Sunday, October 16, 2011

Surprise, you're already in the top 1%

Please forgive me now since this is quite a sidebar from my normal politic-free unsolicited investment advice.

Guess what my friends, if you live in Canada, have a roof over your head, a computer, internet at home and eat every day YOU are already in the top 1% of the world's economic "elite."

Look down this list of the things I suspect you have and please consider your lot in life.  You're not an illiterate migrant worker in Asia/EuroAsia/India are you?  Are you living on the streets in a Mumbai slum competing with the thousands and thousands of other beggars who have NOTHING?  Are you a Somali fisherman trying to eke out a subsistence living for you and your family with the constant fear that the local pirate gangs will take you out?  Or have you been sold into slavery or into the sex trade with no hope of escape without risking the brutal rape and murder of you, and your family?

Consider the following items you might have around you:
  1. Clothing (and even occasionally clean clothing)
  2. food or at least access to food via your mobile phone speed dial
  3. health-care (if you're Canadian like me) which won't bankrupt you.
  4. safe living conditions (no threat of war-lords burning down your village)
  5. Layers of government support for retirement (Canada Pension Plan/Old age Pension)
  6. reasonably well maintained urban infrastructure (Montrealers watch out for those bridges!)
  7. Mobile phones
  8. Internet at home
  9. laptop/desktop/tablet computers
  10. flat-screen televisions
  11. credit-card debt (no doubt from too many nice lunches out)
  12. shoe fetishes
  13. electronic gadget addiction
  14. cars, scooters, motorbikes
  15. luxury coffee (Starbucks, or making it yourself with Kopi luwak beans)
  16. luxury clothing/goods/cars
  17. this list continues...
I'm sure you might not have all of these items, or even most of them but guess what?  Consider how much the FoxConn employee got paid to make your iPhone, iPod, or iPad! (Or shoes, or TV, or t-shirt, or, or or)  Even if you're on minimum wage you earn more in one month than that person gets for an entire year.  Do you think they have healthcare like we do here in Canada?  Don't be so sure.  The establishments in both India and China are often VERY lax in worker safety because it's viewed as a population control mechanism.

So the current whining of a great deal of protesters of the "occupy whatever-city-here" movement are misinformed greedy hypocrites.  They should try living in a slum in India for a month.  Many of them think they are the 99%, but seriously folks, even your minimum wage burger flipping job pays more per DAY than the kids in India get ALL YEAR for the burger uniform they sewed together for your burger-flipping ass.

 Now I'm not trying to discredit all of what they are saying.  Part of their message includes FAIR taxation for ALL and I completely agree with this part.  History has proven that ONLY a graduated income tax is the fairest most responsible way to go.  The more you make, the more you pay.  Simple.

Our American friends however have a bit more ground to stand on in their complaints since Wall Street did set them up for disaster with the sub-prime mortgage fiasco from a few years back, AND more than half of all American bankruptcies are caused from medical bills.

Thanks to CONSUMER demand for cheaply made crap a great deal of the manufacturing base in many first-world countries has been outsourced.  We did it to ourselves and only have ourselves to blame.  YOU have to make the choice to spend more on your socks or your shirts.  You have to create more demand for home-made goods.  The sooner we all do, the sooner the disparity curves flatten, and the middle classes bloom.

But if you have a job and you live in Canada, get over yourself.  YOU are in the top 1% of the world elite.  Now start behaving like you are...  Buy some shares of companies you like and for the products and services you use on a daily basis.  (I own shares of my mobile phone provider... The dividends pay for 1/3 of my bill so far.  Eventually I'll have enough shares so that the dividends pay for the phone bill completely)

Capitalism isn't going away.  We all need to man-up (or woman-up) and pay our fair share of taxes to help keep our country great and running smoothly.  (Yes there will always be scandals and corruption, but not nearly to the same extent here as there are say in Somalia!)  TAXES MUST RISE people.  It's inevitable.  You can't borrow your way out of debt.  Having said that, there are rules in place that govern what sort of incomes are taxed in what ways, so it's both honest, and ethical (and damn smart) to make prudent choices to help determine how your slice of the pie gets taxed.  (TFSA, RRSP, dividend paying stocks, etc)

The real trick my friends?  Don't get greedy.  As soon as you starting thinking of the whole pie, you're in for a world of hurt.  I'm happy with a thin thin slice.  If you get greedy you stand to lose everything.  If you set reasonable and incremental goals then you will prosper for years to come.  As a starving artist the first while can be rocky, but stay the course and it will lead you to financial freedom.  My thin slice?  Enough monthly income to pay my rent, food, phone, and travel expenses.  Then I'll have more freedom when it comes to choosing what work I accept rather than just picking up the phone and saying "Yes I'm available" every time it rings.

Full disclosure:  My "income" (which is all re-invested at this point) from my investments just cracked $500 a month, even if I don't make any trades.  (Just the yield from my dividend and distribution paying holdings)  For some $500 a month represents a pittance, for me this represents nearly 20% of my fixed monthly costs. So start now, contribute often and in a few short years you will start to smile more and more.  I know I am.

I admit "a few short years"  is a VERY difficult concept for my hipster 20-something friends.  But honestly folks if you start saving this very instant even $25 a week you'll be a moderately wealthy jackass by the time you hit 45.  Handsomely wealthy by the time you hit 55 and a completely rich asshole by the time you hit 65.  Remember how long summer was when you were a child?  It seemed to last forever.  Now look outside!  It's nearly winter...  how did that happen so quickly?

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