# Spending Money



## medwards (Feb 6, 2005)

The Sunday Observer on what it takes to be "rich" these days and how the wealthy spend their money:

https://observer.guardian.co.uk/cash/story/0,,2067692,00.html


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## Acct2000 (Sep 24, 2005)

Unfortunately, this may not make them any happier than the rest of us.

To each, his own.


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## guitone (Mar 20, 2005)

Kind of sad, really.


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## eagle2250 (Mar 24, 2006)

My luxury vehicle is a 2001 Ford Explorer Sport Trac; my yacht is a flat bottomed fishing boat, powered by a 15 horse Evinrude; we dined in three "world class" restraurants in the past week, to include McDonalds, Bob Evans and JJ's Gourmet Sandwich Shop; and my "Saville Row" closet inventory includes HSM, HSM, and HSM suits! By gosh, I must be rich!


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## Acct2000 (Sep 24, 2005)

But are you "Young at Heart?"

I'll confess to buying "store brand" groceries.


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## Kav (Jun 19, 2005)

" The rich are different from other people. Yes, they have more money."- conversation between Earnest Hemingway and F.Scott Fitzgerald, who said which argued by literary historians


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## guitone (Mar 20, 2005)

It is not the rich so much at the new rich, they are flashy and love to show the world what they have. Worse than that are the aspiring rich. I can stop now, point, I hope, made.


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## Wayfarer (Mar 19, 2006)

Keep in mind too, with the pound cracking the 2 USD mark, that article is talking $2 million USD and $10 million USD as the benchmarks. Not sure how buying power, tax burden, etc. cross the Atlantic.

I agree, the spending by the new rich and the wannabe new rich can be quite revolting. However, they worked for it, so let 'em buy those gold-leafed marble columns for their entertaining rooms I say! As to happiness, I have read some literature that actually seems to show affluent and/or wealthy people are happier than the general population.


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## BertieW (Jan 17, 2006)

See:

A New Measure of Well-Being From a Happy Little Kingdom

By ANDREW C. REVKIN
Published: October 4, 2005

NYT

What is happiness? In the United States and in many other industrialized countries, it is often equated with money.

Economists measure consumer confidence on the assumption that the resulting figure says something about progress and public welfare. The gross domestic product, or G.D.P., is routinely used as shorthand for the well-being of a nation.

But the small Himalayan kingdom of Bhutan has been trying out a different idea.

In 1972, concerned about the problems afflicting other developing countries that focused only on economic growth, Bhutan's newly crowned leader, King Jigme Singye Wangchuck, decided to make his nation's priority not its G.D.P. but its G.N.H., or gross national happiness.

Bhutan, the king said, needed to ensure that prosperity was shared across society and that it was balanced against preserving cultural traditions, protecting the environment and maintaining a responsive government. The king, now 49, has been instituting policies aimed at accomplishing these goals.

Now Bhutan's example, while still a work in progress, is serving as a catalyst for far broader discussions of national well-being.

Around the world, a growing number of economists, social scientists, corporate leaders and bureaucrats are trying to develop measurements that take into account not just the flow of money but also access to health care, free time with family, conservation of natural resources and other noneconomic factors.

...

Indeed, America's brief flirtation with a similar concept, encapsulated in E.F. Schumacher's 1973 bestseller ''Small Is Beautiful: Economics as if People Mattered,'' ended abruptly with the huge and continuing burst of consumer-driven economic growth that exploded first in industrialized countries and has been spreading in fast-growing developing countries like China.

Yet many experts say it was this very explosion of affluence that eventually led social scientists to realize that economic growth is not always synonymous with progress.

In the early stages of a climb out of poverty, for a household or a country, incomes and contentment grow in lockstep. But various studies show that beyond certain thresholds, roughly as annual per capita income passes $10,000 or $20,000, happiness does not keep up.

And some countries, studies found, were happier than they should be. In the World Values Survey, a project under way since 1995, Ronald Inglehart, a political scientist at the University of Michigan, found that Latin American countries, for example, registered far more subjective happiness than their economic status would suggest.

In contrast, countries that had experienced communist rule were unhappier than noncommunist countries with similar household incomes -- even long after communism had collapsed.

''Some types of societies clearly do a much better job of enhancing their people's sense of happiness and well-being than other ones even apart from the somewhat obvious fact that it's better to be rich than to be poor,'' Dr. Inglehart said.

Even more striking, beyond a certain threshold of wealth people appear to redefine happiness, studies suggest, focusing on their relative position in society instead of their material status.

Nothing defines this shift better than a 1998 survey of 257 students, faculty and staff members at the Harvard School of Public Health.

In the study, the researchers, Sara J. Solnick and David Hemenway, gave the subjects a choice of earning $50,000 a year in a world where the average salary was $25,000 or $100,000 a year where the average was $200,000.

About 50 percent of the participants, the researchers found, chose the first option, preferring to be half as prosperous but richer than their neighbors.

...

Another one

https://www.mindfully.org/Reform/2004/Happiness-Tashi-Wangyal8oct04.htm

And

https://www.eurekalert.org/pub_releases/2004-09/aps-wdn092404.php


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## agnash (Jul 24, 2006)

*Happiness*

I have a tolerant wife (except for sweater vests) and two wonderful children. Not a lot of spending money, but plenty of happiness.


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## BertieW (Jan 17, 2006)

This one may also interest some of you. 



Underpricing of Natural Resources Relative to Social Cost 
The level of consumption depends not only on market interest rates, but also 
on the price of current consumption relative to its social cost or, more specifically, 
the price of consumption goods relative to capital goods. To the extent that 
consumption goods are priced below their social cost, consumption will tend to be 
excessive. 
Some natural resources are consumption goods, others are direct or indirect 
inputs in the production of consumption goods, and many are both. The under- 
pricing of natural resources may contribute to the pricing of consumption goods 
below their social cost. Such underpricing also alters the relative prices of different 
consumption goods, thereby leading to inefficiencies in the composition (as well as 
overall level) of consumption: too much consumption of resource-intensive goods 
and services relative to consumption of other goods. Thus, when natural resource 
inputs are priced below social cost, both the overall level and the composition of 
consumption can be affected in ways that lead to excessive natural resource use. 
The underpricing of natural resources can stem from at least three sources. 
First, insecure or poorly defined property rights can lead to excessively rapid 
resource exploitation if the exploitation does not require much prior investment 
(Bohn and Deacon, 2000). Second, natural resource underpricing can arise from 
the failure of the market to incorporate the (negative) externalities associated with 
the use of natural resources. Examples of such externalities include the various 
damages stemming from the use of fossil fuels (such as acid precipitation or climate 
change), and the loss of such ecosystem services as flood control, water-filtration 
and habitat provision when wetlands are drained for conversion to farms. 

Third, use of natural resources may be underpriced because of government 
subsidies. The World Bank’s 1992 World Development Report (Figure 3.2) examined 
fossil fuel, electricity and water prices in 32 developing countries. In all but three 
of those countries, subsidies caused prices to fall below cost, even before account- 
ing for potential externalities. Similarly, the International Energy Agency (1999) 
has estimated that in India, China and the Russian Federation, full-cost pricing 
would reduce energy consumption by 7, 9 and 16 percent, respectively. In these 
countries, most of the departure from social cost pricing is attributed to energy 
subsidies. For estimates of aggregate global subsidies on the use of environmental 
and natural resources, see Myers and Kent (2000). 
158 Journal of Economic Perspectives


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## PennGlock (Mar 14, 2006)

BertieW said:


> This one may also interest some of you.


Seems like yet another take on the same Malthusian nonsense that's been circulating for 300 years. This paper takes the B.S. further by alluding to some kind of psychological component into their definition of utility, which allows them to fudge several conclusions through the rest of the paper.

I feel like they're underestimating technology in a couple of ways

The model assumes capital assets' effect on utility stays the same through time. I have trouble imagining a future where non-capital assets would not slowly begin accounting for a larger share of utility relative to capital assets-resulting from technological increases- balancing out to some degree any decrease in capital assets. The authors make no provision for the decreasing effect of capital assets on on utility through time. I dont have any figures, but I feel like capital assets as a % of total assets has shrunk in the last 10-15 years.

Then their is the role of technology in their sustainability criterion. The whole system is so sensitive to technological growth that it seems pointless to even talk about other variables. If you throw something close to exponential growth in for technology, sustainability just doesn't become a problem.

Another thing I was thinking of is the existance of forward/futures markets for some of these resources. If you believes these markets are efficient, shouldn't their mere existance ensure mankind stays on the optimal consumption path?

These are just the musings of a layman. Feel free to set me straight if Im completely wrong. Whenever I see these models of the social sciences, they just seem so easily... fudgible.


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## Martinis at 8 (Apr 14, 2006)

IMO this is a poor article on wealth. Seems to me the author typifies the "income" rich instead of the "asset" rich. For the American case, the author should read _The Millionaire Next Door_.

Cheers,

M8


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## BertieW (Jan 17, 2006)

PennGlock said:


> Seems like yet another take on the same Malthusian nonsense that's been circulating for 300 years. This paper takes the B.S. further by alluding to some kind of psychological component into their definition of utility, which allows them to fudge several conclusions through the rest of the paper.
> 
> I feel like they're underestimating technology in a couple of ways
> 
> ...


In your critique you use "feel" or "seem" repeatedly, the same fudgible qualities you accuse the Nobel Prize-winner Arrow of using.

I think it's folly to continue treating ecological resources as externalities to a reified market system. When you try to account for these typically "bracketed" values, the model starts breaking down. In other words, the disjuncture between social and marginal costs is not really resolved by the free market. But if you squint and click your heels...it just...might...work.


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## Wayfarer (Mar 19, 2006)

[email protected] has hit exactly on what I am often trying to discern between here except I use the terms "wealthy" and "affluent" where "wealthy" = net worth and "affluent" = cash flow. I am willing to bet there is high "happiness quotient" difference between the two, with the wealthy having higher happiness. Being affluent (or high cash flow) takes much of one's time, causes stress, etc. but unless born wealthy, one must go through a period of high cash flow to generate wealth. The sad thing is, many waste their affluence on over-consumerism and never manage to attain wealth.

Bertie:

I have read some of your posted link, about half. I want to check out some of the backgrounds of the authors/researches, as I have a sneeking suspicion most of them are left wingers, hence I will view their work with caution. One flaw I have already noted is in the income scenario in the public health students. The inference drawn is position in society and prosperity. The analysis was incorrect. You are not twice as prosperous at 100k with a mean of 200k vs. 50k with a mean of 25k. You should be twice as prosperous in scenario two vs. scenario one.


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## BertieW (Jan 17, 2006)

Ferret out the truth, Wayfarer. We know you will. I have no clue about their politics. And which sources are you referring to? Arrow et al.? The WSJ people? All of them?

Regardless, don't mistake these as "my" positions without reservation. Simply grist for the Internet mill.

I do stand by the view that environmental externalities should be accounted for, and that "efficient" markets work a lot better when we don't make such troublesome assessments.



Wayfarer said:


> [email protected] has hit exactly on what I am often trying to discern between here except I use the terms "wealthy" and "affluent" where "wealthy" = net worth and "affluent" = cash flow. I am willing to bet there is high "happiness quotient" difference between the two, with the wealthy having higher happiness. Being affluent (or high cash flow) takes much of one's time, causes stress, etc. but unless born wealthy, one must go through a period of high cash flow to generate wealth. The sad thing is, many waste their affluence on over-consumerism and never manage to attain wealth.
> 
> Bertie:
> 
> I have read some of your posted link, about half. I want to check out some of the backgrounds of the authors/researches, as I have a sneeking suspicion most of them are left wingers, hence I will view their work with caution. One flaw I have already noted is in the income scenario in the public health students. The inference drawn is position in society and prosperity. The analysis was incorrect. You are not twice as prosperous at 100k with a mean of 200k vs. 50k with a mean of 25k. You should be twice as prosperous in scenario two vs. scenario one.


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## Wayfarer (Mar 19, 2006)

BertieW said:


> Ferret out the truth, Wayfarer. We know you will. I have no clue about their politics. And which sources are you referring to? Arrow et al.? The WSJ people? All of them?


The first random link of yours I looked at was by Dr. Ed Diener. Career university prof in pyschology, working for a well known ultra-liberal campus (Urbana-Champaign). Yes, I cannot see why I might at least wonder if there was a slant to his work, can I? https://www.psych.uiuc.edu/~ediener/homepage2005.htm

I will say though, what I have read so far indicates seems to be balanced stuff.



BertieW said:


> I do stand by the view that environmental externalities should be accounted for, and that "efficient" markets work a lot better when we don't make such troublesome assessments.


I have always acknowledged externalities, both positive and negative. Why would you infer I am suddenly changing that stance?


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## BertieW (Jan 17, 2006)

Wayfarer said:


> The first random link of yours I looked at was by Dr. Ed Diener. Career university prof in pyschology, working for a well known ultra-liberal campus (Urbana-Champaign). Yes, I cannot see why I might at least wonder if there was a slant to his work, can I? https://www.psych.uiuc.edu/~ediener/homepage2005.htm
> 
> I will say though, what I have read so far indicates seems to be balanced stuff.
> 
> I have always acknowledged externalities, both positive and negative. Why would you infer I am suddenly changing that stance?


Did not mean to imply that at all. Merely stating my position on this point.

Can you substantiate your claim about Urbana? I'm not saying you can't, but since you brought up the school's politics... How do we measure something like this?


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## Wayfarer (Mar 19, 2006)

BertieW said:


> Did not mean to imply that at all. Merely stating my position on this point.
> 
> Can you substantiate your claim about Urbana? I'm not saying you can't, but since you brought up the school's politics... How do we measure something like this?


Oh I am sorry, I did not realize I needed to provide citations with each thing I posted. I do believe you are in that general area, are you not? You have no first hand knowledge of this? I will dig up something after my first meeting today.

I notice you did not address the logical error I pointed out in the public health student scenario. Could you either confirm my analysis was correct (and the presented one faulty) or detail why indeed they are correct and I am wrong.


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## Laxplayer (Apr 26, 2006)

I went to the U of I. I never thought of it as ultra-liberal.


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## Wayfarer (Mar 19, 2006)

Laxplayer said:


> I went to the U of I. I never thought of it as ultra-liberal.


At that campus LAX? Maybe "ultra" was hyperbole but I have several aquaintances that went there and they indicated it was certainly left of center, yet a very fine university.


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## Laxplayer (Apr 26, 2006)

Wayfarer said:


> At that campus LAX? Maybe "ultra" was hyperbole but I have several aquaintances that went there and they indicated it was certainly left of center, yet a very fine university.


Aren't most colleges and universities in the U.S. left of center?


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## BertieW (Jan 17, 2006)

Laxplayer said:


> Aren't most colleges and universities in the U.S. left of center?


I'd have to say you're correct in that, Lax. I attended U of I as well, and while certainly there was a good number of typical party animal types among the students (we considered that "cultured"), I never thought it was anything like, say, Berkeley, which I've visited repeatedly.

In fact, one could argue that U of I, claiming the largest Greek (as in "Panhellenic") population might be expected to be somewhat less liberal than other schools. If, of course, we assume that the majority of fraternity and sorority members are not fomenting armed rebellion but instead are pursuing their studies with a mind for corporate citizenship. That was the case when I was on campus at least.

https://www.illiniphc.com/page.php?page_id=1132


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## Wayfarer (Mar 19, 2006)

Laxplayer said:


> Aren't most colleges and universities in the U.S. left of center?


Apparently some will disagree with that statement. I have to say, that the majority of non-business/economic type faculty I have ever run into are mainly left of center, far left in many cases. Ditto the student body, but I attribute much of that to their youth. I too was quite willing to spend other people's money when I was younger on what I felt to be moral and proper. Like most people though, I got a job and started paying taxes, and like a good Pavlovian dog, paying taxes conditioned me not to want to pay more than was absolutely needed!


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## BertieW (Jan 17, 2006)

Wayfarer said:


> Oh I am sorry, I did not realize I needed to provide citations with each thing I posted. I do believe you are in that general area, are you not? You have no first hand knowledge of this? I will dig up something after my first meeting today.
> 
> I notice you did not address the logical error I pointed out in the public health student scenario. Could you either confirm my analysis was correct (and the presented one faulty) or detail why indeed they are correct and I am wrong.


Citations only necessary when making grand and seemingly unsupportable assertions.

As for your point about the public health scenario, I feel no need to defend those putting forth those claims. The claims are their own, not mine. I introduced the point merely as fodder, not as an article of faith to which I adhere. You may be right in your assessment. If so, I tip my hat.


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## Wayfarer (Mar 19, 2006)

BertieW said:


> Citations only necessary when making grand and seemingly unsupportable assertions.


I did admit that "ultra" might be hyperbole, but if we wish to define this situation as the political leanings of the faculty, I think anyone can find a plethora of data on that. Did you require I dig up something on the political leanings of university faculty?



BertieW said:


> As for your point about the public health scenario, I feel no need to defend those putting forth those claims. The claims are their own, not mine. I introduced the point merely as fodder, not as an article of faith to which I adhere. You may be right in your assessment. If so, I tip my hat.


So then what you are saying is, you are constantly starting threads with articles and research that you do not necessarily agree with, offer us no opinions of your own, and merely lie as a snake in the grass looking to critique those of us willing to actually take ownership of a position? I have long suspected you of possibly having adopted this tactic, first perfected by a former member, and shall now modify my approach to your threads accordingly.


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## Laxplayer (Apr 26, 2006)

BertieW said:


> I'd have to say you're correct in that, Lax. I attended U of I as well, and while certainly there was a good number of typical party animal types among the students (we considered that "cultured"), I never thought it was anything like, say, Berkeley, which I've visited repeatedly.
> 
> *In fact, one could argue that U of I, claiming the largest Greek (as in "Panhellenic") population might be expected to be somewhat less liberal than other schools. *If, of course, we assume that the majority of fraternity and sorority members are not fomenting armed rebellion but instead are pursuing their studies with a mind for corporate citizenship. That was the case when I was on campus at least.
> 
> https://www.illiniphc.com/page.php?page_id=1132


Good point, Bertie. I would also argue that the university's large agricultural program would tilt the school towards the right.

Wayfarer,
I'm wondering if you have the UIUC confused with the U of I-Springfield, IL. UIS (formerly known as Sangamon State University) was once considered to be a radical university. Ward Churchill is an alum. https://en.wikipedia.org/wiki/Ward_Churchill


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## BertieW (Jan 17, 2006)

Wayfarer said:


> I did admit that "ultra" might be hyperbole, but if we wish to define this situation as the political leanings of the faculty, I think anyone can find a plethora of data on that. Did you require I dig up something on the political leanings of university faculty?
> 
> So then what you are saying is, you are constantly starting threads with articles and research that you do not necessarily agree with, offer us no opinions of your own, and merely lie as a snake in the grass looking to critique those of us willing to actually take ownership of a position? I have long suspected you of possibly having adopted this tactic, first perfected by a former member, and shall now modify my approach to your threads accordingly.


Ah, no. That's not what I'm saying. I don't "constantly" start threads like this. In this case, I came upon a story/study that touched on a point someone else in the thread suggested, so I threw it into the mix to get batted around like most other things do. God help us if everything we read online and post for consideration is something we have to defend to the death. That seems just silly.

Here. Maybe this will help settle things down: I do think it is worth further exploring the idea of devising a "happiness quotient" as the article noted. Exactly how something like this is done, I don't know. I do think that in America an awful lot of energy and value is placed, almost exclusively, in money and making more of it at any cost. Perhaps it's worth leavening our values to consider ways to live well while not despoiling our communities, air and water. Oh, and by being nicer to each other.

In that spirit, I salute you, Wayfarer, and wish you the best.


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## Wayfarer (Mar 19, 2006)

LAX, you have the right of it, that is exactly who I was thinking of when I made the "ultra" statement.

Bertie:

I do agree, what is "happiness" and what makes people so is an important area to study. It does seem too many in the US, Canada, the UK, and some other places put too much emphasis on spending and work to leave much time to really be happy. In any given week, probably my happiest moments are in doing things that in and of themselves are free, such as playing my pipes or sitting in my yard at night, which overlooks a nature preserve, and listening to the coyotes howl. Of course these two acts, which are free in and of themselves, took a certain level of affluence to achieve. However, I can repeatedly sit outside or play my pipes for free, vs. needing to lay out cash at each occurance as say, a shopping spree or a fancy dinner out requires.

I think we are in more agreement than not on this topic.


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## 16128 (Feb 8, 2005)

Wayfarer said:


> However, I can repeatedly sit outside or play my pipes for free, vs. needing to lay out cash at each occurance as say, a shopping spree or a fancy dinner out requires.


I think people torment themselves too much by comparing their lot (ability to spend) to others.

The ingredients for happiness are the same no matter what you have, IMO they are:

1. Appreciation for what you DO have
2. The ability to enjoy yourself despite occasional adverse circumstances.
3. A stable family life and friends
4. Health, and if not, application of #2.
5. Meaningful work, if possible. Or the ability to see your work as meaningful and significant.


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## Laxplayer (Apr 26, 2006)

VS said:


> I think people torment themselves too much by comparing their lot (ability to spend) to others.
> 
> The ingredients for happiness are the same no matter what you have, IMO they are:
> 
> ...


I agree, VS.


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## Wayfarer (Mar 19, 2006)

https://money.cnn.com/magazines/fsb/fsb_archive/2007/04/01/8403844/index2.htm

Keep in mind though, this is something a rather immature and spoiled millionare did. The rest of us would just call this "work".


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## zegnamtl (Apr 19, 2005)

guitone said:


> It is not the rich so much at the new rich.......


Spot on,
I have several very rich clients, a few billionaires in the bunch, a few are second and third generation, they would never consider for a split second, to act like this.


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