Are you part of a household that earns $250,000 or more, otherwise known as “the top 10%”? If so, you and your cohort are responsible for almost half of all consumer spending in America, per Moody’s Analytics. Hot-blooded American consumerism is “the beating heart” of our economy, responsible for around 70% of GDP—but experts worry that an economy (and, by extension, a labor market) dominated by the desires of the upper class is unlikely to allocate resources effectively for the other 90%.

I’ve been writing about personal finance online for almost five years, which means there’s a solid archive (we’re talking hundreds of posts) of wheels-off primer material on everything from how to open a 401(k) if you’re self-employed to the simplest account combinations for earners with W-2 and 1099 income. We’re undergoing a mini-project over the next few months to update this material and make it more readily searchable, but in the meantime, I’ve refreshed this particular piece about investing for retirement with 1099 income. If you’re facing a tax bill right now thanks to some self-employment income but haven’t opened and/or contributed to a SEP IRA yet, give it a look. (Heartwarming aside: While updating it, I noticed an ironic Wealth Planner sales pitch hashtagged, #TakeMoneyWithKatieFullTime2021. You did it, girlfriend!)

May this corner of Instagram never find me. I thank my lucky stars every day that my algorithm is “cats being funny” and “aesthetic bookshelves,” not Men Selling Sales (another option for my alternate universe grift?). “The exciting rewards promised by Sales Influencing are also pretty pedestrian: a big suburban house, a kitchen with stainless steel appliances, a gym membership (or a home gym), cars, vacations, and an aquamarine pool. In other words, what a middle-class family with two incomes might have afforded in 2006. On Elliott’s feed, however, this clear blue pool is today’s version of the green lawn with the white picket fence—a once sickeningly common sign of middle-class comforts, now rarefied by economic collapse and elevated to luxury status.” Absolutely dizzying levels of stupidity. Stay frosty.

🎙 Grace Blakeley, the woman you are. Listeners of The Money with Katie Show may recall our episode with Grace last year, and if you enjoyed that, I can’t recommend this “Tea with Myriam François” interview enough. So many good nuggets and relatively easy listening for topics like capitalism and freedom (plus, British accents!).

Walgreens is officially being taken private by private equity firm Sycamore in what the Wall Street Journal calls “one of the largest leveraged buyouts in the past decade.” Some of Walgreens’ struggles since 2015 are attributable to healthcare “vertical integration”—a cost-containment strategy we covered in our recent healthcare deep dive. It involves health insurers absorbing pharmacy benefits managers, like Cigna buying Express Scripts or CVS acquiring Aetna. As I’ve followed the headlines about this deal, all I can think about is Rogé Karma’s 2023 reporting: “In 2000, private-equity firms managed about 4 percent of total U.S. corporate equity. By 2021, that number was closer to 20 percent. In other words, private equity has been growing nearly five times faster than the U.S. economy as a whole,” a reality he suggests should alarm anyone who values corporate transparency and accountability. It’ll be interesting to see whether the Walgreens acquisition becomes a turnaround narrative or a “stripped and sold for parts” cliché.

Relatedly, as part of research for another project, I went poking around for insights about how much of the US economy is now driven by the process of “financialization”—in other words, money made not from productive capacity or legitimate value creation, but from money itself. I was surprised to learn that in the mid-20th century, manufacturing had 40% of the nation’s profits and 29% of its jobs. Today, finance makes up to 40% of the nation’s profits—but only provides 5% of its jobs. It’s this replacement of a high-employment industry with a low-employment one, author Michael Collins says, that might help explain at least part of our current economic and income challenges.

This New Yorker interview with Bill Gates was eye-opening. It begins with some discussion about his control of roughly $100 billion, and why he believes billionaires should totally exist. His reasoning follows more or less the standard argument that gets trotted out but never fully unpacked, which is some tenuous connection between the ability to become a billionaire and the individual drive to innovate. But then the conversation shifts to his early obsession with software and personal computers, and he describes his relentless dedication (“thousands of hours [of programming] by the time I was 18”) to mastering the subject. I think people like Bill Gates—billionaires now—forget what actually drove them: not some faint possibility of becoming the richest man alive, but a compulsive fascination they were powerless to stop. Let’s explore the counterfactual: Tell 18-year-old Bill Gates that wealth over a billion dollars will be taxed. Does that stop him from starting Microsoft? Methinks not. My theory: Once people accumulate extreme wealth, “loss aversion” makes them construct alternative explanations for their own behavior—but I do not, for one second, believe that the existence of a wealth tax would’ve in any way deterred Gates from his desire to program.

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