I googled and got 2 bedroom apartments at $4k very easily.
however, craigslist probably has more reasonable "working stiff" prices.
Generally, rooms there vary from $1450 for 1br to $3599 for a "HUGE" 1800 sq foot 3 bedroom apartment (I pay 1/5th that for the same footage not counting a 16x23 added room for storage/fall/winter time).
There appears to be a real deal for $600 a month at 21 S End Ave. Pet friendly-- 1br (fits a queen so 9x9 most likely).
OTH, the financial district wants $1900 for a 1 bedroom. Prices range from $1600 to $3900 for 1br apartments.
For $4166 / month, you can get a 4000+ square foot mansion on a a multi acre lot within 30 miles of your work in Texas. Or you can get a pretty spectacular apartment/condominium.
I didn't pull the price out of my ass- it was from comments about housing in movies set in new york plus comments read on "friends" message boards about how ridiculous their apartment was compared to what they would have to have paid for it.
It's expensive to live in california and new york.
It's going to be damn hard for programmers there to compete with some guy in india who can live in a mansion with two servants for $15,000 a year.
In Texas, for $2000-$3000, you can get a 2,700 square foot house with a pool close-in or a 3500 square foot house about 25 miles from downtown (an hours drive with traffic if you work downtown- but 35-40 minutes sideways around town.
Food is excellent, cheap, plentiful.
The climate is very hot and miserable 8-9 months of the year.
Up north, the climate is very cold and miserable for a 2-3 months right?
As some others have said in the thread, it depends on your values and what bugs you.
To some, living in a 2 bedroom apartment for $36,000 per year (half the purchase price of my house 9 years ago) is worth the cultural scene and other benefits that come from new york. To some $700,000 for a 3 bedroom 2 bath house in California is worth it for the ever sunny climate and california values.
The car is admittedly a major point-- it costs about $4k a year to stay in a used, reliable car or $6k a year for a new car ($7k/year for a luxury car).
$15k a year... so about $1250 a month for 450 square feet?
Sounds like a nice place for a single person- but for a family and a dog?
My computer room I'm sitting in is 225 sq' feet. My house is tiny at about 1800 square feet and runs 400 a month + 300 in taxes a year.
The others make some good points about a good climate meaning you can spend more time outside.
The heat doesn't bother me (spent 4-5 hours a day this weekend playing disk golf outside) but it does bother a lot of people. When I go to places with a "great dry climate", my nose and lips start cracking and bleeding- so I guess it depends on what climate is best suited for you.
The climate is very nice here 8 to 9 months a year-- just the opposite months of elsewhere. Late september to late may is nice. No real winter.
As for the rest- I can't vouch for what other people are saving, or doing in addition to having a living space with a pool table, home theatre, etc... A lot of people who I thought were well off turn out to have been overextended now that the economy has retreated.
http://www.pricechecktokyo.com/housing.html Here is the rough idea for Tokyo on the web for rentals... Right now it is about 100 yen to the dollar (actually about 95ish) so divide by 100.
Low end of the rental market
For ¥35,000 a month, one can rent a 12 square-meters room. Such a room would have a sink inside and perhaps a stove for cooking. It would not have a toilet nor a bathroom. The community Japanese-style toilet (often being referred to as a "hole in the ground") is shared among six or seven people. To take a bath, one must visit the local public bath, at a cost of about ¥700 per use. We can't tell you exactly how many Tokyo residents live in places like these but there are a lot.
Top end of the rental market
These are properties geared towards the western expatriate executives. These houses would have American-sized electrical appliances which are too big to fit in most Tokyo apartments. Places like these would be 150 to 300 square-meters in size and the rent would range from ¥1,000,000 to ¥2,500,000 a month.
Owning a place
The average-of-the-average Tokyo married-couple may be looking to buy a brand-new 70 square-meters apartment at a cost of ¥45,000,000 and above.
Notes
Building standards and architectural designs here is quite different. For example, even for apartments with a floor space of about 100 square-meters, it is rare to find ones with two bathrooms and/or two toilets. That may seem strange to foreigners but the fact that Japanese families tend to share the same tub of water for bathing every night, it is merely practical to have only one bathroom in the house. Moreover, a 70 square-meter apartment would be marketed as a 3-bedroom apartment, i.e. rooms are small.
My house is 6 miles from downtown-- very good location. Lots of free/low cost shows, concerts but nothing like other cities. A cartel has basically squashed entertainment here. You sign-- or you don't play the clubs they control. As a club, you sign, or you don't get any signed bands.
From my experience-- in Texas-- living well starts at about $105k. At that point, you have a good life and about $1k a month to blow while still saving.
Below that, you can do things- but you have to make hard choices. At $105k+, you can pretty much do what you want. Get the hot tub, big car, pool AND still go skiing and on a trip to Europe while having cable TV and eating out (4,000 restaurants in Houston).
Housing is a lot cheaper in Texas because there are no artificial land restrictions-- the trade off is that a car is required (which New York does not require). My experience with San Francisco was that a car was needed. But I wasn't there long so maybe I just didn't figure out the ropes.
My friends who lived in california eventually could not afford a house. And after downsizing living quarters a couple time, they finally left california.
Not sure if you have a wife, kids, pets. Your costs sound like a bargain if so.
We had a lot of people in 2007 and 2008 moving here and buying frikkin mansions here and still having $200k to $400k left over from selling their houses in California.
A 1800 square foot house payment is about $400 plus $300 for taxes.
shows $50,000 in Texas requires $92,591.83 in San Francisco to have the same standard of living. $50,000 in Texas requires $123,152.79. in New York (Manhattan) to have the same standard of living.
It's not so much that it can't be taught as it can be completely squeezed out of the children by the time they reach college age. The bar is *very* high in india-- you either pass or you are screwed and may as well kill yourself (as about 3,000 a year do).
Who wants to be "creative" in that kind of environment- you want to master the material and get the best possible grade. Creativity has no value until you are a grad student anyway.
Americans tend to overvalue creativity from an early age-- wasting a lot of opportunities to be good worker bees. The result is poorly trained but creative individuals.
I saw it this way once...
American tries a thousand ways to draw a fish and finally masters drawing a fish. All along the way they are creatively making variations of the fish. Chinese are taught the one perfect way to draw a fish. Once drawing a fish that way is mastered, then they start creatively varying on the mastered fish.
The sub-masters in China would be less creative while the sub-masters in America would be more creative.
The masters in both cases are basically equally creative.
---
I don't know for sure about Indians. Mainly- they just seem less bright and more "yes men" than they were in 2002-2003. I think the bright ones were promoted and the tremendous demand means that we now have bachelors degree types competing against our bachelors degree types where we used to have their masters degree and doctorate candidates competing against our bachelors degree types.
So now they are average decent coders-- who are not as creative (because the creative types were filtered out by their culture, schooling system and national exams), more prone to agree to things which are impossible, and (slightly) lacking in communication skills.
I could live well on that wage in the middle of the country-- but it would be impossible in the upper east coast or the west coast.
Consider that it would take the average indian programmer about 70 years to earn as a gross income enough to buy a "middle class" house in California. Rathole apartments are $50,000 a year in New York.
They've been working up to outlawing eating fattening foods-- you can see it in the research being funded and articles in the paper and magazines.
So now what? Force you to eat if you are underweight (70%??? Wow!)?
BMI is also a problem. I'm 268-- 6'5". My doc says I should be 235.
Problem is I have a six pack, visible veins sticking out on my arms and legs, and you can see individual muscle sections moving when I move. So I'm fairly lean. But my BMI is high. I can lose weight- probably 25 pounds-- no one thinks I can make 235-- not even the doctor any more. I'd have to burn off muscle to hit that weight.
Since you can buy chargers for $9 to $14 at the local walmart (I have one for my office, home, car), there is not much lockin.
But it is idiotic. There should be one kind of charger. Then chargers would be $5. And you would have a lot less waste (my last phone chargers became junk when I changed phones). I can use the same micro-sd memory card on my various phones-- that's nice for transferring data. And I can plug them into my laptop.
Multiple charger formats is as dumb as having more than 5 or 6 kinds of alternators.
I would be for a 28 year copyright, definitely not decriminalizing personal file sharing, for unlimited personal use of a given material in any format once it is purchased in one format, and clauses that allow commercial use of a product if a regular and escalating monetary fee is not paid.
personal file sharing can be larger than some older commercial file sharing was.
We want to encourage creation of works with a 28 year window- we do not want to lock up our culture in perpetual copyright to immortal corporations.
There was a free converter that converted RPGIII to RPGIV if you wanted to have "Rpg3 in Rpg4 format".
But if you wanted improved error handling, files as objects, support for external calls to java, embedded SQL, better transaction control boundaries, you needed to do a more complete conversion.
I agree with your objections and have seen these problems so many times over the last decade that it is getting hard to believe that someone can't write a decent translator.
Java is usually very easy to refactor (smart editors).
It seems like a two or even three stage pass would work.
Stage one, COBOL to raw java. Stage two, raw java to better formatted java. Stage three, better formatted java to even better formatted java.
I wrote an RPG3 to RPG4 converter back in 2000. It used 5 passes-- each a small simple program. The result was actually fairly close to procedural java-- if we had decided to go with java, I could have written a 6th program to do that conversion.
Your commodity hedges will be taxed (potentially at 50%) Tips are based on CPI and the govt is manipulating and perhaps even outright lying about CPI since Clinton.
I expect inflation-- but realize I can't really know the future. So I hedge 10% in commodities, 10% in overseas markets.
That might increase over time.
With the government involved, it really always turns into a game of "heads we win, tails you lose".
I expect for every dollar I take out of my Roth in 20 years, that I'll lose a dollar of Social Security benefits (essentially negating my savings). Meanwhile people who saved nothing will get 75% benefits... so I'll come out very mildly ahead.
And have missed big cars, houses, exotic vacations, and tons of snatch in return for not eating dog food when I'm 70.
If I don't die before 70.
And if we don't have a world war, fatal pandemic, asteroid strike, etc.
Only bonds are safe. Equities are never safe and you can get zero return for a couple decades.
If your time frame is 100 years, then cool. But as as a human being, from the time you are 40 until you are 60, you could get zero return on your money while inflation ate half of it's purchasing power.
I like his solar idea because it is very bond like.
He has an almost certain rate of return (unless electricity drops in price).
Assuming he gets 5% in a CD and pays.28% fed tax and 10% california tax, he'll actually end up with about 3.9% return on his investment.
Two problems-- * a period of high inflation is really likely since the government has created a couple trillion bucks out of nothing. * Social security issues make it likely the tax rate will rise to over 28% (if nothing else, they may inflate him into the 36% bracket-- he's probably already hit by AMT).
Next issue is that historically, power triples every 20 years unless you are by a hydro-electric plant or something like that. Nuclear energy doesn't help much- we have that in Texas and it just gets charged out at the highest rate (I assume they make a higher profit when natural gas and other fuels get expensive). So anyway, the 3% inflation assumption is a bit low. I don't think it is unreasonable to see a return curve more like this...
I'm sure there are a gazillion problems we havn't considered. But every dollar saved, is a dollar you don't have to pay taxes on so you get the full benefit of the dollar.
How much money would he have to save to produce $3000 after tax income.
Assuming 10% calif taxes and 28% federal taxes, that's about 4838 pre-tax income to support that amount of payment from net income. Assuming 3.75% bonds (equities would be way too risky), he would need about $129,000 to produce that income stream. If he had $50k, he could probably get 6%+ safely in corporate bonds but most solar setups seem to be below that amount.
So by investing $38,000 he has produced an income stream equivalent to saving $129,000.
If the price of electricity goes up, that would go up in a leveraged fashion. So if electricity doubled (likely) over 10 years, then it would be like $260,000.
OTH, if interest rates rose to 7.5% (also likely), then it would be like $65,000.
If he retires, then he will not have to take out money from his 401k to pay for electricity-- avoiding a taxable event.
Inverters and batteries will break and be more expensive to replace in the future. Panels should last a very long time.
I wonder if he could incrementally add new panels to increase the savings effectively.
My mini-plan is to set up a non-grid tied system to run an air conditioner (to lower my daytime air conditioning needs and thus trim off the most expensive electricity usage).
If he had put $38,000 in the market 12 months ago, it would be worth a lot less.
He has a near guaranteed rate of return of 7.8% which is the average for the stock market. Further, he doesn't have to pay taxes on that return (it's money not spent, not money earned).
When he retires, he won't have to take $4,900 a year out of his 401k/ira (and pay $900 in income taxes) to pay his power bill. (and that only gets higher going forward-- 50% income tax is possible as we struggle to pay for social security in 15 years).
Panels are not the likely issues. Panels are in the 20-30 year range (tho at 80% power).
Inverters and batteries are the issue. Inverters can go bad every 5-7 years and batteries more frequently than that.
On the plus side... power seems to be ~280% more expensive over 20 year periods that I researched. 2 cents in 1968, 5 cents in 1988, 15 cents in 2008.
So in 10 years, presumably, his power bills will be about double what they are now.
And that assumes no period of high inflation-- recent government printing of money could lead to a period of high inflation. If we return to 1980's inflation, his project could pay off very quickly.
And no period of energy bill increases-- if oil quickly returns to over $100 a barrel and natural gas doubles-- then electric bills could go up a lot.
Of course if we get a period of hyperinflation (20%-70%+), then he will have hit the jackpot.
Because a native might provide information on the secondary taxes not listed on that page.
It is a great page, but it doesn't come close to the total tax load.
In the US, the stated tax rate is 28% on the page. In reality, it's much higher. So I know that the rate on that page doesn't include.
Social security Taxes (7.5%) -- except for rich people.. who it can be.1% or less (esp if they structure their income as dividends) Employer portion of social security (7.5%) -- except for rich people.. who it can be.1% or less (esp if they structure their income as dividends) Sales Taxes (5-8%-- higher some places) Metropolitan bus service taxes (1%) Gasoline taxes (low because they forgot to index for inflation) Property taxes cigarette taxes (now more than the purchase price of the cigarettes in many states) alchohol taxes (usually over 10% but under 50% of the purchase price) Car taxes (usually fairly low) Telephone taxes (higher than the bill portion of my land line) Electricity taxes Water Taxes (not the water bill- the tax portion usually phrased as a sewer fee) Mud taxes Trash collection taxes... There are over 50 common taxes the last time I saw the list. ---
Our tax system is regressive on people in the middle-- about $20k to about $80k. While they are highly aggressive against people below $20k- they also have tax credits for them which mitigates the hit a bit.
---
Then when you include corporate taxes which corporations usually pass straight through to the consumer, the rate is almost always over 50% tax load.
They've just found a lot of ways to hide it.
Just like in our last election, they had bills to "vote yes to give permission to sell 50 million in 10 year bonds to cover police pension funding, old people, children, new schools, free beer for everyone"... when what it really meant was "vote yes to raise taxes by 50 million dollars over the next 10 years so we can give out these benefits".
Slashdot Mirror
I googled and got 2 bedroom apartments at $4k very easily.
however, craigslist probably has more reasonable "working stiff" prices.
Generally, rooms there vary from $1450 for 1br to $3599 for a "HUGE" 1800 sq foot 3 bedroom apartment (I pay 1/5th that for the same footage not counting a 16x23 added room for storage/fall/winter time).
There appears to be a real deal for $600 a month at 21 S End Ave.
Pet friendly-- 1br (fits a queen so 9x9 most likely).
OTH, the financial district wants $1900 for a 1 bedroom. Prices range from $1600 to $3900 for 1br apartments.
For $4166 / month, you can get a 4000+ square foot mansion on a a multi acre lot within 30 miles of your work in Texas.
Or you can get a pretty spectacular apartment/condominium.
I didn't pull the price out of my ass- it was from comments about housing in movies set in new york plus comments read on "friends" message boards about how ridiculous their apartment was compared to what they would have to have paid for it.
It's expensive to live in california and new york.
It's going to be damn hard for programmers there to compete with some guy in india who can live in a mansion with two servants for $15,000 a year.
In Texas, for $2000-$3000, you can get a 2,700 square foot house with a pool close-in or a 3500 square foot house about 25 miles from downtown (an hours drive with traffic if you work downtown- but 35-40 minutes sideways around town.
Food is excellent, cheap, plentiful.
The climate is very hot and miserable 8-9 months of the year.
Up north, the climate is very cold and miserable for a 2-3 months right?
As some others have said in the thread, it depends on your values and what bugs you.
To some, living in a 2 bedroom apartment for $36,000 per year (half the purchase price of my house 9 years ago) is worth the cultural scene and other benefits that come from new york. To some $700,000 for a 3 bedroom 2 bath house in California is worth it for the ever sunny climate and california values.
The car is admittedly a major point-- it costs about $4k a year to stay in a used, reliable car or $6k a year for a new car ($7k/year for a luxury car).
$15k a year... so about $1250 a month for 450 square feet?
Sounds like a nice place for a single person- but for a family and a dog?
My computer room I'm sitting in is 225 sq' feet. My house is tiny at about 1800 square feet and runs 400 a month + 300 in taxes a year.
The others make some good points about a good climate meaning you can spend more time outside.
The heat doesn't bother me (spent 4-5 hours a day this weekend playing disk golf outside) but it does bother a lot of people.
When I go to places with a "great dry climate", my nose and lips start cracking and bleeding- so I guess it depends on what climate is best suited for you.
The climate is very nice here 8 to 9 months a year-- just the opposite months of elsewhere. Late september to late may is nice. No real winter.
As for the rest- I can't vouch for what other people are saving, or doing in addition to having a living space with a pool table, home theatre, etc... A lot of people who I thought were well off turn out to have been overextended now that the economy has retreated.
http://www.pricechecktokyo.com/housing.html
Here is the rough idea for Tokyo on the web for rentals...
Right now it is about 100 yen to the dollar (actually about 95ish) so divide by 100.
Low end of the rental market
For ¥35,000 a month, one can rent a 12 square-meters room. Such a room would have a sink inside and perhaps a stove for cooking. It would not have a toilet nor a bathroom. The community Japanese-style toilet (often being referred to as a "hole in the ground") is shared among six or seven people. To take a bath, one must visit the local public bath, at a cost of about ¥700 per use. We can't tell you exactly how many Tokyo residents live in places like these but there are a lot.
Top end of the rental market
These are properties geared towards the western expatriate executives. These houses would have American-sized electrical appliances which are too big to fit in most Tokyo apartments. Places like these would be 150 to 300 square-meters in size and the rent would range from ¥1,000,000 to ¥2,500,000 a month.
Owning a place
The average-of-the-average Tokyo married-couple may be looking to buy a brand-new 70 square-meters apartment at a cost of ¥45,000,000 and above.
Notes
Building standards and architectural designs here is quite different. For example, even for apartments with a floor space of about 100 square-meters, it is rare to find ones with two bathrooms and/or two toilets. That may seem strange to foreigners but the fact that Japanese families tend to share the same tub of water for bathing every night, it is merely practical to have only one bathroom in the house. Moreover, a 70 square-meter apartment would be marketed as a 3-bedroom apartment, i.e. rooms are small.
My house is 6 miles from downtown-- very good location. Lots of free/low cost shows, concerts but nothing like other cities. A cartel has basically squashed entertainment here. You sign-- or you don't play the clubs they control. As a club, you sign, or you don't get any signed bands.
It's not living well.
$50,000 is not living well in Texas.
From my experience-- in Texas-- living well starts at about $105k. At that point, you have a good life and about $1k a month to blow while still saving.
Below that, you can do things- but you have to make hard choices. At $105k+, you can pretty much do what you want. Get the hot tub, big car, pool AND still go skiing and on a trip to Europe while having cable TV and eating out (4,000 restaurants in Houston).
Housing is a lot cheaper in Texas because there are no artificial land restrictions-- the trade off is that a car is required (which New York does not require). My experience with San Francisco was that a car was needed. But I wasn't there long so maybe I just didn't figure out the ropes.
My friends who lived in california eventually could not afford a house. And after downsizing living quarters a couple time, they finally left california.
Not sure if you have a wife, kids, pets. Your costs sound like a bargain if so.
We had a lot of people in 2007 and 2008 moving here and buying frikkin mansions here and still having $200k to $400k left over from selling their houses in California.
A 1800 square foot house payment is about $400 plus $300 for taxes.
More power to you... but
http://www.bankrate.com/calculators/savings/moving-cost-of-living-calculator.aspx
shows
$50,000 in Texas requires $92,591.83 in San Francisco to have the same standard of living.
$50,000 in Texas requires $123,152.79. in New York (Manhattan) to have the same standard of living.
It's not so much that it can't be taught as it can be completely squeezed out of the children by the time they reach college age.
The bar is *very* high in india-- you either pass or you are screwed and may as well kill yourself (as about 3,000 a year do).
Who wants to be "creative" in that kind of environment- you want to master the material and get the best possible grade. Creativity has no value until you are a grad student anyway.
Americans tend to overvalue creativity from an early age-- wasting a lot of opportunities to be good worker bees. The result is poorly trained but creative individuals.
I saw it this way once...
American tries a thousand ways to draw a fish and finally masters drawing a fish. All along the way they are creatively making variations of the fish.
Chinese are taught the one perfect way to draw a fish. Once drawing a fish that way is mastered, then they start creatively varying on the mastered fish.
The sub-masters in China would be less creative while the sub-masters in America would be more creative.
The masters in both cases are basically equally creative.
---
I don't know for sure about Indians. Mainly- they just seem less bright and more "yes men" than they were in 2002-2003. I think the bright ones were promoted and the tremendous demand means that we now have bachelors degree types competing against our bachelors degree types where we used to have their masters degree and doctorate candidates competing against our bachelors degree types.
So now they are average decent coders-- who are not as creative (because the creative types were filtered out by their culture, schooling system and national exams), more prone to agree to things which are impossible, and (slightly) lacking in communication skills.
I could live well on that wage in the middle of the country-- but it would be impossible in the upper east coast or the west coast.
Consider that it would take the average indian programmer about 70 years to earn as a gross income enough to buy a "middle class" house in California.
Rathole apartments are $50,000 a year in New York.
Similar issues would exist in Tokyo.
They've been working up to outlawing eating fattening foods-- you can see it in the research being funded and articles in the paper and magazines.
So now what? Force you to eat if you are underweight (70%??? Wow!)?
BMI is also a problem. I'm 268-- 6'5". My doc says I should be 235.
Problem is I have a six pack, visible veins sticking out on my arms and legs, and you can see individual muscle sections moving when I move. So I'm fairly lean.
But my BMI is high. I can lose weight- probably 25 pounds-- no one thinks I can make 235-- not even the doctor any more. I'd have to burn off muscle to hit that weight.
Since you can buy chargers for $9 to $14 at the local walmart (I have one for my office, home, car), there is not much lockin.
But it is idiotic. There should be one kind of charger. Then chargers would be $5. And you would have a lot less waste (my last phone chargers became junk when I changed phones).
I can use the same micro-sd memory card on my various phones-- that's nice for transferring data. And I can plug them into my laptop.
Multiple charger formats is as dumb as having more than 5 or 6 kinds of alternators.
I would be for a 28 year copyright, definitely not decriminalizing personal file sharing, for unlimited personal use of a given material in any format once it is purchased in one format, and clauses that allow commercial use of a product if a regular and escalating monetary fee is not paid.
personal file sharing can be larger than some older commercial file sharing was.
We want to encourage creation of works with a 28 year window- we do not want to lock up our culture in perpetual copyright to immortal corporations.
Sort of.
There was a free converter that converted RPGIII to RPGIV if you wanted to have "Rpg3 in Rpg4 format".
But if you wanted improved error handling, files as objects, support for external calls to java, embedded SQL, better transaction control boundaries, you needed to do a more complete conversion.
I agree with your objections and have seen these problems so many times over the last decade that it is getting hard to believe that someone can't write a decent translator.
Java is usually very easy to refactor (smart editors).
It seems like a two or even three stage pass would work.
Stage one, COBOL to raw java.
Stage two, raw java to better formatted java.
Stage three, better formatted java to even better formatted java.
I wrote an RPG3 to RPG4 converter back in 2000.
It used 5 passes-- each a small simple program.
The result was actually fairly close to procedural java-- if we had decided to go with java, I could have written a 6th program to do that conversion.
I wonder how many people missed your joke.
Even with the italics.
Just remember that
Your commodity hedges will be taxed (potentially at 50%)
Tips are based on CPI and the govt is manipulating and perhaps even outright lying about CPI since Clinton.
I expect inflation-- but realize I can't really know the future.
So I hedge 10% in commodities, 10% in overseas markets.
That might increase over time.
With the government involved, it really always turns into a game of "heads we win, tails you lose".
I expect for every dollar I take out of my Roth in 20 years, that I'll lose a dollar of Social Security benefits (essentially negating my savings).
Meanwhile people who saved nothing will get 75% benefits... so I'll come out very mildly ahead.
And have missed big cars, houses, exotic vacations, and tons of snatch in return for not eating dog food when I'm 70.
If I don't die before 70.
And if we don't have a world war, fatal pandemic, asteroid strike, etc.
30 year warranties are like the pension guarantees offered to auto workers.
In all my experience, only Sears was that reliable.
Picture it this way... give me money today (a $20).. and I'll guarantee that I'll give you $80 in 30 years.
Trust me.
You might want to look a 1962 to 1982.
And several other similar periods.
Only bonds are safe. Equities are never safe and you can get zero return for a couple decades.
If your time frame is 100 years, then cool. But as as a human being, from the time you are 40 until you are 60, you could get zero return on your money while inflation ate half of it's purchasing power.
I like his solar idea because it is very bond like.
He has an almost certain rate of return (unless electricity drops in price).
5.7% tax free is actually pretty studly.
Also, adjusting for wimpy inflation of 3%...
3000 1 3000
2940 1.03 3028.2
2880 1.06 3055.39
2820 1.09 3081.49
2760 1.13 3106.4
2700 1.16 3130.04
2640 1.19 3152.3
2580 1.23 3173.07
2520 1.27 3192.26
2460 1.3 3209.74
Assuming he gets 5% in a CD and pays .28% fed tax and 10% california tax, he'll actually end up with about 3.9% return on his investment.
Two problems--
* a period of high inflation is really likely since the government has created a couple trillion bucks out of nothing.
* Social security issues make it likely the tax rate will rise to over 28% (if nothing else, they may inflate him into the 36% bracket-- he's probably already hit by AMT).
Next issue is that historically, power triples every 20 years unless you are by a hydro-electric plant or something like that. Nuclear energy doesn't help much- we have that in Texas and it just gets charged out at the highest rate (I assume they make a higher profit when natural gas and other fuels get expensive).
So anyway, the 3% inflation assumption is a bit low. I don't think it is unreasonable to see a return curve more like this...
3000 1 3000
2940 1.05 3087
2880 1.1 3175.2
2820 1.16 3264.5
2760 1.22 3354.8
2700 1.28 3445.96
2640 1.34 3537.85
2580 1.41 3630.32
2520 1.48 3723.19
2460 1.55 3816.27
Which is only 5% inflation.
I'm sure there are a gazillion problems we havn't considered. But every dollar saved, is a dollar you don't have to pay taxes on so you get the full benefit of the dollar.
How much money would he have to save to produce $3000 after tax income.
Assuming 10% calif taxes and 28% federal taxes, that's about 4838 pre-tax income to support that amount of payment from net income.
Assuming 3.75% bonds (equities would be way too risky), he would need about $129,000 to produce that income stream. If he had $50k, he could probably get 6%+ safely in corporate bonds but most solar setups seem to be below that amount.
So by investing $38,000 he has produced an income stream equivalent to saving $129,000.
If the price of electricity goes up, that would go up in a leveraged fashion.
So if electricity doubled (likely) over 10 years, then it would be like $260,000.
OTH, if interest rates rose to 7.5% (also likely), then it would be like $65,000.
If he retires, then he will not have to take out money from his 401k to pay for electricity-- avoiding a taxable event.
Inverters and batteries will break and be more expensive to replace in the future.
Panels should last a very long time.
I wonder if he could incrementally add new panels to increase the savings effectively.
My mini-plan is to set up a non-grid tied system to run an air conditioner (to lower my daytime air conditioning needs and thus trim off the most expensive electricity usage).
If he had put $38,000 in the market 12 months ago, it would be worth a lot less.
He has a near guaranteed rate of return of 7.8% which is the average for the stock market.
Further, he doesn't have to pay taxes on that return (it's money not spent, not money earned).
When he retires, he won't have to take $4,900 a year out of his 401k/ira (and pay $900 in income taxes) to pay his power bill. (and that only gets higher going forward-- 50% income tax is possible as we struggle to pay for social security in 15 years).
Panels are not the likely issues.
Panels are in the 20-30 year range (tho at 80% power).
Inverters and batteries are the issue.
Inverters can go bad every 5-7 years and batteries more frequently than that.
On the plus side... power seems to be ~280% more expensive over 20 year periods that I researched. 2 cents in 1968, 5 cents in 1988, 15 cents in 2008.
So in 10 years, presumably, his power bills will be about double what they are now.
And that assumes no period of high inflation-- recent government printing of money could lead to a period of high inflation. If we return to 1980's inflation, his project could pay off very quickly.
And no period of energy bill increases-- if oil quickly returns to over $100 a barrel and natural gas doubles-- then electric bills could go up a lot.
Of course if we get a period of hyperinflation (20%-70%+), then he will have hit the jackpot.
Because a native might provide information on the secondary taxes not listed on that page.
It is a great page, but it doesn't come close to the total tax load.
In the US, the stated tax rate is 28% on the page.
In reality, it's much higher.
So I know that the rate on that page doesn't include.
Social security Taxes (7.5%) -- except for rich people.. who it can be .1% or less (esp if they structure their income as dividends) .1% or less (esp if they structure their income as dividends) ...
Employer portion of social security (7.5%) -- except for rich people.. who it can be
Sales Taxes (5-8%-- higher some places)
Metropolitan bus service taxes (1%)
Gasoline taxes (low because they forgot to index for inflation)
Property taxes
cigarette taxes (now more than the purchase price of the cigarettes in many states)
alchohol taxes (usually over 10% but under 50% of the purchase price)
Car taxes (usually fairly low)
Telephone taxes (higher than the bill portion of my land line)
Electricity taxes
Water Taxes (not the water bill- the tax portion usually phrased as a sewer fee)
Mud taxes
Trash collection taxes
There are over 50 common taxes the last time I saw the list.
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Our tax system is regressive on people in the middle-- about $20k to about $80k.
While they are highly aggressive against people below $20k- they also have tax credits for them which mitigates the hit a bit.
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Then when you include corporate taxes which corporations usually pass straight through to the consumer, the rate is almost always over 50% tax load.
They've just found a lot of ways to hide it.
Just like in our last election, they had bills to "vote yes to give permission to sell 50 million in 10 year bonds to cover police pension funding, old people, children, new schools, free beer for everyone"... when what it really meant was "vote yes to raise taxes by 50 million dollars over the next 10 years so we can give out these benefits".
If you wanna be happy for the rest of your life. Never make a pretty women your wife...
Nice swing song.
No..but that does give me another idea besides punching them really hard.
Not sure I can piss on demand tho.
I look forward to breaking my wrist or knuckles.
Then I'll give them the address of the local biker gang's hangout so they can go there and enforce this rule.
If it is for the dopes that pay for ring tones, well that won't matter anyway--- I roll my own from 30 second mp3 cuts.