At home my husband and I have gotten in the habit of eating our first, smaller serving, and then watching a recorded episode of a TV show (Stargate Atlantis is the current pick). Only AFTER the show is over, usually around 40 minutes without the pesky commercials, do we allow ourselves to go back for seconds. Very rarely are we hungry enough to go back for more afterwards. Has worked like a charm for me, I've lost 9 pounds and counting using this method.
I get paid half-monthly. However, the timing doesn't matter that much any more because I have a significant cash reserve to tide me over if there's a problem.
I actually really like weekly paychecks. My husband and I both get paid weekly even though we are in wildly different fields, and one of his checks pays the mortgage because we pay biweekly. We take out spending money once a week instead of once or twice a month, and bills get paid as soon as we get them.
You are right, Thursday. I think sometimes the reward of spending money you worked hard to save up is worth more than whatever you are spending it on. We are in the realm of dreams and desires when it comes to luxury items, and as long as people aren't taking out a second mortgage or loading up their credit card, I can't begrudge them the enhanced pleasure that seems to come with buying a big-ticket item every once in a while. I've certainly done it myself.
If you're looking at the percentage of households who PAY TAXES and then look at the average income for each of those quintiles, you're obviously leaving out the large percentage of households (about a quarter) who PAY NO TAXES, and getting a grossly distorted view of the "average" (vs. median) household in the top quintile (which is comprised of lot of people making a hundred grand and a few people making a hundred mil to produce that "average" of 231K).
When you look at census data for all households for that same year, nearly 30% of all households earned less than $25K, while 26% earned 75K or more. I'll admit I had probably been looking at figures for a couple of years out of date when I originally posted that 75K would put you in the top quintile. The top quintile now begins at 88K. Less then 3% of all households in the US earn more than 200K. Median income for ALL households for that year was 44K.
I think our understanding of the "average joe" should bear some relationship to what is actually average. It may seem like I'm picking nits, but the larger point is that I believe a major source of our culture's consumer woes is our inflated sense of what is normal to earn and own. This idea that if you don't have a 3000 sq ft house with 2 cars still under payments and digital cable, your middle-class membership card is in danger of being revoked.
I use the APlus accelerator and am very pleased. A small operation, but they have it dialed in! I understand that they just signed a marketing agreement that will take it nationally. Much more than an accelerator. Allows you to work with investment, multiple properties, adjust your budget on the fly, etc.
For the sake of clarity, I've never said this was individual income, I have always used the term "household" in the article. Second, the article is not about whether you can get by on $75k a year, clearly you can. This is about what's fair and not fair. A tax put into place to catch the top 1% of household incomes should not be levied aginst 30-40% of the population. It's as unfair as announcing, tomorrow, that the government will double the taxation rate for anyone earning less than $50k per year. Or equally, doubling it for those earning $1million or more. This whole issue is about a tax system that has not been linked to inflation, thus every year it takes money from more and more households who were never intended to be taxed.
I do want to write a whole post on deciding whether to take a pension early.
The short version is that you can figure out how long you have to live to make postponing the start date the best choice using a financial calculator (such as I linked to above). Basically, a stream of income that begins on one date (when you start taking the money) and ends on another date (when you die) has some value. The value you care about is the Present Value (what you'd be willing to pay to get this stream if income, or what the fund would be willing to pay to buy it off you--if their rules allowed it). You can solve for the Present Value if you know the other values: the Payment, the Number of payments, the Interest rate, and the Future Value.
In this case, the Future Value will be zero (because the money stops when you die) and you can use the same interest rate in both your calculations (use the rate you could get on some safe investment). For the Payment, use whatever the company told you you could get. For Number of payments, use however many months are between when you might start taking the money and when you might reasonably expect to die.
If you go through that exercise, with a bunch of different values, you can roughly figure out how long you have to expect to live before it makes sense to delay taking the money to get the higher monthly amount. (That is, the longer you wait, the fewer months you end up collecting, assuming that you die at the same age either way.) If you expect to have an average life span, it probably comes out to about the same thing. If you expect to die early, you might as well get the money early, even if the payments are small. If you expect to live to a ripe old age, delay long enough to get the maximum payment.
As to putting the money into an IRA, you can do that as long as you have some earned income--you can only put into an IRA income that was paid to you for work that you did. I don't think it matters if you're taking a pension too.
Most people think that if frugality became widespread, the economy will go through a downturn and that's a bad thing. However, that kind of analysis is from the perspective of our current overconsuming and overworked society. I think if everyone became frugal, we'll end up just downscaling the economy. Because we consume less, we will also work less and have more time to spend with our families. There will be less stress and less stretching to make ends meet. Overall, I think it will be positive for our society.
I've seen that table before. The figures are for households, not individuals. In 2005, there were roughly 114.5 million households so the top 20% would be roughly 23 million households. Also, households with negative income were excluded.
I'm with Thursday on this one...I saved up, watched the used market on craigs-list, and bought with cash my first motorcycle.
It was a salvaged motorcycle that needed only light work that a neophyte could do with a little guidance from a service manual (included with the bike - score!) and a good friend who does auto and bike repair for his family. Now that I have done the work and had it inspected and declared street legal by the highway patrol, I feel I am much more connected to that bike than my friend who went and got a loan and spent 4 to 5 times as much on a newer bike.
Sure his is a shiny new 07 model and has a bigger engine and goes alot faster than my 10 year old fixer upper...but I didn't put myself into debt for a new toy. And I love my bike!
Thank you for the sympathy, everyone. This has me wondering how many millions of dollars have been literally stolen from senior citizens and sent overseas. It's something we should take seriously.
Catherine Shaffer
Wise Bread Contributor
---
As much as some people would like to think, scammers and thieves do not necessary come from overseas.
Please, think it twice before making those discriminatory remarks.
Years ago, I worked for a company for just over five years and because my retirement benefit was over 10k (by their rules), I can't take a lump sum.
I got this great idea but am not sure how great it is. If I were to start taking my withdrawals, I would get $183 a month. If I wait another year, I would get $193 a month.
So, what if I were to start taking the $183 a month and put it straight into an IRA or something? Is that better than just letting the money sit there?
Can you talk about strategies like that?
How many income-earning people are there at a given time in this country? Obviously not the whole population because 60 million folks earning around a quarter-mill is obviously junk. I'd be interested to find out.
75 is a really comfortable middle class for two parents, two kids anywhere I've lived. But I haven't spent considerable amounts of time in a big city. Around 100k people usually.
I bought a Space Pen for just under $20 when a cheaper ballpoint pen would've done just as well for most ordinary uses. Why? I'm not sure any more. I use it primarily for writing Postcrossing postcards.
I like to fight the impulse to think that the most expensive must be the best by finding reasons to sneer at the expensive stuff.
It works especially well when costs more is what used to be the best. A really good mechanical watch was once at the pinnacle of human engineering practice. My cheap quartz watch keeps much better time than any mechanical watch--even one that costs 500 times as much. Very good sneering opportunities there.
It can also work when what costs more is only slightly better. I really like writing with good fountain pens, but between the precision manufacturing and the precious metals, you can't get a really good fountain pen for less than $100. A good gel pen that costs a few dollars writes better than a cheap fountain pen, and almost as well as a great fountain pen. (I own too many fountain pens to have much room for sneering here, but I recommend it to other people.)
For many things, it's worth paying for the best. But it's never as simple as that, and a little strategic sneering can bring considerable satisfaction, making it easier to go with the cheap choice.
Just as there is an emotional payoff for having the biggest, shiniest toys on the block, I think there is an emotional payoff for having saved up and bought that toy. For me, being able to pay out of pocket — without help from family or without debt — makes me feel really good about a purchase, especially if I've saved up for a top-of-the-line item.
My experience with airlines has been that if they have an upgrade (first class, direct flight, earlier flight) they offer it straight up when you check in. I've gotten all three of these upgrades without asking (this is post-9-11, but not the last year or so. I fly rarely)
Of course, you have to be checking in with the person, not at a kiosk or ahead of time.
At home my husband and I have gotten in the habit of eating our first, smaller serving, and then watching a recorded episode of a TV show (Stargate Atlantis is the current pick). Only AFTER the show is over, usually around 40 minutes without the pesky commercials, do we allow ourselves to go back for seconds. Very rarely are we hungry enough to go back for more afterwards. Has worked like a charm for me, I've lost 9 pounds and counting using this method.
I get paid half-monthly. However, the timing doesn't matter that much any more because I have a significant cash reserve to tide me over if there's a problem.
I actually really like weekly paychecks. My husband and I both get paid weekly even though we are in wildly different fields, and one of his checks pays the mortgage because we pay biweekly. We take out spending money once a week instead of once or twice a month, and bills get paid as soon as we get them.
love to read the article on the crack-pot guy
You are right, Thursday. I think sometimes the reward of spending money you worked hard to save up is worth more than whatever you are spending it on. We are in the realm of dreams and desires when it comes to luxury items, and as long as people aren't taking out a second mortgage or loading up their credit card, I can't begrudge them the enhanced pleasure that seems to come with buying a big-ticket item every once in a while. I've certainly done it myself.
(And yes, the sneering, I like it, too.)
Catherine Shaffer
Wise Bread Contributor
Good luck getting an appointment. I have been getting the run around for 6 weeks.
If you're looking at the percentage of households who PAY TAXES and then look at the average income for each of those quintiles, you're obviously leaving out the large percentage of households (about a quarter) who PAY NO TAXES, and getting a grossly distorted view of the "average" (vs. median) household in the top quintile (which is comprised of lot of people making a hundred grand and a few people making a hundred mil to produce that "average" of 231K).
When you look at census data for all households for that same year, nearly 30% of all households earned less than $25K, while 26% earned 75K or more. I'll admit I had probably been looking at figures for a couple of years out of date when I originally posted that 75K would put you in the top quintile. The top quintile now begins at 88K. Less then 3% of all households in the US earn more than 200K. Median income for ALL households for that year was 44K.
I think our understanding of the "average joe" should bear some relationship to what is actually average. It may seem like I'm picking nits, but the larger point is that I believe a major source of our culture's consumer woes is our inflated sense of what is normal to earn and own. This idea that if you don't have a 3000 sq ft house with 2 cars still under payments and digital cable, your middle-class membership card is in danger of being revoked.
Don't the banks go after the borrowers for the difference between the loan outstanding and the final realized value of the property?
So there should be a number of bankruptcies.
I hope that the legal agencies pursue these cases deeper and bring criminal cases against these guys. Some years in jail should be good for them.
Probably one of the best mispelled search engines I have used is this one:
http://www.kekoa64.com/ebaytool
And believe me, I do a lot of ebaying!
We make over $75K and have not been hit by the AMT. There's something more to it than just your income, it's also linked to your deductions.
I use the APlus accelerator and am very pleased. A small operation, but they have it dialed in! I understand that they just signed a marketing agreement that will take it nationally. Much more than an accelerator. Allows you to work with investment, multiple properties, adjust your budget on the fly, etc.
For the sake of clarity, I've never said this was individual income, I have always used the term "household" in the article. Second, the article is not about whether you can get by on $75k a year, clearly you can. This is about what's fair and not fair. A tax put into place to catch the top 1% of household incomes should not be levied aginst 30-40% of the population. It's as unfair as announcing, tomorrow, that the government will double the taxation rate for anyone earning less than $50k per year. Or equally, doubling it for those earning $1million or more. This whole issue is about a tax system that has not been linked to inflation, thus every year it takes money from more and more households who were never intended to be taxed.
I do want to write a whole post on deciding whether to take a pension early.
The short version is that you can figure out how long you have to live to make postponing the start date the best choice using a financial calculator (such as I linked to above). Basically, a stream of income that begins on one date (when you start taking the money) and ends on another date (when you die) has some value. The value you care about is the Present Value (what you'd be willing to pay to get this stream if income, or what the fund would be willing to pay to buy it off you--if their rules allowed it). You can solve for the Present Value if you know the other values: the Payment, the Number of payments, the Interest rate, and the Future Value.
In this case, the Future Value will be zero (because the money stops when you die) and you can use the same interest rate in both your calculations (use the rate you could get on some safe investment). For the Payment, use whatever the company told you you could get. For Number of payments, use however many months are between when you might start taking the money and when you might reasonably expect to die.
If you go through that exercise, with a bunch of different values, you can roughly figure out how long you have to expect to live before it makes sense to delay taking the money to get the higher monthly amount. (That is, the longer you wait, the fewer months you end up collecting, assuming that you die at the same age either way.) If you expect to have an average life span, it probably comes out to about the same thing. If you expect to die early, you might as well get the money early, even if the payments are small. If you expect to live to a ripe old age, delay long enough to get the maximum payment.
As to putting the money into an IRA, you can do that as long as you have some earned income--you can only put into an IRA income that was paid to you for work that you did. I don't think it matters if you're taking a pension too.
Most people think that if frugality became widespread, the economy will go through a downturn and that's a bad thing. However, that kind of analysis is from the perspective of our current overconsuming and overworked society. I think if everyone became frugal, we'll end up just downscaling the economy. Because we consume less, we will also work less and have more time to spend with our families. There will be less stress and less stretching to make ends meet. Overall, I think it will be positive for our society.
I've seen that table before. The figures are for households, not individuals. In 2005, there were roughly 114.5 million households so the top 20% would be roughly 23 million households. Also, households with negative income were excluded.
I'm with Thursday on this one...I saved up, watched the used market on craigs-list, and bought with cash my first motorcycle.
It was a salvaged motorcycle that needed only light work that a neophyte could do with a little guidance from a service manual (included with the bike - score!) and a good friend who does auto and bike repair for his family. Now that I have done the work and had it inspected and declared street legal by the highway patrol, I feel I am much more connected to that bike than my friend who went and got a loan and spent 4 to 5 times as much on a newer bike.
Sure his is a shiny new 07 model and has a bigger engine and goes alot faster than my 10 year old fixer upper...but I didn't put myself into debt for a new toy. And I love my bike!
quote: #8
---
Thank you for the sympathy, everyone. This has me wondering how many millions of dollars have been literally stolen from senior citizens and sent overseas. It's something we should take seriously.
Catherine Shaffer
Wise Bread Contributor
---
As much as some people would like to think, scammers and thieves do not necessary come from overseas.
Please, think it twice before making those discriminatory remarks.
Thank you.
Years ago, I worked for a company for just over five years and because my retirement benefit was over 10k (by their rules), I can't take a lump sum.
I got this great idea but am not sure how great it is. If I were to start taking my withdrawals, I would get $183 a month. If I wait another year, I would get $193 a month.
So, what if I were to start taking the $183 a month and put it straight into an IRA or something? Is that better than just letting the money sit there?
Can you talk about strategies like that?
How many income-earning people are there at a given time in this country? Obviously not the whole population because 60 million folks earning around a quarter-mill is obviously junk. I'd be interested to find out.
75 is a really comfortable middle class for two parents, two kids anywhere I've lived. But I haven't spent considerable amounts of time in a big city. Around 100k people usually.
I bought a Space Pen for just under $20 when a cheaper ballpoint pen would've done just as well for most ordinary uses. Why? I'm not sure any more. I use it primarily for writing Postcrossing postcards.
I like to fight the impulse to think that the most expensive must be the best by finding reasons to sneer at the expensive stuff.
It works especially well when costs more is what used to be the best. A really good mechanical watch was once at the pinnacle of human engineering practice. My cheap quartz watch keeps much better time than any mechanical watch--even one that costs 500 times as much. Very good sneering opportunities there.
It can also work when what costs more is only slightly better. I really like writing with good fountain pens, but between the precision manufacturing and the precious metals, you can't get a really good fountain pen for less than $100. A good gel pen that costs a few dollars writes better than a cheap fountain pen, and almost as well as a great fountain pen. (I own too many fountain pens to have much room for sneering here, but I recommend it to other people.)
For many things, it's worth paying for the best. But it's never as simple as that, and a little strategic sneering can bring considerable satisfaction, making it easier to go with the cheap choice.
Just as there is an emotional payoff for having the biggest, shiniest toys on the block, I think there is an emotional payoff for having saved up and bought that toy. For me, being able to pay out of pocket — without help from family or without debt — makes me feel really good about a purchase, especially if I've saved up for a top-of-the-line item.
Wow, that food actually looks GOOD, unlike most of the OAMC recipes I've come across...is that pesto?
My experience with airlines has been that if they have an upgrade (first class, direct flight, earlier flight) they offer it straight up when you check in. I've gotten all three of these upgrades without asking (this is post-9-11, but not the last year or so. I fly rarely)
Of course, you have to be checking in with the person, not at a kiosk or ahead of time.
Maybe I've just been very lucky.
Thanks, everyone, for the kind words.