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Unless you paid someone else $100 for the Iced tea in which case your net worth was $100 less. You really are starting to look rather dumb if you can't understand that simple fact.
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So you jusst ignore the fact that if he paid to have it done he would be $35 poorer. Your nit-picking argument is just that and a poor one it is.
Harry K
Ummm, that would be in New York City. In the rest of NY State it is measured in miles or by some physical item. "You go down this road until you come to Bob Jones' house, turn left there and go until you come to a pole with a big transformer on the pole. It's across the street from it".
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of us down to
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You're kidding right?
How is it that you can see the logic of paying someone else to do your chores and the impact it has on your net worth, yet you don't understand how not spending money is not the same as earning it?
As you clearly stated, if I had to earn money to pay someone I would have to pay taxes on those earnings, right?
Yet when I "earn" (your word) that same money by doing it myself there is no tax implications. How is the world of checks and balances does that make sense to you? Where did the money I "earned" by doing it myself come from and where - physically - is it?
Please don't tell me it's in my pocket. If I had $35 in my pocket (or bank) before I cleaned the yard, I'll still have $35 in my pocket (or bank) when I'm done. An even stronger argument is the zero dollar starting point: If I had $0 in my pocket (or bank) before I cleaned the yard, I'll still have $0 in my pocket (or bank) when I'm done. Where is this $35 that I supposedly "earned" by doing it myself?
Unless you can physically show me the $35 (or $70K) I "earned" by doing things myself, it just doesn't exist. Don't show me the same $35 (or $70K) that I started with, that's already been accounted for. Show me the money I *earned*, above and beyond what I already had.
Let's try it this way.
earn 1 (=FBrn)
Show me where I *gained* or *acquired* anything more than I started with by doing it myself.
You are absolutely right. I meant New York the country - everything to the near east of the Hudson.
Last March, I spent a month in Cheektowaga (near Akron which is near Buffalo). During the week I was there, I found it differed little from my part of the country, save it was populated by liberals.
I have lasting memories.
Five days after returning, I suffered a pulmonary embolism, most likely generated by a deep vein thrombosis resulting from sitting in an airplane for five hours. It took $91,000 to get it fixed.
Aside: Less than 4 minutes after we called 911, I had FIVE fit, tall, muscular paramedics and EMTs in my bedroom with enough stuff to equip a small emergency room! Had I been a woman, I'd have fallen hoplessly in love on the spot! As it was, even I.... well, never mind.
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Not to mention the simple fact that I never said I earned $70 an hour but that I was making $70 an hour for my efforts. That doesn't mean that I have to be paid for it only that it is a measure of the value of the effort.
making. The means of gaining success or realizing potential:
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I guess when you've completely run out of ways to refute my arguments, the best option is to play the semantics card.
Let's see, I'll search this thread myself, instead of paying someone to do it for me, and "make" a few pennies.
Oh, look what I found:
"$35 dollars saved is $35 dollars earned."
I wonder who said that.
Absolutely. Your property is now worth considerably MORE than the $35 you saved simply because it has a neatly-trimmed lawn.
Why not mow it twice a week and DOUBLE your pocket money? (-:
-- Bobby G.
Another clueless one.
Harry K
Clear foul. Sigh. Derby's not an idiot and frankly, it's pretty sad to see someone not only be dead wrong about something, but rude to people who are simply trying to educate him.
No, it's not. Bob, I'm kind of feeling bad for you. Have you ever taken an economics or bookkeeping course? It doesn't sound as if you have because aside from Ben Franklin homilies, earning and saving are two completely different economic activities, as people have been trying to explain to you.
When you do something like mowing the lawn yourself, you're not earning money. (In fact, you're spending money for gas and for the wear and tear on the equipment and more.) But just to make it simple, we'll say you're not spending that money mowing your own lawn. In fact, no money appears anywhere in the economic event of YOU mowing the lawn.
What you are spending is your time. If you could be making $100 an hour consulting but instead mow the lawn for $70 an hour, are you still making $70 or are you losing $30?
If you chose to mow your lawn yourself, you can no longer use that time to work extra hourse at work, do consulting, or break into your neighbor's garages to steal their tools, if that's your thing.
If your time had no other possible value, then maybe you could feel that you earned $70, but even then it wouldn't be true. To make or "earn" money in the first place, you have to increase your net worth, not just conserve it. Mowing the lawn yourself means you haven't spent money, but it certainly doesn't mean you made any. That would happen only if you mowed your neighbor's lawn, too AND they paid you for it.
Way back when Venice was the merchant capital of the world, they invented double-entry bookkeeping, which has become the very cornerstone of modern accounting. For every debit, there is a credit and vice versa.
Your assets have stayed the same by mowing your own lawn. While you see that as a gain of money, your financial position has not IMPROVED by mowing your lawn, it's simpy held its own.
It's easy to understand why you believe that money you can keep in your pocket is a net benefit to you, it just seems to be common sense. But consider this. When you mow for yourself, you aren't being paid, there's no new money coming in and you have to pay for the tools, the gas, the insurance, the damage if you throw a rock and crack you neighbor's car window, etc. You can't engage in any other activity during that time, and if you're a professional earning a good rate, you could come out at a net loss. You'll really lose money if the mower runs over your foot and cripples you. That's a fairly large risk you previously offloaded to your groundskeeper.
Sadly, based on HeyBub's "understanding" of how wealth is created, transferred and destroyed, I have to conclude that a lot of people just haven't been exposed to the basics. You wouldn't tell me that a "2 by 4" is actually 2 inches by 4, would you? Somewhere along the line you acquired the knowledge that what started out as a 2" by 4" is now a LOT smaller. It's just one of those things you learn along the way.
Saving money is not the same as earning it although it sometimes seems that way. A lot of us here in AHR are skinflints like me that would rather repair something 10 times than buy a new one and just burn at the thought of paying someone $100's for something they could do themselves with a little research.
I didn't *make* any money installing my own sump pump, but I did save $100's. Fortunately, saving $100's has great spousal approval (when I do things right) so there are what economists call "blue sky" or "good will" values to things to complicate the picture.
I had a stay-at-home mom who lived through the 1929 Depression. She made the Scots and the Jews look like spendthrifts. She could save like nobody's business. But without my dad's weekly paycheck, eventually she would have saved all she could and then would have run out of money. That's why saving isn't earning. Without dad's income there's was no NEW money entering the family, just less money going out.
Now, if like Huck Finn, you can *trick* somebody into working for you AND you used the time to make ivory carvings that you sell, you might well have "made" some money. But you would have also made some enemies when they realize they've been played.
The correct economic choice is to spend your time on things that bring you the greatest financial return.. Most people, however, spend their time on things that all bring the most satisfaction. Unless you neighbor said "Hey BobR, your overgrown lawn looks like crap and I am trying to sell my house so I'll pay you $35 to mow it" you aren't making any money mowing your own lawn. You may be *saving* $35 cash if you do it yourself, but you're spending your time. This is something that's essential to understanding capitalism and how businesses typically grow.
As for calling someone trying to explain something an idiot, my feeling is that "friends come and go, but enemies accumulate." You owe DD an apology. He is an intelligent and honorable man and he happened to be exactly right in this case. Calling someone an idiot when *you've* got the facts wrong is a double self-insult. The only remaining question is: are you big enough to admit when you made a mistake?
-- Bobby G.
Thanks for defense, Mr. G.
I chose to ignore BobR's insults and language mainly because it adds nothing to the discussion, other than perhaps showing his stubborn refusal to admit that he is wrong. Had I taken the discussion in that direction there would have been even less of chance that he would have eventually realized how flawed his economics are, so I'll continue to ignore his tone.
In any case, I'm done with this. I'll let him have the last word, which he undoubtedly will, and I'll just continue saving (not earning, not making - just saving) money by not paying others to do my chores.
Thanks again.
You're confusing income and earnings. Earnings = (income - expense) And it has nothing to do "savings" unless increased earnings go there. BobR had an established lawn work expense. By using his own labor he cut out much of that expense. And so increased his earnings. You and Derby just can't understand that because....don't know why. It's as clear as the nose on your face. The "business plan" suggestion is likewise a red herring. There is a limit to expense cutting, and available time/work. Might as well say to a plumber making $1000 a week working 8 hour days, "Gee, why don't you work 32 hour days and bring home $4000.
Technically, even foregoing cable TV/internet expenses shows up as earnings. Replacing somebody else's labor with yours to cut an expense should draw no argument about earnings. It's really kind of crazy that anyone should take issue with that. Might show how people value labor. Might be they don't look at personal finances in a business like manner. I know when I spend some hours cutting out an $1000 auto repair expense by doing the labor myself I earned every penny of the difference in cost. Adds to my net worth also. Where did the earnings come from? Right out of a auto mechanic's pocket. No need for the Abbott/Costello money-handling routine.
--Vic
re: "Adds to my net worth also. Where did the earnings come from? Right out of a auto mechanic's pocket. "
I know I should stay away like I said I would, but I've got to give it one last try.
Vic,
Please give me the name of the auto mechanic who didn't fix your car.
I want to ask him if he noticed that the pocket money he was carrying (i.e. his net worth) was decreased by $1000 after you fixed your own car. I mean, the money came "right out of his pocket" didn't it? He must be $1000 poorer now than he was before you fixed your car, right?
Wait...maybe you didn't have a specific auto mechanic that you would have used. So how does it work then? Did 1000 mechanics have their pocket cash decreased by $1 each? or 500 by $2? or 2000 by 50 cents? or is there just 1 random auto mechanic out there someplace who is $1000 poorer? Gosh, I hope not. Doesn't seem fair, does it? I mean, why *him*?
Just whose pocket(s) are lighter by $1000 now that your car is fixed?
His name would be Wayne or Jennings Chevrolet. Or maybe Joe Blow.
Essentially, yes. When costs are known, it's a zero sum game. What money doesn't accrue to him/them accrues to me. I get a dealer price of $1200 to change my intake manifold gasket. However many hours labor at $100 per. It has to be done, just like BobR's lawn has to be done. I hire myself to do it, take maybe twice as long, and pocket what I would have paid the dealer minus my costs. That income is absolutely missing from his pocket, whether he can attach that to me or not. He lost the competition for my dollars. I can calculate my hourly pay or not. Bottom line is he lost income, I lost expense. Earnings = (income - expense) What's so hard to understand about that?
Geez, it's as if you never heard somebody in business say "Things are slow, ain't making no money." Anybody who has ever worked in a trade understands this. They frown on DIYers for more than one reason. As an aside, just about everybody in my neighborhood uses a landscaping service. I do that myself. The service costs about $50 a week, or maybe $1000 per season. I know that. Everybody else knows that. When I see the lady across the street mowing her lawn I don't think it's because she can't afford the service. It's because she understands that cutting expenses increases earnings.
--Vic
Unless their sole purpose was to instigate a useless argument which is clearly the case.
I don't owe DD an apology and you are full of it too if you think I made a mistake.
I'm pretty sure that everyone accounts for that. Nobody with any sense mows their lawn for an hour to make $35 if they could make more with the time elsewhere. If they enjoy doing one over the other they are generally honest enough not to claim earning when it's a net loss. Things like mowing your own lawn instead of paying a known amount to somebody else is easily calculable. And I mowed my own lawn when I billing big hourly dollars. I never could bill enough honest dollars to preclude time to mow the damn lawn. But you can hire somebody else to mow the lawn while you watch TV. If you watch TV is that costing you $35 an hour for the "pleasure?" Then of course one can put a value on the exercise. Which is perfectly valid. People pay to go to the gym for exercise they can get free. Those costs are known to those who pay gym fees as an expense. If BobR not only canceled the mowing expense, but a gym expense, his earnings could be more than $35 and hour using the earnings - (income
- expense) formula.. You mentioned semantics elsewhere. Of course. I only jumped into this because Derby mentioned net worth, and essentially said BobR's labor was worthless. My main personal accounting tool for years has been net worth. It's always been evident to me that cutting expense increases net worth, with all else equal. I was "offended" that Derby thought otherwise. So I dragged out the earnings - (income - expense) formula. It just can't be denied. To quibble "no fair" because it's generally applied to business statements won't fly either. After all, when you start talking about net worth and opportunity costs, you've more or less stepped into that territory. And there's no law against using business accounting in personal finances. Keeping it simple in answering something else you've mentioned, equipment costs are also figured in as expenses by sane people. I know my mower cost me $350 5 years ago. I know I spend about $15 a year on gas. I could, but I don't itemize it. It all shows up in net worth. Just as a $35 weekly payment to a landscaper does.
Anyway, I don't claim to be an accountant. But I say if you cut your own grass instead of paying somebody else to do it, you earned the difference in net worth. And denying that is quibbling and playing with semantics.
--Vic
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