Jason Moran
Thursday, October 23, 2008
Market Predictions From Grandpa
Grandpa Bouchard stopped in town yesterday seemingly to rave about the stock market, cycles, charts, patterns, and the idiots of the world. Grandpa is retired now, but he has been a broker among a myriad of other things. He has spent 10-16 hours per day for 60 years researching the market - and he has some pretty strong opinions.
He said just about everything fits into one of 16 (or so) patterns and it is so easy to predict what will happen next if you identify the right pattern.
One of them is a depressionary cycle that was supposed to hit a year ago. He told us to get our money out of the market and even to get it out of banks. He was a year off, but it was a 240 year cycle leading into a depression that he identified quite a while ago and it is hard to get down to exact dates when the cycles are that big. Of course it is cool that his predictions are starting down the path that he felt they would, but if he continues to be correct then things will get far more scary than they are now.
Grandpa told me (with crazy eyes) WAIT FOR GOLD TO HIT $650. As in, he's positive gold will continue to drop in price at least to $650 per ounce. Once it does then I should buy up gobs and gobs of it because it will go through the roof for years and years.
So, why are precious metals dropping in price even though demand is through the roof? Have my lessons in economics been a complete waste? He says this: Hedge funds and the other very large owners of gold and silver have to sell now because they need cash to stop the bleeding - that is helping to drive the price down over demand because they are bigger players. They should be all sold out soon which is when those with demand (regular people) will start getting their hands on it...and when prices will skyrocket.
Overall Grandpa B is worried about having almost anything sitting in the stock market as a whole. He is actually serious when he says this will be a Great Depression unlike the 1929-1932 time period. He thinks nearly every financial institution will collapse and he has asked my cop dad which gun he should purchase to protect his home from the crazies in the coming years.
"A depression is when money goes back to it's rightful owner". - Grandpa Bouchard
Unfortunately my grandpa thinks things will get far more difficult than I can imagine (with me being 28 years old and never having lived through difficult times during my lifetime). However, he believes the U.S. will fair better than most of the rest of the world. Sure, there was a housing bubble in the U.S. with home prices going up an average of four times their value over some number of years I can't remember. However, over that same period England's home prices went up 12 times, Ireland 20+ times! Most countries went up a similar amount. So, if a $100,000 house in the U.S. drops down to it's real value at $25,000 that's pretty tough to deal with. However, in Ireland that $100,000 would drop down to about $4,000! My head would asplode.
Grandpa Bouchard stopped in town yesterday seemingly to rave about the stock market, cycles, charts, patterns, and the idiots of the world. Grandpa is retired now, but he has been a broker among a myriad of other things. He has spent 10-16 hours per day for 60 years researching the market - and he has some pretty strong opinions.
He said just about everything fits into one of 16 (or so) patterns and it is so easy to predict what will happen next if you identify the right pattern.
One of them is a depressionary cycle that was supposed to hit a year ago. He told us to get our money out of the market and even to get it out of banks. He was a year off, but it was a 240 year cycle leading into a depression that he identified quite a while ago and it is hard to get down to exact dates when the cycles are that big. Of course it is cool that his predictions are starting down the path that he felt they would, but if he continues to be correct then things will get far more scary than they are now.
Grandpa told me (with crazy eyes) WAIT FOR GOLD TO HIT $650. As in, he's positive gold will continue to drop in price at least to $650 per ounce. Once it does then I should buy up gobs and gobs of it because it will go through the roof for years and years.
So, why are precious metals dropping in price even though demand is through the roof? Have my lessons in economics been a complete waste? He says this: Hedge funds and the other very large owners of gold and silver have to sell now because they need cash to stop the bleeding - that is helping to drive the price down over demand because they are bigger players. They should be all sold out soon which is when those with demand (regular people) will start getting their hands on it...and when prices will skyrocket.
Overall Grandpa B is worried about having almost anything sitting in the stock market as a whole. He is actually serious when he says this will be a Great Depression unlike the 1929-1932 time period. He thinks nearly every financial institution will collapse and he has asked my cop dad which gun he should purchase to protect his home from the crazies in the coming years.
"A depression is when money goes back to it's rightful owner". - Grandpa Bouchard
Unfortunately my grandpa thinks things will get far more difficult than I can imagine (with me being 28 years old and never having lived through difficult times during my lifetime). However, he believes the U.S. will fair better than most of the rest of the world. Sure, there was a housing bubble in the U.S. with home prices going up an average of four times their value over some number of years I can't remember. However, over that same period England's home prices went up 12 times, Ireland 20+ times! Most countries went up a similar amount. So, if a $100,000 house in the U.S. drops down to it's real value at $25,000 that's pretty tough to deal with. However, in Ireland that $100,000 would drop down to about $4,000! My head would asplode.
Labels: economy, gold, grandpa, money, silver, stock market
¶ 9:27 AM 7 Comments
Friday, October 03, 2008
Deleveraging, Depressions, and Bailouts Oh My!
I hate those greedy, evil and selfish banks as much as you do. This predicament is a terrible spot to be in. However, do you want to have another depression? The depression was the result of a "do nothing" policy. The government never stepped in and things were pretty bad for a while. They would have been worse if a world war didn't start up after a few years.
Anyway, $700b bailouts suck, too. I've been paying my mortgage and other debts, so why should I take on more to cover the sorry louts that can't pay up (and to cover the banks sorry behinds for ever approving them in the first place!).
However, have you ever heard of The Paradox of Deleveraging? The same principal carries in the opposite direction. If *I* am thrifty then *I* save money. However, problems happen when *everybody* does the same thing. If *everybody* suddenly becomes thrifty then they do not save money! By spending money I am providing somebody else's paycheck. If everybody stops buying things then *I* do not have a paycheck because of how everything interacts. The paradox of deleveraging is similar because it isn't one or two banks failing - it is all of them!
The third option that isn't being talked about is nationalization a la Sweden a few years back. Not everybody is a fan of it, though. Fannie Mae and Freddie Mac are already pretty much nationalized...so why not some more financial institutions? I haven't come to a conclusion on this one yet.
-<---------->-
I did want to say that the powers that be are finally checking into the silver market. It seems that when demand is through the roof, supply is pretty much gone, yet prices go down it raises some eyebrows.
Anyway, $700b bailouts suck, too. I've been paying my mortgage and other debts, so why should I take on more to cover the sorry louts that can't pay up (and to cover the banks sorry behinds for ever approving them in the first place!).
However, have you ever heard of The Paradox of Deleveraging? The same principal carries in the opposite direction. If *I* am thrifty then *I* save money. However, problems happen when *everybody* does the same thing. If *everybody* suddenly becomes thrifty then they do not save money! By spending money I am providing somebody else's paycheck. If everybody stops buying things then *I* do not have a paycheck because of how everything interacts. The paradox of deleveraging is similar because it isn't one or two banks failing - it is all of them!
The third option that isn't being talked about is nationalization a la Sweden a few years back. Not everybody is a fan of it, though. Fannie Mae and Freddie Mac are already pretty much nationalized...so why not some more financial institutions? I haven't come to a conclusion on this one yet.
-<---------->-
I did want to say that the powers that be are finally checking into the silver market. It seems that when demand is through the roof, supply is pretty much gone, yet prices go down it raises some eyebrows.
Labels: banks, depression, government, money, silver, taxes
¶ 2:17 PM 4 Comments
Friday, September 19, 2008
Great Depression II
In the 20s and 30s W.W.I was simple the World War. Maybe we'll start referring to 1929-1932 as G.D.I because it was simply the first of it's kind.
I don't want to be a doomsday nutcase, but I am deeply scared about the world we live in. I'm not scared of life ending - I'm scared about catastrophic economic collapse. Something that can shake the world more than a 10.0 earthquake, a worldwide wipe out of retirement savings, financial institutions, and debt/credit.
Grandpa Bouchard, my mom's dad, was nearly vibrating a few months back because he was so excited about the massive collapses he predicted would be coming in the near future. He was never specific, but he felt like many banks would fail and we might just see times not-so-different than those during the Great Depression. He was envious that I was young enough to experience it, learn from it, and make it out on the other side someday. I guess it is possible that much of what is remaining of his retirement savings could get wiped out. I certainly hope not because if that turns out to be the case then the Average Joe will be in a much worse predicament.
I was reading a few articles and they didn't scare me - but that's because I already scared myself by wildly speculating what could happen.
So many of the banks out there are interconnected such that the rapid failing of a few could bring down the whole lot of them. The Fed pretty much had to bailout AIG a few days ago. If they didn't I think things could have quickly become exponentially worse.
It's no wonder my favorite commodity (silver) has spiked (along with gold, oil, etc) - these things are considered "safe" thus many are buying them up because they don't know exactly what stock will lose them their life savings next. At least gold and silver have a REAL value to fall back on...
I don't want to be a doomsday nutcase, but I am deeply scared about the world we live in. I'm not scared of life ending - I'm scared about catastrophic economic collapse. Something that can shake the world more than a 10.0 earthquake, a worldwide wipe out of retirement savings, financial institutions, and debt/credit.
Grandpa Bouchard, my mom's dad, was nearly vibrating a few months back because he was so excited about the massive collapses he predicted would be coming in the near future. He was never specific, but he felt like many banks would fail and we might just see times not-so-different than those during the Great Depression. He was envious that I was young enough to experience it, learn from it, and make it out on the other side someday. I guess it is possible that much of what is remaining of his retirement savings could get wiped out. I certainly hope not because if that turns out to be the case then the Average Joe will be in a much worse predicament.
I was reading a few articles and they didn't scare me - but that's because I already scared myself by wildly speculating what could happen.
So many of the banks out there are interconnected such that the rapid failing of a few could bring down the whole lot of them. The Fed pretty much had to bailout AIG a few days ago. If they didn't I think things could have quickly become exponentially worse.
It's no wonder my favorite commodity (silver) has spiked (along with gold, oil, etc) - these things are considered "safe" thus many are buying them up because they don't know exactly what stock will lose them their life savings next. At least gold and silver have a REAL value to fall back on...
Labels: doomsday, economy, money, recession, retirement, silver, stock market
¶ 11:30 AM 4 Comments
Monday, September 15, 2008
Convincing You About Silver
It doesn't seem like you are all convinced that silver is a good thing yet. Think again.
I already presented my case by showing that industrial use is growing every year (after all, silver is the most reflective, conductive, (etc) of the pliable precious metals). The world's existing supply has nearly been depleted. One of the richest sultans or oil czars out there could actually buy all of the known silver in the world (if they wanted to). Very little silver exists, it's as simple as that.
However, that article I linked to has something even more interesting to say:
This bank(s) will probably go out of business (is it JP Morgan/Chase?) because it will simply not be able to buy out all of the shorts it now owns. That may not make perfect sense to you, but this is a way to sort of think about it: One unlucky bank owes the world massive amounts of the not-readily-available silver, and when push comes to shove it will simply be unable to pay up. When it makes the attempt silver's value in dollars should sharply increase.
The gamble is worth it! Worst case it's an even trade, best case you make a pile of money.
I already presented my case by showing that industrial use is growing every year (after all, silver is the most reflective, conductive, (etc) of the pliable precious metals). The world's existing supply has nearly been depleted. One of the richest sultans or oil czars out there could actually buy all of the known silver in the world (if they wanted to). Very little silver exists, it's as simple as that.
However, that article I linked to has something even more interesting to say:
Let me state that clearly - one (maybe two) U.S. bank holds a net 36% share of the entire COMEX silver market. The same one or two U.S. banks hold 82% of the total commercial net short position. This is a concentration that is unprecedented; maybe double or triple or more what the Hunt Brothers held on the long side in 1980. Without these, one or two traders, there would hardly be any commercial silver short position at all. This makes the big concentrated short a danger to everyone, including the market itself. That’s why the regulators must act now.
This bank(s) will probably go out of business (is it JP Morgan/Chase?) because it will simply not be able to buy out all of the shorts it now owns. That may not make perfect sense to you, but this is a way to sort of think about it: One unlucky bank owes the world massive amounts of the not-readily-available silver, and when push comes to shove it will simply be unable to pay up. When it makes the attempt silver's value in dollars should sharply increase.
The gamble is worth it! Worst case it's an even trade, best case you make a pile of money.
Labels: money, silver, stock market
¶ 9:47 AM 2 Comments
Friday, August 08, 2008
Silver Spoons
It makes you wonder whether the United States is as rich as it is because it went off of both the gold and silver standard. Maybe the fact that America started living off of credit and fiat money (money that the government mandates is legal tender but really has no actual value) gave it the leverage to spring ahead of everybody else. However, we all know that fiat money can have the bottom fall out from under it (see the Japanese Yen in 1989 - it is still recovering. I wonder if it was smart in the short run (of 100 years or so) but dumb in the long run. Sure I can buy expensive houses, cars, jewelry, and great stuff on credit - but that doesn't mean I can afford that debt and continue living that far above my means in the long run.
Historically gold was more expensive than silver because there was 8 to 12 times as much silver as gold. I don't know if anybody has been paying attention, but we've already mined 95% of the worlds surface silver. Nowadays there is 7 times as much gold as silver! Also, silver has a rising demand every year because it has an ever increasing industrial use. In other words we have used 90% of the worlds surface silver in the past 100 years and we are using more every year, yet it still doesn't cost very much.
The government wanted us off actual bullion (silver, gold, etc) as currency so it forced us to use worthless paper money instead. It's an "agreement" that the government has forced upon us. When we run out of money, the government simply prints more. I feel like we've been living in a land of make believe our whole lives and somebody is just going to stop playing the game sometime soon. We're living in the money Matrix and I've just figured out the facade that has been in place this whole time. There is no dollar.
Is it possible that the dollar (well, all of the world's fiat money) could collapse? I mean, do you understand that at a point in time the paper money we had were representations of actual bullion (silver or gold) that was held in a safe repository somewhere (like a bank)? Paper money exactly represented trading gold/silver for other goods or services. Now it is simply paper money that represents...uh...well, the government tells us it has legal value. Dimes and quarters used to have 90% silver in them and were roughly equal in value to the precious metals inside. In 1965 they changed half dollars from 90% to 40% silver and most other coins were filled with worthless metals. Let's just say that coins prior to 1965 are worth a bit more than face value.
Anyway, I haven't plunged into this yet, but I plan on grabbing up all kinds of silver and perhaps gold since it never really loses value. It fluctuates in the market, but over time it is more dependable and stable than almost any other commodity. In the long run your pile of silver and gold can be traded for more and more of the increasingly worthless money we use to buy things with. ¶ 9:01 AM 15 Comments
"[Silver] was politically demonetized beginning in 1873 and ending in the late 1930s when Roosevelt's silver manipulations forced China off the silver standard. Removing all that monetary demand for silver naturally made it lose value against gold, and rising industrial demand could not yet soak up the excess supply."
It makes you wonder whether the United States is as rich as it is because it went off of both the gold and silver standard. Maybe the fact that America started living off of credit and fiat money (money that the government mandates is legal tender but really has no actual value) gave it the leverage to spring ahead of everybody else. However, we all know that fiat money can have the bottom fall out from under it (see the Japanese Yen in 1989 - it is still recovering. I wonder if it was smart in the short run (of 100 years or so) but dumb in the long run. Sure I can buy expensive houses, cars, jewelry, and great stuff on credit - but that doesn't mean I can afford that debt and continue living that far above my means in the long run.
Historically gold was more expensive than silver because there was 8 to 12 times as much silver as gold. I don't know if anybody has been paying attention, but we've already mined 95% of the worlds surface silver. Nowadays there is 7 times as much gold as silver! Also, silver has a rising demand every year because it has an ever increasing industrial use. In other words we have used 90% of the worlds surface silver in the past 100 years and we are using more every year, yet it still doesn't cost very much.
The government wanted us off actual bullion (silver, gold, etc) as currency so it forced us to use worthless paper money instead. It's an "agreement" that the government has forced upon us. When we run out of money, the government simply prints more. I feel like we've been living in a land of make believe our whole lives and somebody is just going to stop playing the game sometime soon. We're living in the money Matrix and I've just figured out the facade that has been in place this whole time. There is no dollar.
Is it possible that the dollar (well, all of the world's fiat money) could collapse? I mean, do you understand that at a point in time the paper money we had were representations of actual bullion (silver or gold) that was held in a safe repository somewhere (like a bank)? Paper money exactly represented trading gold/silver for other goods or services. Now it is simply paper money that represents...uh...well, the government tells us it has legal value. Dimes and quarters used to have 90% silver in them and were roughly equal in value to the precious metals inside. In 1965 they changed half dollars from 90% to 40% silver and most other coins were filled with worthless metals. Let's just say that coins prior to 1965 are worth a bit more than face value.
Anyway, I haven't plunged into this yet, but I plan on grabbing up all kinds of silver and perhaps gold since it never really loses value. It fluctuates in the market, but over time it is more dependable and stable than almost any other commodity. In the long run your pile of silver and gold can be traded for more and more of the increasingly worthless money we use to buy things with. ¶ 9:01 AM 15 Comments
Tuesday, July 08, 2008
Salary Vs Contracting: The Other Side Of The Fence
I thought I'd revisit Salary Vs. Contracting now that I'm back in a salaried job.
I have now worked an even amount of hourly, salary, W-2 contracting, and 1099 contracting.
My overall take on it is this: I want to do pure 1099 contracting if I can help it at some point in the future...but I am enjoying the perks of a salaried job while I can.
I haven't gotten paid for holidays in years, and it is really nice to still get a full paycheck for 3 and 4 day weeks. I don't have any vacation days yet, but when I do and I take my vacation it will be awesome to not take the "double hit". When you are contracting it is a double hit because you pay lots for your vacation and you come home to no pay for the time you took off.
However, let me explain why the 1099 route is the best way in my personal opinion (for software developers). First of all, you don't 1099 under your personal name. You create a corporation (LLC, S-Corp, etc). The business at the front end is the key to the whole thing.
Since you are working for this newly created business you can pay yourself for your work and for rent (because you have to do your work at some physical place). Then you get to write off your computer, supplies, travel, and all kinds of other things on your taxes. Plus, it provides legal protection. If you did something stupid like break a non-disclosure agreement they can't sue the pants off of you directly, they would be suing your company.
Before I continue with a few more good 1099 points, let me tell you some of the bad. Your taxes are way more complex, so you'd better hire an accountant. You'll have to do some payroll stuff for yourself and any other employees you have, including their taxes and sending off IRS paperwork. Some of your clients won't pay, or at least not in a timely manner. Sure, you might make 30,000 dollars, but what if they give that to you in 5 months in a single payment? Can you survive until the check shows up? One last thing, you need to pay double taxes (employer and employee portions).
Anyway, the last couple 1099 pros: You generally make a bit more than salary/normal contracting so that covers your extra taxes and then some if you are writing off enough on your taxes. You can hire other people to do the work for you. Lastly, you can work on your own terms.
Let's say you are busy at a client but company ABC wants you to redo their website for $8K. You don't have the time. However, you ask your website-savvy buddy that wants to moonlight a little how much he thinks he could redo the site for. He says he could redo it for about $4K, but in case anything unexpected comes up it could max out at $5K. You take the contract, let your buddy do it, pay him worst-case-scenario $5K and bank $3K just for setting the whole thing up. You can't do that if you are working directly for an employer.
All that being said, I'm happy where I am at my salaried job right now.
I have now worked an even amount of hourly, salary, W-2 contracting, and 1099 contracting.
My overall take on it is this: I want to do pure 1099 contracting if I can help it at some point in the future...but I am enjoying the perks of a salaried job while I can.
I haven't gotten paid for holidays in years, and it is really nice to still get a full paycheck for 3 and 4 day weeks. I don't have any vacation days yet, but when I do and I take my vacation it will be awesome to not take the "double hit". When you are contracting it is a double hit because you pay lots for your vacation and you come home to no pay for the time you took off.
However, let me explain why the 1099 route is the best way in my personal opinion (for software developers). First of all, you don't 1099 under your personal name. You create a corporation (LLC, S-Corp, etc). The business at the front end is the key to the whole thing.
Since you are working for this newly created business you can pay yourself for your work and for rent (because you have to do your work at some physical place). Then you get to write off your computer, supplies, travel, and all kinds of other things on your taxes. Plus, it provides legal protection. If you did something stupid like break a non-disclosure agreement they can't sue the pants off of you directly, they would be suing your company.
Before I continue with a few more good 1099 points, let me tell you some of the bad. Your taxes are way more complex, so you'd better hire an accountant. You'll have to do some payroll stuff for yourself and any other employees you have, including their taxes and sending off IRS paperwork. Some of your clients won't pay, or at least not in a timely manner. Sure, you might make 30,000 dollars, but what if they give that to you in 5 months in a single payment? Can you survive until the check shows up? One last thing, you need to pay double taxes (employer and employee portions).
Anyway, the last couple 1099 pros: You generally make a bit more than salary/normal contracting so that covers your extra taxes and then some if you are writing off enough on your taxes. You can hire other people to do the work for you. Lastly, you can work on your own terms.
Let's say you are busy at a client but company ABC wants you to redo their website for $8K. You don't have the time. However, you ask your website-savvy buddy that wants to moonlight a little how much he thinks he could redo the site for. He says he could redo it for about $4K, but in case anything unexpected comes up it could max out at $5K. You take the contract, let your buddy do it, pay him worst-case-scenario $5K and bank $3K just for setting the whole thing up. You can't do that if you are working directly for an employer.
All that being said, I'm happy where I am at my salaried job right now.
Labels: contracting, job, money, work
¶ 11:28 AM 5 Comments
Tuesday, May 13, 2008
Adventures In Wealth Building
The goal is to be able to retire someday without caring whether social security pays me a dime.
You get there basically by increasing your net worth to the point that you can support your lifestyle via stuff you've saved. Net worth is basically this: Take everything you owe anybody (debt) as a negative. Next take everything you have (cash, 401K, IRA, house, cars, giant bars of gold, etc) as a positive (asset). Put those together and you'll have your net worth.
It's very common for a recent college graduate to have a large negative net worth. To increase it, you have to keep paying off debt while trying to gain less new debt while adding to your assets. I signed up at Net Worth IQ to help me track it over time.
I'm happy to say that I made the switch from negative net worth to the positive side in early 2008. I still have $25K of the $36K of college debt left, and I have a huge amount of mortgage debt - which sucks because I owe more on my house than it is even worth now that homes dropped in value. However, I've been stashing money in a Roth IRA, regular IRA, and a 401K. Plus, I just paid off all of my credit cards and I paid off both of my cars as of last month (I used that tax rebate everybody got to make the final payment!).
I just made it into the positive - so I have a long way to go. I hope to be on track by the time my early 30s hit. Check out this formula to see if you are on track:
AGE: Your current age (you can use decimals to be more exact)
$$: Your annual spending. This is not what you make, this also should not include most of your debt (like student loans). This is today's dollar amount that you spend on living or want to spend (food, travel, clothing, property taxes, car payments). Basically the things you'll be paying when you're an old geezer.
Target NET WORTH = (AGE/166 - 0.15) * AGE * $$
That is what your net worth should be today...based on this semi-common premise: "You will need 20 times what you annually spend to retire at 72".
I'm way behind...where are you at?
You get there basically by increasing your net worth to the point that you can support your lifestyle via stuff you've saved. Net worth is basically this: Take everything you owe anybody (debt) as a negative. Next take everything you have (cash, 401K, IRA, house, cars, giant bars of gold, etc) as a positive (asset). Put those together and you'll have your net worth.
It's very common for a recent college graduate to have a large negative net worth. To increase it, you have to keep paying off debt while trying to gain less new debt while adding to your assets. I signed up at Net Worth IQ to help me track it over time.
I'm happy to say that I made the switch from negative net worth to the positive side in early 2008. I still have $25K of the $36K of college debt left, and I have a huge amount of mortgage debt - which sucks because I owe more on my house than it is even worth now that homes dropped in value. However, I've been stashing money in a Roth IRA, regular IRA, and a 401K. Plus, I just paid off all of my credit cards and I paid off both of my cars as of last month (I used that tax rebate everybody got to make the final payment!).
I just made it into the positive - so I have a long way to go. I hope to be on track by the time my early 30s hit. Check out this formula to see if you are on track:
AGE: Your current age (you can use decimals to be more exact)
$$: Your annual spending. This is not what you make, this also should not include most of your debt (like student loans). This is today's dollar amount that you spend on living or want to spend (food, travel, clothing, property taxes, car payments). Basically the things you'll be paying when you're an old geezer.
Target NET WORTH = (AGE/166 - 0.15) * AGE * $$
That is what your net worth should be today...based on this semi-common premise: "You will need 20 times what you annually spend to retire at 72".
I'm way behind...where are you at?
Labels: debt, money, net worth, retirement
¶ 1:33 PM 1 Comments
Wednesday, April 23, 2008
New Job!
Oh man, I never told everybody about my new job! I was working for Harley-Davidson Dealer Systems as a contractor, enjoying my job and definitely not looking for a new position. In fact, my contract was extended and Harley really like me.
Out of the blue Secureach Systems gave me a call and wanted to know if I was interested in a full time (salaried) position.
Being the good contractor that I was and also being content with my current employment I told them "no". However, I'm always a pleaser so I agreed to sit and listen to their sales pitch at their office in Medina, OH. I'm going to skip a lot of details but I was basically able to ask them for what I wanted and they gave it to me because they wanted me to work for them so badly.
So, here I am, out of the contracting world, sitting in an un-air-conditioned room filled with servers (making the room average about 90 degrees). Needless to say, my new building better get their air conditioning working soon. Otherwise, I'm pretty happy. I started a few weeks back - March 31, 2008.
Oh, I'm "Senior Programmer" for now, and somewhere down the road I'll get a new title: "Senior Development Manager". They are a company that makes a product for the health industry. It securely calls patients with test results, appointment reminders, and most importantly it ties the loop together for the doctor's practice so nothing falls through the cracks (so lawsuits are a think of the past and malpractice insurance rates are actually reduced).
Out of the blue Secureach Systems gave me a call and wanted to know if I was interested in a full time (salaried) position.
Being the good contractor that I was and also being content with my current employment I told them "no". However, I'm always a pleaser so I agreed to sit and listen to their sales pitch at their office in Medina, OH. I'm going to skip a lot of details but I was basically able to ask them for what I wanted and they gave it to me because they wanted me to work for them so badly.
So, here I am, out of the contracting world, sitting in an un-air-conditioned room filled with servers (making the room average about 90 degrees). Needless to say, my new building better get their air conditioning working soon. Otherwise, I'm pretty happy. I started a few weeks back - March 31, 2008.
Oh, I'm "Senior Programmer" for now, and somewhere down the road I'll get a new title: "Senior Development Manager". They are a company that makes a product for the health industry. It securely calls patients with test results, appointment reminders, and most importantly it ties the loop together for the doctor's practice so nothing falls through the cracks (so lawsuits are a think of the past and malpractice insurance rates are actually reduced).
Labels: doctors, employment, insurance, job, money, SecuReach
¶ 9:57 AM 1 Comments
Tuesday, February 26, 2008
Forget What You Know About Taxes
This is the last entry from the What Would You Do As President? series. Up this time around is:
Lincoln started taxing to pay for the Civil War, but it was repealed after a few years. Income tax started up again in 1894, but the Supreme Court ruled it unconstitutional the next year. It came back for good in 1913 with the 16th amendment. Even though the Constitution prohibited direct taxes to individuals, the powers that be decided to make it possible.
Regardless, the key point is not the constitutionality of taxes; the point is that income taxes have only really been around for less than 100 years. If we survived without taxes before, what makes today so much different other than us being satisfied with our present condition? I'd like to argue that everybody could be better off with less, or even no taxes (gasp!).
Maybe it has something to do with our money not being on a standard (like the gold standard). I don't want to jump to conclusions, but I do know that when there is a gold standard the government can’t just print money to fund its spending, so it keeps government spending in check. Plus, it helps keep inflation under control so your money doesn’t become practically worthless in a few years.
So, what is my advice? To completely dump the entire Internal Revenue Service and forget about taxes? Not quite.
Let’s replace personal income tax with a consumption tax.
So, the taxes you pay when you buy stuff increases, but that is what replaces the income tax. In other words, if you buy less stuff you will pay less taxes. Businesses still get taxed separately, but their write-offs would obviously be better considering the inherit tax that goes with all of the products and services supporting their business.
Maybe that’s too crazy, so how about a very low flat tax plus consumption tax.
How about a 5% flat tax on all money earned (and we’ll still throw in a few tax incentives like dependents, mortgage tax adjustments, etc). Since people with a few more bucks will be buying the yachts and the luxury items, the taxes they will be paying will go up according to all of the stuff they spend their money on. I don’t know if these concepts are feasible, so maybe the better place to start is to start cutting out government programs and services since the government just costs way too much money. If we cut out enough, then the taxes we pay will be reduced.
- Revise the tax code to bring fairness and relief to the working/middle classes.
Lincoln started taxing to pay for the Civil War, but it was repealed after a few years. Income tax started up again in 1894, but the Supreme Court ruled it unconstitutional the next year. It came back for good in 1913 with the 16th amendment. Even though the Constitution prohibited direct taxes to individuals, the powers that be decided to make it possible.
Regardless, the key point is not the constitutionality of taxes; the point is that income taxes have only really been around for less than 100 years. If we survived without taxes before, what makes today so much different other than us being satisfied with our present condition? I'd like to argue that everybody could be better off with less, or even no taxes (gasp!).
Maybe it has something to do with our money not being on a standard (like the gold standard). I don't want to jump to conclusions, but I do know that when there is a gold standard the government can’t just print money to fund its spending, so it keeps government spending in check. Plus, it helps keep inflation under control so your money doesn’t become practically worthless in a few years.
So, what is my advice? To completely dump the entire Internal Revenue Service and forget about taxes? Not quite.
Let’s replace personal income tax with a consumption tax.
So, the taxes you pay when you buy stuff increases, but that is what replaces the income tax. In other words, if you buy less stuff you will pay less taxes. Businesses still get taxed separately, but their write-offs would obviously be better considering the inherit tax that goes with all of the products and services supporting their business.
Maybe that’s too crazy, so how about a very low flat tax plus consumption tax.
How about a 5% flat tax on all money earned (and we’ll still throw in a few tax incentives like dependents, mortgage tax adjustments, etc). Since people with a few more bucks will be buying the yachts and the luxury items, the taxes they will be paying will go up according to all of the stuff they spend their money on. I don’t know if these concepts are feasible, so maybe the better place to start is to start cutting out government programs and services since the government just costs way too much money. If we cut out enough, then the taxes we pay will be reduced.
Labels: government, law, money, politics, president, taxes
¶ 3:10 PM 2 Comments
Friday, January 11, 2008
Cutting Out The Excess
So, I don't understand why we have less money every month than the month before. A year ago I had $10K in the bank, 5 months ago I had $3K in the bank, this month I have $17.00 in the bank. If this trend continues I will have a lot of debt collectors bugging me starting next month.
I figured it out.
I create a real budget-- using actual bank / credit card statements to determine what we really spend month to month. Now it all makes sense, here is why we are losing out money:
We spend more per month than we make.
It doesn't feel like we are living lavishly, and we used to have money -- so what changed? My wife stopped working, but we kept on living at the exact same lifestyle.
A cup of Starbucks here and there or a night out for dinner and drinks a few times a week had been adding up to a considerable amount of money. Somehow, without buying cars, HDTVs, or really anything we have found a way to spend more than I earn.
Now it's a big game of cutting out the excess in our lives, making everything efficient, staying home more, going out for coffee less, and figuring out how not to go into debt. Where's Dave Ramsey when you need him?
FUN FUN FUN. ¶ 3:16 PM 7 Comments
I figured it out.
I create a real budget-- using actual bank / credit card statements to determine what we really spend month to month. Now it all makes sense, here is why we are losing out money:
We spend more per month than we make.
It doesn't feel like we are living lavishly, and we used to have money -- so what changed? My wife stopped working, but we kept on living at the exact same lifestyle.
A cup of Starbucks here and there or a night out for dinner and drinks a few times a week had been adding up to a considerable amount of money. Somehow, without buying cars, HDTVs, or really anything we have found a way to spend more than I earn.
Now it's a big game of cutting out the excess in our lives, making everything efficient, staying home more, going out for coffee less, and figuring out how not to go into debt. Where's Dave Ramsey when you need him?
FUN FUN FUN. ¶ 3:16 PM 7 Comments
Friday, August 31, 2007
Is a Salary Better Than Contracting?
It is common knowledge that contracting pays more per hour than a salaried job does. I don't know that there is an exact expected ratio, but in my experience an hourly paid contracting job pays a minimum of 1.333 times better than a salary would. (I know there are caveats, I'll get to those in a minute).
Take your salary and multiply it by 1.333. That is practically the worst case scenario for how much you would make by contracting instead. That sounds totally worth it, doesn't it?
Pros of contracting:
Pros of salary (with cons of contracting):
So, is 1.333 times your salary worth the gamble of having bench time? Can you handle the fact that vacation is completely on you, and you will have next to nothing in your next paycheck? Is it worth it to have no income if you get the flu? What about having to prepare for retirement without any help from any company?
So far it is worth it for me because I am pretty good with my money and I believe I have what it takes to prevent myself from being out of work for too long. Is a salaried job the easy way out or is contracting just a long-term Vegas-styled gamble?
Take your salary and multiply it by 1.333. That is practically the worst case scenario for how much you would make by contracting instead. That sounds totally worth it, doesn't it?
Pros of contracting:
- Lots more money
- You still get paid even if you work more than 40 hours in a week
- Lots of varied experiences which will make you well-rounded
- You can never get bored because things change all of the time
Pros of salary (with cons of contracting):
- Predictable pay
- No "Bench Time" (This is a contracting term that means you are not currently billing any hours to anybody / out of work)
- Vacation time and sick time!
- Other perks like cheaper health insurance, 401K matching, bonuses, etc
- Gaining a much deeper understanding of one line of business (become an expert because you have worked at the same thing for a long time)
- Potential to "move up" within an organization because of how super good you are.
So, is 1.333 times your salary worth the gamble of having bench time? Can you handle the fact that vacation is completely on you, and you will have next to nothing in your next paycheck? Is it worth it to have no income if you get the flu? What about having to prepare for retirement without any help from any company?
So far it is worth it for me because I am pretty good with my money and I believe I have what it takes to prevent myself from being out of work for too long. Is a salaried job the easy way out or is contracting just a long-term Vegas-styled gamble?
Labels: contracting, money, work
¶ 9:49 AM 2 Comments