Ten Things to Stop Doing in 2006

[Gone4Good]

The US was in the bottom 80%, behind many nations that Americans typically think of as oppressed.  We may have freedom to say what we like, freedom to worship, but in the realm of finances, we have very limited freedoms... we are in fact scraping the bottom of the barrel.

Yup, life is so hard - as evidenced by the growing number of books, magaznie articles, and message boards dedicated to retiring early.

 

[Nords]

Nords, I think you probably did as does everyone else who is an employee, except in limited circumstances.

I did do that for a couple decades, but I plan to live a much longer ER than that...

 

[Gone4Good]

Yes, for the priviledged few... but what about our kids?  What about our families?  Perhaps I could take the attitude that so many others seem to have... get mine, sit on the lid and poison the rest.  Screw 'em.  I got mine.

I don't believe that at all. "Our children" are growing up in a time of unprecedented wealth and economic stability. It used to be that the "American Dream" consisted of a "chicken in every pot." But now life isn't complete without two cars, a big screen TV, several computers, a 2,000+ sqf home with central air, international travel, etc. etc. (all of which is affordable today by the "middle class" but once was reserved for the rich if it was available at all). Anyone in the middle class can retire early if they choose to do without some of this stuff. I doubt the same could be realistically said for many other "middle class" generations in history - either in the US or anywhere else in the world for that matter.

It's amazing how few people recognize their great fortune for being born in a developed country at this very moment in history. Sure things could always be better, but they can, and have been, a whole lot worse too. It's important to keep that in perspective.

 

[haha]

I can't remember the name of the survey that was reported in the Wall Street Journal a while back, but it rated the fiscal burden of governments of all nations around the world (I have a copy of it in a notebook I keep at work... if you are interested let me know and I'll post it).  The US was in the bottom 80%, behind many nations that Americans typically think of as oppressed.  We may have freedom to say what we like, freedom to worship, but in the realm of finances, we have very limited freedoms... we are in fact scraping the bottom of the barrel.

Dave, your message is not going over well at all. Reminds me of what happened to former sweetie-pie MJ when he admitted that for $60, 000 he just might interpret an oral agreement in his favor.

Well, I am with you.(And with MJ)  I don’t care if I have to worship Dilbert, as long as the government would please keep its fingers out of my pockets.

Oh, and BTW, will you post that study you mentioned?

Ha

 

[HFWR]

Select "additional options", then browse/attach.

 

[MasterBlaster]

Regarding US versus international tax rates:

The studies along these lines that I have seen convieniently ommit the additional US tax burden of state, property, social security, and medicare taxes. When those are included US tax rates don't seem so low anymore.

Keep in mind who is publishing the study and what their political agenda is.

Still, Since US medical care is paid for outside of the government (for many people) then US tax rates would tend to be much lower than other industrialized countries.

 

[Jay_Gatsby]

Still, Since US medical care is paid for outside of the government (for many people) then US tax rates would tend to be much lower than other industrialized countries.

I thought that the government paid for Medicare/Medicaid. How are those healthcare programs paid for outside of the government?

 

[SteveR]

Yes, for the priviledged few... but what about our kids?  What about our families?  Perhaps I could take the attitude that so many others seem to have... get mine, sit on the lid and poison the rest.  Screw 'em.  I got mine.

Dave,

You seem to be painting with a pretty broad brush.
I am not sure what you are trying to say in your post other than to vent about someone else having more than you or you not getting your way. Not intending to start a flame war here, just sharing my thoughts to your overly broad comments. Perhaps if you had a more specific area you would like to discuss it might make it easier for some of us to carry on a meaningful dialogue on the topic. As it is, I am not clear on what specifically you are trying to share with the board.

 

[jefipius]

Yes, for the priviledged few... but what about our kids?  What about our families?  Perhaps I could take the attitude that so many others seem to have... get mine, sit on the lid and poison the rest.  Screw 'em.  I got mine.

Percentages taken/stolen/given/paid to the g'vmnt are meaningless. What is important is how long you have to work to get the goods and services you need, the quality of life and the type of society you enjoy, and how much you can save at the end of the day. I've lived in several countries, and when it comes to purchasing power in the hand of the average Joe at the end of the month the USA comes out well ahead.

 

[MasterBlaster]

Yes, for the priviledged few... but what about our kids?  What about our families?  Perhaps I could take the attitude that so many others seem to have... get mine, sit on the lid and poison the rest.  Screw 'em.  I got mine.

Well this sounds like the sour grapes from someone who doesn't want to make the hard choices to save and prosper. The biggest problem with people who think like that is there are lots of em' and they can vote.

From their perspective, you need to pay your 'fair share'

 

[MasterBlaster]

I know many middle class people who could never retire early.

Well if they have to live the 'Holiday Inn' lifestyle you may be right. If they have to have a couple of new cars every year, the expensive home electronics, vacations,blah blah blah then they'll never make it.

If they step back and live well under their means then just like other FIRE's they'll do just fine.

So basically I don't agree with your premise. It's a choice they make.

 

[REWahoo]

Average home cost in S. Florida is $350k (townhouse). Avg. property tax bill for said home is $7k. Average insurance bill is about $3k. Average middle class salary is $44k before taxes. You do the math.

So...you're saying your kids (who this is all about) are just average? I thought this was Lake Woebegone!

 

[justin]

Average home cost in S. Florida is $350k (townhouse). Avg. property tax bill for said home is $7k. Average insurance bill is about $3k. Average middle class salary is $44k before taxes. You do the math.

Why live in Florida then? What's wrong with the other 49 states? If it is no longer economical to live in your area, relocate to a place where you can get by on a lot less. I know the stats you gave would be much better in other parts of FL, Atlanta, Raleigh, Charlotte, etc.

 

[MasterBlaster]

Or choose much cheaper housing. Whos is to say that you need an average house.

Nobody said that ER wouldn't require some sacrifices.

If you have to have that great house and those new cars and all that other stuff - blah blah blah, then get ready to work till you're old. You can't have it both ways.

Get those expenses down and start saving and stop whining.

 

[haha]

Why live in Florida then?  What's wrong with the other 49 states?  If it is no longer economical to live in your area, relocate to a place where you can get by on a lot less.  I know the stats you gave would be much better in other parts of FL, Atlanta, Raleigh, Charlotte, etc.

You apparently don't get it. This board is full of people who will move away from their families and friends, move away from parents, leave nice climates in attractive cities, eat 49 cents pound frozen chicken wings, so they can "retire early" and go pick up pennies in some woebegone rural redoubt. For most people, this is not normal behavior, borne of normal attitudes.

I think Dave has an excellent point, and since there are many bombastic one-sided and mostly wrong points expounded here every day, why does Dave's message bother you so much?

The USA may be pretty good; that does not mean that criticism may not be valid or helpful. Reminds me of the stupid saying from the Viet-Nam era- “America, Love It or Leave It.”

Ha

 

[REWahoo]

... 49 cents pound frozen chicken wings...

Ha, you're getting screwed paying those kind of prices. I can get 'em wholesale for half that.

 

[justin]

You apparently don't get it. This board is full of people who will move away from their families and friends, move away from parents, leave nice climates in attractive cities, eat 49 cents pound frozen chicken wings, so they can "retire early" and go pick up pennies in some woebegone rural redoubt. For most people, this is not normal behavior, borne of normal attitudes.

Ha,

You apparently don't get it. People relocate all the time for economic or social reasons. Migrate from one country to another, one city to another, or one state to another. That's been the case during the last few hundred years at least. Historically, it hasn't been to retire early. It's been to survive, put food on the table, squeak out an existence. Now, as standards of living have risen to a sufficiently high level, people move for "quality of life issues" - better weather, culture, amenities, public services, religious acceptance, lower cost of living.

Some move from Rural America to SoCal, Hollywood, the big apple, Florida, etc. because that is where there are jobs. Others from these big city areas want to slow it down a notch and move to Small Town America to live, work and raise a family.

Dave implied that he doesn't see how an average person in Florida can make a decent living let alone save anything for retirement, early or not. When questions like that arise, it's either time to figure it out for yourself or question why you live in such a place.

You stated "For most people, this is not normal behavior, borne of normal attitudes". I would suggest relocating for economic reasons is a very normal and common behavior, borne of normal attitudes. It happens all the time to people all over the socioeconomic ladder. Deprivation, taken to extremes, is not common in the U.S. But I'm not suggesting deprivation is a necessary course of action. Rather, a self-evaluation is needed of why one lives in a particular place. What does it cost, what are the benefits (good jobs, family/friends nearby, etc.).

 

[haha]

There I go, shooting off my mouth, and I learn once again that I am wrong on all counts.

What's a peckerwood like me to do?

I guess just be grateful that I can get all this information for free.

Ha

 

[justin]

And it must be right, because you read it on the Internet!

At least you can rest assured that the advice is worth every penny you paid for it.

Opinions are like a$$holes. Some stink more than others

 

[REWahoo]

How about an even better price on some used ones [chicken wings]?

Uh oh. Sounds like 'ol You-Know-Whoda's been hanging around the back door of Hooters again. :

 

[Gone4Good]

Regarding US versus international tax rates:

The studies along these lines that I have seen convieniently ommit the additional US tax burden of state, property, social security, and medicare taxes. When those are included US tax rates don't seem so low anymore.

Keep in mind who is publishing the study and what their political agenda is.

Still, Since US medical care is paid for outside of the government (for many people) then US tax rates would tend to be much lower than other industrialized countries.

Rather than reference mysterious "studies" why not look at actual tax rates?
A family of 4 with 2 dependent children living in "high tax" NY state earning $50K per year will pay approximately the following in taxes:

Income $50,000
Federal Tax $2,715
FICA $3,563
NY State $1,558
NY Sales tax $1,350
Total Tax $9,185

Total tax as a % of income 18.4%.

As far as medical care, most people get insurance through their employer so you should include that as income rather than as an increase in the tax burden.

 

[Gone4Good]

I was responding to the posters comments that "Anyone in the middle class can retire early if they choose to do without some of this stuff." (emphasis not added)

That statement is totally out of touch with reality.  

Do the math my friend. For a 20 year old if we assume 3% inflation, 4% spending growth, 5% wage growth, and 8% market returns an initial savings rate of 15% of income will result in a 4% SWR situation by his/her 55th birthday. These are not crazy assumptions. Early retirement is perfectly achievable for almost anyone who wants it and plans for it early enough. That people don't do it is irrelevant to the question of whether or not they can, or could have.

 

[MasterBlaster]

Yrs2Go:

I'm not sure what your point is from your post.

You should probably throw in some property taxes as well to your example.
However from your numbers the Federal tax only represents 29 % of their total tax burden. So be careful when you compare US tax rates to other countries.

Also it might be interesting to do the same for a single NYC professional making $200k/year. I'll bet that person has a much higher average tax rate.

I have no data, but I read that the total tax bite for most people is around 40-50 percent when you add it all up.

 

[Gone4Good]

Yrs2Go:

I'm not sure what your point is from your post.

You should probably throw in some property taxes as well to your example.
However from your numbers the Federal tax only represents 29 % of their total tax burden. So be careful when you compare US tax rates to other countries.

Also it might be interesting to do the same for a single NYC professional making $200k/year. I'll bet that person has a much higher average tax rate.

The point of my post is that for average folks total taxes are pretty low.  Property taxes would add to the total probably by a few % points but mortgage interest deductions could further lower the federal tax burden.  This family may also rent. 

Even for high income folks the tax burden isn't the 60+% we've seen thrown around here.  A NY resident making 200,000 without itemizing or using any tax deferred accounts would pay something like:

Income                  $200,000
Federal                    $43,292
FICA                           $6,413
State                        $12,091
Sales Tax                    $3,749
Property Tax             $10,000
  Total Taxes             $75,544

Taxes as a % of total income 37.8%.

Any guess as to what someone making $200,000 in France might pay?


I'd like to see the calculation behind the claim that "most" people pay between 40-50% of their income in taxes. It simply isn't true. Look at your tax returns for last year and tell me what you see. Use those tax tables to calculate what an "average" family would pay and see for yourself.

 

[cute fuzzy bunny]

I'm not sure, but I'd bet the people making 200k a year surrender faster than the guys who make 50k.