Category: Individual & Economic Liberty

Should You Buy A Home You Can’t Afford?

mansion-875094_1920Is there ever a situation where buying an unaffordable house makes sense? A new report by real estate service Trulia seems to suggest so. The report notes that in some cities, Millennials should consider buying a house that is a little beyond their budget, given that they are likely to receive promotions and raises that will make it more affordable down the road. About the only worse advice I can think of would be for you to stick your hand in a rattlesnake’s nest.

The report is based on the assumption that in 30 years time, today’s 25 year-olds will be earning the same as today’s 55 year-olds, assuming a certain level of inflation. For example, the typical Millennial in New Haven, CT, can expect to spend 37% of their income on housing in the first year of a mortgage but, three years later, this will drop to 31% or less.

Ralph McLaughlin, a housing economist at Trulia, is quoted as saying, “There’s a sweet spot  of metros where a mortgage looks obtainable but unaffordable, and yet it shouldn’t take long to become affordable.” In other words, it’s obtainable in the sense the person can get the loan, but unaffordable because it currently swamps their budget.

Given that mortgage payments are usually level payments spread out over the term of the loan, the actual mortgage payment doesn’t go down (and neither will maintenance costs or property taxes). Consequently, McLaughlin is assuming some significant promotions and raises for today’s Millennials.

But even if McLaughlin’s assumption is correct, and you can reasonably plan for a climb up the corporate ladder, does this mean you should buy a home today that you can’t really afford? Absolutely not.

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Tipping the Scales

14876811184_e694b850bb_oJoe’s Crab Shack has just decided to experiment with forgoing tips at a few of its locations. Tipping is a longstanding American practice that has recently been called into question. It has been largely done away with in other parts of the world, but has been standard practice at sit-down restaurants in America for a very long time. But some people are now starting to question the practice, with many taking to social media and posting opinions and anecdotes about their tipping experiences. As you can imagine, the debate has been lively and passionate.

A criticism raised against tipping is that it usually correlates with employees being paid very low wages, leaving them to fend for themselves to make much needed extra money. The meritocratic logic in support of tipping says that good employees will be rewarded for their work and earn a lot from tips, and that bad employees will be incentivized to work harder to earn more in tips.

Those in favor of tipping would argue that it encourages good service because employees are forced to earn tips. It also teaches customers to evaluate their service and reward good service when they get it. Common sense suggests this should promote good service. The counter-argument is that employees are completely at the mercy of unpredictable customers and their varied moods. A customer who might have had a particularly glum day, and is in a bad mood (or who is just a jerk), might decide not to give a tip, whether or not they were actually provided good service.

3 (not so) Crazy Ways to Save Money

woman-shaking-piggy-bank-shutterstock_96849385-400x400A little while ago, Business Insider published an article about a Google employee who was living out of the back of a truck parked in the company’s corporate parking lot. Brandon, the employee in question, stated that his goal was to save 90% of his post-tax income by living in the truck and eschewing electricity, heating, air-conditioning, a kitchen, toilet or a personal shower. While definitely effective, Brandon’s plan is a little ambitious, and his lifestyle is probably not everyone’s cup of tea. But it did get me thinking about some simple ways one could cut out extraneous spending without having to move into the backseat of a car. Here are 3 not-so-crazy money-saving ideas of mine:

Eat Out Less, Cook More

I definitely enjoy eating out. There’s a lot to like about it. It’s a good way to hang out with friends or to get out of the house and relax. Sometimes, I just don’t feel like putting in the time or effort to cook a nice meal for myself. Which reminds me. I’m not a great cook to begin with. Eating out is a way for me to try new foods which

Crowdfunding – Free Market Solutions for Social Causes

crowdfundingpicIf you’re like me, you’ve probably contributed to a couple of crowdfunding campaigns before. I love the idea of crowdfunding. It feels great to direct your support to projects in which you are interested, and to be able to contribute an amount that works for you. It’s like a more visible and interactive way of fundraising and donating. Crowdfunding started out mainly as a platform used for deliverable content like films and music but recently, it has expanded to include personal and cause-oriented projects such as helping victims of natural disasters or supporting the adoption of a child. Essentially, crowdfunding has become a free market solution for social causes.

GoFundMe seems to be the premier platform for cause-oriented crowdfunding, but IndieGoGo can still claim it’s place as the first personal and non-profit funding platform. IndieGoGo recently decided to make a move for GoFundMe’s crown by building

The Koch Brothers: Friends or Foes of Black Americans?

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Most black folks have no clue as to the identity of David and Charles Koch. The few that do are leery of this duo. Heirs to an oil business that they inherited from their father, the Koch brothers (as they are affectionately known), worked hard to transform it into a massive multi-business enterprise with gross profits in excess of $115 billion a year. Consistent with their strong Tea Partyish and quasi-libertarian leanings, the brothers have doled out millions of their own money in promoting conservative causes, leading to a spot on Time Magazine’s ‘Most Influential’ list.

The Kochs have been criticized in some circles as being racist, particularly for their role in championing laws that some critics believe have hindered the ability of black Americans to vote. Arguably, they’ve been a thorn in the side of President Obama; ankle biters who have challenged him every step of the way on issues ranging from health care reform to climate change. Liberals are generally repulsed by the brothers’ conservative ways and willingness to utilize their wealth by contributing millions to right-leaning causes. But because of their wealth and the pervasive impact their funding has on the everyday lives of all Americans, their influence must be accounted for.

Trick or Treat?

In 2014, these two billionaires sent shock waves through the world of higher education by donating $25 million to the United Negro College Fund in support of America’s struggling black colleges and universities. Many African-American leaders harshly criticized the move as nothing more than influence peddling. Yet the question still remained as to whether this offer of generosity would be accepted by the black higher education community in the context of the steady migration of black students to better funded and predominantly white institutions of higher education which decline federal government support, while some conservative lawmakers are trying to close under-performing and financially-strapped black colleges and universities.

My father worked at an HSBC, as they were known during the latter part of his career as a university administrator. For that reason, I paid attention to the Koch announcement, curious as to whether those United Negro College Fund leaders would view the financial offer as a trick or treat. As to be expected, many immediately questioned the intent of the contribution in light of their understanding of the Koch brothers. Others took a more thoughtful stance due to the perilous scenario facing many of these higher ed institutions. “

Confiscation of Money and Private Property: Are You Fed Up Yet?

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It’s 3:00 a.m. in the morning, and I am up writing this after having my sleep disrupted by a disturbing dream. In my dream, I am headed somewhere on an Amtrak train when it suddenly comes to an abrupt stop. A federal agent approaches and asks for the work ID I have on a cord around my neck. I say “No,” stating that it is unconstitutional to ask me for this without reasonable cause. The agent responds with “Okay, thank you very much,” before proceeding to ask other passengers the same question.

Later in the dream, I notice a long line of people have been rounded up at the back of the train. The female conductor, who is stationed at the front of the line, just shakes her head. She mentions to the remaining passengers that this has become a frequent occurrence on many train routes and that those who agree to the confiscation are rounded up for additional search and seizure. “Those who say yes are presumed to be guilty,” she says, with a very concerned look on her face.

I am not surprised by the timing of this dream, because I have been preparing for several days to write an article on what is known as Civil Asset Forfeiture. This practice is coming under fire across the U.S. as growing numbers of innocent Americans are having their cash, computers and other items confiscated by the feds, without even being charged with a crime.

Civil Asset Forfeiture is a little-known legal tool used by law enforcement to confiscate your property, sell it and then use the proceeds to fund their crime-fighting efforts – or just buy themselves new stuff that they want. Because of the egregious manner in which it is used, states like Michigan and New Mexico have enacted reforms to prevent innocent citizens from having their money and property taken. And even law enforcement officers are now speaking out against this practice, which brings in millions in revenue to police departments who then use the money to further oppress the masses.

So how widespread is this issue? Well, you be the judge. The best case example is in Philadelphia – the so-called City of Brotherly Love – where from 2002 to 2012, over $64 million in forfeiture funds (almost $6 million a year) was exacted from its citizens. Just in 2011 alone, city prosecutors filed over 6,500 forfeiture cases to confiscate cash, cars, homes and other property. The worst offense of all is that the Philadelphia District Attorney’s office is reputed to have used $25 million of that $64 million to pay salaries, including those of the very prosecutors who led the forfeiture actions.