Author: MoneyWatch101

Social Security- Will it be around?

       

         I find this to be somewhat of an oxymoron in life. People have given to social security for years and are expecting to get it back in their golden years of retirement. What if they eliminated this program? Would you be bitter or will you just roll with the punches life throws your way and accept the changes. From my point of view, I would likely feel a bit worried as it is a program that is sustaining financially the older generations of American citizens. In any case if it came down to a vote, I would vote to keep it in place forever as it is beneficial to those people in retirement.

8 Changes to the system as per RichUncle EL:

1. If you are a multi-millionaire- Banned from the program
2. The age of receiving benefits should be set for everybody at 65, and never change.
3. If you have a portfolio of real estate / investments that earn substantial income- Banned from program 
4. For the Government to never raid the SS Fund for other purposes. (Make it a federal law.)
5. Make the inflation adjustment a yearly standardized rule. (Based on the CPI Index)
6. If you have a trust with assets over 2 million – Banned from program
7. Individuals with standard pension retirement account should receive less in S.S. benefits than others who never benefited from a plan like this.
8. If you receive enough passive income to live from royalties / patents-Banned from program 

In any case there is a great article featured in NY times.com that explains the current state of the program. Social Security Article The article goes to show that S.S. benefits will be exhausted as of 2033 and I retire in 2045 so I will be in a pissed off mood for a few days, unless I become a multi-millionaire before my retirement. Ha Ha. It may seem that I am excluding the rich from benefiting from this program, but if you are making tons of money from your assets why would you care to get a $1,500 check from a struggling federal government program. It just doesn’t make sense for somebody who is considered financially rich to apply for Social Security. What’s your take on the rich applying for the program?

In any event I hope they extend this program and fix all of the bugs and for crying out loud the government should follow my 8 steps to fix the Social Security program. Thus making the U.S. a better place to live in.

Watch your money cause the government might not do it for you.

Even in Music Series III

I have come to enjoy these posts as I decipher what some of the artists in today’s music world are saying about money and how they can influence younger generations to either spend or save their hard earned money. The artist of the month is Pitbull or Armando Perez aka Mr. Miami and Mr. 305 as he refers to himself in the third person 90% of the time. The lyrics and the subject matter of the post is in a song called, Rain over me Ft. Marc Anthony in his album titled Planet Pit. If you can withstand all the sexual connotations that he mentions in the song and just wait for the monetary reference he makes it is well worth it. This is actually a great song with a catchy beat to it that might get your hips moving without you even realizing it. Ha Ha.The song has 100 million views on YouTube and is most likely the most popular song on the album.

What did Armando say:

They will not know what I got till they read the will. I aint trying, I aint trying to keep it real, I’m trying to keep wealth and that’s for real.

This is pure genius as Pitbull’s mentality is perfectly stated in that line as somebody who has a saver’s mind frame and really cares about his future. When I heard this line after playing it a few times it really struck a nerve with me because I have had the same perspective he has for my entire life. I hope after listening to songs like this people are pulled to think the same way instead of always thinking about splurging on that next new thing which will never improve peoples financial well being. If Pitbull is smart with his finances as he states, I can see him leaving a massive legacy for his family and for his future foundations. (Most artists have a foundation as a way to give back)

Financial influence is everywhere and sometimes it is delivered in a negative context! But this time it was delivered in a positive light. 

Better yourself and strive for a new mentality of preserving what you have and growing it everyday.

My motto – Watch your Money!

Book Giveaway

This book was referred to me by a family member back in 2007 and it changed the way I viewed money and debt. The Total Money Makeover by Dave Ramsey is a great motivating book and a fast read. If you want a copy for your home library:



1. Leave a comment as to why you want this book on this post.


2. Follow by email on my site. Enter your preferred email on the home page.

Brief Description of the book:

      This book makes you feel guilty for not applying yourself fully to your debt and money goals. The author provides witty and humorous banter based on his personal life story. In addition to all the great advice in the book, Dave Ramsey provides real life examples of other families who read the book and were struggling with debt prior to finding The Total Money Makeover lifestyle. Towards the end of the book you will notice some cool worksheets to help organize your finances.

One thing is if you do not have any debt then this book might be a bit annoying with all the references to debt elimination, but still put in your vote to win because you can benefit from baby steps 3- 7. The baby steps are an excellent road map anyone can follow to achieve great financial results.

I will make a random selection on May 1st and contact you by email if you are the winner.

Good Luck 

***Update- The winner of the Book Giveaway is comment # 1 Diana R. I will send you an email today and get your mailing address info. Congrats Diana R. Also to those of you who are interested in reading the book, check your local library and borrow it. You will not regret it.

Thanks to all of you for sharing your comments.

What we really pay in Taxes?

        

         I would like to share with you the eye opening fact of how much we really pay to the government in taxes? Obviously you know that we are taxed on average about 25% of any earned income give or take a few percentage points. But did you know that then that net income is taxed in many different ways thus increasing your tax percentage significantly. Whenever you buy that cool new cell phone or a six pack of beer or even batteries for your electronics. All these items are subject to sales taxes. Read below to get a better idea of how much we pay in additional taxes.

Earned Income : 25%

Sales Tax : 7% (My State sales Tax)

Property Taxes: .5%-2.5% (Depending on the assessed value of your home by state)

Dividends : 15%-25% ( Depending on your income)

Interest: 15%-25% (This is subject to ordinary income tax, on top of your earned income)

Final Result: Depending on how you use your net income you could be paying up to 50% of your earned money to the government in the various forms of taxes.

Now that you see the final result of how much we really pay in taxes; wouldn’t it make sense to make things like health care, education, and home ownership somewhat more affordable. It’s no wonder that the average person is struggling to make ends meet and the income gap is widening everyday between the rich and the poor. I have always rooted for the underdog because I feel we all should have our share of success and wins in life. So I guess that’s why I am for making things fair for the citizens who are really trying to get by and not just abusing the system.

Example of average taxes for someone who makes 35,000 in earned income:

Income Tax: $8,750

Sales Tax (Clothes, Alcohol, electronics, Etc. ) =$3000 spent *.07= $210

Property Taxes @215K*1.5% (Home Owners only): =$3,225

Dividend Taxes = N/A

Interest Taxes 10K @ 1% interest = $100

Total in Taxes = 12,285 / 35,000 = .35 or 35% in taxes paid.

Income Left over for living expenses and savings = $22,715

In conclusion somebody making this much is paying 35% to the government when it’s all said and done on a yearly basis. Also this example is on the low end of the estimated amount people spend on sales tax. Granted if you contribute to a retirement plan your taxable income will be less than if you do not contribute. I did not include dividend income because most people do not have dividends and the majority of those who do have them are invested in a Roth IRA vehicle thus making earnings in those types of vehicles tax deferred. The final number is not enough for the average person to pay mortgage /rent, all expenses to live, and have fun money. The Net income for somebody making this much broken down by paycheck is about 1,000 or $2,000 monthly on a biweekly pay cycle.

So be well informed on how you can for your specific situation pay less in taxes by legally doing what is beneficial for you and your family.

Contact a tax professional to get more detailed specific tax information

Computer Purchase

       

       
        
       As you all have read in my previous computer post, I was in the market to purchase a computer/laptop. So without further delay, I decided on a Toshiba Satelite 775 Laptop it has all the features I was initially looking for and it was priced right for my budget. Also I purchased it through Costco for $888 including taxes and they offered a free anti-virus software and a two year warranty. The specs of the CPU are listed below for your viewing pleasure. Also I was inches close to purchasing an apple product but due to job related reasons I did not go that route. Many of you had suggested apple as your preferred choice but, because at times I work from home, I did not want to purchase two separate computers: one for work and another for home use.

Tech Specs:

17.3 inch Led Backlit Screen
i7 2.2ghz with Turbo boost to 3.1
8gb Ram
1 TB Storage

Great Keyboard

Blu Ray Player (Whoo Hoo)

3.0 USB, 2*2.0 USB, HDMI, etc

So far I am content with the speed and the features of my laptop. After I hit the power button it is up and running in blazing fast speed in about 5 to 10 seconds. A dramatic improvement over my last computer. I was looking for a well priced under a $1,000 CPU with all the features I mentioned in my previous post and I definitly achieved that. Laptop Search Post  My rational behind this purchase was why spend over my budget to get something that is comparable in speed and size, and on top of this have to deal with work related issues in the future that could get worse as time passes with an apple. I am attempting to simplify my life not add stress to it.

The other three contenders for my money were an Apple all in one 21″ desktop for $1300, a Dell Xps laptop for $800, and an ASUS for $1249 but all had less features and two competitors were pricier than the Toshiba I purchased. The Mrs. was extremely against the Asus so that one was the first to go. I will give you an update in a few months as to how it is performing.

Comment if you have recently purchased a computer and the amount you paid for it.

Miles per Gallon

Have you ever calculated the amount of gas per gallon it takes to run your car? Miles per gallon is the gauge that most people use to find out how many miles your car runs per tank. This simple test can be done with simple math. Why you ask?

1. To effectively know how many miles your car can go per tank. (MPG)
2. To find ways in the future to improve your cars gas efficiency.
3. To detect when your car is in need of repair.
4. To Compare your current MPG with that of your future Cars MPG.

MPG Calculation :

1. Fill your gas tank and reset your odometer trip A to Zero.
2. Jot down how many gallons it took to fill up your tank. (14 is the average)
3. Drive normally as you would drive and when it’s time to refill look at the odometer reading.
4. Divide the number of miles you drove by the number of gallons your car took to fill up.
5. The result is your cars MPG as an average of city and highway miles.

My car MPG is 27.2 miles per gallon on 16 total gallons of driving is 435 total miles. I think that’s pretty good but could I do better of course just have to find some smart ways to drive more efficiently. Imagine if you had the new Prius which goes about 50 miles per gallon, with a full tank of gas (12gallons) you could possibly go about 600+ miles before refilling it. That would be an efficient car if I must say.

Now if you could, do the same test on your own to get an exact MPG for your car. Comment below if you already know what your cars MPG is and how do you attempt to increase the miles and possibly tweak out more miles from your car.

By increasing your MPG you can watch your money.

*Update- I tweaked 440 miles out of my car on 1 tank of gas increasing my MPG to 27.5 mpg.

*Pic is the sharp looking Subaru concept Impreza that will never be released. (So Sad)

Slash your bills by $100

Slash your bills by $100

I did this experiment in my past and I know most of you can also, I successfully found a way to cut expenses on a monthly basis, all of you should follow the simple steps to save yourself a Benjamin Franklin too.  So I didn’t do anything complicated, I just harassed a few companies and asked if there was anything they can do to lower my bills. Negotiation tactics 101 at it’s finest and guess what I slashed my bills by a hundred dollars. That’s basically the gist of this post. Never settle to pay more when a quick phone call can net you better results for your money. Cable companies and credit card companies never want to lose you as a customer so do your best to talk them down a few bucks on a monthly basis.

Continue reading Slash your bills by $100