(Warning: this post contains personal opinions and analysis, some of which might be deemed political.)
There are really two classes of 'contract work' in the US.
The first class is what I'd call skilled specialists. These are your independent marketing consultants, security experts, developers, designers, copywriters, etc. These folks are usually, but not always, fairly experienced. They take up contracting or consulting as a career choice, and while they have to hustle to stay above water, they accept the hustle as the price of freedom from a corporate life. Often they work remotely. If they're strong and well-networked, they have some leeway in negotiating fees and terms for their services. The catch is that there are very few availabilities on the market for their services at any given time, and most firms don't appropriately value those services. As such, skilled specialists thrive or stumble on the strength of their reputations and rolodexes. Many of them have served for years in the corporate world, or in high level academia. They may have the ability to reeenter corporate America at will, e.g., for a client who really wants to bring them in house.
The second class is what I'd call no-choice contractors. These are most often (but not always) younger workers, whom a company will hire for short term jobs, and then spit back out whenever it's done with them. Many of these workers are placed by temp agencies, or respond to open positions for fixed term jobs, and would probably take full time jobs if the jobs were available to them. This category includes seasonal hires, unskilled laborers, and skilled laborers placed at companies on short-term assignments with the vague (and usually fruitless) hope of ascending to full-time status.
Skilled specialists are a much smaller pool, on the whole, than no-choice contractors. And many skilled specialists are but one wrong decision, or bad run of luck, away from slipping into the no-choice pool.
If you're unfamiliar with US corporate culture, the best way to understand my distinction is to first realize that labor lost the war with capital here about 30-odd years ago. During the Reagan era, labor rights one might take for granted in Europe were effectively positioned here as socialistic, and thus cancerous to the 'competitiveness' (read: profit margins) of the firm. Wall Street and hedge funds, along with prevailing MBA management culture, have convinced us that the flexibility afforded to big firms by contracting out their jobs is necessarily a good thing. It allows them to be more nimble, and to operate with a higher degree of tactical freedom from quarter to quarter, or from year to year. More important, if not all important, is that a contract labor force is better in the short run for returning shareholder value.
This line of reasoning is very attractive, but almost too attractive. What we have now is a system, and a culture, that treats more and more jobs as holes to be filled, and which treats individuals not as prospects to be groomed, but as cogs to be worked hard and replaced when worn out. We have also traded strategic thinking for tactical thinking, and we no longer understand the difference. But that's a rant for another time, perhaps. :)
It's fun to poke fun at the system we have in the US, but we're doing fairly well from a numbers standpoint. Our GDP is fantastic, our median income is quite good, and we still manufacture a bunch of stuff.
China didn't actually start to manufacture more than us until just a few years ago, and they have something like three times the population.
People say the middle class is shrinking, but seldom mention that the number of people in the upper class is growing. We have pretty good employment numbers and our securities market is booming.
Many of our businesses are the most profitable in the world. We are still sought out as the place to go for education and starting a business. We have more people trying to come here than we can even accommodate.
So, from a numbers view, we are doing okay. We may not be number one in every category, but we're up there on the list and still doing quite well.
Of course, there's more to life than numbers, but hopefully I expressed it well enough.
Numbers are only useful in relative terms. Median is going up, but so is the income and wealth gap. What most people look to achieve in their life is security. Security of resources, water, food, electricity, and physical safety. People want the security of being able to plan for a future, a family, education for their children, seeing their children and children's children move ahead in the world.
What GDP and median income don't capture is that the above security is slipping away from more and more people. Increasingly, you're either a professional married to another professional making $200k+ or $300k+ as a household, which is great. Then you search which metropolitan areas other high income households are moving to and go there and your life is pretty good.
The flip side is you marry someone who makes little, or not marry at all because it's not a prudent financial decision. Wherever you live, your kids are stuck going to school with worse resources and only have other poor kids to become friends with, many in single parent households.
I don't know how it plays out in the end, but I would postulate that large class divides aren't good for societies and nations. Everyone doesn't need to be equal, but there has to be a veneer of everyone being "in this together", and if it becomes too obvious that we're not, then it incentives behavior of "steal or be stolen from", meaning too many people start to game the system and we lost trust in each other.
I've been reading that we are doomed since the days of reagonomics. Well, technically longer. I've seen the very same predictions and arguments made, yet here we are.
To be absolutely clear - the system isn't perfect and could use improvements. My post was merely to point out that we're not only not doomed but are doing fairly well.
We have hungry people, but we don't have people dying of hunger in the streets. We have crappy medical coverage, but we have some of the best practices in the world - and horribly unaffordable emergency treatment that will probably financially ruin you. We have both wealthy and poor, but our poor are rather wealthy on the global scale.
It's not perfect, there's room to make improvements, but it's not really that terrible and the doom and gloom predictions haven't changed since the 80s. They've barely changed since the 60s. I can't speak for earlier than that, I wasn't cognizant.
Society isn't breaking down. The kids are as reckless as they ever were and old people complain about them as they always have. There isn't going to be a revolution, class warfare isn't going to erupt into violent confrontations on a mass scale, and nobody is going to eat the rich.
Call me when they are hanging bankers and politicians from lamp posts. It's not perfect but it's not horrible. It's actually pretty good for the average person. Even the below average have it pretty good if we examine them from the perspective of a global community.
Our poor people get more monthly food assistance than some people spend on food for an entire year. Not that we should emulate them, but we should stand back and admit that it's not that bad and acknowledge that the many predictions of doom have been grossly inaccurate.
Can we improve? Of course, and we should. Only insane people would think the system is perfect and can't be improved. I'm fact, the only differences I see between groups of people are the things they want to improve. I don't think anyone seriously believes it is currently ideal.
It's just not that terrible for the average person. You don't start getting massive uprisings with serious revolution potential until those average people can't get their football and beer.
I agree, people need to be pushed quite far to literally revolt. As long as they have something to lose (and they can't afford to lose it or are willing to, such as football and beer), they will behave .
But societies rise and fall on a greater timeline than one's lifetime. Wages haven't risen since the 70s or 80s and there is still no revolution, so it will take time. But recognizing that there is a problem is the first step to fixing it, before it's too late and it snowballs. Or perhaps ups and downs are unavoidable, and it's best to just plan for yourself.
Either way, the declines in birth rate, marriage, and equality are, by all indications, due to structural economic factors. Society is changing, maybe not breaking down to the point of violent confrontations yet, but it is something to watch out for in the future, but it could take a while.
> It's fun to poke fun at the system we have in the US, but we're doing fairly well from a numbers standpoint. Our GDP is fantastic, our median income is quite good, and we still manufacture a bunch of stuff.
NONE of that matters because those metrics measure the winners. The key measure is, does our system have a lot of big losers? If the answer is yes, then that system has failed.
No, those are your metrics. Your goals don't match those of the system. Ill defined terms like big losers don't really help.
I don't think anyone would argue the system is perfect. I'd conclude that it's not nearly as bad as you seem to think it is. By being a part of the system, you're already better off than some 40% of the globe, by default.
taking your argument to its logical extreme, the goals of the system are met so long as the median and averages look favorable relative to other countries... an ultra wealthy 1% can offset the relative lack of wealth in the rest of the 99% and the median can still look good - I think this is the point you may have been missing above
> an ultra wealthy 1% can offset the relative lack of wealth in the rest of the 99%
Citizens of western nations (the US in particular, median income there puts you among the .3% globally) and the rest of the globe have a similar dynamic yet I have seen no westerners who proclaim the evils of income inequality attempt to resolve that disparity, in fact they seem set to increase their own income making the problem worse. Thus I don't take that argument on it's face as a serious one.
Please point out where and how you believe I've been "poking fun at the system," or predicting its downfall, or in some broad way denouncing the US, as you seem to suggest I am doing? Critiquing an element of a system does not = opposing that system in its entirety. In this case, the element I take issue with is our short-term-optimized view of the value of human capital. Essentially, we fail to rationally calculate the NPV of a skilled worker's contribution as he or she grows more skilled over time.
In the context of this subthread, which you have missed entirely, I am explaining to someone outside the US what's led to the rise of the contract labor force here in the US, and providing a framework by which we might view the different types of contract labor in our industry. That is all I am doing. That is the whole, fairly narrow subject of my post.
Yes, I'm pointing some fingers in very specific directions where blame is due. I'm hardly denouncing the whole US system, or even the whole financial culture, and I'm hardly throwing the baby out with the bathwater. To be clear, neither is the Wharton professor in the interview we are ostensibly here to discuss.
You have also failed to cite a single number, which is ironic, given the crux of your post. You have provided a broad sweep of claims without citation or data. Put some specific numbers on the table if you're going to make them the basis of your argument. (And hopefully someone else can take you up on that argument, because once again, it's not at all the argument my post seeks to open. If you want to bait me into some broad argument about whether or not the US system is superior to the European or Chinese or Turkish or Brazilian or whatever system, I am not interested in taking the bait.)
Going forward, I'd appreciate if you actually took the time to read what I am saying in the context in which I am saying it. Instead, you seem to have latched onto my use of the words "MBA" and "Reagan" and possibly "Europe," and have thus attempted to beat me in some imaginary debate on a point I didn't even make. If all you're here to do is torch strawmen, you won't find many interested takers.
Now, if you feel you were attacked that is unfortunate, but the system isn't that bad and histrionics about Reagan and being seen as cogs in a wheel is rather dramatic when the system has demonstrated itself to be reasonably effective.
i seemed to have missed the part where you lavished us with citations. i really hate it when people go on for like 9 paragraphs without a single citation and you say something and they are like 'whats your source?! no source no truth!'
most of what you said I generally agree with (about contract workers). then you lamented with the trite: "if only we were like europe" type comment.
tbh, i want to be nothing like europe. who's economy do you lionize? Portugaul 9% ump, Ireland 6.1% ump, Greece 22% ump, Spain 17.6% ump? Even France isn't doing great.
Or would you prefer to cherry pick one of the more Nordic countries like Sweden with virtually no ethnic or geographic diversity?
I'm sure Europe is great, but they are by no means an archetype of economic success. Nor is our situation anything like theirs, so this is why people get irritated by such comments.
"Many of our businesses are the most profitable in the world."
As an employee, who's not invited to share in those profits, why do I care? Why would I rather have that, than have more stability and more vacation time like they do in Europe?
Not really. And that doesn't address my question. Why do I care that our businesses are more profitable if I don't get any of the benefits of it? What do I get for that "more profitable"? Do I get to work less? Do I get more vacation? Do I get more stability? Do I get more pay? The answer to all of these is no. So what do I get?
You don't have to care, though you might be grateful that they are profitable and thus able to pay your salary. Given that you're on HN, you're probably paid quite well and better than you would be in other countries.
So, it's in your best interest that they continue to be profitable. Your benefit is contined employment and the benefits that go along with that.
If you want to get more from a business profiting more, your best choice would be to buy shares of that business through the stock market. Even those that don't pay dividends can increase in value and increase your wealth along with it.
You are, of course, perfectly entitled to not care one iota. You don't need my permission to do that.
"You don't have to care, though you might be grateful that they are profitable and thus able to pay your salary."
Companies in Europe are profitable, too.
"So, it's in your best interest that they continue to be profitable."
I wasn't asking why I should care that they're profitable. I was asking why I should care why they're more profitable.
"You are, of course, perfectly entitled to not care one iota. You don't need my permission to do that."
So your answer to my original question of why I should care that companies in the US are more profitable while offering crappier benefits to employees than European companies is that I really shouldn't; and that it's a raw deal for everyone else.
"If plants were tested after production for indicators of plant health and labels could be put on vegetables indicating quality"
It's a fine idea until Monsanto, et al., find a way to subvert the standards and bend them into an anticompetitive regulatory mote via government lobbying.
What we really need, as Step Zero in any plan for wholescale reformation of American society, is to reimpose and reinforce campaign finance restrictions and sever the direct financial ties between our big corporations and the politicians who serve them.
Some readers may choose to see this as a line item on the progressive wish list. I see it as a necessary precondition to any attempted societal change whatsoever. Right now, the very heart of our issue is that the government no longer serves the people of this country; it serves moneyed interests, nakedly and shamelessly.
Obligatory Star Trek reference: America has become Ferenginar. We think we're the Federation, but we're headed down the wrong path for that. We are effectively an oligarchy at this point, heading in the direction of totally dysfunctional kleptocracy. The "us vs them" mindset tearing us all apart right now is a symptom of political polarization, which the lobbyists would consider to be a feature and not a bug. Until our voices matter to politicians more than David and Charles Koch's billions, we're fucked. Nothing will change, and anything we try to change will be immediately corrupted and turned against us. The fox bought the whole damned henhouse.
> reimpose and reinforce campaign finance restrictions and sever the direct financial ties between our big corporations and the politicians who serve them.
I don't disagree, but it seems to me that it is only possible to legislate such a thing when the problem such legislation would solve doesn't exist.
I tend to prefer even less likely solutions, such as term limits, or diffusion and decentralization of one or both of the legislative bodies, but these solutions run up against the same problem as campaign finance reform - the people with the power to enact the change are the ones who benefit most from the status quo.
Let's say I have a child with special needs, be it giftedness or disability. If I want to provide my child with decent care and quality of life in the SF Bay Area, a household income of $160k is going to make things very difficult. Not impossible, but certainly very hard, and likely harder than anywhere else in the country.
In this case my "spending habits," as you put them, might include expenses like routine hospital or clinical bills, specialist care, or some sort of domestic help. Double all of that if my child is physically as well as mentally disabled, or if my child exhibits some sort of prodigy that I want to nurture properly.
You have to remember that the price of goods and services in this local economy is largely driven by those earning some significant multiple of our hypothetical $160,000.
* Stop working and live on your 160k per month for life
* Deal with kids special needs
* Live in SF
Pick two
Does this really need stated? Do we need a disclaimer at the bottom of EVERY financial story ( * you may need 10-15% more if your kid has special needs)
Sorry if you were somehow offended by my considering the needs of those we rarely consider. You're more than welcome to read through my posting history and see that this is possibly the first time I have ever mentioned the subject on HN. It may well be the last time. And in case it wasn't abundantly obvious through subtext, I'm mentioning it out of personal experience.
I read, and contribute to, quite a few financially oriented threads on HN. I don't see this subject brought up all that often, and certainly not as ubiquitously as you suggest.
I understand what you're trying to say within the narrow context of this thread ('hypothetical: earn $160k and never work again'). It's the whole "Must we hear this every time??? UGH!" aspect of your tone that really bugs me. But this subthread is veering far enough off topic as is, so I'll just leave it at that.
"Even if you'd eventually make $50m, your life wouldn't change much from a net worth of $14m to $50m. You could buy a nicer jet?"
I know you're kidding around here, but all kidding aside, whether your net worth is $14M or $50M, you can't afford a jet. (I mean, nominally speaking, you can front the sticker price -- but you'll get eaten alive on fuel and maintenance over the jet's useful lifespan, and the jet as an asset is depreciating all the while.)
I say this almost as a reflex. I used to work in talent management many lifetimes ago, and I'd actually find myself having this talk with people in this specific situation. Explaining to someone who just made $10M on a single movie that s/he can't afford a jet is a surreal experience. Sorry for the tangent!
I dined once with a billionaire and a couple of multimillionaires. The billionaire owned a jet. The multimillionaires were envious of him because they only owned jet timeshares.
(If you own your own jet, it's always where you want it, you can decorate it the way you want, and you can leave your stuff in its bedroom and living room. It's like having a pied-à-terre in a city instead of renting a hotel room each time you visit.)
The operating cost of a jet that's actually ready at your beck and call also includes its crew. That's maybe another $200k/year, or 4% annual interest on $5M principal, so add another ~$5M to the wealth required in order not to go broke this way. (Disclaimer: I unfortunately have neither the practical experience nor finance knowledge to know if I've used the right fully burdened labor costs and multiplier, but it's going to be in that ballpark.)
My experience tells me you're lowballing the crew salaries; your pilot alone draws at least $200k. You probably don't pay for the rest of the crew, but you do pay monthly fees for storage, private airstrip clearances, and ad hoc (big) costs each time you fuel it up, 'rent' an attendant, and cater the flight.
I think it really depends on what you expect from your crew. Let's say you have a rotating pool of four 1-2K hour pilots, with 2 on deck for each flight on a week-on/week-off schedule. Skip the 'attendant', have the crew fuel up, and I think you could probably get away with $200K/yr for the personnel costs, depending on taxes/benefits.
Obviously the number, length, and complexity of flights would have a big impact as well. For 1 or 2 round-trip domestic flights per week, it should be doable.
Source: Had a friend who worked on several private flight crews that operated like this.
Edit: They mostly worked with clients in the $100MM/yr range, who tended to treat their staff like garbage and consequently had high turnover. Über-rich lurkers, YMMV.
Interesting. The calculus is certainly different among billionaires (personal experience sample size = maybe 3 or 4, and no, sadly, I ain't one of 'em myself!).
The billionaires I've met, who by and large own and don't rent, have what I'd call three distinct use cases for private air travel: business, social, and family. Business travel can range from more or less daily to at least 3x per week. Family travel is less frequent and generally limited to whole-family trips, but said trips can and do occur a lot more frequently when you have those means. And then there are what I'd call social trips -- a bucket into which I'd lump anything from charity events, to fundraisers in DC, to golf tournaments, to spur-of-the-moment trips to the house in Aspen or the Hamptons.
Said billionaires, if asked, would consider most of the above to be business trips, because their business lives never stop, and some measure of business is usually baked into most trips -- even if it's a quick stop at one city to conduct business before heading on to the vacation spot.
A commercial pilot at a regional airline makes less than $50,000 a year, many are closer to $30,000. When you get hired by a big airliner (over 1500 hours of flight time) and eventually you get to captain (not co-pilot) then you increase substantially, but nowhere close to $20,000, unless you fly a drug lord in strange places.
My gut tells me that calculus goes by the wayside when you're flying Bill Gates around the world, or even just flying your 'garden variety' billionaire and his/her family around the country. I could be totally wrong here, because I'm neither a jet owner nor a pilot. But I've worked around enough uberrich people in my day to know that their domestic staff gets paid really well, and I have to believe a private pilot cracks into the sixes rather handily. Whether or not he/she cracks $200k is another matter, but it seems likely.
There aren't very many of these jobs going around at any given time, and they involve exhaustive security and background clearances. You are also privy to a ridiculous amount of inside info flying these guys around everywhere, and you need to be trustworthy, i.e., come with references from other billionaires and such. It's a very hard world to break into, and if flying commercial paid better than this did, no one would bother trying.
I have friends who are pilots at the majors who clear $300,000+ a year. Pay has risen substantially since the round of bankruptcies cleared legacy debts. FedEx and UPS apparently pay the most - although I'm not sure why.
This is correct (have family in the industry). Pay for pilots at major domestic airlines is based primarily on seniority and equipment you fly. Captains at the end of their careers flying the larger planes - 747, 777, 787, A350 - are easily clearing $300,000 with great benefits.
Flying cargo is more dangerous than flying people? There is stuff that is banned from being transported in a passenger plane that can be flown in a cargo plane.
I'd also imagine you are logging a lot more hours, facing more intense time pressures, and possibly flying some really irregular or odd-hours routes when you're flying cargo.
Buying a jet creates high paying, skilled jobs which support families, their children's education, and so forth. The downstream effect from the purchase includes the pilot, the airport expenses, maintenance crew, and the taxes on the expenses and all of those salaries.
Not a cent of the money is in any way wasted.
I'm reminded of the Maryland luxury tax, which allegedly crippled their boat building industry and put a lot of middle class people out of their jobs. I say allegedly because I remember the story, not the source that confirmed that there weren't other coinciding factors.
No, I don't believe fuel and depreciation are being destroyed. I think that is the difference between this situation and the broken window parable. They are simply being traded for a service to arrive at destinations swiftly. If we judge purely off opportunity cost the billionaire's time is worth a lot more than the average layman. The extra cost in the goods and services of a private jet may very well be worth the expense to the billionaire.
Fuel and depreciation are only destroyed wealth if there is no lost opportunity by not purchasing them, and that entertainment alone is not a sufficiently worthy value.
Presuming so would also argue that the majority of human endeavor is also waste; everything from entertaining TV shows to having small animals as pets to music lessons to trips to private space flight to works of fiction.
It certainly seems like an example of the broken window fallacy to me. Invoking the creation of jobs to refute the claim of wasting labor is the same illogical argument. It's just redefining bad as good and pretending it is an argument. Jobs are not a scarce resource. Labor is a scarce resource. Capital is a scarce resource. Instead of making cake for the rich, a baker may instead make bread for the poor.
You're moralizing the issue, which points to the fact that most of what you said is nothing more than a personal subjective judgement. For someone with that wealth, it's not usually going to be a wasteful extravagance at all.
Billionaires are like large corporations unto themselves. Their business interests are of the scale of small companies in the S&P 500.
Take Patterson Companies, an S&P 500 company, among the smallest with a $3.4 billion market cap. $3.4 billion in wealth isn't enough to get you onto the Bloomberg global richest 500 list.
By contrast, Henry Kravis of KKR fame, is worth $5.x billion (merely #345 on the billionaire list). It makes perfect sense for someone with his large business interests to utilize a personal jet for optimization of time. It's about as wasteful as an average person in the developed world owning a car. Oh those average people in the developed world, living that luxurious extravagant life in which they own a car (or a home, gasp!).
> most of what you said is nothing more than a personal subjective judgement
Indeed it was, I was offering my own considered opinion, not some absolute universal truth.
No surprise such opinions don't go down favourably on HN though. Amidst all the interesting technical and scientific discussion, there are disappointing overtones of wealth worship, and a weird cult-like following of billionaire entrepreneurs.
Not really. Buffett bought a jet, after calling it indefensible for years, and actually named it The Indefensible.
I reckon it is a good investment for many CEOs. There time is worth FAR MORE to their companies than whatever a jet costs to run, the saved time is invaluable as is the clarity that comes with better conditions when flying.
Buffett, yes. But I remember talking to a group secretary who'd been an executive secretary in the Dot Com heyday. She flew to Paris on the Concorde for bi-weekly meetings.
It's not just door to door time, but schedule flexibility. Not every route has a direct flight, multiple flights per day, etc.
Many people schedule meetings to end right before they have to leave for the airport and catch the last flight back home for another important meeting the next day. Would prefer that someone making decisions impacting the livelihoods of thousands of people each day is focused on the issue at hand, not catching the next flight.
I am a [piston-engine] pilot (only use mine for business a few times/year; most is personal/family travel). However, I spend a lot of time with other entrepreneur pilots and many believe that their airplane is instrumental in their business.
Being able to show up, in-person, walk around, shake hands, interview the customer, look them in the eye, walk their factory floor or otherwise see things first hand and then still make it home to put the kids in bed is far more impression setting than dialing into a video call.
What little I've used mine for business, being able to be out and back the same day, direct, makes it more likely that I'll bother to show up (vs call or visit annually). Video conferences are better than phone calls, but a poor substitute for an in-person visit.
Because video conferencing, at least the kind that most of us can afford without specialist equipment, is still annoyingly unreliable in 2017.
Not saying every meeting has technical issues, or even most of them, but some do and finding a technology that everyone who needs to be in the meeting can use given different corporate standards is a PITA.
It's still also no substitute for meeting face to face over the long term.
I looked up the quote and it seems like it was fornicates though I remember it being fucks. I didn't do a ton of research to verify it though. i remember it as "if it fucks, floats or flies; rent" but I lost the book so I can't look it up easily.
so Felix Dennis is the 'Old Wise Person' refereed to elsewhere in this thread with the same quote? Or is this another one of those quotes like the ones attributed to Einstein i.e. no-one know who said it.
It was in his book "how to get rich" or something similar to that title. Half memoir half advice. It's actually a pretty good read... title notwithstanding. I am not sure if he was he originator of that saying though.
The Audible version is extremely good. The narrator makes it sound like Monty Python, which seems to be an accurate tone for the book. It isn't a parody, but it's definitely irreverent and thoroughly entertaining.
At 14M you are already in the territory where a jet card is definitely something you could afford. If I had that sort of money, I would use a jet card for flights within a continent and go first class commercial for intercontinental (and definitely use VIP terminal or at least meet and greet services).
But at 50M you might be looking at fractional jet ownership already.
Let's pretend someone has arrived upon 14 million in after tax net worth (not the case in OP's scenario).
You want to be set "forever" and not dependent on working again. You'll probably work, but may not be able to replicate the same financial success you experienced previously, so it's hard to count on future income.
There's a debate around what's called the "Safe Withdrawal Rate" which is financial-market speak for: how much of my nest egg can I spend every year and never run out of money, ever?
There's some debate about the exact number but I'll use 3% net of investment fees as a solid number. 3% of 14 million is $420k. You've got $420k pre tax to spend. Fortunately taxes on capital income are usually lower than taxes on earned income, so your tax rate will decline and probably end up somewhere in the high 20s. You'll end up with about $320k after tax to spend. Not bad. But not what most people think about as rich, either. I wouldn't be buying jet cards at that level.
I'm not saying the money isn't important - to the extent it gives you control over your time in the future (a function of spending habits), it is extremely valuable. But there's often a disconnect between high 7 and very low 8 figure net worth and assumed income/perceived lifestyle that people can live, especially if they stop working or were in a field with one-time exits (some entrepreneurs, retired athletes, etc).
$320k disposable every year is very different from $320k post-tax income. With the latter, you'd probably be stashing nearly half of it away for various reasons. The annual spending of a person drawing $320k post-tax from their investments is more comparable to someone earning about $500k post-tax from work.
$14MM isn't really as much as some folks seem to think. As you point out, there are expenses associated with having that much money. There are constraints to what you can spend while still having enough money to work for you, so that you don't have to.
Buying a jet, with just that much money for assets, is probably a bad choice.
You're going to want a house, perhaps more than one. You're going to want someone to manage your assets. You're going to want vehicles. You're going to want to do something to increase your security. You're going to want to keep at least one lawyer on retainer. Things like that...
What that money is enough to do is make more money. Once you have a goodly amount of capital, it becomes much easier to make more money.
So, instead of them buying a jet, they should hire a good finance manager and lots of insurance. I'd also recommend living frugally while using the bulk of their newfound wealth to increase their wealth.
$14MM is good money but it's not really 'fuck you' money. If they insist on buying a plane, I'd recommend a used Piper Cub. That's about all they can realistically afford, at least at first.
> You'll end up with about $320k after tax to spend. Not bad. But not what most people think about as rich, either.
I think that's firmly in what people consider to be rich, and certainly is by any reasonable metric. I may not be 'jet rich', but that's an incomprehensible amount money for 99% of the people on this planet.
> You'll probably work, but may not be able to replicate the same financial success you experienced previously, so it's hard to count on future income.
If that is the case, then you should focus on learning how to invest properly and on achieving, say, 10% annual returns yourself (i.e. without having to pay bank fees for subpar investment advice, which is what you usually get).
Just because you made bank doesn't mean you have to get all conservative. Or at least, I wouldn't.
One example: you could make calculated bets when there's "blood on the streets", e.g. wait (for years) until the market crashes, but when it does, leverage up that $14m to $50m and book a nice 20-30-40% gain.
Or acquire an existing company using mostly debt (and a bit of equity), etc
Nah, 14M isn't enough to practically afford a NetJets card - unless you are making about 5M - in which case you'd expect to have more than 14M. I work on WS and am very senior, so often fly private, and I have a bunch of friends who always fly private. The generally accepted threshold is about 25M with an income of 2-3+ before it makes any sense. I suppose that if you had no other expenses (like a nice house and cars or a thing for vacations or art) you could afford it for a while as your only extravagance, but it isn't that special. In fact, for long haul, 1st on an airline like Cathay or Singapore is better than a G650ER in many ways. For short haul domestic a private jet blows away commercial, but mostly I'd rather spend my money in other ways.
Well sure, but OP used the word "buy," and I felt the need to clarify that full ownership of a private jet is really not a great idea until you've got that precious third comma.
Nah, you can get a small four or five seater jet (eclipse) for pretty cheap these days - https://www.controller.com/listings/aircraft/for-sale/178755.... Maintenance is expensive, but it's doable. Not saying it's a wise purchase, and not a 747, but my very conservative father-in-law is in that realm and loves flying his jet around (he lives in the middle of nowhere and owns a lot of farms, so it's almost a necessity). All in you're probably looking at $1,000/hr to fly it. But then no TSA...
That said, point taken, most people wouldn't buy a jet if their net worth was $15m. I might.
If you cleared $10MM on the sale, you could absolutely buy and operate a baby jet (a 501, 525, 510, Premiere, etc, maybe even a 560) without going broke.
I'm likely to buy one if I ever crack $7MM. $5MM is a bit too snug I think though to contemplate owning a jet personally (unless it's a business enabler).
I worked with one of the cofounders of Intuit. He has what he described as the "Honda Accord" of helicopters. If someone worth many hundreds of millions only has an average helicopter, you probably need many tens of millions for a small helicopter.
I'd say that an R44 is the "Honda Accord" of helicopters, and they're around $500k brand new. With a net worth of hundreds of millions, I'd expect that he went for something safer (with a turbine), like a Bell Jetranger.
You don't even need a $500k net worth to afford a Cessna. Most guys I know that have them are firmly middle class. They have to make some compromises on houses and cars, but it's worth it to them because they love to fly.
Somebody was asking about this on Reddit (/r/flying I think) a few months back. Short answer is that the FAA does not take kindly to receiving payment if you don't have a commercial license, and if you do then there's better work out there than Uber-for-cessnas.
During the Cold War, the USSR stepped up the size and sophistication of its covert operations and intel apparatus dramatically. But the Russians have always believed in espionage as an effective, asymmetrical advantage.
I would still put this into the cultural camp. But I tend to see culture as a reflection of many factors including social, genetics, generational (which includes technological which is itself influenced by the overall culture), evolutionary aspects, and competition factors (which positively influence evolutionary and social aspects vs -say- a dormant passive society), not just social factors which culture is typically view as a product of.
There's a difference between theory and praxis that we need to consider here. Most countries "believe" in espionage; the Russians have always invested in it as a sort of national discipline. Russia 'specializes' in spycraft, you might say.
Team is basically code for what I will call the Three P's: pedigree, pattern, and proof.
* Pedigree: Do you have a track record in this domain? Have you been involved in success stories before? If nothing else, do you check the requisite Stanford/Google/Facebook/Apple boxes?
* Pattern: Does this team more or less resemble successful teams the VC has seen before?
* Proof: Who is vouching for this team? Who else is interested in this deal?
Because Kim's reign is predicated on maintaining credibility with his generals. He does that by rattling his saber and extracting economic concessions from the global community in general (and the US in particular).
Why he needs to go precisely this far is a good question. Possibly because Trump has consistently misplayed his hand and made a series of stupid bluffs that were quick and easy to call. Kim is probably testing the edges of his geopolitical box, figuring that it's a bit roomier than he'd previously calculated.
Where do we go from here? To the very brink, at least if Trump is left to his own (mobile) devices. My guess is he will reroute a CBG or two towards the Korean peninsula and make a lot of bluster about whatever new line he is prepared to draw.
Meanwhile, everyone else works frantically on a backchannel plan that allows both Kim and Trump to save some face. I don't see how this happens unless brokered by China, who emerges the big winner on the world stage.
We get the leaders of Japan, China and South Korea together on a conference call and all agree not to start World War 3 when China decides to push through some "regime change." Why would China do this? Because North Korea is useful to them as a buffer state and a proxy to aggravate the West, but only so long as they can be controlled. Once they pose a real threat to their neighbors, they also pose a real threat to China. And China would rather have the chance to prove its dominance than let US do so.
So, Kim Jong-Un accidentally trips down the stairs and lands head-first on a bullet, along with his entire regime, and we all look the other way, and the US sends everybody lots and lots and lots of money.
The problem with that plan is that China has only marginally more control over Kim than we do. He's a rogue from their perspective too, and their ability to effect a "regime change" is limited by the same "don't poke the nuclear nutjob" problem we have.
There's some truth to that (see the recent Malaysian assassination under the nose of Chinese security), but China very clearly has benefited from the status quo and I would bet that there are powerful people in the NE region of China who do have influence and are pedaling it like mad right now.
We can't know, but there's no reason to suspect they are. Why would China want a North Korea able to nuke Beijing? Why impose sanctions on North Korea if they're following your orders? And when has North Korea ever listened to anyone?
China has been playing a dangerous game in nurturing the Kim regime and allowing it to obtain nuclear weapons. China has benefitted over the years from the presence of a hedge on its border against the US and South Korea, and from the frustrations the Kims have caused for the US, South Korea, and Japan. But it's been keeping a wild animal as a pet in its own backyard, and now that animal's got claws and rabies.
Interestingly enough, I see the emergence of common ground between Washington and Beijing on this issue. Sooner or later, China is going to calculate that Kim Jong-Un is more trouble than he's worth. When that happens, I can see the US and China arranging an unwritten agreement to take out Kim in exchange for the US's acceptance of the legitimacy of the North Korean state.
That would be a bitter pill for the US and its allies to swallow. But it seems preferable to the current course and speed of events, which basically have Kim developing usable ICBMs within a decade or less. To assume that a growing nuclear arsenal will somehow make Kim less of a threat, or endow him with a newfound sense of global stewardship and responsibility, is to place a particularly strange bet.
The people of North Korea suffer greatly in poverty, lack of food, lack of resource, lack of education. The greatest issue is not taking out the head of the snake, it's the millions of refugees that would go to South Korea, flooding one of the most tech-advanced countries with people needing help and livelihood. That's the big tsunami that nobody wants to look at.
I don't think anyone is saying that accepting the DPRK is a good option. I'm saying it may end up being the best worst option available to us at some unspecified point in the next decade or so.
Hopefully we can encourage or entice China into forcing systematic reform on a post-Kim DPRK. I don't think China will all too keen to foster democracy and open markets, so we shouldn't expect too much. But we can probably inveigh on China that an economically and socially stable DPRK is preferable to an unstable one, and that the global soft power China desperately craves will come when it is seen as having at least a shred of concern for human rights. Up to us and China to come to terms on exactly what the bargain would be. But my best guess is that it won't be something we'd currently find conscionable or acceptable.
My point is, from a realist perspective, our bargaining power is only going to incrementally diminish over time. Today we have the strongest hand of cards we are ever going to be delt, and it is a really shitty hand. Tomorrow our hand is going to be even shittier, and China's stronger. You dont need to stretch your imagination too far to see that we have no real way to win this game. Previous presidents have tried checking. Trump has tried bluffing. Sooner or later, someone at the table is going to call.
What do you mean by "accepting?" There are going to be millions of resource-less refugees when North Korea falls apart. The US already "accepts" North Korea in the way that there is lots of foreign aide sent there, and most of it gets gobbled up at the "top of the food chain." Adding legitimacy to a foul empire is not any sort of solution that embarks upon the path to positive change.
"I don't see how this happens unless brokered by China, who emerges the big winner on the world stage."
NK is entirely dependent on China, and every administration has tried to get them to do something about their unruly vassal state. Unfortunately the status quo is what they desire most, so absent escalation they won't do anything.
Imagine you're North Korea. Like you give a fuck if the US starts flying things close to your borders. They know that if the US attacks it's game over for South Korea, so unless the US is willing to throw South Korea under the bus the US won't do a damned thing.
The US will also have to convince China it was attacked in order to get support. Otherwise China will sit out any conflict, as ugly as it might get.
North Korea is really smacking the bear around with a stick here seeing how far they can go before they get bit.
China doesn't want this mess getting any messier. At the end of the day, both Trump and Kim are wild cards, and a simple fuckup could blow nuclear fallout and/or waves of refugees over the Chinese border.
Meanwhile, China can come out a big winner by seizing this opportunity to play the adult in the room while simultaneously embarrassing the US. Trump has handed this win to Xi in a tidy little gift box.
Yes, and North Korea's continued existence is useful to China. If this pet bites the hand the feeds it, China can euthanize it and select a new pet. Plenty of generals ready to take Kim's place and consolidate power over NK with China's assistance.
Imagine that person believes, that if that's not done, alternative is WW3. Can you guarantee that's not going to happen?
What if they actually nuke something, and then China will follow?
Even if we just remove the missile sites, and any sort of nuclear ordinance on the first attack, they don't really have nearly as much as they claim capable of hitting Seoul[1], and even then it can only hit the northern 3rd of the city, which is less populated. The city itself has put a lot of work into infrastructure in preparation, enough bunkers and shelters to house 20 million. Yes, it will get hit, people will die, but as long as no nuke comes down, I'd consider than a win, for eliminating such a dangerous tyrant.
Of course, coming to terms with China will be an entirely different matter.
I don't think you have any idea how many pieces of artillery they have, nor how many tunnels there are going beneath the DMZ. They are ready to cause as much destruction and chaos as their 1950s era arsenal can inflict.
It would take thousands of cruise missiles to even dent their defenses. You can't use bombers until the anti-aircraft systems are down. It's going to take hours to finish the job, and even then who knows what they've launched in that time. Seoul is an easy target, very hard to miss.
I read(1) that only the northern part of Seoul the city is in striking distance of their (somewhat limited in numbers) long range artillery, and that there are lots of shelters e.g. the way the subway system doubles up as being bunkers.
However the civilians part between Seoul and the DMZ, home to millions, is not going to fare exceedingly well - if the North decides to "waste" their ammo on civilians instead of the military that will be hitting them back.
Indeed, it is hard to overstate the damage NK could wreak on Seoul, even in the opening hours of a full scale conflict. Roughly half of the population of SK lives in the greater Seoul metro area. Artillery barages could claim millions of lives, and wreak economic devastation, and we're not even talking about nukes yet. I don't relish the thought of Kim, backed into a corner, fearing total oblivion, his fingers fluttering inches away from the big red button.
I suspect that the US has had the capability to disable ICBMs for some time now. (See patriot missile system and iron dome and remember Regan's star wars project and its not a big leap to make) I think it's just a matter that we don't want to let would be nuclear assailants know until they have already committed.
As much as I hate Trump, none of this is his fault. If we have to address this at the root, it's China, the pink elephant in the room. China, our biggest trading partner and also an authoritarian government (US is probably kicking itself allowing such a horrible actor to be so powerful), is propping up this vassel state and prevent any progress made in the peninsula. If China wasn't propping them up, North Korean government would have already fell long time ago.
So what happens now? Do we just let China keep protecting its puppet until the puppet has shipped a nuclear bomb to a port in Los Angeles? I hope not. I hope the world takes action before then.
North Korea's brinksmanship isn't Trumps fault. The ham fisted diplomacy which has left us with no good options in the face of their escalation absolutely is. The Obama administration managed to keep the system in something like a steady state for eight years, after all. It's getting out of control now for a reason.
That is it. China has full control over its huge border to NK. No way for them to import missile parts unless China is OK with that. Everything of value that NK has and that its elite enjoys is imported from China: Cars, buses, flat-screen TVs, mobile phones...
Plus, China could cut or reduce the oil/gas supply any day to zero.... if they wanted.
I agree. DPRK should keep its nuclear weapons. I am more concerned about nukes in the Indian peninsula when it comes to world security. How good is Pakistan at keeping its nuclear arsenal safe? How good is India? Can we trust them to be competent?
What we should focus on is strengthening the democracy and the economy of ROK so when DPRK fails, ROK can be independent and strong like Germany was in the nineties in its unification. We are nowhere close.
The idea of NK dropping a nuke anywhere is just utter non-sense. It's obvious that all the threats, from both sides, are nothing more than sabre rattling and when you look at the actual actions of nations the US has done really terrible things, while NK has done very little, yet everyone seems to be OK with the US having thousands of nukes under the control of a psycho leader, but can't handle the idea of NK having some nukes to protect themselves.
Personally speaking, I find the lack of relationship between manuscript "pages" and published pages a more solvable problem than it ever has been historically. WYSIWYG visual editors for different ebook and print formats and page dimensions would at least give a working approximation for those who wish to self publish and exercise some degree of QC over the eventual reading experience.
My wild theory is that the reading experience, or RX if you will permit my being cute, is going to become An Official Thing in the ebook era, especially as authors play with the different narrative structures theoretically unleashed by the medium.
Totally agree with your comment about the scene as the atomic unit of the novel, however. Or at least the molecular unit, if you consider the beat to be the atom.
There are really two classes of 'contract work' in the US.
The first class is what I'd call skilled specialists. These are your independent marketing consultants, security experts, developers, designers, copywriters, etc. These folks are usually, but not always, fairly experienced. They take up contracting or consulting as a career choice, and while they have to hustle to stay above water, they accept the hustle as the price of freedom from a corporate life. Often they work remotely. If they're strong and well-networked, they have some leeway in negotiating fees and terms for their services. The catch is that there are very few availabilities on the market for their services at any given time, and most firms don't appropriately value those services. As such, skilled specialists thrive or stumble on the strength of their reputations and rolodexes. Many of them have served for years in the corporate world, or in high level academia. They may have the ability to reeenter corporate America at will, e.g., for a client who really wants to bring them in house.
The second class is what I'd call no-choice contractors. These are most often (but not always) younger workers, whom a company will hire for short term jobs, and then spit back out whenever it's done with them. Many of these workers are placed by temp agencies, or respond to open positions for fixed term jobs, and would probably take full time jobs if the jobs were available to them. This category includes seasonal hires, unskilled laborers, and skilled laborers placed at companies on short-term assignments with the vague (and usually fruitless) hope of ascending to full-time status.
Skilled specialists are a much smaller pool, on the whole, than no-choice contractors. And many skilled specialists are but one wrong decision, or bad run of luck, away from slipping into the no-choice pool.
If you're unfamiliar with US corporate culture, the best way to understand my distinction is to first realize that labor lost the war with capital here about 30-odd years ago. During the Reagan era, labor rights one might take for granted in Europe were effectively positioned here as socialistic, and thus cancerous to the 'competitiveness' (read: profit margins) of the firm. Wall Street and hedge funds, along with prevailing MBA management culture, have convinced us that the flexibility afforded to big firms by contracting out their jobs is necessarily a good thing. It allows them to be more nimble, and to operate with a higher degree of tactical freedom from quarter to quarter, or from year to year. More important, if not all important, is that a contract labor force is better in the short run for returning shareholder value.
This line of reasoning is very attractive, but almost too attractive. What we have now is a system, and a culture, that treats more and more jobs as holes to be filled, and which treats individuals not as prospects to be groomed, but as cogs to be worked hard and replaced when worn out. We have also traded strategic thinking for tactical thinking, and we no longer understand the difference. But that's a rant for another time, perhaps. :)