An Open Letter to Bernie Sanders Supporters

IMG_1836This is an open letter to those who are flocking to Bernie Sanders events and are proudly calling themselves Socialists.  You may be enjoying the excitement and talking about “feeling the Bern,” but do you really know what is at the root of Socialism, Democratic or not?

While Bernie Sanders may say in speeches that he will be making things fair by taxing rich corporations and stock speculators, the root of Socialism is armed robbery.  It is employing others to take things from people to give to you; taking things that you did not earn by putting the ones who did earn them under the threat of imprisonment.  And if you don’t believe it involves guns, just try to not pay your taxes and see whether the people who show up to arrest you are wearing guns.  And while you may believe from Sander’s speeches and the rants from your Socialist professors, who hide away in the ivory tower because they have no capability to do anything truly useful for society, that you would just be taking money back from evil people who came by their wealth dishonestly and by oppressing “the workers,” let me introduce myself as one of the people you would be stealing from to get your free healthcare, free college, and other free money.

Let me first say that I am certainly nothing close to a billionaire and that I have made less than six figures for most of my career, but I would be one of the ones paying for your “free college,” your “free healthcare,” your “free housing,” and your “free food.”  You see, if you took all of the wealth made by all of the billionaires combined in the US, it wouldn’t come anywhere close to covering even just “free tuition.”   This means that it will be middle class people paying for most of this free stuff Sanders is offering.

Despite not making hundreds of thousands of dollars per year, I’ve been able to put myself in a much better financial position than most of my peers with a paid-for house, no debt, college savings accounts for our children, and enough savings and investments to greatly ease worries about losing a job.  Like virtually all people in my situation, I didn’t do it by taking from anyone or cheating anyone.  Anyone with whom I traded my services or goods has felt that they got at least in value what they gave me in return.  This is true of people who become wealthy because those who cheat others seldom stay in business or remain as employees for long.

The reason that I have been able to amass more wealth than my peers is because I made choices starting from high school to put me into the position that I am in today.  I came from a middle class family that saved up money for my college education because they felt it was important.  I worked hard in high school, completing all assignments and studying before every test, to graduate in the top 5% in my class, which qualified me for a scholarship to attend a state university. While I could have taken out loans and attended a private college like the University of Southern California, I chose to attend the University of Arizona because I could go on a full merit scholarship.

While at the University of Arizona, I worked extremely hard on my classes, studying and doing homework during any opportunity between classes and doing five hours of homework or more on a typical night, taking maybe one day off per weekend except during  finals.  I attended office hours regularly, read what I needed to read, got all of my homework problems right, and made sure all projects were my absolute best work.  I took between 19 and 21 credit hours per semester (including orchestra and jazz combos) to graduate as fast as I could (I graduated in four years, but could have graduated in 3 1/2 if the classes I needed were available).  This combined with my scholarships and living a very modest lifestyle allowed me to leave without undergraduate school without debt.

Because I worked so hard as an undergraduate, graduating Summa Cum Laude with an aerospace engineering degree, I was accepted into every grad school to which I applied, including Stanford and MIT.  Because U.C. Berkeley offered a full scholarship, which Stanford and MIT weren’t going to (or at least were slow to indicate what they would do), I chose Berkeley over the more expensive private schools.  I chose to live within my means rather than buy what I could not afford and then complain about how high my student loan balances were.  By taking a research assistantship, living modestly, graduating quickly and taking odd jobs here and there I was able to graduate without going through the rest of the money my parents had saved for school and without taking on any debts.  I didn’t have a lavish apartment.  I didn’t go on any expensive trips.  After graduating, it took 9 months to get a full-time job so I did part time and consulting jobs in the interim.

When I started a regular job I started at a salary somewhat above what people with BS degrees would have gotten.  This is not because I was privileged or because I cheated someone, but because I worked hard to get through grad school and graduate with a Ph.D.  I spent a lot of hours in the lab, working on my research and dissertation, studying for really difficult written and oral exams covering everything I had learned during the previous seven years, and writing and editing my dissertation.  Along the way I learned skills such as organization, research, writing, money management, and how to read complex journal articles, all of which made me more valuable.

Once I started work I continued to work hard but not just for the sake of working hard.  I worked to learn skills that were useful.  I tried to figure out what most needed to be done and to do it. I thought about the goals of my organization and how I could help it get there.  I didn’t wait to be told what to do, but instead thought carefully about how I could contribute and improve things.  I was reliable – coming in to work extra when it was needed without being asked, making sure I was ready for meetings and events and making sure my company was seen in the best possible light.  Because of this, I continued to gain salary and increase my income from work..

While having a good salary, after ten or fifteen years of working my way up helped, a lot of my wealth generation was due to the choices I made and the willingness to sacrifice and wait for things.  When I did get a regular job, I did make the stupid mistake of buying a new car and putting it on a 6.5 year payment plan, but I swore that would be my last new car, paid it off in 4.5 years, and am still driving it today 18 years later.  For our other car we bought a used Camry for $3,000, then five years later bought another newer model for $8,000.   We may sell this one next year since we’ve had it for about seven years and pay $14,000 cash for another Camry or an Avalon.  I saved thousands of dollars per year on depreciation by buying used cars for which I could pay cash and driving them for several years.  This has allowed me to trade up in cars with cash and to save and invest for retirement.

For the first several years in the new job and after getting married, our only vacations were  a weekend away or two and a road trip to visit in-laws.  We didn’t go to any all-inclusive resorts in the Caribbean because we could not afford it.  We didn’t buy a time share.  We didn’t go to the beach for spring break.  Instead we saved and invested the money, knowing that we cold go later when we could pay cash for it instead of putting the trip on a credit card.

We also bought a modest house where we could afford the payments since they were less than 25% of our take-home pay.  We put it on a fifteen year loan and paid it off in twelve years, allowing us to save hundreds of thousands of dollars in interest.  If we buy another home we’ll pay cash using some of the money we’ve invested to upgrade.  When we want to make a home improvement, we save up and pay cash.  We save and invest for car repairs, home repairs, vacations, and home improvements.

And by investing, I am not taking advantage of anyone.  On the contrary, I’m providing money for people to start businesses and create jobs for other people. More importantly, I’m providing funding for people to create businesses that do things for other people, like feed hungry people through restaurant chains, make cellphones so that people can communicate, and create computer chips that allow people to use the internet.  I invested in Cypress Semiconductor that made the chips that made USB technology possible so that you can connect your iPod to your laptop.  (You’re welcome).  I invested in Home Depot that provided the building materials for thousands of homes.  (You’re welcome, again.)

None of the companies into which I invested have made people feel like they have been cheated.  In fact, people eagerly go to these businesses because they feel they are getting something of value that makes their lives better.  In exchange for funding these businesses I have received a small percentage of the profits (about a 2% return on my investments on average).  Other money I have made from these investments is because the businesses have grown to provide services to more people.  It is because I have been willing to risk my money that these businesses have been able to grow and provide more services for more people.  You see, you make money in a free enterprise society by helping people.  The more people you help, the more money you make.

So I have cheated no one.  I have stolen from no one.  I have made money by providing goods and services to people that they were delighted to receive and were eager to provide me goods and services in the form of money in return.  I worked my way up to earn more by being reliable and thinking of what I could do to provide what was needed to others.  I saved and went without many of the luxuries others around me were enjoying so that I would have money to invest.  My investments have allowed others to create and grow businesses to create goods and services that have delighted others.  I have fed the hungry.  I have clothed the  naked.  I have provided access to the vastness of the internet through chips and computer hardware that was created due to my investments.  Today I’ve amassed enough wealth to be financially independent, although I continue to work as hard as ever.  I don’t sit upon my wealth like Scrooge McDuck, but instead continue to invest and allow other businesses to grow and provide more services to more people.

And my having wealth does not prevent you from having just as much wealth or even more.  Bill Gate’s and Warren Buffet’s wealth has no effect on my ability to be wealthy.   What I have, I have created through my work and my sacrifice.  You could do the same and multiply the amount of wealth in existence.  You don’t need to knock down a home to build another.  Two people can have homes if they each put for the effort to build it.  Likewise, you could create just as much wealth by doing what I did – doing things for other people that they wanted and were willing to pay you to do, living below your means so that you could build up savings, and then investing that savings, providing even more things to even more people in doing so.

So if you think you deserve some of my wealth, don’t be a coward and hide behind Bernie Sanders.  Tell me why you think you deserve my wealth and I do not.  Tell me why you think it is right to steal what I have.  What have you done?  Who have you helped?  What have you provided to others?

You may think that Socialism will make your life better, but I can tell you that it won’t.  The only way those who work hard and those that do not can be equal is if they both have nothing.  Socialism destroys wealth, it doesn’t balance it.

Agree?  Disagree?  Please leave a comment.

Follow on Twitter to get news about new articles. @SmallIvy_SI

Disclaimer: This blog is not meant to give financial planning or tax advice. It gives general information on investment strategy, picking stocks, and generally managing money to build wealth. It is not a solicitation to buy or sell stocks or any security. Financial planning advice should be sought from a certified financial planner, which the author is not. Tax advice should be sought from a CPA. All investments involve risk and the reader as urged to consider risks carefully and seek the advice of experts if needed before investing.

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Follow on Twitter to get news about new articles. @SmallIvy_SI

Disclaimer: This blog is not meant to give financial planning or tax advice. It gives general information on investment strategy, picking stocks, and generally managing money to build wealth. It is not a solicitation to buy or sell stocks or any security. Financial planning advice should be sought from a certified financial planner, which the author is not. Tax advice should be sought from a CPA. All investments involve risk and the reader as urged to consider risks carefully and seek the advice of experts if needed before investing.


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