Fog Creek Software
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Money, taxes, and whining

This is only tangentially related to software, but this discussion reared its ugly head at work on Friday, and I've been unable to get over it.

<RANT>

Many people (and some on this board -- see the "What people earn" thread about the Parade article) think that somehow everything should be free, a $125,000 salary qualifies as middle-class for a single person, and taxes should not apply to them.

My coworkers (programmers at a financial services company in Boston) almost uniformly drive a luxury car/SUV (Lexus, BMW, and their ilk), own their own homes, and make around $90,000 - $150,000 depending on seniority.  Throughout the day, I am barraged by off-hand comments about how property taxes are absurd, excise taxes are absurd, how gas is too expensive (probably due to taxes, of course...never mind that we pay ~$1.75/gal vs. $5/liter in the U.K.), and how we shouldn't raise taxes on people making over $120,000 because that hurts the middle class.

'Scuse me, but when did the middle class (whom these folks purport to be a part of while making >$100,000 when single) fall anywhere *near* that income range?!?  I grew up in a household of four where my father made over $30,000 in a good year, and we were relatively comfortable.

I paid my way through college, and now I manage to make the same amount as my coworkers.  I *know* that I make an absurd amount of money (single, living with my fiancée), and I know that the taxes taken out of my paycheck pay for the roads I drive on, the medicene that may save my life and my children's lives in the future, the schools my kids will go to, and the soldiers that ensure the whole mess can keep on running relatively uninterrupted.  I'll be able to easily buy a car (I still drive an '88 VW!), a decent house, and go on a vacation every now and then.

I get scared when I think that "these people" who have deluded themselves into thinking that 100K is a normal salary for a single person vote.

</RANT>

OK, that's it.  I guess I just had to get that out of my system. Let the flames begin, I suppose.

Murry
Monday, March 10, 2003

When you have a wife and children to support, you'll see things differently.

I make $75,000 and have $80 a month to "play" with. I drive a car that cost under $20k and so does my wife. I own a house in the suburbs of Boston (1 hour outside the city) and it cost be $250,000 (with escrow that is $1,800 per month). 

You are single. You have no real expenses. Get over yourself.

If you don't like what you earn, quit. I know plenty of people who need work.


Monday, March 10, 2003

As I said, I'm referring to folks who are SINGLE, not people with families.

Murray
Monday, March 10, 2003

"I grew up in a household of four where my father made over $30,000 in a good year, and we were relatively comfortable."

Ditto here, but that was ~ 20 years ago, when you could get a good car for about 6K (compared to 20K today), an average house (in my neighborhood) was 70K (compared to 250K today) gas was roughly .50 cents a gallon (compared to 2 bucks today) monthly grocery bill was $150 (you spend about that a week these days with wife & kids).

To sum up -- yes 30,000 was a good middle class income, about 20 years ago. If you want to live, own your own home, have kids, save for retirement, save for your kids' education then you'll have a hard time making it on 30,000 for most parts of the US today.

In terms of what my parents made (a little over 30K) in the early Eighties, I'd say you've gotta be in the 70K to 80K range today. A far cry from the 100K+ mentioned in the earlier article, but far more than the 30K that your Dad made.

Sergent Sausage
Monday, March 10, 2003

Hrm, I was actually meaning that my father is making $30K now, and was making around that amount in the mid to late 90's.  $12-$15K was more like it in the 80's (especially when everything went into the crapper ~1989).

Murray
Monday, March 10, 2003

First, a perspective on progressive taxes with regard to tax cuts:
http://realpolitik.us/archives/000330.php

For what it's worth, I don't have any problems paying property taxes (though I wish our state would figure out how to bill auto taxes monthly instead of annually), sales taxes (for local purchases - the internet should be a tax-free zone), gas taxes, etc - money that goes to the county and state.

I have major problems with the federal government taking 20% of my pay. IMHO a large portion of federal income taxes are simply a welfare program for contractors and civil servants inside the DC beltway.

Philo

Philo
Monday, March 10, 2003

Taxes are theft, pure and simple.  Merely making a law that declares that it is okay to take what another has earned without their permission does not make it right to do so.  It doesn't matter whether you are a cashier at the local fast food joint or Bill Gates, you should have the exclusive right to keep, spend, save, or give away what you earn.  Why is this so hard to understand?

tired of tedium
Monday, March 10, 2003

All I have to say is...  "submarines". 

Geez, I need a good bike ride.

Nat Ersoz
Monday, March 10, 2003

>> "Taxes are theft, pure and simple.  Merely making a law that declares that it is okay to take what another has earned without their permission does not make it right to do so.  It doesn't matter whether you are a cashier at the local fast food joint or Bill Gates, you should have the exclusive right to keep, spend, save, or give away what you earn.  Why is this so hard to understand?"

How would you pay for things like, Oh I don't know, say Roads maybe.

As long as there is/are 'public' things there will be taxes.  How old are you?

>> "$12-$15K was more like it in the 80's (especially when everything went into the crapper ~1989). "

Hmm... yea let's raise interest rates to 13% again.  That'll cure the double dip recession. 


Monday, March 10, 2003

Tedium:  If you think taxes are theft, then please move to someplace where there are no roads, no schools, and no military.  These things are not free, so don't expect to get them as such.

anon
Monday, March 10, 2003

Gads, kill this thread.  SUBMARINES! SUBMARINES! SUBMARINES!

Nat Ersoz
Monday, March 10, 2003

Murray, I completely agree with you. 

I find it very bizarre that so many people whine about how little money they make, when they are in reality making far above average.

It's been my observation that most people have very little clue where they spend their money, so they generally have to earn more to cover the "gaps".

For the record, my husband and I make around Cdn $30,000 / year - combined.  It's not anyone's business as to why.

However, we own a Cdn$400,000 house, drive a station wagon ~$20,000 and live comfortably.  We don't have any debt aside from the mortgage and our savings are enough to live on for a couple of months (a little low right now, since we just made a couple of major expenses).

Many of my friends (not to mention family) make triple or quadruple our income - yet they are way behind financially.  It comes down to planning and having a clear picture of what your goals in life are.

Have a family too, thank you very much.
Monday, March 10, 2003

The only thing I hear when I hear "how do we pay for roads" and the like is a set of small minds that cannot conceive of a better solution to the problem.  There was a time when people actually owned roads and made money for their use.  I don't expect anything to be free, I am willing to trade value for value. 

If you believe that it is right to take what does not belong to you, then say so and I have no problem with you supporting taxes.  If you believe it is wrong, though, and still support taxing your neighbors, then you are a hypocrite.  Simple logic.

Nat's right though, this conversation belongs elsewhere.  Sorry for interrupting the flow.

tired of tedium
Monday, March 10, 2003

Name: tired of tedium
Age: early college, late high school
Reads:  Ayn Rand, none of her critics.
Confuses 'alternative' and 'counter-current' trends as independent thinking.  Do not approach until it has had time to mature.

 
Monday, March 10, 2003

>> "The only thing I hear when I hear "how do we pay for roads" and the like is a set of small minds that cannot conceive of a better solution to the problem.  There was a time when people actually owned roads and made money for their use.  I don't expect anything to be free, I am willing to trade value for value. "

How old are you?  Do you carry a gun and a piece of straw in your mouth?

It would be mass hysteria if everyone got to charge people for traveling on their section of road.

Grow up or go live in third world nation.  You might get away with your primitive thoughts.


Monday, March 10, 2003

Tedium:

There is such a thing as a "social contract".  From birth, we are entered into such contracts without explicitly agreeing to them depending on our geography, nationality, ethnicity, class, etc. etc.  Part of the social contract, at least in modern, Western-style republics and democracies is the notion of "public interest". 

For example, it is in the public's interest to have high-quality, maintained roads that connect centers of commerce and culture.  Privitization of roads would lead to a pay-to-play situation where only those who can afford the toll from L.A. to San Fransisco on Route 101 can travel from one point to the other.  It is only through combined effort (and cost-sharing) that we can ensure that *everyone* can utilize that road without regard to present economic status.

Public media is another example.  Private media outlets are constantly saturated with content that is warped to serve the interests of the outlet, its owner(s), or its owner(s) business parters.  (Ever listen to a CNN reporter talk about goings-on at AOL-Time Warner?)  Public media allow a more (although not absolute) independant, impartial perspective on events and trends *because* they are unburdened with IOU's to advertisers, etc.

To make things a little more concrete, just imagine for one moment what you would do if you lost your job, or if an illness struck, or if any of a hundred unfortunate things happened that put you in a position where you *couldn't* pay for critical goods (such as food, maybe).  I am quite sure you'd be glad that unemployment is available, and if things continue to go badly, I'm quite sure you'd be doubly glad that there is a safety net of social services to keep you from dropping into really dire circumstances.  Keep in mind, no matter how well off you are now, you (and me, and everyone around us) has the potential to fall.  It's a statistical game of chicken to push to have no publicly-availble safety net to catch you, me, or any of us when that does happen.

So, no, I don't think that taxes are theft.  I think they are the best system we've come up with so far to ensure that a particular sustainable social contract is maintained.  If you think there is a better system available, please provide a link.  However, don't blindly say (or imply) that privatization is the answer when it is patently obvious that such a system would completely destabilize the social contract that we all depend on.

anon
Monday, March 10, 2003

A question for those who think taxes are too high.

We have a world with, what, 160 countries?  What other country is doing a better job on the benefits-to-taxes front?  And I include in those benefits not just tangible things such as roads and sewer systems, but intangibles such as being able to say what you want without getting shot or tortured, or being able to call 911 and have someone arrive in less than three hours.

When you say we pay too much in taxes, what other countries are you comparing us to?

Hardware Guy
Monday, March 10, 2003

Wow this went off topic fast (though expectedly).

But the 'social contract'/'tax' issue has real appliciablity to business aspects of software development.

Ever hear the phrase 'Microsoft tax'? Well, it may be bad that the MS 'tax' goes to MS and not some entity that exists primarily for the public good, but the common Windows infrastructure has allowed a huge segment of the industry to grow. (Some will argue that it's also destroyed other huge segements of the industry; they may both be true.)

Similary, true open standards like HTTP and HTML and many others have allowed entire industries to grow and exist. How much larger is the web than teletext? And it got there because there were NOT tollboths in the way. As tollboths get put up on the 'information highway' (it is happening), things are going to stagnate and get worse, at least where these restrictions exist.

It's unfortunate we can't all just co-operate instead of being coerced into taxes and the like, but that's human nature.

mb
Monday, March 10, 2003

In the Netherlands, salery taxes range from 35% to 50%. Sales tax is 19%. So, the US situation isn't so bad. Of course, social security is much, much better here.

Frederik Slijkerman
Monday, March 10, 2003

<sigh> Here we go again...

It seems as though anything that even tangentially mentions money is a cue for one set of people to get into a 'taxes good/taxes bad' dichotomous punch-up, another set of people to brag about how clever and disciplined they are and how the rest of this feckless, extravagant world has only itself to blame, and one person to divert the issues another way by chucking in the 'Microsoft' rollerskate.

Can anyone even remember what the original post was about?

Fernanda Stickpot
Monday, March 10, 2003

>> "Can anyone even remember what the original post was about?"

Something about money, taxes and whining...  :P


Monday, March 10, 2003

In defence of tired of tedium...
Name: Tapiwa
Age: 26
Location: London, UK
Profession: Finance
Reads: A whole lot of different stuff, and thinks too.

Just because ToT's views are not mainstream does not make him an ignorant gun carrying teenager in the Midwest.

Ideas such as public goods and the social contract, (whatever that is), are relatively new. For an idea of what a lot of us feel is the scope of the law, read a pamphlet called "The Law", by Frederic Bastiat. Great reading.....

"We disapprove of state education. Then the socialists say that we are opposed to any education. We object to a state religion. Then the socialists say that we want no religion at all. We object to a state-enforced equality. Then they say that we are against equality. And so on, and so on. It is as if the socialists were to accuse us of not wanting persons to eat because we do not want the state to raise grain. "
**This was written in 1850**

I would add, 'We object to state provided/controlled roads. Then they say we are opposed to modern transportation.'

London has just introduced congestion charging in the City centre.... it is a quasi toll for using the roads at certain hours. If one did not have to do legal gymnastics to get planning permission, we would probably see the emergence of private road owners.

Use my road, between London and xyz. Pay £10 for the privilige, and oh yes because it is a private road, I am setting the speed limit at 200mph!  Any takers?

tapiwa
Monday, March 10, 2003

Oops, forgot the url

http://bastiat.org/en/the_law.html

tapiwa
Monday, March 10, 2003

"Ideas such as public goods and the social contract, (whatever that is), are relatively new."

Relative to what?

Hello? Roman Empire, circa 2000 years ago? The entire concept of feudal nation-states is taxation/public services taken to the extreme.

And the social contract was far, far more important when depending on your neighbor was an issue of survival (as opposed to simply being able to walk down to the corner because he shoveled his sidewalk). Implicit social bargains are part of the evolution of civilization.

Philo

Philo
Monday, March 10, 2003

>> never mind that we pay ~$1.75/gal vs. $5/liter in the U.K

$5/liter == $1.32/gal

"Of all life's pleasures, I think I like nitpicking the best" - Wally

Pedantic is my penultimate name
Monday, March 10, 2003

There is a strong parrallel between government taxation and the issue of executive renumeration.  The issue is accountability.

People don't mind high flying executives earning millions and millions of dollars if they are actually doing a good job and providing millions and millions of dollars worth of value.

People don't mind paying taxes but start to get angry when they see their taxes increasing and the services they recieve decreasing AT THE SAME TIME.  It's not a good trend.

I think people have the general attitude that the government should get as little money as possible, not because people begrudge contributing or helping others or paying their way, but because they cannot see how the government getting more money will help solve any problems.

braid_ged
Monday, March 10, 2003

No. A liter is smaller than a gallon. You got the division upside down.


Monday, March 10, 2003

I guess I spoke too soon earlier, since after all, a dichotomous punch-up on the 'taxes good/taxes bad' issue is actually on-topic.

Okay, well, my take on taxation is best explained at this link:

http://www.henrygeorge.org/canons.htm

but I won't say any more on that subject because I'm still a beginner and I don't want to try to argue beyond my ability to argue.

What bugged me, however, was the idea that anyone could live on CAN$30,000 a year, owning a CAN$400,000 house into the bargain, if they would only stop and think about their goals.

Don't get me wrong, I'm filled with admiration for anyone who can do this. But I think very carefully about my goals. They are modest: not to have to live in a cardboard box eating cat food when I retire; not to eat cat food now but still stay out of debt; to pay for my master's degree by the time I qualify.

Unfortunately I can't do *all* of those things; I have to pick and choose. Even if I left out the master's degree, I still can't do all those things. And I earn *way* more than CAN$30,000 a year. I don't agree that this situation is because of my fecklessness and extravagance.

However, if this very thrifty person would be kind enough to describe what their goals are, and how they managed to meet them while still owning a house worth over 13 times their joint income, I would really like to know how it's done. Please don't mistake this for sarcasm, it's genuine curiosity.

Fernanda Stickpot
Monday, March 10, 2003

I'll tell you how we can solve this argument once and for all: Ask the citizens of NoTaxLand how they feel about not having to pay any tax.

Now does anyone know where NoTaxLand is exactly? I'm damned if I can find it on the map of the REAL WORLD.

tiredofwhiners
Monday, March 10, 2003

It's not about raw salary, its about the personality of the person. 

Some people always spend more than they make.  They can make $600k and still be broke.  They simply spend everything they earn, and will always feel poor.  They raise the bar everytime they get a raise.  They always live above their means, regardless of what their means are.

Likewise, some people always spend less than they make.  no matter what they make.  They can make $30k and still feel comfortable.  They always live below their means, regardless of what their means are.

Bella
Monday, March 10, 2003

First:  I won't talk more about taxes.  Nat was correct, this isn't the forum for it.

Now, on to my detractors:

Blank persons #1 and #2:

You might like to purchase a copy of the book "Logic and Rational Thought" by Frank R. Harrison and turn to page 507 so that you can read the entry on "Ad Hominem."  This should show you why your posts only serve to strengthen my comment about "small minds."  In order to amortize the cost of the book effectively, read the rest of it when you are done, and then come back here and demonstrate to me how the logic that I used to arrive at my assertions is faulty.

anon:
Thanks for a well reasoned reply.  I don't agree with your assumptions about social contracts, nor do I agree that that they are the only means to the ends you mention.  At least you offer some logical support for your position, though, so thank you for taking the time to respond.

And tapiwa:

Thanks for the support in this thread as well as in the earlier thread on discrimination.  If you liked "The Law" be sure to read his "Economic Sophisms," which I liked even better, and "Economic Harmonies."  I'd also recommend "The Incredible Bread Machine" by R.W. Grant.  It's hilarity with a powerful message.

And to all, I would still like to see a solid argument that starts from plausible moral assumptions and ends with taxes != theft.

By the way, if anyone *is* interested in solid logical underpinnings starting from basic obvious assumptions, no one has done a better job of it than Andrew Galambos in his book "Sic Itur Ad Astra: The Theory of Volition."  It's expensive, but like I said, I don't mind trading value for value.  Even if you don't agree with it, his arguments are compelling.  Thanks for a lively debate.

tired of tedium
Monday, March 10, 2003

Ferdinanda,

The way we manage is to carefully and obsessively measure what we are spending.

We do not make any purchases that have not been thought out in advance, and very few purchases are made that don't meet our life goals.

Certainly, some of our good fortune has been luck.  The right timing.  A strong family and friend network to provide a safety net (something I agree everyone should have access to).

But the careful tracking and budgeting that we do is really the main story.

You say your goals are modest:
1) save for retirement
2) eat well
3) to stay out of debt
4) pay for master's degree

The key is to determine how those goals break down, and whether there are any "hidden priorities".  For instance, to you, eating well might mean gourmet meals that require no preparation.  The hidden priority here is convenience.  Sometimes various goals can be incompatible - for instance, if the costs of meeting all of your goals (including the hidden goals) exceeds your available income.  Or, perhaps you could meet all of your goals, but not within the desired time frame. 

Most of the time though, people think they have a set of defined goals and priorities, but then spend the majority of their income on other things.  Buying lunch.  Going to movies.  Buying cigarettes.  Getting that DVD.  Whatever. 

What I've found helpful is recording and categorizing every expense, and reviewing them on a weekly basis.  Was that expense necessary? Did it help me achieve my goals? What do I need to do make the next milestone on the current goal?  What can I do to minimize necessary expenses that are not achieving my goals?

I think it is also important to work on a small set of goals and priorities at a time.  We ended up with a house that seems a lot more valuable than what we can "afford", because we made sacrifices on our other priorities - for instance, delaying the start of our family by several years in order to save for our down payment. 

Bottom line - I think it comes down to discipline and patience.  If, for example, you want to have sufficient cash to take a Master's degree, you may have to stop going out for dinner (nb I have no idea what kind of lifestyle you may or may not have, this is just an example). 

In my experience though, most people aren't willing to make the trade-offs necessary to meet their goals.  Which is fine.  If someone needs to have triple my income to match my lifestyle, because convenience is a priority for them - more power to them.  What gets me is people not realizing that their lifestyle choices have a lot more to do with their financial position than do taxes...

Have a family too, thank you very much.
Tuesday, March 11, 2003

A friend from a bankrupt dotcom in Germany tells me:
Taxes/other deductions: 30-50% - usually 40% if single, then if married higher earning spouse chooses 30% while other 50%.
Unemployment: ~70% salary for some time interval, which then decreases; assumes employee didn't quit.
Insolvency: state pays for 3 months if you were unpaid and company goes insolvent.
Gas: ~4X US cost
College:  usually near-free, and tax benefits to companies who employ students

Unclear whether this is now sustainable due to babyboomers, absorbing East Germany, new military spending.

My spin on this is you don't hit rock bottom like in the States, and the people are not as money-conscious.

Tj
Tuesday, March 11, 2003

Well, thank you for that carefully considered advice, which is much appreciated. I congratulate you on your ability to implement your principles so thoroughly.

I guess I do feel a bit disappointed, though, because I was wondering if you would have some kind of knowledge that I didn't, something that isn't in any of the money-management books out there, but it all comes down to the same thing: write down every purchase, budget carefully and indeed obsessively, and review everything. Since I'm already doing this, and have been for some considerable time, I guess I've run out of ideas.

The money-management books keep telling me to stop wasting money on DVDs, but I can't, because in order to do that, I would have to *start* wasting money on DVDs, and I can't afford a player ;-)

They also tell me to stop driving such an expensive car, which is going to be even more tough because I don't drive.

I think I'm going to have to face the fact that my income simply is too small to meet all my goals. Before I started doing my master's I was saving 47% of my income, with 22% of that going into retirement funds, 5% into income protection insurance, and so on. Now I spend about 33% on the master's, with the remaining 14% going to those other savings.

If I were to face up to what I really *need* to do to meet my goals, it would be something like this:

37% - education
33% - retirement fund
5% - income protection insurance
<1% - life insurance
10% - emergency fund
33% - mortgage/savings for deposit
45% - household bills, including food
17% - public transportation

Even taking education out of the picture, that works out as considerably more than my income.

I would like to draw attention to fact that there is no 'DVDs and gourmet food' item in this set of needs. When I say I want  to eat well, I mean that I want to eat three meals a day that are in line with generally accepted nutritional guidelines. Nothing more.

There seems to be an abundance of advice for people who are spending too much on frivolous things, and need to cut those things out of their budgets.

On the other hand, I'm finding great difficulty in getting any useful advice for my own situation, which is that I've cut out everything I can until I can't cut out any more. The only advice I ever get is 'don't waste so much money on frivolous things', and when I point out what I spend my money on, things like education, housing, food, and retirement funds suddenly get redefined as frivolous.

It's as if people will go to any lengths to avoid admitting that sometimes, it really is possible not to have enough money to meet genuine needs.

Fernanda Stickpot
Tuesday, March 11, 2003

Obviously, without knowing you and your situation, it's hard to give specific advice.

Based on your breakdown, my more specific advice would be that (as you say) it is impossible to save a third of your income for one goal (education) and a third for another goal (education).

Your breakdown looks like you are highly focussed on saving for two or three different goals (retirement, education, emergencies).  Unfortunately, you can't do everything at once.  I have no idea how far away your retirement is, nor do I know how long you have until payment of your Master's.  But assuming that your retirement is still a number of years away (say 20) and that the Master's is only a couple of years away, the more immediate priority is in fact the education.  As such, if I were you, I would reduce the retirement fund level dramatically. It's important to continue to contribute, but unless you need the 33% to offset your taxes, that's a level of contribution that I would make only if retirement fund was my number 1 goal.

Also, you are contributing a little over 5% towards insurance, but you also have an emergency fund and 'savings for deposit'.  Rather than define a certain amount of the income as 'emergency fund' (a strategy that is entirely appropriate if the fund is your main goal), I would pick minimum amount that I am comfortable with as a buffer and stop contributing once you have that amount.  Once you've got your education goal out of the way, then getting your actual savings up to whatever point makes more sense. And actually, if it were me (pretending to be you on completely inadequate information <g>), I might even choose to have that amount covered by a credit line that I would only use under emergencies.  Yes, that would mean that in an emergency you would incur some debt (although interest rates are low right now).  But, remember that your goal is saving for education - and it is most likely that the emergency will not even occur.  If one does, getting rid of the debt over saving for education would temporarily be the new goal.  But I'd make that gamble, especially since the emergencies sound like they are different from the "losing your job" possibility (for which you have the income replacement).  Personally, I don't have income replacement insurance at all.  Instead have a couple of months (ideally six, although we are not topped up at the moment) of salary saved up.  The route I've chosen is more risky - but again, I have a strong network of friends and family, so I believe that it is an acceptable risk in our situation.

Transportation:  We pay just over Cdn$6,000 per year, and we lease a car.  If your salary is double mine (a guess), then you are paying thousands of dollars more.  I'd look at whether you can reduce the 17% of your income that you use for public transportation.  If the distance between your work and home is significant and that is the reason for the high percentage, I'd consider decreasing it by moving or asking to work at home one day a week or something.  Can you reduce the frequency you have to fork out for public transportation tickets (unless there is a monthly pass or something).  Do you take cabs places?  Can you carpool?  Some cities (in Canada) have websites where people offer rides.  Do/can you walk or ride a bike when possible? It's possible that where you live, transportation is simply more expensive than where I live - but it would be an area I would look at.

The 33% for mortgage and savings for deposit.  I'm not sure what savings for deposit are.  As commented above, possibly this area could be frozen until you have saved for school.  Also, it's worth noting that interest rates are very low right now.  Have you restructured your mortgage to take advantage of this lately (if possible)?  You could also play with your mortgage payment frequency and possibly save a few dollars a month. (Eg switching from bi-weekly to twice a month) Note that there is a tradeoff between long term costs and monthly costs, but sometimes it is worth it.

45% - household bills, including food.  Again, since I have no idea how these break down, it is difficult to make specific suggestions.  This is a higher percentage of your income than ours.  Evaluate whether some of the household bills are things that could wait or be done by you (or friends and family - don't forget that having a strong network behind you is critical).  Can you save water and or electricity by modifying your habits - eg keep the house a couple of degrees cooler, and wear a sweater. Don't use air conditioning except when the heat/humidity is interfering with your sleep/health. Take shorter showers, or only take baths.  Use the stove top and microwave more frequently than the oven. Turn off lights when you are not in that room.  Go to bed earlier etc.  Is your weather stripping up to snuff (an inexpensive improvement that can really make a difference)?

Food - look at what kinds you buy (aside from "not catfood").  I'd keep track of what you purchase over a given month, and analyze the various ratios and costs. Calculate your per meal cost for everything you make.  We tend to avoid the "expensive" stuff.  Ie nothing prepackaged (if I can make it, I will).  Lots of fruit and vegetables, but only the stuff that is in season.  I can and freeze things that I buy in season to supplement the variety available.  What about cheese and meat?  These are more expensive, and should be limited to a couple of times a week.  Make dishes that have leftovers (tend to have a lower per meal cost).  Buy things in bulk, but only if it's actually cheaper.  Limit the amount of "snack" foods - not only is it more expensive, but they tend to be subject to extra taxes (in Canada, there's GST on snack foods, for instance).  Speaking of taxes, if you buy deli type stuff (should not be a usual purchase if you are trying to save), in Canada it is best to buy at least six in order to save the tax.  Plan out what you are going to eat a week in advance, and buy what you need to make it all at once.  Don't go back to the grocery store until the next week.  Compare prices at different stores for the items you frequently buy.  Read the flyers.

Unfortunately, there are no magic bullets, and sometimes income does not cover all wants.  I'm certainly not arguing that.  What I'm saying is that Cdn$30,000 can stretch much further than "general wisdom" says it can, provided you have discipline and patience. 

Have a family too, thank you very much.
Tuesday, March 11, 2003

taxes != theft

Hmmm... you counter an ad hominem attack with an ad hominem attack of your own.  You are much more clever than I thought.  Maybe even a College senior.

Taxes aren't theft simply because you are living under a social contract.  Many moons ago a bunch of people decided that banding together would be beneficial and this is the system that they came up with. 

Of course, that means that we were born into this system, like it or not.  The simple solution is to find a different piece of land where people haven't decided to legalize 'theft' as you call it. 

Note: Beirut, Somalia, or Bosnia might be good places to start looking for some new land, as they have very minimal governments.


Tuesday, March 11, 2003

Alternatively, he could just not pay taxes and see if his arguments convince a jury of his peers.


Tuesday, March 11, 2003

Ad hominem is not an attack.  It is a logical fallacy wherein you attempt to refute an argument by calling the person making the argument into question.  Since you made no argument that I could detect, my reply was an observation, not an instance of ad hominem.  You really should read that book.

As to your argument, I already stated that the notion of a social contract is dubious at best.  It is likely an invention of those benefitting from social plunder to make it palatable to those being plundered.  I am asking for a cogent argument that starts from solid assumptions.  You are getting better though.  Care to try again?

tired of tedium
Tuesday, March 11, 2003

I can't believe you guys make 100 grand US surfing Joel's discussion forums. The world is really fucked up.

Li-fan Chen
Tuesday, March 11, 2003

Hi, Have a family, and thanks for all the advice. I will print it and add it to my file of money-saving tips.

Yes, my point was that I *can't* allocate over 100% of my income to all these things. So in fact, I *don't* do all these things. But making the choice feels a bit like deciding which limb to cut off when I'd rather use them all.

I have approximately 32 years until retirement, and I've calculated that if I save 33% of my current income (and I'm always referring to net income, not gross) I will have just enough to provide for my retirement, as long as I own a home outright by then.

Unfortunately, I will also be paying about 37% of my income towards my Master's for the next two years, and while it's doable, it doesn't give me a lot of wiggle room. It doesn't allow for future episodes of unemployment, time out to raise children, etc. Yes, I realize that not everyone will absolutely have to retire at 65, and may be productive well into their seventies. But older people do have health issues, and therefore I think that it's a prudent goal to at least pursue the possibility of being able to retire at 65.

Also, the insurance is not against simple job loss. It's against prolonged periods of illness which might render me unable to do any job. In that case, I will be insured for GBP 1,000,000 until the age of 60. Contrast this with the sum I would have built up if I put the money into a savings account since I started - I would now have GBP 750 to last me until age 60. Not having your willpower and discipline, I lack confidence in my ability to make such a small sum of money last that long ;-) so I choose insurance instead.

I don't actually have an emergency fund because I spent it all on an emergency. Unless my income increases I don't envisage being able to replace it. Your point is well taken that a line of credit might do - but if I can't put money away for savings, how will I be able to put money away to pay debts? A credit card is but a poor substitute.

Yes, transportation is much more expensive where I am. When I used to commute, I spent 25% of my income on commuting. I don't drive, but it would not be feasible to drive into the capital anyway. I now have a local job which is only 45 minutes' walk away.

My biggest problem is that, in order to get six hours' sleep, do a full-time job, and study for my Master's, I'm finding that I can't manage the two forty-five minute walks I need to take to and from work every day. Also, after one scary incident too many, I'm finding that I don't always have the courage to walk home after dark. Nor to take the 20-minute walk to the bus stop and wait in the dark for a bus that is most unlikely to come after 7 pm anyway. So, I tend to take a taxi at least one way, which costs twice as much as a bus. Often, if I fall asleep over my books, I oversleep and don't have the 45 minutes I would need to walk or take a bus to work, either. I guess this is also a failure of self-discipline on my part. So, I have decided to learn to drive and to purchase an inexpensive car. But, this will still cost me at least one month's salary as an initial investment. Nevertheless, I hope that it will save me money in the long run, and even increase my employability.

The 33% 'for deposit' - what I mean is, if I took out a mortgage, I would have to spend 33% of my income on paying it. I would have to pay roughly the same for rent, too - and I *am* talking about one of the lowest-rent areas in the region, so moving somewhere cheaper is not an option, because I'm already living in the 'somewhere cheaper' that people move to. I would not be prepared to get a 100% mortgage, either, which is why I would save for a deposit if at all possible.

However, the housing issue is moot for the next two years because my elderly, widowed mother - who constitutes my only family - has generously consented to allow me to live with her rent-free until my Master's is paid up. I certainly do appreciate the value of family in this situation. If it were not for her generosity, I would not have the opportunity to study at all.

But that doesn't mean I'm comfortable with the situation. The idea of allowing my elderly mother to support me, albeit for a fixed period of time, leaves me wracked with guilt, and yet the reason I'm accepting the situation is because, by studying, I'll at least have the possibility (not the certainty) of increasing my resources enough to support myself and provide for her, too, if need be.

This is also why I have the insurance - which, BTW, my mother cannot comprehend the need for - after all, if I became very sick, I could always live with her for the rest of my life; she is only 73 and her osteoporosis hasn't led to any ill-effects so far, and when I turn 60 she'll only be 102, so what's my problem?

See what I mean? She's generous and self-sacrificing to a fault, but she *is* my only family, and neither of us is exactly immortal or invulnerable. The flip side of relying on my family is that my family also needs to rely on me, and I'm not sure I'm equipped for the task.

Since my mother owns the house, she is the one who makes the decisions about how to pay the household bills, and I don't feel it's my place to question her on this. She does have the gift of frugality, though, and I think she knows what she's doing.

So, what have I chosen to do? I pay the 37% for my Master's, the 5% for income protection insurance, and put 10% into savings - 5% of which goes into a pension fund and 5% of which goes into an index-tracking ISA which I have earmarked for retirement but which I suppose I could liquidate if there really, really were an absolute, dire, life-threatening emergency.

So, what point am I trying to make? I guess I agree with you that friends and family are invaluable - but just as I rely on their support, they will in all likelihood need to rely on my support, and I want to take all possible measures to be sure that I can provide it.

I also agree with you that careful budget management is essential - but that's why I budget so carefully.

You see, advice that amounts to 'have you tried not spending money?' is invaluable, but when it's the only advice I ever get, the effect is almost to imply that I'm stupid and haven't really thought about how to maximize my resources. Whereas in reality, I think very, very hard about these things and do all that I can.

Fernanda Stickpot
Tuesday, March 11, 2003

No, my use of the term was proper.  Perhaps you could pick up "English for dummies" when you're at the bookstore?

As to your 'argument':  merely thinking something is dubious does not make it so.

Maybe you read the logic book but didn't understand it?

tired of tired of tedium
Tuesday, March 11, 2003

Murry, to reply to your original point. Yes, I agree, nothing bugs me more than listening to the guys I work with moaning about taxes and how expensive everything is.
It's not that they are bad guys, it is just like they never stop to think about how lucky they are just to have a job and a place to live.
I guess people are just naturally selfish, but it wouldn't hurt for some of them to open their minds a bit more. they always have to have the newest this and the latest that.
Personally I would gladly pay higher taxes if I could see that it was actually being put to good use, but here (and I'm sure in many countries) taxes go up, but services are visibly getting worse and worse. thats frustrating.

Alison, Ireland.
Tuesday, March 11, 2003

Bravo ferdinanda and alison. There are a few people around here who don't realise they've actually got very, very lucky. Some of them are so damned selfish they that they don't want to pay any tax and spend thier spare time dreaming up excuses to try and justify why not. How pathetic can you get?


Tuesday, March 11, 2003

>You might like to purchase a copy of
>the book "Logic and Rational Thought" by
>Frank R. Harrison and turn to page 507 so
>that you can read the entry on "Ad Hominem."

Dude.  I'm pretty sure I used more-or-less the exact wordsa a few months ago in a JoS post.  I remember including a link to amazon so people could buy the book.  Is there any chance you did that?  That'd be funny. :-)

I read "LandRT" in college for philosophy 200-something.

Good book.  It made discrete math, and later computer architecture, a lot easier.

Regards,

Matt H.
Tuesday, March 11, 2003

NoTaxLand does exist (kind of). Each US state has its own taxes and budget. Washington state has no state income tax and (I think) about 8% sales tax. Oregon has state income tax, but no sales tax. I lived in Washington and California. I don't really see much difference in the available service or education between sales-tax-only Washington and sales-tax-and-high-state-income-tax California. In California, the roads are just as crowded and bumpy, except I am paying a lot more money to support them.

runtime
Tuesday, March 11, 2003

Califorinia has more visitors or tourists per capita than Washington, so you would expect sales tax to be higher to balance the fact visitors don't pay income tax.

Doesn't explain why services are so bad, though. Maybe Californian politicians spend all the tax revenue on drugs and prostitutes. Perhaps.


Tuesday, March 11, 2003

Matt H:

I actually picked the book up for a refresher class I took at a community college a few years ago.  At the time, I thought it was a pretty good book, but didn't get much direct use out of it.  I pulled it out later, though, because I started studying Eli Goldratt's thinking processes, using a book by William Dettmer:

http://www.amazon.com/exec/obidos/asin/0873893700

A lot of the material covered in Dettmer's book reminded me of stuff I'd covered in logic classes in college and again in the class I mentioned above.  So, I thought to use L/RT to supplement the techniques.  Fortunately, it happened to be handy yesterday for a completely different purpose :)  Kind of a crazy coincidence, though.

Ever looked at the Thinking Processes?  Very interesting stuff.

tired of tedium
Tuesday, March 11, 2003

tired - you went to a community college? no public funding we hope...


Tuesday, March 11, 2003

Here in Italy there is a little state that is 'NoTaxLand'.
It's name is "Principato di Monaco". Nedless to say it's very difficult to become a citizien...

Ciao

Giorgio Pallocca
Wednesday, March 12, 2003

MAKE 1000$$$$ FAST NO BULL$HIT
DO THIS NOW! TIME IS WAISTING!

This works better than letters & it's all electronic!

Posted By: E'Sean <spontaniuz@msn.com>
Date: Wednesday, 21 July 2004
Money making 

"This is so awesome. Try it. The more people that do it the better."

"I turned $3 into $14,706 within the first 30 days of operating the business plan that I am about to reveal to you free of charge."

If you decide to take action on the following instructions, I will personally GUARANTEE that you will enjoy a similar return!"

Please do not be skeptical about this program.

At least think about it for a few days.

Otherwise you will be throwing away over $10,000 in cash!

Dear Friend, My name is Mark Sutton. I was laid off from my job in August of 2001  At that time I wasliving beyond my means and in serious debt. Several debt collectors were hounding me on an almost daily basis, and this consequently started a chain reaction that ended with the repossession of my car and then my home. As you can probably imagine, my prospects looked pretty bleak. Then, in March of 2002, I received a short and simple email telling me how to make over $10,000 at a time.

I ignored it because of course, I was skeptical.

However, I didn't delete that email because something about it rang true to me, and I was desperate to know whether it was possible to make that amount of money in such a short space of time. By this time, I was even deeper in debt, and I had just about reached the point of despair. I finally realized that I had absolutely nothing to lose by having a go at the plan offered to me in that email.

And apart from that, I just couldn't stop myself from thinking "What if it actually works?" Therefore, I put my doubts to one side and I went ahead and followed the simple instructions given in that email. It took me less than 30 minutes

to complete and it cost me no more than $3. And yet, by the end of 2002, I was able to book the family holiday of a lifetime in Miami, and I bought a brand new Audi A8 with hard cash. And in the autumn of 2003, I purchased a tidy semi-detached home for no less than $125,000. And yet,

I don't owe a single penny to anyone!

To date, I have made exactly $392,718. My accountant has drawn up a cash-flow forecast in which he predicts that, within the next 24 months, I will become a millionaire just through this one business alone. Even now as I write this, I find it strange to come to terms with the fact that, like most people, I've worked hard and struggled all my life just to 'get by' and then something ridiculously simple drops into my lap and immediately turns my life around completely.

When I think back to all the similar emails I had previously deleted, it makes me shudder, because now I know just how close I came to missing out completely.

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The business plan I am about to share with you works perfectly every single time. I've never made less than $10,000 from it on each occasion. Let me assure you that this is a LEGITIMATE BUSINESS OPPORTUNITY, a perfectly legal moneymaking enterprise. It does not require you to sell anything. It does not require you to speak to your friends, family or anybody else (unless you want to). In fact, you do not need to come into contact with any people whatsoever. Anyone with a pulse can become successful and make their fortune with this system. If you believe that 'every dog has his day', then follow the simple step-by-step plan exactly as it is set out below. If you do this and this alone, I GUARANTEE that within the next 30 days you will receive over $10,000 in cash via your PayPal account. I know that this must sound like an outrageous claim, particularly if you've never had possession of this sort of money before, but believe me, this business works like nothing else you may have seen before in your life!

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STEP 1

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https://www.paypal.com
Be sure to use this link so you can sign up for a free PREMIER or BUSINESS account. You'll need to have a PREMIER or BUSINESS account (and not a PERSONAL account) otherwise you won't be able to receive credit card payments from other people.

STEP 2

It is an undeniable law of the universe that we must first give in order to receive. So the first thing to do when you have your Premier/Business PayPal account is to IMMEDIATELY send a $3 payment from your PayPal account to the FIRST email address in the list below, along with a note saying: " Please add me to your mailing list." Be certain to add this note, as this is what KEEPS THIS PROGRAM LEGAL. Instructions on how to send a payment are under "SEND MONEY" at the Paypal Site. It's so Easy!! When you send your $3 payment to the first address in the list, do it with a great big smile on your face because "as you sow, so shall you reap!"

Here's the current list:

(1)mr_skunky29@yahoo.ca  (2)bmedsker@cablespeed.com  (3)disbellj@midsouth.rr.com
  (4)motyellek@adelphia.net  (5)spontaniuz@msn.com

After you have transferred a $3 payment to the email address at the top of the list, something very eerie happens. It gives you an indescribable, overwhelming sense of certainty, belief and conviction in the system. You've just proved to yourself that, because you have done it, there must be a great number of other people ready to do exactly the same. Thus you have now seen for yourself, first hand, that this business actually works!

STEP 3

Once you've sent a $3 payment to the address at the top of the list (along with a note,please add me to you mailing list! - this is VERY important!), the next thing you need to do is to obtain a copy of this email message, as you'll be sending it out to at least 40 people.

The copy that you will send out will contain YOUR unique PayPal referral URL and YOUR email address at number 5 in the list - having deleted the address at Number 1 in the list, and moving the others up a position. The easiest way to do this is to:

(A) Go to your toolbar (at the very top of the screen) and select EDIT and then SELECT ALL.

(B) Go to the toolbar again and select EDIT and then COPY.

(C) Start (compose) a new email message (PLAIN TEXT so everyone can view it!).

(D) Fill in your email address and subject line.

(E) Go to EDIT and PASTE to paste this text into your new email message. Now you can edit this email message in any way you want!

The first thing to edit are the email addresses in the list above. Delete the top email address, and then move the others up a position, and then add YOUR email address to the bottom of the list (the number 5 position). Be sure to use your email address that is associated with your PayPal account. But DO NOT forget to send $3 via PayPal (along with your note!) to the email address at position number 1 before deleting it! Don't be tempted to add your name to position 1 in order to earn money fast! It doesn't work like that!

If you do that, you will ONLY reach the people you directly send emails to, and then your name will be immediately removed from the No.1 place and you won't reach thousands of people! But, if you add your name to the Number 5 position, there will be literally thousands of people receiving and sending email's later - when your name is at the Number 1 spot!!!

Now you need to edit the PayPal referring URL (shown above in Step 1) with your own PayPal referring URL. You can find YOUR referring URL at Paypal after you join. Just look at the bottom of the first page once you sign into Paypal, and click on the "referrals" link. You will be given a referring URL similar to the one above, except the code number at the end will be different. Simply delete the current PayPal referral URL in Step 1 above, and replace it with your PayPal referral URL.

(F) Once you've edited your email message as outlined above, send out a minimum of 40 copies of this email. You can advertise it any way you want but NO SPAM!!!

richboy
Sunday, July 25, 2004

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