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Flattery is the enemy of Retire Early dreams. Once someone sees that retiring early is a goal within his reach, it is hard to talk him out of it. But flattery prevents many of us from ever seeing the possibilities.

The usual progression of thought starts like this. You hear a comedy act about "the high cost of living nowadays." You start feeling a little deprived. The idea gets reinforced by a politician, who says he wants to help the middle-class "deal with all the financial pressure they are under." You wonder, why did I have to be born at a time when ordinary people have it so tough? Finally, a neighbor kicks in with this thought: "You know, it's getting hard just to make a living." You shake your head, flattered.

Flattered, because the hidden message is that just the fact that you are getting by means that you must be a pretty tough character. It's like when a boy who survived a fistfight shows off his scars. We all enjoy this feeling, and the notion that we are struggling against a strong economic wind in our faces brings it on.

The next step is to reward yourself for all this toughness. As hard as your life is, you need to get away from it all every six months or so. And you need furniture which speaks for you, sending a subtle signal as to how special you are for having such survival skills. And a brand of coffee that gives you a lift through all the rough spots that come with making a living under such difficult circumstances.

At the end of the day, you're satisfied with yourself because you know you earned each and every one of those little rewards. But in examining my own attitudes from my free-spending days, what I think was really happening is that I was accepting unearned praise for a toughness I didn't possess.

Which wouldn't be such a big deal, except that the final step in this progression of thought was to blind myself to the consequences of my uncritical unacceptance of flattering ideas. Once I spent the money on the vacation, the furniture, and the coffee, I didn't want anyone telling me that such spending might be a bad idea. "Hey, buddy, I worked hard for every dollar I've spent. I don't need you to tell me what to do with it," I would think.

Which was true, in a way. I didn't need anyone to tell me how to spend my money, and I still don't. But it would have been nice if my own mind had been functioning well enough that I would have made decisions that were in my long-term best interest.

I spend a lot of time trying to figure out why my mind failed me for so long. I now am coming to believe that it was flattery that paralyzed my logic. The only reason to have cut back spending on things I liked would have been to acquire some other thing I liked better in return. Early retirement, for instance. But early retirement is a threatening notion to someone who pats himself on the back for his courage in getting through hard economic times.

To accept even the possibility of early retirement is to cast doubt on the popular worldview of economic hardship. If ordinary people are earning enough to retire earlier than ever before in history, it can't also be true that our financial struggles are tougher than ever today. To believe the former, you first have to stop believing in the latter.

It's surprising how powerful a force flattery can be. If someone tried to directly take away your chance at early retirement, you would resist with all your strength. But flattery slips in through the back door. It's a message pretending to be your friend, offering sympathy for your trouble.

Because it's not true, though, it doesn't help make the trouble go away. Instead, it makes the trouble worse. It's not true that the middle-class has it worse than ever before. The middle-class has it great, at least in financial terms. The biggest economic problem faced by the middle-class is that it is throwing away much of its financial rewards on things that offer little lasting value. It's paying for those things with its "Get Out of Work Early" card.

These thoughts were sparked by a report I learned about last week from a link on the Living Below Your Means board. It's called Time Well Spent: The Declining Real Cost of Living in America," published as part of the 1997 Annual Report of the Federal Reserve Bank of Dallas.(http://www.dallasfed.org/htm/pubs/pdfs/anreport/arpt97.pdf).

The report is based on the proposition that it doesn't matter so much what something costs in dollar terms; what matters is how many hours of work it takes to earn the money needed to buy the item. The price of a pair of stockings was 25 cents a century ago, but the average worker earned less than 15 cents an hour. So it took 1 hour and 41 minutes of labor to buy those stockings, compared to 18 minutes today.

We've seen similar price drops for most other goods and services over the years, according to the study. The labor-cost calculations are based on the wages paid to production and nonsupervisory workers in manufacturing ($13.18 an hour in 1997).

The distance between common perceptions and objective realities is best illustrated by looking at what has happened to the price of housing. In 1920, the price of a new home was 7.8 hours of labor per square foot. In 1956, the price had dropped to 6.5 hours per square foot. In 1996, it was down to 5.6 hours per square foot.

These aren't huge drops, but they are significant. What's strange is that, if you asked the man or woman on the street what has happened to the cost of housing, you would hear that there has been no relief at all. You'd be more likely to hear complaints that prices had risen than satisfaction in our good fortune.

This seems strange in a way. Don't people want to hear good news? Aren't people naturally optimistic? It would make sense that people would trick themselves into believing that things are better than they are, but why would they want to think things are worse than they are?

My theory is that we're seeing the effects of the flattery that we're subjected to, in movies, in political speeches, in conversations with neighbors. We want sympathy for our struggles (many of which are real, just not the financial ones), and the little white lie we tell ourselves about rising costs gives it to us. Seemingly at no cost.

There is a cost, however, in the long run. The cost of not knowing the truth about our finances is that the decisions we make are based on incorrect information. A weak understanding of reality leads to bad decisions. If you know that living in a smaller house means you can retire at age 45, you might decide it's worth it to do so. If you've persuaded yourself that retiring early is beyond the reach of the average man, making such sacrifices is pointless (or "extreme").

Houses are cheaper today than they've ever been, but we've been flattered into thinking that we need larger houses to shelter our smaller-than-ever families. A lot of us really are economically pressed. But the reason is not that it's tough to make a living today. We make it tough with our choices. We buy houses twice the size of what people made do on 40 years ago, and then complain about there being nothing left of our paychecks after making the payments.

There is a logic at work in how we make our money decisions. If you are tied to a job until age 65 anyway, you might as well enjoy bits of fun where you can. If I've fooled myself into thinking that early retirement is not possible, why should I bother even worrying about how much that cup of status coffee is costing me? I might as well spend what I have if there is no possibility of making a significant change in my circumstances anyway.

I'm becoming more convinced that this is the reason for today's excess consumerism. People haven't allowed themselves to hear how good they've got it financially. So they act on incorrect understandings of their possibilities in life, and make decisions they would never make if all the information were before them.

If this analysis sounds harsh, that's not the spirit in which I think about it. More than anything else, I'm trying to understand why I made so many bad decisions for so many years myself. What was I thinking? I've come to believe that I wasn't thinking so much as I was feeling. Feeling flattered.
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hocus so eloquently penned:

I'm becoming more convinced that this is the reason for today's excess consumerism. People haven't allowed themselves to hear how good they've got it financially. So they act on incorrect understandings of their possibilities in life, and make decisions they would never make if all the information were before them.

Wonderful hocus!

In the introduction to one of her Twightwad Gazette Books, Amy Dacyczyn points out that we are "drowning in rising expectations." That is, the bar for "happiness" or "contentment" is continually being raised.

Political leaders, employers, and manufacturers have a vested interest in making one feel discontented. Could you imagine the impact if George W Bush admitted that times are great (they are for the vast majority of Americans)? How could he develop the discontent necessary to get elected if he dealt straight with reality.

From a personal viewpoint, I realized about 5 years ago that I must be one of the luckiest people in the world. I have a warm house, a great paying job (soon to be ex-job), and a great community of friends and family. Although things could be better, I have realized that the costs (economic and time) to improve would be prohibitive. For me it would be like upgrading from a Lexus to a Mercedes. Some would be willing to pay for the upgrade, but I am just happy to have a car...a very nice car. (FYI: I drive a 10 year old economy car.)

Timothy Miller in his book "How To Want What You Have" points out that we seldom take time to realize how blessed we are. One of his three keys is to express gratefulness for that which we have. For those of us who live in the US, we continue to look at those above us on the financial and social ladders and want the things that they have. (Never mind they often come with divorce, stress, or worse.)

When I spent some time examining my real place in the world economically, I was humbled by my real wealth and embarrassed by my inability to share.

Cheers,
terrynor
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What was I thinking? I've come to believe that I wasn't thinking so much as I was feeling. Feeling flattered.

Jeeze Hocus, the last time I pondered something as subtle and insidious, it was the Art of War.

I think what you have realized and finely penned, wins hands down for insidious and subtle. It makes AOW concepts look....frankly....coarse and crude.

Pardon me, I gotta read it a third time.

GS



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terrynor wrote:
"From a personal viewpoint, I realized about 5 years ago that I must be one of the luckiest people in the world. I
have a warm house, a great paying job (soon to be ex-job), and a great community of friends and family. Although
things could be better, I have realized that the costs (economic and time) to improve would be prohibitive."

I've known for many years that I am a very fortunate person. When my daughter came along 7 years ago, life became even better. I too have all the things terrynor mentions above. I bought my house 2 years ago for $285,000, which is a bargain for where I live (most homes going for $400K to $600K). It was a major fixer-upper. I've sunk about $40,000 into it (most of which went to a new roof and remodeled kitchen) and it is now worth about $375,000. It's a small house for the neighborhood, but it's perfect for us and we love it. We live below our means and I will be fortunate to retire this year. I have a dear friend who lives down the street who is trying desperately to buy happiness. She and her family joined the tennis club ($200+ a month), have just sunk $300,000 into remodeling their already beautiful home (which they'll never recoup), and are trying to decide which private high school is the most prestigious one to send their daughter to (even though the area public school is at the top of it's class). And she's still not happy. Quite frankly, if I was spending all that money, I'd be a nervous wreck (even if I had it). I'm much more satisfied watching the balance in my portfolio climb steadily and knowing that in a few brief months I can spend more time with my beautiful child and my vegetable garden. Life is grand!
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hocus wrote,

There is a logic at work in how we make our money decisions. If you are tied to a job until age 65 anyway, you might as well enjoy bits of fun where you can. If I've fooled myself into thinking that early retirement is not possible, why should I bother even worrying about how much that cup of status coffee is costing me? I might as well spend what I have if there is no possibility of making a significant change in my circumstances anyway.

I'm becoming more convinced that this is the reason for today's excess consumerism. People haven't allowed themselves to hear how good they've got it financially. So they act on incorrect understandings of their possibilities in life, and make decisions they would never make if all the information were before them.


Another outstanding piece. No doubt there's the germ of "Secrets of Retiring Early - Part II" in there.

On the subject of the "pressures" of modern life, one thing that always fascinated me when I was working was the fact that "young executives" on the way up had to continually "upgrade" their homes and automobiles to models commeasurate with the status of their new positions. If you didn't upgrade your diet to M&Ms (i.e. a 7,000 sf McMansion and a Mercedes) you were likely to stunt or halt your career progress since you obviously weren't "a team player."

Folks who ignored this game -- even at the cost of upward mobility and higher compensation -- often could accumulate even more assets "than the monkeys higher up on the tree."

They'd also be in a better position to retire early.

intercst

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from intercst: On the subject of the "pressures" of modern life, one thing that always fascinated me
when I was working was the fact that "young executives" on the way up had to
continually "upgrade" their homes and automobiles to models commeasurate with the
status of their new positions. If you didn't upgrade your diet to M&Ms (i.e. a 7,000 sf
McMansion and a Mercedes) you were likely to stunt or halt your career progress
since you obviously weren't "a team player."


from me: Amen to that! When I was working for a major software company with a lot of hard-charging, aggressive folks, the car thing simply amazed me. Everyone trying to spend more than the last guy on a BMW, Mercedes, Jaguar or whatever. I recall telling my boss (who at the time drove a Lexus and then updgraded to a Mercedes when he got promoted) a story I had read in a magazine article. Apparently a management type somewhere was planning to buy a BMW 3 series. Then he got wind of the fact that the admin assistant for his unit was going to buy one also. He immediately changed his plans and bought a BMW 5 series. When I told my boss this story, it was in the vein of "Can you believe anyone would let that bother him?" To my surprise, my boss' response to that story was "It makes perfect sense to me" (that the guy would upgade). And he was serious !

jtmitch

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one thing that always fascinated me when I was working was the fact that "young executives" on the way up had to continually "upgrade" their homes and automobiles to models commeasurate with the status of their new positions.

Apparently a management type somewhere was planning to buy a BMW 3 series. Then he got wind of the fact that the admin assistant for his unit was going to buy one also. He immediately changed his plans and bought a BMW 5 series.

In my Big-5 consultancy days, I usually saw this same thing taken one further degree: People didn't upgrade their homes/autos to keep up with their new positions, they did so in anticipation of their new positions.

I had one senior manager explain it this way to me: "If you want to BE a partner, you have to SPEND like a partner."

I just nodded my head, and decided I needed to find someone else to mentor me. (Side note: The guy I ended up latching on to as my mentor lived well below his means, although to be honest, those means were quite large. When he finally made the partnership, which at my firm meant a raise from about 250k as a junior partner to 750k as a new full partner, I asked him what he was going to do with the money. "I dunno, I guess I could use a new pair of jeans," was his reply. I can respect *that* sort of splurge with that sort of raise.)

--WP
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To accept even the possibility of early retirement is to cast doubt on the popular worldview of economic hardship. If ordinary people are earning enough to retire earlier than ever before in history, it can't also be true that our financial struggles are tougher than ever today. To believe the former, you first have to stop believing in the latter. - Hocus

I think that anyone, no matter how much money they make, can retire early. I am living proof of that. I started at the UT Vet school in 1983 making $13,800 a year. I started at that time putting away $200/month and kept putting exactly that much away in mutual funds in my 403B account. Over the years I worked my way up $28,000 per year and never changed the amount I put in, although I wish I had! A person can live really cheap if they have too. I've seen small houses in the rough part of Knoxville for sale for $12,000.

During that time I bought boats, vans, and trucks that I wish I had never had bought but had instead taken that money and invested it. Today I have $251,000 in my 403B account. I calculate that of that amount only $36,000 is actually money I put in, the rest is the dividends and increase in value of my mutual funds. I will start taking distributions in January of next year.

If my account is around $274,000 on December 31st of this year I will be getting around $17,000/year using the 72(t)/SEPP distributions. About as much money as I will need during retirement! I have never made the vast sums of money that most of the programmers and engineers on this board have made yet I am retired today and I haven't noticed any change in lifestyle from when I was working.

- Art Who is "on vacation" today in Georgia! If you can be " on vacation" when you are all ready retired!

p.s. I asked my family and they said you can't be on vacation if you are all ready retired!




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"He immediately changed his plans and bought a BMW 5 series. When I told my boss this story, it was in the vein of "Can you believe anyone would let that bother him?" To my surprise, my boss' response to that story was "It makes perfect sense to me" (that the guy would upgade). And he was serious "

Pecking order...

It is disappointing that the delta between people and chickens isn't greater than it is.

buckbuckbuck!

kram
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Hocus: You are fantastic! Another well thought out concept.

Your opening paragraph, Flattery is the enemy of Retire Early dreams. Once someone sees that retiring early is a goal within his reach, it is hard to talk him out of it. But flattery prevents many of us from ever seeing the possibilities., caused me to think not so much in terms of self-induced economic flattery, but rather of another type of flattery which causes people to avoid early retirement.

It is flattery of the workplace. How many people continue to toil in jobs they dislike because they receive occasional "attaboys", whether it is in the form of promotions, large raises, stock options and similar forms of flattery.

I can look back at our past messages and find many comments referring to workplace flatteries that have kept people on the job longer than they should or want.

I know only because I was one of them. That larger office, bigger title, more responsibility, more money. Man o' man, how can I think about about leaving when they are lavishing all of this praise and flattery on me?

I am important, I am valuable, I do contribute, one could say to themselves, but still hate the job, the travel, being away from family and friends.

Isn't this workplace form of flattery as dangerous and as insideous as the self-induced flattery you write of? It certainly was for me. NowInMaui

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NowInMaui says: How many people continue to toil in jobs they dislike because they receiveoccasional "attaboys", whether it is in the form of promotions, large raises, stock options and similar forms of flattery.

I can look back at our past messages and find many comments referring to workplace flatteries that have kept people onthe job longer than they should or want.
I know only because I was one of them.


I guess I'm just "lucky" my boss never gave "attaboys" (or even "attagirls"). In ten years he never complimented my work to my face - to my project leader, yes, but not to me. This man really put me on the path to ER. Maybe I should write him a thank you note :)

arrete
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Isn't this workplace form of flattery as dangerous and as insideous as the self-induced flattery you write of?

NowinMaui:

Your comments remind me of the argument made in the book "The Time Bind," by Arlie Hochschild. She maintained that, despite what they say, a lot of people prefer spending nights and weekends at the office rather than at home. The reason is that they get more recognition at work and find their work lives more subject to their control than their home lives.

I think she is onto something, and that it is very sad. Everyone wants to make a contribution of some sort, and it seems perfectly natural to me that a good number of people would look to their work for meeting a part of this need. But it is a big mistake to put all your eggs in this one basket, especially when the entity holding the basket could change at a moment's notice.

And yes, flattery plays a big role in enticing workers to put too many eggs in the work basket. The worker who does not fall for the flattery that comes with being assigned a big office has more flexibility to consider offers from companies that pay more but offer smaller offices. The worker who is not impressed with the flattery of a big title is better able to determine whether he is being paid what he is worth or not.

The form of workplace flattery that particularly annoys me is the idea that the people who work for a company are all part of "a family." I keep careful track of who is in my family, so I know when I am being conned in this regard. If you want to be part of my family, you have to deal with the baby when he's sick. Otherwise, I may get along with you fine, but you are not family.

Business is business, and family is family. Business should be humane, I'm all for that. But I don't like confusing the two roles. "Family" has a special meaning to me, and I like to keep clear about it. It is flattery when a business calls itself family, because the suggestion is that they care about me more than they do and they will help me through hard times when I cannot pay my way.

It's dangerous to start believing that there is any truth to this way of talking because it promises things it can't deliver. I'd rather an employer shake my hand and mean it than add me to the "family" and not mean it.
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hocus wrote:
The form of workplace flattery that particularly annoys me is the idea that the people who work for a company are all part of "a family."

Only too often, it's a dysfunctional "family". This is what leads to the "management bashing" that we've recently been discussing.

-Ron
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On the subject of the "pressures" of modern life, one thing that always fascinated me when I was working was the fact that "young executives" on the way up had to continually "upgrade" their homes and automobiles to models commeasurate with the status of their new positions. If you didn't upgrade your diet to M&Ms (i.e. a 7,000 sf McMansion and a Mercedes) you were likely to stunt or halt your career progress since you obviously weren't "a team player."

a friend of mine recently started a job with a large consumer products company. it's a subsidiary of that company that thinks commercials with jets will make us want to buy razors.

anyway, he noted how all the managers at his level drive a certain BMW....so he went out and bought one. on the one hand, i don't blame him. he works hard and is able to greatly add to his income by doing outside consulting/teaching that pays really, really well. he likes his cars and motorcycles and other nifty toys he can buy. still, i find it odd that i personally would think buying those things simply to spend money and enjoy them (that flattery bit) would be better than buying them to keep up with someone else or maintain an image.

i think i'll make a pledge to myself that i can't legally keep. i pledge that if i ever become a manager with hiring authority, i will only hire engineers that drive 7+ year old cars, fully max out their 401(k)s, and pack a lunch everyday. and i'll fire the ones who buy sportscars to impress me.

zay34kc3


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terrynor must have read my mind when this was written:

From a personal viewpoint, I realized about 5 years ago that I must be one of the luckiest people in the world. I have a warm house, a great paying job (soon to be ex-job), and a great community of friends and family. Although things could be better, I have realized that the costs (economic and time) to improve would be prohibitive. For me it would be like upgrading from a Lexus to a Mercedes. Some would be willing to pay for the upgrade, but I am just happy to have a car...a very nice car. (FYI: I drive a 10 year old economy car.)

i use this line of thought whenever i think, "gee, it'd be nice to buy that surround sound system or new car that i don't really need."

it also reminds me of my pay/work ratio rule. sure, someone could make 1.5x what i make, but if they have to work 2x as much, i still come out ahead. my ratio is higher.

zay34kc3
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On the subject of the "pressures" of modern life, one thing that always fascinated me when I was working was the fact that "young executives" on the way up had to continually "upgrade" their homes and automobiles to models commeasurate with the status of their new positions. If you didn't upgrade your diet to M&Ms (i.e. a 7,000 sf McMansion and a Mercedes) you were likely to stunt or halt your career progress since you obviously weren't "a team player."

this is very true for sales people, at least from what i've seen. i know a person who used to be a sales manager, and he even admitted that managers like sales people (younger) who buy bigger houses, cars, boats, etc. that means they need more money and will work harder. the "worst" was an older person (usually a man) whose kids were out of college and whose house was almost paid off. they were seen to have no "drive."

funny. i'd prefer a sales person who was, most importantly, aggressive and knew how to keep costs to a minimum and prices as high as possible to maximize profits.

zay34kc3
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On the subject of the "pressures" of modern life, one thing that always fascinated me when I was working was the fact that "young executives" on the way up had to continually "upgrade" their homes and automobiles to models commeasurate with the status of their new positions. If you didn't upgrade your diet to M&Ms (i.e. a 7,000 sf McMansion and a Mercedes) you were likely to stunt or halt your career progress since you obviously weren't "a team player."

Wow, I guess I am lucky in that respect. I work for a pretty large company - too many people to keep track of who is driving what, and I don't think anyone even knows where I live, much less how big the house is.

The last place I worked for, my boss very much lived below his means - got all his cars used, had pretty simple things that made him happy, and his favorite phrase was "2 for 29.95!!!!!!" (He managed to find QUITE a deal on shoes and boy was he proud!). We still figure the bulk of his retirement expenses are as follows: gas for the boat, bait, and beer. He is an avid fisherman, and is loving being retired.

He encouraged me to save, save, save - told me that it might not look like much at first but it would grow and I would be glad I did it. He was right.

Cindy
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Your comments remind me of the argument made in the book "The Time Bind," by Arlie Hochschild. She maintained that, despite what they say, a lot of people prefer spending nights and weekends at the office rather than at home. The reason is that they get more recognition at work and find their work lives more subject to their control than their home lives.

I think she is onto something, and that it is very sad. Everyone wants to make a contribution of some sort, and it seems perfectly natural to me that a good number of people would look to their work for meeting a part of this need.


sad indeed. the kiss my wife gave me today for bringing her flowers was far, far better than any recognition i've ever received at a job.

zay34kc3
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These thoughts were sparked by a report I learned about last week from a link on the Living Below Your Means board. It's called "Time Well Spent: The Declining Real Cost of Living in America," published as part of the 1997 Annual Report of the Federal Reserve Bank of Dallas.(http://www.dallasfed.org/htm/pubs/pdfs/anreport/arpt97.pdf).

I found this article a couple of years ago and I highly recommend reading it. It puts a whole new perspective on earlier times and I think of it every time someone says "but it was so much cheaper back then."

Imagine, going into a grocery store and everything is 4 to 10 times more expensive. How much chicken would you buy at $21 a pound or Milk for $12 a gallon? Oranges and bananas were a luxury. That was the situation in 1902.

How often would you go out to eat at if a typical $40 meal for two now costs $200. Amazingly movie price have kept pretty constant (and now we have sound, color and special effects).

How much would you patch your clothes and darn your socks if new ones cost 4 times today's prices? You wouldn't have a closet full of clothes like you do today.

How important would it be to have someone at home since convenience items are out of reach? Hand made clothes and meals made from scratch would be a lot more common. Running a household would be a lot easier with a lot of free labor (kids).

You would have to work much longer just to get the basics. Putting away something for retirement would be much more difficult. An average worker living below their means would give a standard of living far below the poverty line today. Could you think of doing that today to retire early?

Things have gotten a lot better since 1902

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<Art Who is "on vacation" today in Georgia! If you can be " on vacation" when you are all ready retired!

p.s. I asked my family and they said you can't be on vacation if you are all ready retired! >


Yes you can be on vacation even if you are already retired. As long as you are off somewhere ENJOYING yourself, you are on vacation.

My wife and I just got back from Florida last week after visiting my M-I-L. I would not classify that as a vacation, even if I was still working.


BRG


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Political leaders, employers, and manufacturers have a vested interest in making one feel discontented. Could you imagine the impact if George W Bush admitted that times are great (they are for the vast majority of Americans)? How could he develop the discontent necessary to get elected if he dealt straight with reality.

Got me thinking about a speech I saw President Clinton gave recently. In a span of 10 minutes he used the word "safe" probably 30 times. How the government was going to provide for our safety. And this was stated over and over again, but in different ways.

I was actually taken aback by the speech. Were people really listening to this and being lulled into the belief that it is government that is going to take care of us and make everything all nicey, and we don't have to take any responsibility for our own lives?


An Aside: The reason I very seldom watch national network news anymore is the realization that their main thrust is to sell fear. Tell me if I'm wrong, but it seems clear to me.




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I'm trying to understand why I made so many bad decisions for so many years myself. What was I thinking? I've come to believe that I wasn't thinking so much as I was feeling. Feeling flattered.

LOL, hey Hocus, how can you possible say they were bad decisions? At the time you made them, you weren't aware of the why. You were aware of what you thought you wanted, but in no way were you acting from a self-aware mode.

How many people really think of what they are doing? Why they are doing it? Or, really just rationalize what they want to do.

Look how easy it is to lead people into believing they need that spiffy car. Think of how many people smoke today due to the movie stars they admired, that they watched smoking in the movies of yesterday.

I'm a monkey see monkey do type of guy. A lot of people are that way. As I've become aware, I look for behavior I think is the best and do my best to learn the dance. As you may have noticed I've been hanging around this board tryin to learn a new dance...;-) The RE swing.

But it's due to the fact that I've had to realize I cannot count on my being aware of why I do something all of the time. Most peoples behavior is fine in 90% of situations. But will be irrational in the other 10%. Though, I think, the majority of people wouldn't believe this. I've found the best way to insure what is really going on is to ask outside opinions. If you think you're cool, but three people are telling you you're an a**. Well, it's time to get yourself a saddle.

As for understanding the why, of so many bad decisions for so many years, cut yourself some slack. Like, what role models did ya have? Think about how far you've come, and how many people you are now helping! You and the other heavies on this board are role models. Whenever you people do the breakdowns of cost or points of view. You allow us to see how we should have been thinking about a problem. Or see that there are many ways to break things down. But your way wasn't the way I would have done it! If I could. But now.....

Works for me!

Thanks Everybody!

Gracefully Savage

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No. of Recommendations: 7
hocus said: Business is business, and family is family.

No Lawyers were harmed in the writing of this message.

Several years ago I worked as the Network Administrator for the largest lawfirm in Miami. The firm's client list looked like a "Who's Who" book. Entertainers, sports legends, politicians, international terrorists, Russian mafia, Central American dictators, high-tech entrepreneurs.

We "Support Staff", were expected to put in the same amount of hours and have the same commitment as the partners and associates, even though there was no chance of our ever becoming partners ourselves (Only attorneys can be partners in a law firm).

One month, October of 1996, I worked 88 hours of overtime. That's right, I worked 6 weeks in a 4 week month. This was not unusual, I just remembered to keep track of those hours that month.
Since I was an "Exempt" employee (salaried), I got no compensation for this "Extra" time at all.
I was allowed to continue working for "The Firm".

In that year the firm earned an amazing $85,000,000 profit. I'd like to think I had some hand in that, technology being a productivity multiplier.

Did I share in the windfall?
No.

Did I get a pat on the back?
Well, yes.

While at the firm Christmas party, the managing partner came to my assistant administrator and I, put his arm around our shoulders, and said, "Of all the people in this firm you two are my favorites".

Was I flattered?
Yes, I believe I was.

Did I believe it?
No, not really.

Did it keep me there?
No. I left the Firm in February 1997 to go to work for the Environmental Protection Agency.

A lower profile position, but I got a lot of my life back.

Chuck
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aacoh said:An Aside: The reason I very seldom watch national network news anymore is the realization that their main thrust is to sell fear. Tell me if I'm wrong, but it seems
clear to me.


I agree.

A few years ago, John Stossel and ABC News were the first to admit on TV that there had actually been a DECLINE in violent crime rates over the previous 25 years. How fresh!

Mr. Stossel actually apologized for his duplicity in misleading the public...

I have a lot of respect for him as a result of that program. I wish he was on the air more.

Chuck
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"Your comments remind me of the argument made in the book 'The Time Bind,' by Arlie Hochschild."

This is an excellent book that I encourage everyone here to read.


Off2Explore
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"he noted how all the managers at his level drive a certain BMW....so he went out and bought one."

Hopefully he bought a used one in good shape from CarMax?


Off2Explore
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"i use this line of thought whenever i think, 'gee, it'd be nice to buy that surround sound system or new car that i don't really need.'"

I've found that the best way to handle toys is to put off the purchase for a year or so. If you still believe that you really want the toy a year later, it's probably a hobby that you want to pursue.

I've saved a lot of money from this "lie down until the feeling goes away" purchase method. On the other hand, I kept wanting a good 35mm SLR camera, so I finally broke down and asked my husband to get me one last Christmas. Don't deprive yourself; just make sure you spend the money on toys you will actually use and enjoy. You'll probably find that's about 5% of the ones you might have bought on impulse.

Off2Explore
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No. of Recommendations: 6
<<the "worst" was an older person (usually a man) whose kids were out of college and whose house was almost paid off. they were seen to have no "drive.">>

I was a manager in a large retail corporation with over 650 retail locations. With frequent meetings, I noticed I was fast becoming one of the older, longer tenured managers in my area. This seemed to cause a certain amount of respect from my management peers but a lack of same from the higher ranking people above. One of the few peers of mine who was in the same age/tenure group remarked to me that the reason for this was that the higher ranking management types felt that we were less maleable, pliant and impressionable than the younger managers. They could be manipulated when we could not. They were seen as hungry where we were not. They needed to work harder, longer hours,etc to cover their financial needs while we did not. We had achieved a level of financial independence that made us less likely to accept that the liquid falling on our heads was rain when we all knew better.

I have no doubt that my retirement this year at 55 caused as much relief to my superiors as it did to me.

Gary :o)

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As you may have noticed I've been hanging around this board tryin to learn a new dance...;-) The RE swing.

- Gracefully Savage



Hehe... I always thought it was a dance to the tune of RE RE RE REspect... (just a little bit)

Couldn't help myself. Apologies to AREtha.

Mog
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Hocus writes:
The form of workplace flattery that particularly annoys me is the idea that the people who work for a company are all part of "a family." I keep careful track of who is in my family, so I know when I am being conned in this regard. If you want to be part of my family, you have to deal with the baby when he's sick. Otherwise, I may get along with you fine, but you are not family.

I so wholeheartedly agree. And I'll add to that by saying that you are "family" only while you're employed there. I worked at a place that claimed to be "family" to its employees. One employee was laid off, and fell on more bad luck, and turned to her former "family" in her time of need. Was anyone in this "family" there to help her out. He**, NO!

Chooey

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An Aside: The reason I very seldom watch national network news anymore is the realization that their main thrust is to sell fear. Tell me if I'm wrong, but it seems clear to me.

Mike,

You just punched one of my buttons. I gave up in TV news (except for storm warnings) when I realized most of the promos were of the We know something that will kill you. Watch the ten o'clock news for details! If it's that damn important, tell me now, not later! They're just trying to plug their next newscast by convincing people that they've got sometihing we need.

Bob
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In the introduction to one of her Twightwad Gazette Books, Amy Dacyczyn points out that we are "drowning in rising expectations." That is, the bar for "happiness" or "contentment" is continually being raised.

I don't want to commit slander of any sort, so I will try to phrase this carefully:

I am under the impression that I saw a 60-minutes type show a few years back, showing how the owner of the Tightwad Gazette took about $1 million from sales of the Gazette, put it in bonds because she didn't trust stocks, and then set about raising her kids.

Part of raising her kids was feeding them colored marshmallows sold past their expiration date at some kind of food clearance warehouse.


Now, I don't know if Amy Dacyczyn is the woman I'm thinking of -- and no one should believe anything I say unless someone else here can verify it, because maybe my recollection is wrong -- but at the time my wife and I were both under the impression that the woman in the program was -- how shall I put this? -- not the nicest person or the best parent we'd ever seen.

I also want to point out that this show was a few years back and if she had put some of the money in stock index funds (after educating herself maybe) instead of bonds, she could have afford to shop at a store where the food is a little bit fresher.

--azurefox
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An Aside: The reason I very seldom watch national network news anymore is the realization that their main thrust is to sell fear. Tell me if I'm wrong, but it seems clear to me.

Mike,

You just punched one of my buttons. I gave up in TV news (except for storm warnings) when I realized most of the promos were of the We know something that will kill you. Watch the ten o'clock news for details! If it's that damn important, tell me now, not later! They're just trying to plug their next newscast by convincing people that they've got sometihing we need.


I gave up TV news a few months after I was able to get most of my news from the Internet.

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This is in response to azurefox's message # 12672.

That sounds like Amy Dacyczyn to me. (I don't watch much TV.)

One of the reasons I like Amy Dacyczyn's Tightwas Gazette books is because she is so extreme. When I read those books, I alternately:

1) nod my head sagely and pat myself on the back for having already implemented that fine idea,

2) say "Oh! I could do that"

3) and ROFLMAO -- "Why would anyone do such a silly thing?"

It gives me something to think about. A different benchmark, if you will.

Part of raising her kids was feeding them colored marshmallows sold past their expiration date at some kind of food clearance warehouse.


Is it the "colored marshmallows" or the "past their expiration date" that bothers you? Colored marshmallows are junk, but that means they don't have anything in them to go bad. It's more of a texture change than a nutritional change as they age.

We've got one of those food clearance warehouses near here. I don't shop there because they mostly have convenience food which is too salty for me, but one of my friends does. She says that it gets really crowded when the welfare checks come in.

my wife and I were both under the impression that the woman in the program was -- how shall I put this? -- not the nicest person or the best parent we'd ever seen.

I wouldn't want her for my mother either, but her kids will really know how to LBTM! In her books, I get the impression that not only do her children have all the real necessities of life, but she tries to make sure they also get the frivolities that matter to them. She started fixing garishly colored gelatin snacks when one of her sons felt the need to compete in the junk snack arena. That's more than I would do!

and if she had put some of the money in stock index funds ...

I don't think she could stand the volitility. Money magazine did a profile on them, and made recommendations, but they decided to stick with just spending less. It's what they are good at.

Vickifool
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In her books, I get the impression that not only do her children have all the real necessities of life, but she tries to make sure they also get the frivolities that matter to them.

Her books undoubtedly put a positive spin on things, don't you think?

In the TV show (which I saw a few years ago, and which I recall vaguely) she was feeding her kids stuff I wouldn't feed my dog. Peanut-butter sandwiches with ground up potato chips (all ingredients she could get at the old-food warehouse). No meat, no fresh veggies (probably too expensive?). I even recall vaguely that a reporter's concern about 'nutrition' was greeted with a response along the lines of nutrition being a 'scam'.

The kids did not look like happy campers at all (but maybe that's just my subjective impression?).

I can only imagine they will grow up very resentful and have a hard time finding partners in life who will put up with the reflexive penny pinching that is getting build in to them. I would guess they will all need therapy. Maybe they can just check a book on therapy out of the library.

Those are just my views and unsubstantiated opinions. I'm going off a 20 minute TV show that left me with a very negative impression.

You on the other hands, have the books written by the woman herself, in which she describes herself as being virtuous.


I'll let everyone come to their own conclusions.

--azurefox
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No. of Recommendations: 13
A few years ago, John Stossel and ABC News were the first to admit on TV that there had actually been a DECLINE in violent crime rates over the previous 25 years. How fresh!

Mr. Stossel actually apologized for his duplicity in misleading the public...

I have a lot of respect for him as a result of that program. I wish he was on the air more.


There are two reasons John Stossel isn't on the air more. First, his reports run counter to accepted socially and politically blessed viewpoints, and he has to spend a fair amount of time dealing with the fallout (like threatened boycotts and tax audits). Second, and most important, he is not a talking head. He has to spend a large amount of time researching his topic, and developing a story from facts. This of course is completely opposite of most news reporting, and can be quite time consuming.

Harley - who doesn't agree with everything Stossel says, but who really admires his integrity, which is unique in his profession.
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No. of Recommendations: 9
In his introduction to 'Time Well Spent: The Declining Real Cost of Living in America,' Bob McTeer states “Time is money, they say. But money, rather than time, is how we usually keep score…. Whenever we get close to the Joneses, they refinance.” Seems more like a grudge match than sheer competition to me. (Thanks for your reference hocus.)

It may be that the real costs of living in America have declined, but it feels like living is awfully expensive. That's because of the debt load we carry now in contrast to the credit that was available decades ago. American consumers have been sucker-punched by the soft stroke of flattery. We think we deserve everything we want - all for surviving a trip down the birth canal. A beautiful woman purrs “because you're worth it” from the television.

I don't think there was a pivotal time when our society's attitudes changed. Instead, there was gradual erosion of good values in favor of acquiring ephemeral happiness. In the 1950s, the 'disposable culture' became an endorsement of affluence. In the 1960s, Americans adjusted to changes of the new social order that gave rise to the 'Me Generation' in the 1970s. That generation of Americans thrived in the 1980s and produced a tech savvy generation of latchkey kids called 'GenX.' Segued into another decade of phenomenal economic success and breakthrough technologies are the 1990s. That time gave rise to the battle cry “Show me the money!”

So, through fifty years of remarkable accomplishment and economic bullishness, why do Americans feel so poor when we earn so much, when we look so fabulous? Answer: Available Credit. By definition, credit is 1) A reputation for sound character or quality; 2) An acknowledgment of work done; 3) Reputation for solvency and integrity entitling a person to be trusted in buying or borrowing.

Many Americans are steeped in popular and pervasive credit card debt. They clear some debt only to acquire more, as in the case of the Joneses. All that's being kept up is interest rates and insolvency. People are borrowing more money for longer terms and are acquiring more credit accounts. Very many people carry debt that is half their after-tax income, and at every economic level. Without correcting our course and shifting our focus back to fiscal responsibility, our longest lasting legacy may be debt.
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The distance between common perceptions and objective realities is best illustrated by looking at what has happened to the price of housing. In 1920, the price of a new home was 7.8 hours of labor per square foot. In 1956, the price had dropped to 6.5 hours per square foot. In 1996, it was down to 5.6 hours per square foot.

I live in the Los Angeles area, one of the most ridiculously overpriced housing markets in the nation. I think only San Francisco and New York are worse.

The above numbers got me curious, so I did a few calculations. I paid 6.6 hours of my labor per square foot for my house. Obviously more than the current average, but not as outrageous as I've always felt it was.

Of course, I'm using my salary, not $13.18 an hour, and I own a 2000 square foot home, vs. the 1400 square foot home I grew up in.

My wife and I pay about 38% of our combined take home pay on the mortgage, which being a 30 year loan, is almost entirely interest. It's 25% of our gross.

This isn't at all painful for us since we have no other debt. I used to live someplace cheaper, but it involved an extra 60-90 minutes driving for me every day. Some savings are not worth it.

I'm curious - what do other people's homes here cost, in terms of your own labor hours per square foot?

- Gus


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azurefox refuted my post thusly:
...I would guess they will all need therapy. Maybe they can just check a book on therapy out of the library.

....You on the other hands, have the books written by the woman herself, in which she describes herself as being virtuous.


I'm not that silly! I checked her books out of the library, of course!

Vickifool -- debating with her friends about how much therapy is really needed to overcome the trauma of growing up since 1902

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I'm curious - what do other people's homes here cost, in terms of your own labor hours per square foot?

- Gus


That's a really good question! I think I was making $22000/year when we bought our old "2200" sf house for $180000 in 1983. Around 7.5 hours/ft. (I think the house is actually 1800 sf, but let's not quibble. Especially since I'm not sure about the salary either, and it's a woman's salary. And both of us were "working" so we had no at-home support.)

Our new house is harder, because I can't decide the "labor" rate. I don't work for money, so divide by zero. With my DH, we have a choice of base salary, salary plus bonus, salary plus options, W-2 wages, etc. I figure the answer is either 7.5 hours/sf again at what I feel is the "income" or 1.5 based on what feels like funny money to me.

It was interesting to think about, anyway.

Vickifool


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"I'm curious - what do other people's homes here cost, in terms of your own labor hours per square foot?"

Ignoring my husband's income, and pretending that I am paying for the house alone, less than 2. If you count his income too, more like 1. We live well below our means. :-)

Off2Explore
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my home that I just bought cost minutes of work per square foot.

tim
*60 more months
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sorry, that was 26 minutes per square foot
tim
(the midwest is great)
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"I'm becoming more convinced that this is the reason for today's excess consumerism."

I've been out in the stores recently after a lengthy absence from public life. I noticed a definate increase in the size of the crowds (especially on the week ends) and in the amount of merchandise moving out the door. I think the "I deserve it now" attitude is stronger now than ever.

Thank you for helping me understand better what I have noticed
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tymmo wrote,

sorry, that was 26 minutes per square foot

You're obviously not billing under a PPO contract. <grin>

intercst
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Hopefully he bought a used one in good shape from CarMax?


<pretenious tone>

no, no, no. up and coming managers there drive only new.

</pretenious tone>

zay34kc3
happy with his 7 year old station wagon
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No. of Recommendations: 15
Nice one Hocus,
puts spending in a new light to me.
This weekend I was going to spend approx £300-400 on a new stereo system. There is nothing wrong with my current stereo, okay its a little old but it plays music to a decent standard. Why was I going to buy the new stereo then? Because I thought I deserved an expensive treat after getting a new job. Okay, buying it would make me feel better in the short term, and when my mates come around they can all marvel at my new found wealth that has manifested itself in a state of the art stereo system. How flattered I would have felt. But in reality, I dont NEED a new stereo yet, the one I have functions perfectly well. Instead, my mates can come around and see my old stereo and maybe even wonder why I havent splashed out on something new. However, I will be grinning safe in the knowledge that I will be retiring slightly earlier than I would have been had I not read your message.
Cheers
Smytheyboy
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"No meat, no fresh veggies (probably too expensive?)."

If this is true, I doubt the guest was the Tightwad Gazette author. She and her husband have a 1 acre garden (according to the book) which provides them plenty of fresh vegetables. They preserve these and use them all year round.

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I'm curious - what do other people's homes here cost, in terms of your own labor hours per square foot?

Current house (inner suburb of Minneapolis):
Current house, my salary: 1.22 hours/sqft
Current house, both salaries: 0.80 hours/sqft

As I've stated, we're moving to a new house this fall (boondocks suburb of Minneapolis):
New house, my salary: 2.15 hours/sqft
New house, both salaries: 1.41 hours/sqft

Not sure the best way to compute acreage. We are over tripling our lot, but since both are under 1 acre, the ratios get blown out of proportion. The new house will also be substantially closer to my job; I should save almost an hour of commute time per day. I haven't calculated the cost/sqft using the per hour for total work time (work+lunch+commute), but the new house will be better in that regard.

--WP
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"I'm curious - what do other people's homes here cost, in terms of your own labor hours per square foot?"

In Mid michigan my 1400 square ft. house cost me @ 2.29 hours. I feel pretty good about this, but we have been the house @ 20 years with a major remodling job about 5 years ago ( price taken into account ).

A note my dad would often tell me " A man is rich in proportion to what he can live without"

My favorite car is based on two things Over 100,000 miles under $1,000.

looking forward to retiring earlier every year.

Bob
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I'm curious - what do other people's homes here cost, in terms of your own labor hours per square foot?"


Mine was 1.75 hrs/sq. ft. (if you use 2000 hours in a year, if I use the actual number, it is somewhat higher)
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I only skimmed the article, so I probably missed it, but how are they calculating wages? Are they using average total wages, or take home pay?
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If this is true

I want to emphasis that when I say "no fresh veggies" I mean I don't remember seeing any in a 20 minute TV segment that I saw a few years ago.

I saw the kids eating peanut-butter sandwiches with crushed up potato chips, and I saw the old colored marshmallows. I did not see any veggies.

It's entirely possible that they have a ton of them in their garden and always have them for dinner.


My main point in my response is that "tightwad" has negative connotations for a reason and that any advice from an 'official' tightwad should be carefully weighed.

That's all I meant!
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The above numbers got me curious, so I did a few calculations. I paid 6.6 hours of my labor per square foot for my house. Obviously more than the current average, but not as outrageous as I've always felt it was.

Of course, I'm using my salary, not $13.18 an hour, and I own a 2000 square foot home, vs. the 1400 square foot home I grew up in.

My wife and I pay about 38% of our combined take home pay on the mortgage, which being a 30 year loan, is almost entirely interest. It's 25% of our gross.

...

I'm curious - what do other people's homes here cost, in terms of your own labor hours per square foot?


I paid 2.1 hours of labor per square foot, but I used my current salary, which is higher than when I bought the house 4 years ago. My mortgage, also a 30 year, is 12.6% of my current gross.

--malakito.
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Speaking of flattery, this whole thread has been one of the most self-congratulatory things I have ever seen.

Atta boy, keep up the good work!

Mike D.
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GusSmed wonders what do other people's homes here cost, in terms of your own labor hours per square foot?

My house in Scottsdale, Arizona, cost me about 2.24 hours per square foot based on the actual cost and my gross salary at the time. If I were to rebuy it at the estimated value today, it would be about 2.58 hours.

That seems like a great bargain, so I triple-checked the calculations. Boy do I feel lucky :^)

--Madness
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No. of Recommendations: 90
In response to a claim in a television profile that a proponent of frugality provided her children "No meat, no fresh veggies (probably too expensive?)."

LynnMP127 observed that:

If this is true, I doubt the guest was the Tightwad Gazette author. She and her husband have a 1 acre garden (according to the book) which provides them plenty of fresh vegetables. They preserve these and use them all year round.

Your comment reveals the difference between how those using Retire Early thinking look at things and how some who are uneasy with the idea look at things. I did not see the television program at issue, but I've seen other profiles of Amy Dacyczyn, and the pretzel logic used by reporters desperate to find something negative to say about her is a thing of wonder.

The case you bring up is a perfect illustration of the phenomenon. It does not count at all if she grows fresh food and feeds it to her family. All that matters is that she doesn't pay enough for it. For reasons that I am not able to spell out at this point, the fact that not enough money is exchanged in obtaining food is seen to contaminate it.

The media portrayals are full of this sort of "logic." I have seen her criticized because she buys second-hand toys for her children. It does not seem to matter that her entire writing career was the result of her desire to arrange things so that she would have time to raise her five children.

She was determined to find a way to make this happen, did so, shared her ideas with a few people, and then became a celebrity because there was no one else speaking this message. It seems strange to me that a woman is characterized as a bad mother because she does what it takes to spend time with her children. (And the Dacyczyn family had to get by on under $20,000 until she unexpectedly hit it big. We are not talking about yuppies here.)

Two other criticisms are that: (1) she doesn't give enough to charity; and (2) she continues to live frugally even though she doesn't need to now that she is "rich." She has said that she does not feel comfortable spending a lot more money since the family already has all its needs provided for at the lower spending level. And she plans to allow the money from her books to grow, and then use it for the education of her children and charitable contributions.

If she would just spend like everyone else, criticism (2) above would be answered. And criticism (1) would never be raised because there just wouldn't be much left to give to charity. However, because she has chosen a path where she may leaves millions to charity rather than hundreds or thousands, she is attacked for her lack of generosity and her neurotic stinginess. All human behavior has an explanation, but I am not able myself yet to pinpoint the source of this way of looking at things.

It makes me uncomfortable to even discuss these matters because I don't understand why it is anyone's business how Amy Dacyczyn raises her children or how much she gives to charity. We have a right to criticize her books, if any of the advice in them is not good. But the other matters are personal. But in the case of someone who chooses not to spend as much as others, all the usual rules about not judging others do not come into play, at least in the minds of her media critics.

It's my impression that the critics that Dacyczyn cares about are the ones who read her book and allow it to influence their lives. The latest edition includes a section of letters at the back that will bring tears to your eyes if you have a soft spot in your heart for your fellow man. You'll hear stories of marriages that were breaking up and were saved by her advice, and stories of people who had no place to turn in their financial distress until they saw Dacyczyn on television. Still, the media critics note, look at the marshmellows her children eat. Let's not forget the marshmellows!

It's not required of television journalists that they read books before commenting on them. So it may be that the people responsible for this broadcast really did not know why the marshmellows posed no threat to the health of the Dacyczyn brood.

The book explains in its usual, careful, sensible, patient, detailed, helpful way what the expiration dates on food products mean, why and when they are valuable, and why and when there are cases where the consumer can get a great deal by purchasing food products that are still perfectly safe to eat but hard to sell because others do not understand the meaning of the dates.

I wonder at times if misunderstandings of this type would be cleared up if the 20 minutes of television time devoted to the Dacyczyn expose had been devoted instead to providing practical information to consumers who want to learn about this sort of thing. Of course, I've been called (and rightly so) an "idealist utopian" for daring to think such things. It's left to the likes of Amy Dacyczyn to provide practical help to people trying to work, live, and raise families, and we all know what kind of person she is. A buyer of suspect marshmellows.

Even Dacyczyn's defenders usually note that they do not follow every piece of advice in her books. One of the reasons I so respect her journalistic approach is that she tells all readers up front that she does not expect them to do so. The purpose of her articles is to explore issues intelligently, examine them from various angles, and allow people to draw their own conclusions based on evidence (not prejudice or invective).

There's no "con" in an Amy Dacyczyn book. You can take it or you can leave it, but there are no fancy words suggesting that you are not good enough to share in the wisdom of the elite to which the writer belongs. Dacyczyn is a person writing to other people, and makes no pretense to being more. She wouldn't make it on network TV.

Like all others, I have not taken action on every article she published. I never thought that this was even a remote possibility when I bought her book. However, if I were asked by a publisher to delete some of the articles from her books to get it to a smaller size, it would be a hard task. There are few that did not present issues in a fair light, and there are few that did not stimulate thinking of my own.

Amy Dacycyzn did more for me than teach me some frugality tricks. At a time when I had become disillusioned with the pretense and haughtiness of the journalism profession, she offered me a model of how one could use writing to do a small bit of good in the world (which was the idea back in the days I got started). I'll think of her fondly every time I hand my child a crusty marshmellow (and every time he laughs back at the daddy to whom he needn't say "bye-bye" to at the initiation of 12-hour stretches of separation each day).
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Two other criticisms are that: (1) she doesn't give enough to charity; and (2) she continues to live frugally even though she doesn't need to now that she is "rich."

Hmph. Whatever happened to "It's her money and therefore it's her business how she spends it?" This reminds me of people who criticize Bill Gates' charitable foundation because it doesn't spend money on the "right" charities. So even if Amy Dacyczyn donated to charity, someone will say she doesn't donate enough or doesn't donate to the right ones.

Yet another instance of people who can't run their own lives but feel perfectly justified in telling others how to run theirs.

Anna :-)
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hocus says: I did not see the television program at issue, but I've seen other profiles of Amy Dacyczyn, and the pretzel logic used by reporters desperate to find something negative to say about her is a thing of wonder.


The discussion about Amy Dacyczyn on a talk show reminds me of a situation Larry Roth (Editor of the former Living Cheap News and author of Beating the System) got into in his first (and only, as far as I know) talk show experience. He had been asked to come on a local talk show to speak about frugality. He was blindsided by another guest (a psychologist) who had been brought on to show how there must be something wrong with Larry, since he was so frugal. She even intimated that there was something wrong with saving "all that money".

Larry really is a good read, though sometimes says pretty controversial stuff. And I don't agree with his investing strategies. Even so, Beating the System is one of my all time favorite books. He self-published. Here's his URL for his writings

http://www.livingcheap.com/

Side note: it isn't in the press's best interest to encourage frugality. They need companies to spend advertising dollars, and making frugality look good wouldn't please very many advertisers.

arrete
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I'd have a hard time if I ever had to choose my favorite hocus post, but his defense of Amy D. ranks very close to the top. Thanks, hocus, for once again putting into clear, concise words my jumbled thoughts!
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GusSmed wonders what do other people's homes here cost, in terms of your own labor hours per square foot?

My current house was purchased in 1988 for $108,000, 1882 sf. At the time I was making $16.68/hr. So if my number crunching is correct, my cost was 3.4 labor hours per square foot. I never believed in the buy-as-much-house-as-you-can-afford theory. The house is now paid for and I'm retired.
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GusSmed wonders what do other people's homes here cost, in terms of your own labor hours per square foot?

I love this thread. When I moved into Denver, I considered the single guy's dream, a loft in Lower Downtown. But every time I looked, I couldn't justify the costs, even though the market was rising.

Well, at the time (I was still working as a well paid software engineer) the cost of a loft rose from 3 to between 4 and 5 hours/sq. ft.! No wonder they looked expensive to me! And the housing market in Colorado is notoriously cyclical. I think I'll wait for the next downturn.

-Ron
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On the subject of the "pressures" of modern life, one thing that always fascinated me when I was working was the fact that "young executives" on the way up had to continually "upgrade" their homes and automobiles to models commeasurate with the status of their new positions. If you didn't upgrade your diet to M&Ms (i.e. a 7,000 sf McMansion and a Mercedes) you were likely to stunt or halt your career progress since you obviously weren't "a team player."

Wow, so this really exists!

A friend of mine recently married a "successful" executive. Previous to this marriage she was a single mom, a teacher making about 30,000 per year. Her debt was extremely low, she owned her own home and her SUV was paid off. (She lived in NH where the SUV was necessary for her commute.)

Her new husband does not want her to work, since it would put forth the wrong immage. Although he makes over $200,000 per year, he has two mortgages on his house and about 50,000 in credit card debt. He insists she needs a new SUV, (though the old one is in great shape and only about 5 years old,) and should join the gym and tennis club. He also has a 11 and 13 year old with no college fund. Oh yes, his BMW needs upgrading.

Although he is a very nice guy, how do people like this get to run companies?

Baffled.

InParadise
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This thread is heavily multi-threaded. Not that I usually mind, but this one has gotten unmanageable. Remember, you can always start a new topic on things like how many hours of work/sq ft of house, and Amy Dac...'s lunch habits. I like the topics being discussed, but it gets difficult to go back and re-read a particular post when everything is so jumbled. Just a minor complaint.

By the way, Hocus, I think you are right on the nose with your comments about Amy's habits vs her articles vs her privacy. I wish I could have said it so well. And whoever made the comment about this thread being self congratulatory, you were pretty much on the nose too. But it's fun to do sometimes.

Harley
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With my DH, we have a choice of base salary, salary plus bonus, salary plus options, W-2 wages, etc. I figure the answer is either 7.5 hours/sf again at what I feel is the "income" or 1.5 based on what feels like funny money to me.

I didn't include the "funny money" in my calculations, and only included my income, not my wife's. I have an additional income of 70% in options + stock over my base salary.

Since all of my "funny money" is stock or stock price related, I consider it a one-time event, even though I've cashed about $30K of it so far this year. As such, it goes straight into investments, rather than into expenditures.

This is important, I think. I've read a few novels in which the main character gets over his head by treating bonuses / options as if they were income. Spending it on toys is bad enough, but increasing recurring expenses like a mortgage based on that is a recipie for disaster.

I do have a few toys, though :).

- Gus
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Not sure the best way to compute acreage. We are over tripling our lot, but since both are under 1 acre, the ratios get blown out of proportion.

I think the report was talking about house size, not lot size. I certainly based my calculations that way.

Lot size isn't a good measure because in some parts of the country, land prices are nearly zero. My in-laws have 20 acres or so, but live in the wilds of South Dakota.

- Gus
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<< Yet another instance of people who can't run their own lives but feel perfectly justified in telling others how to run theirs. >>

Yet another reason why I don't bother to watch tv! (:


Washu! ^O^
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Although he is a very nice guy, how do people like this get to run companies?

Greetings InParadise!

How about, image and psychobabble.

Is he not a, team player? (He belongs to that $200 per month health club) Is he not a, Hot Runner? Is he not motivated? When you look at him, doesn't he exude success (Look at that $50 tie, those $300 shoes). He must be going places! (Look at that $60K car) Come on! You really want to be like him. You know you do! He's just dripping, Success! Can't ya just, smell it!

GS....ROFL......

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>I'm curious - what do other people's homes here cost,
>in terms of your own labor hours per square foot?

Paid 1.1 labor hours per square foot, in Minnesota,
for a 2600sf 4-bedroom 3-bath house.

(using our current income numbers, divided by
price paid 5 years ago - but numbers aren't
much different if we use 5-yr old income numbers)

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I'm curious - what do other people's homes here cost, in terms of your own labor hours per square foot?

Would have no idea how to compute this. We live in company housing which is a perk of employment, and includes utilities. In return my husband is on the refinery's fire brigade and occasionally gets called out to fight a fire, even in the middle of the night. However, this has happened maybe 10 times in the 4 years we have been here.

InParadise
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Got me thinking about a speech I saw President Clinton gave recently. In a span of 10 minutes he used the word "safe" probably 30 times. How the government was going to provide for our safety. And this was stated over and over again, but in different ways.

I was actually taken aback by the speech. Were people really listening to this and being lulled into the belief that it is government that is going to take care of us and make everything all nicey, and we don't have to take any responsibility for our own lives?


An Aside: The reason I very seldom watch national network news anymore is the realization that their main thrust is to sell fear. Tell me if I'm wrong, but it seems clear to me.


Well, when you think about it the Federal Goverment is someone to fear,/b>. They have their finger on the buttons that controls thousands of nuclear warheads. Millions of megatons of Hydrogen Bombs are something to fear. Talk about something that would cause the value of your portfolio to go immediately to zero. I imagine any kind of nuclear war, even a small limited one, would severely affect the values of all our stock portfolios. One crazy kamikaze terrorist with a suitcase sized nuclear weapon could destroy New York City.
- Art




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>I'm curious - what do other people's homes here cost,
>in terms of your own labor hours per square foot?

Last house we owned was roughly 1 hour per heated square foot. The house before that was, in our spending days, about 2.2 hours/sq ft.

Current home (the boat) is closer to (gasp) twelve hours per heated square foot.

Yikes -- I think I wish I hadn't done that calculation!

Dory36
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I have an 1800 sf townhouse purchased 6 years ago.

Using my 1995 income (can't find 94!), it was 4.2 hours per square foot. Current income it is down to 2.9 hours (which is a good thing, since all I've got is my salary now to take care of it! There were 2 incomes when we bought it)

Cindy
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Wonderpup wrote:
The new house will also be substantially closer to my job; I should save almost an hour of commute time per day. I haven't calculated the cost/sqft using the per hour for total work time (work+lunch+commute), but the new house will be better in that regard.

Congratulations! The "total work time" is an important part of housing.

Vickifool

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Millions of megatons of Hydrogen Bombs are something to fear. Talk about something that would cause the value of your portfolio to go immediately to zero.

Art, I am still wiping the tears from my face after reading this. Not that the idea of bombs is funny, but you do have a way of expressing yourself! Thanks for the best laugh I have had in days!

Susi
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I briefly looked thru the report you mentioned and it seems like they compare pre-tax wages. A worker in 1910 paid no taxes, while a worker in 2000 pays up to 50% (including state and local taxes). So while I generally agree with the report (that things now really cost less than they did in the beginning of the century), the difference is up to 2 times less.
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bamboo7431 wrote:
I briefly looked thru the report you mentioned and it seems like they compare pre-tax wages. A worker in 1910 paid no taxes, while a worker in 2000 pays up to 50% (including state and local taxes).

Although I'm no fan of the guv'mint, I gotta call this one.

(a) workers in 1910 certainly did pay taxes. Either directly as sales and excise taxes (liquor and tobaco have long been money makers for the govt.) or indirectly through higher rents to cover land taxes. (No, I won't accept any arguement that the landlords payed these taxes, so they didn't affect the workers. I don't beleive in altruistic landlords!)

(b) however we may feel about the quality of service delivered by the guv'mint, taxes are largely used to deliver services. Of obvious interest on this board are social security and medicare programs. Sure, I'll accept that using guv'mint programs is like investing through a full service broker. Premium prices for barely standard service. And the guv'mint's spending does distort the market. But taxes do represent a cost that voters have volunterily taken on for programs that they believe are to their benefit.

I'd have no problem with the country deciding to go back to fee based education and private policing. But a mercenary army with nuclear weapons does bother me...

So while I generally agree with the report (that things now really cost less than they did in the beginning of the century), the difference is up to 2 times less.

Nope. If I wasn't paying direct taxes, I'd be paying indirect taxes. (Or I'd be doing without. Poor folks simply didn't get much schooling or police protection a century ago.)

A century ago, the average blue collar worker worked in a company town, renting housing from the company and buying all of their supplies from the company stores. And the company wasn't a charity.

-Ron
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Well, when you think about it the Federal Goverment is someone to fear,/b>. They have their finger on the buttons that controls thousands of nuclear warheads. Millions of megatons of Hydrogen Bombs are something to fear. Talk about something that would cause the value of your portfolio to go immediately to zero. I imagine any kind of nuclear war, even a small limited one, would severely affect the values of all our stock portfolios. One crazy kamikaze terrorist with a suitcase sized nuclear weapon could destroy New York City.

Hey Art,

I must say, this is something not discussed on the boards; but a nuclear bomb, germ warfare, terrorism, is very much a likely scenario.

I'm sure this is the thinking of many who say "Why bother?". I know that was how I felt for many a year.
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aacoh wrote,

I must say, this is something not discussed on the boards; but a nuclear bomb, germ warfare, terrorism, is very much a likely scenario.

Yes. But I'd add "Earth colliding with an asteriod" to the list.

intercst

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InParadise pondered:
Her new husband does not want her to work, since it would put forth the wrong immage. Although he makes over $200,000 per year, he has two mortgages on his house and about 50,000 in credit card debt. He insists she needs a new SUV, (though the old one is in great shape and only about 5 years old,) and should join the gym and tennis club. He also has a 11 and 13 year old with no college fund. Oh yes, his BMW needs upgrading.

Although he is a very nice guy, how do people like this get to run companies?


As I read the annual reports for some of the companies I invest in, I noticed that the top executives made enough money to retire immediately at a very nice withdrawal rate. Why are these guys still working?

Some of them I could believe like their jobs. Andy Grove, for example.

I started a Foolish Four portfolio, and perhaps those execs like the challenge of turning a company around and making it a success. But then I noticed that those guys don't own significant stock in their company. Some of them don't own any vested stock, in spite of large options packages. If they thought they could turn the company around, wouldn't they hang on to the stock?

Maybe they've figured out the lifestyle required to spend a >$2 million salary, and are deeply in debt?

Your guess is as good as mine

Vickifool
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Dory36 wrote:
Current home (the boat) is closer to (gasp) twelve hours per heated square foot.

I knew there had to be a disadvantage to living on a boat besides the lack of closet space!

(I'm moving to a new house soon. My current closet is 30" wide. My new closet is almost as big as the room I rented out when I was in college. As one of my friends teased me, I'm going to have to buy a dress!)

Vickifool -- happy to leave 1902 closets back in 1902
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Gus: I'm curious - what do other people's homes here cost, in terms of your own labor hours per square foot?

When I bought my 2000 sq ft house three years ago (next week), it cost me 1.83 hrs/sq ft. Today, it's 1.38 hrs/sq ft based on my salary alone. Household income would be closer to 1.05 hrs/sq ft.

Shy

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I wrote: Current home (the boat) is closer to (gasp) twelve hours per heated square foot.

Vickifool replied: I knew there had to be a disadvantage to living on a boat besides the lack of closet space!

Closet space?!? What's that? Believe it or not, when we went home to the boat last month, we stored the two suitcases in a utility locker ashore, because there simply isn't room for even a couple of suitcases!

I will refrain from talking about the size of the head (bathroom, for you landlubbers), except to say that I find airline bathrooms luxurious!

(The 12 hours/sq ft sounds high, but our boat probably has about 150 sq feet inside. Ours is a 30 year old boat -- a new one would be the same size, and cost 60 hours/sq ft!)

Dory36, who actually has to think about where a new paperback will be stored...
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GusSmed asked:
I'm curious - what do other people's homes here cost, in terms of your own labor hours per square foot?

I pay 4.3hr/ft^2 post tax, in Raleigh, NC.

Chuck
Thinks paying .5 hours of labor for a 2 hour movie is a good deal...


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Hi! Have a few of the AD books myself. The food for children critisism may come from the pre-farm days. You may recall that they saved 40,000.00 USD for the down payment on a single modest income. At the time Amy was feeding her family on very basic very cheap food. Balony comes to mind. And yes, not buying fresh veggies. These were her choices, and not ones I would make. But I support her in these choices, and she certainly recommends that people do what they are comfortable doing - not what she herself did.
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(a) workers in 1910 certainly did pay taxes. Either directly as sales and excise taxes (liquor and tobaco have long been money makers for the govt.) or indirectly through higher rents to cover land taxes. (No, I won't accept any arguement that the landlords payed these taxes, so they didn't affect the workers. I don't beleive in altruistic landlords!)
We STILL pay sales and excise taxes
The land taxes are still built in the rents
Yet we are paying income tax not even on top of that, but BEFORE it.

To put it to math:
- in 1910 a worker earned X and payed no income taxes,
but payed Y dollars for rent, which consisted of Z - true rent and (Y-Z) - money to cover land taxes.
- in 2000 a worker earns X2000, pays income taxes with the tax rate of I and pays Y2000 AFTER-TAX dollars for rent which still includes money to cover land taxes.

If I understand correctly, the report tried to estimate the "real hours" needed to earn money to pay the rent, or, in other words, the percentage of income after taxes (real money on hand) that is spent on rent. So the report compared

Y Y2000
- to ----- ,
X to X2000

while to compare apples to apples the second part should be

Y2000
-------------
X2000 * (1-I)

which, (if we assume I to be 50%) is twice bigger than Y2000/X2000
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however we may feel about the quality of service delivered by the guv'mint, taxes are largely used to deliver services.
I have nothing against taxes per se, all I was saying that calculating the ratio of rent to pre-tax salary doesn't give a fair comparison.
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Hocus,

I appreciated your thoughtful post on recent posts criticizing Amy Dacycyzn. I also own her book (the recent value compilation) and found it to be a source of incredible inspiration. I found myself pouring over it for countless hours.

As I look back, I realize I found inspiration not so much in the details, but in her down to earth approach. Like you, I appreciate the fact that the Dacycyzn family really was a middle class family doing something so out of the ordinary on very modest means.

So often I have become disillusioned by the media and the real life stories of success they grind out. Almost every time I read about a financial or success story of someone painted by the media as "ordinary" the details reveal someone who had family connections or a high income or some other advantage that I can't relate to. The Dacycyzn family is the real thing.

Thanks again for your post!
cpen
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bamboo7431 wrote:
I have nothing against taxes per se, all I was saying that calculating the ratio of rent to pre-tax salary doesn't give a fair comparison.

And, of course, I don't agree with you.

Let me see if I can identify the point of disagreement. You suggest that because before 1912 there were no direct (income) taxes, modern tax payments should be folded into the prices of goods. For example, if an individual pays direct taxes at a rate of 50%, the "effective price" of any goods or services bought should be doubled. This, you claim, would give the "fair" comparison to the earlier situation, where indirect (sales and excise) taxes were factored into prices paid.

If the direct taxes were just a substitute for the earlier indirect taxes, you would, of course be correct. But it is my view that largely, the direct taxes pay for services that weren't available a century ago. Social Security taxes, for example, are a payment for the services rendered by the Social Security, Medicare and Medicade programs. I'll not argue the value of these programs. But they are services that are now available, and were not in 1910. They should not be "factored in" to the price of a house, therefor. They represent the cost a service that I pay for (however involunarily). If older relatives needed these types of services a century ago, we each payed directly for them. And we didn't factor the costs into the price of a house back then, either.

-Ron
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<<One month, October of 1996, I worked 88 hours of overtime. That's right, I worked 6 weeks in a 4 week month. This was not unusual, I just remembered to keep track of those hours that month.
Since I was an "Exempt" employee (salaried), I got no compensation for this "Extra" time at all.
>>


This reminds me of a story about a highly ambitious and hardworking guy. He always worked lot of extra hours and made sure whatever project were outstanding got done.

Comes time for a promotion, and the boss promotes someone else. "I really would have liked to have promoted you." he was told by his boss, "but if I'd done so I would have had to hire two people to take your place."!
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This reminds me of a story about a highly ambitious and hardworking guy. He always worked lot of extra hours and made sure whatever project were outstanding got done.

Comes time for a promotion, and the boss promotes someone else. "I really would have liked to have promoted you." he was told by his boss, "but if I'd done so I would have had to hire two people to take your place."!


Funny ... the same thing happened to me !! (except that he said he would need 3 people to replace me)

Shortly thereafter, I left for another job.
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The answer to you r question is:
People are petty jealous simpletons.

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What counts is net worth - An excellent book is the MIllionaire Next Door- MOst people with a net worth of more than one million do NOT drive a BMW. They buy their clothes at JC Penny and equivalent,not Nordstrom. Unlike the image projected on TV, where every 'successful' executive lives in a huge Mansion,with umpteen cars, maids, gardeners, throw parties that cost $20,000 apiece, etc, many will be surprised that a significant number of millionaires get their shoes re-soled, drive a car for years and years, and spend money frugally (compared to their incomes). Most doctors, athletes, and high profile business execs do not have high net worth with respect to their income. I highly recommend it (paperback or borrow fromthe library!)
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