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January 23, 2010

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I'm in the Deep South and around here that's not really a term we're used to hearing or reading about in any kind of acceptable context. That aside, having your money slaving away for you is certainly a great visual to help get you motivated.

For decades the American dream was to have two cars, a house and a turkey every pot. Unfortunately we never learned that these things should not be financed!

Having wealth, money making you money, should be the American dream that every knows and works towards!

The most noticable financial difference between the analogy of a "slave" and a "money stream", is the fact that a slave would depreciate in value, while hopefully a properly created, funded and invested "money stream" would continuously appreciate in value (even after you retire... if you built it correctly).

I personally like the idea of a money trees better. My money trees are small right now, but at least they are starting to produce a little bit of cash (via dividends).

I kinda feel like you used a poor choice of words there. There's nothing "cute" about slavery. I get what you mean, but it's sort of an offensive way to talk about it.

I like the analogy of a slave, right now my slave doesn't work quite as hard as I would like but it I am still young and building up my investment portfolio. Most of my retirement savings is in mutual funds in my 401k and my wides Roth IRA. I Lon for the day when my investments are working hard enough to outpace my contributions, that would be sweet.

In defense of FMF the complete quotation that this post is based upon was mine.
I grew up in England, the only slavery that ever existed in the UK was in the 1800's when children were still being exploited by being sent down into the coal mines and working in terrible conditions in cotton mills and other factories. When I was growing up there (1934-1956) I never saw a single black person (other than G.I's in WWII) so as you can see my early life experiences were very different from many Americans. The all boy's public grammar school that I attended was also quite different in several ways. In England there is a state religion with Queen Elizabeth being the head of the church. Thus, every morning, school started with everyone attending a general assembly where after the Head Master's address, hymns were sung and prayers were recited. Non Protestants were excused from assembly so out of a school of 1000 boys, 2 Catholics and 1 Jew left the hall prior to the religious segment of the meeting. Occasionally the headmaster would single out a student that had done something very bad such as being caught by a prefect smoking a cigarette in the toilets. Dressed in his black mortar board and cap and gown he would stride down into the assembly, single out the boy in question, march him up on to the stage, while chastising him and striking him on the legs with a bamboo cane. Then in front of the whole school he would be severely admonished and then have to subject to a public caning. Yes! life was very different in my schooldays from those of my children growing up here. They really believed in the old adage, "Spare the Rod and spoil the Child".

Inspirational post and where I want to be as soon as possible. I too am doing all I can to make 'my slave' as big as possible by investing around 60% of my gross earnings towards my retirement pot.

My retirement investing strategy is currently holding 14% cash and 20% in bonds. The rest is in stocks, property and gold. I intend to increase my cash/bonds target weightings by 1% every year until I reach retirement.

I've amassed some cash but have not used it to make a big slave. Currently the only slave is me working and saving 50% of my pre-tax income. Hopefully this slave can retire after another dozen to twenty years.

-Mike

If Debt Is Slavery, then the people who owe money are slaves, people who deposit money are slave holders, and the banks are just the intermediaries. That's practically Marxism 101 right there. It's not your CDs or your bonds working for you, it's the guy who borrowed money from the bank your CDs were purchased from, and the company or govt. who issued the bonds you purchased.

Given that the people (and governments and corporations, too) who owe money generally use it buy something they wanted more than they wanted to be debt-free, I wouldn't use the slave terminology, because we generally think of slaves as people who had no choice but to serve others.

I had to read the entry twice to get the slave reference. Heh.

For those offended by the word And I understand your point. Please remember the site you are on and lighten up a bit. Substitute 'servant' and you have the same analogy. Good for you old Limey, not quite at your level myself yet: only one condo and one Lincoln. lol
Always enjoy your postings.

Side note if it matters: 'billy' above is not the same as BillV who is me.

@MattJ
My best CD is one issued by Goldman Sachs at 5.15% maturing on 10/15/2015 (bought on 10/15/2008 at $1000 each, now trading at $1085) and my best Muni Bond is from North Carolina Muni Power at 5% maturing on 1/1/2016 (bought on 10/29/08 at $981 each, now trading at $1108).

In the case of Goldman Sachs they issued the CDs before the government allowed them to borrow money from the Federal Reserve Bank at 0.25%. In retrospect this turned out badly for the taxpayers and wonderful for greedy investment banks of which Goldman Sachs is the absolute worst - unless you work for them, then it's a wonderful company. I believe that Bernanke, and maybe even Geithner will lose their jobs over it.

In the case of municipal bonds they are issued to allow states to build and maintain infrastructure for citizens like you and me. We pay for the bonds though our state income and sales taxes.

@BillV
I did notice that billy was not you. You and I seem to agree on most things.

Slavery is a concept of using labor for free. Old Limey was obviously not trying to offend anyone and wasn't making a reference to a specific enslaved group. Lighten up.

THis is a tasteless and awful analogy. Get a clue.

@ Jim, etc.
Geez, lighten up all of you. I'm from the deep south and I'm not offended. It's not being referred to people. It's kinda funny and makes the concept concrete, therefore making it easier to understand.

Crystal/Laura
Well said both of you.

Just asking, how many of us have used the phrase "wage slave?" I know I have, in reference to myself--when I was one.

sorry Jim, you're wrong on this. It is neither tasteless nor awful. the word'slave' has not entered into the realm of "You just can't use it".

The word is not yet taboo as the n/s/c/k/h/g/j words.

Old Limey,

Looks like you have a couple good holding there. Everything I had paying over 5% (fixed) as since matured and my CD ladder runs from 2.3% to 4.75%. I just wish I could find a good replacement for a chunk of money that just came up. I don't want to put more in the market at this point, but not really seeing that much that is attractive on the fixed side.


As for those getting offended, I also think people need to lighten up as well. It was obvious as to the what the slavery reference was regarding and to spin it another way is just plain silly. Are we to get offended when we see the biblical references to the borrower being a slave to the lender? I think not.

Sorry for all the typos in that last one.

@JimL
My CD ladder goes from 4.05% to 5.15% between now and 10/15/2015. The best replacement so far has been high yield bond funds of which for combined return & low volatility and drawdown the best has been BJBHX, it's also NTF with no ST redemption fee. I'm watching things closely right now since high yield bond funds need a rising market if they are to continue their nice upward move. A less volatile income fund with a lower return (Ann% 23.8 last 12 months) is OSTIX, it has a transaction fee and a 1% ST redemption fee for shares held less than one month.
My muni bonds are laddered out between 4.5% and 5.5% to 2020 and when one of those matures there isn't much available with a good yield and a price below par, so I have been using a muni bond fund called SXFIX for reinvesting interest when it comes in.
The nice thing about holding CDs and Muni Bonds to maturity is that if you buy them at par or less, unlike stocks, you can't lose, which is ideal in my situation where I no longer need growth - 5% free of taxes will do just fine.

Interesting way of thinking about money and investments, haven't quite thought about it this way before.

Old Limey,

I will check out SXFIX. Thanks! Would love it if those rates still existed!

Have to agree about the word choice here. It's distracting from an otherwise valid point. Language does matter, any writer would know that the right words have a lot of power. In this case they offended lots of folks, including me.

Old Limey,
Don't let the small minded, overly sensitives get you down. There was/is nothing wrong with your choice of words. the word slave is still a legitmate word and it conveys many thoughts.
Get a grip z et al. And this is from someone more than merely liberal. FMF. I know this is your site and you are most tolerant.

BillV:
Don't worry Bill, I don't allow other people's opinions to bother me in the slightest. Everyone is entitled to their own opinion on any subject. I have a few very controversial opinions, as does almost everyone, but the only person I discuss them with is my wife. The use of analogies is a very common part of the written and spoken word and is often used to dramatize, elucidate, and generate discussion.

In this case I would say that FMF's topic was very effective since he counts the number of responses that each topic generates, as do most advertisers. Responses are the lifeblood of blogs such as this so keep up the charitable work everyone!

If anyone thinks that I'm one of the ones who got offended, they've got me wrong.

I don't claim that the word 'slave' is beyond the pale to use, I just claim it's not too useful here. What Old Limey is doing is not extracting value from a slave, he's calling in markers. He is loaning other people his money, and anyone who borrows it by their own free will (whether it's through a bank or govt or directly) owes him more money back than they borrowed.

I am, however, saying that the word slave is the wrong (incorrect wrong, not immoral wrong) word to use here. To claim that it's the right word is to claim that Marx was right, in my opinion.

Loaning money; earning rent on same (otherwise known as interest)is a fundamental of Capitalism.

BTW, marx's ideas are not completing without merit.

Matt I see your point, I just don't agree the word is wrong within the contesxt it is used and on this site. Your point that OL is not exploiting anyone is correct. But for many of us here it drove home a point.


Just curious, have you never heard or used the phrase 'wage slave"?

Btw, btw I decided to respond to you Matt to help FMF with his advertisers as suggested by OL.


Now I must bid you adieu for today. Got to go feed my slave. (I teasing, Matt)

Just curious, have you never heard or used the phrase 'wage slave"?


I have heard it. I've only ever used it in the context of criticizing its use. A reasonable use of the term would be in the context of people who actually are wage slaves, such as folks who lived in crooked company towns or sweatshop laborers chained to their workstations and locked up at night.

I agree it's sometimes valuable to use exaggeration to drive home a point. In this case, however, referring to his income stream as a 'slave' is not just an exaggeration, it's incorrect. Everyone providing him income agreed to do so by contract, and they can almost all escape that contract immediately by paying him off (else escape at the end of the contract by not renewing). If the money were truly a slave to him, he could demand more output and his slave would have to obey, and the only limit would be his desire to avoid working his slave to death.

Of course you can use whatever words you want to use. Would you stand up in front of a room full of black people and give a speech about making money your "slave"? I would hope not. All I'm trying to do is call out the fact that there might be many people who are offended by your use of this word, so why use it? Think of a better analogy.

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