Click on the Picture to Watch the Commerical

 

 

Before I begin on this rant, I'll say the one prior to this probably PO'ed some people. This one will incense a few others I'm sure.

*****

I've run across some people who think they belong with the prosperous. At best, they'll exhibit, what they think, are the values and beliefs of the rich. In doing so, they believe they belong to that cohort just from sharing values alone.

I'm not talking about some loud mouthed brother-in-law or neighbor who can't stop braying about how well off they are, but the ones who are convinced they belong to the wealthy...and VOTE that way.

The above commercial completely shows what I'm talking about. People who feel rich. I hope you aren't like that women in the commercial! The next story can't really outdo that thirty second commercial, but I love telling this one to people.

At a BBQ (and it's always at BBQ's that I run into them) I had a conversation with Bill who ran a very small plumbing business. As conversations drift from one subject to another as they do, we landed on politics. Uh-oh!

So, Bill waxes away on social issues, taxes and in general where he thinks he stands on the economic ladder. I sat there and let him run with it till he was done.

“How much business do you do a year?” I ask him. “How many employees do you have?”

“Oh, I have one guy permanent with me, sometimes I’ll hire this other guy if the jobs requires it. Last year was good, I did about $400,000 in business.”

“Well, that ain't bad.” I say. “How much can you keep?” I'm real nosy by the way.

“This year? After paying for the supplies, the two guys, the truck and all that? I'm guessing $100k.”

I tell him the Small Business Administration defines “small business,” at the top level, as having 500 employees. He barely had 1.5 employees.

“What you have there is a micro-business, Bill!”

*****

One of the things Bill went on about, and agreed with, were the actions and convictions of major business and the wealthy. He would mimic what they thought.

“Bill,” I say “You feel that you and say, Raytheon, are on the same page?”

“Yeah, we both are in business, trying to make money.”

I ask, “Can you call up Senator Reed and have lunch with him down in DC tomorrow, to talk about whatever you'd like to talk about?”

“No! I'd never get past his handlers!” he replies.

“Raytheon can.” I say.

I tell him that the rich, the well off, want nothing to do with him. He can't afford membership in posh country club, and if he could, he'd be rejected as he has not the pedigree. He came from a line of blue collar workers. The Old Money in the Club would be disgusted to be seen around him.

I go on.

“Bill, I forget...you live in West Greenwich...or was it Rumstick Point?”

“I live in East Providence.” he says.

“Not in the Hamptons?” I tell him. Yep, twist that knife just a wee bit deeper.

“You know what the very rich do? They live off of dividends, interest and capital gains. They don't get up every day to go to work. You and I may own some mutual funds, 401k's, but we're not part of that investor class...we can't live off that. They can though.”

“Well, If work hard enough...I can maybe some day.” he says.

“Good, in order to do that, you can't rely on CD interest rates, they suck. You'd have to go for stable, well entrenched company stocks that pay conservative dividend yields.”

“How much would you like to live on..and be realistic...what can you live on comfortably?” I ask.

“Ah, $100,000 a year would be nice.” says he.

So I pencil on a the paper table cloth what he needs in total for this to happen.

“Bill, a conservative, safe dividend rate is about 3%. So take .03/$100,000. You need $3,333,333 to make that happen, and that doesn't take into account, taxes, inflation, nor does it take into account falls in the stock price or if the governing board decides to lower the dividend payout, which they can do as they please.”

Bill just stared at that figure, $3,333,333.00. As if he was staring at ship way off on the horizon.

“Bill, see what happens when you use real numbers, they tend to stare right back into your face. Now I'm not saying don't aim for a dream you have...just don't delude yourself into being something your not yet.”

I go on. “Know what the rich don't do? They don't gauge their assets by “feeling” about them. They look at actual spreadsheets and numbers! They make their money work for them. YOU worked all your life, so have I. Neither of us is rich...period.”

You can ape the beliefs of the rich all you want. But if you aren't one of them, guess what, you AREN'T one of them.