prosperity
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Posts posted by prosperity
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I think implementing such a system here wouldn't be too bad. Adopt-a-newbie, in a way. It would be a good way of vetting the trolls, the antagonist 'sort-kinda-Objectivism-has-some-good-elements', as well as encouraging the good, honest kind of person.
What would be a better phrase than blessings?
A sort of selfish point system. Selfish points? Greed points? The greed-o-meter?
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Yeah, I hit the back button quick and saved my text to a file. It doesn't look like the message was sent. I'll let you know if the person on Facebook responds.
In the meantime, maybe you can handle this one: http://bibleforums.org/forum/showthread.php?t=151676
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They are afraid you'll lead the sheep astray. They, like the old Soviets, need to build walls to keep thier people in, which is rather telling.
I also noticed that there are an awful lot of "tell me what to do" posts on there.
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I'm just curious...why do you hang out in Bible forums?
Second Question:
Can we post a question about whether God can create a mathematical equation so complex that even He cannot solve it or would that be against TOS?
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What I'm getting at, is that Objectivism as a philosophy is kind of like another school out there.
Uhhh....no.
My first question for the Buddhist would be: what is your (or the) 1st premise or proposition of your philosophy?
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From a laissez-faire perspective one could argue that the more famous a president is, the more likely they are to be bad.
A good laissez-faire president is unlikely to have done much that would merit going down in history (i.e. they spent less time interfering in things), and so such a president has been conveniently forgotten.
On the other hand a president that gets into the history books beyond a footnote likely meddled in things, and so was probably bad.
Thus the most famous president is a good candidate for the worst.
I dunno...I mean George Washington and Thomas Jefferson are/were pretty famous/well known.
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I agree. Citibank apparently didn't need the money, but they were pushed into taking the money. Similarly, I don't understand why it was taken, but it was behind closed doors. What "weapons" were used against them? I really don't know.
Anyone that takes government money, or might get it, gets smashed in the media for the things that they do as a part of their business. Like having a retreat, bonuses, etc. Honestly, that is the company's business. If it's bad business, yeah, it should fail.
On the other side, there's very little in the way of value that is produced by a lot of government workers for the cost. But there isn't a lot of talk going on there. Lots of waste.
At least there are companies that are standing up and making it a point to say that they will not accept Government money.
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Too bad the people in charge of them can simply create more money to keep these schemes afloat. If it were a real company perhaps they could go out of business and people would be allowed to look after themselves (the horror!)
The underlying principle here is personal responsibility. I was reintroduced to this idea a few weeks ago working with a small business and trying to negotiate a new health insurance plan. While I wasn't suggesting that they cut benefits to employees, the first thing that was mentioned to me was exactly that...in other words, NOT cutting employee benefits.
As is, the company pays nearly 100% of the employee health insurance costs (the only exception being copays).
At this point, the general consensus from the employees is that you cannot take that away because it would be "unfair". Now, the company can do anything it wants, if it is willing to pay for it - and it may be worth it for the employer to do something like that for its employees.
But, when you give someone something and it is perceived to be free, it is difficult to take that away - ever. When you install a feeling of entitlement, it is near impossible.
For Medicare, and Medicaid, you have similar mentalities...though perhaps the elderly don't feel as entitled as the poor. I have witnessed first hand a Medicaid patient in an emergency room demanding services in such a way that you really would think health care was a right and the Doctors were this person's slave.
I don't think there is a strong sense of personal responsibility in regards to these programs. If you ever confront someone on medicaid (especially if they have an explicit entitlement mentality), ask them why they haven't taken responsibility for their own life...watch their expression and get ready for an earful.
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I have to be willing to admit that I could be schizophrenic or dreaming, etc.
Why?
You are starting from an arbitrary point and trying to make the facts fit the theory if you do that.
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I think the aspect that is most confusing to me is that multiple things are being mixed into the examples. Maybe it is just me, but I'm only happy when I see a spreadsheet showing both alternatives, with inflows and outflows listed for each year. That way, I can easily find which stream has a better IRR.
I also read a couple of your articles on your site, and they're well-written; but, once more, I didn;t find the level of detail that I would require. For instance, in your example of leasing a car, versus buying, versus cash, versus "being your own bank", my own comfort level is very low when I find high-level descriptions without a table showing the annual cash-flows (in and out) for each alternative. The same in your example about "company matching" of 401(k).
I'm guessing that the audience you're addressing would not want to see a page full of numbers. So, I'm not suggesting you're going about things the wrong way. In summary, I'd say that I don't find it confusing as much as I find it not detailed enough to allow for a judgment.
I was actually toying with the idea of doing that but I was concerned that throwing numbers at folks might confuse them...but it may be easier to include it. I am so familiar with how it works, sometimes it is easy for me to leave something out that others aren't quite familiar with. If someone was interested in the general idea, I could provide more specifics.
Of course, I do have mock illustrations in PDF format showing the diff between an insurance policy and a hypothetical high yielding bank account (or some other account) showing both the effect of taxes and without. You are more than welcome to take a look if you'd like, just PM me an email addy.
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Sorry, I missed that. So, you're comparing a 401(k)/IRA with a 7% return (after fees) against an insurance policy with a 7% return (before fees). Is that correct?
What is the 4-5% you mention? Is that the net return on the policy after fees have been accounted for? In other words, is it a comparison of 7% net from a 401(k) mutual fund versus a 4-5% net from an insurance policy?
Another question, how does the insurance calc work in adding in the benefit that comes from having insurance coverage? For instance, if I'm paying (say) $1000 for a policy, then a part of it is buying me the benefit of true insurance, and the balance is like "pure" savings. Is only the "pure" savings component (say, total premium minus the amount that would be required to buy term insurance) treated as an outflow?
And, if you're willing, another question: Would it follow that an insurance policy is even better when compared against a non tax-preferred account: like a mutual fund outside a 401(k), or a regular taxable brokerage account where one is trading stocks/bonds etc. ?
I'll try to give as best an answer as I can to your questions. Please keep in mind that these are conditional answers (obviously noted as such by the word "if").
I'm working on an objective theory of financial planning, but it's not complete yet so I'd hesitate to go too far into details about what role these contracts play in one's comprehensive planning...other than to say that in practice, I know that the 80/20 and 90/10 "rule" I alluded to earlier works very well at reducing risk while not eliminating the potential returns found under the more traditional "invest it all and diversify" or the accumulation theory of planning.
Sorry, I missed that. So, you're comparing a 401(k)/IRA with a 7% return (after fees) against an insurance policy with a 7% return (before fees). Is that correct?The short answer is "yes". This is taking into account that the average 401(k) fees range from between 2-3% total (by the time you are done paying for admin fees, mutual fund fees, etc.). They create a lot of drag. I find, many times, that when someone says they are consistently getting 10% returns in their 401(k), they are getting that news from their adviser.
The net return before taxes is usually a bit lower, say 8-9% and assuming that their allocations are spit exactly even and IF they are getting 10% gross. The reality is, the blended rate of return for most folks at least according to DALBAR, is much much less than that. My personal experience has told me that if people are diversified well (like they are taught to be), then they are really chugging along at maybe 7-8% before fees and maybe 5-6% after fees...and before taxes. Obviously this is an average.
What is the 4-5% you mention? Is that the net return on the policy after fees have been accounted for? In other words, is it a comparison of 7% net from a 401(k) mutual fund versus a 4-5% net from an insurance policy?The 4-5% is the illustrated rate. Cash value insurance rates are always quoted as an illustrated rate. The net rate after fees varies depending on the company's mortality experience, how efficient they are in managing assets and paying claims, etc. However, it is easy to calculate the real rate of return based on net cash value vs. premiums paid. In most cases, if you are funding the contract up to MEC guidelines, you will see a real rate of return in the guaranteed column of 3-4% if the illustrated rate is 4-5%. This only applicable for dividend paying whole life policies from a mutual company. The rules are a bit different for other types of whole life and can vary significantly if you are looking at an offering from a stock company.
The comparison I made was 7% net of fees for 401(k) and 7% illustrated rate for the whole life. Actually I ran two illustrations: 7% net of fees (for accumulation purposes) and then I also figured it after taxes when illustrating income in retirement. The 401(k) produced slightly more accumulated value than the life insurance policy over a period of 25 years, but produced less income suggesting that the drag of taxation is significant.
I assumed the life insurance policy's dividend rate at 7%. This is not the guaranteed rate. This is the rate that is non-guaranteed and assumes that the company is well run and remains well run. Dividends have historically been higher than 7% every year for the last 100-150+ years for the mutual life insurers that I mentioned earlier indicating that these companies have been run very efficiently for the last 100-150+ years depending on the company. However there is no guarantee that the companies will remain so (obviously).
Another question, how does the insurance calc work in adding in the benefit that comes from having insurance coverage? For instance, if I'm paying (say) $1000 for a policy, then a part of it is buying me the benefit of true insurance, and the balance is like "pure" savings. Is only the "pure" savings component (say, total premium minus the amount that would be required to buy term insurance) treated as an outflow?I'm not sure exactly what you are asking when you ask about "outflow".
Whole life is a bundled financial product. There is technically no way to calculate how much is going to the cost of insurance, except for indirect inference. It's actually designed to be that way and though some people use that as an argument against whole life, it actually works out well for the policyholder.
Yes, some of the money is going to buy death benefit and some is going to pure savings. How much goes to which depends entirely on how the contract is set up from the very beginning.
Does that answer your question? If not, can you clarify what you mean?
And, if you're willing, another question: Would it follow that an insurance policy is even better when compared against a non tax-preferred account: like a mutual fund outside a 401(k), or a regular taxable brokerage account where one is trading stocks/bonds etc. ?In general, yes. Mutual funds were designed to provide easy diversification from small investors. Problem is that when you reach the level of diversification that a garden variety mutual fund offers, you are earning about the same as the non-guaranteed rate in an insurance policy, at least in theory. In actuality, I think the life insurance does a little better IF the mutual fund is in a qualified account and a LOT better if it is in a non-tax preferred account, and assuming that DALBAR's research is valid about their 2-3% long-term average returns. According to their research, 90%+ mutual funds fail to outperform their respective benchmarks. In most cases, this leaves most mutual funds with long-term averages less than 10% gross.
Also, keep in mind that anything I'm saying about the life insurance is assuming it is a dividend paying whole life from a mutual life insurance company and that you are funding the contract up to MEC guidelines and all other things are equal when comparing it to an investment account (though, realize that comparing these to investments has to be a loose comparison at best because insurance - at least IMO - is a savings product whereas mutual funds etc. are investment products).
Let me know if any of that was confusing or I didn't answer your question(s).
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What pre-tax annual rate of return did you assume on the 401(k)? The main reason advisers recommend 401(k) plans is that they are comparing them against a stock+bond portfolio that is taxable. The major assumption underlying this is that a stock+bond portfolio will return more than an insurance policy (which appears to have a CD-like return). Are you challenging this underlying assumption?
From my post above:
The mutual funds that 401(k)s invest in, however, according to DALBARinc show that the average investor earns less than 5%...still, even with a 7% after fees in the 401(k) and 7% illustrated rate in the whole life policy (which is usually before fees), the life insurance policy does much better assuming the above tax implications.Yes, I am challenging that assumption if you are putting the money with a mutual life insurance company and it's a dividend paying whole life policy that is funded up to MEC guidelines. The dividend rates, which are not guaranteed, demonstrate that these companies are fairly well run, and well run for the last 100 to 150 years...think the Guardian, Mass Mutual, Mutual Trust Life, NY Life. None of those companies have had to pay their guaranteed rate ever in some cases and in others for most of their operation.
...the guaranteed rate though, like you said, is more like a CD rate. Typically, 2-3%, though on the mutual insurers, it's more like 4-5%.
...then again, I'm not advocating all of one's money in these...just a good percent. Instead of trying to make 100% of your money earn 10% or more I go at it from the perspective of getting 80-90% of your money to earn 6-7% and then the remaining 10-20% earning 50% or more. About the same return...much less risk.
Interesting. I'm getting my first retirement investment from my company this year (equivalent to 25% of salary I believe), and I am supposed to be able to choose how it is invested - by default it's just handed over to Morgan Stanley and they do with it as they please, I guess. I am supposed to sit down and talk with the company's accountant sometime soon about this. Is cash value insurance a possibility I could/should consider talking to him about?(I am clueless when it comes to savings/investment, so I wouldn't be surprised if my question doesn't even make sense
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I'm not a big fan of qualified plans. ...keep in mind that these were created as a direct response to the onerous tax rates in the 70's...you are basically saving by permission. Probably the most irritating (at least in my view) is that even if you get beyond the taxes in the traditional qualified plans, the Government has made it a habit to change the rules on qualified plans. In the 90's you were discouraged (through caps and excise taxes) from accumulating to much money and from contributing too much...now you are just discouraged from saving too much...
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But in response to your question:
Cash value insurance is probably not an option. And, inside of a Government sponsored plan, it's not something I would ever do anyway, even if the life insurance company offered it (and some do). The lure of Government plans is the tax deferral. The trap is that it is simply delaying your tax liability.
I wrote an article about it (in my sig) and have a few other ideas concerning qualified plans. In plain English it works like this: If you plan to do well in your 401(k), you are guaranteeing a bigger tax bill (unless the tax code gets thrown out when you are ready to get at that money). Also, most of the time - and definitely if you are not getting a match, you will pay back more money in taxes than you actually saved...usually within 7-10 years, sometimes less. If you don't plan on doing well, don't worry about the taxes, but you will have to worry about what you're going to live on if you need your savings.
Of course the alternative is the Roth or Roth 401(k)...but at that point, you are getting the same tax advantages as a life insurance policy except the life insurance is a private contract, has no caps, mandates on withdrawals, or restrictions on the use of the money.
If you do consider the insurance option, I'd educate yourself as most advisors either aren't familiar with how to use them for cash accumulation or would rather just forgo the concept of savings and use all investments instead.
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From my experience, just max out your tax-deferred vehicles (401k, 403b, IRA) and you should be better off than a VUL. Agents love to sell the VUL, WL and annuities because they get a monster commissions for selling them.
This is something that most financial planners tell you to do. It's become something of an undigested slogan. The best way to accumulate wealth is still by using private contracts without Government help or favors like 401(k)s, IRAs, etc.
In fact, to test that theory, I recently ran the numbers taking into account current tax assumptions (because, I am operating on the assumption that the best case scenario is that marginal tax rates remain the same for the next 30 years).
IF, and this is a big if, IF the life insurance policy is funded so that a minimum amount of death benefit is purchased and maximum paid up additions is purchased (or in the case of a UL the contract is set to "minimum death benefit, maximum cash value"), the whole life or universal life should outperform the qualified retirement account in almost every scenario where the individual has a combined (State and Federal) marginal tax rate of 25% or more. At 15% marginal tax rate, the insurance and 401(k) are about even in net income with the difference being the insurance policy has a death benefit too.
The assumption I used was for a mutual life insurer's dividend paying whole life. The dividend rates rarely dip below 7%, and in some cases, they've never dipped below 7% in the 150 years the company has been paying dividends. That's not a guarantee, of course, but the assumption is that they know how to run a decent business and produce consistent returns for their policy holders.
The mutual funds that 401(k)s invest in, however, according to DALBARinc show that the average investor earns less than 5%...still, even with a 7% after fees in the 401(k) and 7% illustrated rate in the whole life policy (which is usually before fees), the life insurance policy does much better assuming the above tax implications.
The second issue is that of frictional costs. The investments in a 401(k) endure a consistent fee for the life of the investment, whereas the life insurance policy (whole life) guarantees that the contract will become more efficient over time, thus reducing frictional costs.
These two components offer probably the greatest advantages. A third could be a life insurance policy's non-direct recognition loan offering. You just can't do that kind of thing with any investment.
That being said, I think whole life insurance properly belongs under the category of "savings", not "investment".
I'm with Capitalism Forever: consider your options using the "no red flag" standard, forget complying with the law...its impossible. And if you ever get audited, recognize that you have a gun to your head.
The magic word(s) for business owners is "executive bonus plan". Or "double bonus plan". It takes a while to get to a point where your taxes will consistently be zero but I think it's worth it.
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This is a problem I have with Objectivism. The notion that 100% absolute certainty about anything other than purely logical issues (math, noncontradiction, etc) is possible.
Re-run your skepticism while keeping in mind that Objectivism also says that knowledge is both contextual and hierarchical as well as relative. That should address the issue of 100% certainty - that something is certain within a specified context. That is why both Newton and Einstein are correct about their theories.
It is also something that science - having glossed over philosophy - hasn't picked up on yet.
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I'm sure you've heard of arguments FOR Government intervention...
...the one that I run into most goes something like this:
Them: "The laws that are on the books must be on the books for some reason"
Me: "That doesn't mean it is a good reason"
Them: "Well, if there wasn't a good reason, then there wouldn't be a law prohibiting (or enforcing) blah blah blah"
So...I was thinking about what a good, yet quick, response for something like this could be. It's not like the majority of folks that I somehow end up in conversations with think profoundly about philosophy...
...and so, I thought about responding with something along the lines of "Government's job is to prevent the initiation of force and protect individual rights, not act as a special type of private enterprise or business with exclusive rights to initiatory force".
I'm not sure if this is way over most people's heads though...
...any thoughts or suggestions as to how you handle the "might makes right" arguments concerning intervention into the economy?
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50 years old and not scared of computers! (I should hope not. Fine way to earn a living.)
Slightly off topic, but did you get your username from "the seven year itch"?
...I'm 29 BTW
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This actually deals with, I think, more than one branch of philosophy...but I believe it has significant moral implications. Has anyone else seen an argument against individualism that goes like this:
http://www.zmag.org/znet/viewArticle/19865
I've seen variants of it, but this article actually tries to assert that knowledge is owned, and that the living owe the dead for it - in some sort of literal sense.
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but still, let the research roll on, both into the solar yield efficiency and the operating costs efficiency - just not using government grants, please.
JJM
...and the next question is, given that, will the market want to fund such research?
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I'd say watch it, read the book on which it's based, then read James Valiant's Passion of Ayn Rand's Critics. Also, check out Diana Hsieh's False Friends of Objectivism webpage. That should give you plenty of evidence for you to decide if Barbara Branden version of events is anywhere close to reality.
If I remember correctly, Leonard Peikoff was never portrayed in that film. Not even an introduction. That seems strange due to the fact that he met Rand in 1951. Now, to be fair, I never read the book, only saw the movie so I cannot comment as to whether that was left out. Also, the story is supposed to be (from what I gather) about the relationship between the Brandens and Rand.
Still, I thought it odd that a MAJOR player in the Objectivist movement was never mentioned.
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I had a quick hunt around. Apparently, the best research on algal sourced fuels at the moment is leading towards 15-20,000 gallons per acre per year. That's a pathetic 51 mililitres per square metre per day, less than 6% of average daily insolation. On our 100kl diesel open-air lake system that means the maximum permissible construction cost can only be $2m tops. Even a trippling of that wont cover the cost of building the lake system. It that is the best that can be done then forget it.
JJM
Yikes. If what you say is accurate, then it doesn't sound like such a good idea.
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Consciousness, in man, is more than just awareness of external reality. Man has the capability of doing something with that awareness, such as remembering it, conceptualizing it, thinking about it, having an emotional reaction to it, deciding what to do about it. In other words, for man, there is a content of consciousness -- memories, thoughts, emotions, etc. Though, in a way, it is not in a location in the same way that a ball in a box has a location. However, it is not incorrect to say that one's memories are in one's mind, or that one's thoughts are in one's head. So, there is a content of consciousness, for lack of a better way of putting it; however, we cannot specify the location, as in it is in the frontal lobe or the hearing section of the brain, or anything like that. It is more the awareness of what your mind is considering, and your awareness that you can direct it -- i.e. you can recall the memories of your fist love at will. When it comes to introspection, it is irrelevant knowing the exact place of those memories, thoughts, etc. You are able to recall them at will, and process them at will, which makes them contents of consciousness.
Along the same lines, and this may start bleeding into ethics...but, would concepts then be considered man-made facts? Or are man-made facts strictly limited to the physical world?
The reason for my asking is that on another discussion board someone had brought up the idea of "social debt", and the premise was this:
People living today are using knowledge created by others to either live their life or create new knowledge, or both. If they are using others' knowledge, then they owe a debt to Society (or at least to those that created that knowledge) that gave them that knowledge. Any wealth created by that knowledge, therefore, is not wholly the property of the individual claiming it.This is clearly a justification for statism, but I am not exactly sure how to confront the "ownership" as it were of knowledge other than knowledge is ultimately derived from the metaphysically given, which cannot be owned by someone. Society, as such, is a concept itself not a special type of organism I understand and not subject to dues owed.
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You know, I respect his inventing ability and think it's a great machine (as mentioned in the article, yes, I probably would try to talk to her). But overall I feel sad for that man. He should spend some time trying to get to know a real woman, because he obviously has a lot of good qualities that someone is sure to like. I think he is afraid to try to relate to a real, complicated person. I'm not saying he should give up working on his robot...it's really cool. But he ought to try to at least make some friends, if not get a girlfriend right away.
Yeah...I mean having a robot like that is very "I-robot" like. It would be cool to have something like that around to do all the chores, any physical labor, and do all the other "gopher" type work you'd need done. They'd be a pretty good office assistant too...not to mention they could replace factory workers or jobs where people are doing repetitive grunt work.
...of course unions probably would not like that. Workers complain when they get carpel tunnel syndrome or chronic back pain from heavy lifting at work...
...but they might complain when the boss decides to replace them with a bunch of "fem-bots".
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Something I thought that would be amazing (not for "girlfriend" purposes, but in general, as an assistant).
http://www.thesun.co.uk/sol/homepage/news/article2023392.ece
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Good point as well, additionally, nuclear 'waste' is a non-issue, much of it is fissionable, as you point out, convertible to a fissionable fuel as in a breeder reactor, and the rest of it can be accelerated through it's nuclear decay chain by using it as a neutron absorber creating more heat and power in the process. Ideally, nuclear fuel need not leave the reactor until it's converted to lead or iron.
So, if used properly and efficiently, the "natural" end product of a nuclear reactor is iron or lead?
Reading the bible is the surest path to atheism
in Religion
Posted
I don't know...the greed-o-meter sounds pretty cool