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ronholm
Joined: 26 Jan 2007
Posts: 12111
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| Posted: Sun Aug 26, 2007 12:26 am Post subject: |
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| Bucketfoot wrote: | | ronholm wrote: | Shoot... I thought I moved to the country but the damn city followed me.. 
I am a few minutes north of the Kansas Speedway... Anything and everything you could possibly need is within a very short drive... And yet i still live at the end of the street.. I have a nice tree line separting me and about 200 acres of beans and on the other side of my piece is about 150 acres currently being used by 60-80 head of cattle...
But the city is closing in fast... |
First let me state that I am not saying you are complaining... but I always find it funny when people who have moved to the country, mountains, etc, complain about the city and population encroaching on them, when they themselves were a part of the problem by moving there in the first place 
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HEHE...
No offense taken... I understand your point.. But when I moved I didn't turn several thousand acres into the "Legends" shopping mall, ( http://www.legendsshopping.com/ ) I just have 3/4 of an acre for the house and workshop... The rest of my ground is left the way god intended ( that stupid waterpark will be in soon )
I don't want the stupid sewer.. My septic works just fine.. I have a well, and my water comes from there.. And on both of these things they fought me hard before they quit charging me for them..
So I understand your point.. But I am not one of those that would move to the country and then want to bring the quickie mart, and the walmart and every other damn thing with me..
Shoot... I would be happy to live in a tent in the middle of a thousand acres.. running water and electricity are for sissy's
And I knew when I bought my place that it wasn't going to stay rural for very long.  In the last 5 years it the value has increased by almost 60%since I bought it.. Sometimes you just get lucky
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oliverg
Joined: 15 May 2007
Posts: 800
Location: Melbourne, Australia
TV/Projector: Sony G90 X2 - Vidikron Vision 1
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| Posted: Sun Aug 26, 2007 12:34 am Post subject: |
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Hard times happen - I'm 35 now. At 33 I had a business turning over a mil a year. I got married. A week after my honeymoon I visisted a chiropractor and he accidentally almost broke my neck.
Net result: 3 years on, I've lost my house, my marriage, my business. My health insurance had lapsed (my wife and I were going to get 'joint' insurance so I let it happen). I'm now living at home with my parents in some rooms down the back of their house. All I have left is my home theatre and my Porsche and 80k in shares. I could probably sell the car and the HT but .. they make me happy. Even if I can't drive for long than 20 minutes.
I've sued the chiropractor. 3 years and a failed surgery later, my lawyers have organised a mediation with the chiropractor's insruance company. In 2003 there was a new law (to "protect" insurance companies!!) where they have capped the amount that can be claimed as a result of 'medical negligence' - the most I can claim is $130k per year (a 500k per year loss for me). The most I can get for 'pain and suffering, loss of enjoyment of life' is 350k. If I was in the US, I'd be able to claim 20-30 million. But all the money in the world means nothing if the most you can do is lie in bed and watch movies.
Even in this situation, with my money vanishing at a VERY rapid rate, I still think "f*ck it" and last week I bought a G90.
If we don't do the things that make us happy in life, there's no point.
Kind regards
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Dave Lister
Joined: 16 Jan 2007
Posts: 436
Location: Adelaide, South Australia
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| Posted: Sun Aug 26, 2007 7:43 am Post subject: |
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| oliverg wrote: | Hard times happen - I'm 35 now. At 33 I had a business turning over a mil a year. I got married. A week after my honeymoon I visisted a chiropractor and he accidentally almost broke my neck.
Net result: 3 years on, I've lost my house, my marriage, my business. My health insurance had lapsed (my wife and I were going to get 'joint' insurance so I let it happen). I'm now living at home with my parents in some rooms down the back of their house. All I have left is my home theatre and my Porsche and 80k in shares. I could probably sell the car and the HT but .. they make me happy. Even if I can't drive for long than 20 minutes.
I've sued the chiropractor. 3 years and a failed surgery later, my lawyers have organised a mediation with the chiropractor's insruance company. In 2003 there was a new law (to "protect" insurance companies!!) where they have capped the amount that can be claimed as a result of 'medical negligence' - the most I can claim is $130k per year (a 500k per year loss for me). The most I can get for 'pain and suffering, loss of enjoyment of life' is 350k. If I was in the US, I'd be able to claim 20-30 million. But all the money in the world means nothing if the most you can do is lie in bed and watch movies.
Even in this situation, with my money vanishing at a VERY rapid rate, I still think "f*ck it" and last week I bought a G90.
If we don't do the things that make us happy in life, there's no point.
Kind regards |
I can sympathise with you here mate, I got hit by a car at 15 while riding a BMX bike, the car was doing 70Km/h and I have back and neck injuries that don't show up on x-ray as well as injuries to my knees, I got $3500 from SGIC (State Gov Insurance Co.) from the compulsory third party that is on car registration as 'compensation for pain and suffering' but that is it, Centrelink refuse to put me on the disability pension and tell me to go out and work, I tell them "you try being in this much pain and have people tell you to go out and work, you wouldn't even be able to do your cushy desk job or even get up for work because of lack of sleep, I have a very high pain threshold, I hardly feel it if I burn myself with a soldering iron and yet I am in too much pain to sleep let alone work and I am trying to keep off medication because once you are on it you never get off it and it causes organ damage", their response "you look fine to me, go and get a job".
I don't have the money for lawyers to take the driver to court, they would get most if not all the money anyway.
I could now tell them I have a 4 - 5mm kidney stone and the doctor was surpirsed that I am not doubled over in pain, I am waiting to see a specialist to see about having it destroyed by ultrasonics as there is no way I will pass it, the phrase 'like giving birth through your urethra' is enough of a put-off.  
I have heard that chiropractors are dangerous and should not be trusted, now I truly believe it, one wrong move and the arseh*le has ruined your life.
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Beat that you digital technicolour flashlight owners.
Stuff for sale;
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oliverg
Joined: 15 May 2007
Posts: 800
Location: Melbourne, Australia
TV/Projector: Sony G90 X2 - Vidikron Vision 1
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| Posted: Sun Aug 26, 2007 10:15 am Post subject: |
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Dave, I'll PM you my lawyers details - he did my case no win/no fee and he specialises in cases like yours - if ANYONE can get you help, he can. Its worth contacting him just to see what he has to say. He's already helped out another mate of mine in similar circumstances.
Check your PM - Kind regards
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Dave Lister
Joined: 16 Jan 2007
Posts: 436
Location: Adelaide, South Australia
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dc_pilgrim
Joined: 31 Oct 2006
Posts: 225
Location: PA
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| Posted: Mon Aug 27, 2007 12:42 pm Post subject: |
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| greg_mitch wrote: | Ok help me here. I think I was listening to some bad financial advice earlier....
For example:
Scenario 1
200k mortgage @ 6.25%
100k annual salary
25% tax bracket
What is my net annual income tax burden after my mortgage interest deduction?
Scenario 2
100k annual salary
25% tax bracket
What is my annual income tax burden? |
Assuming the loan is in the early stages, and little has been paid down, the interest should be something a little south of the $12.5K that is 6.25% of the principal. Lets say 11.5K for kicks (would mean an average mortgage outstanding of 184K). Your tax benefit on that amount appears to be $2875 in that case, but there is a little more to it. But that mortgage means you definitely itemize, so you can deduct state income taxes, property taxes and charity. Let's assume that those are respectively $5k, $2.5K and $1K ($8.5K). So your total itemized deductions are $20K. In 2007, for married period is $10,700 - so you only itemize if you have a mortgage (10.7K>8.5K), but realistically, you are only getting a benefit on the incremental mortgage dollars in excess of the standard deduction (in this scenario, 107.k-8.5k=2.2k; 11.5K-2.2K= 9.3K). In reality, your tax benefit is only there on the dollars in excess of the standard deduction, so the tax benefit is only 25% of $9.3K or 2,325. Thus the real net borrowing cost is 9,175. The net of tax benefit borrowing rate is right around 5%. If there wasn't stnadard deduction leakage (e.g. if your other itemized deductons were >= the standard deduction) The net borrowing cost would be 4.6875%.
So the decision to pay off or keep the loan depends on whether you think you can get an after-tax return greater than the after tax borrowing costs (4.7%-5% depending on the facts, at a tolerable risk), and other issues like predictability of cash flows, discipline to save the money if not forced by the mortgage, sense of security, etc.
Personally, I have a 15 year mortgage. I pay a tiny bit extra even though the rate is very low and I can get a higher return in an FDIC account (I managed to get the second lowest rates in recent history), and would pay it off entirely if I could. Math would tell me I can be much richer if I kept the mortgage, but part of financial freedom is flexibility, and eliminating debt is a great way to make life more flexible.
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greg_mitch
Joined: 03 May 2006
Posts: 5320
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| Posted: Mon Aug 27, 2007 12:51 pm Post subject: |
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| dc_pilgrim wrote: | | greg_mitch wrote: | Ok help me here. I think I was listening to some bad financial advice earlier....
For example:
Scenario 1
200k mortgage @ 6.25%
100k annual salary
25% tax bracket
What is my net annual income tax burden after my mortgage interest deduction?
Scenario 2
100k annual salary
25% tax bracket
What is my annual income tax burden? |
Assuming the loan is in the early stages, and little has been paid down, the interest should be something a little south of the $12.5K that is 6.25% of the principal. Lets say 11.5K for kicks (would mean an average mortgage outstanding of 184K). Your tax benefit on that amount appears to be $2875 in that case, but there is a little more to it. But that mortgage means you definitely itemize, so you can deduct state income taxes, property taxes and charity. Let's assume that those are respectively $5k, $2.5K and $1K ($8.5K). So your total itemized deductions are $20K. In 2007, for married period is $10,700 - so you only itemize if you have a mortgage (10.7K>8.5K), but realistically, you are only getting a benefit on the incremental mortgage dollars in excess of the standard deduction (in this scenario, 107.k-8.5k=2.2k; 11.5K-2.2K= 9.3K). In reality, your tax benefit is only there on the dollars in excess of the standard deduction, so the tax benefit is only 25% of $9.3K or 2,325. Thus the real net borrowing cost is 9,175. The net of tax benefit borrowing rate is right around 5%. If there wasn't stnadard deduction leakage (e.g. if your other itemized deductons were >= the standard deduction) The net borrowing cost would be 4.6875%.
So the decision to pay off or keep the loan depends on whether you think you can get an after-tax return greater than the after tax borrowing costs (4.7%-5% depending on the facts, at a tolerable risk), and other issues like predictability of cash flows, discipline to save the money if not forced by the mortgage, sense of security, etc.
Personally, I have a 15 year mortgage. I pay a tiny bit extra even though the rate is very low and I can get a higher return in an FDIC account (I managed to get the second lowest rates in recent history), and would pay it off entirely if I could. Math would tell me I can be much richer if I kept the mortgage, but part of financial freedom is flexibility, and eliminating debt is a great way to make life more flexible. |
I think I got a little lost in the paragraph form. Let's keep this simple using your numbers:
Scenario 1
Annual Tax Burden??-$20k[itemized deductions] = net tax refund?
Scenario 2
Annual Tax Burden??-$10,700[standard deduction] = net tax owed still
If you take the amount owed + the refund that is the difference between a mortgage and no mortgage right? Assuming all else is equal.
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dc_pilgrim
Joined: 31 Oct 2006
Posts: 225
Location: PA
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| Posted: Mon Aug 27, 2007 1:06 pm Post subject: |
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| greg_mitch wrote: |
I think I got a little lost in the paragraph form. Let's keep this simple using your numbers:
Scenario 1
Annual Tax Burden??-$20k[itemized deductions] = net tax refund?
Scenario 2
Annual Tax Burden??-$10,700[standard deduction] = net tax owed still
If you take the amount owed + the refund that is the difference between a mortgage and no mortgage right? Assuming all else is equal. |
Its really Annual taxable income - decuctions - exemptions = tax burden - tax withheld and/or credits = refund or payment.
I'll assume you do not have kids (exemptions) or credits and give you the amounts on $100K income and my assumed itemized deductions.
Scenario 1: W/mortgage deduction, federal taxes = 11,148
Scenario 2: w/o morgage, federal taxes = 13,473
Difference = $2,325. It costs 11,500 in interest to get a tax reduction of 2,325.
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ecrabb
Forum Moderator
Joined: 13 Mar 2006
Posts: 15909
Location: Utah
TV/Projector: JVC RS40, Epson 5010
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| Posted: Mon Aug 27, 2007 4:29 pm Post subject: |
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| Bucketfoot wrote: | | First let me state that I am not saying you are complaining... but I always find it funny when people who have moved to the country, mountains, etc, complain about the city and population encroaching on them, when they themselves were a part of the problem by moving there in the first place |
I know what you mean, but it kind of depends on whether you move to an existing house or build. If you build, then yes - you're kind of contributing to what you were trying to get away from in the first place: development. But, if you move out to some existing farm house or a house in the woods or whatever, I don't think there's anything hypocritical about that. Even if you build, but on lots of land, you're still not contributing to population density.
As I said before, I'd love to live 15 minutes from the burbs, but the prices aren't enough less that I wouldn't spend the difference I saved on mortgage putting the gas in the car to drive to work every day. It just wouldn't make sense for us right now. If only I could work from home...
Speaking of money... Do you ever eat at the The Perfect Landing at the FBO at Centennial Airport? We go there for lunch sometimes when we go visit my wife's brother and his family in Highlands Ranch. It's fun to watch the people land their Gulfstream or Citation, eat lunch, then take off on their way somewhere else. What a life. Talk about more money than you know what to do with...
SC
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Bucketfoot
Joined: 17 Mar 2006
Posts: 698
Location: Centennial, CO
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| Posted: Mon Aug 27, 2007 4:52 pm Post subject: |
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Yep, Perfect Landing is on our regular lunch schedule rotation (I work 5 minutes away). In fact we just ate there last week.
It's always enjoyable to sit and watch the wide variety of aircraft that take-off and land there.
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Dave Lister
Joined: 16 Jan 2007
Posts: 436
Location: Adelaide, South Australia
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greg_mitch
Joined: 03 May 2006
Posts: 5320
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| Posted: Thu Aug 30, 2007 12:55 pm Post subject: |
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We have a 2 year statute of limitation here. I filed a lawsuit on day 725!
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