Making the choice to pay more taxes … just to pay more taxes

That thought is the VERY first thing that entered my mind when our esteemed Senator Ray Lesniak suggested that we need to raise the gasoline tax by 5 cents per year for the next 3 years, so that we can get additional funding from Federal gov"t. His intention is well placed because it is supposed to be designed to replenish the Transportation Trust fund. That’s where I get the pay more taxes just to pay more taxes thought.

What he doesn"t seem understanding is that what he is effectively stating, is that we need to raise the tax on people who work and commute in NJ, so that everyone across the country that works and pays taxes will also pay more Federal taxes so that NJ receives some large additional funding from the Federal gov"t.

Perhaps that would make some sense, but there are a couple other wrinkles in this whole piece of legislation:

  1. The Transportation Trust fund has been “raided” by politicians that were in prior to some (but not all) of the current legislators
  2. The 15¢/gallon increase would more than double the current 14.5¢/gallon existing gas tax
  3. This is thankfully lower than his original proposed legislation which was to increase it by 24¢/gallon
  4. As already mentioned, this will not only raise NJ driver’s taxes, but will likely also increase Federal taxes

Does this make sense to anyone, or am I just being insanely silly?

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Your biggest expense should be you!

Your biggest expense should be for your future self for the first 5 years. The younger you are, the easier and better it is for you to take 50%-60% of your paycheck and put it away. Imagine being 19, 20, or 21 and earning $20,000 and not having to pay a student loan and you are living at home (or with a family member that is paying the rent/mortgage and you happen to live there with them). So what is an alternative choice you can make? What about putting 50% of that away and not paying a dime in Federal Income tax! Crazy?, not at all! Continue reading

Posted in budget, budgeting, Financial Arsenal, financial directive, Goals, Income Tax, networth, Retirement Savings, spending plan | Tagged , , , , | Leave a comment

Pay less taxes than you put into an IRA

Let’s see how a person could pay less taxes than they put away into an IRA (or 401k). We will use a simple scenario of a single person with a gross income (including interest earned) of $29,500 or less. You cannot use form 1040EZ to use this deduction that you may be eligible for, since an extra IRS form (f8880) would be necessary. Continue reading

Posted in 401k, Financial Arsenal, financial directive, Income Tax, IRA, thrift savings plan, tsp | Tagged , , , , , , , | 1 Comment

High yield savings doesn’t exist … think again

High yield savings accounts do exist in some regional areas. I just heard the other day on the radio of a bank that will pay you $20/month if you make X electronic deposits per month. They didn’t mention any specific balance requirement. I think I’ll have to pay attention the next time that particular advertisement is on, even if I"m in traffic.

There is another avenue of savings that a lot of people don’t consider. What about a simple brokerage account? The account could be opened with very little minimum balance, like I did over at Fidelity. Continue reading

Posted in brokerage, Financial Arsenal, spending plan | Tagged , , | 1 Comment

Net worth as of Jan 2014

Here is my our net worth report for January 2014.
I just checked our net worth and this is what I found:

  • growth by 125% from the same time 1 year ago
  • growth by 23.4% from 9 months prior
  • growth by 51.4% from 6 months prior
  • growth by 7.8% from 3 months prior
  • growth by 11.4% from previous month

Continue reading

Posted in 401k, Financial Arsenal, financial directive, networth, Retirement Savings, Roth IRA | Tagged , , , , , , | 4 Comments

To curb retirement tax breaks for the rich or not

Here is a CNN Money article that asks if President Obama is trying to curb retirement savings tax breaks for the "rich". I have to agree with the writer when she speaks about the purpose of the myRA accounts that President Obama is currently pushing. As I wrote about in this article, most everybody is eligible and can open up their own accounts with no minimums aside from perhaps a small value like $5 or so.
I took it upon myself to enhance the graph that they had on the page by the rate that the benefit gave them vs the amount of income that they earned. Continue reading

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The lowdown on MYRA accounts

The current POTUS has signed legislation for "lower income" families to be able to put some of their hard earned money into a new type of account called a MYRA account. The primary goal of the MYRA account is a very noble goal indeed, since it is designed to let those that have lower incomes put small sums of money … “as low as $5″ … into the account, and also is supposed to be limited on the downside to be no less than the individual has put into the account. Continue reading

Posted in 401k, IRA, MYRA, Retirement Savings, Roth IRA | Tagged , , , | 2 Comments

The Feds increase minimum wage again

It seems that every so often in the current administration, that they keep wanting to increase minimum wage again. This time is no different.

I believe that there would be benefits to increasing it, but only if certain conditions would occur: Continue reading

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Net worth as of Dec 2013

Since this is a personal finance site, I figure I should divulge some bits of person financial information such as net worth. This is the first post of my net worth and I will try to post this every quarter as time permits, or every month if I am able.
I just checked our net worth and this is what I found:

  • growth by 121% from the same time 1 year ago (I chose Dec 31st)
  • growth by 13.8% from 6 months prior
  • growth by 30.6% from 3 months prior
  • growth by 6.3% from the previous month due in part to our 6 month car insurance bill having to be paid

If the yearly growth is positive, and especially by anywhere near 50%+, I couldn’t be any happier! :-) Obviously, that is going to be very, very difficult to continue following such increases as our net worth grows.

Now keep in mind that this net worth that I’m talking about is limited in scope to the financial accounts for retirement, checking, savings, and any non-mortgage related debt only. It does NOT include house appraisal or the mortgage, the 2 vehicles that we have – even though they are older, or the overall contents of our house, such as furniture or audio/video equipment or other electronics.
I could easily but don’t like to include the house/mortgage as part of net worth, simply because we have to live somewhere.

Edited to correct the numbers to properly represent all of the growth and no shrinking from the previous month.

Posted in 401k, Financial Arsenal, financial directive, networth, Retirement Savings, Roth IRA | Tagged , , , , , | Leave a comment

Unemployment extension suggestion

I doubt that any of the legislators will ever read this, but why not set a limitation on the unemployment extension permanently? I was reading this article (http://www.nytimes.com/2014/01/08/us/politics/unemployment-benefits.html), and the following thoughts came to mind.
The thought I have would be to limit unemployment benefits to no more than twice the amount that they put in or possibly tier based on the number of years of work. For instance, how is it fair that someone who works for say 2-3 years and put money into the unemployment fund is able to have 99 or more weeks of paid unemployment, compared to say someone who worked for 25 years and rarely or never drew on the unemployment benefits and they are now limited to only 99 weeks of unemployment. This could solve the from ever having to extend unemployment benefits again.
I know this may sound overly simplistic, but I also believe that the legislators — yes ALL of them — should consider using the KISS rule more often.

Does this sound like a good idea to you, or do you have another thought that might benefit our illustrious legislators?

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