On How Living at Home at 31 Taught Me Nothing and Everything About Saving

We in the US seem to have a cultural hang up with multi-generational households. I've noticed that this is primarily in the middle class. The upperclasses (Kennedys as an example) don't seem to have much problem with it...

Posted on January 20, 2015 at 2:34 pm 0

On Working in the Fast Food Industry for a Minimum of $20 an Hour

Unfortunately for U.S. fast food workers, the capital structure in the (American) fast food industry will keep them from making anything close to a living wage. McDonald’s, the corporation makes profit consistently, no disputing that. The franchisee motivation is where things get twisted. For most franchisees, the margins are paper thin, allowing them to mostly barely pay the operational expenses, debt service, and improvements over time. Who in their right mind would buy a franchise for $2.5M? That’s where things get twisted. A franchisee may invest $1.4M of their own money, finance the remaining debt for 7 years. At the end of the 7 years, the debt is paid off and the franchisee has an asset worth $2.5M. This works out to about a 9% rate of return. The problem is that the franchisee is really in the real estate flipping business. He/she is not making money selling burgers and fries but rather the business itself. The restaurant is really inside a black box as far as capital is concerned. That is why the food is absolute rubbish and it doesn't matter. And the employees get treated like cattle. Fast food business model is terrible for labor because almost any increase in the cost of labor causes the disinterested capital to simply not invest. Even a small increase in labor cost causes the capital to shift to another equally heartless investment (payday loans?)

Posted on October 28, 2014 at 10:34 am 0

On The Billfold Book Club Discusses Helaine Olen's 'Pound Foolish'

@HelloTheFuture <> I was in my mid 30's before saving for retirement (or anything else for that matter.) Leaving grad school, getting married, and expecting a baby in the span of 2 years really motivated us to save and invest. We've maxed out the 401(k) and Roth (when eligible) for most of the past 18 years. Luck was a big part of the equation: 1) we were healthy for the most part. 2) No long term unemployment. 3) we were able to build a trusting, caring, supportive marriage. BTW, my wife is a SAHM. The first 3-4 yrs were difficult as neither my wife nor I had discipline financially but it did get progressively easier through the years. We have friends who are in similar situations as us, others who never quite got started, and some others who struggle to stay afloat financially because of job loss, divorce, or health issues. No matter what anyone says, luck plays a hugh component in finacial well being. You have to be lucky AND play your part.

Posted on July 24, 2014 at 11:12 am 0

On "Money Can't Buy Happiness; It is Happiness": A State-By-State Analysis

@Ester Bloom Fascinating indeed. Your point about Oregon being unusual is also manifested in the numbers. Oregonians need 95% higher income to be happy as opposed to neighboring Washington which needs just 36% higher income to be happy. I guess the Seahawks really did make Washingtonians happier...

Posted on July 18, 2014 at 10:38 am 0

On "Money Can't Buy Happiness; It is Happiness": A State-By-State Analysis

Alaska had the second highest median income in 2011 at $67.8K vs US median at $50.5K. So Alaska had median income which was 34% higher than the US median. $98.9K is 32% higher than $75K so it seems in line.

Posted on July 18, 2014 at 10:07 am 0

On Crop Tops Cropped from College, Education = Reparations?, Academic Rejection vs Other Kinds

@apples and oranges No doubt we live in a racist society. The writer was making a case that STEM education does not help blacks. I was pointing out that in fact it does, and by a significant factor. Since black STEM graduates have 181% (.58/.32) the rate of employment of black non STEM graduates, it is irresponsible to say that STEM education does not work for blacks.

Posted on June 6, 2014 at 2:30 pm 0

On Crop Tops Cropped from College, Education = Reparations?, Academic Rejection vs Other Kinds

STEM does work for Black people. STEM grads have employment rate of 58% vs 32% for non STEM grads (not counting underemployment.) That's pretty significant. Underemployment of 32% vs 56% comparing STEM to non STEM. It may not be "Magic" but something significant is at work.

Posted on June 6, 2014 at 11:57 am 1

On When One Person Earns More Than the Other in a Relationship

Work is love made visible. And if you cannot work with love but only with distaste, it is better that you should leave your work and sit at the gate of the temple and take alms of those who work with joy. For if you bake bread with indifference, you bake a bitter bread that feeds but half man’s hunger. And if you grudge the crushing of the grapes, your grudge distils a poison in the wine. And if you sing though as angels, and love not the singing, you muffle man’s ears to the voices of the day and the voices of the night.” - Kahlil Gibran, (1883-1931) from The Prophet – “On Work” To the OP's credit, he recognizes that there is no work that he can do with love. So he prefers to sit at the gate...

Posted on March 31, 2014 at 4:31 pm 1

On I Bought a House When I Was 21

@jquick Assumption that I would make is that EmmaP is one disciplined young woman. From her responses to some of the posts, she's also a thoughtful, decent person. I only hope that I can teach my own daughter a fraction of these traits... I've been lucky enough to come across many young people like EmmaP. So much for the caricature of the entitled millennial.

Posted on January 29, 2014 at 11:10 am 0

On The Problem With Financial Literacy Is That It Doesn't Work

For me, it was behavior more than knowledge. I did not begin to save until my mid-30’s. It wasn’t for lack of information. My undergrad major was economics and I had taken a personal finance class with a brilliant, funny, and dynamic professor and to this day remember some of his class presentations. I did not capitalize on this knowledge for a long, long time. It took me almost 15 years after graduating before I began to save in any meaningful way. What changed was my behavior rather than my knowledge base. It was a sort of a gradual awakening and I stopped rationalizing my financial behavior and stopped counting on magical solutions regarding finances. It’s the classic two marshmallow problem. I’m lucky that I somehow went from a one marshmallow young man to a two marshmallow middle aged one.

Posted on January 10, 2014 at 9:21 am 0