[nradov]

That perception bears almost no relation to reality. The most reliable path to building a modicum of wealth has remained the same for generations: start a small business in some boring field and work your ass off for 80 hrs/wk.

Building wealth through real estate is also still totally possible outside of the HCOL metro areas. Try unfashionable areas like Cleveland or Oklahoma City. And let's not have any low-effort comments claiming that there are no good jobs available in those places: the actual economic data on median income to housing price ratios tells another story.

[taurath]

Just start a small business, or build wealth through real estate is a take that indicates some severe divorce from the reality of poverty in America.

You need both capital (which folks don’t have access to) and the ability to absorb risk (which folks don’t have access to).

Similar advice is in the vein of just stay with your parents for free, have a relative invest $50,000 in your business to start it up.

This runs counter to your internal narrative as a self made person I’m sure, but have you ever worked for 40 hours a week and not had anything left after paying for your share of rent, food and utilities? This is the reality that doesn’t seep into forums like this, where the majority is wealthy, college educated, and broadly privileged in some way either through exceptional talent or background.

> let's not have any low-effort comments claiming that there are no good jobs available in those places

I will bite - homeownership is indeed higher in the rust belt, but many folks struggle to find jobs that meet the median without giving up their health and bodies, if they can find steady work at all.

[jcranmer]

Upward mobility still occurs in the US, at all levels. While the advice is difficult, almost impossible, for most to apply, it is sometimes applicable.

One of the main issues is that a lot of advice is presented as an unconditional, absolute guarantee to success. A college degree was never a guarantee of future success (contrary to great-grandparent's assertion), but the push to get everyone to get a college degree has rendered its utility as a helpful marker much more useless. Similarly, the ability to start your own business is difficult for most people, but even for poorer individuals, it is possible to start, say, a cleaning service with very little assets. (At the same time, such businesses are unlikely to make a whole lot of money at the end, but you might be able to move from working class to middle class, e.g.). A lot of contractor businesses--your plumbers and the like--are going to be from the lower middle class or middle class, and you can make some good money there, although that is also likely to be at the cost of your health much sooner than you expect.

[taurath]

> Upward mobility still occurs in the US, at all levels.

This is not a super relevant statement as it can be made with a single example - the rate of mobility is down relative to when those who'd give the advice experienced (which has been compounding for at least the last 30 years, some say since the 1970s).

According to one economist in 2020, in the U.S., absolute mobility, the chance a child earns more than their parents, has fallen from about 90% to roughly 50%. Source: https://www.economist.com/united-states/2020/05/16/two-leadi...

> the push to get everyone to get a college degree has rendered its utility as a helpful marker much more useless

Social segregation also plays a really important role too, and cross class relationships have plummeted - as someone who is doing well but didn't go to college, the relationship building in college is a factor that will work against me my entire life.

I would never say that upward mobility is impossible, or that its not worth it to strive for it. I am saying that dismissing headwinds due to no guarantee of success doesn't really take into account severely constrained actual access to opportunity that continues to become more constrained over time.

[6510]

> Similarly, the ability to start your own business is difficult for most people

Ah right, after a 14 hour shift you've left your car half way as that was how far she could take you. You are now on your knees with the god of all migraines, around you are small mountains of laundry as you fail to repair the washing machine while your ramen gets cold. Your mind locked in a loop, if I pay this bill how will I buy food, I need to pay this bill, I need to buy food. Then POOF suddenly it strikes you that you could start your own business. Adrenaline rushes though your veins. The whole business lasts about 20 seconds before you wake up in the laundry, shit what time is it, fk I have to walk to work.

[nradov]

If you try hard enough you can always find a plausible sounding excuse why failure is inevitable. And yet on Saturday at the neighborhood Independence Day party I met a guy who immigrated from Ukraine about 25 years ago with no money, no college education, no family support, and no English language skills. Instead of complaining he just went to work and while not exactly wealthy he's now doing fairly well as an electrical contractor.

Life is usually a struggle. No one should expect any different.

[taurath]

> you can always find a plausible sounding excuse why failure is inevitable

I think this starts to make an inferred narrative about how failure is inevitable and that its excessive complaining, when there is large amounts of data showing how it is genuinely more difficult.

Just your Ukrainian example, it was cheaper to live 25 years ago, the cost of college has gone up ~180%. Since 2001 incomes have gone up 64% while housing has gone up 136%, healthcare up 180%, food up 100% and transportation up 120%. Thats a different playing field.

The point being made isn't that failure has any inevitability. Most people will be able to make it work enough to live, and those who can't due to choices, trauma, disability, drug use, or excessive bad luck are the homeless people you see begging on freeway offramps and intersections. At the economy level its a numbers game. It will never be impossible to make it big, in the same way that some people with every single advantage will end up on the street without a penny.

[mothballed]

Rule of thumb for survival vs sober reality. nradov provides the mindset needed to survive, you provide the wisdom of risks and challenges to be aware of.

Today a dreaming Ukrainian is quite likely to instead get ripped away by conscription kidnapping teams and used as cannon fodder on the front, and not even make it to America. The reality changes but the rule of thumb is still good, you do the best with what you have and make yourself ready for opportunity you might not ever get.

[taurath]

My mindset in the workplace is not about these facts, its more about what I present to people to help their worldview and advocate for a world where we don't just hold qualitative data (those who are doing well are likely to meet others who are doing well, people who vacation on a Yacht do not interact with people who don't take vacations), but also the trend and to advocate for policies that address the growing grotesque inequality and opportunity gap. Its hard to make people empathetic for others who they don't see, which is why I try to draw a line to the homeless population.

Everyone, everywhere, tries to optimize their local situation as best as they can with the skills and knowledge they have available. The further one gets into understanding how mental health works, the more one realizes that mindset is a result of experiences usually more than it is of willpower. People in poverty are exerting willpower to the maximum every single day. People are anxious for a reason, and depressed for a reason - these do not pop up like some contagious airborne virus, they're a result of the setting and society and their place in it.

[throwitaway222]

Or you can think differently, 4 families can buy a 1 acre land plot, 5 or 6 children and a couple dads then start building a modest house (maybe 1200sqft) and then resell the entire thing in about a year for 4 times the land-only price. Suddenly 4 families that were making 25k each per year have $1.3m from some tiny plot they bought in the Santa Cruz mountains. Then they do it again and again and again. This is LITERALLY not even that hard to do today.

[mothballed]

The step of building the house for your family at an incredible discount vs buying can work a lot of places. It's not very repeatable to do it commercially though. I DIY'd my entire house for extremely cheap but even in one of the most generous spots in the USA they only allow me to build a house once every 5 years and I have to file a sworn affidavit I do not intend to sell or profit off of it. If you want to do this as a business proposition as a random unlicensed person you'll be fronting all your own capital and then looking at about 5-6 year turnaround per time, and the buyer likely won't be able to use a mortgage, plus (in my case at least) I'd be subject to prosecution if it came to light I was doing that for a living. The smaller scale version of this is motorcycle/car curb-flippers that don't spend a gazillion dollars securing a dealership license, probably a bit more accessible but again as soon as the state or real dealerships get a sniff you're fucked.

I can recommend doing this to make a house for your own family but I think you have to be a bit insane to front your own money to build houses in almost anywhere in California as a business proposition unless you have a contracting license, which is to say, you already were able to make a decent living. I only got away with doing it for my family because all the people who could have brought the insane rules down upon me were kind enough to realize it was just a family trying to survive, they'd have fucked me with all sorts of inspections, shenanigans with the utility company, having trouble getting water, trades licensing, engineering stamps and plans, etc if they'd have gotten a sniff I had done this "again and again."

This kind of stuff did work fairly well up until in the 60s/70s before developers got in bed with the regulators/planning and zoning boards. Back then a guy and his truck could become a developer easily.

[throwitaway222]

Sure, may be more difficult in Santa Cruz, but fairly typical in 90% of the country. And families that would dare do this, probably know 5 GCs that stamp their name.

[taurath]

“Just think differently” but the answer starts with have a pile of money

[mothballed]

You could probably get away with it without much money once per county or maybe state, max out every loan imaginable, buy shit land (probably 50% financed at best on vacant land), declare you're owner-building your own house for non-commercial reasons. It's possible in my state. By the second or third time though your creditors and the planning board will be on to you and you'll be chased out of the county and you'll have to relearn all the bureaucracy again, which is the hardest part.

[6510]

> you can always find a plausible sounding excuse why failure is inevitable.

Exactly! This is the mind set. So tell me, how do you progress when you are there?

Or even better, now that we've accumulated many people conditioned by streaks of failure, how do we maximize their productivity and tax revenue? Should be an easy question for you :)

[throwitaway222]

This is why immigrants are often the most exemplar people of the American Dream today. Most of the people today pushing socialist or communist agendas are not these immigrants, but instead children of very wealthy company owners that only saw a downward trend from their parent's trajectory. It's from that privileged that they found fighting for other people their cause. However it's misguided and they don't even understand this. They're in a small class of very privileged people, and they're pushing an ideology that has taken so many people from the world. And they don't understand that most people just want a meaningful job, not handouts and not free stuff. Meanwhile these people just keep pushing it to college students and the cycle continues. No matter how many times you tell them that it hasn't worked before they always respond with well it hasn't been done "right", and even current attempts in the United States are causing nearly unlimited fraud, they won't listen. The current philosophy of these people is to break the United States so badly that the only trajectory could be up. It's almost like they're seeing their own failures as people and want to replicate it for the country. Stop treating everyone as a victim, stop being a victim and you'll see the world shine.

Steps off soap box.

[taurath]

> And they don't understand that most people just want a meaningful job, not handouts and not free stuff.

Wanting my tax dollars to go to children who can’t access food is not begging for a handout - you’re repeating middle school Republican propaganda at this point.

I’m a success story, but unlike you I’ve developed some empathy for the very real cycle of poverty I myself got out of, instead of the jingoistic “just create value”.

> They're in a small class of very privileged people, and they're pushing an ideology that has taken so many people from the world.

This is exactly how I feel about your ideology - that if only people would stop being a victim and think outside the box instead of complaining then they would see a better world. You’ve never dealt with disability or not being able bodied, you don’t see the value in anything other than what makes money.

There’s a spec of truth in it - some people turn their minds off and think of themselves as victims. I think of myself as a survivor, and a lucky one at that. I’ve overcome a lot and I can see where if many things outside of my control went the other way I could be dead right now. Wanting the path to be more clear for the next person is exactly the “see the world shine” that you advocate for.

We have the highest concentration of wealth ever in this country, because that’s what this system produces right now. Has it improved the world for the average person or made it worse?

[throwitaway222]

> Has it improved the world for the average person or made it worse?

Capitalism has VASTLY improved the world for the average person. A lot of the things you're doing are becoming the nanny for other people. That cripples their future. Instead of letting people become the best they can be, they will languish in average or low because the safety net allows them to just sit. This cripples countries and it destroys working ethic. I am not advocating for cutting protections for disabled people, but right now able bodied people are just sitting back and being victims.

https://www.youtube.com/watch?v=h7n6injw8GI

[taurath]

I'm not arguing against the improvements to the average person in the last 100 years, but I am saying the system that exists TODAY produces poverty, desperation and homelessness on the bottom end, and massive wealth to the top, and a hollowing out of the center, and that we should do something about it. Its easy to argue that it was the worker protections and safety that enabled the economy and the middle class. Since 1979 worker productivity and wages have diverged, and all the resources have funneled to the top.

> Instead of letting people become the best they can be, they will languish in average or low because the safety net allows them to just sit

We're not concerned with people being the best we can be. Else education wouldn't be on a shoestring budget, housing costs wouldn't force two parents to work with no pre-k childcare, our colleges wouldn't cost 10x that of other countries many of which are free, we'd provide healthcare not tied to employers so that people could take risks, we'd mandate maternity and paternity leave for parents so that they can bond with their children instead of leaving them with attachment disorders.

People are undeveloped for those reasons - it costs a lot of money and society is filled with middlemen maximizing the profit of every single human need. Our birth rate is horrible because its expensive, there is little hope for a better future, and there is no support within the country to have kids. We have a massive child poverty problem, and we can't even fund school lunches.

If you cared about people being the best, you'd care about that, not making sure that everyone gets punished. The system benefits business owners and investors, and everyone else serves them.

> I am not advocating for cutting protections for disabled people

Yet protections and programs continue to be cut!

[nradov]

Most socialists and communists have an ideological blind spot in that they don't understand how to create any wealth in the first place. Based on their policy proposals they implicitly seem to believe that the means of production just appear from somewhere, like a gift from a benevolent parent. And that wealth can be redistributed based on ideological whims without destroying it — or without preventing it from being created in the first place. This is an example of magical thinking.

[giantrobot]

I don't know what you mean, I mean I made a million dollars with only a small hundred million dollar loan from my dad! This sort of entrepreneurship is available to anyone in America.¹

¹ Terms and conditions apply.

[scottyah]

The propagation of this type of mindset is more damaging than the gambling.

[romanhounds]

how so? because people don't like when you move into their area and buy your way into everything? Displacing the people around? The "artisanal farmer" with 100M cap investment into gear.

People who don't shun and humiliate these silverspooners are more damaging than the gambling.

[Analemma_]

“Building wealth through real estate” should not be possible, and it’s half the reason we’re in this mess: people treating their homes as a store of wealth and blocking new construction to protect the value of their investment has locked young people out of the housing market. Hence all the gambling. What you should be hoping is that YIMBY policies carry the day in the end and “building wealth through real estate” is eliminated as a thing.

[throwitaway222]

> Building wealth through real estate should not be possible

I am sympathetic to this argument, but there are problems. How do you get homes built if you make this change?

[Analemma_]

Construction companies can still turn a profit building and selling them. The idea is that houses should be depreciating assets, like cars. If houses are appreciating in value it means you're not building enough of them.

[nradov]

Most houses do depreciate, or they require frequent expenses just to maintain their value which amounts to the same thing. There are occasionally exceptions to this rule in times of rapid construction price inflation but that's rare.

It's the land under the house that typically appreciates. Land is unlikely to depreciate unless the broader regional economy declines.

[mothballed]

It's the actual house in many areas. Where I live a burned out, unusable trailer only good for rebuilding the whole thing (that is, negative value based on purely structural value) on a piece of land is worth ~100k+ whereas the land itself (unmortgagable) is only worth about $35k.

When you have a house you get basically a special token to have a house built under the codes, zoning, and other restrictions that were in place when it was built. And possibly the permission to build it all. Also a token that includes getting utilities, etc under the old rules. In many places this may have been done back in the 60s when "a guy and his pickup truck" could just build a house with almost no questions asked, and many of them were done that way. These tokens are generally appreciating (NIMBYism, increasing regulatory challenge, etc), commonly faster than the actual physical materials in the house are depreciating.

Coming back to why the burnt out trailers are worth $100k+ on $35k land where I'm at even though you'll just have to pay to raze them

1) It includes planning/zoning pre-approval, just re-do the same structure on the standing foundation and you won't have to spend a gazillion dollars doing everything back to the new rules.

2) The presence of the house includes the ability to use debt to mortgage the land up to a gazillion dollars. The exact same piece of land magically becomes mortgageable with the burnt out unusuable trailer on it, which let people bid the price to infinity during the covid era, then locked into high rates no one will give up. Meanwhile, I got one of these pieces of land for ~1/3 the price the exact equivalent raw land value was rolled into on mortgageable properties.

Think about it this way. If I build a house with the cheapest, shittiest, materials and the most illegalist of Mexicans 30 years ago. And then pass a bunch of laws that say nobody gets to do the thing I did, and now you need code-magic expensive materials and deport all the Mexicans, require expensive environmental reviews, and maybe even make it harder to legally build. That appreciates the value of my house -- because to substitute my cheap house you have to build an expensive house, so I can just charge almost as much as the expensive house and the market will bear it. Thus you end up with stuff like raw land value prices in my area not appreciating at all, yet house prices massively appreciating.

[s1artibartfast]

or that the cost to build them is going up.

[myrmidon]

By people paying for houses they actually want to live in?

Real estate as "investment" is not helping anything here; it hurts home availability, first because prospective homeowners have to compete with capital that just wants to use those as store of value/for rentseeking (driving up demand/prices) and secondly because this creates incentives against building more houses (because that hurts those real estate "investors").

[lenerdenator]

> The most reliable path to building a modicum of wealth has remained the same for generations: start a small business in some boring field and work your ass off for 80 hrs/wk.

Hardly. My grandfather was working under union rules as a machinist. No education beyond the 8th grade and what he learned in the US Navy during WWII. He was able to afford a house in a Lower Midwestern city (one that would be considered LCOL) and five kids.

I have a bachelor's degree that's paid for, a decent paying software job, and no wife/kids. Wanna guess how many homes I own in the same city?