Yes, or to put in the words of businesses say, it is all about managing your cost structure. Paying that mortgage off buys you a whole bunch of cash flow to work with. You can invest it, spend it (or a combination thereof). Spending it could mean taking a pay cut by getting that less stressful job/career.
Well, you are right, paying off the mortage will lead to higher cash flow in the future, but at the cost of lower cash flow now. If you invest wisely in a diversified portfolio consisting of a healthy mix of index funds, mutual funds, bonds, and some cash in a money market you should easily be able to beat the interest cost through gains, dividends, bond payments, etc. over the long haul. Over 10-20 years the market tends to go up at much more than 6% per year (about the real cost of a morgtage after tax, it's hard to say what it really is though since eveyone gets different rates and has different tax rates), bonds tend pay a steady stream at between 5-10% depending on the bond (Treasury bonds are lower right now but even though interest rates have been higher lately they are still lower than the historical average), and a money market will get you about 4% these days and tends to be indexed below the T-Bill rate.
Paying off principle only helps build equity, but if you buy a house and can get it to increase in value you have used the banks money to build your own equity. It is just like leverage in the business world, using someone elses money 9the banks) to make yourself money. Now all of this is not for the feignt of heart, when you loose money the loss is amplified as well. Right now we are seeing a lot of the down side of this because people got crazy in some markets such as FL and SO CAL and just kept buying houses to flip, developers couldn't stop building, and then the number of people looking to move to these areas declined. The developers have a hard time knowing what real demand is because such a large number of their sales were to flippers so the markets got saturated with too many homes. The "bubble" will end and another will come, it is the nature of a market with imperfect information.
If you are close to retirement the situation may change, but this depends on the individual financial picture.
Except for the fact that $100k in New York City is worth exactly $100k in Kansas.
That is a bit nieve, the same currency can have different values. A $ in Kansas will buy you a soft drink in a convenient store, that is probably not the case in NYC (I don't live there so I can't vouch for NY prices, but the point is that there are definately different values place on money in different regions). The way to look at the "value" of a currency (either internationally on exchanges, or regionally within a country using a single currency) is purchasing power parity (PPP). While not foolproof, PPP can be used to compare any good or service such as a Big Mac, a Coca Cola, or a gallon of milk (milk may be bad because government subsidies can mess this example up). While other factors do go into prices than the value of the good and the value of the currency, PPP can be used to show that a $ in Kansas is not the same as a $ in NYC.
Yes, you are correct that things like land do have different values as well, but a currency doesn't really have any true value, it varies from person to person and region to region. Even when the US was on the gold standard, gold's value changed and gold has a different value to different people.
What happens when it reaches $0.01? At that point it cannot fall any further, and the smallest price increase, to $0.02, would bring a 100% profit.
Stocks can trade lower then $0.01. They can trade at fractions. When I watch a streaming stock screen low price shares often trade at the thousandth of a $1 level (usually 1000 shares at $2.225 or somthing like that). People will make trades at thousands of shares at a time at a minimum level hen stocks get really low in price, otherwise it doesn't make sense to pay the fees. I own a stock that was delisted (I never owned too much), now for me to sell it I have to pay about 1/2 the value in a transaction fee so I have just left it as shares, who cares if I lose another $15 or so at this point, I already lost a majority of my initial investment. A single share may not have any realizable value, but if you own 1 million shares valued at $0.001 you still have some value there and in the OTC markets you will run into many stocks valued at fractions of a penny. The bottom limit of shares price (before it truely becomes zero) is $0.01 divided by the maximum number of shares held by any shreholder.
Think about what happens in your office, or the office that this position is in. What problems do they commonly face? If it is a new group that hasn't worked together than think about problems getting new groups together run into. Managers spend a lot of time dealing with people and the problems that people have with each other. Some examples would be simple jelousy problems between people, argumentative behavior (both to coworkers and to superiors), problems determining the best method in the course of completing a project. My list is generic, but once you think about how you expect the team to work together and who is on the team you can figure out what the situations that will occur often will be.
In theis specific situation, where you are looking for a development manager you need to know the experiance levels on the team, and their communication abilities. If the team is an existing team then the manager doesn't need to be a team builder, he/she needs to know how to get a well oiled machine to run better (or know how to fix a borken machine), if the team is new then the manager must have that last skill plus the ability to build the team by using people to their best total potential (sometimes this means a few people don't use all of their potential). That right there gives rise to more questions/situations. You can ask about how they would assign the group (or a fictional group) to different tasks (just give the interviewe a set of experiences for each person and see how they assign them to a given project). Another questions is how the manager would put together a team if hiring all of the new developers. Just put some thought into the situations the interviewe is going to have to face in the field and see how he/she would handle those situations. As the story unfolds during each scenerio make sure to ask follow-up questions if there are holes in their story or throw more kinks in the situation (maybe you are talking about getting the team to meet a deadline and bring up something about two employees getting into an argument so now thye have to solve two problems).
I'd be especially interested in hear each candidate articulate their "management philosophy".
That is a good first step, but you are going to get what they want you to hear, probably almost a quote out of a management book, but it won't do a very good job at getting to what they will be like. A situational interview where a multitude of situations are presented and the interviewee must determine his/her actions. Start with some of the common problems you have faced in the organization nd then move on to some pretty wierd situations. Make sure you take into account that the interviewee may not take the same course of action that you might prefer, but judge it in relation to their stated management philosophy, their other answers, and how you think those that will be under the managers control would see it.
Interviewing is unique for each firm and any direct answer here is probably not worth too much. Every situation has unique challenges and one manager could be great for one firm while horrible for another. Does your team need leadership just to keep them working together, does it need technical guidance, is great on the technical side but just needs a manager to keep them on task? Any of these situations would require a different management style, if you need a technical lead then hire based more on technical ability, of if you really just need someone to cooridinate between the developers and more other development groups but doesn't require too much technical knowledge then hiring someone with good project management skills is probably the most important. Interview questions should always try to see if the person will fit into the culture, has the knowledge required to do the job, and has enthusiasm for the job.
It just goes to show how reliant much of the Western world has become on GPS when we're now looking for more tech solutions to use in case GPS ever goes down. Whatever did people do before GPS?
I actually use it several times a year when I go backpacking, but I never count on it working and always keep USGS Topo maps and/or US Forest Service maps and a compass with me so that if my GPS unit fails I don't get lost. The GPS is nice to have in the back country, but more for purposes of tracking my pace, movements, and elevation than for actual navigation. The maps available for the back country tend to be off and are missing a large amount of information on trails so all that I can use in these cases is a the lat/long or UTM info (UTM works much better with Quad maps, but with other maps latitude and longitude work just fine). I think that anyone that really relies on GPS for navigation is just short changing themselves, not know how to read a map and figure out relatively close to where you are is taking a risk.
I am also a private pilot and spend a lot of time on the water. I have never counted on GPS in these situations either, although GPS sure is handy when it comes to getting right back on top of a known fishing spot. When I got my pilot's license GPS was not an approved form of navigation so we learned dead reconing skills and how to read a chart for VFR rules (who knows what they are teching new pilots these days, I haven't flown in a long time and haven't kept myself current). I never got my IFR license so didn't spend too much time with IFR tools like Loran but they can also be quite accurate. I know I could always find an AM radio station with the direction finder (I used it to listen to talk radio more then navigation, but it was fun to know where the stations tower was located). There are plenty of ways to navigate without GPS, most of them just require finding the intersection of two lines and having an idea of where you are in the first place.
Killing someone and taking their posessions seems perfectly rational to me, especially if you throw in a suitcase with a few million dollars.
What you are using is something we discussed in Economics and I have also read a number of books on the exonomics of crime that allude to your thought process, so from an purely economic standpoint you are correct, it is rational. From a standpoint of living in a socienty in which people have to interact in order to survive, it isn't rational. So making a single statement that has some logic or demonstrates some rational thought doesn't mean that if you look at the bigger picture that it is rational. In the case of Cho, what would have been rational would have been to seek help, go to a smaller school, talked with his parents, or any other action that might have saved those murdered on Monday's lives and his own. You may try and claim that it was rational because he gets to make a statement or some other partly rational case, but what statement did he make other than that he was sick and needed help? The same goes for Eric Harris, the statement he made was that he was sick. Yes, Cho used his name and called him a martyr but that doens't prove anthing. Cho probably would have done this if Columbine never happened, or if Eric Harris never existed. To tell you the truth I bet you know more about Eric Harris and how he thought than Cho did, I think he just pulled a name out of a hat. He probably would have used another mass murderers name instead.
These murderers have no cause they are fighting for, they have simply gone out and killed people for no jusifiable reason. Personally I don't care what any of them have to say in the light of justifying their actions. The only reason I care at all about what they have had to say is for the purpose of being able to spot other troubled individuals and get them help before they go out and start a killing spree.
From what I have gotten from statements by those who knew Cho, there is plent of evidence that he had serious mental health problems. His grandfather said that Cho was problematic from a very young age but his parent didn't have the time or money to seek help. He was known by the local police to have stalked two different women. He wouldn't talk to those that did try to reach out. Everthing I have heard leads me to a conclusion that he was simply insane. The video clips I have seen of his ramblings were just that, ramblings. He said that others could have stopped this from happening but failed to give examples. He seemd to indicate that he had a real problem with rich kids, but when he went on his rampage he didn't go after rich kids, he wen't after a random selection of students and faculty. He said that what he was doing was like the actions of Jesus Christ yet he also made comments about how bad christianity was. His actions didn't seem to be related to his complaints about what was wrong. All of these point to a sick individual, which in this case warrants the term insane. How is is rational to go into a building, kill 2 people, go to the post office and mail some stuff to a news network, then go to another building, kill 28 more, then blow your own brains out? There is no rational reason to do such a thing, quit trying to make a case for his actions being rational when all of the evidence points in the opposite direction.
The same goes for Eric Harris, he had many "reasons" to kill people. None of those reasons are actually acceptible to speople in this world eccept thos that are insane. He also didn't seem to single out those that were his "targets" He also took his own life and you claim his thoughts are rational. Give me one example of it being rational to take your own life. The act of suicide itself is 100% irrational.
I'm sorry but I can't see the thought of premeditated mass murder as being rational. Sure, they may have had some reasoning in their mind that follows some logical process but just the simple fact that these people were thinking about and then commiting mass murder makes them 100% irrational. Thais is exactly why the defense for committing murder in an act of rage is called temporary insanity.
Federal witholding is such a scam. Taxes should NEVER be withheld. When you never see the money, you don't ever think of the taxes as your money, so you are not vigilant to changes in taxes, nor do you care much how they are spent.
If you ask any tax professional they would tell you that the ideal situation is to have your witholding taxes be smaller than your bill so that at tax time you owe a minimal amount. It is silly to give the IRS an interest free loan, and failure to pay a certain percentage of your annual taxes due during the year results in penalties (which makes sence because you could see it as them giving you a loan). I would agree that it would be beneficial to have to pay your taxes on a regular basis rather than have them withheld for the sake of knowing what you are paying but it really does simplify things to have them withheld. Persoanlly, I don't want to write a check (or have an electronic payment transmitted) every month or so. I also don't think most of us want to pay for the extra oversight that it would entail to manage a regular stream of payments comming in from so many people (hundreds of millions of earners vs. just millions of employers). Having employers make regular payments really does simplify everones life except the employer. I would hate to see the IRS keep the same level of staffing they have during tax time all year, that would be another waste of my tax dollars.
I would have to disagree with your comment on never thinking of it as money since I never see it. I see the line item on my pay stub every pay period for federal witholding. I hate seeing that a significant portion of my pay is taken from me to fund garbage projects like bridges to nowhere. Just because I never see it doesn't mean I don't know that it is missing.
I also think you confirmed my primary point, which is that as individuals we get shafted with regards to selling things like cars.
I think that you don't really understand what the tax code has become, a way to encoruage certain activities while discouraging other activities. I would also have to disagree with your idea that we get shafted, because it is not really the same as you think. Yes, we do have to pay on gains, but in essence a gain is income which should be taxed as long as we have an income tax. We don't get to deduct a loss because we, as individuals, don't have the right to claim things such as depreciation.
But at the same time, if they made it "fair", then they'd have to do something else to the tax code to collect the same measure of taxes. This is one reason why I'm scared to see what becomes of AMT reform, assuming it ever happens. With something as huge as reforming AMT, there are always winners and losers, and I'm afraid I may be a loser, but then again you never know.
I don't know what you know about the AMT, but it is a sham. It was originally written bacause of something like 22 millionairs that managed to avoid paying federal taxes by using legal deductions. Because of certain changes in it over the years and a failure to index it to inflation it has now managed to get 2.6 million people. If it isn't changed it will get something like 22 million people for the 2007 tax year. The democrats are blaming Bush's tax cuts for this, but in reality the tax cuts they cite and force certain people to subscribe to the AMT are actually fine with those effected because they would have paid more without the tax cuts. I personally feel that the AMT should be abolished, or rewitten because it is now going to hit the middle class. One other option is to drop the changes made during the early Clinton years to the AMT that are actually causing the AMT to hit these people, but since anything Clinton did is considered to be perfect to those Democrats in congress (and since the biggest proponets of those changes were Pelosi and Rangel), this will never happen. I don't trust congress to fix this, particularly the Democrats because their idea of fixing the tax code is to raise taxes for everyone (since taxes on the rich usually get passed on to the poor through other means). I wouldn't trust the Republicans either because they have lost their sence of fiscal responsibility. I feel for you since it is inevitable that you will eventually be hit with the AMT since it is the only way for congress to finance their proposed budget and it will bring in about $1 trillion over the next decade for congress to spend on more pork barrel projects.
I have spent a lot of time looking into things like the "fair tax" and there are several problems with it. Personally I don't really agree with the idea of redistribution of wealth, which should encourage me to want something like a national sales tax or a flat tax, but they all have certain problems. A national sales tax program would cause all prices to rise, which if offset by the increased disposable income, would be fine, but it causes a problem for people with low incomes. They already struggle to get by and how would this impact their lives? A refund for them doesn't work very well either, because most of people living in this category have a hard time living month to month and a refund would postpone this source of money. A flat tax is also unfair to people with minimal income. Now one could implement a flat tax where people with low incomes (say
Now arguably the loss you normally take on a car is depreciation, but as far as I know, there's simply no allowance to take a loss on your car that is faster then true economic depreciation.
You seem to be mixing personal and business tax rules. A business can report a loss on the sale of a car if it is sold below it's cost basis. The cost basis is caluculated by taking the original price and subtracting any depreciation claimed. As an individual people don't get the option of claiming depreciation. Any loss in value of personal assets doesn't matter. If you make a profit on personal assets they do tax you because the gain is seen as a form of income. It can be treated as a capital gain if the asset was held long enough or as regular income if is was held for a short period of time.
If you take a loss on a car, it should be based on true economic depreciation, unless you are in a real hurry to unload it or never bothered to look at a blue book. The government has a set depreciation schedule that has little to do with economic depreciation. It's essentially a double-declining balance method based on a half-year convention. It is not likely that any asset actually loses it's value on such a schedule.
Many companies buy back their own shares, both to boost share price and to give stockholders a return not based on dividends. I don't know if SCO has the cash to do it any more, but...
SCO is not in the position to buy back their shares but they do have a very simple option, a reverse split. Although it isn't common and often has a negative effect on the market capitalization of a firm because it is a sign of weakness in the market it will have the needed results. It is quite simple to do, legal, and only requires the board of directors to execute. Shareholders don't even have to agree, although most would if it means the difference between being listed or going the way of an OTC stock.
Share repurchase programs usually don't have a significant effect on price by themselves. The number of shares needed to repurchase, and the cash needed to execute a significant repurchase program often doesn't make it feasible to significantly fix the stock price. Share repurchase programs are usually designed to server one of two puposes: to signify that management thinks the company is undervalued, or to consolidate ownership. The second option is only used when a company has piles of cash and it accounts for more than 10-15% of the market cap. Smaller programs tend to be used to accumulate treasury stock while the price is low, then re-sell that stock as the price gets at or above where management thinks it should be in order to raise capital without issuing more debt.
So you are telling me that I should base science on a political group? That sounds like listening to the Pope in the middle ages telling people that the earth is the center of the universe and the debate is over.
If game play constitutes an investment then does the Securities and Exchange commission get involved?
There is no need to get the SEC involved. They only involve themselves in regulated securities exchanges, or in other words pubicly listed companies. Unless you are attempting to sell stock in your in-game "investment" then they have no juristiction. When "mom and pop" open a store (another form of investment) they don't regulate that and this would be a similar situation.
If my game "investment" is based upon my actions in the game (e.g. not publicly known), then would this be insider trading?
Insider trading can only occur when you use non-public informtion in regard to publicly traded companies.
Isn't that what separates "owning/running a business" from "investing in a business"?
Owning a business is a form of investing. Running is a business is a job and generally a salaried position even in privately owned small businesses. The act of investing is contributing something of value (time doesn't count for the IRS, but any property with value does). Even though most small buinesses owners are in a management position the two categories are different. The IRS has rule governing investments and if a business is activily managed by the investor the investment is treated differently than if the investment isn't run by the owner (active/passive treatment). Actively managed businesses (most WoW and SL players would fit into this since it requires 500 hours per year to count) can use losses from the business to offset regular income while passivly managed business losses can only be offset against other passive losses (these can be carried forward for up to 20 years and backward 2 years if I have my numbers correct but this applies to both categories).
I wouldn't recommend trying to use MMORPG's as a way to constitute a business though unless you really can demonstrate an intent to turn a profit. If you are on EBay buying and selling virtual goods in exchange for cash you probably would have a case but the odds of an audit are probably over 50%. One of the best ways to get an audit is to take something that is usually considered a hobby and claim it as a business. It would be much easier to deduct expenses against capital gains so that if you sell virtual goods on EBay you won't have a gain but here accurate records of expenses used in the "investment" are key as well as any % stake in the game being sold at any given time. I can't say how they would treat having losses on your investment in a virtual world to offset gains in something considered less virtual, but claiming a that there was no capital gain would probably be pretty easy to justify. I would speak to a tax accountant about your specific situation before doing any of these, but in theory there really is no difference between a virtual world and the real world if cash is exchaged in the real world.
But when I set my mutual fund on "dividends: reinvest", there is never a single moment when I could do whatever I want with the money without selling. It *never* shows up in any cash accout. I simply have more shares one day later. It is *still* tied up in the investments. It meets, in essense, every characteristic of an unrealized gain.
I will agree that we disagree on what constitutes a "meaningful sense", but I would like to point out that you made the choice to set a mutual fund to reinvest. In essence you simply appointed an agent to make your life easier, but you (or your appointed agent) really did get the cash and make the decision to reinvest.
I wouldn't argue against you (I don't agree with the double taxation of dividends in principle)but making a change in the tax code to allow what you desire is essentially turning your mutual fund investment into a traditional IRA. You have to understand that the tax code is more than just a way to get revenue for the government, it is also designed to influence behavior. One of the most current examples was Bush's tax cuts, particularly the allowance of large immediate "depreciation" of the purchase of fixed assets. This was designed to encourage small businesses to buy more (since going beyond the cap of about $400K in capital expenditures reduced this immediate deduction) and it did work. Tax-deferred investments are capped at a limit so that the "wealthy" can't just keep all of their investments there.
My point is that since that money is still invested, it has not yet been realized in any meaningful sense.
I will not try to argue that double taxation is "good" or that money reinvested "shouldn't" be taxed, only that the current tax code taxes coporate profits and then dividends as well as capital gains. In essence when you re-invest dividends it was realized in a meaningful way, you had the opportunity to put it in a checking account, purchase more shares in the same company, or rebalance your portfolio by purchasing another investment. When you cash of of a company (and realize a capital gain/loss)to rebalance your portfolio you have the same options again. So in fact you did realize it in a meaningfull way because you had the opportunity to do whatever you want with that money which was previously tied up in a company. This is exactly why mutual funds often rebalance their portfolios at year end and often sell their losers in order to offset gains and dividends that they realized throughout the year. These funds often repurchase those same shares after waiting the required 30 days.
I am an accountant and you are correct. There are a few issues here though. One is showing intent to turn a profit. This will allow expenses to be used as business deductions.
Alternatively it can be looked at as an investment. As an investment active/pasive rules would apply hence losses can only be set against like category gains. Another problem here is determining the costs basis for the virtual items sold which could be very complex to determine but it possible. It comes down to determining the portion of you stake in the game that was sold and your "investment" in the game. If you want to try to deduct your cost basis maticulous record keeping is the key, both as "investments" are made and the % of your stake in the "investment" sold at the time of sale.
I don't see the difference. Treat the investor as if here were a company. Now, how do you distinguish retaining profits from re-investing dividends?
Retained profits is called retained earnings, these result from net income reported to the IRS. Dividends recieved from other firms end up as part of net income and are taxed approriately (a combination of the owning firms profits/losses, and the percentage of ownership of the other firm determine these rules). A company with a stake of over 80% in another firm doesn't pay taxes on dividends recieved to begin with. If they own less the rules change some but they sre still not taxed on all of the dividends (I'm sorry I can't remember the exact numbers here, but they are in the IRS tax code if you want to sift through it).
Unrealized capital gains can be deferred. Capital gains resulting from rebalancing my portfolio, cannot.
This was my point. If you sell "virtual" items for real money then you have realized the gain. This is how you rebalance your portfolio. One could argue that changing the assets within the game constitute rebalancing, but it could be argued the other way as well since your in game asstets are much like ownership in a company. It isn't "you" that rebalanced your assets, it is the "company" operating in the game. Now if you move assets from one game to another the IRS could have an issues but it could also be argued that all of your in-game characters, even in different games, are part of one large company operating in different "markets" kind of like a multi-industry company.
They would be able to either deduct their monthly access fees or use those as the basis
Exactly... They can be used to offset the gains but not as a standard deduction since there are in essence the investment. Other items can be included as well such as % of other expenses related to playing the game (ie. hardware, Internet connection, office space, etc.).
In order to uses these expenses as a standard busines deduction one would have to show evidence that he/she is attempting to profit from playing the game. Now one would open themselves up to potential audits because one of the most likely way to get audited is to claim something commonly used as a hobby as a business.
Luckily... if I earn 2000 gold in WoW, then spend that 2000 gold on repairs, consumables, gear, etc, I should be able to write the value of that gold off making it a wash. (2000 gold earned, but 2000 gold spent) Or even better, if I start the year at 2000 gold, and end the year at 500 gold, can I claim a loss?
It depends on your in-game expenses. If you buy virtual "luxury items" that don't qualify under the IRS tax code for a deduction then you shouldn't be able to deduct them. In the real world businesses can't deduct all expenditures either. Buying a car isn't tax deductible immediately, a depreciation schedule applies so similar rule should apply here. The IRS would have to determine what those virtual "luxury items" are, and set depreciation schdules for different items, but in continuing with your logical approach to taxing in-game activities the same rules should apply that do in the real world.
The problem is that under that principle, investors could evade taxes. Basically, investors have long salivated at the thought of deferring taxation of all intermediate gains (reinvested dividends) until spent on consumption. (Yes, you can do this with retirement accounts, but I'm talking about once those are maxed out.)
If you exempted those good-as-money gold transactions from taxation, investors could do something similar. Basically, they could set up "pseudo-dollars" that are instantly redeemable for real dollars (and vice versa). Then they would be exempt from dividend taxation until they want to spend the dollars on consumption.
Now, I actually support the idea of allowing deferral of taxation on dividends that are re-invested, but I just wanted to point out the problem (from the IRS's standpoint) of exempting WoW gold.
I would have to disagree with your logic. If the "pseudo-dollars" that are intantly redeemable are never taken out of the game it is much more like a company reinvesting its profits to fund future growth (or holding it for cash reserves) than the investor re-investing dividends. Hence once the money is taken out it is much more like a capital gain since the only method to get the real cash is to "sell" your stake.
Capital gains can be deferred until death under current U.S. law so there is no need to adjust the tax code, the IRS only needs to keep tabs on transactions so that those who profit properly report their cost basis and sales price. If the "investment" in the game is only time the cost basis is zero, if they purchased some of their virtual assets with real money then they have a cost basis to reduce their gains (and we can argue the money spent playing the game such as internet connection, computer hardware, subscription fees, etc should be included in the cost basis and pro-rated on their percentage of use toward the game like other business expenses). One could even argue the active/passive investment rules here (500 hours or more per year involved in managing a business constitute active business activity). I don't really see the difference, and currently I don't think that the IRS does either.
According to Businessweek MS loses $71 on every xbox 360 sold!
You are missing something here, they also get a royalty from every game sold for an XBOX, they get every $ for games they develop, and they get subscription fees for using their online service. Sure, they lose some money on the hardware, but that doesn't mean the XBOX is a loser.
Microsoft for the most part is hemorrhaging cash on all but two fronts in the industry, and that is for how long?
I would love to see your evidence of them hemorrhaging cash. Take a quick look at their financials, read their 10K, or annual report, and show me any evidence of this. Sure, they do a lot of R&D that turns into nothing, but then again, so does Google. Google makes something like 96% of their revenue from one source, online advertising. Want to talk about having all your eggs in one basket?
I am not a big Microsoft fan, but I really don't think they are irrelevant, dead, or anything like that. It is possible to knock them off their block and OS X, Linux, and others have had some success in doing so. They has regularly missed the boat at the early stages of the next generation of products, but when it comes down to it they seem to always come out ahead. Remember Netscape vs. IE, Novel vs. NT, or Word Perfect vs. Word? In each and every case MS was behind to begin with but managed to find a way to unseat their competition. One can always argue that their products are inferior, don't comply with standards, etc. but that doesn't mean anything to the average computer user.
Until I see MS actually losing money I will not really belive that they are dead. MSFT may not lead in every single software area, but they never have. Google is likely to keep their edge in online search, MSFT will probably never even try to unseat some other companies, but that doesn't mean they have died. Even though they are far behind Google in online search they still turn a profit on MSN.
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Well, you are right, paying off the mortage will lead to higher cash flow in the future, but at the cost of lower cash flow now. If you invest wisely in a diversified portfolio consisting of a healthy mix of index funds, mutual funds, bonds, and some cash in a money market you should easily be able to beat the interest cost through gains, dividends, bond payments, etc. over the long haul. Over 10-20 years the market tends to go up at much more than 6% per year (about the real cost of a morgtage after tax, it's hard to say what it really is though since eveyone gets different rates and has different tax rates), bonds tend pay a steady stream at between 5-10% depending on the bond (Treasury bonds are lower right now but even though interest rates have been higher lately they are still lower than the historical average), and a money market will get you about 4% these days and tends to be indexed below the T-Bill rate.
Paying off principle only helps build equity, but if you buy a house and can get it to increase in value you have used the banks money to build your own equity. It is just like leverage in the business world, using someone elses money 9the banks) to make yourself money. Now all of this is not for the feignt of heart, when you loose money the loss is amplified as well. Right now we are seeing a lot of the down side of this because people got crazy in some markets such as FL and SO CAL and just kept buying houses to flip, developers couldn't stop building, and then the number of people looking to move to these areas declined. The developers have a hard time knowing what real demand is because such a large number of their sales were to flippers so the markets got saturated with too many homes. The "bubble" will end and another will come, it is the nature of a market with imperfect information.
If you are close to retirement the situation may change, but this depends on the individual financial picture.
That is a bit nieve, the same currency can have different values. A $ in Kansas will buy you a soft drink in a convenient store, that is probably not the case in NYC (I don't live there so I can't vouch for NY prices, but the point is that there are definately different values place on money in different regions). The way to look at the "value" of a currency (either internationally on exchanges, or regionally within a country using a single currency) is purchasing power parity (PPP). While not foolproof, PPP can be used to compare any good or service such as a Big Mac, a Coca Cola, or a gallon of milk (milk may be bad because government subsidies can mess this example up). While other factors do go into prices than the value of the good and the value of the currency, PPP can be used to show that a $ in Kansas is not the same as a $ in NYC.
Yes, you are correct that things like land do have different values as well, but a currency doesn't really have any true value, it varies from person to person and region to region. Even when the US was on the gold standard, gold's value changed and gold has a different value to different people.
Stocks can trade lower then $0.01. They can trade at fractions. When I watch a streaming stock screen low price shares often trade at the thousandth of a $1 level (usually 1000 shares at $2.225 or somthing like that). People will make trades at thousands of shares at a time at a minimum level hen stocks get really low in price, otherwise it doesn't make sense to pay the fees. I own a stock that was delisted (I never owned too much), now for me to sell it I have to pay about 1/2 the value in a transaction fee so I have just left it as shares, who cares if I lose another $15 or so at this point, I already lost a majority of my initial investment. A single share may not have any realizable value, but if you own 1 million shares valued at $0.001 you still have some value there and in the OTC markets you will run into many stocks valued at fractions of a penny. The bottom limit of shares price (before it truely becomes zero) is $0.01 divided by the maximum number of shares held by any shreholder.
Trademark is actually covered under both state and federal laws.
Hey, if they don't have buzzwords they can't be management material right? :-) Or at least thats what I've learn working on an MBA.
Think about what happens in your office, or the office that this position is in. What problems do they commonly face? If it is a new group that hasn't worked together than think about problems getting new groups together run into. Managers spend a lot of time dealing with people and the problems that people have with each other. Some examples would be simple jelousy problems between people, argumentative behavior (both to coworkers and to superiors), problems determining the best method in the course of completing a project. My list is generic, but once you think about how you expect the team to work together and who is on the team you can figure out what the situations that will occur often will be.
In theis specific situation, where you are looking for a development manager you need to know the experiance levels on the team, and their communication abilities. If the team is an existing team then the manager doesn't need to be a team builder, he/she needs to know how to get a well oiled machine to run better (or know how to fix a borken machine), if the team is new then the manager must have that last skill plus the ability to build the team by using people to their best total potential (sometimes this means a few people don't use all of their potential). That right there gives rise to more questions/situations. You can ask about how they would assign the group (or a fictional group) to different tasks (just give the interviewe a set of experiences for each person and see how they assign them to a given project). Another questions is how the manager would put together a team if hiring all of the new developers. Just put some thought into the situations the interviewe is going to have to face in the field and see how he/she would handle those situations. As the story unfolds during each scenerio make sure to ask follow-up questions if there are holes in their story or throw more kinks in the situation (maybe you are talking about getting the team to meet a deadline and bring up something about two employees getting into an argument so now thye have to solve two problems).
That is a good first step, but you are going to get what they want you to hear, probably almost a quote out of a management book, but it won't do a very good job at getting to what they will be like. A situational interview where a multitude of situations are presented and the interviewee must determine his/her actions. Start with some of the common problems you have faced in the organization nd then move on to some pretty wierd situations. Make sure you take into account that the interviewee may not take the same course of action that you might prefer, but judge it in relation to their stated management philosophy, their other answers, and how you think those that will be under the managers control would see it.
Interviewing is unique for each firm and any direct answer here is probably not worth too much. Every situation has unique challenges and one manager could be great for one firm while horrible for another. Does your team need leadership just to keep them working together, does it need technical guidance, is great on the technical side but just needs a manager to keep them on task? Any of these situations would require a different management style, if you need a technical lead then hire based more on technical ability, of if you really just need someone to cooridinate between the developers and more other development groups but doesn't require too much technical knowledge then hiring someone with good project management skills is probably the most important. Interview questions should always try to see if the person will fit into the culture, has the knowledge required to do the job, and has enthusiasm for the job.
I actually use it several times a year when I go backpacking, but I never count on it working and always keep USGS Topo maps and/or US Forest Service maps and a compass with me so that if my GPS unit fails I don't get lost. The GPS is nice to have in the back country, but more for purposes of tracking my pace, movements, and elevation than for actual navigation. The maps available for the back country tend to be off and are missing a large amount of information on trails so all that I can use in these cases is a the lat/long or UTM info (UTM works much better with Quad maps, but with other maps latitude and longitude work just fine). I think that anyone that really relies on GPS for navigation is just short changing themselves, not know how to read a map and figure out relatively close to where you are is taking a risk.
I am also a private pilot and spend a lot of time on the water. I have never counted on GPS in these situations either, although GPS sure is handy when it comes to getting right back on top of a known fishing spot. When I got my pilot's license GPS was not an approved form of navigation so we learned dead reconing skills and how to read a chart for VFR rules (who knows what they are teching new pilots these days, I haven't flown in a long time and haven't kept myself current). I never got my IFR license so didn't spend too much time with IFR tools like Loran but they can also be quite accurate. I know I could always find an AM radio station with the direction finder (I used it to listen to talk radio more then navigation, but it was fun to know where the stations tower was located). There are plenty of ways to navigate without GPS, most of them just require finding the intersection of two lines and having an idea of where you are in the first place.
What you are using is something we discussed in Economics and I have also read a number of books on the exonomics of crime that allude to your thought process, so from an purely economic standpoint you are correct, it is rational. From a standpoint of living in a socienty in which people have to interact in order to survive, it isn't rational. So making a single statement that has some logic or demonstrates some rational thought doesn't mean that if you look at the bigger picture that it is rational. In the case of Cho, what would have been rational would have been to seek help, go to a smaller school, talked with his parents, or any other action that might have saved those murdered on Monday's lives and his own. You may try and claim that it was rational because he gets to make a statement or some other partly rational case, but what statement did he make other than that he was sick and needed help? The same goes for Eric Harris, the statement he made was that he was sick. Yes, Cho used his name and called him a martyr but that doens't prove anthing. Cho probably would have done this if Columbine never happened, or if Eric Harris never existed. To tell you the truth I bet you know more about Eric Harris and how he thought than Cho did, I think he just pulled a name out of a hat. He probably would have used another mass murderers name instead.
These murderers have no cause they are fighting for, they have simply gone out and killed people for no jusifiable reason. Personally I don't care what any of them have to say in the light of justifying their actions. The only reason I care at all about what they have had to say is for the purpose of being able to spot other troubled individuals and get them help before they go out and start a killing spree.
From what I have gotten from statements by those who knew Cho, there is plent of evidence that he had serious mental health problems. His grandfather said that Cho was problematic from a very young age but his parent didn't have the time or money to seek help. He was known by the local police to have stalked two different women. He wouldn't talk to those that did try to reach out. Everthing I have heard leads me to a conclusion that he was simply insane. The video clips I have seen of his ramblings were just that, ramblings. He said that others could have stopped this from happening but failed to give examples. He seemd to indicate that he had a real problem with rich kids, but when he went on his rampage he didn't go after rich kids, he wen't after a random selection of students and faculty. He said that what he was doing was like the actions of Jesus Christ yet he also made comments about how bad christianity was. His actions didn't seem to be related to his complaints about what was wrong. All of these point to a sick individual, which in this case warrants the term insane. How is is rational to go into a building, kill 2 people, go to the post office and mail some stuff to a news network, then go to another building, kill 28 more, then blow your own brains out? There is no rational reason to do such a thing, quit trying to make a case for his actions being rational when all of the evidence points in the opposite direction.
The same goes for Eric Harris, he had many "reasons" to kill people. None of those reasons are actually acceptible to speople in this world eccept thos that are insane. He also didn't seem to single out those that were his "targets" He also took his own life and you claim his thoughts are rational. Give me one example of it being rational to take your own life. The act of suicide itself is 100% irrational.
I'm sorry but I can't see the thought of premeditated mass murder as being rational. Sure, they may have had some reasoning in their mind that follows some logical process but just the simple fact that these people were thinking about and then commiting mass murder makes them 100% irrational. Thais is exactly why the defense for committing murder in an act of rage is called temporary insanity.
If you ask any tax professional they would tell you that the ideal situation is to have your witholding taxes be smaller than your bill so that at tax time you owe a minimal amount. It is silly to give the IRS an interest free loan, and failure to pay a certain percentage of your annual taxes due during the year results in penalties (which makes sence because you could see it as them giving you a loan). I would agree that it would be beneficial to have to pay your taxes on a regular basis rather than have them withheld for the sake of knowing what you are paying but it really does simplify things to have them withheld. Persoanlly, I don't want to write a check (or have an electronic payment transmitted) every month or so. I also don't think most of us want to pay for the extra oversight that it would entail to manage a regular stream of payments comming in from so many people (hundreds of millions of earners vs. just millions of employers). Having employers make regular payments really does simplify everones life except the employer. I would hate to see the IRS keep the same level of staffing they have during tax time all year, that would be another waste of my tax dollars.
I would have to disagree with your comment on never thinking of it as money since I never see it. I see the line item on my pay stub every pay period for federal witholding. I hate seeing that a significant portion of my pay is taken from me to fund garbage projects like bridges to nowhere. Just because I never see it doesn't mean I don't know that it is missing.
I think that you don't really understand what the tax code has become, a way to encoruage certain activities while discouraging other activities. I would also have to disagree with your idea that we get shafted, because it is not really the same as you think. Yes, we do have to pay on gains, but in essence a gain is income which should be taxed as long as we have an income tax. We don't get to deduct a loss because we, as individuals, don't have the right to claim things such as depreciation.
I don't know what you know about the AMT, but it is a sham. It was originally written bacause of something like 22 millionairs that managed to avoid paying federal taxes by using legal deductions. Because of certain changes in it over the years and a failure to index it to inflation it has now managed to get 2.6 million people. If it isn't changed it will get something like 22 million people for the 2007 tax year. The democrats are blaming Bush's tax cuts for this, but in reality the tax cuts they cite and force certain people to subscribe to the AMT are actually fine with those effected because they would have paid more without the tax cuts. I personally feel that the AMT should be abolished, or rewitten because it is now going to hit the middle class. One other option is to drop the changes made during the early Clinton years to the AMT that are actually causing the AMT to hit these people, but since anything Clinton did is considered to be perfect to those Democrats in congress (and since the biggest proponets of those changes were Pelosi and Rangel), this will never happen. I don't trust congress to fix this, particularly the Democrats because their idea of fixing the tax code is to raise taxes for everyone (since taxes on the rich usually get passed on to the poor through other means). I wouldn't trust the Republicans either because they have lost their sence of fiscal responsibility. I feel for you since it is inevitable that you will eventually be hit with the AMT since it is the only way for congress to finance their proposed budget and it will bring in about $1 trillion over the next decade for congress to spend on more pork barrel projects.
I have spent a lot of time looking into things like the "fair tax" and there are several problems with it. Personally I don't really agree with the idea of redistribution of wealth, which should encourage me to want something like a national sales tax or a flat tax, but they all have certain problems. A national sales tax program would cause all prices to rise, which if offset by the increased disposable income, would be fine, but it causes a problem for people with low incomes. They already struggle to get by and how would this impact their lives? A refund for them doesn't work very well either, because most of people living in this category have a hard time living month to month and a refund would postpone this source of money. A flat tax is also unfair to people with minimal income. Now one could implement a flat tax where people with low incomes (say
You seem to be mixing personal and business tax rules. A business can report a loss on the sale of a car if it is sold below it's cost basis. The cost basis is caluculated by taking the original price and subtracting any depreciation claimed. As an individual people don't get the option of claiming depreciation. Any loss in value of personal assets doesn't matter. If you make a profit on personal assets they do tax you because the gain is seen as a form of income. It can be treated as a capital gain if the asset was held long enough or as regular income if is was held for a short period of time.
If you take a loss on a car, it should be based on true economic depreciation, unless you are in a real hurry to unload it or never bothered to look at a blue book. The government has a set depreciation schedule that has little to do with economic depreciation. It's essentially a double-declining balance method based on a half-year convention. It is not likely that any asset actually loses it's value on such a schedule.
SCO is not in the position to buy back their shares but they do have a very simple option, a reverse split. Although it isn't common and often has a negative effect on the market capitalization of a firm because it is a sign of weakness in the market it will have the needed results. It is quite simple to do, legal, and only requires the board of directors to execute. Shareholders don't even have to agree, although most would if it means the difference between being listed or going the way of an OTC stock.
Share repurchase programs usually don't have a significant effect on price by themselves. The number of shares needed to repurchase, and the cash needed to execute a significant repurchase program often doesn't make it feasible to significantly fix the stock price. Share repurchase programs are usually designed to server one of two puposes: to signify that management thinks the company is undervalued, or to consolidate ownership. The second option is only used when a company has piles of cash and it accounts for more than 10-15% of the market cap. Smaller programs tend to be used to accumulate treasury stock while the price is low, then re-sell that stock as the price gets at or above where management thinks it should be in order to raise capital without issuing more debt.
When did they have a good name?
So you are telling me that I should base science on a political group? That sounds like listening to the Pope in the middle ages telling people that the earth is the center of the universe and the debate is over.
There is no need to get the SEC involved. They only involve themselves in regulated securities exchanges, or in other words pubicly listed companies. Unless you are attempting to sell stock in your in-game "investment" then they have no juristiction. When "mom and pop" open a store (another form of investment) they don't regulate that and this would be a similar situation.
Insider trading can only occur when you use non-public informtion in regard to publicly traded companies.
Owning a business is a form of investing. Running is a business is a job and generally a salaried position even in privately owned small businesses. The act of investing is contributing something of value (time doesn't count for the IRS, but any property with value does). Even though most small buinesses owners are in a management position the two categories are different. The IRS has rule governing investments and if a business is activily managed by the investor the investment is treated differently than if the investment isn't run by the owner (active/passive treatment). Actively managed businesses (most WoW and SL players would fit into this since it requires 500 hours per year to count) can use losses from the business to offset regular income while passivly managed business losses can only be offset against other passive losses (these can be carried forward for up to 20 years and backward 2 years if I have my numbers correct but this applies to both categories).
I wouldn't recommend trying to use MMORPG's as a way to constitute a business though unless you really can demonstrate an intent to turn a profit. If you are on EBay buying and selling virtual goods in exchange for cash you probably would have a case but the odds of an audit are probably over 50%. One of the best ways to get an audit is to take something that is usually considered a hobby and claim it as a business. It would be much easier to deduct expenses against capital gains so that if you sell virtual goods on EBay you won't have a gain but here accurate records of expenses used in the "investment" are key as well as any % stake in the game being sold at any given time. I can't say how they would treat having losses on your investment in a virtual world to offset gains in something considered less virtual, but claiming a that there was no capital gain would probably be pretty easy to justify. I would speak to a tax accountant about your specific situation before doing any of these, but in theory there really is no difference between a virtual world and the real world if cash is exchaged in the real world.
I will agree that we disagree on what constitutes a "meaningful sense", but I would like to point out that you made the choice to set a mutual fund to reinvest. In essence you simply appointed an agent to make your life easier, but you (or your appointed agent) really did get the cash and make the decision to reinvest.
I wouldn't argue against you (I don't agree with the double taxation of dividends in principle)but making a change in the tax code to allow what you desire is essentially turning your mutual fund investment into a traditional IRA. You have to understand that the tax code is more than just a way to get revenue for the government, it is also designed to influence behavior. One of the most current examples was Bush's tax cuts, particularly the allowance of large immediate "depreciation" of the purchase of fixed assets. This was designed to encourage small businesses to buy more (since going beyond the cap of about $400K in capital expenditures reduced this immediate deduction) and it did work. Tax-deferred investments are capped at a limit so that the "wealthy" can't just keep all of their investments there.
I will not try to argue that double taxation is "good" or that money reinvested "shouldn't" be taxed, only that the current tax code taxes coporate profits and then dividends as well as capital gains. In essence when you re-invest dividends it was realized in a meaningful way, you had the opportunity to put it in a checking account, purchase more shares in the same company, or rebalance your portfolio by purchasing another investment. When you cash of of a company (and realize a capital gain/loss)to rebalance your portfolio you have the same options again. So in fact you did realize it in a meaningfull way because you had the opportunity to do whatever you want with that money which was previously tied up in a company. This is exactly why mutual funds often rebalance their portfolios at year end and often sell their losers in order to offset gains and dividends that they realized throughout the year. These funds often repurchase those same shares after waiting the required 30 days.
I am an accountant and you are correct. There are a few issues here though. One is showing intent to turn a profit. This will allow expenses to be used as business deductions.
Alternatively it can be looked at as an investment. As an investment active/pasive rules would apply hence losses can only be set against like category gains. Another problem here is determining the costs basis for the virtual items sold which could be very complex to determine but it possible. It comes down to determining the portion of you stake in the game that was sold and your "investment" in the game. If you want to try to deduct your cost basis maticulous record keeping is the key, both as "investments" are made and the % of your stake in the "investment" sold at the time of sale.
Retained profits is called retained earnings, these result from net income reported to the IRS. Dividends recieved from other firms end up as part of net income and are taxed approriately (a combination of the owning firms profits/losses, and the percentage of ownership of the other firm determine these rules). A company with a stake of over 80% in another firm doesn't pay taxes on dividends recieved to begin with. If they own less the rules change some but they sre still not taxed on all of the dividends (I'm sorry I can't remember the exact numbers here, but they are in the IRS tax code if you want to sift through it).
This was my point. If you sell "virtual" items for real money then you have realized the gain. This is how you rebalance your portfolio. One could argue that changing the assets within the game constitute rebalancing, but it could be argued the other way as well since your in game asstets are much like ownership in a company. It isn't "you" that rebalanced your assets, it is the "company" operating in the game. Now if you move assets from one game to another the IRS could have an issues but it could also be argued that all of your in-game characters, even in different games, are part of one large company operating in different "markets" kind of like a multi-industry company.
Exactly... They can be used to offset the gains but not as a standard deduction since there are in essence the investment. Other items can be included as well such as % of other expenses related to playing the game (ie. hardware, Internet connection, office space, etc.).
In order to uses these expenses as a standard busines deduction one would have to show evidence that he/she is attempting to profit from playing the game. Now one would open themselves up to potential audits because one of the most likely way to get audited is to claim something commonly used as a hobby as a business.
It depends on your in-game expenses. If you buy virtual "luxury items" that don't qualify under the IRS tax code for a deduction then you shouldn't be able to deduct them. In the real world businesses can't deduct all expenditures either. Buying a car isn't tax deductible immediately, a depreciation schedule applies so similar rule should apply here. The IRS would have to determine what those virtual "luxury items" are, and set depreciation schdules for different items, but in continuing with your logical approach to taxing in-game activities the same rules should apply that do in the real world.
I would have to disagree with your logic. If the "pseudo-dollars" that are intantly redeemable are never taken out of the game it is much more like a company reinvesting its profits to fund future growth (or holding it for cash reserves) than the investor re-investing dividends. Hence once the money is taken out it is much more like a capital gain since the only method to get the real cash is to "sell" your stake.
Capital gains can be deferred until death under current U.S. law so there is no need to adjust the tax code, the IRS only needs to keep tabs on transactions so that those who profit properly report their cost basis and sales price. If the "investment" in the game is only time the cost basis is zero, if they purchased some of their virtual assets with real money then they have a cost basis to reduce their gains (and we can argue the money spent playing the game such as internet connection, computer hardware, subscription fees, etc should be included in the cost basis and pro-rated on their percentage of use toward the game like other business expenses). One could even argue the active/passive investment rules here (500 hours or more per year involved in managing a business constitute active business activity). I don't really see the difference, and currently I don't think that the IRS does either.
You are missing something here, they also get a royalty from every game sold for an XBOX, they get every $ for games they develop, and they get subscription fees for using their online service. Sure, they lose some money on the hardware, but that doesn't mean the XBOX is a loser.
I would love to see your evidence of them hemorrhaging cash. Take a quick look at their financials, read their 10K, or annual report, and show me any evidence of this. Sure, they do a lot of R&D that turns into nothing, but then again, so does Google. Google makes something like 96% of their revenue from one source, online advertising. Want to talk about having all your eggs in one basket?
I am not a big Microsoft fan, but I really don't think they are irrelevant, dead, or anything like that. It is possible to knock them off their block and OS X, Linux, and others have had some success in doing so. They has regularly missed the boat at the early stages of the next generation of products, but when it comes down to it they seem to always come out ahead. Remember Netscape vs. IE, Novel vs. NT, or Word Perfect vs. Word? In each and every case MS was behind to begin with but managed to find a way to unseat their competition. One can always argue that their products are inferior, don't comply with standards, etc. but that doesn't mean anything to the average computer user.
Until I see MS actually losing money I will not really belive that they are dead. MSFT may not lead in every single software area, but they never have. Google is likely to keep their edge in online search, MSFT will probably never even try to unseat some other companies, but that doesn't mean they have died. Even though they are far behind Google in online search they still turn a profit on MSN.