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Posted

The 2020's will benefit from the baby boomers, the richest, largest generation to die thus far passing on their wealth. Myself and a half dozen close friends

all stand to inherit 400k-2m this decade. In most cases it will be spent. In others, a greater % of it will be spent than the boomers who hold it now. This is a one time

benefit creating a new delta for successive generations. 

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Posted
3 hours ago, flesh said:

The 2020's will benefit from the baby boomers, the richest, largest generation to die thus far passing on their wealth. Myself and a half dozen close friends

all stand to inherit 400k-2m this decade. In most cases it will be spent. In others, a greater % of it will be spent than the boomers who hold it now. This is a one time

benefit creating a new delta for successive generations. 

 

I am one baby boomer who doesn't plan on dying this decade!

Posted

I do think we're probably getting close for the pendulum of labor vs capital to swing back to the labor party. Capital has killed it since around 1980. Capital is in very "free" and labor is getting more expensive. These trends tend to last decades. In my opinion, the pendulum has swung too far in favor of capital, that's why you see all of the political extremism on both sides.

Posted
16 minutes ago, stahleyp said:

I do think we're probably getting close for the pendulum of labor vs capital to swing back to the labor party. Capital has killed it since around 1980. Capital is in very "free" and labor is getting more expensive. These trends tend to last decades. In my opinion, the pendulum has swung too far in favor of capital, that's why you see all of the political extremism on both sides.

 

I agree, I dont have the answers, I know enough to know that its not an easy answer. What I do see is that the middle class is getting squeezed and everyone feels it, but they struggle to put their finger on what they are feeling and that frustration ends up getting directed toward "them" on the other side of the aisle. Either side of the aisle. 

 

I dont identify with the right or left, I liken it to arguing about who the best WWF wrestler is...all just characters.

 

I recently watched this documentary that I felt did a pretty decent job summarizing, its worth a watch and free.

 

 

Posted
4 minutes ago, Blugolds11 said:

What I do see is that the middle class is getting squeezed and everyone feels it, but they struggle to put their finger on what they are feeling and that frustration ends up getting directed toward "them" on the other side of the aisle. Either side of the aisle. 

 

There's literally a job for anyone who wants one with signing bonuses for jobs like delivery drivers.  This is the most amazing job market for low-skilled labor I've witnessed.

Posted

Signs everywhere in a 30 mile radius of me offering $80k plus sign on to drive trucks or work the factory. 3 days off per week.
 

Plumbers, electricians and mechanics make $125k working their own hours. Basic landscaping and contractor labor is $25-35 an hour. Stock boys at Shop rite start at $17 an hour. 

 

You want to be long this trend. 

Posted (edited)

I pay my nanny $60K / year ($23 / hr plus $400/month healthcare premiums) with 2 weeks paid vacation 5 sick days and paid snow days. This is the rate for well referenced/experienced nanny’s in suburban DC.
 

would be closer to $50K if paying under the table though there are modest tax benefits for going above board. 

Great time for “low skilled” labor (though I wouldn’t describe a nanny as “low skilled” but you get my point

 

Edited by thepupil
Posted
23 minutes ago, ERICOPOLY said:

 

There's literally a job for anyone who wants one with signing bonuses for jobs like delivery drivers.  This is the most amazing job market for low-skilled labor I've witnessed.

ng2r6.jpg

Posted

I’m not saying there aren’t decent paying jobs out there.

 

I would argue that the MINIMUM liveable wage is now $20/hr. As in I think that would provide the absolute minimum quality of life in my area with no splurges.

 

Let’s assume in my area monthly expenses for a single guy/gal conservatively estimated as follows:

$1600 Rent (gets you two bedroom in older duplex, thats what I rent mine for)

$200 utilities

$400 Groceries (no eating out, $100/week and thats eating pretty simply, $100 barely gets you a bag of groceries)

$50 car insurance

$150 some kind of transportation, cheap college car, maintenance, parking, bus pass, tolls etc

$200 fuel for vehicle, 1 tank a week around $40-$50

—————-

$2600/mo total x 12mo = $31,200 Net a year EXPENSES to live what I would call very very modestly. Nothing extra.

 

$40,000 gross

-$4072 FED

-2480 FICA

-580 Medicare

-2041 State

——————

$30,826 NET

 

So with the aforementioned assumptions we see that even at ~$20/Hr above we are at a deficit. This does not account for any savings for retirement, investments etc. 

 

Doing some research I was surprised to see that 46.5% in the United States earn less than $30k/yr. Obviously location plays a part in this..ex. SanFran vs BF Alabama…Midwest vs coasts 

 

The Economic Policy Institute (EPI) estimates that CEO compensation has grown 1,322% since 1978, while typical worker compensation has risen just 18%. In 2020, CEOs of the top 350 firms in the U.S. made $24.2 million, on average — 351 times more than a typical worker.

 

I have no dog in this fight, its just what I see and some facts pulled via quick google search. Which is why I was agreeing with Stahleyp about political extremes on both sides. That’s the divide. Sure there are some held up on Abortion/God/Guns…but really the biggest contributing factor to the divide is $$$ IMO.  It’s no wonder the numbers are so low when you look at stats published by the brokers Fidelity etc and avg numbers saved for retirement for respective ages, Social Security becomes the primary source of income for the majority in retirement because it’s tough to put anything away with those low numbers. And why avg CC balances/debt is so high, they have to charge it because there isn’t much left for anything extra. 

 

I see the same things, local gas stations offering $18/hr, 5 GUYS sign out front offering $20/hr to fry burgers…but why aren’t these positions being filled? Why is literally EVERYWHERE you look posting help wanted signs? Why do they have to offer that much? Why are the stats showing such low numbers? Is the argument that 50% of the population is just lazy? Is that easy answer realistic? Or is it something else? 

 

 

Posted (edited)

There is a huge living arbitrage with work from home. Imagine someone being paid in USD by a US company for work done from their living space in say Thailand where their cost of living is 1/3 and they get 3x the luxury apartment. I think this is the lure of digital nomadism but also even expatriation abroad. 

 

 

Edited by scorpioncapital
Posted
12 hours ago, Blugolds11 said:

I’m not saying there aren’t decent paying jobs out there.

 

I would argue that the MINIMUM liveable wage is now $20/hr. As in I think that would provide the absolute minimum quality of life in my area with no splurges.

 

Let’s assume in my area monthly expenses for a single guy/gal conservatively estimated as follows:

$1600 Rent (gets you two bedroom in older duplex, thats what I rent mine for)

$200 utilities

$400 Groceries (no eating out, $100/week and thats eating pretty simply, $100 barely gets you a bag of groceries)

$50 car insurance

$150 some kind of transportation, cheap college car, maintenance, parking, bus pass, tolls etc

$200 fuel for vehicle, 1 tank a week around $40-$50

—————-

$2600/mo total x 12mo = $31,200 Net a year EXPENSES to live what I would call very very modestly. Nothing extra.

 

$40,000 gross

-$4072 FED

-2480 FICA

-580 Medicare

-2041 State

——————

$30,826 NET

 

So with the aforementioned assumptions we see that even at ~$20/Hr above we are at a deficit. This does not account for any savings for retirement, investments etc. 

 

Doing some research I was surprised to see that 46.5% in the United States earn less than $30k/yr. Obviously location plays a part in this..ex. SanFran vs BF Alabama…Midwest vs coasts 

 

The Economic Policy Institute (EPI) estimates that CEO compensation has grown 1,322% since 1978, while typical worker compensation has risen just 18%. In 2020, CEOs of the top 350 firms in the U.S. made $24.2 million, on average — 351 times more than a typical worker.

 

I have no dog in this fight, its just what I see and some facts pulled via quick google search. Which is why I was agreeing with Stahleyp about political extremes on both sides. That’s the divide. Sure there are some held up on Abortion/God/Guns…but really the biggest contributing factor to the divide is $$$ IMO.  It’s no wonder the numbers are so low when you look at stats published by the brokers Fidelity etc and avg numbers saved for retirement for respective ages, Social Security becomes the primary source of income for the majority in retirement because it’s tough to put anything away with those low numbers. And why avg CC balances/debt is so high, they have to charge it because there isn’t much left for anything extra. 

 

I see the same things, local gas stations offering $18/hr, 5 GUYS sign out front offering $20/hr to fry burgers…but why aren’t these positions being filled? Why is literally EVERYWHERE you look posting help wanted signs? Why do they have to offer that much? Why are the stats showing such low numbers? Is the argument that 50% of the population is just lazy? Is that easy answer realistic? Or is it something else? 

 

 

Common, a 2 bedroom for a single guy?  I lived in a studio when I was single, so did my friends.  This is also very area specific, in some areas given the cost of living, $15 an hour is a fantastic wage, in others barely enough to make ends meet.  As to your question, a decade or so ago, the Economist magazine quoted a study that claimed that a single mother with 2 kids would need an income of more than $100K per year, before your after-tax income would exceed government benefits that she would get if she would choose to stay on welfare.  My guess is that very generous government benefits particularly over the 2020-2021 turned a lot of people off work.  Not having to worry about paying rent - no evictions did not help either.

Posted

When I look back on when I was moving out. I had a job paying a little over minimum wage. I remember looking at apartments and what I could afford. So many of them I would pull up and it would be like a crack house neighborhood. I was like WTF... I guarantee most these people aren't event working... I thought to myself I could quit my job get on welfare and get this same lifestyle as working hard with my job to afford the same POS apartment. Luckily im not the kind of guy who just gives up.. So fast-forward I now make more than most people in my network and can take care of my life. But when you get down to the minimum wage level it really does pose the question.. do I just live on welfare and let the government cover my crap?? or do I work minimum wage jobs to afford the same lifestyle?? Many of the low income people work part time just enough to cover extra expenses but will literally quit a job to stay under the poverty threshold for government assistance. IMO the people who have it worst are the honest ones that ride the poverty line. 

Posted

Yup. Ive literally had someone ask me if I could reduce the 1099 amount I sent them so they could stay under a certain amount for benefits and child support purposes. I was like huh????? for real??

Posted
14 minutes ago, Gregmal said:

Yup. Ive literally had someone ask me if I could reduce the 1099 amount I sent them so they could stay under a certain amount for benefits and child support purposes. I was like huh????? for real??

 

Actually this may be the real issue. 

 

The job that makes more money may actually be a liability when it may impact qualification for welfare, subsidized housing, WIC, etc. 

Posted
1 hour ago, Dinar said:

Common, a 2 bedroom for a single guy?  I lived in a studio when I was single, so did my friends.  This is also very area specific, in some areas given the cost of living, $15 an hour is a fantastic wage, in others barely enough to make ends meet.  As to your question, a decade or so ago, the Economist magazine quoted a study that claimed that a single mother with 2 kids would need an income of more than $100K per year, before your after-tax income would exceed government benefits that she would get if she would choose to stay on welfare.  My guess is that very generous government benefits particularly over the 2020-2021 turned a lot of people off work.  Not having to worry about paying rent - no evictions did not help either.

Correct, area specific as I said. In my area the studio on the low end $1300 and on the high end, over $1600. Even if you found a “cheap” studio and save a couple hundred a month, maybe an extra $2k/year in your pocket, does that go that far? 

 

I honestly don’t know anywhere that $15/hr is a fantastic wage, and I’m not being argumentative, an extra value meal at McDonalds is $12. 

 

It all comes down to viewpoint, there are those that game the system on both ends of the spectrum, isn’t much of this human nature? If someone quits a job to stay under the poverty threshold for assistance, is that much different than someone playing the game to lower their tax burden? Carried Interest loophole anyone? Both are technically legal, one is considered “smart use of the tax code” and the other a moral/ethical question? I guess I consider both to be different ways to play the same game. To be clear I don’t like either, but I think its easier to focus on the single mother with multiple kids by different fathers, smoking her menthols and sitting at home watching tick took all day on her new phone for $100k/year than the upper echelon on Wall Street playing the game with much larger numbers that is actually costing the avg joe more by them paying less. 

 

Some people work, some people play the game. There will always be those who are deadbeats and figure what’s the point, you cant change that. I pay more in taxes in a year than the majority of those I know personally gross on their W2. Sure those gaming the system sitting at home rub me the wrong way, but my point is that it should EQUALLY rub you the wrong way that there are also those doing IMO the same thing on the top end. Warren Buffett has acknowledged this. Does this article make you more or less perturbed than the single mother with 2 kids on gov benefits that could work:

 

https://www.nytimes.com/2021/12/28/business/tax-break-qualified-small-business-stock.html

 

 

Posted (edited)
1 hour ago, Blugolds11 said:

Correct, area specific as I said. In my area the studio on the low end $1300 and on the high end, over $1600. Even if you found a “cheap” studio and save a couple hundred a month, maybe an extra $2k/year in your pocket, does that go that far? 

 

I honestly don’t know anywhere that $15/hr is a fantastic wage, and I’m not being argumentative, an extra value meal at McDonalds is $12. 

 

It all comes down to viewpoint, there are those that game the system on both ends of the spectrum, isn’t much of this human nature? If someone quits a job to stay under the poverty threshold for assistance, is that much different than someone playing the game to lower their tax burden? Carried Interest loophole anyone? Both are technically legal, one is considered “smart use of the tax code” and the other a moral/ethical question? I guess I consider both to be different ways to play the same game. To be clear I don’t like either, but I think its easier to focus on the single mother with multiple kids by different fathers, smoking her menthols and sitting at home watching tick took all day on her new phone for $100k/year than the upper echelon on Wall Street playing the game with much larger numbers that is actually costing the avg joe more by them paying less. 

 

Some people work, some people play the game. There will always be those who are deadbeats and figure what’s the point, you cant change that. I pay more in taxes in a year than the majority of those I know personally gross on their W2. Sure those gaming the system sitting at home rub me the wrong way, but my point is that it should EQUALLY rub you the wrong way that there are also those doing IMO the same thing on the top end. Warren Buffett has acknowledged this. Does this article make you more or less perturbed than the single mother with 2 kids on gov benefits that could work:

 

https://www.nytimes.com/2021/12/28/business/tax-break-qualified-small-business-stock.html

 

 


@Blugolds11 great post. We villify low income earners who game the system. And celebrate high income earners who game the system. Each simply does it in their own way; not surprising human nature being what it is.

 

In terms of labour and the current severe shortage perhaps the real issue is the US simply does not have enough workers. Usually the simplest answer is the best one. I do find it interesting that when all the government covid payments ended earlier in 2021 we did not se a spike in labour participation (all those lazy people collecting free money would be forced back to work). This of course did not happen. Shocker (well, we don’t talk about that failed theory any more in polite company). I am not sure the lack of workers in the US today is due primarily to lazy people who do not want to work. But hey, some people believe in Santa Claus. Maybe he really does exist! I try and stay open minded…
 

Immigration is one easy solution but has become such a political hot potato it is perhaps of limited use for the US. 

Edited by Viking
Posted
1 hour ago, Blugolds11 said:

Correct, area specific as I said. In my area the studio on the low end $1300 and on the high end, over $1600. Even if you found a “cheap” studio and save a couple hundred a month, maybe an extra $2k/year in your pocket, does that go that far? 

 

I honestly don’t know anywhere that $15/hr is a fantastic wage, and I’m not being argumentative, an extra value meal at McDonalds is $12. 

 

It all comes down to viewpoint, there are those that game the system on both ends of the spectrum, isn’t much of this human nature? If someone quits a job to stay under the poverty threshold for assistance, is that much different than someone playing the game to lower their tax burden? Carried Interest loophole anyone? Both are technically legal, one is considered “smart use of the tax code” and the other a moral/ethical question? I guess I consider both to be different ways to play the same game. To be clear I don’t like either, but I think its easier to focus on the single mother with multiple kids by different fathers, smoking her menthols and sitting at home watching tick took all day on her new phone for $100k/year than the upper echelon on Wall Street playing the game with much larger numbers that is actually costing the avg joe more by them paying less. 

 

Some people work, some people play the game. There will always be those who are deadbeats and figure what’s the point, you cant change that. I pay more in taxes in a year than the majority of those I know personally gross on their W2. Sure those gaming the system sitting at home rub me the wrong way, but my point is that it should EQUALLY rub you the wrong way that there are also those doing IMO the same thing on the top end. Warren Buffett has acknowledged this. Does this article make you more or less perturbed than the single mother with 2 kids on gov benefits that could work:

 

https://www.nytimes.com/2021/12/28/business/tax-break-qualified-small-business-stock.html

 

 

So true. I have friends who do the same work as me, but as an independent via S Corp. They paid themselves less than 60K, got great tax breaks and also some of the Covid Loans. In effect for similar skills and work, they are able to extract far more from the system.

 

I know of doctors and business owners who do the same. Its perfectly legal stuff and they are even proud of it

Posted
21 minutes ago, rohitc99 said:

So true. I have friends who do the same work as me, but as an independent via S Corp. They paid themselves less than 60K, got great tax breaks and also some of the Covid Loans. 

 

I know of doctors and business owners who do the same. Its perfectly legal stuff and they are even proud of it

I realize it's unrelated but curious. S corps aren't allowed to retain earnings so where does the rest go?

 

IRS pursues these transactions with purpose and vengeance, going after promoters, lawyers, and accountants. Microcaptive insurance was a thing, until it stopped being a thing. IRS is also about to get a lot of money to close the tax gap and I'd hate to be on the receiving end of that document request. 

Posted
26 minutes ago, lnofeisone said:

I realize it's unrelated but curious. S corps aren't allowed to retain earnings so where does the rest go?

 

IRS pursues these transactions with purpose and vengeance, going after promoters, lawyers, and accountants. Microcaptive insurance was a thing, until it stopped being a thing. IRS is also about to get a lot of money to close the tax gap and I'd hate to be on the receiving end of that document request. 

i could be mistaken on this as i dont have one. i was told that an S-corp can withhold earnings and pay the owner a salary. that way the 'employee' gets paid less and is taxed at a lower rate. if you want to pull the earnings, then you pay yourself a dividend and get taxed accordingly. thats my understanding which could be wrong

 

If thats not allowed, i hope those who are doing it better be careful

Posted
13 minutes ago, rohitc99 said:

i was told that an S-corp can withhold earnings and pay the owner a salary.

 

I think that is a requirement if the individual is actively involved.  Otherwise it will look like they're avoiding employment taxes (FICA).

Posted
1 hour ago, ERICOPOLY said:

 

I think that is a requirement if the individual is actively involved.  Otherwise it will look like they're avoiding employment taxes (FICA).

Yes, these are people working as Tech consultants

Posted (edited)
2 hours ago, Viking said:


@Blugolds11 great post. We villify low income earners who game the system. And celebrate high income earners who game the system. Each simply does it in their own way; not surprising human nature being what it is.

 

In terms of labour and the current severe shortage perhaps the real issue is the US simply does not have enough workers. Usually the simplest answer is the best one. I do find it interesting that when all the government covid payments ended earlier in 2021 we did not se a spike in labour participation (all those lazy people collecting free money would be forced back to work). This of course did not happen. Shocker (well, we don’t talk about that failed theory any more in polite company). I am not sure the lack of workers in the US today is due primarily to lazy people who do not want to work. But hey, some people believe in Santa Claus. Maybe he really does exist! I try and stay open minded…
 

Immigration is one easy solution but has become such a political hot potato it is perhaps of limited use for the US. 

The easy solution is to get rid of all these programs.  You think you are helping people but you are just keeping them from getting ahead and creating a dependency on the state. Not just the welfare programs but government control over interest rates and all this government intervention. All that garbage has to go.   All you are accomplishing is jacking up asset prices which benefits older and wealthier citizens and does net nothing for those starting out. Which is what you and your polite company are really after.

 

 

Edited by no_free_lunch

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