I was reminded recently in comments of my life in corporate America in the 1990s doing sales and marketing. Hard work never got us anywhere. It sort of reminds me of the teachers who tell students to "just try harder!" This has never made any sense to me. You can push harder or pull harder but try harder? No. Trying involves patience and dedication but not effort as we have conventionally thought about it. Not "harder."
Both of the companies I worked for won clients as a result of two things. The first was just luck. I would happen across some bit of information (mostly on accident) and we'd have a new client. The second was who I knew...which was a lot of people. We built a lot of business from networking which brings us to numbers 3 and 4 of the Secret Weapons of the Super Rich: Executive Perks and Networking.
Senior executives at large companies typically receive not just a salary but bonuses, grants of stock, and stock options. They may have the ability to defer some of their compensation until future years, which can help with tax planning.Corporate leaders may also get help with tax preparation, along with free medical care and valuable insurance benefits.
We've talked about this one before. One very clear advantage the wealthy have over everyone else is they are able to structure how they are paid so they pay less in tax. This is why you never hear any talk of flat taxes any longer--something I would be in favor of today. The wealthy would end up paying more than they do now if there was a flat tax. The wealthy also enjoy the advantages of being able to hire accountants and lawyers--something your average Joe can't do. I had many clients who would regale me with stories of how they were going to save money while passing it on to their customer.
Senior executives at large companies typically receive not just a salary but bonuses, grants of stock, and stock options. They may have the ability to defer some of their compensation until future years, which can help with tax planning.Corporate leaders may also get help with tax preparation, along with free medical care and valuable insurance benefits.
We've talked about this one before. One very clear advantage the wealthy have over everyone else is they are able to structure how they are paid so they pay less in tax. This is why you never hear any talk of flat taxes any longer--something I would be in favor of today. The wealthy would end up paying more than they do now if there was a flat tax. The wealthy also enjoy the advantages of being able to hire accountants and lawyers--something your average Joe can't do. I had many clients who would regale me with stories of how they were going to save money while passing it on to their customer.
The topic for discussion at the World Economic Forum in Davos, Switzerland, in January is "shared norms for the new reality." Sound sleepy? For most of the rich and powerful in attendance, the real payoff is an opportunity to network with other rich and powerful individuals.
Sounds great, right? But honestly this new reality is simply adjusting the market to sell more to each other as opposed to the vanishing middle class. I can only imagine the tittering and guffawing that goes on Bill Clinton shows up at this event (as he has in the past) and talks about the engine of the middle class.
I guess I'm laughing as well because this is how we got our business back in the 1990s: networking. There was no hard work at all involved...just my very social personality. We got new business because of the people that I knew who trusted me. We lost business because we weren't in the "club." This was more true of the first company I worked at as opposed to the second. The first was run by two guys who were just terrible with clients. We pitched to every major company in town and we only were chosen from 2 of them. And that was to do smaller, less paying work.
Later, when I and two others split off from the first company we did better but we still weren't in the right networks and it was very clear we never would be. This is why I also laugh at people who think that small business is being fucked over by the government. Small business is being fucked over by the in crowd. They don't want small businesses to succeed, on the whole, because it leaves less money for them. Greed really kicked into high gear in the 1990s culminating in the nuclear level we have today.
They are able to do this because they are very strict about who they let into the club. It ain't Joe the Plumber, that's for sure. And yet he (and countless others) blame the government and President Obama who actually gave them tax breaks. Why is this?
Because their love of the dream (working harder and then making it) is too powerful to ignore. Like many other myths, they simply believe.
9 comments:
If you look at the people who make the most money in companies, it's not the ones who actually do any work. It's wheeler-dealers who sit around schmoozing all the time. They "work hard" in the sense that they spend a lot of time on the job, but it's in settings that most of us don't consider to be "real" work: sitting around in meetings, traveling around the country, meeting clients in bars and restaurants and sporting events, telling other people what to do, making unreasonable demands of employees (because they don't really understand the issues involved).
Not all execs are like that -- some of them actually started the companies they run. But the vast majority of CEOs are just hired guns. They may not even understand the business they're in -- like when Apple hired that guy from Pepsi -- but there's this delusion that "talent" trumps all. When Steve Jobs regained control of Apple it went from slowly drowning to being a major innovative force in the industry as well as making lots of money.
CEOs make a lot of money not because they deserve or earn it, but because the boards and compensation committees are made up of other guys in the same position: they all sit on each other's boards and comp committees. So you have all these guys standing around patting each other on the back and jacking each other's salaries up.
On the other hand, Mark, you're wrong about it being impossible for regular people to work hard and do well. The majority of millionaires in this country got there by working a regular job for 40 or 50 years and saving all their money. True, they are just barely millionaires -- their net worth after that 40 years is maybe $1-2 million and includes their houses. But they can retire in comfort and not have to worry about starving in their old age.
But this is very hard for most people because American society is driven by consumption. Everyone needs a better car, a bigger house, restaurant meals, a new iPod, a lake cabin, a boat, a load of crap toys for their kids every Christmas which they immediately destroy, a new car for their kids when they hit 16, and on and on. And they need it all now, so they buy it on credit. They're always in debt, paying usurious interest rates. And then a third to half of them get divorced and waste even more money on lawyers and harassing each other in court over alimony and custody for the next 10 or 20 years.
People who avoid the whole keeping-up-with-the Joneses treadmill can do quite well, even though you'd never be able to tell from external factors.
But the sad truth is that if everyone lived that way American business would collapse. Our economy is addicted to excessive consumption, in the same way that the Chinese economy is addicted to excessive production and unfair trade practices.
I can't hire an accountant or a lawyer? News to me.
I've always referred to it as working smart, not working hard. Take investing for example...my thinking is that you can end up with a whole lot of money if you do just a few things right while avoiding serious mistakes.
Funny that you should mention Apple there blk. Neither Jobs nor Wozniak, who founded and built the company had an a MBA from an Ivy League school. They were not part of the 'frat' so to speak. It was the Board of Directors that wanted a 'professional' as CEO, someone with the right credentials - and so in came Sculley. Funny how that didn't work out so well.
But aside from that, what I want to know from one of the barking lefties here is this - what did Jobs and/or Wozniak do to you or anyone you can identify by name that abused you (or the other), so that they could become wealthy. Or what abuse did they inflict after becoming wealthy that was necessary or helpful in them maintaining that wealth.
Because that is your whole fucking premise you 'tards - that the rich only get and stay rich by, as M so eloquently puts it fucking you over. So please, put up or shut the fuck up.
C'mon - ONE of you? M, blk, oojc, jeff c, daniel, brendan, angela, tess, dick nixon - surely at least ONE of you can put up.
This is why I also laugh at people who think that small business is being fucked over by the government.
Admittedly, not the FEDERAL govt, but here is the story of Buck Knives. Certainly fucked over enough by the State govt of California that they moved. At least they didn't go offshore.
In 2005 the company relocated to Post Falls, Idaho.[8] Leaders of the San Diego business community considered this move a blow to San Diego County's economic landscape and a symbol of the state of California's problems in attracting and keeping businesses.
Then you trot out the old, moldering corpse of the zero sum game:
They don't want small businesses to succeed, on the whole, because it leaves less money for them.
Funny how it isn't greed for those small businesses to want market share and profits at the expense of other companies (big or small). Uh, why is that exactly?
You know, when it's all said and done, you're just better off quoting articles you like - because your analysis and commentary add zero value.
This is just too much fun...
So what is the World Economic Forum all about - besides the caviar and champagne and back-scratching for the world's rich?
The World Economic Forum (WEF) is a Geneva-based non-profit foundation best known for its annual meeting in Davos, Switzerland, which brings together top business leaders, international political leaders, selected intellectuals and journalists to discuss the most pressing issues facing the world, including health and the environment.
Holy smokes - the WEF is a non-profit?
They have politicians, intellectuals and journalists too?
They talk about world issues and not just business domination?
Did Jobs or Woz ever go to Davos before they were fabulously wealthy?
Dammit! Google ate another comment. Oh, well guess I'm getting what I pay for. Or is Google (and it's rich owners) deliberately fucking me over?
Oh noes! Rich people actually get together and, gasp talk to other rich people. And about money to boot! The horror!
So, it's the rich person's guilds that are keeping the lower classes out? And it's a 'new reality' development? Unlike the guilds of the renaissance somehow. Also much unlike labor unions that keep the work away from those who aren't members.
you never hear any talk of flat taxes any longer
No, you just hear about raising the taxes on the rich...which makes -
being able to hire accountants and lawyers
A productive exercise. See, joe average doesn't need an accountant or lawyer when filing a 1040ez. But since we for some gawd awful reason won't talk about a flat tax, have a in no possible way 'fair' progressive tax system, that has been filled with exemptions to 'promote' certain financial activities - then accountants and lawyers become a good return upon investment.
Does it make sense to spend $1000 on an accountant in order to keep 1% of your income? Only if you make more than $100000 a year. That's what you're missing there.
ability to defer some of their compensation until future years
Unlike a 401k....
not just a salary but bonuses, grants of stock, and stock options.
A stock option is an option to buy stock. Possibly at a preferred price - but it still has to be bought. I get bonuses. My mangers get bigger bonuses - do you expect different? And a grant of stock? As part of my compensation package? No thanks, stocks are a gamble, and I would rather gamble on my own informed choice of stocks rather than having my savings and income tied to the same company.
I had many clients who would regale me with stories of how they were going to save money while passing it on to their customer.
Which is silly. Company A and company B both save money. Company A 'passes' (I'm assuming you mean they don't pass the savings on to their customers) it along while company B chooses to take advantage of lower costs in order to reduce prices. All other things being equal company A loses business to the smarter company B. That's called competition Marxy, and it's how the market self corrects.
adjusting the market to sell more to each other as opposed to the vanishing middle class
Riiiight. Because 1% of the rich people buy 80% of the TVs, cars, toasters, refrigerators, clothes, furniture, cell phones and food.
Sometimes I don't know if you even think about what you say - or just spout off the latest whackalopian talking point.
Because 1% of the rich people buy 80% of the TVs, cars, toasters, refrigerators, clothes, furniture, cell phones and food.
Yeah poor M can't make up his mind - is the middle class getting fucked over (and priced out of the market), or is the middle class failing to consume enough to keep the economy humming? That's not even taking into consideration the other leftie concern that the middle class was/is too driven to consume - needlessly. All that crass materialism run amok.
Also you sound as if you think the sales and marketing people are the only people who work there. Yes, luck and who you know are important to a salesman, that's hardly surprising. And that doesn't change, whether you're selling the product to a customer, a loan application to the bank, or a merger deal to a multinational.
Are you aware that once you get away from retail sales, you're usually also talking about the guys who install _____, and the guys who maintain it? Luck and who you know are hardly ever a significant part of those guys' jobs, no matter what they're installing or maintaining.
You seem to act as if those guys don't even exist.
Or maybe luck and who you know is a bigger factor if it's a union shop.
Come ON lefties. Isn't one of you going to defend your hatred of the rich? Isn't there one of you who will provide an example of a rich person fucking you over? Are you THAT easily shut up?
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