That's the best we could do.

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