EB: Giving ’em the business!

Brain dumps from the original Bonehead.

Overinflated.

I’ve been pretty lucky for the past few years – my rent increased at all… but that wasn’t always the case!  A few years ago while living down in Florida I had the misfortune of watching my monthly payment increase anywhere from 60-95 dollars with each annual renewal.  Also, during that time, the price of gasoline increased roughly a dollar per gallon… and at 12 miles-per-gallon, and if you want to know what THAT feels like just grab a handful of Short Curlys in a nice firm grasp and just yank as hard as you can.

Unnecessary and definitely uncool.

You’re right – my bad.  I think being away for so long has made me a bit overeager?  Sell the truck would be the conventional solution but maybe not when I already own it.  Book value is maybe four grand and buying a new vehicle is going to mean taking on a new note.  Even with the savings in gas expenses it would take years to begin to recoup any of it.

Anyways, all of this got me to thinking about the conceptual nature of how this financial stuff is supposed to work; and wondering if it’s really “supposed to work” at all?   Let’s go back to the rent thing for a second.  During those three years where my rent kept going up, let’s say I held down a job and maintained status quo… nothing special but not below average either.  I could then reasonably look forward to the average run-of-the-mill, 3% annual increase right?  That’s, of course, taking alot of ‘givens’ into account – such as the company I work for being in good enough financial standing that they’re actually giving out annual increases, but what the hell… let’s go wild. 

So to fully flesh out this scenario, let’s say I’m earning an above average salary, ok?  We’ll call it 50k per year just to simplify the math.  At the end of one year that’s an additional $1,500 to my yearly base and then at the end of year two that’s an additional $1,545 – that’s a gain of $3,045 from year one to year three by having some good days and some bad days, not getting promoted and not getting canned.  Now, before we get into some full-contact Buzzkill, I should mention that all of these are pre-tax numbers.  Once you reduce that by the national average of 30.8% to pay taxes that leaves an average of about $1,050 per year, or $87.50 in take-home income each month.   

And now to bring it full circle: back to the 12 mpg gas guzzler and the annual rent spikes.  Eighty-seven dollars a month would set me just about even on that annual rent increase if the price of gas wasn’t continually on the rise… but it is.  Or maybe I’d break even if I’d been good enough to warrant a four or five percent raise in that hypothetical scenario. 

Whatever.  Enough with the IF’s.  You remember Ed?  Remember that line he used to say?  If my aunt had balls she’d be my uncle!  Enough with the damn IFs.

Right.  So, again, how is all of this supposed to work?  When you think if pulling even, financially or otherwise, you’re thinking of average, right?  But even starting with an above-average salary the only way to break even is to be exceptional.  I’m no numbers wizard and it’s quite possible that I’m missing something here but it seems to me that something in this system is broken. 

Just to be clear – I’m not suggesting that our taxes should lowered because cutting into the profit margins just isn’t allowed… lower taxes would only mean that less gets done.  Besides, many “civilized” nations actually charge a higher percentage than the U.S. does.  What I want to understand is how does the average American citizen financially survive in our present conditions?

 

-E

June 21, 2008 Posted by | Observations, Work | 4 Comments