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My Identity Crisis
My Identity Crisis By David Leonhardt When we are young it is all so simple. We know exactly what I want to "be" when we grow up. You know what it's like: "I want to be a fireman." I want to be a ballerina." "I want to be a movie star." "I want to...
New Year's Resolutions for Your Home Business
"Happy New Year" may be the most positive phrase in the English language. For those whose fortunes were less than they desired over the last twelve months, the new year is an opportunity to close the book and start afresh. Those lucky souls who came...
Offshore investing - Leveraging overseas trading
In today’s climate of a falling dollar and emerging economies all over the world, offshore investing can be an attractive option. Before looking at investing overseas, however, you should understand your financial goals, the potential pitfalls of...
Surviving Corporate Politics
Opportunities Are Made, Not Created
In the business of corporate politics, one thing has become very clear: Most business decisions are grown from the grassroots level. Sure, it may all seem likes it’s coming from corporate HQ, with...
To Grow Out Of Unemployment
There is a connection between economic growth and unemployment. There is a connection between growth and inflation. Therefore, commonsense (and financial theory) goes, there must be a connection between inflation and unemployment. A special...
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Ben Franklin Didn't Quite Get it Right
When Ben Franklin said "a penny saved is a penny earned", he didn't quite get it right. Actually, a penny saved is worth more than a penny earned. Do you find this statement shocking? I am about to prove to you that what I'm saying is true. Most people erroneously believe the best way to strengthen their financial health is to increase their income. On the contrary, saving money by cutting costs will get you there quicker. You see, it's very simple. When your income increases (with some exceptions like the part of it you put into your 401k), that extra money is taxed. On the other hand, any amount you save by cutting costs is not taxed. Therefore, $20 saved by cutting costs is worth more than a $20 increase in income. The following (although over-simplified) example will illustrate this principle. Let's suppose that Jack and Cindy have identical jobs and incomes. Let's also suppose they shop at the same grocery store and pay about the same amount for groceries each week. Now, Jack gets a $20 per week pay increase and Cindy does not. However, at about that same time, Cindy finds a new grocery store where she is
able to save $20 per week on her grocery bill. Assuming nothing else has changed, Cindy is now better off financially than Jack, even though she did not get a raise and he did. How can this be? It's because Jack has to pay taxes on his $20 raise but Cindy does not have to pay taxes on her $20 grocery discount. Assuming Jack is in the 25% federal tax bracket (and disregarding any possible increase in his state or local taxes), he will be able to put only $15 into his piggy bank each week whereas Cindy will be able to put the whole $20 a week into hers! Bottom Line: It is more blessed to receive a discount than to receive an equal amount in a pay increase!
About the Author
Terry Mitchell is a software engineer, freelance writer, and trivia buff from Hopewell, VA. He also serves as a political columnist for American Daily and operates his own website - http://www.commenterry.com - on which he posts commentaries on various subjects such as politics, technology, religion, health and well-being, personal finance, and sports. His commentaries offer a unique point of view that is not often found in mainstream media.
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