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About that 1% & the Middle Class
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Editor, Manteca Bulletin,

This is in response to Mr. Breacain’s letter to the editor on Nov. 1.  According to your statistics, I am a member of the 1% club.  I meet all of your statistical requirements except one: I do not have millions or billions of dollars in wealth. 

Since 1979, my wealth has increased by over 23,000 percent.  My income has increased by over 1,700 percent.  There have been many times over this time period I have paid no taxes (zero percent tax rate) and even gotten more money back than I paid. I am not alone in this category.  There are millions of people like me. We are the middle class. I expect those numbers to get better before I retire. I did not come from a rich family, but a typical middle class family like so many other families.  I started out earning minimum wage.  I went to college and received grants and student loans.  I paid back my loans and invested in the “rigged” stock market.  I was able to raise a family, buy a house and put money away.  I did all this while supporting my family on one income.

An income that was less than what others today say is below a living wage.  Here is the secret to gaining wealth: live below your means, save for a rainy day, invest and prepare for several financial crises that will happen during your lifetime.  When I started out, there were many people who had financial issues greater than I had or now have.  Over the last 30 years, I have spoken with people about saving money and investing in the stock market.  They did not care about being financially sound but living at the maximum of their capabilities.  Those people now have financial problems.  They are complaining about the wealthy and wanting to tax the rich because they are fools with their money.  (A fool and his money are soon parted.)  Those people borrowed money to buy stuff that they did not need.  They spent more money than they made.

Compound interest is a funny concept.  With a 10% interest rate, you can become rich by investing or you can become poor by borrowing.  The 30 years that Mr. Breacain reported in his statistics, inflation caused wages and the stock market to increase, my income and investments worked together to grow.  During the same period, the 99% club’s borrowing costs countered their wage increases so that their wealth barely increased.  Mr. Breacain, this is not a class war, but a war between conservative capitalist against liberal socialist, who did not prepare for life.  The American Dream is alive and well, and working.  What you and the other 99% cannot accept or understand is, that you can fail living the American dream, especially if your beliefs are based on false concepts.  This is and has been what the American economy has looked like for over 200 years. 

Mr. Breacain, you and the 99% need to accept your failures and stop blaming others for your failures.  Because of the high volatility of the stock market, during the last big drop I bought some stock that is paying over 21% yield in dividends.  Every $1 I invested in this company will be worth $515 at the end of 30 years.  This was at one time a 5% yielding stock.  Why was the yield driven down so low?  Why did people buy houses that only 10% of the market could afford?  You complain about 401(k)’s and home equity losing value.  Value is the key word.  Understand what drives value: Don’t buy it if it is overvalued.  Wait until it is undervalued.  You were not stripped of your assets.  You squandered your wealth because of your false beliefs in the market mechanics. 

The 99% club wants those who took advantage of their ignorance to give it back.  Does that mean a young couple that could not afford your house at the price you paid for it should give it back to you?  Should I give back my stock to the person who sold it at such a low price?  When my assets become overvalued, you may buy them from me.

Scott McComas 
Nov. 3, 2011