Journal Journal: What you can learn from the failure of Bush's tax cut
One thing that I'll agree with the Socialists is the fact that the wealthy benefited the most from Bush's tax cut and his tax cut wasn't as effective has he wished it'd be in improving the economy.
This is where the agreement ends. Your typical Socialist will use this fact to make you feel helpless in order to gain support for their cause. I will tell you what Socialists won't so that you can actually learn something from it.
Bush's logic states that tax cuts put more money in the people's hands, which in turn will encourage them to spend more to stimulate the economy. While this is true to a point, the problem is that bulk of the tax cut went to the wealthy, and most of the wealthy got wealthy by saving and investing wisely, not blowing their money away like your typical middle and lower class. This means that bulk of Bush's tax cut did not circulate back into the economy to stimulate it. But what can we learn from all of this?
The Millionaire Next Door is a well known book on the study of your "average" millionaire. This book dispels many of the stereotypes of the wealthy. Your typical wealthy gathered their wealth by living below their means, as shown on the examples below.
1. They tend to by used cars (You are not what you drive), with 2 out of 3 millionaires preferring to drive American cars (Ford being #1) rather than flashy European cars.
2. Most of them are older folks, which mean that they gained their wealth by using the slow and steady method instead of blowing their money away on get rich quick schemes.
3. They have modest houses, which mean less upfront cost, taxes, insurance, and maintenance costs.
4. They clip coupons.
5. They avoid buying on credit.
6. The wife is usually more frugal than the husband, which makes sense as it's hard to gain wealth when you have a gold digger for a wife.
7. They also tend to stay married with their first wives. Again, it's hard to gain wealth when you lose half of it during the divorce to your gold digger ex-wife.
8. Over 80% of them are first generation millionaires, another fact the Socialists don't want you do know as they want to make you believe that you need to be born wealthy to be wealthy.
The book was published in 1996, so while the data my seem outdated, the more recent study conducted by The Phoenix Companies Inc. shows that the data in The Millionaire Next Door is still very much valid.
With the country split 50/50 in the coming election, don't count on your favorite candidate winning it. And even if your candidate wins, many of their promises hinge on increased tax revenue from the growth, which may or may not happen, not to mention that politicians are known to break their promises.
Do what you can do to make the difference in the upcoming election, but have a contingency plan in place instead of relying on bunch of uncertainties. I highly encourage you to learn more about the spending habits of the typical wealthy and learn to control your own spending to build wealth. While you may not end up being a millionaire, you'll still be in better shape then being broke, or even worse, being in the red with crushing debt load.
This is where the agreement ends. Your typical Socialist will use this fact to make you feel helpless in order to gain support for their cause. I will tell you what Socialists won't so that you can actually learn something from it.
Bush's logic states that tax cuts put more money in the people's hands, which in turn will encourage them to spend more to stimulate the economy. While this is true to a point, the problem is that bulk of the tax cut went to the wealthy, and most of the wealthy got wealthy by saving and investing wisely, not blowing their money away like your typical middle and lower class. This means that bulk of Bush's tax cut did not circulate back into the economy to stimulate it. But what can we learn from all of this?
The Millionaire Next Door is a well known book on the study of your "average" millionaire. This book dispels many of the stereotypes of the wealthy. Your typical wealthy gathered their wealth by living below their means, as shown on the examples below.
1. They tend to by used cars (You are not what you drive), with 2 out of 3 millionaires preferring to drive American cars (Ford being #1) rather than flashy European cars.
2. Most of them are older folks, which mean that they gained their wealth by using the slow and steady method instead of blowing their money away on get rich quick schemes.
3. They have modest houses, which mean less upfront cost, taxes, insurance, and maintenance costs.
4. They clip coupons.
5. They avoid buying on credit.
6. The wife is usually more frugal than the husband, which makes sense as it's hard to gain wealth when you have a gold digger for a wife.
7. They also tend to stay married with their first wives. Again, it's hard to gain wealth when you lose half of it during the divorce to your gold digger ex-wife.
8. Over 80% of them are first generation millionaires, another fact the Socialists don't want you do know as they want to make you believe that you need to be born wealthy to be wealthy.
The book was published in 1996, so while the data my seem outdated, the more recent study conducted by The Phoenix Companies Inc. shows that the data in The Millionaire Next Door is still very much valid.
With the country split 50/50 in the coming election, don't count on your favorite candidate winning it. And even if your candidate wins, many of their promises hinge on increased tax revenue from the growth, which may or may not happen, not to mention that politicians are known to break their promises.
Do what you can do to make the difference in the upcoming election, but have a contingency plan in place instead of relying on bunch of uncertainties. I highly encourage you to learn more about the spending habits of the typical wealthy and learn to control your own spending to build wealth. While you may not end up being a millionaire, you'll still be in better shape then being broke, or even worse, being in the red with crushing debt load.