Income Inequality

This term is getting a lot of press lately and it makes me worry that somehow my success is being looked at in a different light than it was a few years back.  When I was poor, it wasn't because of some rich guy's efforts to cheat me, it was because I hadn't reached that point in my life where my hard work, education and saving had reached it's potential.   Income inequality was just words that didn't exist.   If you were poor, it was where you were in your life.  You can't retire at the start, you have to work a while.  You can't start out rich (at least in my family) you had to work at it.

During our lifetime, Barbara and I always paid in to a couple of retirement plans and managed to save a few dollars on the side.  Some of our success was because of my extra part time job in the Guard but mostly because we saved.   Once upon a time my Grandfather, Curly Fruits, shared with us that he saved an extra 7% of his income through a savings plan Shell Oil let him participate in.  Barb and I never set out to save exactly 7% but we did save extra when and where we could. 

There was a trick back in the 70's and 80's that I didn't think about.  We put money in 401Ks, IRA, 503Bs and other tax deferred savings programs.  We did gain a little as the money we invested was a write off on our taxes.  The annual savings was not reported and in the end it was supposed to be that we could take it out when we were in a lower income tax bracket.  Guess who is the winner in that scheme.   Now that we are approaching the magic age, we will be forced to make mandatory withdrawals and pay taxes on the money as income.  Dang, who saw that coming?  Not me.  I was sure that when we were in the lap of luxury, our savings would allow us to have more choices, not more taxes.  I was also sure that some Democrat would propose legislation endorsed by AARP that would forgive us our debts in that category.   WRONG!

The other day, I had a discussion with a younger member of our extended family and she was sure that my paradigm was no longer valid.  She said that the cost of an education was so high that a college education hardly pays for itself.   She said that students come out of college with such high burdens that they can't reach the lofty goal of being even middle class.  I don't see it that way.  I guess if you can just go to school and don't have to work to go there, you should be able to come out of school with high honors.  If you worked like I did (GI Bill didn't hurt) and lived on the cheap (8'X38' mobile home) you might escape the crushing debt.  Barb will tell you that her first two years of school only cost her books in California but the last two years were in Kansas and we both had jobs. 

So, I guess the point I would like to make here is that income inequality is not a sentence to forever being poor.  It might be a description of where you are on the income scale, but I sure as heck don't feel responsible enough to give you my money to bring you up.  The only exception in this the person we brought into this world and his wife.  They are working as hard as they can to be better off and a little help from us is the right thing to do.  Besides, if they are going to be the recipient of my estate someday, why not share it with them now when it is needed.  Our parents didn't do that for us but they didn't have it to give.  

Have a great day out there.


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