http://en.wikipedia.org/wiki/United_States_fiscal_cliff
Amongst the few that post here I often wonder how each of us deals with life today in this country. Many here were not and have not been affected by the economic downturn. Please identify yourselves if this includes you and advise us of how you managed to maintain or actually create additional wealth over the last 5 years. I am on the opposite side of the equation at the moment. As I worked in Aerospace I choose not to retire on a 401K. I made this choice knowing a crash might wipe away some or all of my retirement, so I invested in land/housing. In the late 90's I bought a home and moved out of the condo I had for three years. I was able to select a home that had a decent yard to add on a couple of rooms and small mortgage. As the years went by I bought a second home in
http://www.state.hi.us/tax/a1_b3_6harpta.htm
Even though we had to make a choice regarding where to raise the twins, Hawaii is extremely expensive, food in particular, example, orange juice, 1/2 gal. often cost as much as $9!
So we put the house up, looking at about $150K profit, however HARPTA does not permit non-residents to reap even one dollar without a massive tax, in fact if we had sold the house at the listed price, my $150K profit I would have wound PAYING the state money, yep! So we did all the math with the folks buying the house, they agreed to the price and we left
So, we were in Ca. now and my twins are facing class sizes of 25 - 30 in the local kindergarten!
We began to look at other states, states close to my first son, who wanted to stay in Ca. and after an exhausting search we fled Ca., selling and buying in a ten day escrow on both houses and we moved to Arizona, class size... 15.
So, now we the people are facing the "fiscal cliff" a cliff I've already been thrown over. But what will all this mean for the twins? The Az. schools are great, the teachers and people are top notch, genuine folks that are charitable and aren't fake, so far...
Not sure if my own experience will assist the debate but at least it will give Americans a different perspective on the discussion.
ReplyDeleteThere is a generational gap which will cloud the issue so please remember I was born in 1936 and grew up in UK during the Second World War when conditions were very conducive to fostering self reliance and thrift.
An education cut off at age 15 and a restless and enquiring mind brought me to Australia alone at age 16.
Travel within Australia together with long hours spent in Libraries and the experience of working with all manner of men gave me a degree from the University of Hard Knocks.
An abiding interest in, together with a fair understanding of economics permitted my wife and I to follow a path which permitted no debit other than the small amount to complete the purchase of our first house. The term of the loan was twenty four years but we cleared it in six. Subsequent homes have been financed by the profit from the current abode. I was self employed for the last twenty years of my working life and we established a small business (Import) following our unbreakable rule of no debit. Set up was of course very small due to financial restraints but every cent was ploughed back for two years and after that we were able to take advantages of tax breaks to amass a sizable nest egg ( ?your 401 ).
Unlike TD we saw well in advance the coming GFC so liquidated our assets and went into fixed term bank deposits where they remain to this day.
What is the moral here? Well quite simply, never as a country or as an individual, carry debit. America now carries fiscal debit beyond the ability to service or repay. I fear there are many in your country and mine who are pretty much in the same position. Why cannot people follow the advice of my old Grandmother who told my brother and I "money you have which you did not earn, is money stolen" or my father as he delivered me to the ship at Southampton on the way to Australia "Never spend this weeks pay check until you have the cheque in your hand for next week"
You probably think me old fashioned, you are correct but can you all say, as I can, I owe no man on this earth one cent.
Cheers from Aussie
Fiscal sanity, low debt levels.
DeleteYou 're singing the Tea Party tune Kingston.
1773-2009 DI
William
DeleteMy thanks but I fear that with or without the Tea Party element, the Repubs, like the Democrats, are too far down the slippery slope to recover without massive restructuring and a seismic shift in the expectations/entitlement mentality of your people.
An old timer once told me that all a man needs for happiness is three meals a day and half a bed. For the past 52 years I have had that, I can attest the old bloke was correct.
Cheers from Aussie
Over the past couple of days predictably the RINO'S have been backing away from the no increase in taxes pledge.
DeleteTo them it's all about spending other peoples money. Dem or repub.
The debt ceiling will go up. Nothing will change. Look elsewhere for sanity.
1773-2009 We the people are disgusted.
ReplyDeleteMy take on taxes:
When the government taxes income, it raises the price of work compared to leisure. And because the tax code penalizes capital gains with higher rates, it also raises the price of saving and investment compared to consumption.
Yet work, production, saving and investment are how we generate national income, so it doesn’t make sense to discourage taxable income with higher tax rates.
This isn’t some sort of modern-day revelation. Andrew Mellon, a Treasury secretary during the 1920s, noted that “the history of taxation shows that taxes which are inherently excessive are not paid. The high rates inevitably put pressure upon the taxpayer to withdraw his capital from productive business.”
In the past few days, the Republicans have found their way to dodge their commitment to Grover, in essence, they have all said the pledge they made were for the time they made them, 20 years ago. I don't have a particular problem with philosophical takes on taxes. However, when you are in a hole, it seems less then logical to me to focus on what our system of taxation should be. I get what you are saying here Lou, it makes sense. But it's a vary narrow focus. If we increase taxes as you make more money, the message is, don't make more money. If there was nothing more important in life then making money to society or the individual, taxation levels would seem to be of high importance. But, I don't think any of us here believe there is nothing more important in life then making money.
DeleteThe interesting part of raising taxes, is will it really raise more money for the government coffers. In the past, it has proven that raising taxes motivates people to become more tax efficient in the way they deal with their finances.
DeleteCompanies issue stock option instead of cash awards. The company gets a write off and the employee defers taxes on the gains.
August 2011, our spineless congress and president kicked this can until after the election.
ReplyDeleteBoth sides pretty much got what they wanted with a large majority of incumbents being re-elected.
Now the bell tolls, the can is full of piss. Professional politicians, have a good long drink of your handiwork.
Well, TD, I've told part of my story before, but here is how I avoided calamity. In high school, I was every bit the burn out and failed out. After getting my GED, I went into the service and this did nothing really to turn my life around. After choosing a more straight and narrow path, I got a job working on the exchange as a "runner", taking orders from the desk to the trading pit to get them filled. Long story short, I worked my way up to being a broker and for a brief, very few years, did very well. But that came to an end when the market was automated.
ReplyDeleteI sold my condo for a very nice profit and used that money to go back to school to become a nurse. I had some school debt, but my wife, being the wise gal she is, leaned on me to pay it down quick and I did. After a few years, I moved from Chicago to Las Vegas, at the expense of my new employer, and received a nice bump in salary. Living cheaply here, I was able to put away 20% of income into the 401. I've since switched jobs and taken a 15k paycut (my choice), but we've moved and cut our expenses. Recently, I applied for grad school to go back and become a Nurse Practitioner. We'll see how that pans out.
To Kingston's comment above, I have worked with all kinds of different characters myself, and have at times lived on the fringe of conventional life. I haven't, however, ever lived on Uncle Sam and I do not have any debt at all at this time. Liberal or not, I believe people need to get off their ass and go to work and when and if we ever decide that working people should receive a living wage and health insurance, I will be joining the choir to loudly sing it's time to end welfare as we know it.
Money wise, I have taken the approach to keep adding and dollar cost averaging. I made pretty decent money rotating in and out of sectors, but the reality is that I no longer want to watch the market every day. I am making use of Fidelity's managers for the moment and will give that a year and see how they do. My retirement point is about 25 years out at this point and as such, I'm not going to obsesses over daily movement.
working people should receive a living wage and health insurance
ReplyDeleteWho determines the living wage? Minimum wage was once intended to be that living wage. As we have extraordinary issues today with supply and demand in the entry level labor pools, the minimum wage is artificially raised by the government, never a great idea.
Health care is a completely seperate issue worthy of it's own topic.