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Choose your parents wisely: Upward mobility largely a myth in America.


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So I was browsing this report and stumbled onto some interesting numbers:

http://www.americanprogress.org/kf/hertz_mobility_analysis.pdf

Table 3 is where the most useful info is found.

Over half of the top 20% (top quintile) income earners came from parents in the upper 5%. Only 6% of the people in the top 20% income range came from parents in the bottom 20%. What that means is that if you chose parents who made in the bottom 20% of income, you only have a 6% chance of making your way to the top 20% bracket, and only a 1.1% chance of making it to the top 5%.

It also means that nearly 83% of those in the upper 20% of income earners came from parents that were middle or upper class (top three quintiles).

Every European country except the UK has upward mobility numbers that are HIGHER than ours.

Want to be rich? Choose your parents wisely. Or choose parents that live in Europe.

Edited by AcworthFalcFan
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So I was browsing this report and stumbled onto some interesting numbers:

http://www.americanprogress.org/kf/hertz_mobility_analysis.pdf

Table 3 is where the most useful info is found.

Over half of the top 20% (top quintile) income earners came from parents in the upper 5%. Only 6% of the people in the top 20% income range came from parents in the bottom 20%. What that means is that if you chose parents who made in the bottom 20% of income, you only have a 6% chance of making your way to the top 20% bracket, and only a 1.1% chance of making it to the top 5%.

It also means that nearly 83% of those in the upper 20% of income earners came from parents that were middle or upper class (top three quintiles).

Every European country except the UK has upward mobility numbers that are HIGHER than ours.

Want to be rich? Choose your parents wisely. Or choose parents that live in Europe.

I'd still keep my parents even tho they were dirt poor and if I die the same.

But yea, I see your point.

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Because most people don't have the drive or determination to do what it takes to get to the top. Sure, there are some that were born rich but don't point at Bill Gates when you say that--those stories are out there all over the place and there is really no excuse for anyone not to retire a millionaire that's below the age of 40...

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Because most people don't have the drive or determination to do what it takes to get to the top. Sure, there are some that were born rich but don't point at Bill Gates when you say that--those stories are out there all over the place and there is really no excuse for anyone not to retire a millionaire that's below the age of 40...

LOL, what?

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unfortunately neither do many of the people in charge of peoples savings. :P

Hard to argue that right now that's for sure but yeah, I was shocked at how little it really took to become a millionaire--granted it takes 30 plus years but your average worker could make it happen. That's one of the reasons I think a basic personal finance course should be mandatory before graduating high school so that everyone knows the consequences of debt and what to do to live debt free and not rely on others...

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Hard to argue that right now that's for sure but yeah, I was shocked at how little it really took to become a millionaire--granted it takes 30 plus years but your average worker could make it happen. That's one of the reasons I think a basic personal finance course should be mandatory before graduating high school so that everyone knows the consequences of debt and what to do to live debt free and not rely on others...

Cap that's fine advice for all young people. I'd like to add that it's critical to avoid those "high fixed costs" like huge mortgages, car payments and credit card debts. Now I'm not saying don't enjoy life but if you keep that in mind it won't get out of hand.

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Seriously, just a matter of compound interest really and mutual fund averages along with not accumulating debt but most people don't have that mindset unfortunately...

Those numbers assume that the markets will perform to their historical averages, which MIGHT be a safe assumption to make. But if there were ever a time in our lives in which the markets may significantly underpeform for a duration or more than 10 years it is now.

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Those numbers assume that the markets will perform to their historical averages, which MIGHT be a safe assumption to make. But if there were ever a time in our lives in which the markets may significantly underpeform for a duration or more than 10 years it is now.

Also it seems that by cap saying this, he is older and has already reached such success. That being the case means that he was working and building up his cash over the past 30 years or so. It has became much harder to have such economical freedom with the cost of living sky rocketing but the payrate staying the same. In the 70s and 80s if you were willing to work a fulltime job you were able to support yourself reguardless of what the job was. That is no longer the case.

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Also it seems that by cap saying this, he is older and has already reached such success. That being the case means that he was working and building up his cash over the past 30 years or so. It has became much harder to have such economical freedom with the cost of living sky rocketing but the payrate staying the same. In the 70s and 80s if you were willing to work a fulltime job you were able to support yourself reguardless of what the job was. That is no longer the case.

And if Cappy has done it, he has my respect. I dang sure didn't.

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And if Cappy has done it, he has my respect. I dang sure didn't.

Neither have I and I'm a finance major... AND I'm Cappy's age or older. I took a huge chance a started my own business only to run every bit of money I had into the ground. I'm still struggling trying to convince myself that I can bounce back considering my age and the current state of things with our economy. I guess I need to find more mind altering drugs and hope a mystical secret will be revealed to me while I'm in a proper state to actually receive the message.

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Also it seems that by cap saying this, he is older and has already reached such success. That being the case means that he was working and building up his cash over the past 30 years or so. It has became much harder to have such economical freedom with the cost of living sky rocketing but the payrate staying the same. In the 70s and 80s if you were willing to work a fulltime job you were able to support yourself reguardless of what the job was. That is no longer the case.

I'm just 38 but am practicing what I preach--working on getting completely debt free and building my retirement...

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People always seem to forget the value of being born unto parents who value education and hard work. If those values are absent for your first 18 years, it makes it EXTREMELY difficult to achieve.

Sure, people pass on money, but the values that they do/don't pass on make so much more of a difference.

So saying that anyone under 40 can be a millionaire by retirement is just denying the simple reality of the influence of environment.

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People always seem to forget the value of being born unto parents who value education and hard work. If those values are absent for your first 18 years, it makes it EXTREMELY difficult to achieve.

Sure, people pass on money, but the values that they do/don't pass on make so much more of a difference.

So saying that anyone under 40 can be a millionaire by retirement is just denying the simple reality of the influence of environment.

Anyone "can" be, that has nothing to do with whatever. Whether or not it's actually achieved is a different story. Again, that's why I am an advocate of a mandatory personal finance class before graduating high school so that everyone is exposed to the knowledge and have no excuse but to point the finger at themselves...

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Anyone "can" be, that has nothing to do with whatever. Whether or not it's actually achieved is a different story. Again, that's why I am an advocate of a mandatory personal finance class before graduating high school so that everyone is exposed to the knowledge and have no excuse but to point the finger at themselves...

Sure, someone with a 1% chance of having the attributes necessary to get ahead 'can' be. But they won't, realistically speaking.
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What kind of lame excuse is that? Seriously, if they get educated on the concept the only thing holding them back is themselves...

It's not an excuse, it's proven reality. Not everyone has the capacity or ability to learn everything.

Are you really so naive as to think that someone who fails high school classes repeatedly, and there are quite a few, is going to grasp simple financial management? And even if they do, that they are going to have the tools to go out, find a job and put that knowledge to work? It is a proven fact that this is just not true.

You're just reinforcing my point: most of the skills needed to succeed are ingrained by upbringing.

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Because most people don't have the drive or determination to do what it takes to get to the top. Sure, there are some that were born rich but don't point at Bill Gates when you say that--those stories are out there all over the place and there is really no excuse for anyone not to retire a millionaire that's below the age of 40...

And that's the myth that is debunked by the numbers. If it was all lack of drive/determination then there wouldn't be a difference across parental income. There are huge differences, which proves that there are structural/financial obstacles to success among people born to poor parents.

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Also it seems that by cap saying this, he is older and has already reached such success. That being the case means that he was working and building up his cash over the past 30 years or so. It has became much harder to have such economical freedom with the cost of living sky rocketing but the payrate staying the same. In the 70s and 80s if you were willing to work a fulltime job you were able to support yourself reguardless of what the job was. That is no longer the case.

Exactly right. Given inflation, rising health care costs, the skyrocketing housing costs, making a salary in the lower two quintiles doesn't provide as much for the family as it used to. The reality today is that the people who work hardest and work the longest hours are steadily slipping behind those born to wealth who can immediately set up an investment portfolio and have the necessities provided by their parents.

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People always seem to forget the value of being born unto parents who value education and hard work. If those values are absent for your first 18 years, it makes it EXTREMELY difficult to achieve.

Sure, people pass on money, but the values that they do/don't pass on make so much more of a difference.

So saying that anyone under 40 can be a millionaire by retirement is just denying the simple reality of the influence of environment.

Exactly. Even among those who value education but are poor, the financial obstacles are huge. Massive debt to get a college education which hinders economic advancement once you get a good paying job, for example.

The fact is that America is not the meritocracy that we like to pretend it is.

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Anyone "can" be, that has nothing to do with whatever. Whether or not it's actually achieved is a different story. Again, that's why I am an advocate of a mandatory personal finance class before graduating high school so that everyone is exposed to the knowledge and have no excuse but to point the finger at themselves...

When every dime you make goes to feed the kids and to put a roof over your head, investment knowledge isn't very useful. Not saying that you're wrong, but we have to acknowledge that there are people born into circumstances that prohibit them from investing/saving.

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