Paper Wealth

In the essay "The Rich", I showed that the combined wealth of the rich is much less than being told by the commie's. I realize that many people would argue that based on a misperception promoted by the media that middle class Americans alone would have more combined wealth than 5% of what the rich are worth. That is only an illusion created by a number of factors including cash flow. First, let's take a quick look at the way most people think of how much wealth a person has. People like to call this a person's "total worth."

In total worth, a person (we all love to brag about this which is why it is so inflated) includes the value of everything that person "owns". But there are flaws to this which is why people have learned to ask for a person's net worth. In total worth a person will claim their worth as including such things as the part of a home or business which is owned by the bank or financial institution to which that property has been financed. A person claiming a total worth of 100 million dollars my be worth less than 10 million dollars because they may have everything "leveraged out" or mortgaged to where they only have an equity of less than 10 million dollars.

With net worth, we subtract the part of our "total worth" which others really own or is mortgaged by others. When one realizes this, one also realizes that most of the perceived wealth of everyone including the middle and upper classes is just paper wealth or numbers on paper or in a computer that mean little except for bragging rights.

Even with net worth, there are things which distort or inflate the real worth of an individual. One of these things is market value. For example, your home or business may be assessed as being worth $100,000 but you may only be able to get $75,000 if you sold it today. Also, when the economy increases or decreases, the value of such things fluctuate radically so that you can lose your entire equity in such possessions over night.

For example, I knew a man who was purported to be worth $200,000,000 but he was heavily leveraged out and, when the economy took a nose dive, he lost all of the equity in his holdings causing the creditors to take control of his holdings and sell them before they lost their money in those holdings. When this happened, the man lost every dime he had because all he was really worth was the equity he had in those holdings and when the value of those holdings dropped in market value low enough to where he no longer had any equity left, then he was broke. Therefore, market value is an important part of your real worth and changes daily.

Then, when you realize that there are other costs of ownership and purchasing items, you also realize that most people really don't have any real wealth. For example, if you purchase a home for $100,000 and have to pay an interest rate of 10%, then you cannot have any real wealth until the home appreciates to more than the cost of the interest you have paid into that home. (See my next essay about The Housing Scam.) In a nut shell, you cannot really consider that you have any wealth in your home if you have paid more for that home in all costs included than its market value. With the $100,000 home, you actually pay the $100,000 principal, $300,000 in interest (30 years at 10%), and other costs such as closing costs, realtor fees, taxes, repairs, and such. Selling that home for just $400,000 is selling it for a loss but most people don't realize this and are taught other wise.

Therefore, if you have paid into the house more than it is worth on the market, then you don't really have any wealth invested in the home and it is a liability instead of an asset. The same thing is even more true with your car and other property because of devaluation. Such things lose value on a daily basis.

Then you have other things such as your retirement plans being owned by the government and businesses instead of you so that you don't really have control or ownership over these things. Then, when you realize that many Americans rent instead of buying their homes, you should also realize that most American middle and lower class really don't have much if any real wealth at all. They are pretty much broke but are perceived as having wealth because of their daily cash flow. At this point, it is easy to understand that the same things are also true for the rich meaning that the less than 40 trillion dollars the millionaires in the world are supposed to own is not real wealth and real wealth for the rich could actually be less than 20 trillion dollars.

Now you should realize that the commie's lies are even bigger than I stated in my essay "The Rich." It is really all about the cash flow and not combined wealth. The cash flow only makes us look more wealthy than we really are.

It is time for revival on a global basis. Acknowledge your crimes against God's Laws, repent of those crimes, and seek the amnesty of our Lord Jesus the Christ. John 3:16 - For God so loved the world He gave His only begotten Son so that who so ever believes in Him will have everlasting life.

Pray long, pray hard, pray often!!!

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