Comments by "Me, Myself and I" (@me-myself-i787) on "How Money Works"
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@SebastianBugiu The way I see it, it's not really being homeless. You have all the essentials: a roof over your head, security, and enough land for an air mattress, without illegally trespassing on public property (sleeping on the pavement is generally illegal because it takes up space which would otherwise be used by pedestrians).
You just don't have the luxuries that come with an apartment, such as walls, aesthetics, utilities, appliances (e.g. dishwashers, washing machines, tumble dryers), and multiple rooms for eating, sleeping and relaxing. You have to do everything in the same place.
However, you could go to Costco and buy a large battery and water tank and filter (but still small enough to fit inside the parking space you're renting), and maybe even use that power to power a microwave and eat hot meals.
Obviously you wouldn't have a refrigerator, so you would need to get food which can last without being in the fridge.
And you could still wash your clothes every so often at a laundromat. And get a Planet Fitness or PureGym subscription and use their showers.
It's not as nice as a regular apartment, but it is helpful for improving your savings and living a nicer life in the future.
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I think money laundering laws are unconstitutional.
The 5th Amendment protects against mandatory self-incrimination. For example, if a prosecutor asks the defendant on the stand whether he/she did the crime, the defendant could say "Yes", be convicted, and go to prison.
Alternatively, the defendant could say under oath that they didn't do the crime. Then, if they're convicted, the prosecutor could additionally convict them of purjery and lying under oath, increasing their sentence.
Thanks to the 5th Amendment, they have a 3rd option: "I plead the 5th". It's not a confession, AND it's not lying under oath in the case of guilt.
Now, here's the thing. Tax evasion is illegal. So, if a criminal makes money illegally, he/she has to declare where he/she got the money from and pay taxes on it, to avoid committing tax evasion. Prosecutors can then use this intel to prosecute the criminal for their crimes.
So, either the drug dealer declares his income, pays taxes, and goes to prison for drug dealing, or doesn't declare his income, doesn't pay taxes, and goes to prison for tax evasion.
Or, there's a third option.
Declaring the taxes came from a legitimate business.
No tax evasion, no getting caught drug dealing.
The 5th Amendment should allow this.
But no. This is considered money laundering.
If money laundering is illegal, "witness laundering" (i.e. pleading the 5th) should also be illegal.
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@WanderingExistence Medical costs are so expensive because of regulations, including Certificate of Need laws and the Affordable Care Act.
And the elderly could live with their children. Or if they don't have children, that means they wouldn't have had the expense of raising children, and would've been able to afford to purchase a long-term lease on a small apartment.
Plus, if their money is invested in the stock market, they won't be living on a fixed income, since stocks grow exponentially. As long as they have a sufficiently large nest egg and don't spend too much.
Assuming 5% growth per year and annual spending of $10,000, you would need a $200,000 nest egg. Which is quite large, but not that unrealistic for a lifetime of saving, especially if you don't have children. Plus, generally, the market grows faster than 5% per year. So, assuming a 7% growth rate per year and annual spending of 5% of the invested money, with an initial investment of $200,000, after 5 years, you could spend over $11,000 per year, and you would have over $220,000 invested in the market. And it would keep growing.
As for the sick and disabled, their family can help support them. Unless they were so mean to their family that they don't want to help. Or their family doesn't make much money. But even then, non-profits can
help.
As for how someone could save up $200,000, assuming they make $20,000 per year (a middling income), if they have a frugal lifestyle and only spend $10,000 per year, that's $10,000 per year in savings.
Now, let's say they invest that money into the stock market, and assume they work for 40 years (20-50). This will be somewhat difficult to calculate.
$10,000 × 1.07^40 + $10,000 × 1.07^39 + $10,000 × 1.07^38 + $10,000 × 1.07^37 + $10,000 × 1.07^36 + $10,000 × 1.07^35 + $10,000 × 1.07^34 + $10,000 × 1.07^33 + $10,000 × 1.07^32 + $10,000 × 1.07^31 + $10,000 × 1.07^30+... Etc.
The result is over $1 million.
Even if their investments make no returns, $10,000 × 40 = $400,000. Which is double the minimum nest egg to retire with $10,000 per year.
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@DipayanPyne94 Turns out, YouTube has a character limit.
Here's the rest of my comment:
Charities can help if you're sick and disabled and your family hates you or is too poor to help.
As for how you'd save up $200,000, assuming a middling income of $20,000 per year, and a frugal expenditure of $10,000 per year with the rest of the money saved up, that's $10,000 per year in savings. Even if they don't invest the money into the stock market, $10,000 per year × 40 working years (24-64) = a $400,000 nest egg, double what is necessary for a retirement income of $10,000 per year.
Even if you retire early at 54, that's still $300,000 saved up. Plenty of money.
Or if you retire at 64 but have $100,000 in medical expenses in 40 years.
And if you do invest your savings into the stock market, you could end up with a nest egg of over $1 million.
And $20,000 per year is not an unrealistic income. Obviously, you won't make that much at the start of your career, but you will make more than that at the end of your career.
So it balances out.
Edit: Now the rest of my original comment has appeared, so this comment is somewhat redundant.
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