Is unearned income acceptable?

An interesting read that offers some insight on how unearned incomes effect on our financial system.

The rich get rich through wealth extraction, not wealth creation

If the asset, say a house, already exists, then there are no costs of production apart from maintenance costs. Those who receive unearned income from existing assets do so not because they are in any sense ‘deserving’—they have not contributed anything that did not previously exist—or because they are judged by others as needy and unable to provide for themselves, but because they can. This is power based on the unequal ownership and control of key assets, what J.A.Hobson called ‘improperty’ in the 1930s.

Let’s say you get £10,000 profit from your house. That money can only have any value if there are goods and services you can buy with it. And for that to be possible, the makers of those goods and services have to produce more of them than they can consume with their own (earned) income. So your £10,000 of unearned income is parasitic on the work of others.

source

a reply to: AlaskanDad

Obviously. Iv been arguing this point forever. No one turns up a profit without gouging someones pocket.

Now if you were to say put such a person in charge of an organization that can increase its influence to multipul individuals at once and over a greater area.

Then you would have your explaination of why corperations are reporting in record breaking profits.

It's not Earned, It's swindling the population of its cash and milking it into reserve tanks where the publically will only ever see the work of their tit drop by drop well the reserves stay full and more tanks are being installed in order to fill up more tanks endlessly. So that the rich who run those croperations can suckle all the milk until they are obese with greed.

a reply to: AlaskanDad

OK,

Renting personal property is bad, we should not own it and let the banks do it so the common man cannot get a return on the investment made buying the property in the first place?

OK, so I am evil because my husband and I have a 401K. That, after all, is unearned income. It also happens to be money we are working hard to save and invest to help support us after we retire so that we are less of a drain on the US government system.

But let's not talk about all us Middle Class folk who scrimp and save and put that money into retirement investment accounts.

Let's also not talk about people like us who don't want our children saddled with college debt, so we save and invest in similar investment funds that will go for his education someday ... tax free I might add.

Why should we not be allowed to save our money and let it earn for us? You could chide us for not keeping it in static savings, but thanks to the Fed Reserve keeping interest rates in the crapper, your money will do nothing in those accounts.

a reply to: infolurker

It's everything combined that effects house values. it's never one thing, the economy is a web.

It repeated over and over that if any product were to crash if its a far reaching product say like Oil or Rice or anything.
It effects over all prices on everything.

It's a butterfly effect. Oil prices drop, Carbon taxs increase. The tax increases are used to pay the impossible mountain interest. And Interest Eats up just about everything.

So the rich are hording all their assets in order to not be subjected to the wrath of the banks. Which hinders the population and hinders the economy. It creates inequality. Even rich people have to try to evade tax hikes just because of this.

It's a revolving door that was created in order to keep the system the way it is. Plenty of Rich people know about it but they don't want to get their asses slammed out by the revolving door.

Countries are going to need to learn economic independance and become less reliant on trade so that the banks arn't threatened by countries that are demanding their return on loans.

a reply to: AlaskanDad

I have always said that owning more property than you can live in, or work out of, is socially unacceptable. Concentrating ownership of housing stock in a certain demographic of high earners, does nothing positive for the price of a home for new buyers, and means that persons looking to rent, are at the mercy of people who can, and do charge FAR too much for the "service" they provide, and often times they do this while making no significant effort to maintain the property.

My sister and her husband are in a cleft stick at the moment, because their landlord is raising the price of their rented accommodations, despite the fact that there are still MASSIVE problems with damp in the building, a fire hazard in the attic in the shape of a whole bunch of someone else's property that has not been moved out (my sister and her man are banned from even LOOKING in the attic, which is hilarious considering the fact that the attic is a potential source of the damp problem, which means that they cannot investigate it for themselves), and the fact that the bathroom is shoddier than a drunken pirates salute!

With rents being what they are in these parts, the rent on their place will be going from JUST about bearable, to absolutely unjustifiable with a single forty pound hike. Frankly the whole practice makes me want to spit acid and shoot nails out of my nostrils!

a reply to: infolurker

FTA:

[The] investor’, the landlord, and the bank providing the mortgage are all ‘rentiers—recipients of unearned income, based on the control of existing assets that others need or want, rather than on contributing to the provision of new goods and services. As such, their income is a form of free-riding on the labour of others.

a reply to: TrueBrit

In the small scheme of everyday life people like you and billions of others are effected by this.

I hate it when people just want to *Land lord* people's lives and add a theith to toll them to live there.
And when they charge way more than what their property repair/taxes is just barbaric. Turning a little profit. It's okay.

Trying to rob *Suckers* is not okay.

a reply to: ketsuko

Here is a quick quote FTA that I hope will help answer your questions:

Think of investing in equipment, a new firm, a school, a training programme, or wind farms. Here the term is used to refer to wealth creation—things which improve the provision of goods and services like better machines, new products, new skills and cleaner energy.

But then think of gains ‘investors’ might get from renting, lending, buying stocks or bonds and other financial assets, buying up existing property and waiting for its value to go up, and speculating. Investments of this second kind need have no connection with investments of the first kind. They need not create anything new. All they are supposed to do is provide a return for the ‘investor’—wealth extraction, regardless. On this definition, gambling is a form of investment.

a reply to: infolurker

No. We should just have housing which does not cost the earth, because no one is buying bulk, and therefore the buyers market is established and rooted, and cannot be shifted back to the awful mess that we are currently in.

The common man does not own any damned property around these parts, because the common man, that being the most populous, has not got enough money to do so! It's only the extremely well off, who have that luxury in places like where I live, where dwellings cost a bomb, and landlords, unless one is very lucky, are uniformly bastards of the lowest possible aspect.

The people who dwell within a dwelling ought to own it. The banks ought to own little or nothing of their own, and accept their rightful place as a repository of other peoples hard earned money, whose job it is to keep the wealth safe from bandits and disaster, and little else besides

a reply to: AlaskanDad
Charlatans lol. With money And it is totally gambling. Stock market is one big auction house.

a reply to: TrueBrit

I think the real issue is multiculturalism.

The prices prevent people from poorer nations from swarming in.

Pretty sure the whole agenda is just Racist in general. Well the rich get more rich. Keeping the poorer people out of the cities and towns as prices increase. Eventually it will only be rich people who will own and dwell.

That's their original plan right? lol. Keep invaders out well they rob their nabours, brothers sisters and unrelated *except by association* families?

What about social programs?

Those are unearned income.

"Free health care" is not free, it is being paid for by someones taxes from their labor.

Welfare or it's equivalent is unearned income, nothing was produced or done to earn the income, the money one receives is taken mostly from middle class families who are themselves struggling to make ends meet.

Any thing or payment given by the government to someone who does not in turn produce for the item or payment for the government is by it's definition unearned income.


If someone owns a home and then sells it at a profit, well, it isn't exactly a profit, because it would cost that much or more to purchase an equivalent home. The value is actually overall the same as it was when purchased. That is not unearned income, it is parity. The overall value of most real estate stays the same or depreciates when comparing the past purchasing power of the original amount of the house, and the current purchasing power of the sell amount of the house.

You mofo's need to go back to freshman year of college and study basic economics. Seriously. The constant drivel about the rich and how unfair it is that some people make investments is just tiresome. If any of you have a pension, 401k, or any other kind of investments you are making unearned income.

People invest their money hoping to get a return. There is a level risk associated as you may actually lose your money. You know that old adage of risk and reward. The greater the risk, the greater the reward.

Choosing to invest in real estate or other asset classes hoping to get a return is not evil. The point is you see value in something that someone else may not. That asset's value increases and you reap the reward because you took the risk of investing your money (or leveraging up with a mortgage or other debt).

I bought a condo in a neighborhood that most people seemed to ignore, but I saw potential. Took out a 100% loan at the time to buy it. I maintained the property, shopped at my neighborhood stores, etc. Next thing you know, the neighborhood is all of a sudden really popular and my condo increased in value by $100k. I sold it and reaped the capital gain from selling a price higher than I paid. How is this evil? I could have also lost my azz by the value going down.

Without ownership of property, the property will fall into ruin. Someone without a big financial interest in the housing will simply let it degrade--as is proven by all the "housing projects" in existence.

Roofing degrades with time, termites destroy if not treated, storms and water cause damage, painting degrades, vermin occupy, wood rots. All these cost money--who is gonna pay?

Someone also has to pay taxes on the property for schools, police, sewer, county hiway depts., etc.

Someone has to pay insurance against fire and storm and personal liability.

Most young people are not good renters--- they destroy more than the owner can ever recover in rents after he has paid the above costs and taxes and insurance. Ownership of property is a form of protecting oneself from the inflation that every government intentionally causes.

Thinking that the owner of rental property is not "earning" any payment or profit is very childish thinking. It is also
communism at its core.

a reply to: TrueBrit

If you want to own something so bad, move to a place with cheaper cost of living. I'd love a 2000 square foot loft in SOHO in NYC, but I don't have the $3 million or so it would cost to buy one which is why I don't live there. Regardless of how much I think it is nuts to pay that much for a shoebox apartment, the reality is that there are more people with money who desire to live there than there are properties for sale and willing to pay that much for that privilege. It is called supply and demand. This is why that same apartment in bumblestank Arkansas probably would go for $50k because no one but toothless hicks and Bill Clinton wants to live there.

originally posted by: Edumakated
You mofo's need to go back to freshman year of college and study basic economics. Seriously. The constant drivel about the rich and how unfair it is that some people make investments is just tiresome. If any of you have a pension, 401k, or any other kind of investments you are making unearned income.

People invest their money hoping to get a return. There is a level risk associated as you may actually lose your money. You know that old adage of risk and reward. The greater the risk, the greater the reward.

Choosing to invest in real estate or other asset classes hoping to get a return is not evil. The point is you see value in something that someone else may not. That asset's value increases and you reap the reward because you took the risk of investing your money (or leveraging up with a mortgage or other debt).

I bought a condo in a neighborhood that most people seemed to ignore, but I saw potential. Took out a 100% loan at the time to buy it. I maintained the property, shopped at my neighborhood stores, etc. Next thing you know, the neighborhood is all of a sudden really popular and my condo increased in value by $100k. I sold it and reaped the capital gain from selling a price higher than I paid. How is this evil? I could have also lost my azz by the value going down.

The alternative to investment income is ALWAYS being forced to trade your time for money.

Stupid.

a reply to: Edumakated

You must be one of those racist types against multiculturalism.

*Move to a poorer place* Whats your idea of a poor place?

Please say Africa.

" Is unearned income acceptable? "

Yes.

Unearned income pays a lot of taxes.



Not to mention the cost associated with a full blown revolution to end it.

a reply to: grandmakdw

You really should have read the article before trying to inject the usual talking points into the thread.

Basically some investments are good for society while others take away from society in general. It is kind of an interesting article if you can get past the idea that just making money is good for yourself so there for it must be good.