Wealth is relative. That is, people tend to consider themselves wealthy by comparing themselves to those around them. The fact that most people today live healthier, longer and more comfortable lives than King Henry the Eighth is irrelevant to them. They care more about where they stand compared to the people next door or the colleague across the hall or the persons featured in today's news.
This means you can feel rich only if you have more wealth than others around you. That, in turn, means you have to be different from most people. You can't be just like everyone else and yet be wealthier than everyone else. But if you see yourself as just an ordinary, middle class person, does that mean you haven't got a chance to be wealthy?
No. You can be wealthy. While some wealthy people inherit their riches, most millionaires get there on their own by saving more. It helps if you earn more. You'll have more money to work with. But earning more helps only if you save more. If you spend all your above average earnings, expect to dine on dog food in your retirement.
You have to resist temptation to spend. An 856 inch big-screen TV and a 4,300 horsepower SUV won't make you wealthy. The same goes for $700 shoes and $1,200 handbags. You have to be comfortable with fewer European vacations and plenty of home cooking. When people laugh at your frugal ways, you have to focus on getting the last laugh.
Most people won't make it. They won't become wealthy. That's inherent in the definition of wealth as a relative concept, and it's also a result of the human tendency toward conformity and group think. But plenty of middle class people end up having comfortable retirements or better. In part, that's because of social welfare programs like Social Security and Medicare. But these programs alone don't provide a good retirement. You must be responsible and save.
What to do? It's not complicated. The main thing is save early, often and in significant amounts, like 15% to 20% of your income. Invest in a diversified portfolio to increase your chances for good long term returns. (See http://blogger.uncleleosden.com/2009/07/simplest-financial-plan-of-all.html.) There are a variety of ways to build up your wealth: http://blogger.uncleleosden.com/2009/11/techniques-for-retirement-saving.html. Look at each dollar you receive as a saving opportunity. Remember that no matter how much money you make, in the end you will have a finite income (we all do), and what you spend can't be retrieved. It's gone. So don't waste that opportunity to save (see http://blogger.uncleleosden.com/2010/07/how-to-think-about-saving.html). Avoid debt as much as possible (see http://blogger.uncleleosden.com/2010/07/why-you-should-avoid-debt.html). Don't give up, even if you have financial setbacks. Like so many other things in life, quitters aren't winners when it comes to building wealth.
You can have a somewhat decent retirement even if you don't save much, by building up your benefits and eliminating debt. (See http://blogger.uncleleosden.com/2011/01/hope-for-financially-lost.html). But if you want to climb into the ranks of the wealthy, be different.
Thursday, April 27, 2017
Tuesday, April 11, 2017
Fly the "Friendly" Skies of United? Maybe If You Feel Like a Cow.
As the entire world with Internet access knows, yesterday a passenger on a United Airlines flight from Chicago to Louisville was grabbed by security personnel and dragged down the aisle of a plane when he refused to get off in order to allow some United crew members fly to Louisville where they had to staff a flight the next day. http://wjla.com/news/nation-world/new-video-shows-bloodied-visibly-shaken-united-airlines-passenger. He ended up bleeding from a cut on his lip, and the plane had to be emptied of all passengers and his blood cleaned up before it could leave. So everyone departed late.
United evidently believes that some fine print on its tickets allows them to kick passengers off after being boarded, even when the passenger presents no threat to security or safety. There are reports that some sort of algorithm chose the passengers who were kicked off, although many people have noted that the dragged man was Asian. Would United have dragged a white female out of the plane like this? Why couldn't United have done the simple thing and rented a car (there are car rental agencies at airports, you know) and had the employees drive to Louisville? They'd have gotten there anyway in time to work the next day. But no. United needs to put its convenience ahead of its paying customers' convenience.
It hardly needs to be said that United's conduct was outrageous. A man who wanted nothing more than to be United's paying customer wound up being a poster child for the widespread discontent with airlines. Airlines are among the most intensely disliked industries and we now have yet another reason why. One wonders why United allowed the passengers to board before trying to bump them. And if United is so disorganized it has to board and then bump, perhaps it should think about the fact that it's in a service industry, and service should be provided promptly, courteously and with a smile. But, wait, we're talking about an airline--and that's different. It would seem that with airlines today, there's no distinction between people and cattle, and all should be treated like cattle.
United's CEO, Oscar Munoz, proved himself inept and tone deaf, initially criticizing the passenger for not acquiescing in being treated like a cow. In a second statement, he began to sound little less strident. After figuring out that he was the object of widespread international scorn and ridicule, he finally decided to apologize the day after the incident. But with his three varying statements, it hard not to wonder whether the third one was sincere or a business decision.
This gets to the larger point. This incident went viral and circumnavigated the globe in two nanoseconds. Probably tens of millions and maybe hundreds of millions of people worldwide have seen the video. The commentary on social media can be scored as zillions mad at United, zero pleased with United. United's reputation has gotten ugly fast and its stock price dropped today. Why was there such an international uproar over this incident?
Because it perfectly illustrates how people--at least ordinary people--don't matter any more. The airlines will take your money. But they'll treat you like a commodity and seat you or not, at their convenience. And if they seat you, they'll unseat you at their convenience. They'll claim that the fine print in their tickets allows them to treat you like a cow, even if that involves conduct amounting to a physical assault on you.
Legal processes are now underway to investigate this incident, and the passenger will no doubt retain legal counsel to press claims against United. If United were to play it smart, they'd settle this one fast with the customer, even if it means paying him a pretty penny, because they need to get this story out of the headlines. If this story stays in the news, the video of the passenger being dragged down the aisle will be played again and again and again, many millions of times over. But, given Mr. Munoz's initial defensiveness and seemingly slow apology, it's unclear that United will make the smart move here. Maybe United thinks passengers won't stay away over this incident. But some probably will, or at least demand the lowest fare on the route. Either way, it could cost United, and with the airlines being a low margin industry, losing just a modest amount of business could noticeably affect United's bottom line. ( This is why the airlines try so hard to fly full by overbooking and applying bootprints to paying customer's asses if they overdo the overbooking--because just a small change in revenue levels matters to them.)
The overarching lesson, especially for those in the 1% or in positions of authority, is that ordinary folks are well aware that they are viewed as being nothing more than cattle--and not just by airlines. In way too many contexts, way too many people are being told they are inconsequential. They don't like it and are fighting back. The people who elected Donald Trump were fighting back. The people who almost elevated Bernie Sanders over Hillary Clinton were fighting back. The vast majority of people don't want to be disputatious or quarrelsome. But if often enough you knock them down and kick them while they're down, they'll react with the speed of the Internet.
United evidently believes that some fine print on its tickets allows them to kick passengers off after being boarded, even when the passenger presents no threat to security or safety. There are reports that some sort of algorithm chose the passengers who were kicked off, although many people have noted that the dragged man was Asian. Would United have dragged a white female out of the plane like this? Why couldn't United have done the simple thing and rented a car (there are car rental agencies at airports, you know) and had the employees drive to Louisville? They'd have gotten there anyway in time to work the next day. But no. United needs to put its convenience ahead of its paying customers' convenience.
It hardly needs to be said that United's conduct was outrageous. A man who wanted nothing more than to be United's paying customer wound up being a poster child for the widespread discontent with airlines. Airlines are among the most intensely disliked industries and we now have yet another reason why. One wonders why United allowed the passengers to board before trying to bump them. And if United is so disorganized it has to board and then bump, perhaps it should think about the fact that it's in a service industry, and service should be provided promptly, courteously and with a smile. But, wait, we're talking about an airline--and that's different. It would seem that with airlines today, there's no distinction between people and cattle, and all should be treated like cattle.
United's CEO, Oscar Munoz, proved himself inept and tone deaf, initially criticizing the passenger for not acquiescing in being treated like a cow. In a second statement, he began to sound little less strident. After figuring out that he was the object of widespread international scorn and ridicule, he finally decided to apologize the day after the incident. But with his three varying statements, it hard not to wonder whether the third one was sincere or a business decision.
This gets to the larger point. This incident went viral and circumnavigated the globe in two nanoseconds. Probably tens of millions and maybe hundreds of millions of people worldwide have seen the video. The commentary on social media can be scored as zillions mad at United, zero pleased with United. United's reputation has gotten ugly fast and its stock price dropped today. Why was there such an international uproar over this incident?
Because it perfectly illustrates how people--at least ordinary people--don't matter any more. The airlines will take your money. But they'll treat you like a commodity and seat you or not, at their convenience. And if they seat you, they'll unseat you at their convenience. They'll claim that the fine print in their tickets allows them to treat you like a cow, even if that involves conduct amounting to a physical assault on you.
Legal processes are now underway to investigate this incident, and the passenger will no doubt retain legal counsel to press claims against United. If United were to play it smart, they'd settle this one fast with the customer, even if it means paying him a pretty penny, because they need to get this story out of the headlines. If this story stays in the news, the video of the passenger being dragged down the aisle will be played again and again and again, many millions of times over. But, given Mr. Munoz's initial defensiveness and seemingly slow apology, it's unclear that United will make the smart move here. Maybe United thinks passengers won't stay away over this incident. But some probably will, or at least demand the lowest fare on the route. Either way, it could cost United, and with the airlines being a low margin industry, losing just a modest amount of business could noticeably affect United's bottom line. ( This is why the airlines try so hard to fly full by overbooking and applying bootprints to paying customer's asses if they overdo the overbooking--because just a small change in revenue levels matters to them.)
The overarching lesson, especially for those in the 1% or in positions of authority, is that ordinary folks are well aware that they are viewed as being nothing more than cattle--and not just by airlines. In way too many contexts, way too many people are being told they are inconsequential. They don't like it and are fighting back. The people who elected Donald Trump were fighting back. The people who almost elevated Bernie Sanders over Hillary Clinton were fighting back. The vast majority of people don't want to be disputatious or quarrelsome. But if often enough you knock them down and kick them while they're down, they'll react with the speed of the Internet.
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