(noun, etymology Dutch from ‘boedel’: estate, possession, inheritance, stock.). 1. Crowd, pack, lot, as in ‘the whole boodle.’ 2. a. Counterfeit money b. Money acquired or spent illegally or improperly, particularly when used in bribery for political purposes. 3. Slang for money in general.

The Best Financial Advice Ever

Posted on: Jan. 27, 2015  |  By: Ronnie Kahn  |  Category: Advice, General

A Capital Idea

Attention Millennials:  do you need some financial advice about how much to spend on college or how much to take out on loans or how to best pay off your loans?  Do you need some financial advice about what career path to take or where to live that has good job opportunities while being a place that is affordable?  Do you want to know what would happen if you lost your job or became sick?  Do you want to know if you’ll have enough when you are old?  Do you need some financial advice about…hold on, let’s just forget about all these questions and this financial advice and go to the linchpin of all advice about money in our present day world.  A warning though, everything you need to know goes against all those things that you were warned about when you were growing up or that you saw in countless movies that prove what a mistake this would be.  That is, the only truly practical advice when it comes to money is this…marry anyone who has capital.  No, don’t marry rich or marry someone just because they seem like they make a boatload of money, although that could lead to gathering capital.  Just marry into a bunch of assets, no, I didn’t say marry a bunch of asses, although some end up doing just that.  I meant it doesn’t matter if it’s financial investments, businesses, or real estate, because capital is the name of the game and it is the only game left in town.

When I was in my twenties, I had a couple of relationships where my love interest’s parents had a decent chunk of money.  I acted as though money didn’t matter as an idealistic youth.  If it were now though, I should act like a wolf in sheep’s clothing.  When I met my current wife, I told myself that it was the relationship that really mattered and it did not factor in that she was not as well-off as my previous couple of long-term relationships.  Now, I should be saying, so what if I have a great marriage and happen to be a productive cog in the modern economy.  If I would have married capital instead, I could have been doin’ nothin’ all these years and raking in the interest, dividends, and rents.  What was I thinking?  Vows?  “For richer and richer, ‘till capital do us part.”

So my little millennial, what is the point of putting out effort to find a job and make some money when there is no real money in income.   There is only money to be made from capital which means that if you don’t have a lot to start, you need to get a lot in order to make it worth your while to sit on your ass like I should have done all these years.  Then, when you get capital, why, it just keeps making more capital.

Let’s not kid ourselves though.  Unless you’re born into it or you can steal it, the only way to get it is to marry it.  Stop worrying about the future.  Capital means you are investing in the past and you can be proud of it.  Why worry about making a difference in the world?  You can’t even be productive anymore.  There is no more intrinsic value even left to careers and jobs.

Now you may say that someone should marry for love like I naively thought all those years back and that I am just a cynical old man.  Those of us who are lucky enough to make a good income and add to what our society produces, we can get along okay.  As for finding a mate, if you do happen to marry someone like that, all the better.  Someone, on the other hand, who has the big chip stack though when they start out, why they make money by doing nothing which really produces nothing toward society as well.  They just make their money because of one thing, ownership.  They own the assets and sit back and wait for the rent to come to the landlord.  The term “rents” is not just used literally to mean only real estate rents.  Investments earn the same “rents” in the form of dividends, interest, and growth.  But if you really want to make real money, you’ve got to start out with a lot.

It should go without saying that you should not just choose a mate but a family behind that mate.  If you play your cards right, you can get a nice inheritance.  The best choice would be to marry an only child and that way you can have it all and not watch your wealth diminished by those lousy siblings or other relatives getting their bequests.  Also, if you mistakenly pick a family with good genes and long life expectancy where your inheritance will be delayed, make sure the family gifts out a lot now as opposed to waiting until they croak.

As a society, we can finance public debt in two ways.  We can tax in order to pay for things and if you tax more to those with higher wealth, income can be redistributed.  In a world where capital is king though, you can pay for things the other way by issuing bonds or more debt and pay for things that way while giving the most interest to those with higher wealth.

In any society, knowledge, skills, and technology can help those without assets build income.  However, these days, less and less money is going to education, research, skill development and so on, which makes a gap between those who have income from rents and those who are able to make it by working.  This further means that income inequality becomes larger and opportunity smaller as capital now makes more of an impact on wealth than work, meaning fewer of us can make wealth by having a high paying career.  As overall growth slows, including population growth, capital and those who have it becomes the major driver of wealth.  Also, wealth has been transferring from public to private wealth as tax rates decrease on the wealthy and stock, bond, and real estate values grow too.  The rates have become regressive at the top which means more of you need to marry money while there are less and less who have it.  My Dad used to say “if you’re going to steal, steal big.”  Now, in this day and age, he should be saying “if you’re going to marry, marry big.”  Five or six million in assets is chump change.  You need to think along the lines of $150 million and up but thanks to income inequality, there are more and more who fit the bill (and will pay the bills).  Keep in mind, you do not need to be more productive or create more jobs with your added wealth.  That is just a smoke screen to keep the small fish from trying to nibble at you.  Even if you do have trouble with having to pay too much in taxes as they decide you try and tax your wealth and not your income, you can always hide your assets in a foreign bank like everyone else.  But the rich really do not have to worry too much about tax revenue since the middle class who own property really pay for most of the services these days with their property tax anyhow.

You are barking up the wrong tree to put your effort into finding a lucrative career.  What is demanded of you are your social skills to find a mate and not occupational skills.  For there to be a competitive job market with decent salaries, money has to be invested in education and tuition has to be reasonably priced which are two things that are missing in the U.S.  Workers are not just paid on what they bring to a job but what employers can get away with paying.  That means a decent minimum wage moves that bar more toward those at the bottom than the top but that is another thing the U.S. keeps low.  Salaries are a social construct.  High salaries are not based on some type of amazing productivity.  It is much more acceptable now to pay an executive far more money than used to be the norm.  Often times, corporate profits rise not because of something within the company but factors in the industry outside of the company.  Yet, even when that is the case, compensation rises.  Also, we all know about cases where profits were down and bonuses were paid anyhow.  In one similar country, an executive will be paid an astronomical salary yet in another that same executive will be paid something more down to earth.  The movement of income to the few at the top is much more concentrated in the U.S. than other countries yet other countries have just as much technical know-how.

The increased excesses in money among the few is then used to pay for campaign contributions, lobbying money, and think tanks all to justify lowering taxes, tax breaks, and other policies which, in turn, is used to increase inequality even more.  Those who have the capital will always come up with ways to promote their own self-interest while claiming it is better for everyone to adapt the policies they promote.

After World War II, inequality was the least it had ever been due to population growth and what the war did to help promote a strong middle class.  All that is reversing course though and wealth will most likely continue going to the hands of the few.  Social mobility has decreased in the U.S. and many countries.  This is especially so for those students who are saddled with enormous debt from tuition.  With the investments of government also going down for education and health, this puts an even harder burden on most everyone.  The big loser is equality of opportunity and our society as a whole.

It’s time to buy a ticket and meet your soul mate on the inheritance train.  Take a ride on the generational transfer of wealth to you and to your new family.  Keep in mind too that income inequality is not only likely to change soon but is getting even greater.  While you never know if society will wise up and there might be a movement to have more progressive taxes, taxes on capital, or, even more likely, things get so bad that the middle class rises up to take the ridiculously wealthy down.  Until that time though, the billionaires will own the world.  Another scenario is just that when things become so unequal that output and income begin to crack like glass that slowly shatters, that means the economy will eventually shatter into tiny broken pieces.  Hell, if that don’t get ya, global warming probably will.  If you have enough capital though, you can pay to go live on a new planet where everything will be just capital.

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