Why we should save and get pm's and be careful with money
mkman123
Posts: 6,849 ✭✭✭✭
http://news.yahoo.com/s/ap/20100606/ap_on_bi_ge/us_what_recovery
Read that, might change some people's mind. A guy who was making $100/hr and now only making 1/10th of it and plenty of other stories. This is why I think its important that a lot of Americans save and penny pinch to a certain degree........you never know when you are going to lose your job. I bet the chiropractor who was making 100/hr didn't think he was going to be out of a job and making only $10/hr.....he should have come onto this forum, many of us could have given him some good advice!
Those of you that can stack substantially monthly should feel blessed that you are not in the situation that some of these people are in. I'm sure there are thousands more of these same stories out there.
Read that, might change some people's mind. A guy who was making $100/hr and now only making 1/10th of it and plenty of other stories. This is why I think its important that a lot of Americans save and penny pinch to a certain degree........you never know when you are going to lose your job. I bet the chiropractor who was making 100/hr didn't think he was going to be out of a job and making only $10/hr.....he should have come onto this forum, many of us could have given him some good advice!
Those of you that can stack substantially monthly should feel blessed that you are not in the situation that some of these people are in. I'm sure there are thousands more of these same stories out there.
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The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
People will have to realize than many of themselves have been grossly overpaid for too long a time. These high salaries, especially in the Govt sector, have not only bankrupt municipalities, but the gross negligent spending of those workers perpetuated an economy that was well above its means. IE, people spent all their money which created an artificially high (strong) economy, rather than save. If growth rates are to be measured against the past, then this "recession" will last many, many years.
Knowledge is the enemy of fear
<< <i>Declining wages, eh? Doesnt sound very inflationary to me.
People will have to realize than many of themselves have been grossly overpaid for too long a time. These high salaries, especially in the Govt sector, have not only bankrupt municipalities, but the gross negligent spending of those workers perpetuated an economy that was well above its means. IE, people spent all their money which created an artificially high (strong) economy, rather than save. If growth rates are to be measured against the past, then this "recession" will last many, many years. >>
Compared to China slaves yeah I see your point.
Gross manipulation of the blue collar worker for corporate GREED!
Greed is all the this country seems to produce these days!
<< <i>Declining wages, eh? Doesnt sound very inflationary to me.
People will have to realize than many of themselves have been grossly overpaid for too long a time. These high salaries, especially in the Govt sector, have not only bankrupt municipalities, but the gross negligent spending of those workers perpetuated an economy that was well above its means. IE, people spent all their money which created an artificially high (strong) economy, rather than save. If growth rates are to be measured against the past, then this "recession" will last many, many years. >>
and add into the soup the as the main ingredient (IMHO) the GLBA of 1994. which enabled all of the cheap, almost "free" debt.
Declining wages mean a low standard of living. High prices are still high, and I don't see them coming down. High prices and declining wages both impact living standards, but you shouldn't confuse declining wages and a lower standard of living with deflation. Inflation is coming, whether wages are declining or not.
And of course, this is just jmski's personal opinion.
I knew it would happen.
This makes no sense. Follow along:
Worker makes $50,000/yr. Pays $300/mo for medical insurance. Difference of these 2 entities = $46,400/yr
Worker gets 3% raise. Medical insurance rises 10%.
Worker now earns $51,500/yr. Med ins now $330/mo. Difference of these 2 entities = $47,540/yr
<< <i>" Even if a person gets, for example, a 3% increase in their income, it will not matter because their medical insurance premiums increased 10%"
This makes no sense. Follow along:
Worker makes $50,000/yr. Pays $300/mo for medical insurance. Difference of these 2 entities = $46,400/yr
Worker gets 3% raise. Medical insurance rises 10%.
Worker now earns $51,500/yr. Med ins now $330/mo. Difference of these 2 entities = $47,540/yr >>
I was thinking with smaller numbers. I agree with the example that you gave but some peoples take home income is decreasing even though they are getting a 3% increase in their take home pay but their medical insurance premiums are going up 10%. Their real income (take home pay) is going down. I was looking at it from a take home pay (after taxes) point of view and not on a gross income point of view. My apologies for not being clear on that. Maybe I am still wrong on that. My apologies on that.
I still see your point. I never claimed to be good in math but it just seems to me that if your expenses are increasing at a much higher rate (10% for example) than your income (3% for example), then that person's take home pay would decrease overall. That was the point that I was trying to make. Again if I am wrong on this, then I apologize for that. I guess I am looking at it the wrong way. I just know that in one particular year my "real income"(take home pay) went down despite a 3% increase in my income because my medical insurance premiums have gone up 10% and none of my other expenses changed at all. I just looked on my pay stub and I saw that that it how I know that my real income (take home pay) is decreasing. The only way for me to stop this is to cut back on my living expenses. That is the reality for me even though I agree with the mathematical example that you provided.
Like I said, If I am looking at this the wrong way and I am still wrong, then I stand corrected and I apologize.
<< <i>
<< <i>" Even if a person gets, for example, a 3% increase in their income, it will not matter because their medical insurance premiums increased 10%"
This makes no sense. Follow along:
Worker makes $50,000/yr. Pays $300/mo for medical insurance. Difference of these 2 entities = $46,400/yr
Worker gets 3% raise. Medical insurance rises 10%.
Worker now earns $51,500/yr. Med ins now $330/mo. Difference of these 2 entities = $47,540/yr >>
I was thinking with smaller numbers. I agree with the example that you gave but some peoples take home income is decreasing even though they are getting a 3% increase in their take home pay but their medical insurance premiums are going up 10%. Their real income (take home pay) is going down. I was looking at it from a take home pay (after taxes) point of view and not on a gross income point of view. My apologies for not being clear on that. Maybe I am still wrong on that. My apologies on that.
I still see your point. I never claimed to be good in math but it just seems to me that if your expenses are increasing at a much higher rate (10% for example) than your income (3% for example), then that person's take home pay would decrease overall. That was the point that I was trying to make. Again if I am wrong on this, then I apologize for that. I guess I am looking at it the wrong way. I just know that in one particular year my "real income"(take home pay) went down despite a 3% increase in my income because my medical insurance premiums have gone up 10% and none of my other expenses changed at all. I just looked on my pay stub and I saw that that it how I know that my real income (take home pay) is decreasing. The only way for me to stop this is to cut back on my living expenses. That is the reality for me even though I agree with the mathematical example that you provided. >>
My above example works because you are applying the 3% increase to a MUCH larger number than the 10% increase. So although by themselves, 10% is larger than 3%, when they are applied to actual numbers, the results can be dramatically different! However, your overall premise is correct if you believe that we experience greater than 3% inflation. Medical insurance is just 1 expense. When we add into the equation the cost of energy, food, entertainment, even increasing taxes, then the 3% raise quickly evaporates. So although my example worker now enjoys a nominally higher paycheck, he probably feels no better off than last year because of the rising cost of living....I.E. inflation. This has been the case for the past 5 decades though, and is not a new concept. A guy who made $10,000/yr in 1960 probably had the same standard of living as the guy who makes $70,000/yr today for example.
I knew it would happen.