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 Post subject: $50,000
PostPosted: Sun Jul 25, 2010 12:50 pm 
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Grand PooBah
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I need your help. My first lesson next year is to help students understand the value of $50,000. So I ask you all...if you had $50,000, what would you do with it?

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 Post subject: Re: $50,000
PostPosted: Sun Jul 25, 2010 2:40 pm 
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This is an interesting question. I am not sure anyone can give you a good answer because the true value of money is never what it is on face.

For instance, look at it from an educators perspective. Suppose one signs a 10 month band directors contract for 50K. At the very least, 1/4 of that goes to the government for taxes. This leaves $37,500. Since I was teaching in California, that number is probably a bit higher now. Now that Cali needs to have a massive tax increase to stay afloat and now that we have national socialized medicine, it is safe to assume that the tax number is going to get much more severe even yet.

Yes, band directors are in that "evil rich" category who must "pay their fair share!!"

Then you have to add in the personal bank fees from the new bank bill and "smart grid" power prices that are comming and subtract even more from the original 37.5K number that we started from.

Since we are just looking at the round figure of 37K after taxes, assume that a band director worked 8 hours a day for ten months. We all know band directors work much more when football games, parades, competitions, rehearsals, booster meetings, saturdays etc. are all factored in.

But just for fun, let's just use the round number.

8 Hours a day for 10 months = about $23.50 per hour worth of work per day (if my numbers are wrong, please correct. I am a musician, not a math fool.)

From there subtract mortgage/rent, property taxes (if applicable) bills for food, clothes, cable, internet etc.

Then subtract for entertainment expenses (whatever one thinks they need to be entertained over the course of a year).

Then see what the students have left when they have done this calculation.

I will take any recommendations on saving that they might have to offer!!!


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 Post subject: Re: $50,000
PostPosted: Sun Jul 25, 2010 8:09 pm 
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50k sure doesn't leave much to play with if it is annual salary like maa is assuming. Now, if it is like a bonus of 50k that kind of puts things a little differently.

Right now, I still do not entirely trust the volatility of the market and with the national debt mounting every day that is not necessarity the safe bet anymore. I would place the entire 50k in gold.
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I believe that gold is going to continue to climb at least for the near future. Of course, like any investment, there is inherent risk and money could be lost. You would need to check the prices on a daily basis to make the most of your money. Long term... I believe it will go up to a point and then stagnate; at that point I would pull out and move into something a little more liquid.

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 Post subject: Re: $50,000
PostPosted: Mon Jul 26, 2010 10:41 am 
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Investing in gold is a great idea if you have the money free and clear.

Just remember that if you invest in gold you should do it soon because there is a provision in the health care bill that imposes a large tax on all purchases of gold.

What this has to do with health care I do not know, but it is in there.

Also remember, in the 1930's the government confiscated all gold and made the ownership of gold punishable by a large fine and ten years in prison. Now that we have the same kind of government that we did then, one would have to assume they would do something similar if (God forbid) the currency was to collapse.

They knew then that smart people held gold as an insulation against the uncertainty of the market. Progressive governments do not like it when people operate outside of the social parameters that they can control directly. This is also why there is an interest in the legalization of marijuana.

But don't invest in bud!!!


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 Post subject: Re: $50,000
PostPosted: Mon Jul 26, 2010 11:51 am 
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maa0162 wrote:
Just remember that if you invest in gold you should do it soon because there is a provision in the health care bill that imposes a large tax on all purchases of gold.

Wrong. Income from sales of gold and silver has ALWAYS been taxable and reportable to the IRS. The provision does not add a new tax (nor raise existing taxes), simply changes the Form 1099 reporting requirements for ALL goods of $600 or greater in value.

Previously, gold and silver coins and collectibles transactions were exempt from reporting on 1099 forms (but still had to be reported on 1040s). The health care bill simply removes that exemption. All it does is give you more paperwork if you wish to invest in gold, nothing more.

As to the original topic, I'd pay off some debt, maybe buy a new car, maybe take a trip with my wife to Costa Rica.


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 Post subject: Re: $50,000
PostPosted: Mon Jul 26, 2010 12:21 pm 
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Much has been written about the tax on gold, but here is a recent article about it:

http://abcnews.go.com/Business/gold-coi ... d=11211611

Note specifically the paragraph which states:

"Starting Jan. 1, 2012, Form 1099s will become a means of reporting to the Internal Revenue Service the purchases of all goods and services by small businesses and self-employed people that exceed $600 during a calendar year. Precious metals such as coins and bullion fall into this category and coin dealers have been among those most rankled by the change.

This provision, intended to mine what the IRS deems a vast reservoir of uncollected income tax, was included in the health care legislation ostensibly as a way to pay for it. The tax code tweak is expected to raise $17 billion over the next 10 years, according to the Joint Committee on Taxation."

This sounds like a tax to me. But that is not the worst; the government tracking of private transactions this small should be a major cause for concern in America.

When it comes to the topic of $50,000, the point is, is that the current government does not believe private citizens have the right to their own wealth. They want your 50K for their own purposes.


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 Post subject: Re: $50,000
PostPosted: Mon Jul 26, 2010 12:42 pm 
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Wow... :hijack:

To add to the mess, sales of anything have always technically required reporting to the federal government; gold is basically treated like anything else in that respect. If you are selling to people you don't know or on an open market then it is a very good idea to report because you don't know if the other party will or not. Now if you're selling it to people that you know either personally or professionally... I have heard that this reporting requirement sometimes goes unnoticed. ;)

Any of course the government wants your money, especially this government. Everyone deserves some of what you worked hard for, don't they? :box:

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 Post subject: Re: $50,000
PostPosted: Mon Jul 26, 2010 12:43 pm 
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Grand PooBah
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Someone should probably start another thread on gold and all that kind of stuff...this thread is for the benefit of high school students =P

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"It is your destiny to be the leader who uses this event to rally a city, a nation...a world"

"Its not what you do or what you say, but HOW you do it that matters the most"

UC: Riverside, Class Of 2007


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 Post subject: Re: $50,000
PostPosted: Mon Jul 26, 2010 12:55 pm 
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Point well taken formermarcher.

Unfortunately, this is the world of finance that young students will walk into. Nobody just "gets" 50K, they have to get it in some taxable way, even if it comes from a will in trust.

I think a good idea to start, before the students do any other investigation on their own, is to have them ask their parents what 50K means to them. If they do not speak to their parents often about finances or other serious matters, they might be surprised at the responses they get.


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 Post subject: Re: $50,000
PostPosted: Mon Jul 26, 2010 1:47 pm 
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maa0162 wrote:
"Starting Jan. 1, 2012, Form 1099s will become a means of reporting to the Internal Revenue Service the purchases of all goods and services by small businesses and self-employed people that exceed $600 during a calendar year. Precious metals such as coins and bullion fall into this category and coin dealers have been among those most rankled by the change.

This provision, intended to mine what the IRS deems a vast reservoir of uncollected income tax, was included in the health care legislation ostensibly as a way to pay for it. The tax code tweak is expected to raise $17 billion over the next 10 years, according to the Joint Committee on Taxation."

This sounds like a tax to me.

I'll say it again: it's always been the law that these transactions should be reported and tax on 1040 forms. This is not a "new tax", it's closing a loophole to help the government collect the existing tax. As your article itself refers to it: "uncollected income tax" not "new" income tax.

Now, that said I don't think it's a very USEFUL change: $1.7B per year in the Federal coffers is very small potatoes. And, I agree, it will primarily be used for monitoring transactions.

HOWEVER, it's important to realize that private manipulation of the gold market by a few wealthy sources is a large contributing factor towards the spike of gold prices in the first place. Now, instead of "hiding" mass transactions in the lump sum amount reported annually in the 1040, the government will be able to match 1099s to market activity and look for suspicious movement or manipulation. It will be nothing more than an inconvenience for 99.9% of the people out there.

It's the way our government works: everyone ends up inconvenienced to close a loophole that a few insidious individuals were exploiting. (See also: the Sarbanes-Oxley Act, a nightmare of bureaucratic paper shuffling for every corporation, and something I deal with every day, thanks to the jerks at Enron.)
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 Post subject: Re: $50,000
PostPosted: Mon Jul 26, 2010 1:59 pm 
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I suggest that 50 K does not mean a lot to students that sit around and hear about billions of dollars being spent, or salaries in the 500 K plus numbers in the city of Bell. As a booster President I know that it is difficult to generate this much income with the few volunteers that actually do the work of the whole band. I would recommend the high ticket items that you need (the word is need) and leave the smaller items to be worked for with smaller fundraising events that you can work hard for. It is always difficult to generate a large amount like this and it may be your only shot at these large purchases. Make a wish list and stick to it for several years so that you have something to work towards in the future. Make sure the items are quality and will last a lifetime in the Band, the good deals on junk are quickly forgotten once the items have been thrown away. Spend Wisely


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