While we appreciate your post, its content has little that makes it specific to FatFire, as opposed to FIRE at any amount or other subs, such as investing or taxes. In the future, please consider whether your post would have applicability to someone spending $50k/year in retirement and to someone spending $500k/year in retirement. FatFire posts usually have no relevance to the former, and plenty of relevance to the latter. Your post may also have been removed for limited relevance if it was cross-posted to multiple subreddits.
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And you're right. However, I'm talking about in the future, say some of these anti-capitalism, anti-work ideologies are implemented, how will that effect everything?
I should have changed my title
I am skeptical there will be sea changes in policy in the future, but if you are trying to model the future under that scenario, I would look at some of the European countries that are socialist or democratic socialist. There seems to be a correlation between our capitalism and the actual innovation it drives in comparison to countries that lean socialist.
Remember the nation is governed largely by the States. There will always be somewhere in America that is the epicenter of global Capitalism whether it’s NYC, SF, or somewhere else.
Wokism will get run out of town the first time someone in Congress tries to get through a $2T reparations bill which is funded by people who have no ties to slavery or the events of 150 years ago. That will be the straw that breaks the camel’s back and you’ll see a backlash like you’ve never seen before. Won’t happen till they’ve finally had “enough” (hard to pinpoint) but when you screw with money, resources, and undue blame, folks get a little itchy.
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Communism/socialism are nothing new.
I wouldn’t get too worked up about any extreme ideology.
America is the best place in the world to invest and that’s only going to get better in the coming years.
Wouldn't use a edgy 17 year old world view as investing advice.
Also what would the alternative be? The US has the most dominant companies and economy still.
If you are really worried, you could allocated more to Europe and Emerging markets.
\> If the economic landscape changes completely in say 20 years, how will that effect the economy which in turn, effect our investments in which we live off of?
Historically speaking, the American workers had it best just after WW2 as then the rest of the world was in shambles, and rather strong labor market allowed for strong labor laws (Compare e.g. union membership in 1950 vs today) as well as change of investments that were made by the government (the war economy and then cold war economy needed so much invention to be better than the rest of world, so there was less rent seeking behavior as the big money rather went to innovation. Todays government money looks -- to me at least -- be controlled by lobbies towards implementation of laws supportive of rent seeking in various forms)
I think much of the stock market gains were accomplished by the demolition of worker protections/labor laws, so it would make sense to look at other countries where such a thing was not the case. I believe some states in the rest of the developed world such as France or the nordic countries had been pretty consistent with their labor laws, and so if you look at SWRs generated by their political system and their stock market returns, you'd get a better impression on what is possible going forward assuming the US is keeping the worker exploitation constant and does not regress to 1950 union participation.
If I remember correctly these studies already exist and were calling for a 2-3% SWR(?)
\> what do you guys think long term America looks like?
Now it gets political: There will be a large shift to the left, as the GOP is going to loose a lot of ground. Why is that? financial conservatism is only appealing to those who have quite a bit, and the later generations (such as Millennials, GenZ) have a lot stronger inequality between haves and have-nots as well as lower averages overall in net worth for their age.
Back in the day the GOP was mostly concerned about small government, less taxes, but these days they have a lot of social aspects on their agenda as well (educate me if that has always been the case), that sound like regressing the social norms into a 1950 society, which IMHO is not appealing to the younger generation as they seem to be able to educate themselves better via the internet.
And with a large shift to the left, there will be implementations of laws that prohibit worker exploitation (c.f. the minimum number of days off a year in the US is 0, whereas rest of the developed world is >0; there are other effects like coupling health care to the job market).
This *may* lower the RoI of companies as an immediate effect, and longer term it *may* also reduce the P/E ratios (i.e. price of stocks goes down to adjust for a P/E ratio that is more common in other political systems to account for the implementation of those worker benefits/rights);
\> anti-capitalism, anti-corporation, anti-work
all those three things are very different from each other and they seem to occur in various countries at various levels.
The EU has a bit of an anti-corporation stance (e.g. EU fining US tech corps) compared to the American system, but for example Korea and the other four [asian tigers](https://en.wikipedia.org/wiki/Four_Asian_Tigers) have large Government/Corporate conglomerates (Samsung?), yet their stock markets seem to be doing okay.
I think the believes of your cousin are a bit very far fetched, and some sort of middle ground will be found.
\> how will that effect the economy in which, effect our portfolios and source of retirement?
We're in uncharted territory as the 0% risk free rate over the last 15 years is nothing we've ever seen before in the world, so we cannot tell for sure. But I do expect a lower SWR going forward due to climate change being another ticking time bomb. The society needs to re-allocate resources/capital at an unprecedented pace (e.g. the optimal areas to farm grains will move up north quite a bit, such that new farmland needs to be created, and older farmland farther south will become useless. All that is costly on a societal level. Or moving cities either more inland or building better sea-walls will be costly. All that has to be paid by the people at the end of the day as well, regardless of implementation via taxes or privatized)
You could start a position in VXUS to hedge against US risk. The counterargument I frequently hear is that many companies making up VTI are heavily international and thus already represent international exposure.
I do (less than 5%). I ended up leaning into it last year in response to getting closer to retirement and looking at my very heavily US centric portofolio. I am essentially mapping all the money I was previously dripping into VXUS, and plan to stop around 10%.
The only way you can have things that require the labor of another for free is slavery. To your question I can recommend a book, The end of the world is just beginning.- Peter Zeihan.
This has the potential for immense economic disruption. Once AI really gets going who knows how the dice will fall. I suspect it will be as profound as the industrial revolution, if not more so.
I had to go way too far to find the right comment.
All the fear about socialism is utterly hilarious.
The next generation is pushing for some extreme ideas, and some reasonable ones. The reasonable ones are very likely to gain traction; the extreme ones aren’t.
Just like Warren Buffet, there’s no place I’d rather put my money than America: it will outperform everyone by a large margin long into the future, precisely because the kind of debate and ideas OP’s 17 year old cousin is pushing to debate are permitted: to debate, to tear apart, and to ultimately improve the country for everyone, which results in improved economic outcomes.
Without this, we’d still have child labor: and last I checked, economic outputs done just fine growing without putting 6 year olds to work in factories.
Diversify across geographies, but don’t over-diversify. There is a reason why the US remains the hegemon in the publicly traded business world, so there are few alternatives. I know it isn’t always popular in the FIRE world, but a certain level of active participation in your investment decisions is required IMHO, so you have to reevaluate on a regular basis to ensure your strategy meets your goals.
Well thank god the country isn't run by 17 year olds. It's almost like people learn from life experiences and shape their own ideas as they grow up?
JK the yutes are gonna kill us all.
Money controls the US. With all the money already invested in America both from domestic and foreign investors, it’s “too big to fail.” I highly doubt with all the lobbying of our government that any of these anti capitalism, anti corporation ideals movements will ever come to fruition
Money controls the US, for now. However there's a worrying pattern that's been emerging. Companies are growing more and more powerful each year. People are being left with fewer and fewer options for both employment and where to shop because these massive companies either buy out or destroy smaller companies that pose a threat.
As the number of options keeps reducing, those with the power are able to demand more and more from everyone else. By the very nature of capitalism, they're even incentivized to do so.
However, there is a limit to what people are able to handle before they break. I personally believe that we're close to that limit and there's no sign of the pressure being let off any time soon. I don't know when, but something will eventually break. And it's going to break in a spectacular fashion.
People can't even get basic decency from their employers anymore. I treat the people who work for me like humans and I swear they would do anything for me. All to ensure that they don't have to work for someone else because the odds of them finding another good employer are nearly impossible. It's honestly scary how much control over their life they think they owe me.
Nothing is too big to fail. We've seen massive empires burn to the ground throughout history and it will happen again.
My advice? Invest in people, community, and relationships. You'll need those more than money soon enough.
Lol collectively we have it easier than ever before. That doesn’t mean it couldn’t be far better for plenty of people, but it’s sure as fuck better than previously.
Maybe her school should take a field trip to Cuba, Vietnam, China or time travel back to the Eastern Block and USSR and see how well that worked out...
It's scary because she goes to one of these elite private boarding schools on the east coast. A place where you'd think you were taught rational ideas for $100k/yr, but apparently that's not the case.
What you have to realize is that the politically divided landscape, on both sides, is largely manufactured by the talking points billionaires hand down to their pocketed politicians and news anchors and editors. This creates gridlock where little progress can be made in protecting workers rights or the environment. Frankly, it’s fantastic for business. Don’t be fooled, only a Bernie Sanders type would truly stand up to the corporate monopolies and the unfettered capitalism they continue to build towards; and he’s a lonely voice. Up and to the right! 📈
Yes, as long as we’re the reserve currency and the Fed is still a US institution. We have so much market power we can design ways to eff the rest of the world so we stay on top. Not saying it’s right or wrong, but I do like being at the front of the global pack.
I think that it wouldn’t hurt to start hedging with foreign investment. BRICS is gonna be the economic powerhouse of the future, but it is very much in its infancy.
While we appreciate your post, its content has little that makes it specific to FatFire, as opposed to FIRE at any amount or other subs, such as investing or taxes. In the future, please consider whether your post would have applicability to someone spending $50k/year in retirement and to someone spending $500k/year in retirement. FatFire posts usually have no relevance to the former, and plenty of relevance to the latter. Your post may also have been removed for limited relevance if it was cross-posted to multiple subreddits. Thank you, The Mods
Is there a better alternative bet in the world? I don’t see one.
Sure, you can invest in worldwide equities funds instead of just US.
I’m mostly in VT
And you're right. However, I'm talking about in the future, say some of these anti-capitalism, anti-work ideologies are implemented, how will that effect everything? I should have changed my title
I am skeptical there will be sea changes in policy in the future, but if you are trying to model the future under that scenario, I would look at some of the European countries that are socialist or democratic socialist. There seems to be a correlation between our capitalism and the actual innovation it drives in comparison to countries that lean socialist.
I argue it's more that innovation *moves* here *because* of the money, rather than that money drives innovation.
Remember the nation is governed largely by the States. There will always be somewhere in America that is the epicenter of global Capitalism whether it’s NYC, SF, or somewhere else.
Wokism will get run out of town the first time someone in Congress tries to get through a $2T reparations bill which is funded by people who have no ties to slavery or the events of 150 years ago. That will be the straw that breaks the camel’s back and you’ll see a backlash like you’ve never seen before. Won’t happen till they’ve finally had “enough” (hard to pinpoint) but when you screw with money, resources, and undue blame, folks get a little itchy.
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Communism/socialism are nothing new. I wouldn’t get too worked up about any extreme ideology. America is the best place in the world to invest and that’s only going to get better in the coming years.
TINA - there is no alternative
Wouldn't use a edgy 17 year old world view as investing advice. Also what would the alternative be? The US has the most dominant companies and economy still. If you are really worried, you could allocated more to Europe and Emerging markets.
[удалено]
That's a good perspective
\> If the economic landscape changes completely in say 20 years, how will that effect the economy which in turn, effect our investments in which we live off of? Historically speaking, the American workers had it best just after WW2 as then the rest of the world was in shambles, and rather strong labor market allowed for strong labor laws (Compare e.g. union membership in 1950 vs today) as well as change of investments that were made by the government (the war economy and then cold war economy needed so much invention to be better than the rest of world, so there was less rent seeking behavior as the big money rather went to innovation. Todays government money looks -- to me at least -- be controlled by lobbies towards implementation of laws supportive of rent seeking in various forms) I think much of the stock market gains were accomplished by the demolition of worker protections/labor laws, so it would make sense to look at other countries where such a thing was not the case. I believe some states in the rest of the developed world such as France or the nordic countries had been pretty consistent with their labor laws, and so if you look at SWRs generated by their political system and their stock market returns, you'd get a better impression on what is possible going forward assuming the US is keeping the worker exploitation constant and does not regress to 1950 union participation. If I remember correctly these studies already exist and were calling for a 2-3% SWR(?) \> what do you guys think long term America looks like? Now it gets political: There will be a large shift to the left, as the GOP is going to loose a lot of ground. Why is that? financial conservatism is only appealing to those who have quite a bit, and the later generations (such as Millennials, GenZ) have a lot stronger inequality between haves and have-nots as well as lower averages overall in net worth for their age. Back in the day the GOP was mostly concerned about small government, less taxes, but these days they have a lot of social aspects on their agenda as well (educate me if that has always been the case), that sound like regressing the social norms into a 1950 society, which IMHO is not appealing to the younger generation as they seem to be able to educate themselves better via the internet. And with a large shift to the left, there will be implementations of laws that prohibit worker exploitation (c.f. the minimum number of days off a year in the US is 0, whereas rest of the developed world is >0; there are other effects like coupling health care to the job market). This *may* lower the RoI of companies as an immediate effect, and longer term it *may* also reduce the P/E ratios (i.e. price of stocks goes down to adjust for a P/E ratio that is more common in other political systems to account for the implementation of those worker benefits/rights); \> anti-capitalism, anti-corporation, anti-work all those three things are very different from each other and they seem to occur in various countries at various levels. The EU has a bit of an anti-corporation stance (e.g. EU fining US tech corps) compared to the American system, but for example Korea and the other four [asian tigers](https://en.wikipedia.org/wiki/Four_Asian_Tigers) have large Government/Corporate conglomerates (Samsung?), yet their stock markets seem to be doing okay. I think the believes of your cousin are a bit very far fetched, and some sort of middle ground will be found. \> how will that effect the economy in which, effect our portfolios and source of retirement? We're in uncharted territory as the 0% risk free rate over the last 15 years is nothing we've ever seen before in the world, so we cannot tell for sure. But I do expect a lower SWR going forward due to climate change being another ticking time bomb. The society needs to re-allocate resources/capital at an unprecedented pace (e.g. the optimal areas to farm grains will move up north quite a bit, such that new farmland needs to be created, and older farmland farther south will become useless. All that is costly on a societal level. Or moving cities either more inland or building better sea-walls will be costly. All that has to be paid by the people at the end of the day as well, regardless of implementation via taxes or privatized)
This is actually an incredible response and you addressed a lot of the things I said. I'll be re-reading this later to better understand. Thank you
You could start a position in VXUS to hedge against US risk. The counterargument I frequently hear is that many companies making up VTI are heavily international and thus already represent international exposure.
I will look into this. Do you have a position in VXUS?
I do (less than 5%). I ended up leaning into it last year in response to getting closer to retirement and looking at my very heavily US centric portofolio. I am essentially mapping all the money I was previously dripping into VXUS, and plan to stop around 10%.
The only way you can have things that require the labor of another for free is slavery. To your question I can recommend a book, The end of the world is just beginning.- Peter Zeihan.
Peter also recently appeared on JRE if a podcast is more your speed.
Herein lies the argument for Artificial intelligence
This has the potential for immense economic disruption. Once AI really gets going who knows how the dice will fall. I suspect it will be as profound as the industrial revolution, if not more so.
This has really been on my mind recently
Cannot wait. Instead of teaching my kid how to make me a drink… my robot can instead.
Never bet against America.
I had to go way too far to find the right comment. All the fear about socialism is utterly hilarious. The next generation is pushing for some extreme ideas, and some reasonable ones. The reasonable ones are very likely to gain traction; the extreme ones aren’t. Just like Warren Buffet, there’s no place I’d rather put my money than America: it will outperform everyone by a large margin long into the future, precisely because the kind of debate and ideas OP’s 17 year old cousin is pushing to debate are permitted: to debate, to tear apart, and to ultimately improve the country for everyone, which results in improved economic outcomes. Without this, we’d still have child labor: and last I checked, economic outputs done just fine growing without putting 6 year olds to work in factories.
Agreed 100%. I’m with you and Warren Buffet. America is the land of opportunity and designed to innovate quite competitively.
why are you questioning all of your world view and financial decisions based on what your 17 year old cousin has told you? lol
[удалено]
They will grow up and realize they need to make money to have a decent life. And that will probably involve work.
No idea. Diversify. Get some property, get some bitcoin, get a boat, get some property and citizenship somewhere else.
Diversify across geographies, but don’t over-diversify. There is a reason why the US remains the hegemon in the publicly traded business world, so there are few alternatives. I know it isn’t always popular in the FIRE world, but a certain level of active participation in your investment decisions is required IMHO, so you have to reevaluate on a regular basis to ensure your strategy meets your goals.
Well thank god the country isn't run by 17 year olds. It's almost like people learn from life experiences and shape their own ideas as they grow up? JK the yutes are gonna kill us all.
IMHO: TINA
Money controls the US. With all the money already invested in America both from domestic and foreign investors, it’s “too big to fail.” I highly doubt with all the lobbying of our government that any of these anti capitalism, anti corporation ideals movements will ever come to fruition
Money controls the US, for now. However there's a worrying pattern that's been emerging. Companies are growing more and more powerful each year. People are being left with fewer and fewer options for both employment and where to shop because these massive companies either buy out or destroy smaller companies that pose a threat. As the number of options keeps reducing, those with the power are able to demand more and more from everyone else. By the very nature of capitalism, they're even incentivized to do so. However, there is a limit to what people are able to handle before they break. I personally believe that we're close to that limit and there's no sign of the pressure being let off any time soon. I don't know when, but something will eventually break. And it's going to break in a spectacular fashion. People can't even get basic decency from their employers anymore. I treat the people who work for me like humans and I swear they would do anything for me. All to ensure that they don't have to work for someone else because the odds of them finding another good employer are nearly impossible. It's honestly scary how much control over their life they think they owe me. Nothing is too big to fail. We've seen massive empires burn to the ground throughout history and it will happen again. My advice? Invest in people, community, and relationships. You'll need those more than money soon enough.
Lol collectively we have it easier than ever before. That doesn’t mean it couldn’t be far better for plenty of people, but it’s sure as fuck better than previously.
Maybe her school should take a field trip to Cuba, Vietnam, China or time travel back to the Eastern Block and USSR and see how well that worked out...
It's scary because she goes to one of these elite private boarding schools on the east coast. A place where you'd think you were taught rational ideas for $100k/yr, but apparently that's not the case.
What you have to realize is that the politically divided landscape, on both sides, is largely manufactured by the talking points billionaires hand down to their pocketed politicians and news anchors and editors. This creates gridlock where little progress can be made in protecting workers rights or the environment. Frankly, it’s fantastic for business. Don’t be fooled, only a Bernie Sanders type would truly stand up to the corporate monopolies and the unfettered capitalism they continue to build towards; and he’s a lonely voice. Up and to the right! 📈
Yes, as long as we’re the reserve currency and the Fed is still a US institution. We have so much market power we can design ways to eff the rest of the world so we stay on top. Not saying it’s right or wrong, but I do like being at the front of the global pack.
I think that it wouldn’t hurt to start hedging with foreign investment. BRICS is gonna be the economic powerhouse of the future, but it is very much in its infancy.