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...... when factoring finances Not to say these things are not good, nor is it to say these things are not of some level of importance within individuals choices of life. but it is to say, one may benefit from 'real time factoring of finances" Current day, Educational Expense ( Student Loans) Some young people result to have loans that exceed $100K-$200K... Some result to find jobs in ranges non related to their educational majors, many today do not work any place close to their aspired field of study. along with the pay scales downgraded, yet, these loans are not wiped out by bankruptcy or any other filing. they are due and expected to be paid. I really liked what this woman said: "Gloria Steinem made a tremendous statement on CSPAN during a speaking engagement... She was speaking to women... she said, "college has been greatly over sold" to mean it has been exaggerated as to what it means to the working environment and being employed and progressing. She was advising women, to learn trades, take up vocations and indulge to learn technological things." The loans become a monthly expense which comes directly from any income earned as payments due. Interest rates continue to mount. Another is Retirement Savings: Example 401K's.. they are a saving plan. Money that is withdrawn prior to the age of 59½ typically incurs a 10% penalty tax unless a further exception applies. This penalty is on top of the "ordinary income" tax that has to be paid on such a withdrawal, but the Fidelity plan will withhold 20% for tax purposes. But like all it is pre-tax saving, if you take the Money out at age 59½ you have no penalty, but the 10% tax applies, but also the plan program will withhold 20% for tax purposes. but by age 70½ you have to take withdraws, The amount of distributions is based on life expectancy according to the relevant factors from the appropriate IRS tables. A penalty applies to the failure to take the minimum distribution. The penalty is 50% of the amount that should have been distributed, one of the most severe penalties the IRS applies. But you also have taxation on those funds, of which the rate of tax may be higher at the time you take it out, than at the time you gained the Money as pre-tax saving investment. Hopefully, your profit gains will be a greater offset which is to your benefit. But if the election of options in the plan did not perform well... you may still find that it has been costly. People may need to think carefully as to how they handle these things. To avoid the program withholding 20% for tax, roll it over to the ROTH, because they only withhold 10% for tax purposes, and you can make the withdrawals as you choose. at least you avoid the 401K plan holding the extra 10% for tax purposes. But depending on the value of your saving, you tax still may be higher than the 10% being withheld. (Research these variables so you get more information about these programs and plans.) Also, it important for people to consider how their investment holding will affect their later years ability to participate in the Medicare Program... Vs what their cost will be for Medical expense at that time. Hopefully the new ACA ( Affordable Care Act) will present more of its benefits that are within the Act to help people with their insurance needs under these conditions and circumstance. Vehicle investment; Resale values on some vehicles simply NOSE DIVE WITH ALARMING SPEED..... When buying a car, what does it actually cost you per month to own this vehicle? for some people who do not get the most favorable rates, this cost can be a good % of monthly expense. when factored on an annual base cost... how much % of your 'after tax" income (take home pay) does this consume? After 3-5 yrs, factor in depreciation and actual re-sale value, now divide the loss amount by 12, and it will tell you what addition cost that vehicle incurred. Now add this amount to the monthly out of pocket expense, and this will give you an factor of what that car cost per month and per year to have. Some people change cars every 3-4 yrs, some change even more frequently... then there are those who do not change vehicles but every 7-10 yrs. Yes, it is part of the economy, but what can you truly afford will matter much as the years come and go. My motorcycle has suffered a actual depreciation loss around $1000 a year, this does not count the finance charges on the loan which kicked up the actual cost of this unit. which is wiped out when factoring the current resale value.,.. so to add in that expense, it become well over $1000 a year that was lost..in depreciation alone. but in direct consumed out of pocket cost per month and per year, so perspective this unit cost me, $5400 (+) a year, not including insurance and other maintenance cost. Now here is the trip... when it was purchased, the year cost was not so much of a factor, but with financial losses, jobs that pay less than, along with rising cost of other things. Suddenly, that $4400-5400(+) become a different perspective of challenge to the income model. Yes, the answer is... continue to expand the generation % of income. This however become an issue sometimes beyond the control of the employed. When wage does not move upward with the cost of living. If investment capital is by any means challenged, then the options of generating investment income become itself a challenge. Family Expense These exist whether one is single or married. for a multitude of individualized reasons. Rental or Home Ownership We saw the values plummet in 2008, many even today, do not get fixed rate loans which result to pose future increase in cost.. as these cost rise, so will rental rates. FOOD Today, "QUALITY" food is at a high premium... Organic food rate is high in comparison to altered foods.. Processed food is cheaper, than Food of good quality and made with real ( all natural) food substance. Results: Medical complication which are attributed to processed and altered foods continue to increase. These things come with a cost, that as time has proven results to diminished health and increased medical cost. among many other challenges it poses over the span(s) of time. "Raising " The great unknown ... is better suited to describe the financial expense which is within this spectrum. In all Industrialized Nations.. These factors play a great part in the conditions of life people are faced with. For general consideration: Depending on the Individual or the Family and its Standards. Groceries 8% more.less Housing 39% more Utilities 8% more/less Transportation 2% more/less Health Care 5%more Entertainment & Communications: : 2% more/less Household and Personal Hygene & Upkeep 5% more/less These represent 69% Add in what your addition basic's are depending on your lifestyle. Then factor in maintenance cost in these various areas -- Now factor in unplanned expense. Now factor in seasonal changes to all these expenses. Here is the break down of $100: 100 minus say 23% Fed Tax =$77 100- 6.2% State Tax = $6.20 100- for discussion sake excise tax on utilities | communication 6%= $6.00 so far that $100. = $64.80 Now .. spend the $55. on consumer goods = 8.5% sales tax= ($4.68 ) now you have the simple Value of $50.32 for what was slated as an initial $100.00 Easily see 50% Tax rate consuming much of the initial $100. Assume you buy fuel for your vehicle: you buy $55 of gas for your car.. @ $3.20 per gallon.= 17.XX gallons...and the tax on that is $1.75 state and fuel tax = tax on that fuel cost $30.07 now subtract that from 55.00 you have a grand total of $24.93 of actual fuel. You have $9.80 left.... unspent from the initial 100 dollars. IF figures are not exact, ( don't attack the article) you can factor for yourself, (this is written for 'generalized perspective for the sake of conversation).. if you want actual figures which apply to you... then, break it down in figures that apply to your individual lifestyle. and your respective country or living location.  |
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You are fortunate, "Congratulations", hope it continues to be so for you. National static's however paint a different picture for the bulk of what use to be the middle class. I pointed to "some" items that are credit related, of which exist across the spectrum for many people. As I said at the bottom of the post. IF figures are not exact, ( don't attack the article) you can factor for yourself, (this is written for 'generalized perspective for the sake of conversation).. if you want actual figures which apply to you... then, break it down in figures that apply to your individual lifestyle and your respective country or living location. There are many people who are with a comfortable living with minimal debt. But; likewise so, there are people who are highly wealthy, some are of wealth on paper, who carry a great deal of debt and live on a great deal of credit. Some are with high cash flow, In perspectives, there are many variations as to what is wealth and how is Wealth factored. In recent years there are a number of people who were once Billionaires, but now have a far different financial rating. Surely at one time or the other, they may have not thought much about what expense were, but when situations changed, they may find themselves in a different scenario.
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When I visited Thailand and the same thing I found to be true in Costa Rica, the average working people... who may have been lower on the income level... were still able to do things. One thing I noticed in Thailand, is there are many cultural things, which do not have a cost associated with people going to see it and browsing to enjoy the atmosphere. some of the street level eateries were inexpensive, so average working people could afford to patronize these places. They have street vendors who sell many things, unique shops that sell many things and then they had the night markets which sold even more things. Public Transportation was good, cab fare was manageable, and people could use motorbikes to go where ever they wanted. They seem not to be too hung up on massive sized living spaces and found their ways to make home in units that are much smaller than many people pursue in the Western settings. Even if one does not want to cook, they can simply go out and find street vendors... and I saw some places which were large covered areas with a multitude of vendors which provided a wide variety of choices. but on a big picture, it appears that the people are able to manage their money, especially if parents can afford to have available monies to pay for so many things for their kids.
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