Capitalism Pays Investors


For some reason when I hear the word capitalism, I think of the characters Randolph and Mortimer Duke from Trading Places. The Duke brothers, Randolph and Mortimer, are crooked investors on Wall Street.  The two only care about themselves, which is apparent in the plot.  The brothers make a friendly bet, for $1, over the welfare of one of their employees and a street begger, whom they force to trade places.

These brothers are the antagonists.  They have so much money that they need not worry about anyone else.  After dabbling in readings about economics, I’ve come to a turnabout.  These characters are capitalism’s heroes, regardless of their poor morals.  Their income thrives off of their investments: their company’s equity, assets, and employees’ knowledge.

Investors in capitalism encourage spending: Investors get cashflow from consumers.  I think society has a misunderstanding that the rich have assets or the potential to consume assets.  But in reality, the “rich” people are the ones who have a sustainable, passive income that is higher than their expenses, like Mortimer and Randolph.

A sustainable, passive income that is higher than your expenses does not require a lot of buying power, i.e. cash or assets.  And, this cashflow is one form of retirement that will last forever, so you can rest your worries from Social Security, 401k, or whatever other method the government encourages.

America’s status quo is to have a job that covers your expenses.  A lot of Americans live at a level they cannot afford, including maintaining an average credit card debt of $8,000.  Investors have interestingly marketed irrational consumer behaviors, solely for selfish reasons.

Looking at catching up, more generally.

I’m not the first to these thoughts.  Rich Dad, Poor Dad is an interesting, light read detailing cashflows more indepth.  Early Retirement Extreme provides a unique paradigm the stereotypical American would probably find absurd, as he retired in his early 30s due to his low cost of living.  I find a view considering time as a key factor for investing to keep investment thoughts and plans optimistic.

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