Do you care about social classes ?

[Mal]

I know plenty of thrifty or downright stingy people, and many of them are quite rich. But can you say that it is a good thing in the US to be extravagant or at least care little about saving money ? Even the ultra-consumerist Japanese tend to save quite a big portion of their income, and don't mind not having a car or living in a tiny flat even if they could afford better.

Americans don't save. We have one of the lowest rates of saving in the developed world, and are personally at an all time low. Generally we're ok, because its been historically very easy to get land and a house in this country. Investment in property has been our version of saving for a long time, thanks mostly to two government agencies refered to as Freddy Mac and Fannie Mae. Because of this there are more Americans that own property and houses than any other nation in the world. Our return on investment in real-estate in this country is phenominal, its quite frankly the best investment any American can make (and the government makes it easy to get into it as well).

What if they become writers or (individual) researchers ? What if they organise some charities (look at the British royal family, who does'nt "work").

Probably not. I can't think of any famous philanthropists who weren't also great industrialists. Slate magazine publishes a list every year of americas top philanthropists, almost all of them are captains of industry.

I guess that's mostly political correctness, especially when referring to one's own president. But most Europeans are not afraid of talking frankly about their politicians or any celebrity. Maybe that is why it becomes a scandal when an famous upper class person does something that would be ok for a lower class, but not for them (eg. swearing or spitting in public), even if they are not politicians.

It's not all political correctness - on the part of the media (who knows better) it most likely is. On the behalf of the general population, this are the way they see it (or want to see it) - the exception of course being political partisans, but if it was their guy they would see it the same way. Also you may not know, but there was an event a few months back where the Vice President (on the floor of the senate no less!) told a Senator to "go **** yourself". There were some jokes made, but all in all no one really cared.

No, I don't thing there is any "perfect model" in most European countries.

Well, now you're just being silly Of course every society has what they would consider a "perfect" representation of their ideal citizen. (Btw, that poster was funny).

[Maciamo]

Because of this there are more Americans that own property and houses than any other nation in the world.

Please don't get carried away. I guess you meant in total number of people (because the US is by far the most populous developed country). However if you look at the home ownership rate in developed countries, you'll see that the US may have a higher rate than Japan, France or Germany, but lower than Canada, the UK, Australia, and especially Italy and Ireland.

Our return on investment in real-estate in this country is phenominal, its quite frankly the best investment any American can make (and the government makes it easy to get into it as well).

What's the typical return rate (in %) for a real estate investment in the US ?

Well, now you're just being silly Of course every society has what they would consider a "perfect" representation of their ideal citizen. (Btw, that poster was funny).

Well, I have lived in 5 EU countries and still can't think of any, as it depends too much on individual values. Sometimes I think that individualism also has a quite different meaning in Europe and America. While in the USA it means being able to succeed owing to your own efforts and possess things (mostly economical perspective), in Northern Europe it means not caring about what other people think of you, believe your own judgement (which involves a developed critical sense), or even mot minding travelling by oneself around the world. When I hear about American patriotism, the "American dream", the model of the "perfect American", the "American lifestyle" or the "American way", etc. I sometimes wonder if these values are as homogenous as they would be in a collectivist society like Japan. I think it is closer to Japan than to Europe anyway. In many European countries, people still associated more with their little region that with their whole country, and care more about their personal beliefs than some national values. That is partly why it is difficult to create a sense of European nationality based on common values (except very general ones).

[DoctorP]

Americans don't save.

Please know that you are speaking for yourself and not ALL Americans! I personally save, and my whole family saves. I know of many families who save. Truthfully, those who can do, and those who want to...do, but there are some who just don't. Some people are content with living paycheck to paycheck, some of them by choice, but some because of conditions.

@ Maciamo...I looked at the site about home ownership, but I didn't see a good explanation as to what they considered a home...a house? A condo? A flat? I think Mal's point was that many people in the US own a house...and the land it sits on, while many people in Japan, England, etc...own their home, but it may be in the form of a condo or along those lines. Am I way off base here? Maybe you could educate me on something: If I own a house and it is leveled by an earthquake, I still own the land. What of people owning a condo or flat? If the building is leveled do they own anything anymore? Technically their property is gone right? (I am generally asking so that I can learn)

[Maciamo]

@ Maciamo...I looked at the site about home ownership, but I didn't see a good explanation as to what they considered a home...a house? A condo? A flat? I think Mal's point was that many people in the US own a house...and the land it sits on, while many people in Japan, England, etc...own their home, but it may be in the form of a condo or along those lines.

In Japan, yes, but there are very few flats in England. English people usually dislike flats. As for the US, I don't think there are so many houses in places like Manhattan, so many people, even rich, will have to fo with a flat. But I agree in principle that land is cheaper in the States (or Canada or Australia) as there is more space. However in some isolated regions of Japan (Shimane, Akita...) land is very cheap too, and one prefecture even gives land for free to anyone who came from another prefecture and stays for at least 10 years (because of the exodus to the big cities).

Am I way off base here? Maybe you could educate me on something: If I own a house and it is leveled by an earthquake, I still own the land. What of people owning a condo or flat? If the building is leveled do they own anything anymore? Technically their property is gone right? (I am generally asking so that I can learn)

Not sure. Either you get nothing or the share you apartment represented in the whole building. Anyway there are no earthquake in most of Europe (almost only in Greece and Southern Italy).

[Pachipro]

I very much enjoyed the discussion between Mal and Maciamo, but let me touch on a few things here. I ticked "Upper Middle Class".

Like Mal, I made a helluva lot of money in the 90's thanks to the dot com boom and lost quite a bit of it when the market tanked in 2000. Luckily I made most of it back these past 5 years and am now out of the market completely.

Coming from what might be considered a lower middle class working family, I pride myself on climbing the socio-economic ladder, so to speak, through a college education and wise investing and saving. I practiced what some might call "delayed gratification". Today I have no debt whatsoever and own my house outright. I am wealthy enough that I could chuck my high stress white collar job and take, and enjoy, what most would consider a blue collar, lower middle class job - driving a big rig. How would I be classified or even classify myself? I don't know.

According to statistics, my household income (from all sources) ranks among the top 15% in America, but no one who doesn't know me well doesn't know that. To them I am your average middle class working American and they, as well as people with my same household income level, would probably perceive me as just that. I live in a middle class home and drive a middle class car. Does it bother me? Not in the least. I could care less what others think.

So what if you are rich and don't want to show it ?

If you are wealthy and don't show it then you are basically playing a game. People of your socio-economic level may act towards you in strange ways. Some may admire you if you profess to be doing it for "philisophical" reasons, and others will be somewhat beligerant since they may take your turning your back on material items as a commentary on their own avarice. It's a touchy subject. But once again, it only really matters to people who are of the same strata as you. Anyone above or below is very likely to not care at all.

According to MAL I may be playing a game, but I beg to differ. I could go out tomorrow and buy a $500,000 house for cash and/or a couple of Lexus' for me and the wife, but I won't. Why? Because I don't desire them nor do I desire to flaunt my wealth just because I have it and can. The majority of my friends are not even close to me in wealth. I have only one friend who would probably be classified as being in the same "class" as myself as I find most wealthy people to be snobs.

Maybe it's because I never had any to begin with and everything I have was earned through hard work and investing instead of going out and buying the 42 inch plasma TV, the SUV's and stuff I really don't need. Am I a miser? No, not at all. I have everything I desire and if I need or want something I just go out and buy it with cash. I just can't see the logic in driving a gas guzzling SUV or Mercedes/BMW or to live in a ritzy neighborhood in a house that is too big for me just to show others that I have money when a 4 cylinder Toyota Solara does the job and a 2,000 sq ft house fits me quite well.

Mal mentioned that most Americans don't save and he is quite correct. They can't. The average American today is more interested in buying material things on credit than he/she is about saving for the future. According to the US Social Security Office, the average American today retires with only about $2,800 in assets!! And is totally dependent on the measly social security for retirement.

The average American family also has $18,000 in credit card debt at an average interest rate of 18%.

MAL is quite correct in that home ownership is at an all time high, and he also mentioned that the average American's debt is also at an all time high. I read somewhere that if if the economy tanked tomorrow, 70% of home owners would lose their house because of the refinancing boom these past few years. Alot of people refinanced for more than 100% of their homes value and alot of them are living "paycheck to paycheck" because of it. Personal bankruptcy is also at an all time high as well as the National debt. Freddie Mac and Fannie Mae are also under investigation for false bookkeeping. But this story seems to have disappeared from the news recently.

What's the typical return rate (in %) for a real estate investment in the US ?

Right now America is on the verge of a housing bubble that some are predicting will collapse like the dot coms. Depending on where you live, the return can be as high as (going from memory here) 20-30%/year or more in San Francisco where Mal lives, and New York and Los Angeles, to as little as 4-10% here in the Nashville, Tennessee suburbs.

My observation has been that alot of Americans are very materialistic and buy things they don't need, with money they don't have, just to impress people they don't like. They want to express an image that they are wealthy when if fact they are quite poor. They buy expensive SUV's, plasma TV's, and large houses that they really can't afford because credit is so easy in this country. How do I know this? Because I see it all around me. My neighbors and most of my friends and co-workers are in debt up to their eyeballs. Many husbands and wives are working two jobs just to cover their bills and debts. Many of my co-workers (drivers) are also driving on the weekends just to pay their bills! I really feel sorry for them as all they are doing is working and working and working. But they are still buying, and buying, and buying - on credit. Did you know that the majority of SUV's and higher dollar cars here in the US are leased? Americans are actually renting their gas guzzling SUV's and BMW's!

It doesn't matter as money is not related to class. But this tendency of American and Japanese people to think of themselves as "middle class" reflects the fact that they don't really care about classes.

I beg to differ here with you Maciamo. Here in the US "money" or at least the appearence of having it, is related to class. Most Americans, although they may classify themselves as middle class when in fact they aren't financially, do want to "show" others that they have more more money than they actually have. They want to at least give the appearence that they are of the upper or upper middle class when in fact they aren't. Even those in the "upper class" will spend more than they make to give the outward appearence that they "have" more than they actually do. Again, I know this from personal experience. I know a pilot for a major airline who makes more than $300,000 per year yet he's in serious debt because of his trying to live above his means.

Although they don't speak of it openly, nor will most of them admit it, here in the US, I have observed that most people are very concious of class. It is VERY important to most of them what cars they drive, where they live, what schools their kids go to, and what "name brand" clothes they wear. Much like the Japanese. The only difference is that a large majority of Japanese save 10% or more of their take home pay while a majority of Americans save nothing. If this were not the case people here in the US would not be in so much debt trying to impress others or living above their means.

This may have not made any sense, but I feel that I had to input my observations after living here in the US these past 16 years.

[Glenn]

Americans don't save.

What Americans are you talking about here? Baby-boomers? Generation-X? It's my understanding that Americans in their 20s are much better informed than their parents, and are actually investing money and planning ahead for retirement more wisely than their parents. Do you have contradicting evidence?