Sunday, October 3, 2010

Are you rich when you make $350K???

The Financial Comments of a Lawyer

I had to laugh at this following article’s advice to a lawyer and a physician with 3 kids. Most of it is poverty mentality.

Advice #1: Adjust your expectations.

This is not such a bad idea. However, if you go to the original post, all the lawyer wants to do is put away money for retirement, put his kids in private school, pay off their student loans, and have a mortgage on a house. It’s really the American dream.

Considering that the lawyer and physician combined for nearly 10 and 14 years of education at the professional level, it seems that they should be afforded the American dream.

Advice #2: Refinance your mortgage

This one, I don’t know how reasonable as an advice it is. This is because the jobs of the lawyer and physician are in Chicago. This is a very expensive place.

Advice # 3: Think about relocating

Are you kidding me? Lawyer in Chicago and physician at Univ of Chicago, and one of the advice from the Wall Street Journal is to relocate. Have you lost your mind? Do you know what it means to be a faculty at a medical school in U of C? This one really got REtong going because this advice is just silliness. It’s not really meant for the lawyer and the doc. It’s meant for everyone else. Fluffer.

Advice #4: Rethink the schools.
Believe it or not, REtong is a product of the Los Angeles Unified School District, a public school system not reknowned for its prowess in educating children. What I’ll have to say about that experience is that 90% of the time, it is up to the kid to figure out what he wants, go get what he wants, and work hard for it.

Being an immigrant from the Philippines, I knew that I was in a different place in the US. The facilities were better than the private school in the Philippines. Therefore, I either make an effort to be good at school, or my shitty life can be blamed on myself not pushing myself harder.

And this is where I have to laugh about parent’s expectations today in 2010 about schools. We expect teachers to be inspiring, eye-opening, and figuring out how to mentor our children. AMERICA, wake up. Your 80% of children are apathetic, slow, don’t give a damn and lazy. Don’t blame teachers for student’s sucking. Blame the children.

Now, as for sending kids to public school, the issue here for the doc and lawyer is safety. They just don’t want to deal with drugs, gangs and other forms of danger present in public school. And sometimes, REtong does not want to either.

Advice #5: Go after all the little costs
This is poverty mentality if I ever heard of anything. The assumption here is that this family is leaking money all over the place. Most people have to do this if they have no financial control. But, since the guy can make retirement accounts, I would say he’s pretty good in this area.

Advice #6: “Never, ever, ever again blog about how hard it is to live on $300,000 or $350,000 a year at a time when one middle-aged man in four can't find a full-time job, and one in five can't find any job at all.”

This was the saddest part of it. The lawyer has earned the right to blog about how hard it is to live on $300K or $350K because he went to school, sacrificed and is paying his student loans.

He’s only looking for sympathy. As for the other people not finding jobs, welcome to capitalism where your incorrect choice in career can have a deleterious effect on your life.

The fact that most of the people who commented on the article can not give him sympathy, shows you how much they are in poverty mentality. They can’t even give anyone something that is FREE! Sympathy is an emotion.

Having said that, these are the comments in facebook. I post it because it outlines what I really believe about prosperity and being rich.

TatangREtong: You know what really pisses me off about this issue? The lawyer spent 7-9 years of school/training and the physician spent 14 years of school / training. Their prize for that sacrifice and hard work? $100K in taxes!!! Just to support the people on welfare and the BIG guv'ment by Oh-BIGGUV-ama. You might as well become a business major, be a CEO and make $30 million dollars!!!! Oh wait, that already happened to CITI right? LOl!

JM (a cousin of the wife): So apparently I'm "insecure and have no sense." It's my trophy dammit! (He’s referring to the part where the article dumbly suggests to pay off the loan and not put away money for retirement besides the 401K.)

TatangREtong: Oh, and the other SH*T that goes unsaid is this:

By the way, WE, the poor, unemployed, and can't save $$$ for sh*T will now tell YOU (a lawyer and a physician) how to F*cking live your life and HOW to spend YOUR hard-earned $$$.

Talk about ...CLASS warfare. (Just a reminder: the poor and dispossesed actually don't have internet. So don't YOU dare post anything if you are a middle class pseudo-proletariat). I will send the Tea Party and Sarah Palin!!! Hehehe (J/K), I had to get that in there for dRaMa!

But to be fair to the poor, it's actually the Demo-Whiners who are doing this in behalf of the poor and dispossessed.

I love America!

KT (a friend of the ours): WTF? " Buy used. Pay cash. Run it till it dies." Under $10K? He left out car won't start so you can't get to work, and car dies and leave you stranded. And oh by the way since the car is crap you can get sh*t to trade it in so when it does you keep shelling out money to keep the sh*t box running costing you more the long run then that new car you wanted.

Man I really need to disagree what he say on education. Parents should get their kids the best education they can afford. Not the most expensive, but best. A good public school may be fine. But it may not, or it may not stay that way. Same in collage. You need to focus on the quality of the education, and the learning habits an institution can foster, as well as the networks of people you will meet.

You also need to bare in mind the importance of earning money and investing in your own prosperity. A good educational institution can make the difference in how good a job one can get fresh out of school. In a bad economy it can make a difference in how employable you are. It can also make a difference in how much smarter you work verses how hard you do.

Oh and the school loan thing? If you actually do do the math, you can easily earn a higher rate on your money in the stock market then you are charged interest on your school loan. What's more should you find yourself on hard times suddenly or with a unique opportunity you will have assets to leverage rather then a school loan you have already gotten all your use out of.

I wish I had met Tuhan fresh of school. I'd be much richer. :)

RB (Brother-in-law): Michael O’Hare did some calculations
and showed that paying $100k in taxes on an income "not much higher" than $250k is unlikely. If they did pay $100k, their income would be closer to $340k.

The S&P 500 has averaged about 10% return annually over its lifetime. If the APR on loans is less than 10%, then investing would be a good idea, but Prof. Henderson never specifies the rate.

Lastly, if Prof. Henderson's household income was "not much higher" than $250k, then the impact of letting the Bush tax cuts expire on those making $250k and above would be minimal. The US tax system uses are marginal tax rate, which means the top rate, which would be 39.6% if the tax cut expires, would only apply to the income beyond $250k. All other tax calculations applied to the first $250k would remain the same.

In the end, WSJ is correct: don't blog about how hard life is when you make more than $250k.

2nd Comment: Oh, and Cal economic professor Brad Delong ultimately explains it like it is:

KT: You may be rich, poor or somewhere in between. If you are rich but don't feel rich, then the problem is you and you need to fix it. Rather or not you are poor, if you don't feel poor, congratulation you have found true prosperity.

It doe...s not matter who is president, if you feel/think rich, you will always be able to adjust. If you always feel/think poor though, you never will.

Good to remember, poor is not having any money, broke is not having any money right now. The richest man can be broke every now and then but confusing that with poverty is a self fulfilling proficiency.

The calculations are off bec the professor (Attorney Henderson, the guy who put the original post about living with $350K salary) put taxes, social security and medicare all together. For most intelligent folks, 50% of money goes to gov't due to soc security and medicare and taxes. Interesting that the responders did not know this.

But really, the biggest critique these people have is that theChicago professor has too much money and so it should be redistributed.

If money is a resource, then time can be a resource too. How about the govt now starts telling you that you have to spend 5 hours after work volunteering at the hospital or clearing the roads. Gov't suddenly got too big, eh?

The arguments quoted above are specious because they are logical fallacies (Referring here to the financial analysis being GUESSED at for Attorney Henderson). They are red herrings in which they point to some minute critique of what someone has written. This is silliness of liberal intellectuals. They don't know how to argue. Sad, quite sad.

The truth of the matter is this. All the rich people will find ways to get around the taxes. We *always* do. The middle class and the poor will be stuck with the taxes.

The next question is "What side does one want to be on?"

KT: " They don't know how to argue." Ya that's pretty true. A lot of conservative don't argue well either, but they make up for it by also fighting better and working as a team ;)

The poor are poor, they pay the least taxes of all. I have me...t people who are "poor" who live very very rich. They find different ways to make and hide there money. They are in the minority of people who while not believing life is fair also don't believe it can't be unfair but in their favor.

It is all about the side one wants to be on.

Tatang REtong: Yup. Life is NOT fair. It is very brutal, unforgiving and without remorse or logic.

RB: I read most of the responses, and while some are directed at Prof. Henderson's large income alone, there's more to it. Most of the anger comes from the Professor's own sense of entitlement and self-victimization, pleading for sympathy when... he himself has not gone through the necessary belt-tightening and sacrifice to justify receiving any. If the professor had to support a large extended family, or was burdened with huge medical bills from a disease, very well. But when you whine that you have to cut your $60k in retirement investing when most households don't even make $60k, you certainly won't get sympathy who get by with far less.

Say what you will about whether the government deserves our money, but don't delude yourself into thinking you're suffering like most Americans when you have a house, two cars, a six-figure income, three kids getting private-school educations, cable TV, a gardener, and a babysitter. Most Americans would dream about suffering like that.

TatangREtong: Lawyer and doctor. Both paid for it with their sacrifice of schooling. Most people are not educated or skilled enough. Capitalism at work. That's life doing a S&M job on everyone.

BTW, it's a sad day in life when !!!sympathy!!!, which is free because it is an emotion, is to be withheld from a lawyer and a physician who are professional successes. Both are asking for sympathy because they are taking steps to take care... of themselves through retirement accounts. I'll give them sympathy, my fellow rich people, lol. (Gosh, the first statement I wrote is so ridiculous! If that is truly the reason for their criticism, they suck.)

Most Americans can only dream of suffering but when the pain really hits them, they cower and buckle. That's why they could not finish high school or college or do what herr professor did. They simply lash out at his ridiculously rich life.

It's too bad all the critics can't see their faults for their current state of being unemployable and out of work and being BITTER. Funny at worst. Sad at best. Life doing a S&M marathon.

KT: I may empathize with the real pain someone is feeling but I don't have sympathy for anyone who does not seek to change a situation they are unhappy in and prefers to look for someone else to fix it for them and or blame for it.

I have been i...n positions were I was very unhappy, and people in what they believed to be a worse circumstance resented me for being "ungrateful" when really I was just unhappy. See they could not see that what I have was meaningless if I could not be happy and what I needed to do was make a change. Because they were comparing their own situation to mine and thinking they would much rather be in my shoes they could not be very supportive or helpful. In fact they thought I should suck it up, be glad I was not them and accept an existence of misery.

They could not appreciate that I had worked for something fulfilling and that currently I was now stifled; goal not yet reached, and feeling that without a new direction it never would be. Later I realized, how could they. They did not put in the same time, money, and energy to get where I was. They did not make the same sacrifices to delay immediate gratification so that may be more accomplished later. They did not take the risk of giving up something good and safe so they may challenge themselves to achieve more.

See I had worked so that I would not be in their situation, but they had not worked so that they could be in mine. If they were in my position it would have been a gift, not something they had earned. They could not relate to my point of view because they were not on the same level. It's the difference between given a sports car for your 16th birthday and working that paper route since you were 12 to buy your first used car.

The kid that spent all his money on cigarettes and video games just sees the car you have and thinks you should not have any problems giving them a ride. And by the way since it's your car, why they should they pitch in for gas, not like you were not going to the same place anyway.

Whether you're high or low you have to tip on the tightrope ;)

TatangREtong: Well said KT. Yup reading those comments about the lawyer and doctor were very painful because I could see the commenter's denying taking any responsibility for their sucky life. It doesn't take a genius to see that they are transferring ...the responsibility for their happiness from themselves to the government.

Jesus, at least all these illegal immigrants get it. They are crossing water, desert and all kinds of danger to get to America because they hear there are jobs here for hard-working people. What do Americans do? They wait for the government to tax the rich so that they can get unemployment, instead of taking up the low-paying jobs.

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