Finances of 2+2ers

[Howard Treesong]

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roth ira: gross income * this year's tax rate * growth rate = final amount

tax deferrerd ira: gross income * growth rate * retirement tax rate = final amount

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One critical parameter to this is "tax rate." For working stiffs, the current tax rate on active income is rather a bit higher than the tax rate on, say, dividends -- and so if I assume, for example, that I'll continue to make my yearly income when I retire but that I make it via dividends rather than salary, then (assuming things stay the same as they are now) my tax rate will be much lower even though I'm making the same money.

That's of course because the tax rate on qualified dividends is lower than it is for regular income.

I'm somewhat surprised that around 800 people responded to this survey. I would have taken the under to that.

[ike]

21, robusto
lol donkaments

[Shoe]

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We're solid poker players around here, so assume we have smart kids that can get into good private schools. Taking my alma mater as an example, tuition and fees for 06/07 are north of $43K with no travel. That means the total college expenditure for two kids is about $350K. If I were worth $1MM, that'd 35% of my total assets out the door for college. Yeah, I'd sweat that -- I'd do it, of course, but I'd sweat it.

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Not to hijack this thread, but there are a lot of good, public, cheap colleges available. I only paid about $6k a year for my college education (graduated just a few years ago, and that includes room & board), and it was ranked amongst the top in the nation in many of it's business and computer related majors.

I personally can't see how spending an extra $200k or so for my education would have made me better off today, atleast for my major (computer programming), I highly doubt I would have a higher salary today based on what school I went to. Maybe for other professions it makes a bigger difference. I know for me it would take an extremely long time to make up an extra $200k in salary. Especially since with my degree, real-world experience becomes more important quickly.

Note: I do not think there is anything wrong with expensive schools, and I am not saying a cheap public school is better, but I don't think you can judge an education based on the cost of tuition -- studies have actually found that attendance at many colleges goes up after they raise tuition -- without actually changing the ciriculum, thus people are paying for perceived quality which may or may not actually exist.

[Duke]

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[ QUOTE ]
We're solid poker players around here, so assume we have smart kids that can get into good private schools. Taking my alma mater as an example, tuition and fees for 06/07 are north of $43K with no travel. That means the total college expenditure for two kids is about $350K. If I were worth $1MM, that'd 35% of my total assets out the door for college. Yeah, I'd sweat that -- I'd do it, of course, but I'd sweat it.

[/ QUOTE ]

Not to hijack this thread, but there are a lot of good, public, cheap colleges available. I only paid about $6k a year for my college education (graduated just a few years ago, and that includes room & board), and it was ranked amongst the top in the nation in many of it's business and computer related majors.

I personally can't see how spending an extra $200k or so for my education would have made me better off today, atleast for my major (computer programming), I highly doubt I would have a higher salary today based on what school I went to. Maybe for other professions it makes a bigger difference. I know for me it would take an extremely long time to make up an extra $200k in salary. Especially since with my degree, real-world experience becomes more important quickly.

Note: I do not think there is anything wrong with expensive schools, and I am not saying a cheap public school is better, but I don't think you can judge an education based on the cost of tuition -- studies have actually found that attendance at many colleges goes up after they raise tuition -- without actually changing the ciriculum, thus people are paying for perceived quality which may or may not actually exist.

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You don't need a degree at all to sling code, so that's kind of a [censored] example. You'll also never make any real money at it unless you get lucky with a start-up or do your own thing.