I Don’t Deserve to Get Wealthy from Capital Gains – Marc Faber

Marc Faber was on CNBC  the other day and said something that was fascinating. He said he doesn’t believe he deserves to get wealthy from dividends and capital gains. He said people should get wealthy by doing work.

Becoming wealthy from doing work as Faber probably meant it is certainly noble and admirable but I find it to be an interesting comment coming from someone who has been an investor, a very well regarded investor, for a couple of decades now–he worked for investment banks in the 1970s and 1980s.

It almost sounded like guilt for having been wildly successful in his chosen field. There is no shame in amassing a fortune if done legally or being handed a fortune and doing something productive with it. Who knows what he sees as he lives his life but to the extent he sees impoverished people near where he lives in Chiang Mai (generally an ex-pat haven but who knows what is near by) maybe wealth disparity bothers him.

Wealth disparity is obviously alive and well in the US and has been getting worse. It is interesting that it has continued getting worse under a president who is perceived to be so far to the left (I am no Obama fan). Perhaps this speaks to his inability to make any real progress on any of his ideas and so the old problems have not even begun to have been addressed but either way the problem is getting worse.

It terms of mattering to the economy this is one of those things that will get looked back on with hindsight bias; well of course this lead to another crisis or whatever. Part of the equation as to why no progress has been made is that based on what he says the President seems to believe the way to remedy this is by taking more from the rich which is turning out to be a tough sell in congress. To be clear, this is a problem but to paraphrase an Abraham Lincoln quote on this subject the country will be better off if we can figure a way to reduce the wealth gap by providing better backdrop for people to pursue their own definition of success if they are not where they want to be already.

The other thought from the Faber comment is to wonder what he thinks about living off of capital gains and dividends. Here living off is different than becoming wealthy. Someone who accumulates $1 million might be thought of as wealthy but assuming the 4% rule they would be living a middle class lifestyle. It is the objective of just about every investor (including people whose only contact with markets is their 401k) is to accumulate as much as they can which will hopefully be enough for them to live on along with their Social Security.

About Roger Nusbaum 169 Articles

Roger Nusbaum is an Arizona-based financial advisor who builds and manages client portfolios using a mix of individual stocks and ETFs. Roger writes a popular blog, which focuses on risk management, foreign stocks, exchange traded funds, options etc.

Roger has been recognized by many in the investment management industry for his expertise in portfolio management. Roger has been regularly interviewed by the financial press, trade journals, and television news shows. He has also had numerous technical articles published and has been quoted in a number of professional trade journals, newspapers, and consumer finance magazines. He appears frequently on CNBC Asia as a market commentator.

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