Happy tax day

[akdave]

 

 

I pay taxes 4 times a year because I am self employed so April 15th is just another check from money that must be put aside (through discipline). 

 

I just got finished reading "Rich Dad Poor Dad" from a recommendation on this site a little while back.  Definately worth reading.  I am looking at my "tax rate" much differently after readign thsi book.  Unrealized gains utilizing 1031's on land are beautiful as the tax of "zero" on these gains really brings your effective tax rate down on the total that you earn in a year. 

 

I also recommend "The Millionaire Next Door."  There is real truth in there that is ignored by the masses.  I wish that I had read these books when they first came out. 

 

Anyone know of any other "must reads" that are similar? 

Stanley's follow up "The Millionaire Mind" is a great one as well. 

 

Another one I really like is written by a Rabbi named Daniel Lapin "Business Secrets of the Bible".  It is in no way an evangelical piece, it addresses a Jewish outlook toward finances, making and handling money, etc.  I found it fascinating & very helpful.  His book "Thou Shall Prosper" was good too, but it was a MUCH slower read, then re-read, stop and think kind of book.  Business Secrets was a faster mover for me.

 

 

I have "The Millionaire Mind" on order and I already read his 3rd "Stop Acting Rich..."

 

I have added the other books that you reccomend to my que. 

 

I have been arogant and dismissed these books as get rich quick schemes.  It turns out that they are get rich slow scenarios, which is usually how real life works.  A lot of the books were reinformcement for what I already do, other items I learned which is a good thing.  I wish that I had read these 20 years ago. 

 

 

I had lunch with a few people that I have not seen in years.  I discussed my business and one of them pointed out that I must have some inefficiency that I did not know of.  Instead of getting upset, I searched and he was right.  I made adjustments (including staying off of this forum) and made a big step up in efficiency.  Moral, we can always learn, never let arrogance get in the way. 

 

Have you read much from the Rich Dad series?  There was good info to take away from there.  He has several more books, but I got really turned off when I saw Donald Trump on the cover of one of them.  I don't think that I can read that one. 

 

I have read Rich Dad Poor Dad.  I liked it overall.  I think there is something to be learned from all kinds of sources/books/etc.  I really like cause and effect books.  The "get rich slow" you mentioned.  That's one thing I really like about Mill Next Door, it was the first attempt at a comprehensive study of Americas Millionaires and they were surprised at what they found.  Most are first gen, most are frugal, almost none are this high conumption "1%" that we believe represent wealthy people. 

 

I'm all about reap & sow.  Another decent one I liked was John Maxwell's "Failing Forward".  I know he can be labled a hype minstrel, but I think the premise of failure being the best teacher and the reminder that ALL success and failure are temporary are great concepts.

[LarryC]

you prefer to look at the falling wage problem anecdotally, review the conditions for a family of four in 1965 and the same family today. You'll be shocked at the difference, beginning with the TWO income requirement today for that (average) family to get by.

Absolutely!  MLO, that was back in the day when wages kept up with productivity, and you could see the benefits.  What are you thinking?

 

Now gone with the wind of anti-middle class forces like union-busting.

 

Not that I would like to see the unadorned return of unions. but what else is there?

[muel]

The Fed gets $900

The state kicks back $500.

I tell this to the wife and she say's great, can i have the $400 for shopping? .....Humm, sure Dear.

Funny how many people do math this way!  especially those in gov'ment

[muel]

whoops

Edited April 17, 2015 by muel

[Paducah Home Theater]

MLO, that was back in the day when wages kept up with productivity, and you could see the benefits.  What are you thinking?

I guess my problem is that nobody defines what productivity is. Is it literally the productivity of the individual worker, or are we talking about the efficiency of the entire company? There's a difference.

I mean, has the productivity of a burger flipper at McDonald's _really_ gone up in the past 50 years? I just seriously doubt it.

What HAS happened though, is that McDonald's has become more efficient as a company. The warehouse, shipping, and corporate processes that are largely invisible to the customers and cashiers have increased volume, increased efficiency, and in general has made the company reap larger profits. That burger flipper though, he still hasn't boosted his productivity one bit.

The real question is, who should be rewarded for this. The burger flipper? He hasn't done anything to improve anything. Yet this whole scenario is seemingly about justification to triple his salary.

Edited April 17, 2015 by MetropolisLakeOutfitters

[Paducah Home Theater]

If you prefer to look at the falling wage problem anecdotally, review the conditions for a family of four in 1965 and the same family today. You'll be shocked at the difference, beginning with the TWO income requirement today for that (average) family to get by.

Put on your tin foil hats for a minute. If you look at writings from the top officials in Planned Parenthood back in the day, you'll see that this was literally part of the plan. They hypothesized that forcing families to have two people working that it would lower the fertility rate, basically the idea was that the women would be too tired and wouldn't have time to sit around the house and get knocked up.

Also in these conversations people tend to leave out the fact that since the good old days where one income was enough, that inflation due to the federal reserve printing money out of thin air has hurt more than anything else. Our dollar has become vastly diluted since those days.

Edited April 17, 2015 by MetropolisLakeOutfitters

[Fjd]

 

MLO, that was back in the day when wages kept up with productivity, and you could see the benefits.  What are you thinking?

I guess my problem is that nobody defines what productivity is. Is it literally the productivity of the individual worker, or are we talking about the efficiency of the entire company? There's a difference.

I mean, has the productivity of a burger flipper at McDonald's _really_ gone up in the past 50 years? I just seriously doubt it.

What HAS happened though, is that McDonald's has become more efficient as a company. The warehouse, shipping, and corporate processes that are largely invisible to the customers and cashiers have increased volume, increased efficiency, and in general has made the company reap larger profits. That burger flipper though, he still hasn't boosted his productivity one bit.

The real question is, who should be rewarded for this. The burger flipper? He hasn't done anything to improve anything. Yet this whole scenario is seemingly about justification to triple his salary.

 

 

 

Isn't flipping burgers somewhat like piece work?  Maybe in the old days the burger flipper only had to make 9 per hour and now the technology makes it possible to push 90 burgers his way per hour?  I wonder with this increase in productivity if one wrist is larger than the other.

[Paducah Home Theater]

Isn't flipping burgers somewhat like piece work?  Maybe in the old days the burger flipper only had to make 9 per hour and now the technology makes it possible to push 90 burgers his way per hour?  I wonder with this increase in productivity if one wrist is larger than the other.

Even if that were the case, why should the burger flipper be rewarded with triple the salary for doing the same amount of work?

I actually used to be a burger flipper so I'm not trying to be degrading. I know what's involved in doing it, it's not rocket science. I even showed up to work stoned out of my mind and didn't get fired for it. I took an entire box of quarter pounders and put them on the little grill, then put an entire box of little burgers and put them on the quarter pounder grill. Burnt one side to a crisp and the other came out half raw. I even tried to put them in boxes and serve them.

Edited April 17, 2015 by MetropolisLakeOutfitters

[LarryC]

I guess my problem is that nobody defines what productivity is. Is it literally the productivity of the individual worker, or are we talking about the efficiency of the entire company? There's a difference.I mean, has the productivity of a burger flipper at McDonald's _really_ gone up in the past 50 years? I just seriously doubt it.What HAS happened though, is that McDonald's has become more efficient as a company. The warehouse, shipping, and corporate processes that are largely invisible to the customers and cashiers have increased volume, increased efficiency, and in general has made the company reap larger profits. That burger flipper though, he still hasn't boosted his productivity one bit.The real question is, who should be rewarded for this. The burger flipper? He hasn't done anything to improve anything. Yet this whole scenario is seemingly about justification to triple his salary.

Well, you are right that measuring productivity is a complicated subject.  I prefer going for standard. established measures over periods of time.  The US Bureau of Labor Statistics publishes these, and I would think it should be the standard:

 

http://www.bls.gov/opub/hom/pdf/homch10.pdf

 

Mdeneen is absolutely on point about this and the significance of the failure of wages to keep up with productivity since the Reagan administration.

Edited April 17, 2015 by LarryC

[garyrc]

Maybe anyone earning up to, say, twice the minimum wage should get negative income tax.  I'm not kidding!

 

In a way, if we (wrongly) take the minimum wage (as opposed to twice the minimum wage) as our standard, we are already doing that, but not very efficiently.  A recent UC study claims that taxpayers are subsidizing some of the very companies that pay the minimum wage:

 

http://nyti.ms/1FDoBSl

Edited April 17, 2015 by garyrc

[BigStewMan]

I was on the road today.  I walked into an Indian Casino with $120.  Walked out with $200--no taxes taken out of it.  If i do that 10 times each day, I’ll be able to pay my taxes.

Edited April 18, 2015 by BigStewMan

[Paducah Home Theater]

Irrelevant. Labor and shareholders are in the same economy, using the same dollars.

This would assume that employers are always nice enough to increase wages at the same rate or more than inflation. Assuming you have been paying attention, you'd know that this usually isn't the case. Those of us who work for someone that does this are grateful that they take this step but this is hardly the norm across the board. People can cite productivity all they want but unless wage increases are keeping up with inflation, your standard of living will go down, period. And, guess who largely controls the rate of inflation?

Edited April 18, 2015 by MetropolisLakeOutfitters

[mungkiman]

Wait. On any given percentage, the "pie" isn't getting bigger, nor "rounder."

[Paducah Home Theater]

For example: US taxpayers heavily subsidize WalMart employees through Medicaid. It's that simple - WalMart reaches into the tax payers pocket to complete the compensation for its employees. They pay a measily wage, we pay the healthcare costs of those employees. A slick deal for WM.

While this is kind of true, I think we should look at the cause instead of the effect. People using these arguments have to look back to a time not that long ago when many of these jobs were typically reserved for high school and college kids. The economy as of late has forced able bodied grown people to rely on it as a full time job, to the point where it is often actually pretty danged hard for a high schooler to get a job at all due to so many adults trying to get in as many hours as possible. I know because my daughter and all her friends just went through that. Didn't used to be this way. So, now you've got adults working jobs that kids are supposed to do. And, suddenly, because of this fact, the evil Wal-Mart and any company like them are exploiting the labor force. Nobody wants to consider inflation, or anything to do with the economy. It's all Wal-Mart's fault.

My wife actually used to work at Wal-Mart as a shelf stocker and whatever you call the people who unloads the trucks, worked the graveyard shift back in college. Now she's an attorney. That's how it's supposed to work. You're not supposed to get stuck working there forever.

Edited April 18, 2015 by MetropolisLakeOutfitters

[mungkiman]

 

For example: US taxpayers heavily subsidize WalMart employees through Medicaid. It's that simple - WalMart reaches into the tax payers pocket to complete the compensation for its employees. They pay a measily wage, we pay the healthcare costs of those employees. A slick deal for WM.

While this is kind of true, I think we should look at the cause instead of the effect. People using these arguments have to look back to a time not that long ago when many of these jobs were typically reserved for high school and college kids. The economy as of late has forced able bodied grown people to rely on it as a full time job, to the point where it is often actually pretty danged hard for a high schooler to get a job at all due to so many adults trying to get in as many hours as possible. I know because my daughter and all her friends just went through that. Didn't used to be this way. So, you've got adults working jobs that kids are supposed to do. And, suddenly, because of this fact, the evil Wal-Mart and any company like them are exploiting the labor force. Nobody wants to consider inflation, or anything to do with the economy. It's all Wal-Mart's fault.

My wife actually used to work at Wal-Mart as a shelf stocker and whatever you call the people who unloads the trucks, worked the graveyard shift back in college. Now she's an attorney. That's how it's supposed to work.

 

This is more than kind of true. You can choose to blame everything on the "economy", but that doesn't properly account for who owns said "economy.". As an easy example, since Wal-Mart is directly subsidized by the general population, you better bet they are part of the problem. Intentionally so.

[Paducah Home Theater]

EXAMPLE from HISTORY

In the mid 1980s as uP began to appear in everything, there was a huge demand for software engineers.  An CS or EE and some experience could earn you $125k+ and have offers from half a dozen companies in one day. Just mediocre engineers were rolling in the high cotton. Then the companies told India they needed 100,000 SEs and in a space of about 5 years, the labor market for SEs crashed, as India began training 10s of thousands of SEs, and that mediocre guy couldn't even find a job, let alone earn 6 figures. Soon, there was almost no demand as all big projects were sent to India.  That's the problem of adding limitless offshore labor to the pool. It drives prices to the basement.

My primary job at the moment is being a software engineer who fixes stuff that got outsourced to India. I'm well aware of that situation.

[Paducah Home Theater]

Excellent. Then you can see how the economics have unfolded in that specialty. It's a sterling example of how trade and capital flow policy drive wages down.

I just think it's two different conversations but you're acting like it is one and the same. You're mixing in Wal-Mart greeters with software engineers. Not the same situation.

[Fjd]

 

For example: US taxpayers heavily subsidize WalMart employees through Medicaid. It's that simple - WalMart reaches into the tax payers pocket to complete the compensation for its employees. They pay a measily wage, we pay the healthcare costs of those employees. A slick deal for WM.

While this is kind of true, I think we should look at the cause instead of the effect. People using these arguments have to look back to a time not that long ago when many of these jobs were typically reserved for high school and college kids. The economy as of late has forced able bodied grown people to rely on it as a full time job, to the point where it is often actually pretty danged hard for a high schooler to get a job at all due to so many adults trying to get in as many hours as possible. I know because my daughter and all her friends just went through that. Didn't used to be this way. So, now you've got adults working jobs that kids are supposed to do. And, suddenly, because of this fact, the evil Wal-Mart and any company like them are exploiting the labor force. Nobody wants to consider inflation, or anything to do with the economy. It's all Wal-Mart's fault.

My wife actually used to work at Wal-Mart as a shelf stocker and whatever you call the people who unloads the trucks, worked the graveyard shift back in college. Now she's an attorney. That's how it's supposed to work. You're not supposed to get stuck working there forever.

 

 

 

 

In some respects it looks like Walmart may have taken good full time jobs and turned them into jobs for kids.

 

Data from various sources listed below collected by the Institute for Local Self-Reliance

 

What Happens to Small Businesses When Walmart Moves In?

 

1. As Walmart and other big-box chains have expanded across the country, the number of small retail businesses has fallen by 39%. Number of small retailers per 1 million people:

 

2,500 - 1982

2,000 - 1987

1,500 - 1992

1,000 - 1997

500 - 2002

 

Source: 2007 US Economic Census

 

2. Cities are one of the few places where local businesses continue to thrive.  However, now, with Walmart pushing to get in to urban areas, these businesses are under threat.

 

3. After Walmart opened in Chicago in 2006, one-quarter of the small businesses within a 4-mile radius of the store closed.

 

Source: “The Impact of an Urban Wal-Mart Store on Area Businesses,” Loyola University Chicago, 2009.

 

4. Walmart’s new, smaller “Neighborhood Market” and “Express” stores are no less destructive.

 

A study of a Neighborhood Market store in Seattle found that it would reduce sales at nearby businesses by over $25 million.

 

Source: "The Economic Impact of a Walmart Store in the Skyway Neighborhood of South Seattle," C.S. Fowler Consulting LLC, April 2012.

 

5. Walmart claims: “Small businesses that adapt can thrive and grow side by side with Walmart.”

 

A study of 1,200 big-box store openings nationally found:

 

• “large, negative effects” on nearby competing businesses, including many store closures.

• no increase in customers or sales for non- competing businesses (i.e., those offering different products than the big-box store).

 

Source: "Mom-and-Pop meet Big-Box: Complements or substitutes?" Journal of Urban Economics, 2010.

 

6. When Walmart destroys small businesses, the surrounding neighborhood suffers significant economic and social losses.

 

a. Dozens of Local Entrepreneurs Lose Their Livelihoods

 

b. Retail Employment Declines:

 

Average number of jobs created by a Walmart store = 360

Average number of jobs lost at other businesses after Walmart opens = 507

Net job loss = 147

 

Source: "The effects of Wal-Mart on local labor markets," Journal of Urban Economics, 2008.

 

c. Money Leaves the Community As local retailers close, local suppliers and service providers, such as printers and accountants, see their revenue decline. Walmart has no need for these services.

 

Additional Local Economic Activity Created for Every $1 Million in Sales:

 

Big-Box Local Retailers $160,000

Local Retailers $320,000

 

Source: “Thinking Outside the Box: A Report on Independent Merchants and the Local Economy,” Civic Economics, 2009.

 

d. Neighborhood Well-Being Declines Several studies have found that when locally owned businesses are displaced by Walmart:

 

• Civic participation and voter turnout fall

• The number of active nonprofit organizations drops

• Residents are less likely to know and interact with their neighbors

 

Source: “Local Ownership Makes Communities Healthier, Wealthier and Wiser,” Institute for Local Self-Reliance, July 18, 2012. (Reporting on the findings of several published sociological research studies.)

[mungkiman]

 

Excellent. Then you can see how the economics have unfolded in that specialty. It's a sterling example of how trade and capital flow policy drive wages down.

I just think it's two different conversations but you're acting like it is one and the same. You're mixing in Wal-Mart greeters with software engineers. Not the same situation.

 

 

Wait. Are you pretending we are in India, or that we're not?

[garyrc]

... look back to a time not that long ago when many of these jobs were typically reserved for high school and college kids. The economy as of late has forced able bodied grown people to rely on it as a full time job ...

 

And they should have remained reserved for high school and college kids (or maybe just high school kids, since college has become so expensive that working the college approved 20 hour job at minimum wage won't help much!)  Back in those days a high school kid could get a job as a "soda jerk" or as a part-time employee of an independently owned retail store (as I did at 14).  Grown-up jobs would get a relatively grown-up salary.  What happened?  Corporations such as McDonalds became nation wide chains relying on paying low salaries (for a while, below the minimum wage, thanks to the "McDonald's Law" passed by Congress during the Nixon administration).  A castle built on sand, only we are the ones being washed out to sea.  It would be interesting to see a set of stats depicting the % of people in the US being payed the minimum wage, compared to the % in past decades (especially the '60s & '50s).