I was reading some posts around the web discussing how it’s common place to live at home with mom and dad. Is it really that common? Have I lost touch with reality, yet again? After four years of college, where there are just ridiculous amounts of parties and unspoken amounts of fun, who on earth goes home and lives back with mom and dad?
Even if I was unemployed, I’d pay several hundred bucks and rent the sofa in my buddy’s living room or something. Is there no shame in living at home with parents as a grown adult? Perhaps not. Right on my street, live three 26-27 year old young bucks with grandma. Come on, how can these guys live with themselves living with grandma? After 25 years old, that’s 3 years after college to find independence. So I got to thinking, perhaps it is feasible to live at home with mom and dad, or grandma and still get girls!
STRATEGIES FOR GETTING GIRLS WHILE LIVING WITH MOM & DAD Read more…
The Bay Area is full of entrepreneurs. There’s something in the air that creates an almost godly electric spirit that causes people to work hard and innovate. As 2011 nears, more and more I hear about how small business owners are clamping down in preparation for next year’s tax hikes. Clamping down is generally not a good term to use if you are a politician who wants to create job growth.
Let’s say you make roughly $3 million in annual gross revenue from your internet business like my friend Zach does. Not bad, but not exactly big money if you take into account his cost structure. If his pre-tax operating profit margin is 25% after he pays the salaries of all his employees, the rent, and so on, Zach is left with roughly $750,000 subject to taxes. If his tax rate goes up from 36% to 39.6%, for every dollar he makes over $375,000, he will pay roughly $25,000 more in taxes a year in 2011.
Well guess what? My friend is letting go of one of his junior programmers who makes roughly $85,000 to pay for next year’s $25,000-$35,000 tax increase! My friend feels bad letting his 2006 college graduate employee go, but he has no choice since revenue has declined since 2007, and the government is tightening the screws. Zach believes that 2011 revenue will be worse next year than this year, and is budgeting a decline. Thank goodness for 99 weeks of unemployment insurance! And no, it’s not reasonable for the junior programmer to just go work in fast food after only several weeks of looking.
DON’T LISTEN TO THEIR LIES. THEY AREN’T IN IT FOR YOU. Read more…
Recently, I’ve been on a mission to tell anybody who will listen to refinance their mortgage. I get nothing in return, just the satisfaction of knowing that someone who isn’t a rate hawk like me can get a nice kick in the pants to save some money every month for the next 5-to-30 years of their lives. Nobody gave me a kick in the pants when I locked in my refi, which is why I had to pay 0.125% higher than I should have because I was unsure and waited a little too long.
Banks have promotions all the time, and your duty as a borrower and saver is to identify which banks are offering the most attractive terms at any given moment. That bank is Citibank, with mortgage rates often 50 basis points (0.5%) cheaper than any competitor out there for 5/1 and 30-year mortgage products. Citibank is on a rampage to build up their loan book again. As patriots, it’s our duty to spread the word and make sure we don’t fall off a cliff again!
Every month I contribute $1,375 to my 401K so that by the end of the year, the 401K is maxed out at $16,500. Unfortunately, $16,500 a year is a ridiculously low amount of money to save for retirement if you really do the math. After 10 years, you might have $200,000, and after 30 years you might have $600,000 to $1 million depending on the markets and your employer’s match. Whatever the case may be, the 401K is simply not enough money to retire on, especially since you need to pay tax upon distribution.
The government needs to get it together and raise the amount of 401K contribution for those in the later part of their lives. How is it that a 40 year old executive who makes $165,000 can only max out the same amount in his 401K has a 23 year old kid out of school making $35,000? It just doesn’t make sense. Instead, the government should allow pre-tax contributions to increase by $5,000 every 5 years so that by the time one has served 20 years in the work force for example, s/he can contribute $35,000+ a year to their 401Ks until retirement.
Let’s talk about the pencil geek IRA retirement plan for example. If you’re one of the fortunate who are allowed to contribute, you can only fund $5,000 a year! Whoopdeedoo! $5,000 X 30 years later, assuming you don’t lose it in the market yields $150,000-$300,000 maybe! Great, just enough to buy me a Honda Accord sedan when I’m grey. Get it together government and raise that $5,000 contribution amount higher with better tax incentives. Furthermore, let hard working Americans who make over $120,000 the opportunity to contribute regularly, and not just through odd year loop holes. Empower people to want to save for their future!
Last night I got a written notice in the mail informing me that my tenant of 2.5 years is moving back East! Can you believe it? How could he leave paradise to move back home to the sweltering heat of New Jersey? I will never know. Anyway, I’m really sad to see him go because he was as close to the ideal tenant as possible.
Ned paid on time, was quiet, held no raging parties, and never bothered me to come fix anything. OK, so there were several times when he needed an extra week or two to pay rent, but in the end he always delivered.
As a landlord for many years, here are the basics of what I’m looking for: Read more…
One of my graduate school friends recently found himself out of a job. It was a tough slog, but at last, he and his co-founders decided to shutdown their startup and start something new. Nobody is really going to feel sorry for Greg, as he joined Google the year they went public and cashed out on a couple million dollars in stock options over the next 4 years.
His $180,000 a year salary was nothing to sneeze at either, but also nothing too spectacular in the land of $1 million dollar starter homes. In a nutshell, Greg is the typical Silicon Valley success story who busted his butt to get ahead, networked like no other, and fell victim to a downshift in the economy these past couple years.
There are literally thousands of millionaire 30-somethings in the San Francisco Bay Area who are underemployed or just not working because they haven’t found that great idea, or that premium company fit yet. Why should they bother wasting a companies’ time and enlist only to quit 6 months to a year later when something better comes along? That’s not fair to the company and so they do the right thing and wait.
When I asked millionaire Greg about his thoughts on the government extending unemployment insurance to 99 weeks he let out a big “YIHAW!“ You see, Greg has been collecting unemployment insurance for the past 16 weeks via the solvent state of California, and he is worried that Obama will crack down on people like him once Federal care starts kicking in.
A MILLIONAIRE’S TAKE ON COLLECTING UNEMPLOYMENT AS A MILLIONAIRE Read more…
The reason why Warren Buffet is so great is because he’s able to distill the most complicated financial topics into very simple terms. Lucky for us, there is someone like Warren in the economics world. Regular reader, Investor Junkie who disagrees with the government’s unemployment insurance extension, but agrees with the cessation of rising taxes, highlights a fantastic video by the great economist Milton Friedman about four different ways of spending money.
Professor Friedman’s examples are simple and perfectly to the point. In an environment where we are spending other people’s money on someone else (deciding how other people’s tax dollars are spent), we don’t maximize the value of the dollar because we simply don’t have much at stake.
Professor Friedman highlights that people spending someone else’s money on others is a “distributor of welfare funds.” Strong words with a certain amount of truth wouldn’t you agree? In “The Ultimate Solution To A Fair Tax Policy In America”, I discuss the concept of limiting the voting ability of the 47% of non tax paying Americans on raising taxes for the other 53%. Don’t worry, voting rights for everything else is status quo. The reason why I suggest this rational solution is because it makes sure the country isn’t overrun by those who have their cake (don’t pay taxes) and get to eat it too (enjoy the benefits).
One can easily see an America where 90%+ of citizens don’t pay taxes and stick it to the 10% rich because it’s rational to look out for your own interests. It’s up to balanced people who believe in equity to continue fighting for those who perpetually get unfairly blamed for our economy’s problems. It really is ironic, because if everybody studied hard in school, volunteered their time to help others, and were self-sufficient (doesn’t have to be wealthy), America wouldn’t have nearly the amount of problems we have now!
The 4 Ways Of Spending
1) Spend your own money on yourself.
2) Spend your own money on somebody else.
3) Spend somebody else’s money on yourself.
4) Spend somebody else’s money on somebody else.
Readers, do you agree or disagree with Professor Friedman’s thesis that the 4th way of spending is the worst way of spending? If you do agree, why do you think people feel it’s OK to spend other people’s money as they wish?
Regards,
Sam @ Financial Samurai – “Slicing Through Money’s Mysteries”
With the Bush tax cuts set to expire next year, there’s going to be a big debate during the mid-term elections this November! But, should there really even be a tax debate? It’s obvious that we should NOT raise taxes on small business owners and higher income, hard working Americans in a nascent economic recovery!
Everybody knows roughly 47% of Americans pay no federal income taxes. Hence, the ultimate solution for tax legislation is to strip away tax voting rights for the 47% of Americans who pay no tax, but who still get to enjoy the benefits of other people’s contributions. If you’re one of the 100+ million Americans who pay no income tax, isn’t it good enough to enjoy free public schooling, nice roads, friendly firemen and police officers protecting your neighborhood? Being thankful is a great disposition to have. Being greedy is not.
An Example Of A Family Making $120,000 Paying No Taxes: Read more…
Hear that? That is the sound of another self righteous employed person complaining about the unemployed sucking up resources and driving the government deficit further into the red. Who cares employed people?? You guys aren’t the ones who are struggling to find a job in this economy!
There are several tautologies here:
1) Few can live a comfortable lifestyle off of unemployment benefits which average $200-3oo a week
2) The vast majority of people who are unemployed want to make more money, find jobs, and do something meaningful with their lives.
3) Our budget is headed towards a $1.4 trillion+ deficit, so who cares if we’re going to spend another $50 billion to help millions of unemployed people survive for up to 99 weeks?
THE BUDGET DEFICIT DOES NOT MATTER WHEN YOU HAVE NO JOB Read more…
You guys know that the one and only data point I track religiously is the 10-year yield right? Well, after the 10 year yield dipped below 3%, I went to the bank with a buddy of mine to go see how much money we could borrow. The wiry banker sat us down like a loving couple and asked us to go through our finances at which point I kindly stepped out of the room and let him go first. Five minutes later, he came out with a grin on his face, so I curiously went in.
I proceeded to disclose some of my finances, and he proceeded to tell me some curious news. “Look here Sam, you can borrow up to $1.5 million dollars at a 5 year fixed rate at 3.75%!”
Holy moly really? You mean little old me, just like that can borrow that much money at that low of a rate? “So what’s the catch?”, I ask.
“Zero points, and $2,500 in closing costs. But don’t worry, we are giving you a $500 credit for being a preferred member, and frankly, if you guys both take out loans, I’ll throw in another $500 credit,” said the banker.
“Done! Where do I sign?, I ask as I think about the new Audi R8 I plan to buy with just $150,000 of the $1.5 million. Or maybe I should be more conservative and spend $100,000 on the new 2011 Porsche 911. Or actually, I heard the 2011 BMW 335i coupe is coming out for only $55,000 this fall. With all the money “saved”, time for a bachelor’s trip somewhere fun! (I’m still thinking to myself here).
As far as I’m concerned, the US economy is recovering handsomely. How could it not with packed restaurants, and traffic that makes me want to pull your hair out? The most anticipated IPO of the year is Facebook, which may very well go public for $20 billion plus dollars. Meanwhile, the whole world is hooked on Apple products with iPads ($500-800) and iPhones ($200-300) selling like hotcakes. Who needs yet another computing device? I guess millions do!
There is so much money flowing into the Bay Area, it’s hard to imagine another financial crisis on the wing. Yet, I’ve read plenty of posts on “steps to take when the next financial crisis comes” and I’m scratching my head. Am I living in a parallel universe where every other car I see is a fancy German vehicle, and I can never get a reservation at my favorite sushi joint? I feel like I’m living in a little optimistic bubble where the world isn’t falling off a cliff and is actually doing well. Tell me if I am, because bubble living is delusional living at its finest.
The stock markets, although highly volatile have recovered some 50% from the bottom and generally serve as as a leading indicator for the economy. Yet people are still talking about a double dip recession. Yes, the biggest worry is stubbornly high unemployment, but you’ll never be able to tell if you walk the streets of San Francisco.
One of the most anticipated NBA free-agent announcements came when Lebron told the world he’s heading to South Beach to play for the Miami Heat. Of the six teams coveting him, really only three stood a chance: Miami, Cleveland, and New York City for obvious reasons. The other three teams: Chicago, LAC, and New Jersey will just be footnotes and forgotten.
What’s most interesting is not Lebron’s decision to make millions of dollars less to join two guys he thinks he can win championships with. Instead, Lebron’s decision to completely spurn President Obama is what really gets me thinking! No less than seven times has President Obama made a public statement insisting that Lebron join the Chicago Bulls. As you know, Obama was the Senator of Illinois before he became President. Many pundits also believe that Chicago is a better candidate for Lebron to win championships with Carlos Boozer, Luol Deng, Derrick Rose, Brad Miller, and Joakim Noah. But, nope. Not Lebron.
If Lebron James, who is a huge Obama fan, doesn’t even listen to Obama’s words, why should the general public? It wasn’t like Obama was saying go to the Minnesota Timberwolves where they have a snowball’s chance in hell of winning. Chicago is a seriously legitimate team if not the best choice!
FIVE REASONS WHY LEBRON DOESN’T LISTEN TO PRESIDENT OBAMA Read more…
Here’s a short 10 minute video I stumbled upon which eerily highlights several things I do and why (ie play guitar), as well as touch upon reasons why some people are willing to do things for free, and others strongly consider giving up big salaries to just work on a hobby.
Despite an honest attempt to seek out more great things about the East Coast, several readers actually proceeded to bash the West Coast instead! What’s up with that? Some curiously mentioned that the East Coast is fantastic because the horrendous weather for half the year makes the other six months so wonderful. Ummm, that’s like saying you appreciate your right hand more because you chopped off your left hand! Wouldn’t you rather have both hands?
The only positive takeaway from the comments I agree with is the cluster of historically significant cities within a several hours drive. Other than that, nobody came up with any stand out reasons other than the six I provided as to why East Coast living is great. Given that the West Coast was attacked, I feel it’s important to stand up and defend our honor!
The LA Lakers and Boston Celtics have met 11 times in the finals. Combined, the two teams have won an incredible 32 championships in the NBA’s 63 seasons. Purists will note that only 10 of LA’s 15 championships came in LA, while the other 5 were in Minneapolis from 1949-954. Either way, there’s no doubt that the Lakers are one of the best teams in NBA history.
How is it that two teams alone combine for about half of all championships in league history? The answer is simply superstar cities which offer high wages, a huge fan base, and enough diversity in all things to keep one entertained. Let’s be frank. There’s no way the Cleveland Cavaliers, Dallas Mavericks, Charlotte Bobcats, and Utah Jazz will ever win an NBA championship. Not to say any of these cities aren’t nice, they just don’t match the star power of places such as New York, LA, and Boston. Eventually, the best players and staff all gravitate towards one of the major metropolitan areas to really compete for a championship.
MOVE IF YOU WANT TO RAISE YOUR STANDARDS Read more…
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I was reading some posts around the web discussing how it’s common place to live at home with mom and dad. Is it really that common? Have I lost touch with reality, yet again? After four years of college, where there are just ridiculous amounts of parties and unspoken amounts of fun, who on earth goes home and lives back with mom and dad?
