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What are you buying with your $1200 check?

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Red Squirrel

No Lifer
May 24, 2003
58,581
8,179
126
www.uovalor.com
If you believe you cut everything that you possible could out of your budget then the next step will be increase your income. You can only cut so much fat/waste until you can't anymore. Or move to another cheaper/more affordable place. That's why I live to live down here. It is not perfect (too freaking hot and humid in summer and other bad stuffs such as crazy drivers/etc.) but the cost of living is low and I can save a lot of money for my early retirement (10 years or less from now).
I sometimes toy with idea of jumping ship and working in the mine as it does pay more. You can make over 100k in the mine. Hard physical work though. Got to admit I have a pretty cushy job and it actually pays a lot for a tech job. Most tech jobs here pay a bit over minimum wage but this one pays decent, around 80k or so, and there's no ridiculous BS like needing 10 years of experience in Windows server 2019 (I've seen that requirement lol). I get lot of time off with this job which is part of what makes it nice but I do need to think of a way to monetize that time. I sometimes toy with getting into trades on the side like drywalling or painting or something. I don't think you need any kind of special license for that.

I've mostly been concentrating on paying debt with whatever extra money I do have. Credit line and mortgage. I have around 5 years left on the mortgage. Though I lowered the payment a while back to have more breathing room and to actually put a dent in the credit line, so it might be a bit more than 5 years now. Credit line is only costing me like $50/mo in interest though while mortgage is around $400 so maybe I shouldn't have changed it but reason I did is I came close to buying a cabin in the woods last year and would have put that on the credit line. I want to secure something now as land prices won't be any cheaper in the future. May not be smart to spend that much now but that is a one time cost for something that does not depreciate. If I came to a point where I can live there then I would sell the house and eliminate all bills and be in a very solid financial situation.

But yeah end goal is to really try to find a way to get more income or move to where it's cheaper. I know for sure I won't be able to afford to live here forever. I kind of wasted the last 10 years just running in circles paying bills and I know I can't continue this path.
 

deadlyapp

Diamond Member
Apr 25, 2004
5,752
303
126
I sometimes toy with idea of jumping ship and working in the mine as it does pay more. You can make over 100k in the mine. Hard physical work though. Got to admit I have a pretty cushy job and it actually pays a lot for a tech job. Most tech jobs here pay a bit over minimum wage but this one pays decent, around 80k or so, and there's no ridiculous BS like needing 10 years of experience in Windows server 2019 (I've seen that requirement lol). I get lot of time off with this job which is part of what makes it nice but I do need to think of a way to monetize that time. I sometimes toy with getting into trades on the side like drywalling or painting or something. I don't think you need any kind of special license for that.

I've mostly been concentrating on paying debt with whatever extra money I do have. Credit line and mortgage. I have around 5 years left on the mortgage. Though I lowered the payment a while back to have more breathing room and to actually put a dent in the credit line, so it might be a bit more than 5 years now. Credit line is only costing me like $50/mo in interest though while mortgage is around $400 so maybe I shouldn't have changed it but reason I did is I came close to buying a cabin in the woods last year and would have put that on the credit line. I want to secure something now as land prices won't be any cheaper in the future. May not be smart to spend that much now but that is a one time cost for something that does not depreciate. If I came to a point where I can live there then I would sell the house and eliminate all bills and be in a very solid financial situation.

But yeah end goal is to really try to find a way to get more income or move to where it's cheaper. I know for sure I won't be able to afford to live here forever. I kind of wasted the last 10 years just running in circles paying bills and I know I can't continue this path.
If you are that paycheck to paycheck at 80k, then yes you do have fat in your budget. I similarly have almost no savings, but I also knowingly live well above my means because it makes me happy, and I still put about $15k / year into a 401k and $3k into a HSA.

When I was making about the same amount as you, I was still putting about $6k a year into my retirement account, paying about $1000 / month to rent a bedroom at the beach, and also had a new truck. I still was living right about at my means but seem on paper to be doing a bit better than whatever you're doing.

Paying off your debt (especially low interest debt) sounds good on paper but is generally one of the worst possible financial mistakes you can make long term.

Edit: Just so you understand also - you need to ignore the "amount" of interest you're paying, because it doesn't really matter, even if the number is scary. You need to solely focus on the interest rate of the debt load. If you can invest and make more than the interest rate, then paying off the debt is a poor financial choice. You should be paying no interest on credit lines if you are not living above your means, because you should be paying them all off monthly, and if you're not, you should be transferring them to zero percent interest cards - there are too many ways to get around paying interest out there to not take advantage of them.
 
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nakedfrog

No Lifer
Apr 3, 2001
50,649
3,305
126
Christ man, how do you people function mentally knowing you have $300 in a savings account?

Just knowing how much it costs to replace a water heater, air conditioner, home insurance deductible, etc... etc... I can't fathom how you guys aren't mentally on the edge all the time.
I mean, that only covers about half of the US (well, $400 versus $300, but not sure how much difference that would make). On the "bright" side, most of those folks are likely renting so they wouldn't be on the hook for any of those items you listed.
And who says they aren't on the edge all the time?
 

Ken g6

Programming Moderator, Elite Member
Moderator
Dec 11, 1999
15,334
2,358
55
Keep in mind that's 80k before taxes/deductions. 48k is what I actually see. My average pay is around $1500 or so.
Canada taxes must be insane! I have less official income, but similar take-home (I think, in USD vs. CAD).

Oh, wait, I forgot I'm paying for my own health insurance. OK, somewhat less take-home. ;)

Edit2: CAD is 80 cents on the USD?! My take-home is similar after health insurance.
 

nakedfrog

No Lifer
Apr 3, 2001
50,649
3,305
126
Something is off with the math there, since getting paid every other week or twice a month at $1500 is rather a bit less than $48k.
 
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Red Squirrel

No Lifer
May 24, 2003
58,581
8,179
126
www.uovalor.com
There's other deductions too like union dues, benefits, etc but yeah taxes take a good chunk of it. I don't need to worry about health insurance, or having to pay anything if I go to doctor or hospital etc. So there's that.
 

deadlyapp

Diamond Member
Apr 25, 2004
5,752
303
126
There's other deductions too like union dues, benefits, etc but yeah taxes take a good chunk of it. I don't need to worry about health insurance, or having to pay anything if I go to doctor or hospital etc. So there's that.
About 40% off the top for taxes sounds about right for a partially socialist country. I pay around 22-24% federal tax and max out the Social Security (about 5% of my income) and probably only another 4% or so for my health insurance. My property taxes are fairly high (Texas suburbs), but sales tax isn't bad, and overall other taxes (like gasoline, etc) are quite low.
 

Svnla

Lifer
Nov 10, 2003
17,576
1,163
126
About 40% off the top for taxes sounds about right for a partially socialist country. I pay around 22-24% federal tax and max out the Social Security (about 5% of my income) and probably only another 4% or so for my health insurance. My property taxes are fairly high (Texas suburbs), but sales tax isn't bad, and overall other taxes (like gasoline, etc) are quite low.
But you don't have state income tax. Property tax (rate) is high indeed. I think TX is in the top 5 (rate speaking, not just the amount). My friends in Louisiana has some of the lowest property taxes. I think top 5 of the lowest property tax but their sale tax is high, in the 9% and up (state and local combined).
 

VirtualLarry

No Lifer
Aug 25, 2001
50,495
6,065
126
There's other deductions too like union dues, benefits, etc but yeah taxes take a good chunk of it. I don't need to worry about health insurance, or having to pay anything if I go to doctor or hospital etc. So there's that.
I think that if the gov't / "the public" paid for sex workers, that a lot of those old hard-core staunch FYGM republicans might embrace socialism.
 

deadlyapp

Diamond Member
Apr 25, 2004
5,752
303
126
But you don't have state income tax. Property tax (rate) is high indeed. I think TX is in the top 5 (rate speaking, not just the amount). My friends in Louisiana has some of the lowest property taxes. I think top 5 of the lowest property tax but their sale tax is high, in the 9% and up (state and local combined).
Absolutely. When I left california and the ~10% state income tax IIRC, on top of sales tax and other high cost of living, I made an almost 20% improvement in income, even after buying a house in a suburb with high tax rates.

What gets you in Texas is that the property tax increases every year according to the value of the property. In some states (like California) the property tax doesn't change unless the property changes hands and is re-assessed. There are plenty of people in the beach cities that own properties worth millions, but pay taxes on a property that on the books is only worth a couple hundred thousand.
 

jpiniero

Diamond Member
Oct 1, 2010
8,886
1,628
126
About 40% off the top for taxes sounds about right for a partially socialist country. I pay around 22-24% federal tax and max out the Social Security (about 5% of my income) and probably only another 4% or so for my health insurance. My property taxes are fairly high (Texas suburbs), but sales tax isn't bad, and overall other taxes (like gasoline, etc) are quite low.
I looked it up, Canada's tax brackets for singles in Federal is decently higher than the US but not amazing. The provincial income taxes though are extremely high compared to most states.
 

sdifox

No Lifer
Sep 30, 2005
83,206
8,566
126
I looked it up, Canada's tax brackets for singles in Federal is decently higher than the US but not amazing. The provincial income taxes though are extremely high compared to most states.

Income tax comes to about one third in Ontario.
 
Nov 8, 2012
18,510
3,880
136
But you don't have state income tax. Property tax (rate) is high indeed. I think TX is in the top 5 (rate speaking, not just the amount). My friends in Louisiana has some of the lowest property taxes. I think top 5 of the lowest property tax but their sale tax is high, in the 9% and up (state and local combined).

lol you think thats it?

They have roughly 10 - 15% added as consumption taxes with their GST, PST, HST, etc. For example, QC is 14.975%. Ontario is 13%, BC is 12%.

Thats on virtually all Goods and Services (Hence, Goods and Services Tax). In comparison, the US Sales tax doesn't charge taxes on items like groceries - and it also isn't charged on services generally. Next time you get a plumber to your house, you likely will not see a tax for the services the plumber provided. Not the case in CA.


They also have property taxes as well. So it's not a simple "all in one" package at the income level in Canada either.
 
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Nov 8, 2012
18,510
3,880
136
Absolutely. When I left california and the ~10% state income tax IIRC, on top of sales tax and other high cost of living, I made an almost 20% improvement in income, even after buying a house in a suburb with high tax rates.

What gets you in Texas is that the property tax increases every year according to the value of the property. In some states (like California) the property tax doesn't change unless the property changes hands and is re-assessed. There are plenty of people in the beach cities that own properties worth millions, but pay taxes on a property that on the books is only worth a couple hundred thousand.
Which is bonkers crazy and just shows how rich elites manipulate the tax system there heh.

Texas just simply annually assesses the market value of your property - which is lower in general because a $1m home in CA metro areas is a $200k home in TX. Which is more, 2% on $200k, or 0.5% on 1M?

You are also legally able to (and should) argue their proposed market value of your house on an annual basis. I lowered mine by $65k last year, shaved off a good ~$4-5k in taxes.



Also, not sure about your area - but my suburb area is expanding like crazy, so while their assessments are going up, the tax rates are thankfully going down overall.
 
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ponyo

Lifer
Feb 14, 2002
18,618
2,063
126
If you're top earner in California, you pretty much pay socialist tax rate. 37% Federal + 3.8% Net investment income tax + 13.3% CA state tax = 54.1% tax rate. Then you add property tax and sales tax and you're in the mid 60%. No way I would live in CA because of taxes. I'm ok with paying my fair share. CA is not fair.
 

VirtualLarry

No Lifer
Aug 25, 2001
50,495
6,065
126
If you're top earner in California, you pretty much pay socialist tax rate. 37% Federal + 3.8% Net investment income tax + 13.3% CA state tax = 54.1% tax rate. Then you add property tax and sales tax and you're in the mid 60%. No way I would live in CA because of taxes. I'm ok with paying my fair share. CA is not fair.
Wait for them to slap a tax on GPUs, since they are the most power-hungry part of a PC.
 

ponyo

Lifer
Feb 14, 2002
18,618
2,063
126
Puerto Rico has 0% income tax. If you move there and become resident, you pay 0% Federal and 0% state. If taxes are all you care about, that's the place to move to. Only problem is you're stuck living on an island for 181 days out of the year to keep your residency. But with the money you save on taxes, it's probably worth it.
 

Kaido

Elite Member & Kitchen Overlord
Feb 14, 2004
45,156
2,588
126
Puerto Rico has 0% income tax. If you move there and become resident, you pay 0% Federal and 0% state. If taxes are all you care about, that's the place to move to. Only problem is you're stuck living on an island for 181 days out of the year to keep your residency. But with the money you save on taxes, it's probably worth it.
No taxes = massive social support issues. My friend went back to visit her grandma pre-COVID...the last hurricane had ripped off half her roof and so whenever it rained, it just rained in her living room. No money, no support, just been stuck that way for years now. Something like half the island lives below the poverty line. Between the hurricane & COVID, the country's tourism income has been decimated. They expect COVID's impact to be three times worse for their tourism industry than Hurricane Maria's:

 
Nov 8, 2012
18,510
3,880
136
No taxes = massive social support issues. My friend went back to visit her grandma pre-COVID...the last hurricane had ripped off half her roof and so whenever it rained, it just rained in her living room. No money, no support, just been stuck that way for years now. Something like half the island lives below the poverty line. Between the hurricane & COVID, the country's tourism income has been decimated. They expect COVID's impact to be three times worse for their tourism industry than Hurricane Maria's:

It's a double-edged sword. If you're a poor country, goodluck getting significant monetary investment without incentivizing people with capital having a reason to bring over capital.

Also according to wiki, PR still has to pay Social Security, which makes sense if their residents can apply for SS. Obviously thats not a big deal for rich folks, since it's only a 7.65% tax on the first $150k or so of income.


Theres actually some interesting stuff here indicating that it isn't so easy to pay 0% federal there:

Contrary to common misconception,[13] residents of Puerto Rico do pay federal income taxes. As with any state, however, those Puerto Rico residents who fall below the federal tax threshold (i.e., "the poor") do not pay federal income taxes at all. This IRS threshold was $24,400 per year in 2019 for married couples.[14][15] Considering that the median income in Puerto Rico is $20,166[16] a large portion of the population earns too little to have to file federal tax returns even if Puerto Rico was a state. The result is that the bulk of Puerto Rico residents do not pay federal income taxes. It has been estimated that close to 50% of PR residents live below the poverty line, [17] adding another reason why most residents would not have to pay any federal income taxes.

Nothwithstanding the above federal income tax payor qualification statistics, the following Puerto Rico residents are required to file and pay the US federal income taxes:

  1. Puerto Rico residents who work for the federal government (e.g., postal employees, federal agents of any of the federal executive and judicial branches, etc.)[18][19][d]
  2. Puerto Rico residents who do business with the federal government[21]
  3. Puerto Rico residents who are members of the U.S. military[22][23]
  4. Puerto Rico residents who earned income from sources outside Puerto Rico[24]
  5. Puerto Rico-based corporations that intend to send funds to the U.S.[25]
In fact, Puerto Rico residents pay more in federal income taxes every year than do residents of six other US states: "From 1998 up until 2006, when Puerto Rico was hit by its present economic recession, Puerto Rico consistently contributed more than $4 billion annually in federal taxes and impositions into the national fisc." This was more that the IRS collected from taxpayers in six States of the Union: Vermont, Wyoming, South Dakota, North Dakota, Montana, and Alaska, as well as the Northern Mariana Islands.[26][27] Data from the IRS also shows that even while the Commonwealth was going through its economic crisis, it still collected a "sizable amount" of taxes from Puerto Ricans. For example, from 2010 to 2015 the IRS collected about $3.5 billion every year from Puerto Rican taxpayers in the Island.[28] Even despite being without electricity for nearly one year, as well as without running potable water during much of that time after the 2017 Hurricane Maria, as well as through the 2020 earthquake swarm, Puerto Ricans continued to pay "sizable amounts" in federal taxes to the IRS: $3.4B in 2017 and $3.4B in 2018: "That in 2018 the IRS collected approximately $3,443,334,000 from Puerto Rico taxpayers clearly undermines the contention that Puerto Rico residents do not contribute to the federal treasury."[29]
 

ponyo

Lifer
Feb 14, 2002
18,618
2,063
126
You pay 0% federal income tax on any capital gains, interest, and dividend you make while your resident of Puerto Rico. And since Puerto Rico is not a state, you also pay 0% state income tax on those gains. So you save max 37% federal and whatever your state charges. But you also save on the 3.8% net investment income tax. Most people don't think about 3.8% NIIT tax or even know about it because it doesn't affect them. But I pay it. So I really pay 40.8% federal tax and many do as well. And you add the state income tax and it's really heavy tax burden. Moving and becoming resident of Puerto Rico allows you to escape all that tax. It's huge tax advantage once you start living off your investment income.
 

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