10th Dec 2018
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Seven money secrets of the wealthy
Rich man wearing suit with light bulb

You may think that rich people think and act differently to the rest of us, and the truth is, they probably do. But many of the world’s wealthiest people worked hard to earn their wealth, and even harder to maintain it. To learn how to make your own fortune, or keep it, it’s best to seek the sage advice of the wealthy, because they’ve proven that they know about money.

Here are seven lessons to be learnt from the wealthy.

1. They look for investments every day
The wealthy aren’t happy with what they’ve got. Well, some are, and in this context, it’s not really a bad thing. The rich are always looking to increase their wealth, so they’re always on the lookout for investments. They always listen to potential opportunities. They’re constantly on the prowl for ways to save money as well as more. Think small – chances are you won’t get rich quick. Be on the lookout for incremental ways you can save or make money and one day, you too may call yourself ‘affluent’.

2. They control their money
Wealthy people stay away from high-risk investments, such as hedge funds and mortgage-backed securities. They stay in control of their money. If the rich don’t understand what they’re investing in, they don’t invest. But they also understand that there is no reward without risk, and are comfortable with taking on a reasonable level of risk to generate a moderate return.

3. They understand that saving is the same as making money
The rich, well the smart ones, don’t spend money for the sake of it. If they can forgo the fancy designer watch, they effectively save money – money which can then be re-invested in other money-making pursuits. Money saved is money they don’t have to earn again.

4. They invest in appreciating assets
Prosperous people don’t waste their wealth on cars and clothes, but instead, invest their money in appreciating assets, such as property, artwork, collectibles, stocks and bonds.

5. They diversify their assets

Putting all your eggs in one basket is a sure-fire way to fail. Money-making website Investopedia says it best: “it is foolish to invest all your money in one investment.”

It’s important to diversify your portfolio, by putting your money into a variety of investments, stocks, bonds and mutual funds. It’s also wise to invest your money in different types of industries, such as food, oil, retail or tech. That way, if one fails, you are still protected with your other investments.

6. They drive a hard bargain
Wealthy people look for the best possible deal in any given situation, and they’re not afraid or embarrassed to haggle for it.

7. They watch every dollar
Have you ever watched a kookaburra on the wire, scanning for its prey? Well, that’s how the rich watch over every dollar that comes in and goes out and, more often than not, it’s how they made their fortune in the first place. It’s also why they’ll most likely stay that way.

In closing …
The truly rich are the ones with the love and respect of family and friends. This is the real measure of happiness. Money isn’t everything, sure, but it can give you the freedom to live your life the way you desire. It also gives you the option of helping your loved ones live their lives comfortably and securely.

So, the point I am making is this: managing money is one thing, but looking after the really important aspects of your life, which are your relationships and your social interactions, should be a priority. Money may, or may not, buy you happiness, but by being good to those around you will make you feel like a rich person regardless of what’s in your bank account. And if you follow these tips, you may find yourself wealthy in a financial sense as well.

Read more at The Daily Telegraph

Do you have any money tips for our members? Well, why not ‘share the wealth’ with our members?

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    COMMENTS

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    Concerned
    2nd Jan 2019
    10:05am
    Well how lucky for them. First you need the money and then we can all invest like the wealthy. And the implication that people who are not wealthy do not watch every dollar astounds me
    Old Geezer
    2nd Jan 2019
    11:26am
    Anyone can become wealthy and you can start with nothing. Simple just spend less than you earn. I did it with a road block at every turn so anyone can.
    Rosret
    2nd Jan 2019
    11:36am
    You just need a little more than "average" to accumulate wealth.
    Our entire economy is based on the "average" household and the people who get ahead have just a little bit more. It's all about percentages.
    If a manager in the 1970s got 10% more. ie Mr Average got $8000 pa and the boss got $8800pa. Which was quite reasonable. However move forward 40 years and Mr Average gets $80 000 but he needs to be married with a working wife for a viable income so that is $160 000. However the Boss and his wife are now taking home $16000 more. That $16000 is all play money to invest, buy bigger homes etc etc. Then chances are, due to our top heavy incomes the boss is earning far more than 10%.
    Our pay scales are totally out of kilter.
    Circum
    2nd Jan 2019
    11:37am
    People fall into many different categories.Sure many folk do watch every dollar,but many do not.I know many who feel that money in the pocket is there to be spent and that it should all be spent before the next payday/pension day.
    Its not about how much you start of with or earn that will determine how wealthy you become,what you do with it will.
    OlderandWiser
    2nd Jan 2019
    11:37am
    Not true, Old Geezer. Anyone can achieve a modest level of affluence after a lot of hard work and sacrifice. Almost anyone, I should say. There are folk with crippling disabilities who have no hope. There are folk who experience serious life challenges that they can't recover from due to their age or health when it happens.

    It really disgusts me when people rant with this BS claim that they got wealthy from nothing, and then they demonstrate that they have no idea what life is like for strugglers in the real world, and not an ounce of empathy. You DID NOT get wealthy from nothing. For a start, your parents were in business. You had knowledge that many don't have. You got a university education. You are an egotist indulging in self-aggrandisement at the expense of others, and that's disgraceful.

    Concerned, it is certainly true that many who are not wealthy watch every dollar. They may have to! But equally it's true that the majority who retire poor were careless with their money. Even a low wage, if you work for a lifetime, was enough in Australia to enable a person to own a modest home and have a small nestegg - if it money was managed well. The vast majority of Australians overspend. They don't recognise that they do. They would protest angrily that they were ''unlucky''. But a lot of people achieve affluence (NOT wealth) without luck. And the vast majority, if they were given a fortune tomorrow, would have no clue how to invest it and would lose it all quickly. Just look at the record of lottery winnners!
    Old Geezer
    2nd Jan 2019
    12:38pm
    It is very easy just spend less than you earn no matter how much you earn. I know people disabled that are very wealthy too. I know of one young women who is studying at uni and I already a millionaire and is yet to turn 21. She did it all from scratch.
    Swinging voter
    2nd Jan 2019
    8:54pm
    Regarding being married with a working wife for a viable income: at the beginning of the feminist wave when families were far more happy and satisfied, women said we could do anything and now that we have the jobs, we want everything. Women have painted ourselves into a miserable corner. When men were the breadwinners, families lived within their means, stayed together, battled it out and kids grew up knowing that prosperity is hard-earned and usually long awaited. These days younger folk want to start out how we older are finishing up. Baby boomers knew how to work, how to save, how to go without and how to wait for luxuries. Not so today.
    OlderandWiser
    2nd Jan 2019
    10:58pm
    To spend less than you earn, OG, you have to earn more than enough to pay for the essentials of life. If your earnings don't put a basic roof over your head and minimal food on the table, you can't spend less than you earn. And anyone who claims life is easy for people born to poverty is a MORON - and a cruel and evil one at that. Savings don't yield enough now to keep up with inflation. Investment is a risky business, especially for those with no knowledge and not enough funds to diversify. It is NOT easy. It is only easy for those who have had been fortunate in at least one way - be it with money to start them off, education, guidance, mentoring, or a stroke of good luck via a win, inheritance, or the opportunity of a well-paid job. Your chest beating isn't impressing anyone. It's just revealing your miserable character.

    Yes Swinging Voter - I agree with you about how families lived. We were all so much more contented back in the day. I remember my aunt meeting my uncle at the door with picnic basket in hand and they would go out to and BBQ dinner on the creek bank in summer. Our Saturday treat was picking blackberries or mushrooms or shooting rabbits. Life was laid back, but family and community was the centre of everything. When someone was sick or in difficulty, the whole community rallied. I remember the town grocer telling everyone who needed help and the hampers of food and cooked dinners would start arriving and a man would appear on Saturday to chop wood and mow the lawn. Not all baby boomers knew how to save though - as evidenced by the number now retiring with nothing to show for a lifetime of earning. Some encountered crisis later in life, but there are plenty who just lived day to day and never thought of putting anything aside for tomorrow.
    Hoohoo
    3rd Jan 2019
    1:37pm
    It was the same where I grew up OGR. My Dad would milk a cow every morning (even when his family of nine kids were all grown & flown) & give the fresh milk to a struggling neighbour (a single Mum/widow with 4 little kids). And with home grown fruit & veggies, too. People gave to each other quietly & allowed those who received charity to retain their dignity.

    I agree that young people not only want everything, but they also want the latest, designer version of it. Unlike my generation who shared houses with others to save rent costs, who lugged their dirty washing down to the laundromat, who didn't own a car until they had a full-time job, who only ate cheap mince if they wanted to eat meat.

    Our modern consumer society doesn't encourage people to act like this anymore. Young people think only "poor" people have to budget or do with a second hand washing machine, car, mobile phone or TV. They are so sensitive to peer pressure they'd rather stay at home with their parents than do without the latest status symbol.
    Noodles
    3rd Jan 2019
    3:40pm
    I started out at 15 as a typist in a bank on five pounds twelve shilling and sixpence. Started saving from the day I began work and was very proud at the end of my first year of working to have a bank account with one hundred pounds in it.

    I did indeed start with nothing...and I worked in the middle of Brisbane living in boarding house (my parents lived out in the country) and was the youngest there and had to buy all my meals with only breakfast provided. I had no money to do much at all and it took a couple of years where I could splurge here and there.

    Because I wore a bank uniform I had litle need to have many clothes at all and consequently spent very little on them.

    Never once did my parents give me as much as a shilling. I had to do everything for myself ..no handouts at all.

    I learnt the value of money and how to handle it at a very early age . I grew up fast.

    Never once got into debt and always lived within my means.
    OlderandWiser
    3rd Jan 2019
    6:31pm
    I started as a receptionist on $9 a week, paying $8 for board and lodgings, and I borrowed from a relative to buy an outfit to wear to work, as all I had was a school uniform. It took me months to repay the loan and then to buy a second outfit so I didn't have to wash it every night and get it dry by morning. My partner started work at 14 but all pay was stolen until nearly 18. That's a long and sad story - and recently laws were changed to allow a law suit for compensation, nearly 60 years on! When we married, we had $1000 between us a huge debt for medical treatment. We did get into debt because of illness, an accident, and a special needs child who cost us a fortune - but we worked like dogs and lived very frugally and ended up putting our children through university and clearing the debt, then started saving for retirement. The only debt we ever had was a house mortgage and medical bills and that initial one for essential work clothing. We lived very frugally and did whatever we could to avoid spending. Never received a cent in gift or inheritance. We were both orphans so had nobody to give us anything.

    I see young people buying expensive homes with professional landscaping and swimming pools and central air conditioning, paying $5000+ for a fridge, replacing their car every second year, taking overseas holidays with kids tagging along - and then complaining that they can't get ahead and the cost of living is too high. The other day a hairdresser told me she spent $30,000 on one child's sporting activities in 2018, but went on to say they 'had to do it' because all her friends were going overseas with the team. The child isn't particularly talented and has no interest in a sporting career. It's just a case of keeping up with the Joneses.
    KB
    2nd Jan 2019
    10:11am
    I think that you are wealthy if you can enjoy the simple things in life and have a rood of your head, Meaning of wealthy has many different meanings
    OlderandWiser
    2nd Jan 2019
    11:44am
    The richest woman I ever knew had never had two pennies to rub together. She lived her whole life in a humble two-bedroom cottage that was fit for nothing but demolition on her death, and she got by growing vegetables and keeping chickens and making her own soap and skin lotions. But in her last years, she could have called on any of 1000 people for anything she needed and they'd have come running. Some of them were very wealthy. They wouldn't have shared their wealth with her, but they would not have seen her in need of anything. She had no education and lived in abject poverty her whole life, but she wanted for nothing and a huge cathedral was too small for her funeral. They had to put loudspeakers in the park adjacent for the folk who couldn't find room in the church.
    Old Geezer
    2nd Jan 2019
    12:35pm
    I have requested that my body be burnt anonymously with no funeral at all. I can't see the point of funerals at all myself.
    Triss
    2nd Jan 2019
    3:22pm
    Totally agree with you, OG.
    OlderandWiser
    4th Jan 2019
    8:32am
    I was commenting on her wealth, OG - not what her friends decided was an appropriate way to farewell her. You have to divert every discussion with your claims of superiority. Dream on! Good people have friends who want to say goodbye and honour a memory. You wouldn't get that because nobody would care a jot about you dropping dead. They would most likely have a party to celebrate.
    cupoftea
    2nd Jan 2019
    11:24am
    Look after the pennies the pound looks after it self
    Sundays
    2nd Jan 2019
    11:56am
    I agree, it’s not always how much you earn, but how much you spend. You can be careful without being mean
    mr.auspicious
    2nd Jan 2019
    11:28am
    If all this stuff is such a secret, doubt that it would be circulating on the internet in the
    first place.

    One thing that was not mentioned, and is fundamental to this discussion, is the timing
    of buy / sell decisions. If you believe the market is overpriced it's time to sell - not buy.
    If you believe the market is undervalued, the reverse applies.

    For instance, some genuine value emerged in the share market in the days leading up to
    Christmas, then the market rallied last week. The people who benefitted were the
    " contrarian " investors who waited for value to emerge before committing to an
    investment decision. Whether or not any wealth is realised depends on successfully
    timing a future selling decision.

    If you aspire to become " genuinely rich " ask yourself whether you are sufficient astute
    to make the right investment decisions at the right time and are prepared to deal with
    the consequences, especially in circumstances where the decision to invest is proven
    incorrect.
    Rosret
    2nd Jan 2019
    11:47am
    Re stock market. Never panic. Don't listen to the news and their melodramas, the hedge fund managers have the stock market well controlled. The market fluctuates so buy low and sell high.

    Do listen to the news for promising inventions, discoveries etc. If you think it has promise do you own research and decide for yourself. Remember the only money you invest in the share market is money you can afford to lose. Don't buy shares on credit.

    My antecedents always believed in blue ribbon stocks and I would have to say that I think they are right. Of course there was an era where you could live off the dividends. I suppose that's our super returns each year.
    Old Geezer
    2nd Jan 2019
    12:42pm
    Just like you buy bargains in shops you buy bargains in investments. Most people wait until they are over priced then buy and sell when they fall. I buy cheap and sell dear by selling into a rising market and buying into a falling one. I did pick up some bargains recently. One has already reached by sell target so I've sold it for a nice profit.
    OlderandWiser
    2nd Jan 2019
    11:52am
    The article makes it sound easy. It isn't. It requires a great deal of knowledge and a certain psyche to invest successfully. And when you have very little, or you have experienced real hardship with no apparent escape route, you become very risk averse. I think that's the biggest obstacle for most folk. If you are wealthy, you can afford to take a risk. A loss isn't the end of the world. But for a poor person, it might be. And as for diversification - how, if you have so little that there is no way to spread it across multiple investments.

    OG keeps spreading BS about Malcolm Turnbull's investment success, but he DID inherit a hundred million - AFTER attending the world's most exclusive schools. His father and grandfather were filthy rich. He didn't do anything startling. He just did what the born rich are taught to do, and what their inheritance enables them to do. The birth lottery dictates the fate of many - and that fate is to struggle for modest affluence in retirement and never have a hope in hell of getting wealthy.

    That said, I tell my grandchildren if you want to improve your station in life, mix with the rich, impress the rich, and as far as you are able, do what the rich do. Most Australians CAN achieve modest affluence if they work hard and manage well.
    Old Geezer
    2nd Jan 2019
    12:36pm
    It is very easy but most people don't see it.
    OlderandWiser
    2nd Jan 2019
    11:06pm
    It's NOT easy for those who face genuine long-term hardship. But the fortunate love to blame the less fortunate. They rip off and exploit and pillage and plunder and take far more than their share of national resources, dodge tax obligations, collude to pass laws that persecute the disadvantaged - and then they salve their guilty conscience by lying to themselves and pretending they are smart and getting wealthy is easy, so the poor are to blame for being poor. I meet people like you all the time, and I uncover their lies. They love to boast, pretending they are self made. Never come across one yet who was. They are all just liars beating their chests - and too ignorant and arrogant to even acknowledge the truth to themselves. Get over yourself, egotist.
    Lookfar
    5th Jan 2019
    7:03pm
    I suspect you are right about Turnbull, Rainey, and who cares about him, he turned out to ditch all his principles to stay in the job, he is just another rich parasite as you describe, liars beating their chests.
    Might be a good time to reduce the rich, - Max $3. million? - $5. Million? - what maximum wealth level do we need to protect our future from these greed obsessed egotists?
    Sundays
    2nd Jan 2019
    11:53am
    Obviously there are different levels of wealth. Those people living in mansions, driving flash cars, wearing designer clothes can’t all be spendthrifts living on the never never. I’m sure some wealthy people spend up as well as save and invest. They can afford to
    Old Geezer
    2nd Jan 2019
    12:39pm
    Most are not.
    OlderandWiser
    2nd Jan 2019
    11:09pm
    Poor people can't live in mansions, drive Ferraris, and send their kids to posh private schools, so obviously many of the rich DO spend liberally. They are just very fortunate to have enough to both spend and invest. Plenty of them couldn't spend their wealth in a hundred lifetimes, so they can live it up and still have plenty to invest for growth. Turnbull inherited more than he could spend in 200 lifetimes, but still claims to be ''self made''. Like OG, he's totally delusional.
    MICK
    3rd Jan 2019
    7:05am
    You are completely WRONG OGR.
    Many of the rich did have good incomes but they invested this rather than live the high life, at least in their early years. Your comment is for the very few and many rich people were enslaved to their jobs.
    Turnbull? He came from working class people as far as I know and made his fortune whilst working for Goldman Sachs. One fantastic investment I believe.

    I have no jealousy towards people who make a fortune but this group is objectionable because it is in 'the club' which abuses its privilege and avoids paying a fair share of tax. We saw the latest chapter when Turnbull gave this cohort, and himself, huge tax cuts recently.
    OlderandWiser
    3rd Jan 2019
    7:39am
    No, Mick. Turnbull was not working class at all. He inherited a huge fortune. His father and grandfather owned a chain of hotels. They were very, very rich. He was sent to the most exclusive schools and university. Working class people don't get to the kind of job he had at Goldman Sachs. You ha e to wear the right tie (figuratively speaking!). He's typical of the rich who lie to pretend the poor are to blame for their circumstances and the rich have merely worked harder and smarter. A bit like OG, only OG has NO class at all!
    OlderandWiser
    3rd Jan 2019
    7:47am
    "I have no jealousy towards people who make a fortune"
    Neither do I, Mick, but I think those who pretend to be self-made and those who lack empathy and respect for battlers are despicable.
    OlderandWiser
    3rd Jan 2019
    12:17pm
    And I am certainly NOT completely wrong, Mick. I said MANY of the rich spend. If they didn't, there would be no market for cars that cost as much as a house, luxury yachts, mobile homes that cost close to a million, clothing that costs hundreds of dollars for a single small item - or even thousands and tens of thousands. Who buys jewellery worth hundreds of thousands?

    Sure, many have good incomes and accrue substantial wealth by managing it sensibly. But plenty of rich people spend very lavishly. Even throwing parties that cost hundreds of thousands for just one night of fun! Good luck to them. Money should be enjoyed, not hoarded. You can't take it with you. But let's not engage in games of 'let's pretend'.
    MICK
    3rd Jan 2019
    2:15pm
    You might want to read this OGR:

    https://www.news.com.au/finance/work/leaders/malcolm-turnbull-is-donating-his-entire-528000-salary-to-charity/news-story/d7234aa711ed4a0db3cd77ea2ce034c1

    Whilst I have no love of any PM who gives HIMSELF massive tax cuts at a time of debt and no wage rises for workers Turnbull became rich. He was not born rich. You may want to do a bit more homework on this one.
    OlderandWiser
    3rd Jan 2019
    6:11pm
    Mick, he inherited mega millions before age 21. That I know for an ABSOLUTE FACT. I also know he wants to perpetrate a myth. And I know no school teacher or electrician pays the private school fees the school he went to charges. NONE. Note that the article says "Mr Turnbull noted..." Of course he does. That's the myth he wants to perpetrate. And I do believe his father was working class. It was his grandfather that was filthy rich and left him mega millions. Quite likely his maternal grandfather - who might not have been inclined to give much to a son-in-law his daughter had deserted. When you are rich, you can write history any way you choose.
    OlderandWiser
    3rd Jan 2019
    6:15pm
    And BTW. Forming a charitable foundation is one of the best ways to dodge tax. Most very wealthy do it. Auditors have repeatedly found that the charity operates at a loss and the loss is claimed as a tax deduction. But the loss is achieved by paying people fat salaries and investing in expensive buildings, cars, etc. (all needed to operate the foundation, of course!)

    I am related to an auditor who works at very high levels and I have a close friendship with one of Malcolm Turnbull's Goldman Sachs work colleagues. I DO know what the facts. And I know they will never be exposed on the web.
    OlderandWiser
    3rd Jan 2019
    7:34pm
    Maybe use some logic here, Mick and Misty? Where would a working class battler whose father struggled or borrowed to send him to an elite private school and subsequently to Uni in the UK to become an elite Rhodes scholar get $500,000 to invest in a high risk technology venture. For the kind of person Turnbull CLAIMS to be, that would be a lifetime of saving! And he sure wouldn't risk it on a high risk tech venture.

    He inherited mega millions. If he hadn't, he would NOT have had $500,000 to invest in anything - much less a high risk investment.

    Also, he is descended from the Blighs - some of Australians' wealthiest and most influential. And he is a Rhodes scholar - and NOBODY from the common working class gets to be a Rhodes scholar. All the claims are lies in the name of social re-engineering - trying to perpetuate a lie to justify the way he wanted to shape society.
    MICK
    2nd Jan 2019
    10:04pm
    Some very good comments today.

    I completely agree leon. Its a very disciplined life fraught with sacrifices and choices, especially in the accumulation years.
    The only important point which is missing is THE RICH LIVE ON THE INTEREST, NEVER ON THE CAPITAL. The eternally poor never seem to grasp this. Its the lottery syndrome: if you win the lottery you're rich...and can then spend up like there is no tomorrow. That mentality only ever leads to one place. Poverty. Ask most people who win large fortunes. After 5 years its all gone.

    Happy New Year to you all. Hope 2019 is a good one. Yeah...another year older. Not sure who that old coot is every time I look in the mirror. Ha ha ha....
    ex PS
    3rd Jan 2019
    10:18am
    I'm not rich but I live a better life than some I consider to be rich. It does not matter how much money you manage to accumulate, if you don't know how to enjoy that money it is being wasted. I laugh at some of the people who repeatedly state how well off they are, but seem to live mean, miserable lives. These people may have managed to accumulate a lot of money, but their lives are not rich because of it.

    Money can buy you happiness, but you have to be wise enough to realize what happiness is.
    MICK
    3rd Jan 2019
    11:32am
    Agree. Of course the issue is always a balance. No point being a pauper or the richest man in the graveyard.
    Misty
    3rd Jan 2019
    11:57am
    I have just Googled Malcolm Turnbull's life story and his families, he did not have a wealthy upbringing, his father struggled as a single parent after Malcolm's mother left them both and mooved to New Zealand. Bruce, Malcolm's father worked as an electrician and later got into pub brokering but did not make a fortune, Malcolm's wealth came mostly from one fortunate investment. There are many stories on Malcolm's life if you Google them to sort fact from fiction.
    OlderandWiser
    3rd Jan 2019
    12:10pm
    And they are just that. Stories! What Malcolm and others with influence want believed. There are plenty of fabricated stories in history books and all over Google, and many are widely accepted as fact. His grandfather owned a chain of hotels and left him hundreds of millions. How the hell would a single-father electrician afford the most exclusive private school in the nation? Did you bother to check which university Malcolm went to and what the fees are? It never ceases to amaze how stories circulated that have not even a shred of truth in them.

    My partner is fighting to disprove a historical account about his family that was believed for 60 years (including by him) until he found files under FOI that revealed the truth. I uncovered records from the Old Bailey from 1790 that disproved historical records relating to an ancestor, but if you Google that ancestor you won't find any hint of the truth. The untrue history still stands. All it takes is one influential historian to write a story the way he/she sees it and it can become accepted public record.
    Old Geezer
    3rd Jan 2019
    1:57pm
    Misty you are right and no matter what you tell OGR they will not believe you.
    MICK
    3rd Jan 2019
    2:18pm
    Turnbull apparently made one very lucrative investment in ozemail OGR. Turned $500,000 into $50 million. I guess the question you should be asking is how much tax, if any, did Turnbull pay when he realised his profits? The fact that his business interests now reside in an offshore tax shelter sort of feels like ZERO but I would love to be proven incorrect.
    Anybody know the facts?
    Misty
    3rd Jan 2019
    3:27pm
    Malcolm's paternal grandparents were school teacher's and Malcolm's father may have taken out a loan to pay for Malcolm's school fees or just used his savings, either way these grandparents were not rich and did not own a chain of hotels.
    OlderandWiser
    3rd Jan 2019
    6:03pm
    Nobody in that social class can afford the schools he went to. NOBODY. His grandfather owned a chain of hotels. He inherited a fortune. He is rich enough to perpetrate any myth he chooses.
    OlderandWiser
    3rd Jan 2019
    7:36pm
    And where would the son of a humble electrician, whose grandparents were humble school teachers and whose father saved frantically or borrowed heavily to send him to a fancy school get $500,000 to invest in a risky high tech venture, Mick? Answer that if you can!
    OlderandWiser
    3rd Jan 2019
    8:28pm
    Check out ''Born To Rule: The Unauthorised Biography of Malcolm Turnbull''

    Here's just a small snippet:
    Coalition Prime Minister Malcolm Turnbull likes to downplay his image as a privileged, wealthy silvertail by touting his time as a flat-dwelling young boy from a broken family.

    But, writes the business journalist Paddy Manning in his biography of the former investment banker, Turnbull's upbringing was not that humble.

    Head prefect at the elitist and pricey Sydney Grammar School, law graduate from Sydney University and Rhodes Scholar at Oxford, Turnbull's remarkably soft “hard times” ended with his property-dealing father's death in 1982. The 27-year-old Turnbull was the sole beneficiary of a multi-million dollar estate and inherited well north of $2 million.

    Now where would his 'poor' father get well north of $2 million? Misty, you had two jobs and a working husband and you constantly talk about nobody you know having ''that sort of money'' - referring to way way way less than $2 million, and 25 years of inflation later. If Turnbull could possibly achieve what he claims, you should be rich also? Were you lazy, spendthrift, stupid...? Or is maybe Turnbull telling fairy tales?
    Misty
    3rd Jan 2019
    11:17pm
    Malcom's mother, Coral Lansbury's parents were stage actors, not hoteliers, Malcolm attended Sydney Grammar High School on a part scholarship and while studying at Sydney University worked part time as a political journalist, he later won a Rhodes Scholarship to attend Brasenose College Oxford where he also worked for the Sunday Times, so he partly funded his own education by working and scholarships.
    OlderandWiser
    4th Jan 2019
    8:28am
    So I'll ask again. If a poor man's son can do that well, why did you fail so badly, Misty. Where did you hide your millions? Where did his father get $2 million to leave to him after doing it tough? And yes, Malcolm's mother had Hollywood connections - connections to wealth and fame and very useful contacts.

    Turnbull was born rich. He has fabricated a sound-good story for political gain.
    OlderandWiser
    4th Jan 2019
    8:29am
    Politicians are really good at sucking in gullible wanna-be's who are devoid of logic and reason. No wonder Shorten is able to bluff so many.
    Misty
    4th Jan 2019
    10:03am
    What rubbish you write here OGR you obviously wouldn't believe a word, even if Malcolm told you his life story himself, believe what you want, if you want to believe in your own made up versions of the truth then that is your decision.
    Misty
    4th Jan 2019
    10:06am
    Oh and btw OGR the same could be said about you, why aren't you a millionaire?, you say you were poor with nothing so where is your fortune?.
    OlderandWiser
    4th Jan 2019
    12:16pm
    Bad comprehension showing again, Misty. That's exactly the point. You CAN'T start poor and become fantastically rich without amazing luck and a lot of connections. Virtually NOBODY does - though many claim to. You CAN rise from poor to moderate affluence AND I DID. I would probably qualify as a millionaire - though it doesn't mean much these days as a million is no longer a lot of money, especially for a retiree couple with 25-30 years left to live.

    As for hearing the story from Malcolm himself - NO, I absolutely WOULD NOT believe a word because HE is the one fabricating the myth for political gain! Like I said - gullible, and devoid of logic and reasoning! Unlike you, Misty, I don't rely on propaganda. I research FACT. And I weigh the likelihood of something being true. When I read that someone grew up poor and invested $500,000 in a high tech venture, I ask how that could happen. It doesn't ring true. When I read that someone's father was a poor electrician and left his son $2 million in the mid-80s (equal to almost $5 million today) I'm smart enough to know that the guy was NEVER poor. When I read that the son went to the country's best schools, I know for a fact his family was NEVER poor. Poor kids don't survive in a posh school even if someone pays their fees. It's social hell!

    I guess the fact that I am probably a millionaire by many people, and I DID start VERY poor, and an orphan with nobody to help or guide and no education, suggests I'm smarter than the average bear, so maybe you should stop believing crap and start paying attention to logic?
    Misty
    4th Jan 2019
    1:48pm
    Well there you are OGR, you can't start poor and become fantastically rich without amazing luck and connections. WELL I DIDN'T HAVE EITHER OF THESE DID YOU?. Malcolm's father was a struggling electrician who later got into pub real estate, that is how he made his money and can't you also comprehend what I wrote?, Malcolm won scholarships to High School and Oxford University and worked part time to finance his education. How would you know how kids do in a private school anyway?, i don't remember reading in any of your posts that you went to a private school and Malcolm wasn't happy there but stuck it out, shows his character doesn't it, but then again I don't know why I bother telling you the truth you only believe your own misguided stories that are not true.
    Misty
    4th Jan 2019
    1:58pm
    Seems you are right OG, OGR has no desire to acknowledge the truth about Malcolm Turnbull's life.
    OlderandWiser
    4th Jan 2019
    2:02pm
    And you choose to believe fairy tales! I have close relatives who went to private schools - not even exclusive ones - and suffered terribly. I have a psychologist friend who was from a well-to-do family but has treated people who suffered from private school social exclusion. I believe the FACTS - Misty, not fairy tales and propaganda. Nobody from a poor background has the educational opportunities Malcolm had and nobody as poor as he claims to be has a father who leaves them today's equivalent of nearly $5 mil. It doesn't happen. And the truth is out there for those intelligent and interested enough to pay attention to it. But fairy tales are much nicer, aren't they? No, I didn't have luck or connections, and I didn't become fantastically rich. And neither did you apparently. So why would you believe other can? Are you saying you are useless and dumb? Malcolm did, why didn't you? Obviously you believe it's achievable, so you must be a failure.

    There's one more thing. Nobody who grew up the way Turnbull claims to would consent to the policies he has supported. People who know what real hardship is and how hard it is to overcome it don't feed the rich and endorse tax avoidance and persecution of the unemployed and disabled.
    Misty
    4th Jan 2019
    2:40pm
    Yes OGR, you too could have had the education Malcolm Turnbull did if you had won scholarships through hard work and diligence and worked to help pay the fees the scholarships did not cover. No I am not useless and dumb but you can think what you like, obviously very jealous of what Malcolm has achieved in his lifetime, that is what is coming through in your posts. Malcolm Inherited some money from his father , he became a Barrister and was very successful at everything he did, especially when he got into banking so of course it wouldn't have taken him long with successful share trading to wrack up $500,000, probably peanut to him by that time in his life. Who knows what great social policies he might have brought in if he didn't have the likes of Tony Abbott, and all those old fogies blocking him at evrey turn.
    OlderandWiser
    5th Jan 2019
    4:59pm
    Your ignorance is unbelievable, Misty. Both my partner and I were dux of the schools we attended every year we attended. We were straight A students who excelled, but as orphans we could not go to school past age 15 no matter what. No scholarship was going to allow us to live in an orphanage while we went to school. Perhaps we should have lived in a garbage can while we studied? No, that wouldn't have worked either, because we were both SOLD into work contracts against our will and with no option to do anything else. We both tried to go back to school later in life but that was blocked too, very unfairly. Even qualifications we did obtain were not recognized because they were obtained through unconventional avenues when conventional avenues were closed to us. Eventually, I DID succeed in self-educating to find work that normally requires a university degree, and I'm good at it, but it took until I was 50. And then I had to retire to care for a disabled partner at 55, though I'm working part-time now.

    $500,000 was NEVER going to be peanuts for anyone who struggled through childhood poor unless they inherited millions (as Malcolm did) or won a fortune. NOBODY who has to work like a dog for every cent gets rich enough to risk $500,000 on a high risk venture while still young and with a young family or family life ahead of them. Only a gullible fool believes such rubbish. And I'll say again - it he could do it, what's wrong with you? Why are you such a failure? You should at least have enough to not need a pension if it's so easy for poor people to get fantastically wealthy.

    Me jealous of Malcolm's achievements - NO. Mine leave him in the shade - though they are different and not necessarily as materially relevant. Envious of the opportunities and inherited wealth to some extent? Yes. I could have achieved equally with the privileges and opportunities he enjoyed. And he didn't WANT to bring in social policies that benefits battlers and encouraged people to move from poverty to affluence. He never proposed or supported a single one. Dream on if it makes you happy. You obviously are gullible enough to swallow all the political propaganda.
    Misty
    5th Jan 2019
    6:03pm
    You are the 0ne spinning fairy stories OGR , hardly attended school but you were both Dux, couldn't go back to school later because you were both blocked, sold into contracts against your will, qualifications not recognised, what a fairy story and you expect people to believe all this, I don't think so and at least Malcolm Turnbull's story is documented, where is yours so we can check?.
    OlderandWiser
    5th Jan 2019
    11:02pm
    I would not expect an ignoramus like you, Misty, to have any idea what life was like for abused orphans in the 40s and 60s, Misty. You are too consumed with your idiotic fancies about rich heroes to recognize what went on. Paid no attention to the Royal Commission into Sex Abuse of children, nor to apologies to stolen children and forgotten Australians. (None of which were instigated or even supported by Turnbull and his ilk!) Probably too uncomfortable for a fantasiser to deal with those realities.

    Yes, we did top our classes for the few years we attended, and we later proved our intelligence and skill by what we achieved in adulthood, despite unbelievable challenges. But sadly we weren't permitted to go far enough to even try for a scholarship - not that it would do any good even if we'd won one. And yes adult education was extremely hard for poor people to access in the 70s and 80s. And yes, state wards were sold into work contracts against their will, because the state was legally responsible for them until they were adult but didn't want to support them financially. And their wages were stolen by the state. Qualifications obtained through non-conventional channels were not recognised - and still often are not. There are at least 100,000 who can tell stories like ours, but you would call them all liars and carry on about how hard it was to raise children with good jobs and no sign of the C-PTSD that crippled those abused and deprived kids for life. Oh, that's right - you had low incomes. Teacher's aid? Uh-uh. Damned good job. I'd have given my eye teeth for a chance like that.

    Sorry you are so ignorant and arrogant that you can't pay attention to historical fact unless it supports your fairy-tale ideals. I don't care what ignorant arrogant people like you choose to believe. And I don't intend to expose my story at this time. Rich folk can get publicity for any story they want to tell. Battlers struggle to have their story heard anywhere. It will be exposed in due course though, when certain legal actions are completed. But in the meantime, try reading some of the stories of forgotten Australians and stolen children and sexually abused children and you just might learn something.

    Sad that there are people like you out there. It was your kind who let it happen and shunned the victims, blaming them and condemning them for their hardship and telling yourselves and your children how superior you were. I'll bet you were among those who told your children not to mix with those ''dirty urchins'' and to blame the orphans and accuse them of stealing when they lost their pens and pencils. Did you also take gifts of fruit and fresh cream from nuns who wouldn't give the food to the orphans it was intended for? Did they give your kids the clothing that was donated while they dressed the orphans in rags? Lots of families benefited from the generosity of those nuns while orphans almost starved. But you would know all about that, wouldn't you? Because you know everything. Just like all the other self-righteous abusers who stood about smirking and condemning the victims of hideous social injustice and abuse. and now are nasty and insulting, calling the victims liars.
    Misty
    6th Jan 2019
    12:56am
    I really feel sorry g OGR you seem to have such a bitter twisted outlook on life, accusing me of knowing everything, well I am not like you thank goodness, with your mightier then thou attitude.
    OlderandWiser
    6th Jan 2019
    8:20am
    Don't feel sorry for me, Misty. I have a great life. The advantage of a rotten childhood is that everything is so much better when you finally have control of your own destiny, no matter what the challenges. I am not bitter at all. I have overcome huge disadvantage to achieve a great deal, grow a large circle of good friends, develop a lifestyle I enjoy greatly. I have nothing to be bitter about. Angry that people suffered such hideous injustice. Angry that ignorant, arrogant destroyers of social harmony deny it happened instead of supporting demands that society clean up its mess. Determined to do what I can to make society better and put an end to hideous injustices. But NEVER bitter. In fact, grateful that life experiences shaped a conscience and a desire to work for good, instead of making me ignorant and uncaring.

    Keep believing fairy tales. It's you who is assuming a 'mightier than thou' attitude, pretending to know more about me than I do and relying crap on Google to assume you know all about someone you know nothing about. Didn't anyone ever tell you Google is notoriously UNRELIABLE? There ARE more reliable sources of knowledge - but when it comes to history, everything is someone's interpretation or what someone wants us to believe. NOTHING is entirely reliable. People who live though major events will often tell you the history books are lies and the Google reports are garbage. And the rich and powerful have the power to tell stories any way they want. They pay 'cleaners' to remove stuff from the web that gives them away. The poor just have to live with whatever BS the rich choose to have written.

    Believe what you want about Turnbull, but it boggles the mind that you choose to believe a story that declares you a useless failure in life!
    Misty
    6th Jan 2019
    10:27am
    There is no story that declares Malcolm Turnbull a useless failure in life.
    Misty
    6th Jan 2019
    12:27pm
    It isn't only Google that has these facts OGR, Wickipedia, as well as numerous other sites, tell the same story, so are they all telling porkies?, also schools and universities do keep records, as do the taxation dept, so are they telling lies too?.
    OlderandWiser
    6th Jan 2019
    5:22pm
    There it is again, Misty. NO COMPREHENSION. I never said anything about MT being a useless failure. I said you were declaring YOURSELF a useless failure, since you obviously believe a poor man can become a mega-millionaire. What's wrong with you then? Can't even get to be a self-funded retiree? You must be a useless failure. At least I rose from poor to self-funded retiree. I guess I'm much smarter than you then. (I was being kind, declaring that it's near impossible for the poor to get wealthy - which excuses you - but you chose to argue!!!!)

    The tax office has never exposed MT's father's tax files, and never would. And
    Wikipedia is accessed via Google and tells the story submitted by any credible person - so will certainly accept MT's version of the facts. In fact, Wikipedia will NOT publish anything written by anyone with no academic credentials, which means that much of its content is biased and incorrect. It rejects eye witness accounts.

    Yes there are other sources of information on MT, including his unauthorised biography - which I have read (I'll bet you haven't!) and they confirm that he inherited wealth. And common sense declares that he must have, because anyone who genuinely started poor knows that you simply can't do what he did without inherited wealth or a windfall AND substantial privilege.

    Of course definitions of wealth and privilege vary according to experience and perception. I know a man who inherited $1.5 million at 30 and thinks he has always been poor. OG thinks he was disadvantaged, yet he had a university education and his parents were in business. It's all relative. I don't doubt MT THOUGHT he had a tough time. Never having experienced far greater hardship, he probably has difficulty understanding his fortune. And I can see why someone with well over $100 million would think his father's millions were insignificant.

    Anyway, rave on. You are just confirming that you are gullible and lacking both comprehension and logic.
    Lookfar
    3rd Jan 2019
    5:29pm
    I find it quite difficult to get accurate or even vague estimates of Malcom's previous financial situation,- of course if you are ridiculous rich, history can be re-written, but maybe his father's dedication to him was the primal factor, - my Thai wife, a peasant farmer in Lombok, dedicated her life to educating her daughter, udergoing extreme hardships but her daughter eventually graduated with top honours and was presented to the King, (and quickly accepted for Oz citizenship, which is why I know her Mum) - so those stories can be true, but the meat of this discussiom is how to get rich, etc, and I think one important "quality" given the progression towards destruction our society has taken due to the release of too much carbon in the atmosphere, leading to Global Warming, is that to get rich you must not care about the consequences of your actions, - if you work to dig up coal or invest in harvesting in oil, which will almost certainly destroy your descendants and probably the whole human race, you would not care about that destruction that you are a part of, indeed you would cut off from your feelings, deny that it could happen etc.
    Indeed this could be the rule number 8, Sacrifice Everything for your Money, put your greed in number one position in your mind/soul/whatever.
    Of course huge amounts of money give huge amounts of Power, - yet a more corrupting element, so the followers of rule number 8, - and there are many, can view with equanimity the grevious suffering of their cute grandchildren as Runaway Global Warming slowly develops, answering only with the the Platitude, "the earth is always changing."
    "A platitude is a trite, meaningless, or prosaic statement, often used as a thought-terminating cliché, aimed at quelling social, emotional, or cognitive unease.[1]

    Platitudes have been criticized as giving a false impression of wisdom, making it easy to accept falsehoods:

    A platitude is even worse than a cliché. It’s a sanctimonious cliché, a statement that is not only old and overused but often moralistic and imperious. ... Platitudes have an aphoristic quality, they seem like timeless moral lessons. They therefore shape our view of the world, and can lull us into accepting things that are actually false and foolish.[1]

    Platitudes often take the form of tautologies, e.g., "it is what it is", making them appear vacuously true. But the phrase is used to mean "there is no way of changing it", which is no longer a tautology: "Structuring the sentiment as a tautology allows it to appear inescapable."[1] (Wikipedia, Platitudes)

    At the same time, some phrases that have become platitudes may provide useful moral guidance, such as "do unto others as you would have them do unto you". Others, though widely trivialized, may be thought-provoking, such as "Be the change you wish to see in the world".[1]

    So the Multi Rich use Platitudes as mind control propaganda, they have their Billions to invest in keeping control of the rest of us, so if anything you say you realise is a Platitude, - trash it immediately.
    Perhaps one can point out to these blinded by greed persons, the invevitable result of their following rule number 8, as an advert,- (it is the multi billionaires who are causing global warming and are so blinded by their greed they will destroy the earth to keep their snouts in the trough) . - "Have you ever considered a holiday to Venus? the first planet in our solar system to suffer the excitement of global warming called Runaway global warming, - unfortunately the inhabitants will not be able to meet and greet you because they are all dead, - I don't know if it was the atmosphere being almost 100% carbon dioxide, or the pressure on the ground being 90 times ours, (heavy stuff C02) or the temperature being over 400 degrees, or what they did to the fools that caused it, but you will have to take your own water and oxygen, as there is none there. - you will be able to swim though, if you can find some lead, as it is molten there. - One thing you can learn from Venus is that the climate may change, but when it goes bad, it doesn't change any more, - it just stays f'd up forever.
    ex PS
    4th Jan 2019
    12:58pm
    How many " Self made Men" have achieved their fortunes by exploiting the poor, stealing ideas and assets from others and generally reaching the heights by straddling the backs of others. I observe that most successful people have promoted their success by building on what was left to them by previous generations. That is a legitimate and in most cases worthy way of building your future.
    Our son will have a bit of a boost from his parents, just as I was given a step up from mine, this how life should be.
    OlderandWiser
    5th Jan 2019
    10:39pm
    I suspect it's all but impossible to become or even to remain wealthy without exploiting the poor, stealing ideas and assets and straddling the backs of others, exPS.

    I didn't get any boost from parents, but I hoped my children would. Both major parties seem determined to ensure that can't happen. Both seem intent on impoverishing retirees.
    Lookfar
    4th Jan 2019
    9:34pm
    Ex PS, It is perfectly human to want your children to have the benefit of whatever you can give them from your life, - eg your house etc. but we now live in a very Materialistic age, so it seems natural to give your children money, as that seems to be what every one wants,
    (acknowledging the posters above who have found happiness elsewhere), and this is a deep conundrum, - the rich are destroying the earth, but my kids want to be rich, I want to help them - .
    It seems to most that the fabric of society limits their choices, and certainly it has a lot of power, but I have found that, in several situations where I was living next to a very rich family, - that indulged their progeny, that these children were well on their way to be spoilt monsters, they expected, as had always been the case to always get their way, disrespected (overtly or covertly) their parents and everybody else in their environment and looked forward to the day that dear daddy would shuffle off this mortal coil and they could have all his money, do anything they wanted, and never have to work.
    These children are a sort of sickness, our society should not, - if it wants to survive, allow children to be brought up in such a diseased fashion, and I am sure you would not want your children to turn out to be such egotistic selfish demanding monsters, or even a shadow of such. - What a joke that America is led by such a one..
    So, what are the qualities that our children need to survive the undeniably hard times ahead? - somehow I feel that such qualities are not monetary, - what do you think?
    OlderandWiser
    6th Jan 2019
    5:09pm
    Lookfar, I think the next generation will need the innovation and survival skills that past generations had but seem to have been lost. Even in our generation, they are rare (though there are those that still have them).

    Materialism is destroying the earth. That is a fact. I don't agree with some of your statements - and certainly not with your politics - but I DO agree that materialism is causing pollution that is destroying the atmosphere. I have never contested that and it certainly concerns me. Where you and I disagree is on the political and commercial approach to resolving the problem.

    Going backwards is hard. We can't just all stop driving cars and living in brick, tile and glass houses with carpet or tile floors. We can't suddenly stop using electricity.

    I do agree that rich (and even middle class and upper working class) families often produce children who are absolute horrors and who, if they don't inherit great wealth, are doomed to great unhappiness. I agree our society is sick. The only thing you and I disagree on, I think, is your proposed remedy. I believe the ALP and Greens are using the environment to achieve undesirable outcomes and are not genuine in their claimed concern. Of course the LNP is doing nothing for the environment. On that point you will get no argument from me. I just happen to know a lot about the Greens' agenda (I used to be a member and I'm very close to officeholders and policy makers) and what I know is deeply disturbing. And the social re-engineering the Greens and ALP are pursuing is deeply disturbing to me.
    Lookfar
    4th Jan 2019
    9:42pm
    Should we limit, peoples personal fortunes? say 3 millon? so as to remove such monstrosities for societal destruction from our midst? should we limit inheritance? Could there be perhaps a fitness test for anyone inheriting money who would so by have power over others.?
    I guess I woud say yes, and the sooner the better.
    Lookfar
    5th Jan 2019
    8:16pm
    I don't think this discussion would be complete without a refreshing input from Evonomics, so here we go.

    What Monopolies and King Kong Have in Common
    Small may not necessarily be beautiful, but there are scientific reasons that big is often bad.

    By Jonathan Tepper and Denise Hearn

    While Hollywood loves movies like King Kong and Godzilla, there is a good reason these fantastical creatures don’t exist in real life. As J.B.S. Haldane put it in his classic essay, “On Being the Right Size,” “You can drop a mouse down a thousand-yard mine shaft; and, on arriving on the bottom, it gets a slight shock and walks away . . . A rat is killed, a man broken, a horse splashes.” This is the key to the problem of scaling.

    The size of an object determines its structure. The biological principal is referred to as the square-cube law. As a shape grows in size, its volume grows faster than its surface area. As an animal’s size increases through evolution, their structure has to strengthen more than proportionally. This explains why it is so difficult to build ever-taller skyscrapers and why King Kong would shatter his thighbone if he tried to walk. Big animals like hippos need much fatter legs than dogs do.

    There isn’t a formal square-cube law in economics but the general idea holds. Companies scale much like organisms do. Small, rapidly growing businesses are the most productive, and giant businesses are less nimble than startups. It should not be surprising that when Louis V. Gerstner Jr. wrote about turning around IBM, he titled his book Who Says Elephants Can’t Dance? The book became a best seller, precisely because businessmen know that big companies are lumbering giants.

    Today, those giants dominate the economic landscape. Yet GDP growth has been anemic, at best. Large corporations have been hoarding almost $2 trillion dollars, primarily offshore, yet corporate investment levels are dismal by historical standards. Corporations prefer share buybacks to raising wages or investing. Economists cannot figure out what ails the patient.

    Finding the source of our ills is critical. The stakes for the health of the US (and Oz ) economy could not be greater. Why has the rate of startup creation declined? Why are wages not rising? Why is productivity low and not rising? Why has inequality been increasing?

    Many politicians and economists think the problem is the tumor of income inequality, but the answer is that the US economy has large parasites that are sapping nutrients and robbing the country of its energy. Industries have become increasingly concentrated over the last few decades, with a few dominant firms controlling entire industries. We’re in a new Gilded Age. More on that here. Monopolies and oligopolies won’t kill the economy, but they can cripple it.

    The only people who should be happy with the situation we have today are people who own shares in monopolies. Egalitarians should be appalled by higher inequality. Free market conservatives should be horrified by less competition, economic stagnation, lower productivity, and less investment. Everyone should be concerned about the concentration of economic and political power in the hands of very few.

    In the following pages, we’ll review the consequences of concentration in turn: higher prices, fewer startups, lower productivity, lower wages, higher income inequality, less investment, and the withering of American towns and smaller cities.

    Lower Wages and Greater Income Inequality

    Almost all the focus in industrial concentration has been on profits, productivity, and investment, but the biggest impact has been on wages. Workers have systematically lost power versus large companies that now dominate industries.

    Dozens of studies now document how industrial concentration is driving income inequality. The smoking gun, however, has been missing. Researchers had the intuition but could not prove that monopsonies, particularly at the local level, affected consumer wages.

    In a monopoly, one company is the only seller and can hike prices as it likes. In a monopsony, one company is the only buyer and can pay whatever prices or wages it likes. For example, Amazon has become the monopsonist in the book industry, as the main buyer from publishers, and it sets the price at which books are sold. For some professions, one company can set wages.

    Recently, economists have begun to look into the problem of labor market monopsony to find out just how bad the situation is.

    The evidence is depressing. Economists Marshall Steinbaum, Ioana Marinescu, and José Azar looked at job markets across the United States to see how concentrated employers were. They found that most commuting zones where workers would search for a job were highly concentrated, and this dragged down wages. The results of wage decreases were extremely troubling. They showed that going from a very competitive to a highly concentrated job market is associated with a 15–25% decline in wages.

    The market for goods is national, while job searches happen locally. This helps explain why ideal, perfectly competitive markets are in fact a myth. Steinbaum’s study shows that this insight is correct. He and his colleagues note, “The most concentrated labor markets, and the ones where the effect of concentration on wages is largest, are the rural ones.”

    Companies can pressure workers in many ways to drive down pay. Economists Jason Furman and Alan Krueger have shown that many firms are able to suppress wages through monopsonistic behavior, such as collusion, noncompete agreements, and barring employees from class action lawsuits. In 2015, Jonathan Baker and Steven Salop identified market power as a likely contributor to the growth in US wealth inequality. Lina Khan and Sandeep Vaheesan have noted how monopoly pricing is a form of regressive taxation that turns the disposable income of the many into capital gains, dividends, and executive compensation for the few. “Evidence across a number of key industries in the United States indicates that excessive market power is a serious problem.”

    Some monopolies pay very well for the lucky few. Pay tends to increase with size of the firm. Professor Holger M. Mueller of New York University and his colleagues found that wage differences between high and low-skill jobs increase with firm size. They also demonstrated that there is a strong relation between the change in firm size and rising wage inequality for most developed countries. They note that what many interpret as a broad move toward more wage inequality may be driven by an increase in employment by the largest firms in the economy.

    The trend toward larger companies is driving a wedge between the few at the top dominant companies who are paid spectacularly well and the majority of Americans whose wages are stagnant. Economist David Autor and his colleagues concluded in a recent paper that the rise of “superstar” firms with high profits and relatively small workforces has contributed to the shrinkage in workers’ share of national income and a corresponding increase in the share of profits.

    Higher Prices

    The primary reason why regulators have allowed an orgy of mergers and acquisitions is that the combined companies, the “NewCos” in investment banking speak, are supposedly more efficient and can provide lower prices for customers via economies of scale. Allegedly consumer welfare is enhanced when two or three companies completely dominate an industry. As payrolls are slashed and companies achieve the holy grail of “synergies,” reducing duplicate accounting, legal, and HR functions between companies, these savings are magically passed on to buyers.

    Passing on cost savings to consumers is a wonderful story that has no basis in reality. Dozens of economic studies have shown that businesses don’t get more efficient after a merger. The simple truth is that they make more money because they gain market power and can get away with higher prices. Professor Rodolfo Grullon found in his major study on industrial concentration that there is no clear relation between the efficient use of assets and concentration. The main reason companies made money was because they had market power.

    A recent paper by economists Justin Pierce of the Federal Reserve Board of Governors and Bruce Blonigen of the University of Oregon shows that mergers cause higher prices with little evidence of greater productivity and efficiency. They also looked in great detail at whether mergers increased efficiency through reductions in administrative costs and greater asset productivity, but again find little evidence for these grand claims. This corroborates the work of the economists Jan de Loecker and Jan Eeckhout who charted a rise in corporate markups from 18% in 1980 to 67% today. In plain English, companies’ profit margins go up because they can raise prices, not because they’re more efficient.

    The proof is so overwhelming that it begs the question why antitrust authorities have allowed firms to merge. Firms always lobby to plead their case with regulators and legislators, arguing they will exercise their market power responsibly. Firms use economists for hire to create models “proving” that mergers will lower prices. But once mergers go through, prices mysteriously go up. These remind us of New Year’s resolutions to lose weight. They sound great at the time but quickly fade away as soon as donuts and pizza show up.

    Today, King Kong and Godzilla companies dominate the marketplace, choking economic growth, squeezing workers, hiking prices on consumers, and exacerbating inequality. Sometimes reality is stranger than fiction.

    Adapted from The Myth of Capitalism: Monopolies and the Death of Competition (Wiley, Nov. 2008)

    2018 December 14
    OlderandWiser
    6th Jan 2019
    9:55am
    Just reading an article about cars that cost over $4 million.

    No, rich people don't spend. They invest wisely. All those $4 million +++ cars are owned by poor folk.
    Lookfar
    6th Jan 2019
    10:45am
    Hi Rainey, would love to hear that full story, knowing that no bank would lend a poor person 4 million dollars, and that for any poor person $4 mil is not a definiton of a poor person, - not being critical, (although I am of your climate change denial position, - but we can sort that out later) just would like to hear how that seeming contradiction could be?
    Cheers,
    Geoff.
    OlderandWiser
    6th Jan 2019
    4:54pm
    Sorry Geoff. I was being facetious. Of course no poor person could buy a $4 million car - any more than a poor person could send his kid to very exclusive private schools or leave them the equivalent (at the time) or nearly $5 million. Any more than anyone who grew up poor would risk $500,000 on a high risk tech investment.

    I certainly have never had anywhere near $4 million and could never hope to have remotely close to that, and I would certainly NEVER borrow to buy a car of any kind.

    My comment was intended to highlight the fact that claims that the rich don't spend is ridiculous. If they didn't, these luxury cars, expensive yachts, fancy mansions, and hideously priced designer clothes wouldn't exist.
    Lookfar
    6th Jan 2019
    11:18am
    Misty, You sound to me, (sorry if I am wrong) as another person betrayed by Malcolm Turnbull, he strongly supported renewable energy and action against Climate change, he voluably supported Biochar, a movement I strongly support as it removes the carbon from the atmosphers and can heal the Earth's soils), and whilst I did not go so far as vote for the Liberals, I would have if he had stayed true to his ideals as announced, - but he would not, - power or money or hubris, (all deadly sins fyi) caused him to betray himself, also all us Australians, and although not everything that OGR says is correct, I think he (Turnbull) is probably part of the 8th group I have elucidated (Explained) in the preceding posts.
    I think we need to move on, the major problem is not OGR's no doubt well meant concern about franking credits, but the survival of the Human race, the which very few, particularly us older folk, seem ready to take on as our gift to the future, - rather most of us don't want to think and so deceive ourselves that our betrayal of the biosphere, and probably withal, the human race, is not our concern, or that voting blindly is going to solve it.
    Malcolm Turnbull betrayed all that he said he believed in, why?

    back to you Misty,
    Misty
    6th Jan 2019
    12:11pm
    I don't know how you have come to that conclusion Lookfar, if you read my replies to OGRF you will see I am trying to correct OGR'S perception of Malcolm Turnbull's life story and legacy so far, you don't get to be PM if you are a useless failure in life.
    OlderandWiser
    6th Jan 2019
    4:58pm
    What a ridiculous comment, Misty. I never suggested Malcolm was a 'useless failure'. I corrected a myth about his inherited wealth and privilege. He had every opportunity to be a prime minister. Few from the origins he CLAIMS would have a hope in hell, no matter how smart they were - and I certainly never claimed he wasn't smart. Only that he inherited wealth.

    You really do have a major comprehension problem!
    Lookfar
    6th Jan 2019
    12:56pm
    Hi Misty, I don't pretend to know the biographical details you and Rainey argue about, nor would I give them any credit beyond what they have achieved, - there was on another website today discussion about Cane toads, Reginald Mungomery, imported the toads, bred them and released them, - an ecological disaster, but his biography only mentioned the nice things, - this is not good enough, too many biographies hide the disasters, why should you respect some body who betrayed his ideas, - clearly stated in years gone by, - ie with regard to the NBG?
    Reginald destroyed a huge part of the ecosystem of northern Australia, why should his biography not include his enormous error of judgement? - Turnbull partly destroyed, possibly, the middle class of Australia, on the injunctions of his American "bosses" , who have already destroyed that group in America, - only and solely to get their money, - really good, Misty, if you look up Neo-Liberalism" and see how it has affected our planet, - you can see how this sort of biography would suit Donal Trump.
    Misty
    6th Jan 2019
    4:07pm
    I don't particularly care about MT one way or the other but I don't like the truth being misconstrued.
    OlderandWiser
    6th Jan 2019
    4:55pm
    Then stop believing crap and denying truth.
    OlderandWiser
    6th Jan 2019
    5:46pm
    Lookfar, this is the problem with people's stories. The wealthy and influential can tell their story any way they please. Those without influence are condemned to have their story rejected unless it fits with what the rich and privileged want us to believe. History books have been entirely rewritten to suit political and economic agendas. I met a man a few years ago who wrote history texts for high schools. I told him I had documentary evidence, from government files, that something he wrote in those texts was untrue. His reply was that his version would stand as he had the authority and power, and he did not choose to accept what I stated as truth no matter what evidence I showed him. He added that he would lose his position if he wrote the truth as I evidenced it, because the 'powers that be' (the government) wanted it told the way he told it.

    Another example - a friend attending university told us what she was learning about a particular historical event. My partner and a friend of his told her they were there, and what she was taught was entirely incorrect. They gave her the true version of the event - as seen first hand. And they gave her contact details of 20 others who saw it and would concur. Her reply? "I know you are right, but if I dispute the professor's version or write something different in my thesis, he will fail me."

    It's not at all surprising to me that much of the detail is left out of Reginald Mungomery's bio, or that many bios tell the story that those in power want the masses to believe. That's how power and privilege has been manipulated through the ages. It's nothing new. People are now paying professional ''cleaners'' to find and remove published material that reveals facts they don't want known, or tells their story in a way they don't like. Turnbull is certainly not alone in wanting the world to believe what it was in his political interests to have believed. He won popularity with his story, whereas many would have disliked him and possibly voted against him had they known the truth. The people love fairy tales. Those who inherit wealth and privilege are often far less popular. And MT wasn't the typical Conservative politician. In fact, he originally wanted to be Labor, and Labor voters love the underdog, so it's logical that he would want to appear as one. Trump also tries hard to ensure the story he wants to tell is believed, but there are plenty who would dispute his version of his life story.

    Ultimately, the intelligent and thinking person will take Ben Franklin's sage advice and "Believe nothing you hear, and only one half that you see." And what you read has the same merit as what you hear and see, as it is nothing more than what someone heard or saw at some point and chose to put on paper.
    OlderandWiser
    6th Jan 2019
    6:08pm
    I might add that what we are asked to believe changes often. A decade or two ago, we were supposed to believe that priests in the Catholic Church were next to saints and had divine wisdom. Today we are being told many are peadophiles and perverts. There are many cases of persons imprisoned for crimes that legal records confirm they committed, yet a decade or two on they are found to be innocent. I grew up believing written and widely accepted claims that men and women who had same sex relationships were evil. Today we take an entirely different view of gays, lesbians and transgenders. Authorities declared foods, drugs and chemicals safe and recommended their use for decades before declaring they had evidenced serious risks and banning them. Parents who spanked their children were admired for disciplining them. Today they are accused of physical abuse. A generation ago, nobody talked of climate change but simply of weather cycles. Today, there are those who claim the truth is that there are cycles and those who claim the truth is that there is climate change, and both groups accuse the other of 'misconstruing the truth', yet neither does. They merely speak according to their beliefs based on what knowledge they have acquired from whatever sources they have explored.

    Truth is open to interpretation. Even two eyewitness accounts of an event will differ, depending on the perceptions and prejudices the witnesses have acquired through their life experiences. To accuse someone of 'misconstruing the truth' is most often to deny that points of view can differ and that perception and bias can influence. That is why Ben Franklin made that statement, and why it has been widely accepted as sound advice.

    What I find odd is that Misty on the one hand claims authority to declare the version of MT's bio that she read is the absolute truth and any contradiction is 'misconstruing the truth' - despite her lack of first hand knowledge. Yet when it comes to my story, she presumes to know more than the person who actually lived it!
    Lookfar
    6th Jan 2019
    9:19pm
    Oops misty, the NBN, not the NBG, - ahhgh, I hate alphabet soup, - in the beginning there was the Word, probably not even God, when he gave human beings free will and to name all the beasts, etc, envisaged that particular lazy bureaucrat slovenliness, Alphabet soup,. otherwise called abbreviation, and may god bless all who sail therein and may the keel rot even faster.
    Misty
    6th Jan 2019
    9:23pm
    My final say on the subject of MT, OGR, you believe what version you want to believe and I will believe the one I want to believe, end of story.
    OlderandWiser
    7th Jan 2019
    6:56am
    Great. I don't care what you believe Misty. If you want to believe a fairy tale that suggests everyone who didn't achieve wealth is a useless failure, go for it. Personally, I'd rather show respect for those who have to struggle in the real world by acknowledging that people DO NOT achieve massive wealth and privilege coming from underprivileged backgrounds.
    Lookfar
    6th Jan 2019
    8:06pm
    Yes OGR, it is said that history is written by the winners, and they are bloody ruthless. - I recall discussions on a veterans web discussion of a claim by a vietnam vet for his pension as he had been severely wounded, he found that the unit he belonged to no longer existed, the Australian military museum denied it, people who were officers in it denied it, on and on, - he took it to parliament, ministers instructed their employees to find it and pay him etc, and then suddenly everything disappeared, - and even to this day in my computer, amazing! - of course it did not help his case that certain units and members absolutely disgraced themselves and Australia with cruelty, murder, lies etc, the which the Govt and military establishment wished to sweep under the carpet, but to lose it from my computer I find frightening that there seems to be methods to destroy information on ones computer, - it seems. - Whatever, your interpretation of the life of Malcolm feels correct to me, but your misinterpretation of climate change, whether you feel what the greens suggest is the answer or not, has to be based on physical, provable, evidence, - there are tens of thousands of people all over the world measuring temperatures, humidity, sea levels, carbon dioxide concentrations in sea water, amount of heat coming into and leavinf the atmosphers, and so on, - it is that particlar quality that Sherlock Holmes exemplified, - noticing the finer details, - also called legwork, - we are now up to 409ppm of carbon dioxide in the atmosphere, - not seen for 800,000. years, friend of mine is finding in his greenhouse testing that Flowering plants seem to be inhibited at that level, - what Rainey will we do without flowering plants? - eat pine cones?
    You have a good mind, Rainey, I think you can overcome that block in your thinking, (please excuse my bluntness) that stops you looking at the evidence, the overwhelming evidence, that Climate Change, ie a move in the climate of our planet to re move the Human beings, is happening.
    Whilst it seems that a certain kind of rigid puritanism has infected the Greens, and they certainly could never form an actual govt. from their current position, they do try to support action to fight climate change, although there is an element in there that wants all human beings destroyed as unfit to survive, so they bear watching.. as does the labour party, as it is certainly in their interest to be seen as on the side of our grandchildren, - which Morrison is certainly not, but the labour party could get a huge cash donation from Adani tomorrow and they would just open their legs, so a longer term party, dedicated to our childrem, needs to be formed, - don't ask me how, - it is just my job to design the renewable network to displace the coal fired atrocities, - my vision which you seem to negate without any reason at all?
    Whatever, let's try to work it out and not get involved in that rigidity that you and misty both accuse each other of, - we have a planet to save, whether you accept that or not, the facts are there and must prevail.
    OlderandWiser
    6th Jan 2019
    9:09pm
    Hey, Lookfar…. I really think you've misread my comments. I do not deny Climate Change. Not for an instant. It's the response to it by the powers that be that concerns me. It's happening. To what extent humans have caused it is questionable. We know that animals contribute every time they pass gas. We know that volcano eruptions contribute substantially. I support doing what we can as a society, but I don't know that there is much we can do realistically, and I don't support the methods being adopted by some. I do see many using climate change for commercial and political gain, and not at all sincere. I agree completely that Morrison and his party are not sufficiently committed to environmental protection, but I also see Labor and the Greens engaging in social re-engineering that is exceedingly harmful. I would love to save the planet, when someone provides a convincing plan to do it. In the meantime, I will continue to do what I can. I fought long and hard for the protection of forests and a koala sanctuary near our home. I refused to install air conditioning in my home. I grow recycle as much waste as possible. I conserve water as best I can. I support lobbying to save our Barrier Reef and to stop Coal Seam Gas mining. I use natural soaps and cleaning agents and fertilizers and insect repellents wherever possible.

    I'm not sure where you got the idea that I deny Climate Change, Lookfar. If anything I said conveyed that impression, I apologize and withdraw the remark. It is merely your political stance that I disagree with. I don't think the ALP or Greens have any answers, and I worry that to a large extent the Climate Change problem is being abused to excuse a wrongful political and commercial agenda that, in reality, has little or nothing to do with Climate Change and everything to do with abuse of power and wrongful commercial gain.

    As for rigidity - I am seldom rigid about anything, but I do react badly to people who display selfishness or lack of empathy and respect and I detest people who cannot be at all open-minded and fair. I am sympathetic to the concerns of anyone who appears to be sincere and unselfish - committed to do good for society. I have suffered a great deal of injustice, cruelty, social shunning and torment - solely because of being orphaned. While I have overcome challenges to make a good life for myself, I have not forgotten the kind of people who shunned and tolerated the evil that caused me so much hurt, nor those who wanted me beaten down when I tried to raise myself up. When I encounter people like them, I react badly. I have zero patience with those who refuse to unite to acknowledge and fight unfairness. If someone attacks me, I defend. I am more than happy to try to work out any differences with people like you, who speak respectfully and kindly and look for points of agreement.


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