It’s all in your head
An article recently appeared on MSN Moneywise looking into the question of why so many millionaires don’t feel rich:
The article dismisses it as psychology. Rich is a state of mind. It’s all in your head.
I, Finster, beg to disagree.
A million bucks just ain’t what it used to be. Inflation has eroded the value of a million dollars just the same as it has a single dollar. A hour of the time of a skilled tradesman, for example a plumber, electrician, carpenter or mason, typically once ran about ten dollars. Now it’s about a hundred or more. A luxury car used to be ten thousand, now it’s a hundred. A million used to be enough to buy multiple homes, now in many locales it doesn’t even buy one. According to the Federal Reserve Bank of Minneapolis, $100 in 2025 has the same purchasing power as just $12.05 did in 1970 … which translates into $1,000,000 now being worth $120,500 then … and that’s based on watered down government inflation statistics. As recently as 2009, a million dollars could buy 1500 units of the S&P 500. Now it buys less than 150. In 1968, it could buy 28,571 troy ounces of gold. Now it doesn’t even buy 250.
The gold, meanwhile, buys just as much as it did a century ago. If you were a millionaire in gold in 1925, and had the same amount of gold today, you still feel as rich as you did then.
It’s not all in your head. The dollar has lost so much value, you now have to be a millionaire just to aspire to the middle class.
True, but we live vastly better lives now than a “Millionaire” of 100 years ago.
Meantime the World, even America is looking at the Japanese “K” car.
https://www.carscoops.com/2025/12/trump-saw-these-really-cute-cars-in-japan-and-now-wants-them-on-us-roads/
Talk round the campfire is the British PM is about to face a challenge VERY soon. It is said they might call a general election as soon as next year.
Mike
In general, sure. On the inflation front, not so much. A hundred years ago a millionaire was truly rich. Even by government inflation statistics, $1M in 1925 was the equivalent of $38.6M in 2025. In terms of gold, more like $200M (gold was $20.67 an ounce). I don’t have any 1925 survey data, but am pretty confident if you asked, few millionaires would say they didn’t feel rich.
For average Americans, sixty years would be a less flattering comparison. Living standards have been flat to down. Sure, we have snazzier toys, but in the sixties, it was normal for a couple to own a home, a car, and raise a family, on just one income. Both have to work today for similar material returns. When people have to work twice as many hours for the same stuff, that’s a 50% haircut in living standards.
Things turned down in the seventies, but recovered in the eighties and nineties. By 2000 living standards were good. Most of the stuff of the sixties but with better tech. The federal budget was nearly balanced. Since then though it’s been all downhill. In 2000, a million could buy the “American Dream”, but today it takes five:
The 2025 “American Dream” Now Costs More Than $5 Million
I like to distinguish between the effects of technology and of government. No question technology has greatly improved living standards, but government, with its wars, meddling, regulation and inflation, has done the opposite.
Question:- Would a Japanese “K” car sell in America?
https://www.youtube.com/watch?v=gMgyrPt_KvA&t=235s
Am thinking, you know all those DNC sh1th0les New York/LA etc…..?
Cheers
Mike
>I don’t have any 1925 survey data, but am pretty confident if you asked, few millionaires would say they didn’t feel rich.
Millionaires were very rare during the Roaring 20s so no millionaire of that era could realistically say he didn’t feel rich. Only when comparing himself to a Rockefeller, Carnegie, Vanderbilt, or Morgan could a millionaire somehow feel that he was not rich.
I remember reading, perhaps in the original edition of The Intelligent Investor, about a scenario involving a widow with small children and $100,000. It was said that such a widow would easily be able to provide for herself and her children with that endowment. Simply investing that $100,000 in U.S. government bonds would yield approximately 5% per annum or $5,000 a year.
How much is $5,000 a year during the 1920s? Compare it against Henry Ford’s Five-Dollar Day which was started in 1914. A factory worker earning $5 per day would gross $1,300 a year if he worked five days a week for all 52 weeks of the year.
The $5,000 per year of interest earned by the $100,000 of principal invested in U.S. government bonds is nearly four times the standard of living offered by a person working on an assembly line at the Ford Motor Company. I’m fairly confident that inflation was not running rampant during the 1920s (speculative excesses on Wall Street aside) so I don’t think much adjustment for inflation since 1914 is necessary.
The point being: Even $100,000 was a lot of money in the 1920s and it could afford a person a solidly middle class or upper middle class lifestyle without ever having to work or worry about loss of capital. A person with ten times that money is in the upper class and could likely afford a very fine house with a proper butler, head maid, chauffeur, and other lower level servants.
I don’t recall what year it was, but my grandparents paid around $5000 for their house in that era. Just down the street from here, now it would be closer to $150,000, and this is affordable small town flyover country.
On the downside, our 1925 millionaire wouldn’t have email, an iPhone or Netflix. But with the lifetime security, very fine house with the proper butler, maid, chauffeur, etc, I think I could get used to life without them.
Britain heading for sovereign debt crisis, warns economist
Britain and other major developed economies are heading towards a sovereign debt crisis as they struggle to get a grip on spending, a prominent economist has warned.
Gerard Lyons said the risks “might be starting to become more evident” in markets as global bond yields rise around the world.
“Six of the G7 are heading for a debt trap by the end of the decade,” Mr Lyons told the Edelman Smithfield Investor Summit.
“It matters more for France and Britain because both of those countries are more dependent on international investors to buy their debt.
“Hence in France and the UK it is more of a live issue. A debt trap is effectively when your debt becomes greater than the size of your GDP. Quite a few countries are already there.”
Government borrowing costs have climbed this week, with US Treasuries on track for their worst week in six months ahead of inflation figures delayed by the 43-day government shutdown.
Meanwhile, the yield on long-dated Japanese government bond yields – the return governments promise to pay buyers of their debt – hit record highs this week as central bank indicated it will increase interest rates.
Mr Lyons warned Britain had shown the difficulty of getting public finances under control, running only seven budget surpluses since 1969.
“So it’s very difficult for governments to get themselves in a position, when they’re in a debt trap, to stabilise it,” he said.
“And it’s proving difficult to actually stop us heading in the direction of a debt problem. So debt is really coming to the fore.”
Mr Lyons added: “We’re in an environment where Western democracies seem incapable or unable to address the underlying issues that are causing debt to keep on rising.
“So a debt crisis I would say is likely by the end of this decade but we might start to see that, as we started to see with France a few months ago, factored into market thinking much sooner.”
Megas Dispatch from England:- India jumps ship!
So, at last India the “Dark horse” has decided to side with Russia. Russia & India have a good deal of History together. When the war broke out with Pakistan in the early 70’s it was the Russian navy that threw a protective screen around India as Nato (British navy) attempted to intervene.
One of India’s proudest moments was when they agreed to buy oil from Russia…….as in buy European oil from Russia. The British scumbags went APE they “Demanded” a meeting with the India PM ………….& got told to piss off!
The West was then kind enough to sell India “Cutting edge” weapons that failed massively in that little dust up with Pakistan. Only the Russian S400 SAM system’s performed well. Having been well & truly ripped off by the West & the attempt to BULLY India into line…….they finally found the strength to jump ship…………..& its VERY bad news for the West.
India has a LOT of man power, lots will be going to Russia as overseas labour to work in their factors etc. Mean time Russia will invest in India production & feed them cheap oil/Gas from now on.
& European response?
They not going to buy any more Oil/Gas from Russia after 2027……..which is when the contracts end & Russia had already told them they would not sell to them after this date.
Mike
Mega’s motoring dispatch:- Getting the “Privileged poor” the right mobility solutions.
As many of you know there is a subject VERY close to my heart, Motability. The rather strange business of giving the work shy/ losers a NEW BMW/MERC/AUDI @ Megas expense. Even the Marxist low lives running the nation have decided to scale it back a bit…..they have to rough it with a Ford or Renault.
This program costs BILLIONS just by itself, allowing for other benefits the total welfare bill will it £100 billion a year!……………..even Labour ministers say that is totally unsustainable. However it has opened a larger debate about Pleb transport.
Up to now the unwashed scum could go & get an ex fleet BMW/Merc/Audi etc at quite a cheap price (2nd hand) . The Nation would have to import the Diesel or Petrol to run it. This was not a problem under lose fiat money, but one hell of a problem when the seller wants REAL money.
I recall as a child (Pre Nixon) Ashened faced old news readers on the BBC grimly reading out the latest balance of payment figs. After Nixon, this was less of a problem. Well its come home to roast once more……..in Gold backed system REAL payment required, no Gold, No goods.
Thus, wot to do?
The Limey scum governments will simply not be able to afford to import Billions of Hydro carbons just for Fat Sally or Dickhe*d Dave to swam around in a large SUV/Saloon car their ass should NEVER been in …..in the 1st place.
Europeans find themselves in the same position, thus enter the new “E” car. Just like Japan after WW2 They forced “Kei” or K class cars, for those whom could not prove they had a parking space for a real car. Very small & light weight, fun looking………..some of them.
No more than 64 bhp.
European “E” cars are likely to follow suit, the never ending “race” for safety is also going to stop. Rumours are these cars will be “Safety light” as they are intended as city run a bouts. It will cut costs & thus offer an cheaper way into a small EV that will use wind power rather than imported fuels.
This is going to happen, so what will force a Dickhe*d driving a BMW to change to get one?
Hmm…………….Mega does deep thinking………………what if……once these things become available…er its rather difficult to get fuel?
Simply driving up the price would drive inflation…………..but stotages?………Gas lines……Jimmy Carter style……………..hmmmmmmmmmmm
Mike
The Empire strikes back?
https://www.telegraph.co.uk/business/2025/12/06/britains-bond-vigilantes-target-trumps-america/
Mega’s dispatch from England:- Ho-ly SH1T !!!!!!!!!
My God, i never thought i see it, not even as late as last year, but the American Deep state has just dropped a political Nuke. May be not quite as large as Biden doing a runner from Afghanistan, but not far off.
I refer to a document that lays out a new road map for US overseas policy. I won’t trust Trump & co a inch but it makes VERY interesting reading. In short the US wishers to return to the days of “Spheres of influence”. No other Super power in central or South America……..Africa is to be traded with, not to bring “Freedom” to.
In short the great powers are cutting up the cake (Planet) to who gets what. What was most shocking was the US View on Europe. “In 20 years or less it wont be Europe any more, so forget it”
Just has a “War council” is held in London with UK/France/Germany “Fully backing” UKraine…..backing with what?
UK/Europe are now in terminal decline, it wont be long now till it starts to hit. As Max Keiser said many years ago “This is going to be a thing of beauty”………how true.
Mike
I think this pertains:
Birthing Pains for a Multipolar World
I’m not really a foreign policy guy, but this strikes me as potentially the most positive development in that area in a long time.
Silver is on a RIP……………
You can say that again. Platinum not far behind. Just a general sense that silver is now about where gold was a couple months ago…
Sorry Guys
Mum in hospital, not sure whats happening but she is in great pain. Only took 19 hours to get the Ambulance to turn up………….Thank God we sending all our Taxes to Ukraine & not wasting them on silly things like the health service.
Mike
Sorry Mike, I hope all goes well with your mum. We sure could use a priority shift too. Wait times are shorter here but getting longer, and the system is fabulously expensive and complex, with a multitude of programs that overlap nevertheless leave gaps. Yet we still find the money to break things and kill people around the world. Obamacare, Medicare, Medicaid. and Social Security are all too complex to be understood without intensive study, a massive unaccounted cost in itself. The average citizen is a victim; our government is working for somebody else.