— Keith Humphreys (@KeithNHumphreys) November 11, 2017
Ask me anything about personal finance, the index card, whatever.
With tax time fast approaching, paid political protesters have some serious decisions to make before April 15.
Yeah. It’s a joke piece. But I include some decent financial advice, too. More here.
Yeah, this just happened (h/t @yasher)
Of course, it’s delicious to see Sean Spicer get his comeuppance. It’s even more gratifying to see the basic insights from the index fund revolution penetrate the far corners of popular culture. Indeed the advice in that US Weekly tweet–Yup, that’s point #3 in my Index Card–beats the advice provided by many financial advisors, who channel clients into costly active funds, annuities, and other inappropriate products.
There’s a broader point here, too. Lifestyle magazines such as US Weekly, People, Ladies Home Journal, Teen Vogue, and Cosmo include celebrity gossip, fashion and hair tips, relationship advice, and so on. These magazines also include surprisingly serious fare on health policy, disability, LGBTQ issues, and more. Each of these magazines employs some excellent journalists. They reach millions of readers who care about important things, even if they also want the low-down on Johnny Depp’s latest whatever and that other person’s red-carpet fashion disaster at the Grammy’s. That’s human life, giving the important, the titillating, and the mundane what they are due.
Press Secretary Sean Spicer has noted that anti-Trump protesters are being paid.
Spicer says nationwide protests of Trump are not like Tea Party was: This is “a very paid AstroTurf-type movement” pic.twitter.com/WEeGpoP2sK
— Bradd Jaffy (@BraddJaffy) February 6, 2017
Finally someone has finally called attention to this important alternative issue. Paying millions of protesters was bound to be a challenge. Even so, this whole protester pay thing has got to be the most poorly-planned shambolic logistical mess of the Trump era.
As you might imagine, my own inbox is flooded with calls and emails from liberals wondering how to most prudently invest their Women’s March pay, whether they should wait for the 1099 before filing their taxes, whether parking and cardboard signs are tax-deductible, and so on. Apologies to the many RBC readers waiting for my responses.
Everyone’s personal situation is different. Generally speaking, I’d recommend that every protester open an SEP-IRA account for these earnings. You can contribute up to 25% of compensation. But regular protesters should be mindful of the maximum contribution limits: $53,000 for the 2016 tax year, and $54,000 for 2017. Something like the Vanguard Total Stock Market Index Admiral fund seems appropriate if your protest pay exceeds $10,000.
I believe the Vanguard site is back online after being crushed with Women’s Marchers opening new accounts with their January 21 paychecks. You might still want to login after midnight when the traffic is a bit slower.
So much of the operational chaos might have been avoided had the Soros people simply allowed direct deposit. Live and learn.
Nothing says “economic populism” quite like rolling back consumer protections for small investors planning their retirement.
Accompanying information here….
My wife and I hung took a nature walk yesterday. A few pictures were taken.
Kevin Drum wants to know how it can be that 10% of people who make more than $240,000 per year – about 4x the median household income – can be reporting that they don’t have the money to buy the things they need, and 37% say they’re cutting back financially.
One obvious answer is that a bunch of those high incomes are being earned in places such as New York and San Francisco, where housing is heartbreakingly expensive. (I’m doing just fine, thanks, but then I’m single.) Add some private-school or college tuition to that outrageous rent or mortgage payment, and subtract off income taxes and payments on (in some cases) six-figure student-loan debt, and you don’t have to invoke bad money management to explain that some of those folks feel squeezed.
One way to deal with the squeeze, as Matt Yglesias keeps reminding us, would be to get rid of the zoning rules that artificially boost the cost of housing in those high-income places. Another would be to reinvest in public schools, and especially in public universities, to get rid of some of that tuition and student-debt burden.
But the basic fact, as some of Kevin’s commenters note, is that people can spend almost any income level, both because they need to keep up with one another’s spending patterns and because they acclimate psychologically to whatever standard of living they’re accustomed to, so that a consumption level that seemed like luxury five years ago seems like a necessity today. All of this is laid out in detail in Robert Frank’s Luxury Fever, a book that looks sharper and more prophetic with each passing year; once you’ve read it, what surprises and puzzles Kevin will no longer surprise or puzzle you.
The strong implication of Frank’s analysis is that increasing rich people’s private incomes is very much a zero-sum game, and that all of us prosperous types would benefit from higher marginal taxes on our own incomes, as long as those taxes fell equally hard on the people we compete with for status and, especially, housing. As a country, we could use that money not only to relieve the much greater financial pressure felt lower down the income distribution, but also to buy public goods and publicly-provided services – environmental protection, for example – that would genuinely enrich rich folks’ lives in a way that the game of competitive consumption can’t.
Footnote And whether you’re rich or poor, it’s nice to have money, so run out and spend some of yours right now on Harold Pollack’s Index Card, the best guide ever written to common-sense money management.
This weekend I was on the Slate Money podcast with Felix Salmon and Jordan Weissmann.
We had a great conversation discussing many things:
We were having a lovely conversation until the very end, when something bad happened that just wasn’t my fault.