Bookmark and Share


Free, Simple Finance Calculations 
Tuesday, August 17, 2010, 10:33 PM - Economics
Posted by Administrator
I've been using my own custom budgeting spreadsheet for a long time. Most of the budgeting software I've come across is just really overkill for my needs. I don't need to track every penny in and out, I just need to make sure in a general sense, my money coming in is more than my money going out. Most of my expenditures are extremely predictable, bills like rent, phone, cable, etc. don't change much from month to month. If I look at my expenses over a year this is even more true. Issues that aren't the same every month like car repairs and travel expenses are more consistent when looking at the picture for a whole year.

Therefore, I developed a simple budget spreadsheet, which is now available to you. It is based on a very simple concept, it follows the same trail that your money does over the course of a year. We start with income, typically in the form of wages. Then remove the pre-tax deductions that never see your bank account. From there we can reasonably calculate how much you are taxed and subtract that out along with any other post-tax deductions from your paycheck. That leaves your take home pay, where you itemize your expenses and watch your balance drop to zero.

In addition, I developed a simple retirement spreadsheet. This was because I was unable to find an online calculator that convinced me that it took the appropriate considerations for inflation, social security (or lack thereof), and pay raises. Or worse, it was unclear about inflation adjusted dollars vs. present day dollars, as you will see this can make a BIG difference when you are looking at decades. If you want to look at the details you can, I have full spreadsheets for each year, inflation adjusted or not. But if you want to keep it simple, just fill in the purple boxes and you will get a chart that shows your retirement saving/spending.

Please note, I am not a Certified Public Accountant. You should consult one for tax and retirement planning issues. These spreadsheets are only a generic guide to give you a long term outlook for retirement. There are probably some mistakes or things I haven't accounted for, or issues simply too complex to include. I appreciate any feedback on these issues and I will try to address them. I have run numbers against various other calculators and believe what my spreadsheets come up with are at least in the right ballpark.
view entry ( 110 views )   |  permalink   |  $star_image$star_image$star_image$star_image$star_image ( 3 / 2519 )
FairTax Response from Rep. Susan Davis (D-CA) 
Friday, April 10, 2009, 5:58 PM - Public Policy, Economics, Law
Posted by Administrator
In January, I wrote a letter to my Representative, Susan Davis, in support of the FairTax and asking her to co-sponsor H.R. 25. I received her response today. While I was not expecting her to become a co-sponsor, or even support the H.R. 25 (FairTax), I am amazed at her response.

First, she defends the current tax system of over 70,000 pages and counting. Apparently her most important concerns are NOT its complexity or even how some of our presidential appointees are either not smart enough to understand the current system or are cheating it. First and foremost, she cites the need to 1) eliminate the marriage penalty and 2) increase the child tax credit. Yes, because these are the biggest problems with our tax code?

Secondly, she and her staff have apparently not read H.R. 25 and are in serious need of education on the FairTax. She claims that under a national sales tax "the vast majority of the tax burden would fall on the poor." Normally this statement is true, but NOT as implemented in H.R. 25. The FairTax calls for a prebate which means that anyone at the poverty level pays exactly $0, that is ZERO DOLLARS in federal taxes. This actually ends up being less taxes than what a person at the poverty level pays today, considering that the 7.65% payroll tax rate will be repealed as part of H.R.25.

She also claims that this would "make our goods and services prohibitively expensive" to sell in other countries. This is just plain false. The FairTax is charged at the point of sale to the consumer. Any good shipped overseas would be sold completely free of US taxes, allowing us to become an exporting powerhouse.

Please contact Susan Davis' office using one of the methods below and straighten them out about the FairTax:

Congressional Website

U.S. House of Representatives
1526 Longworth House Office Building
Washington, DC 20515
Phone: (202) 225-2040
Fax: (202) 225-2948

4305 University Avenue
Suite 515
San Diego, CA 92105
Phone: (619) 280-5353
Fax: (619) 280-5311

[UPDATE 04-13-2009] I also forgot to include the repeal of any income taxes at the poverty level. That could be another 10% or so more in taxes under the current system as compared to the FairTax.
view entry ( 109 views )   |  permalink   |  related link   |  $star_image$star_image$star_image$star_image$star_image ( 3 / 1127 )
Auto Industry Bailout 
Friday, December 12, 2008, 9:58 PM - Public Policy, Economics
Posted by Administrator
Let's pretend I have a job that is linked to the economy, maybe real estate or something (read: auto makers). Economy takes a crap, I'm not doing so good, can't sell houses (cars). Now I'm having trouble paying the bills now. Oh and by the way, no bank wants to loan me money because in all likelihood I won't be able to pay it back or I'll go bankrupt if the economy doesn't turn around. So then of course I must make a last ditch effort to stay afloat so I go to one of my good friends (the government) with lots of money laying around (nevermind he is already in debt up to his eyeballs). I lay out my plan complete with expenditures and whatnot, say I need $35,000 to get me through to January. Then my friend says, well, I want to help you out, I can't allow you to fail, you are a big part of my life. Nevermind that no one else thinks investing in you is a good idea. Here's $15,000. I look back at my friend, extremely confused.

Me: Didn't I just tell you that I needed $35,000 to not go bankrupt?

Friend: Yes

Me: Didn't you just say I can't be allowed to fail?

Friend: Yes

Me: Isn't bankruptcy failure?

Friend: Yes

Me: Don't you have $35,000?

Friend: Yes, but I'm only giving you $15,000.

Me: Wha?! So basically you are going to "loan" me $15,000 knowing that I'm not going to be able to get the $20,000 difference, forcing me to go bankrupt and default on the $15,000 you loaned me? So you've pretty much "loaned" me $15,000 that you know you won't get back.

Friend: *Crickets*

UPDATE: Mike Huckabee made the same point on FOX News, The O'Reilly Factor, on December 12.
view entry ( 114 views )   |  permalink   |  $star_image$star_image$star_image$star_image$star_image ( 3 / 2880 )
Fuel Prices - A special three part series about the issue 
Wednesday, September 27, 2000, 3:00 AM - Public Policy, Economics

What You Can Do

For the past six months at a minimum the topic of fuel prices continues to recur in American politics. Why? Apparently some people think that they have a God given right to cheap petroleum products. But the truth is that gas is still cheap compared to any decade when inflation is taken into account. Apparently, gas prices are not that important because gas guzzling SUV sales are still increasing. Even if a person buys an SUV for $20,000 or more, what is the big deal about a few more cents at the gas pump? Those that whine about getting hit in their pocketbook need to figure out how important their money really is to them. I have a few options that they should try. one is to organize a carpool. Instead of a bunch of people driving separately to work or wherever wastes much more fuel than all going together. another option is always public transportation, which in effect is one giant carpool. Thirdly, there is buying more fuel efficient cars (not SUVs). A fourth and final option, which could be the most obvious and easiest, is to consume less fuel. How you might ask? For one, don't use the acceleration pedal unless you need to. if you can see a stoplight is red ahead of you, then you can take your foot of instead of the "hurry up and stop" mentality. Also, the need to bolt ahead after a stoplight turns green is a key point where gasoline is wasted. Speed up at a nice pace and don't work the engine too hard. One final point of advice is to shut off the engine when you are not moving anywhere.

Note: This approach has since been confirmed by experts.

The Politics of Fuel

Many politicians continue talking about fixing the problem of high fuel prices (which as I stated in Fuel Prices - What You Can Do). Considering that these "high prices" could be a problem, why should the government do anything about it? I think that is is absurd that the United States thinks it can meddle with the world economy, just because some prices seem "out of control". The truth is if any long term effort of fighting these prices is to be successful, it needs to be done in the form of alternate energy resources. I am not saying go buy an electric car yet, but the public should begin to accept alternate energy sources that are cleaner and more abundant and in the future, will be cheaper. this is only the beginning. What do you think is going to happen as the world begins to run out? prices are going to continue to rise higher and higher, until we are forced to use some other sort of energy which is cheaper (but for now remains more expensive). I would just assume that we choose to convert our power consumption now, rather than as a stopgap measure when it is too late.

Tapping the Reserves

What kind of stupid idea is that? If you haven't heard or can't remember, President Clinton has authorized 30 million barrels of crude oil from the national reserves to be released to combat the price of heating oil this winter. What happens if the price of fuel continues to go up after the winter, what happens then? There is also no proof that this approach will even work. The United States uses 19 million barrels of oil a day and does not even have the capacity to convert much more crude oil into heating oil for homes. Also, this is not solving anything, it just means the government is "biting the bullet" of high prices instead of the people actually buying or using it. Not to mention that this depletes the supply in case of a national emergency. If anything, get rid of the federal taxes and at least we would still have a full reserve for an emergency.
view entry ( 107 views )   |  permalink   |  $star_image$star_image$star_image$star_image$star_image ( 3 / 890 )

| 1 |