Tag: money

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life thoughts

My Wealth Target


photo credit: Dvorscak

When defining how much wealth you want it is important to first define what wealth is. It can’t simply be income because I think most people would agree that the person who earns $100,000 a year and spends $60,000 is better off (wealthier) than the person who earns $1,000,000 and spends $1,060,000. (Amazingly Congress does not believe this.) A few years ago I stated it this way:

Wealth is not about cash, it is about cash flow – to be wealthy all you really need to do is flow less cash out than in.

While I still believe that statement to be true, I consider it to be an incomplete definition of what it means to be wealthy. If you have more cash flowing in than flowing out then I think it is safe to say that you appear to be heading toward being wealthy as opposed to heading towards poverty but there must be a reason for keeping that extra cash flowing in which gets to the heart of what it means to be wealthy.

Continue reading “My Wealth Target”
Categories
life

I Gave at the Office

When I see people asking for handouts on the street I have faced a quandry about how to react. I can’t give to all of them and I have no desire to give if the gift would be wasted. After reading Mosiah 4 (again) I realize that “I give not because I have not, but if I had I would give” (verse 24) can apply for those who have enough to give but who have already given as much as they are able.

In my case, I no longer need to feel any pang of regret for not carrying cash to give on the streets when I have already given to organizations that are meant to help those very same individuals. In other words, I gave at the office once I received my means without waiting to see who I might meet on the street. I no longer need worry if I should give and take the chance that it would be used wisely by an individual because I have selected only the most effective charitable organizations to receive what I am able to give.

Categories
culture life

Done in Wisdom and Order

I have heard this statement from Mosiah 4:27 applied to many things:

And see that all these things are done in wisdom and order; for it is not requisite that a man should run faster than he has strength.

Somehow in all the repetitions, in my mind the statement had become divorced from the context in which it was given. I don’t mean to suggest that it was not applicable in all the places I have heard it applied, but I learned a lot about the proper disposition of material goods (the context it was given in) when I avoided generalizing the counsel.

The statement was made at the end of king Benjamin encouraging his people to give of their goods to those who sought their help if they were able. His statement was to remind those who might be overly generous, to not bring themselves to a beggars status in their efforts to help the beggars. Making that connection was not a major revelation to me, but combined with much of the best financial advice I have come across I came up with a comprehensive approach to the best way to allocate your money to be generous with others while not running faster than I have financial strength.

There are 5 avenues to dispense with material goods. In the proper order they are:

  1. Tithing
  2. Sustenance
  3. Savings
  4. Philanthropy
  5. Luxury

Having the order is one thing, but knowing how and when to allocate your means to each avenue is the tricky part.

First, pay tithing on whatever means you have. With what remains, provide for your own sustenance, in other words, the necessities of life for yourself and your family.

Second, once you have more means than are necessary for your bare necessities you should allocate some means to savings so as to be able to weather the financial storms that life will bring your way.

Third, when your means are sufficient for you to be able to put some money into savings on a regular basis you should start some form of philanthropy even if you are not able to save as much as you would wish to save. (I use the term philanthropy so as to avoid confusion with some of the meanings of the word “charity.”) As your means increase, you should increase your allocations to both savings and philanthropy in a balanced way (that may not be a 50/50 split, but it should not be giving a pittance to philanthropy while saving large amounts of money).

Fourth, once your savings has increased to the level you feel comfortable with for your future needs you may feel free to allocate excess resources towards some luxuries. (Of course by this time your sustenance should be exceeding a cardboard box for shelter and a diet that is limited to rice and Cup ‘o Noodles®.) As your means continue to increase you should increase your philanthropy at least as much as you increase your luxury (and you might want to increase your savings as well).

Finally, if your material means begin to exceed the level required for luxuries enough to make your live materially easy (meaning that more luxuries would not bring more fulfillment in your life) then you should allocate virtually all increases in your resources toward philanthropy.

Categories
life

Done Deal

It’s been more than a week since we received word that there were no more obstacles in the home sale and purchase that we have been working on. (As with selling my house, we completed our home purchase without enlisting the help of a real estate agent.) Despite all the assurances, I never feel fully comfortable until the money has changed hands and the sales have been recorded. Today was that day. It’s nice that no change of status can derail either of those contracts anymore. Now we just have to move the stuff.

Categories
culture politics

Funding Fire Departments

As we drove through heavy smoke that seemed to be blowing north from the fire in Draper last night, our girls started asking about firefighters and how we (as a society) support them. It got me thinking about firefighters as a service of government. Although they are every bit as legitimate and important a service as police, I rarely think about the Fire Department in relation to government.

Since my brain was chewing on the subject it apparently decided to throw me a what-if to consider. I wanted to share here to see what others thought.

Virtually every structure is insuread against fire – this means that insurance companies are highly interested in the work of firefighters. Would it make sense to privatize the fire department by having insurance companies be in charge of funding them? If so, what kinds of changes in service would you expect to see?

I’m not trying to suggest that our fire departments need to be privatized or that they should be. I just wanted to get some feedback on that random idea.

Categories
Local politics

Followup on City Council Pay

Back in May I asked a question about attitudes regarding compensation for elected officials at the city level. I promised to write my conclusions in a followup and now I find that I never did that. My conclusion was that the issue deserved study in Lehi as the city grows so fast, that it should be done with lots of public input, and that the original request seemed very generous, especially for the mayor. Today I read in the Daily Herald:

Lehi officials are looking for public input on a proposal to increase their own salaries as much as several hundred dollars a month.

In May, Mayor Howard Johnson asked the council to triple his salary to a total of $51,000 a year, and to give themselves a raise too. At that time Council members instructed staff to form a committee of former council members to give a recommendation on salaries.

On Tuesday, Lehi city attorney Ken Rushton said the committee had met and had recommended raising Council salaries from $750 to $1,000 a month, and the mayor’s salary from $1,000 a month to $1,500.

In addition, the committee felt Council members should receive another $200 a month as a travel expense stipend, and the mayor an additional $500 per month.

So far I think the council has done a good job of addressing this issue. They have avoided any attempt to push for the large increases that the mayor suggested and in fact there is at least one council member who even believes that they should be reimbursed for travel rather than having stipends. (I would go one step further and have reimbursements with a cap – per trip and/or per month or year.) They have also done a good job so far of making the process open and inviting public input.

Categories
politics State

Self-Policing Lobbyists

Often lost in discussions about ethics legislation and lobbyist influence is the fact that there is a legitimate value that lobbyists can bring to the legislative process. I’m in favor of making solid rules of ethics for legislators and lobbyists without removing lobbyists altogether. With that perspective, I really enjoyed this Deseret News story about a lobbyist who carefully limits the money he spends on legislators.

While some lobbyists often take lawmakers to Utah Jazz games — all good seats are over $50 — or to expensive restaurants, {Paul} Rogers is one of a growing number of lobbyists who works in more modest means, even if they have the wherewithal to spend more on legislators.

“My firm, Tetris, has season Jazz tickets. We use those for ourselves and our families. I’m finding that many legislators don’t want those (more expensive gifts),” Rogers said.

One thing I have always believed is that buying a meal for a legislator as a way to sit down with them is generally a perfectly reasonable “gift” for a lobbyist to give a legislator. If our $50 cap on anonymous gift is encouraging lobbyists and legislators to limit their financial back-scratching to such meals then I am pleased with that rule.

I would not consider this to be sufficient evidence that we do not need any more ethics legislation, but I do see it as a good sign that it is possible to have reasonable restrictions to discourage excessive use of gifts for legislators.

Categories
National politics

Raising Fiscal Awareness

Considering the importance of importance of fiscal policy it seems to evade any serious media coverage in favor of more exciting topics. Ross Perot has launched perotcharts.com to make the information accessible to people. Former Comptroller General, David Walker, has been lecturing around the country about the cliff we are speeding towards and now Peter G. Peterson is pledging to spend $1 Billion in a media campaign to raise public awareness of the issue. (Remember how much a Billion is?)

Ready and waiting as people start to recognize the trainwreck ahead, Downsize D.C. has a campaign which helps people let their congressional leaders know that they are aware of this issue. I think many members of congress are aware of this, but they don’t want to address it because there are no easy answers or short soundbites.

Categories
politics State

Performance Pay – Round 1

The Legislature approved funds and loose guidelines for merit pay for teachers earlier this year. I really like the first news I have heard about the issue since then:

Each district and charter school that wanted money had to come up with its own plan following broad guidelines lawmakers set earlier this year. . . .

Lawmakers have referred to the law that provided $20 million for performance pay as an experiment they hope will inform future efforts to create a long-term, statewide system. . . .

Some states have taken years to create pay-for-performance plans, but Utah districts and charters had only a few months after lawmakers passed a bill appropriating the $20 million earlier this year.

I think the Legislature was exactly right to avoid the temptation (and it probably was tempting) to try to create a central, defined system for merit pay. Instead they put out the money and let the districts provide dozens of differnt plans for how to use the money – within general guidelines. The result will be that within a couple of years we will have found a dozen approaches that are not very effective and a few approaches that look very promising.

Odds are that if the Legislature had spent money studying the issue for years to come up with The One True Approach™ they would have spent as much money as they end up losing on the plans that will end up failing from this experiement. The real difference is that they will have a higher chance of identifying good ways to implement merit pay.

Anyone who grumbles that $20 Million is not enough can be reminded that this is seed money that can show us the best aproaches and it can be increased in the future as appropriate to foster the most effective merit pay schemes.

Categories
National politics

Signs of Change

I was excited by the news that Obama Declares DNC Won’t Take PAC Money. I think that Lyall shares a good point from a letter to the WSJ editor that the way to really rein in lobbyists is to rein in government. (I wish Lyall provided a link.) If Obama can understand that truth then I have hope that he can effect such a change of culture in Washington if he becomes president. For that matter, if he does not become president he still might be able to make a positive change from the Senate since he has shown his obvious commitment to do things differently and he has some influence that might be used to convince others to follow his lead.

I hope that Democratic lawmakers will follow the lead of the DNC (it may be too much to hope, but while we’re at it the Republicans should do the same thing). Maybe Obama could accept McCain’s offer to do townhall style discussions around the country on the condition that McCain put the GOP on the path of refusing PAC money.