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Saturday, May 30, 2009

I'm a Value Whore

So, I know you are laughing at the title of my post, but from time to time I want to post on things financial. I can no longer restrain my inner economist. You'll have to forgive the math and the circular reasoning. Sometimes I can't control myself.

First off, let me say I joke about being a cheapskate, and but it's not exactly the right word. Frugal and penny-pinching don't quite get the job done. After much consideration and self reflection, I have decided I am a value whore.

Now, what is a value whore? In my opinion a value whore is someone who looks for the best bang to buck ratio in life and then does anything legally and morally acceptable to increase the bang or decrease the buck side of the equation.

Going cheap isn't always the best route and I still want to enjoy life. Oh to hell with it, I like material possessions too - obscenely expensive handbags in particular. So being a value whore is my best bet.

Now some of you are shaking in your boots at the thought of any form of lavish spending and that's OK. That's who you are. Some of you wonder why the hell I waste my time clipping coupons and hunting down deals on the internet.

The reason I am a value whore is that the age old adage a penny saved is a penny earned isn't true. In my family's case, a penny saved is 1.57 penny's earned. This means that $100 saved is $157 earned.

Hold onto your hats boys and girls. Here comes the math.

We can all agree that if you save $1 you don't have to earn it. We can also agree that when you earn and spend $1 you have to pay tax on it. Lots and lots of tax on it if you think about it. Here's the breakdown for my family.

Self-employment tax = 15.3%
Marginal Income tax = 33%
Sales tax = 8.25%

This totals roughly 57% . Now this will vary from person to person based on your employment status, marginal tax rate, and where you live. Once you plug in your numbers you will get the idea. The idea and the mindset is the important thing here, not the math.

This has been a half-assed economist public service announcement. I now return you to your regular programing.

1 comment:

  1. We have similar math! If I find a penny on the ground I say "Tax free money!" I also like to take advantage of things like CVS extra bucks to see how much stuff I can get for the original 7 bucks I spent.

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