Monday, March 02, 2015

There's No Such Thing as Capital Gains


Kristophr said...

The DJI is NOT up. The dollar is in the toilet. And the value of the stocks themselves is way down, adjusted for real inflation.

In 2001, the Dow Jones stock basket cost about 41 ounces of gold.

Today ( 3-2-2015 ), the DJI basket costs a little over 15 ounces of gold.

Anonymous said...


The stock market is a revolving ponzi scheme.

Anonymous said...

Money is not capital. Goods and services are capital. Drills, gasoline, electricity, computers, chairs etc. are all capital.

Capital gains do exist. If you eat a bushel of wheat and work to produce two bushels of wheat, you made a capital gain of one bushel of wheat.

Money, financial instruments and markets tend to muddy this understanding.

Cogitans Iuvenis said...

Totally agree with you. The only reason I still contribute to my 401k is because of my company matching plan.

In fact, due to bonuses and whatnot, almost 60% of my 401k value was money put in by my employer. The gamble I am making is how much of that added money will be left by the time I can retire.

Anonymous said...

@Cogitans Luvenis,

"In fact, due to bonuses and whatnot, almost 60% of my 401k value was money put in by my employer."

The sad thing is that you fail to realize that 100% of the value in your 401k was put in by you, not your employer.

If your employer is willing to match your 401k contributions, he is not doing you any charity. Your employer is considering this contribution as part of the cost to employ you. Therefore he computes this contribution as if it was part of your salary because that is exactly what it is.

Any contribution matching that your employer makes is derived from the value that you produce for him with your work.

Therefore, you are being robbed of your money by allowing your employer to control a part of your earnings by claiming that it is a contribution matching.

You should have the right to negotiate a higher wage instead of a contribution matching.

It could also be that your employer has an arrangement with the investment bank that manages your 401k and is getting kickbacks out of contributions made by his employees.

Therefore, your boss is laughing all the way to the bank while brainwashing you into thinking he is being generous.

You would be better off getting a bigger paycheck and use that to invest in yourself by having a home gym or taking night courses into a STEM field etc.

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Cheers my friend.