Derek McGowan

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Posts posted by Derek McGowan

    Is a $70,000 Base Salary Unjust and Corrupting?

    in Ed Hudgins Corner

    Posted

    I am seeing the situation through moral eyes, Derek, and you are pushing the supposed practical consequences.

    I could agree with your assessment of practicality. After all, what difference does it really make how much someone above or below me makes. All that really matters is how much I make. Most people don't know others salaries (many times those salaries are meritless- cronyism, pay gaps between men and women, etc) and the world seem to work fine. Its only when someone knows that suddenly they want to examine how hard they work in comparison to others. And I'll tell you, many times its an exaggeration.

    The base pay at this one company is similar to the base pay of any industry which the market maintains over thousands of companies. That was my point about the software engineer and the doctor pay (though you may be right on the specifics) it doesn't matter what your experience level when you get out of medical school, you are not going to accept a position in your field making 10 dollars an hour. The market has a base, why can't a CEO create his own base?

    Is a $70,000 Base Salary Unjust and Corrupting?

    in Ed Hudgins Corner

    Posted

    If you divorce compensation from merit hardworking employees who don't believe they've been recognized and compensated for their hard work will hit the road.

    What does this article have to do with merit? At what point is any proof offered to even imply that the bottom employees are less productive. Working 80+ hours a week is a right that a company can place upon any employee if they are salary, that proves nothing. In fact the article didn't break down hours at all among staff at all except for the financial lady who helped to do the math as to whether the plan would work.

    The long term guy (only two people were verified to have quit) who decided to leave was himself getting a raise from 41,000 to 70,000. And in fact he said one of the reasons he was leaving was because he might grow to love the money so much that it dampens his hunger to start his own business.

    Did you guys read the article?

    Then the brother who is suing, stated that he had issues with the CEO for years now. He is a 30%, non-involved, stakeholder, and his decision had nothing to do with the raises.

    The companies who were supposedly up in arms about the decision have stayed on and only were worried because the new base would put pressure on their own companies to raise wages. Well that's the market, deal with it! Also the numbers reported say that the company was averaging 200 ne clients a month before the announcement but that number went up to 350 in the month after the announcement.

    And how is this even close to the 20th century motor company? In that devishly instance of pure socialism, the CEO took away from the talented employees to give to the lazy. Again from my first post, did anyone actually lose pay? In fact as I stated, one of the two confirmed to have left the company was getting a 40% raise. Also where is the evidence that new employees, just from the sheer fact that they are new, are less motivated or lazy?

    Does your logic mean that in every job, every new employee, from cashier to software engineer, from teacher to medical doctor, should get minimum wage until the prove themselves?? Again, Google seems to start employees at 80,000. How did they prove themselves to merit such pay? According to this website

    https://www.aamc.org/services/first/first_factsheets/399572/compensation.html

    there is not a single physician position that gets paid less than 130,000 I'm quite sure there are less talented doctors in the freshman field than others. I'm sure there are less talented experienced doctors than those in the freshman field.

    On my own account, I believe that when anyone gets a raise, no matter where they are in the hierarchy, I should get a raise too or I'm leaving... because I deserve it.....

    This is a problem of simply knowing what others make, nothing more nothing less. In fact its not even a problem because from what we have presented to us, only two people left and one because he didn't want to love the raise too much.

    Is a $70,000 Base Salary Unjust and Corrupting?

    in Ed Hudgins Corner

    Posted

    I'm having a hard time understanding how he did the long term employees wrong. He made a minimum for all employees, he didn't cut anyone's wages correct? Was someone due a raise and didn't get it? Its a good possibility that a liberal CEO had many people working for him long term who actually weren't very productive, isn't that what happens in government? The long term employees left because they didn't start at 70K? If that's the case then should every long term employee leave every other job on the planet because the new hires get paid more than they did when they were hired? Are there examples of other CEOs who decided to pay more (Henry Ford I believe is one) and were still highly successful? Don't silicon valley jobs offer relatively high base pay along with free food and day care services? I'm sure that base increases with inflation, why don't the long term employees quit? Sounds like the ones who are being immoral are those few long term employees who think they deserve the world

    Maybe I should just read the article smh......

    ....oh, I just read "long-term employees" - five years !! LOL

    Financial Education for Children

    in Parenting and Child Education

    Posted

    DL,

    When I first brought this plan up a year and a half ago when Empress was 5, my wife explicitly stated that she didn't want her daughter to have the same connection/feelings toward money as she has observed in me. Her observations in this regard have always tinted badly.

    She assumes that because I haven't been as free as she is with her money, or that when she brings up things for us to do/buy and I say that I don't have the money to do it, it means that money runs my life. This is not the case as I've stated to her, through my book and on this forum that if I had a magic wand (needed to correct the disaster of impracticality that would follow) I would rid the world of money all together or at least the need for money.

    While I'd choose not to play the game, I recognize that these are the rules to the game so I have to play it as best as I can. I've seen the calamity that befalls those who are ignorant of the rules and I wouldn't want Empress to go through that.

    But... when I brought this plan back up a week ago with another couple present, my wife seemed to have other reasons to be against it. Because I don't remember them fully, I'd prefer to get her on here to present them herself. Hopefully that will be soon

    Financial Education for Children

    in Parenting and Child Education

    Posted

    Derek, what are your thoughts on teaching property rights to children? Money and property go hand-in-hand, but my experience has been that property rights seems to come first and is easier.

    I would say that property rights seem much more inherent in humans than money. My daughter uses the things she owns as tools to infuriate her half brother or her cousins whenever they stay over. And I don't mean that she has lots of things. I mean she waits for someone to pick up something from out of her room, only then suddenly becoming interested in that item as well, telling them to hand it over- it's hers!

    I almost don't think it needs to be taught since the brain is already molded. The nuances will need to be explained though, but I had no concrete plans on it

    Financial Education for Children

    in Parenting and Child Education

    Posted

    Derek, I'm interested to know your wife's reasons for shooting down your idea. Rather, I'm wondering if her reasons align with mine. hahaha Your plan requires a good bit of time and energy to implement, both of which are hard to come by in a busy home.

    I have a somewhat simpler version of this in place with my son who just turned 11. It started when he opened his first savings account with his piggy bank money. He has a few sources of income - gifts, spare change from pockets, odd jobs he acquires around home for me and our neighbor, and the pay he earns for his regular contributions to our household. He gets paid every other week $30 by direct deposit (he recently negotiated a $5 per pay period increase, and I was so proud). He checks his balance about once a month, but more often when he is saving for something. About twice a year, we review his account and typically move 1/2 to his mutual fund. His pay is earned by meeting my expectations for schoolwork, extra curricular activities, and household chores. His chores are expanded as he gets older. Currently he has a wide variety of duties including things like being totally responsible for getting himself ready to leave the house for the day, taking care of the family pet, setting and clearing the table, keeping his toys neat and organized, sorting and putting away laundry, taking out trash, cleaning his bathroom etc. This summer he has been learning how to wash and dry laundry as well as to cook simple meals.

    I don't charge him for everything as you have described, but I do ask him to pay for certain things. For instance, when he wanted a cell phone, he agreed to pay $12 per month towards the bill. Yeah, that was actually a fun negotiation, too, and we had a few onlookers in the middle of Best Buy! He is also not above offering to pay me to do his chores for him when he doesn't want to. Sometimes I agree, and we work out a price, and sometimes I tell him to suck it up and do his own work. Or he decides he'd rather do it himself if my price is too high for him. Over the summer there was a java programming camp he wanted to attend that was super pricey, and while he was willing to foot the bill himself, I split it with him. And then there are times when I impose economic sanctions against him for poor behavior. Bad manners can be as little as $2, but talking back is $10 per incident.

    Oh, and I ain't too proud to admit that there are times when I go to my little man for a loan! Is it any wonder I haven't taught him about interest rates yet? hahaha

    Sounds good to me. Hope you can share how you plan to handle the transition phase- when he turns 16 and gets a "real" job. What will be his financial responsibilities? Anything new, will he pay rent? The car insurance?

    How will you handle (as a parent) when the credit card offers roll in at 18? Will you intervene at all or will you suppose that he will be educated enough by then to make his own decisions?

    Review of In Defense of Selfishness

    in 3 - Ethics

    Posted

    What Rand was actually objecting to was the use of altruistic morality as a primary for both justification and control by the religious and political rulers, would be and actual, but she lacked a necessary lucidity and substance and preferred to keep it all simple and binary.

    perfect

    Financial Education for Children

    in Parenting and Child Education

    Posted

    I'd teach savings--deferred consumption vs. consumption--that is, spend some, save some and don't spend what you save. Turn deferred consumption into no consumption. Then I'd go with 1/3 savings, 1/3 investment, 1/3 consumption. After savings reach X they can be diverted into investment or capital accumulation for deferred investment(s). One trick might be giving the option of saving but no take-downs because for every buck saved Dad or Mom matches it, sort of like a 401K.

    --Brant

    The savings thing is what my opening post described as the standard child financial education but I don't think it fully connects with most children. If you are being told/ordered to save just because mom says its good for me (you'll thank me later) all you have is a frustrated child or one that simply ignores the money saved and never understands that the saved money has an effect when you actually do use it.

    In my plan the child will be guided to save in order to make large purchases. That is more visceral. The child sees the money, puts some away and then experiences the ability to buy those shoes, that game system, that cell phone, that camera which they can plainly see that they would never have been able to get if they hadn't saved.

    When I say guided, I mean that it would be my responsibility to get the goal in the child's mind, constantly reminding them of what they are seeking and to defer immediate satisfaction. In the standard plan the child is told but it never actually happens for them (I'm talking with an allowance, not with their first job) because saving a dollar out of your four dollar allowance never adds up to anything substantial. They could save their whole childhood and by the time they get their first job their first paycheck makes that entire saved amount look like a waste of time. "Great, now that I've saved for 10 years I can thank my parents that I can pay one month of car insurance."

    Financial Education for Children

    in Parenting and Child Education

    Posted

    Pay the amount weekly but charge them monthly to strengthen the need to budget.

    My issue with this (charging monthly) is that the child is unable to decide on a daily basis where to save money. Of course an adult's life is more budgeted on a monthly basis but I see this education training as bridge in between. Again my focus is on training the brain so I would think that while it would absolutely involve long term exercises, mostly we need short term repetition at such an early age.

    I see it like playing 5 minute chess games when you are below expert level. You strive for thousands of games, mistakes and all to get a deeper intuitive feel for how the structures work even if a professional chess career will consist of mostly 3 hour slow paced games

    Financial Education for Children

    in Parenting and Child Education

    Posted

    Who earns what income in what proportion? Based on that, everyone should be charged for everything. It is not fair to "give" the kid $50 and then charge her for water, unless you, too, have to pony up in some way from your earnings in proportion.

    Thanks for you contribution

    As to the above quote, perhaps I should clarify. It isn't that the child is charged market rates for everything, we wouldn't look at the electric bill and divide responsibility. Instead there would be a set amount say 75 cents per day (with overages if lights are left on) Meals might be 1 dollar a piece unless the child opts to, maybe once or twice a week, eat out in which case its whatever the market price is reinforcing the observation that its cheaper to eat at home and save money for other things.

    Financial Education for Children

    in Parenting and Child Education

    Posted

    My idea....

    The standard method used to educate children about money is an allowance. The child does a set of chores and/or does extra homework then receives money at the end of the week. This is to instill the concept into the child's head that money has to be earned.

    Sometimes the parent will add a second level to the allowance experience by telling the child to split their allowance into spending and saving piles. Its this second level that, though it is done for thoughtful reasons, highlights the problem with the standard approach to financial education in my opinion.

    Firstly, financial knowledge (the fundamentals) is NOT knowledge presented by someone, instead it is a restructuring of your mind. The young brain does not simply understand that money has to be earned or that bills have to be paid because someone told them (after all most if not all teens are told that credit is not your money and that it has to be paid back and interest rates and such) but only after they are exposed to painful consequences does the restructuring set in.

    Thus, instead of giving a child 5-10 dollars a week, give them something more like 50 dollars a week (and I'm talking about 6 -7 year olds) and then charge them for everything. Meals, gas for transportation, water for baths, access to internet, television use, electricity, etc. I haven't worked out the math as to the costs of these things but it would leave them with say 25 dollars after expenses.

    This would help the brain restructuring in two ways.

    One, the ability of an adult to look forward and save for something is based on experience when you actually have some money to work with. A child's brain is still learning to look forward in general but dealing with finances it's impossible. If your allowance is 5 dollars a week and you want those cute shoes that your 1st grade friend had on, or go to dance camp in 6-8 months, it simply wont happen. You have to rely on the parents and thus the brain continues to believe that money grows on trees. Having the internal conflict of cutting back on extras (snacks, television, etc) in order to save for a future AND THEN actually achieving that goal is essential to changes the impression that money is an unlimited spout to a limited pool that needs to manged.

    Second, again becoming familiar with idea of responsibility and money's connection to it. You have to work for money. Then, you see this pile of cash (and I would give it to them as all one dollar bills) but you learn to understand that all of it is not spendable. You have used resources and they have to be paid for. If you can't pay for them then you can't use them.

    Of course there will be a shock period. There will be points where the child has messed up the budget and is crying at the unfairness of the consequences BUT how is that any different then when it happens to them later in life and from my perspective its better for them to get over that shock when the stakes are relatively low vs when the credit card offers start to arrive in the mail and ten years later they are thinking how stupid they were while still paying back the balances.

    No, it would not suddenly be laissez faire though. Yes the child has more money then ever and the ability to choose what to spend on..... to an extent. They get charged for bath water but that doesn't mean they can simply not take a bath. They cannot choose on a daily basis to ignore what the family has made for dinner and instead order pizza every night.

    Also there would be a budget book written that explains the rules to the game, the costs of items and space to do the math. Its not about throwing the child to the lions.

    So what do you think (my wife shot it down)?