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Re: Burns: Every $1 you do not spend = $50 invested
Old 07-25-2006, 05:37 PM   #21
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Re: Burns: Every $1 you do not spend = $50 invested

Originally Posted by HFWR
Warren probably OWNS a furniture company (or two)...* :P
Yeah, a few: CORT Business Services, Nebraska Furniture Mart, R.C. Willey Home Furnishings, Star Furnishings, and whatever's buried in the hairball of Scott Fetzer Companies.

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Re: Burns: Every $1 you do not spend = $50 invested
Old 07-25-2006, 10:36 PM   #22
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Re: Burns: Every $1 you do not spend = $50 invested

Originally Posted by SecondCor521
You might be missing sales tax on the item if it's subject to sales tax in your state.
You might be missing federal income tax, state income tax, SS tax, medicare taxes on the income.
Not to mention the additional expenses and time incurred to earn the money that you pay those previous four taxes on before you pay sales tax before you get your item.* See YMOYL by Domiguez and Robin.

In my case, let's say I earn $2.00, of which I spend 10% of my earnings and time to get, so that takes it down to about $1.90.* SS tax is 6.2%, Medicare is 1.45%, state is 8%, feds are 25%, for a total of 40.65%.* That leaves me with $1.13, which is enough to pay my state sales tax on a $1.00 item with about a nickel left over.* Those of you with higher state taxes, higher incomes, or long commutes probably have it worse, so I'd say Mr. Burns is right on the money.

I believe you may have missed part of the point of the article and my reponse to the OP. We were discussing income after retirement not wage income. SS, Medicare and higher Fed. and State taxes are not part of the equation. In my example I figured in sales tax of 7.5%, state income tax on non-wage income, and Fed. tax on non-wage income. My example would have the figure much closer to $1.30 than to $2.00 for investment income needed to offset spending including sales tax and Fed. and state income tax based on being retired with an average income. Commuting and any other w*rk expense would not enter into the calculation since it is not relevant to a retiree.

In your example you are correct. A job costs you more than being retired in relation to income related costs associated with creation of wage income.

Work? I don't have time to work....I'm retired.
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