“Why Work If We’ve Got Obama?” Said My Rich Friend….

A retired man overlooking the fog over the Golden Gate Bridge.

Jaabir, one of the poorest richest friends I know, decided to take a vacation from not working by driving down to Indian Wells, California to watch the BNP Tennis Open last month. The tennis tournament is considered “The Mecca” for tennis fans everywhere given the terrific turnout of the world’s top pros and the intimate setting.

Before Jaabir left for the seven hour drive south, he urged me to go down with him for a week. I wanted to go, but I couldn’t because I had an interview lined up with a promising new company. I also wanted to be on standby just in case I got word from another potential employer. In other words, I was a dog on a leash. Woof.

To make myself feel better for not going, I started pressuring him to stay so he could do his duty as team captain by recruiting more ringers to help us defend our city championship. Why should he have all the fun right? I learned this strategy from so many who try and bring folks down if they can’t succeed themselves.

As usual, Jaabir brushed off my wishes because he’s free. “Sam, don’t worry! I’ve got everything under control. You are rich, why not live it up a little? Why do you not come with me to Indian Wells? Why work if we’ve got Obama, babay!?

Hmm, what the hell Jaabir! America ain’t no welfare country!” I retorted. But then I got to thinking about my own situation. Maybe Jaabir is right. Even though I was smarting for not being able to join Jaabir to tennis Mecca, I decided to write this post as a way to better understand his viewpoint.

WILL OBAMA SET US ALL FREE?

Imagine having a safety net so strong that no matter what we did, we would never fail. The safety net would encourage us to pursue our wildest dreams instead of always living in fear of getting laid off if we don’t do as we are told. We wouldn’t have to put up with an unpleasant work environment just to get healthcare benefits for our family. We’d be free to hop from job to job until we found something perfect. And if we weren’t presently employed, we’d stay unemployed until the ideal opportunity arose.

In many ways President Obama has helped me break free from corporate America. His administration decided to regulate the hell out of the finance industry which has led to a compression in compensation and the loss of hundreds of thousands of jobs. When a bank is required to hold a higher amount of tier one capital on its balance sheet, profitability goes down. Nobody is going to cry for those of us who’ve lost our jobs in finance. After all, we are evil people according to the Occupy Wall Street movement.

Where some of my laid off ex-colleagues are extremely bitter, I’ve taken the opposite approach and embraced unemployment by seeing what else the world has to offer. I’ve looked into communications fellowships, startups, entrepreneurship and the foreign service to name a few avenues. I feel exactly the way I did when I graduated from college – full of excitement about what lies ahead.

We’ve really only got about a 35 year work window where we have the energy to labor full-time. Old age will sneak up on us and we’ll no longer have the desire to work from dusk ’til dawn. If we ever decide to change jobs when we are older, we’ll likely face roadblocks due to younger bosses not willing to deal with us old dinosaurs.

President Obama’s second term campaign to raise taxes on individuals making over $200,000 encouraged me to no longer seek richess. After all, I’m entirely happy living off $70,000 – $80,000 a year in expensive San Francisco. Why on earth would I want to continuously torture myself for another 10 years if my passive income is already there? Obama gave me the courage to engineer my layoff so that I could do something else.

GOOD TIMES MAKE US MORE FORGIVING

It doesn’t matter whether you are a Republican or a Democrat, there is no denying the good times are back again. For some reason plenty of folks still think the economy is still in dire straits. We haven’t been in a recession since 2009. I’ve been highlighting in articles since 2010 that things are really rumbling back. There’s been 13 consecutive quarters of economic improvement which will probably continue for many quarters to come.

The Federal Reserve has promised to keep interest rates low by flooding the system through its monthly multi-billion mortgage purchase program. Have you seen what Japan’s Central Bank is now doing? Lending (credit) is still relatively tight as we’ve learned from my primary home refinance rejection as well as the discovery that the average credit score for the rejected mortgage applicants is around 729. Just imagine what happens when banks turn on the lending spigots again?

President Obama gave me the confidence to invest a quarter of a million dollars in the stock market last summer when the Dow was at 12,000 because I strongly believed he would win and be better for the economy. The money I made betting friends on the presidential election outcome was just the meringue on my lemon meringue pie.

Despite all the class warfare, continued massive government overspending, and redistribution of wealth through discriminatory tax policies, President Obama’s administration has given millions of Americans the hope of a much brighter future. Some might call our current administration a path towards Socialism. But is Socialism so bad if the happiest people in the world consistently come from countries with Socialist characteristics? If people are getting rich hand over fist with the stock markets at record highs then give me Socialism any day!

Jaabir has a point. I’m unemployed and free partly thanks to Big Government. I realize the desire to make more money through employment is silly once you’ve built a large enough financial nut. Yet the fighter in me is still trying to assimilate back into the Borg out of habit. I never give up.

Perhaps a better way is to get off the grid, take care of ourselves, enjoy life to the fullest, and let other people worry about our country’s problems. If there’s no need to take care of anybody anymore, wouldn’t the world be a better place? We should embrace whomever is President at the time. It’s an important aspect of maintaining our ultimate goal: happiness.

Readers, do you feel President Obama has helped you break free? With a large government safety net, have you found more courage to take more chances that now seem less risky? Alternatively, have you felt less motivated to find new employment or purpose given life is good enough already?

For those asking what Jaabir and his family do for health care in the previous post, he mentioned his wife’s parents pay for their family’s healthcare. Also, if anybody wants to bet on whether a Republican candidate will win the next presidential election, I’ll happily bet NO for up to $1,000 a person. Just shoot me an e-mail or leave a comment. 

Note: The US added only 88,000 jobs in March vs. 200,000 expected. Not good for the markets. Please read or re-read the recent discussion of fear and greed in stock market investing.

Regards,

Sam

Sam started Financial Samurai in 2009 during the depths of the financial crisis as a way to make sense of chaos. After 13 years working on Wall Street, Sam decided to retire in 2012 to utilize everything he learned in business school to focus on online entrepreneurship.

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Comments

  1. says

    Personally, I’d rather see an ease of individuals being able to go into business. Think Singapore or Hong Kong in terms of business friendliness. I think encouraging self-employment and people getting positive cash flows from alternatives while working a job will get us back on track. I don’t believe in making everyone happy-that’s impossible. I guess that is the conservative in me. I’m happier if the government flips off and goes back to it’s own little hole and leave the rest of alone-we could have been out of the recession eons ago if Bush and Obama didn’t provide bailouts.

    • says

      You would think streaming the business process would be a no brainer, but with so many forms to file and taxes to pay and accountants and lawyers to hire, why bother? Government is going to figure out a way to take away your wealth anyway.

      • says

        True. You do make a point with the taxes and forms. It seems that what should be easy isn’t, isn’t that ironic? Thanks for your view though in the post-it’s nice to see and talk with how someone else views the situation! Even though our view points differ, I appreciate your insights and shows that not everyone thinks the same way as I do!

  2. says

    Sam,

    I actually share your vision. Productivity has increased so much in the last 100 years that we should be able to give every citizen shelter, food, healthcare, and clothing. Nothing fancy, just the minimum necessary to survive. Maybe it’s just my wacked out idea of a Star Trek-like utopia.

    “Readers, do you feel President Obama has helped you break free?”

    Yes, because with ObamaCare, Im’ certain that I can get health insurance. This is a big deal if you want to retire early.

  3. nbsdmp says

    Love the topic Sam! It is definitely something I struggle with, in a society where we are now passing out 8th place ribbons to kids and our President making “rich people” the enemy I often think about hanging it up. Where is the incentive? The direction we are going is not what our founding fathers had in mind, it is actually why there was a revolution…

  4. says

    Having had to be on some government aid when I was laid off not that long ago, I can say for sure that ‘living off the government’ and feeling safe about that safety net ain’t the most clever. I mean, we didn’t starve or die, we did keep our home, so I guess it’s a nice enough safety net. But we weren’t exactly living large and had an incredibly hard time making ends meet each month even though we were getting a little help. It’s nice though, to live in a country where there’s a safety net.

    • says

      That’s the thing though. There’s really a belief out there that if we quit our jobs or take risks, we will starve and die. What I’m saying after experiencing unemployment for one year is that the fear is misplaced.

      Obama is helping folks not fall through the cracks.

  5. says

    Mmmm, I ‘m not to sure I agree. If you follow this logic to it’s conclusion, we could all become a nation of takers. If that happens, who will feed the machine so that the safety net doesn’t disintegrate?

  6. JayCeezy says

    Yes, why work? Not sure it was Obama that has made us ‘free’, maybe he is just the guy who jumped out in front of the parade. “Freedom’s just another word for ‘nothing left to lose’, and nothingg ain’t nothing if it ain’t free .” – Kris Kristofferson

    The U.S. has been exceptional for two centuries, but the ‘great experiment’ in Democracy has been winding down for while; my thought is U.S. society has hit the ‘tipping point’ awhile back, but it hasn’t become clear until the past five years. ndspmb and Jose have made excellent points, that ‘making’ is no longer rewarded and ‘taking’ is expected. And the U.S. is now a ‘welfare country’, and ‘makers’ are losing in what is now a zero-sum game.

    Oh well, it was nice while it lasted and if you can’t beat ‘em, join ‘em! China is winning. 47% are winning. We all had our chance to “fix it”, but nobody wanted to give up anything. Hilarious, the Federal government borrows 40 cents for every dollar spent that will have to be paid back by children not even born yet, yet everybody is fighting to keep the spending going for “me, but not for thee.” Only the truth is funny, so we smile through the tears.:-)

    • says

      The best way to get us to give up something together is to say, “You first!” :)

      The majority will always rule the world either through physical force or through legislation. There is no escaping this fact. Better to join the majority than be bitter and get sliced to death.

  7. Shaun says

    The safety net isn’t all that much bigger than it was pre-Obama. A few changes to health care many of which haven’t been implemented yet. Extensions to unemployment benefits (Which if I were collecting it wouldn’t be enough to pay the rent on my apartment) and there was the stimulus program but that wasn’t a social safety net for all, it was a safety net for broke state govt’s no longer collecting the income tax they thought they would mid-recession.

    You can’t attribute everything good/bad to whomever the president is. In many cases he’s not directly 1:1 responsible. Just for example the raising of capital standards on banks probably had as much or more to do with the near collapse of banks on a world-wide scale than Obama being elected president. I know Republicans talk big game and say they’d always do the opposite of anything Obama proposes, but people were out for blood after the recession I’d imagine one way or another something to that effect was going to happen seeing McCain/Obama probably has Tim Geithner advising them on what to do.

    • says

      Amen. Its funny sometimes how people act like running a defecit is a new problem. Or that the top tax rate returning to where it was a little over a decade ago is going to destroy the fabric of our nation. In the end it boils down to wanting to talk a big game and overreact to anything you don’t agree with.

    • says

      You make a good point, so why does our President claim the credit for the recovery during his campaigning? I think benefits are much larger now that if we had a Republican President, which as I argue in this essay is fine if we don’t have to pay for it.

      • Shaun says

        He claims credit for the recovery because he’s a politician!? Is that a real question? When you’re a politician you claim that everything good is not only your doing but your idea and everything bad is somebody else’s fault regardless of party or whether or not it’s actually true.

        I also just disagree that there’s a huge amount more govt handouts than there was pre-2008. Can you name any major things that have changed besides the stimulus(which was likely to happen regardless of who got elected and is already over) and the healthcare law much of which hasn’t gone into effect yet? I can’t, maybe I’m just not paying attention though. It is true once the healthcare law is fully implemented they’ll have subsidized healthcare for a large amount of the nations poor and that’s a pretty large handout (If you consider subsidizing poor people’s access to health insurance an excessive handout). Past that though not much is any different than it was under GWB.

        • JayCeezy says

          @Shaun ***”I also just disagree that there’s a huge amount more govt handouts than there was pre-2008.”*** It seems you are confusing types of government handouts with expenditures of government handouts. Some quick facts: the number of people on Disability increased more than twice the number of non-farm payroll jobs created since 2009. The Federal Reserve pumps $85 billion every month into the economy, and after 3 QEs and annual $1 trillion-plus deficits (60 cents in revenue for every $1 spent) the money is largely increased social spending. 15% of the U.S. population is now on Food Stamps (36 million in 2009, 46 million in 2013). I could go on, but all this information is available to anyone interested with a Google search.

          Bottom line, the expenditures for social services have been increasing (along with the incentives to seek those services and avoid work that doesn’t pay).

        • Shaun says

          @JayCeezy. Yes, the number of people who qualify for food stamps and disability have gone up since 2008. But I’d attribute that more to baby boomers getting old and the recession than the rules to qualify dramatically lessened or amount of benefit per person being radically changed.

          Perhaps there are large numbers of people that post 2008 woke up and said “Hey, maybe I should get around to applying for disability or food stamps because it’s awesome. Not sure why I never thought to try this pre-2008.” but I doubt it. More than likely since 2008 there’s just a lot of people who lost their job or acquired something you can claim as a disability due to old age.

  8. says

    At first I didn’t think Obama would get reelected. But then I started to see where things were going and changed my mind. Things really do feel like we are headed to socialism at times. I wonder what we’ll be saying 5-10 years from now. I know I was annoyed about the payroll tax hikes and the retroactive proposition 30 which raised state taxes by up to 13.3% from 10.8%. I’m sure more of that is to come. Obama hasn’t made me feel more free but I do feel more motivated to get out and save as much as I can because I don’t want to be working as much as i am now into my 60s and 70s.

  9. says

    I don’t feel like the Obama administration is doing much for me. We still make too much money to qualify for any aids. Maybe I can get on disability somehow. :) I think healthcare should be available for everyone. If you’re poor, you can wait longer. If you’re rich, you can pay for better care.
    Good luck with your interview. Hope you get a big raise.

  10. says

    The Obama administration hasn’t done anything for me personally. But to be fair, the Republicans in Congress haven’t really proposed to do anything that would benefit me either. And outside of the tax cuts, the Bush administration didn’t do anything for me either. I’m just not poor enough or rich enough to benefit from government largess.

  11. says

    I don’t think you can make too strong of a correlation between an economic trend and the person who is president. I voted for Obama, but that doesn’t mean we’d be much worse off right now if Romney had won.

    Your bet for the next presidential election is pretty tempting…its VERY hard for one party to hold the office for 3 straight terms even if the economy is in great shape. Just ask Al Gore.

  12. says

    For our situation, Obama has really not done a whole lot for us and for that matter the Republicans in Congress have not done much either. I think we’re pretty much in the middle and not really benefit from either.

  13. says

    Funny, my best years were during the Carter and Reagan years when the economy was really going down the tubes. Obviously, the economy and government have some effect on individuals, but not as much as it seems. I tend to do things that will help or protect my own future. I may identify with some of the Libertarian/Republican philosophies of do for yourself and not depend on other people for your future. It doesn’t mean I don’t rely on other people, but not as a safety net. Despite that statement, I will accept my Social Security and pension graciously!

    So you are dipping your toe in the job market? I hope the position will be exactly what you want. Good luck.

    • Erik says

      “It doesn’t mean I don’t rely on other people, but not as a safety net. Despite that statement, I will accept my Social Security and pension graciously!”

      Unless Im reading this wrong, you make it sound like social security and pensions are handouts from the government that you wont feel bad about taking. But as a contributing member of society taxpayer, you personally funded these programs. They are not hand outs and you earned them. Which if you and I could manage on our own, would be worth a lot more than the government squanders.

      • says

        Social Security and my (teacher) pension are programs sponsored or run by the government. I worked very hard to accumulate enough funds to achieve financial freedom early and not be dependent on these kinds of programs. I view Social Security as a safety net. It was set up as a safety net. There are a lot of people who resent the pension I will eventually receive as a teacher because private industry has almost no pensions left (replaced by 401K). Unfortunately, the government does not give us a choice of contributing to your personal retirement in place of Social Security. Too many people would have absolutely no savings if left on their own. BTW, my pension does replace Social Security contribution although at a higher rate (8%).

      • says

        I agree with what you say. We may SS tax and contribute to our pensions so it’s not nearly the welfare that some back it out to be. The same goes with unemployment insurance.

  14. says

    Obama did help me get a home refinance (FHA Streamline), so I’m cool with that. Not sure I’m down with where the attitude of “Sugar Daddy Obama will take care of me, so who cares”. But if having government support allows people to not hold on to lazy, but to be motivated to prosper in new and awesome ways, that is a good thing.

  15. Eric says

    I certainly see everyone getting health care based on the new system the president pushed, but I just wonder if it will be health care worth having.

  16. crazyworld says

    Another viewpoint on the safety net – it helps the average person take risks (by which I mean entrepreneurial risks) that they would not otherwise. I share this from having grown up in India where there was no safety net. So all of us middle class kids fought to get into the safe areas of study – engineer, doctor, accountant etc (I am an accountant – its not my passion, but a bit late to change course now). This meant that only the rich people could afford go into business or creative pursuits. Does not mean no middle income people did, but unless you were very clearly cut out for a non-conventional field, you did not really risk it back then.
    Yes, some people abuse the system, some people will abuse any system. And this includes both rich and poor. The rich can influence legislation to their own benefit, which looks less like welfare but it amounts to the same thing.
    Yes, there should be limits on the welfare system – no one should be able to live off of support for their entire life. In any case, this is not an Obama thing – he hasn’t added much of anything to the welfare system. We also subsidize big industries, including oil and ag. Where is the “socialist” arguement there?
    Btw, what is socialism exactly and why should it be dirty word? I understand communism – govt owns everything. But that is not what socialism is – we are all free to own property and business. We pay taxes and in turn get law and order, defense, infrastructure etc, which are kind of necessary to run a profitable business. If we are talking about waste, well, yes, there is. But the alternative is? Ok, I have gone off topic now…

    • says

      You’ve telegraphed a great point well. There are jobs because one day someone decided to take some entrepreneurial risk. Why are we punishing them?

      When we have a safety net large enough to encourage people to pursue their dreams, entrepreneurial or otherwise, I see this as a great thing.

  17. says

    I don’t think that anything government gives us FREE is really free. Someone has to pay for it. I believe Presidents have little influence over things we achieve in life.

    Also, your point about safety net. Even if there is one which allows you to stay unemployed without having to work for living, it will create a nanny state because human nature is not to find or feel passionate about work; rather, it is to enjoy life without responsibility.

    • says

      Well, so long as you can vote to raise someone else’s taxes and not your own and get the benefits, that’s free to me!

      The safety net is to soar, not to stay unemployed and do nothing. It’s about figuring out what else is out there.

      • says

        I completely understand your hypothesis, Sam! However, human tendency is not to soar when a safety net exists. Who wants to work hard when there is no fear?

        • says

          I do. If I knew I could never fail, I would take the biggest risks and go for GLORY every single time! I don’t ever want to fail due to a lack of effort. Stupidity, yes, but not b/c I didn’t try.

        • Lyle says

          I have to agree with Shilpan. Sam, I have no doubt that you would work hard under any circumstance, I am the same way, and Shilpan probably is. But, not everyone is like us. Not even close.

        • Lyle says

          but it doesn’t have to just be about fear. When there is a disconnect between working hard and enjoying the fruits of your labor (if you want a BMW then you can work for it, if you want excellent healthcare then you work for it) then all heck breaks lose (not sure of the swearing policy) :)

        • Lyle says

          I would say that personal savings IS the safety net that we all need to have. Family savings work well too (where you can lean on your sister, brother, etc).

  18. says

    “do you feel President Obama has helped you break free?” – No but he helped me save a lot of Money.

    How? – HARP. I was underwater and had to move. I refused to take the loss so I decided to rent. After I started renting it became an investment property and my LTV did not qualify for a refinance. Under HARP 2.0 I now qualify for a refinance.

    • says

      Nice! Good to hear. Although I couldn’t get HARP, I did get an out of the blue loan mod which I think is partially due to the government pressuring banks to help their clients.

  19. says

    I am not sure really sure on my position on this issue. Though I believe that the government should provide adequate healthcare for everyone, I still do not want to depend on them. Admittedly, paying for my own health insurance is quite expensive but a government support is motivating.

  20. says

    What an interesting post. First off, my father always told me that “one man does not a movement make”. Obama is President, of course, but these policies have much more to do with just him. I don’t attribute my success (or failure) to one man in office…ever.

    I think that capitalism is a wonderful thing when it works perfectly. I also think that socialism works incredibly well in societies that embrace its good points (ie check our Finland’s education system…they kick our ass, and that is an understatement). Ideology aside, life is about more than money. Everyone deserves a chance to enjoy it and maximize their potential as humans while at the same time enjoying their (extremely short) time on planet Earth without hurting others. Ayn Rand would disagree with me, but screw her.

    No one man or system is going to do it for us, but I totally agree that when people are scrambling for work just so we can have health insurance benefits that our nation is losing out on their intellectual and creative capital.

  21. Steve H says

    I am not in favor of many of the policies under Obama. To think that the same government that cannot run a monopoly of a post office profitably or a whore house on the border of sin city for that matter-can now control 1/6 of the economy and make it affordable for everyone is wishful thinking. Under ACA, I just received notice from my insurer that my premiums are going up 32% this year. Not exactly affordable. And it states right on the notice, that the increases are because/in part due to ACA. I am torn because there is a legit need for health care. I see abuses in entitlements that curb my support e.g. The you tube video of the guy filming a review of his Obamaphone with his Samsung Galaxy. Really? Or stores that issue phantom receipts for food nutrition assistance and pay pennies on the dollar to the recipient while pocketing the rest.

    I get the need to help our fellow peeps. I would feel more comfortable if the govnment would be better stewards of OUR hard earned money. I feel like the haves are being vilified in order to support the have nots to the benefit of the current ruling power elite. Once the political base is dependent upon the government, for its care and sustenance they will always vote for the hand that feeds them. The class warfare sucks. I am not a 1 percenter yet feel that my head is on the chopping block just the same. Am I paranoid here? I am obviously paying for someone else’s health care in addition to my own family. And food, and phone, and energy, and housing, and whatever else these taxes and fees have me paying for.. The number of people on the dole is rising rapidly.

  22. Lyle says

    I love most of your posts, but disagree with this one. I disagree with the idea that good times are here, or here to stay. I guess it depends on how you define a “good time.” With the labor force participation rate so low, our entitlement programs so far-reaching, I’m sure a lot of people are “having a good time,” but it won’t last. I think the age of the USA being the most dominant country are slowly fading never to return. But I appreciate the respectful way you wrote the article.

  23. Darwin's Money says

    This is the new American way and will be in force well after Obama is gone. A nice fringe benefit of the recent recession, government handouts and the fact that you can’t reign them in once you give them out. The way the math works, it’s simply an equal proposition to either work a minimum wage job (which is all many Americans are qualified for) versus living off government benefits – it’s a wash!

  24. Craig says

    I started reading your blog recently and have enjoyed doing so…until now.

    Based on a lot of your previous posts, I am not sure what to make of this one. You have in the past shown a strong distrust of the government (which I can appreciate), but now you are snuggling in the arms of Big Daddy Obama. What happened?

    • says

      What happened is trying to understand Jaabir’s viewpoint. The best way to heal a divided country is to try and put ourselves in other people’s shoes as well as reflect on our own situation. I could be bitter too about being unemployed and so could Jaabir. But instead, I’m trying to see the positives.

      • Jason says

        I’m a little confused by your post, here FS.

        Why would you be bitter about unemployment, and also why would Jaabir? I was under the impression that both of you are choosing to work less so you can enjoy life a bit more. There’s nothing to be bitter about in that case.

  25. Jason says

    To be honest, I have not seen any change in my way of life since Obama took office. I still curse the alarm clock when it’s time to go to work in the morning, am still worried about my health and my future, still get the shaft each April 15th, and still march toward the same goals as I did well before he took office.

    The friends that I have that were doing poorly still are doing poorly. And I can’t say I have any friends that are doing particularly well.

    I’m not sure what that says about me, but I can’t see a presidential decision making a big difference to my life unless they start conscripting men in their 40s to fight yet another costly war. LOL. All I hope for these days is for a president is halfway-intelligent and not Evil.

    Maybe I’ll change my tune once I FIRE, though. That transformation comes with a whole lot of changes and adjustments.

  26. JimL says

    It is my dream that we can provide a safety net for those that truly need it, yet somehow take away the incentive for people to reduce their efforts in order to maximize government benefits. Obama is leading us down a path on being more reliant on the government and taking away the incentive to really grow. Take a look at his latest proposal do limit how much someone has in their retirement accounts. That is just more hatred to those that are successful.

    • Winston says

      The proposal is to limit tax-advantaged retirement account balances (for example, IRAs) to a total of $3 million per individual. It does NOT limit the total amount of money you can save for retirement, just the amount that receives special tax breaks. IMO, if you have $3mil in tax-advantaged retirement accounts, you don’t need any further tax breaks. You’re doing just fine. That might make you a little sad if you’re super-rich, but 99% of us are not affected. Of course, that value would need to adjust with inflation or eventually it will affect more than just the super-rich.

      • JimL says

        Yes, Winston. I pointed out it was retirement accounts. $3 million does not make you super rich. At a 4% withdrawal rate, that is $120,000 a year, which is not “super rich”, particularly if you live in a high cost area. It is not a matter of need either, but fair taxation. The class envy mantra is getting old.

        • Winston says

          “Super rich” was too extreme of a term, and therefore inaccurate. I’ll give you that. However, if you have $3mil sitting in a retirement account right now you are well-off as far as I’m concerned. You’re doing just fine at $120,000 per year of income (for doing nothing!), regardless of where you live — especially at retirement age, when you should have high-cost items like your home paid off. Realistically speaking, you could be drawing much more than $120k per year since your account should still be gaining value.

          In my opinion, “fair taxation” occurs when those that can pay more do so. But then I have socialist tendencies. Not afraid to own up to that.

          • says

            But doesn’t it take a lot of effort and risk to get to $3 million in retirement savings?

            WhAt is your current retirement savings amount if you are willing to share, and let me know whether it was easy or hard.

            Thx

        • Winston says

          I’m sure it will take a lot of effort to get to $3 million. I hope to get there someday. Certainly, I welcome the tax savings that helps me and others get there. My thought process is that the more money you have/earn, the easier it is to make more money and build wealth. It takes progressively less effort to make money as you increase your wealth. I’ve seen that play out in my own middle-class life. At some point, a person doesn’t really need any more help from the government (tax-advantaged accounts) in order to build additional wealth. Is the magic number $3 million? I don’t know. Maybe it’s $2 million, maybe it’s $5 million. My math tells me that $3 million is a pretty generous number for my area (Houston, TX — low cost of living). For SF, maybe it’s not so great.

          As for my retirement savings account, it’s only about $75k right now. I was a spender for a long time — all of my 20′s and even into my early 30′s. In another thread, I mentioned our shared passion for cars. As you know, those are expensive and I’ve owned a LOT of them (30+). Only now in my mid-30′s do I realize how I need to be managing my finances — largely thanks to your site (thanks, Sam!). So far, building that tiny nut has been pretty easy since I wasn’t saving very hard. However, I’m turning the corner now and saving more and more. Later this year, I’ll be contributing the maximum to my 401(k) if all goes as planned, as well as saving money for other investments/income streams. That will be hard, since I *could* be living it up with that money instead.

          However, once my account balance gets high enough for a comfortable retirement, I really don’t see the need to continue to build wealth as aggressively. $3 million sounds pretty sweet. I’m okay with taxes on anything higher than that.

  27. springfield mo mortgage says

    Obama has made the masses depend on welfare which is bad for the economy in the long run!

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