Millionaires, Billionaires, and Teachers

Our President likes to use the phrase "millionaires and billionaires." A person whose net worth is $1 million or more is a "millionaire."

Most of us working stiffs have trouble thinking in terms of net worth; we are more used to the concept of annual salary. How does net worth translate into annual income, or vice versa? In round numbers, the annual income equivalent is 4% of an investment nest egg. So if you have $1 million socked away, consider that to be equal to $40,000 income every year.

Now this "4% rule" is based on a planning horizon of about 30 years, meaning it is used primarily for retirement planning, or people over 50. If you're young, you should probably go with, say, government bond yields. Today's 30-year US bonds yield about 2.8%. So if you are more like 30 years old, your $1 million life savings is more like an annual income of $28,000.

(By the way, this investment-income equivalence exercise is the same as pricing an annuity. I dare you to try to price an annuity. There are many web sites that will tell you how to build a watch, but virtually none tell you the time. I'll save you some research: the 4% rule is not far from the mark.)

So in round numbers, let's say a $1 million investment nest egg is equal to an annual income of $40,000. Suddenly, $1 million doesn't seem so rich. That relationship can be turned around: if you have an annual pension of $40,000, you are effectively a millionaire, especially if that pension is adjusted for cost of living.

The wife is a teacher, they have taken 8.9% out of her pay check for many years; every penny her own money for her retirement which if she teaches until she's 62 will be that 40K retirement and medical coverage doesn't come with that retirement. The only plus is that 8.9% money is not taxed until she retires. Me thinks, she should have bought more gold with it all these years; that 40K might not be worth all that much in a couple years. I'll have to tell her she's a millionaire.

Don't believe all that you read that the teachers get so much. I have a hunting buddy who retired with 36 years of teaching, got $4400/month; most I have heard of.

California retired teachers make more in retirement versus actual teachers in 28 states.

http://search.comcast.net/?cat=web&con=betac&q=California+retired+teachers+make+more+money+than+teachers+in+28+states

As one who paid the maximum into Social Security for most of my life and in the 6 paid both sides of Social Security as a self employed independent contractor. Do expect tears from me re some teach instead of paying into FICA paying into the California pension ponzi program.

As for your buddy with his only $44,000 yearly pension. To get that annuity on the outside, he would have to had at least $750000 to buy an annuity. That didn’t happen in the ponzi retirement system of California. I have pinged Sierra Wasp for more specifics on what the rest of us at about age 56 would have to pay to get $44,000 per year.

http://search.comcast.net/?cat=web&con=betac&q=California+retired+teachers+make+more+money+than+teachers+in+28+stateser

Sorry, the government present and retired employees of Californicator keep electing the rats, who in turn $crew the rest of us to pay for their wages, retirement and health care.

No sympathy here

I keep hearing rumors that the majority of California’ prison guards are so called conservatives except with their voting for Davis and Brown and taking from the tax trough.

Thanks for the ping. This was an interesting point re
Salaries, Retirement for California tax suckers:

“California spends most of its money on salaries, retirement payments, health care benefits for government workers, and other compensation,” said Schwarzenegger, 65, who replaced Davis as governor. “State revenues are up more than 50 percent over the past 10 years, but still we’ve had to cut spending on services because so much of that revenue increase went to increases in compensation and benefits.”

I don't have any "data" per se, all I have is an idea about is how much Medicare budgets/estimates the cost of supplying traditional Part A & B only, without Part D and even with $100/ month paid out of the beneficiary's Soc Sec "check" ("Federal Credit" is what shows on my direct deposit entries on my bank statement instead of "check") and the monthly Medicare amount varies from county to county around CA as it does in other states. The more rural the county of the beneficialry, the more they budget/estimate. Remember that most prision facilities are in quite rural locations that will drive up that figure.

That monthly figure is... (drumroll...) just under approximately $1000/mo in the Sacramento, Placer and El Dorado counties region, so It could vary quite a bit higher since there are no such state prisions any closer than Vacaville's CA Medical Facility.

So I would be tempted to use around $1250 to $1500 as a basic number and then try to guess how much more per month the Rolls Royce plan that includes a vast array of benefits that traditional Medicare doesn't provide like Prescriptions, Dental and Vision to mention a few... You'll have to find real "data" or use my WAG method of ascertaining the ungodly amount it costs for government yoonyun guards to live far better off in old age than the vast majority of Californians.

There! Was that answer simple enough for ya? In other words... I'm not really sure of any of what I said, or you could say I don't know for sure!!! (wish I'da said that in the first place, don'tchew?)

I was too dumb to buy a set of Sears mechanics tools and carpenter tools to fund my existence. So I went to college.

I still remember Thanksgiving, 1957, during my sophomore year at college. Our extended family were at our Grandparents and after stuffing our selves, our grand dad invited the guys in college and about to go college out to his incredible carpenter workshop. He had been a master carpenter for one of the major oil companies and after retirement was in high demand for his high end work in kitchens, dining rooms and family rooms. He had basically every high end carpentery tool known at that time.

In his shop, he gave all of us a beer, and we noticed that none of our dads were around, just his grandsons.

The talk was general until, he handed out our second and last beer for the afternoon/evening.

Then, he went around and asked each one of us what we were taking in college, and how we planned to make a living with what we would learn in college.

Everytime, one of us would answer the question in what was basically not knowing or false bravedo, he would ask us, “Will you be able to get married, have children and provide for them and our wives, like he had for decades with his family.”

Looking back, our answers were basically bravado. I had decided not to become a geolgist and would be enrolling in bus ad courses the next semester. I said I wanted to be business sales rep with a big company. My cousins went from Architect, to Animal Science, Law and another bus major.

Then, he asked how would we know that we had done good job an be satisfied. After listening to a lot bs and hemming and hauling, we asked him how he knew when he had done a good job and was satisfied. He said when, he finished a custom carpentering job, the customers were happy and he could look at the job and be happy with what he had done. Most important his customers like him after the job and would hire him again or refer him to their family/friends.

He laughed at some of the answers my cousins came up with, including his favorite comment, “You’re sure that someone will pay you good money to do that?” That went over most of our heads being eager beaver college age bucks. A couple of cousins a decade or two later, understood what our Grand Dad was trying to get us to think about after getting non satisfying jobs.

A few weeks later before Christmas, our Grand Dad died from a stroke.

Dacades later and even now, I used his questions with our sons, nephews, nieces and other young people before and during their college years. Some listened, some wasted a lot of time and money in instant unemployment jobs. A few dropped out of college and never went and became skilled in trades where they are in demand.

Looking back, he was trying to help us find what we could do in life, provide for our future families and have a sense of job satisfaction.

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