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Monday, March 27, 2017

Is it Luck with a Stacked Deck?

Posted by Tim Stobbs on March 6, 2013

There was a comment left on my one post that had a line that has been running around in my head.

I visit weekly and find it hard to swallow this post because I’m not sure you realize how lucky you and your family are.

Well yes, I’ve had some luck in my life.  I won’t deny that, but at the same time I’ve realized something a while ago that perhaps some people don’t entirely get: it isn’t all luck when you are playing with a stacked deck.

Pardon!?!? Sorry, but it is true.

The fact of the matter is I know I’m playing with a stacked deck and have been doing that for a long while since I came to an important realization: the world is built for rich people and business.  While people have this odd delusion that their governments are in control, the fact of the matter is they really are not entirely.  Business has ( and has had) a disproportionate influence on our governments for a long time…thus the legal system, the tax system and frankly most systems are geared toward their benefit and not the average person.

So by paying off all my debt and investing those systems are slowly fighting me less and now more often working for me.   For example, but investing more I get dividends which get taxed at a fraction of the rate of my normal income.  While this is good for me as an investor, the real beneficiary of this is the businesses in Canada.   On a personal basis the government estimates in 2012, they lost $4.24B of tax income, meanwhile on the corporate side they avoid $6.295 billion in taxes according to the Federal government’s table of tax expenditures.  This is just one little example.

If you really want to get to the heart of the matter just look at the federal governments 2012 budget estimates, which show they expect total income tax revenues to be $163.3 billion (from Table 6.5).  Guess how much of that is paid by corporate income tax…perhaps half? Not even close, they pay about $32.4 billion or UNDER 20%. This isn’t surprising since businesses get to deduct their expenses prior to calculating their tax and a slew of other options. Personal income tax meanwhile is expected to be….drum roll please…$125.4 billion or 77%.  Yep, not to mention individuals are paying the lion’s share of the GST which brings in another $30.9 billion on top of our income tax.

So yes, the deck is stacked, but rather than getting upset I decided to join the winning side and make the systems work for me, while I’m not rich, I can invest more like them and get more income from our small businesses.   Also by avoiding debt I now get people to pay me to borrow my money rather than the other way around.  It’s not perfect, but it’s better than depending solely on luck.

How about you?  Has it been more luck or playing with a stacked deck in your life?

Comments

10 Responses to “Is it Luck with a Stacked Deck?”
  1. Elizabeth says:

    I strongly believe that you make your own luck. Yes there is a chance that you’ll win the lottery or that you’ll get sick, however the cast majority of our lives is determined by how we act and what we decide to do.

  2. meb says:

    Luck is..when preparation meets opportunity.. I am borrowing this thought I read somewhere..

  3. Mochimac says:

    Both.

    I am lucky to have been born to my parents who made it out of poverty, and I am also making my own luck by taking risks, finding opportunities and making the most of it.

  4. I was a healthy child born in to a middle class family in a safe country. That is incredible luck.

    The rest, mistakes and successes, are all my doing. You make your own luck.

  5. Goldeneer says:

    I am lucky to have been born in Canada and have parents that pushed me to get educated. My luck ends there and perseverance begins.

    Luck has nothing to do with how I can retire at 35. I have faced a layoff, unemployment, over leveraging, bad
    business decisions and a difficult city to invest in real estate. Throughout all of this, I changed my habits to have better health and have seeked every smart investment opportunity I have built.

    The saying “preparation meets opportunity” from meb applies to me.

  6. If we are healthy, alive today, live in a first world country, the cards are already incredibly stacked in our favor. Not only stacked but cheating. The first 10 cards are aces.

    Not counting money, where once we get past its marginal utility, we’re fabulously wealthy.

  7. guinness416 says:

    With the money stuff I certainly started, and continue to have, a stacked deck – a good family, being Irish and so getting free education, having a “network” that is unlikely to let me fail, etc etc. Seeing inlaws in the developing world doing everything in their power to get out underlines that too. But I’m incredibly lucky too – I’ve been to funerals for two people in their thirties in the last couple weeks, and the unfairness of that hit me like a mack truck to be honest.

  8. deegee says:

    I attribute my ability to retire 4 year ago at 45 to some good luck and some good life choices. I know people, such as my former coworkers, who had similar luck as I did but because of different (not necessarily worse, just different) life choices, could not or would not retire early. Then again, I know other people who made similar life choices as I did but did not have the luck I had to retire so early.

  9. Jon_snow says:

    Looks like I will be quitting work at 42 – around this time next year. I would say that this is possible mainly because my wife and I have had an average saving rate of 70% for the last ten years. But I would be kidding myself if I didn’t mention that my parents, who had very successful businesses, helped me greatly along the way as well. A large inheritance is virtually assured barring something catastrophic – I will admit to having won the genetic lottery. I have talked to my parents recently about my plans for next year, and once the shock of it wore off, they were quite supportive – still slightly concerned as I am sure they have no idea that my wife and I are approaching 7 figures with our investable assets. :)

    As depressed as I sometimes feel about my working life, I know very well how blessed I am…

  10. Jacq says:

    There are 8 kids in my family – all got dealt the same stacked deck – a mother who was a teacher, all in the top 1-10% of the class at school, same parents and upbringing (obviously). Of the 7 that still living, 2 of us are financially independent (one is a multi/deca-millionaire and gave up his life to do it – and that’s not me) :-), 1 married someone wealthy and was a SAHM, 1 is a feast and famine deal-maker and the other 3 live hand to mouth or month to month with nothing saved for retirement, despite having had more parental financial help than the others. Yeah, it’s like some people win the (money) lottery and can make it grow and some just piss it all away.

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