Archie Kobain

He must be up to something
What are the chances? Sure, it’s more than likely
I’ve got a feeling in my stomach
I start to wonder what his story might be?
They said it changes when the sun goes down,
around here…

Screw me, screw you… Bee-yach!
I accept no responsibility for this but, apparently, my friend, Bull, has decided to start a blog or two. So what’s does this have to do with me?    No one knows but, here’s what he has so far…

http://thepasturebull.wordpress.com/2011/09/24/screw-you-archie-2/

Alrighty, then…
I think today I will start my multi-part series called:  The Curve
The Curve: Chapter One: Is $3000 a lot of money. 

I don’t usually like to talk about money.  I’ll hardly ever say that something is too expensive.  I’ve never used the words, “that’s out of my price range” …and none of this is because I have tons of cash.  Quite the contrary …but I guess I’ve always understood the relativity of money.  For example:  You might look at a house and think, I would never pay $400K for this house.  But is that true?  What if I took that house and moved it to beachfront property?  Maybe you would be willing to pay $400K for that house, maybe more.

So it’s time to turn in your homework…

Is $3000 a lot of money?
I left you with this question to ponder, last time.  I remember, once upon a time, thinking that anything more than $500 per month was an unreasonable amount of money to spend on anything.  This was my rule for everything… cars, apartments, and later mortgages, etc.  Then somewhere along the way, something changed.

Today, my company sells services to others that range from $800.00 per month to as much as $33,000.00 per month (that’s not a typo – $33K per month, baby), with the average customer being in the $3000 per month range.  So, does $3000 sound like a lot of money?  It does.  But if I offered you to come work for me for $3000 per month, you’d quickly do the math and gracefully decline.  After all, that’s only $36K per year.  If you happened to be a family of eight, that puts you below the federal poverty level.

It works the same going the other way.  When we sell services for $3000 per month, our clients often think that it sounds like a lot of money.  But then, when they realize that it’s only $36K per year, and we’re going to save them way more than that, it suddenly turns into a reasonable amount.

Once you’ve made that money, it costs more now
It might cost a lot more than you’d think
I just found a million dollars that someone forgot
It’s days like this that push me o’er the brink

(“Cool Ranch Dressing”)

The other day, I heard about a contest that someone was sponsoring. The winner would have their debts paid-off, up to $187,000.00.  My first thought was, “how did they come up with this number?”  Then I got over it.  So my second thought was, entering this contest should be limited to people who actually have $187K or more in debt.  Seriously…  it would be a huge waste for someone with only, say… $50K of debt to win that.  That would be like throwing $137K to the wind.  Oh, and I say that mortgages count.  That’s debt.

Speaking of mortgages, let’s turn the number up even higher… 

Is $440K a lot of money?
You bet it is.  Every one of us would love to have $440K, in small bills, under the mattress, lining our pockets… Yes/No?  Of course…  Yes.  What if I told you that, that’s how much money I owe people?  …and I don’t mean Vinny the loan shark for my enormous gambling debts.  I mean legitimate long term debts.

Let me qualify that.  This time, I’m not counting mortgages or automobiles.  I’m also not counting vendor payable or other current liabilities.  I’m not counting investment properties.  And really, I’m not taking about personal debt.  Let’s just call it, money that I am responsible for seeing that it gets repaid.  $440K!  That’s a lot of cheese, when you stop and think about it.  But then, I look back just a few short years and remember when that number was $1.2M.  I’m going to say that $1,200,000.00 is a lot of money.

Although, that’s probably a small number.  If I add to that, other monies that I was responsible for paying back, like cars, personal mortgages, mortgages on investment properties, and trade payables – that number goes to well over the $2M mark.  So, having owed over $2M at one point, I’m sure that you can understand how owing $440K almost makes me feels like I’m paid-off to zero. 

Although, probably, needless to say…  It’s been tricky, over the years, to build a business the way I did it.  That is, starting out with a single credit card  that had a $2500 limit on it.  If someone told me they were going to do that today, I’d tell them they were out of their mind.  Not to say that my being out of my mind is off the table.  ..but the whole thing is tricky.  If someone said they were going to loan you a million bucks at only 5% interest, that sounds like a pretty good deal but let’s do the math…  You are going to be paying $50K per year in interest.  That, by the way, is $137.00 per day, 365 days per year.

So you will need to be profiting $137 every day, including weekends and holidays, just to pay the interest.  Then, let’s pretend they want to be paid back over 10 years.  Now, on top of the $137 per day, we need to repay principal.  Well, your monthly payment to repay the $1M over 10 years at only 5% interest is $10,606.55 per month.  That’s way more than $500.  🙂

Under this scenario, you need to be profiting $10,606.55 per month before you have the first dime to take home for yourself.  So, let’s say that you manage to build a thriving business in the short-term and you put yourself on a salary at a modest $108K per year (or $9000 per month).  Now you are going to have to pay payroll taxes on that $108K, let’s pretend you get to do that at only 15%, that’s $16,200 in taxes.  Plus, you are going to have to pay taxes on the $100K or so that you paid down on your loan.

You see, the only way that you can pay down a long-term loan is wth profits.  And, even if you don’t have the cash anymore, you gotta pay taxes on it.   So now that your income was actually $208K, you’re going to be paying taxes at about 28%.  After all, the more you make, the more you have to pay.  Right?  Don’t forget, Warren Buffett doesn’t have a problem with this.  Why should you?

Taxes on your $208K are about $58K…and you don’t have the $100K that you earned and used to pay down your loan.  So this $58K needs to come from your $108K salary.  So, here you are,  Mr. Businessman, seemingly doing well, paying your bills, paying down your loans, maybe you’re employing people, taking home a moderate small business salary and at the end of the day, you are taking home $50K and paying $58K in taxes.  Sound crazy? 

Maybe I’m crazy.

Maybe I’m not.

Maybe it’s time to introduce this week’s musical guest?

Today we are going fun, rapper, educational, timely, and religious.
After all, yesterday was Rosh Hashanah and I bet that 90% of my non-Jewish compadres out there have no idea what that’s all about or the story of Abraham (and Isaac).  So, today, you’re going to learn something.  Oh, yes.  And without further ado, whatever THAT means, I give you Shofar Callin’: The Rosh Hashanah Song.

Next time that I decide to talk about money, I’m going to talk about money in politics and how each and everyone of us is being robbed every day by a corrupt banking system and how President Obama had the chance to fix it.  The classic battle between Washington and Wall Street, and how Wall Street won…

Want to read ahead?  Read Ron Suskind’s new book, Confidence Men
I love Suskind.  He was once tagged as a Democrat lover because of the book he wrote during the Bush administration, The Price of Loyalty.  But in reality, he’s just a, mostly non-partisan,  journalist.  He calls’em, like he sees’em.  Good stuff, Ron. 

Thanks for your honest non-partisan reporting.

A surprise party for me?
So, I’m looking for a new political party to join.  As you may have already figured out, I’m am not a fan of either one of The Big Two….  In fact, I’ve had it with them.

In spite of his party affiliation, however, I guess I’m still a fan of Gary Johnson.

But enough about a guy who isn’t going to win his party’s nomination.
Let’s go back to talking about me!

I am totally disgusted with both sides  and rather than being embarrased to have one of their names on my voter’s registration card, I’m leaving.  I almost went NPA, No Party Affiliation, but then I got to thinking…  Maybe, instead of starting my own things, like I always do…  Maybe there’s a party out there for me to join and maybe I’ll feel good about being a member of that party?  But am I just asking to put myself into some kind of an off-the-wall  minority position?  Actually, no!  Read on…

52% of Americans Believe that we need a new “Third Party”

Apparently last year, that number was as high as 58%.  So, looking for another party, actually, puts me into a majority of Americans who are realizing that our political system is broken and we don’t want to be a part of it anymore.

So the big question is..which one would you join?

There are tons of political parties.  Some of them are quite silly. 
I’m thinking that the better organized ones, that may actually have some merit, include the Whig Party, The Constitution Party and the Libertarian Party.  Of course, the problem with each of these is that just by mentioning their names, some people already start to conjure up some preconceived notion of what they are about. 

Do I care…  Maybe they just need a little rebranding?

Maybe the key is to find the party that possesses the values closest to my own, then join that party and work to make the party better, stronger, and ultimately, the party that those 52% of Americans would like to join.

Who is with me?

Ever feel like you just went on a long rant and you really need a beer?

I find that on exactly such an occasion, I need an ice cold Taybeh Beer.

Barnsley had to fly to Japan to buy some, then smuggle it into the U.S. for me.  You can’t it here.  Maybe it’s because each label of this Palestinian made beer is clearly marked, “Made in Palestine”.  I’ll bet you the U.S. doesn’t let you import something made in a country that they do not recogninze as a country. 

Now this is all starting to make sense.  The U.S. doesn’t want Palestine to be a country and it’s obviously to keep us, the American citizens, away from this tasty beverage.  I should have known.  After all, most international dispuites are about beer, aren’t they?

But did you notice the tranquility that existed among this blog entry?  A nice Rosh Hashanah song, chased by a cold and tasty Palenstinian beer, respectfully co-existing without as much as raised voices.  Yes.  I believe my blog could be the basis for a better more peaceful world. 

May your diety bless you.

Well, that’s all the time I have for today.
Gotta run.  See ya, wouldn’t wanna be ya…  😉

– Arch