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Showing posts from October, 2013

Luxury, Ability, and Pricing

I recently read an excellent post by Seth Godin titled,"Understanding luxury goods"  where he goes on to talk about how the internet and luxury are coming into conflict, and this got me thinking about knowledge workers and those in the skills trades (think engineers, athletes, doctors, consultants, actors, etc.).
In Godin’s article he states, “A luxury good gets its value from its lack of utility and value. A typical consumer would look at what it costs and what it does and say, "that's ridiculous." When a good like this comes to market, it sometimes transcends the value equation and enters a new realm, one of scarcity and social proof. The value, ironically, comes from its lack of value. ….” and he is correct.  It is NOT the utility of the item that gives its value, it is actually the fact that others admire you for owning it.

So, as Godin goes on to say, “Discount luxury goods, then, are an oxymoron. The factory outlet or the job lot seller or the yoga studio …

You should be mad as hell (Social Security)

Remember, not only did you contribute to Social Security but your employer did too. It totaled 15% of your income before taxes. If you averaged only $30K over your working life, that's close to $220,500.

If you calculate the future value of $4,500 per year (yours & your employer's contribution) at a simple 5% (less than what the govt. pays on the money that it borrows), after 49 years of working you'd have $892,919.98.

If you took out only 3% per year, you'd receive $26,787.60 per year and it would last better than 30 years (until you're 95 if you retire at age 65) and that's with no interest paid on that final amount on deposit! If you bought an annuity and it paid 4% per year, you'd have a lifetime income of $2,976.40 per month.

The folks in Washington have pulled off a bigger Ponzi scheme than Bernie Madhoff ever had.

Entitlement my butt, I paid cash for my social security insurance!!!! Just because they borrowed the money, doesn't …