Money

I had an article about immigrating to the United States from Europe.

I did not write about money. The predicted US GDP per capita is $66K for 2024, so I will calculate with this average to show my thinking.

I had the chance to live like a standard engineer between 2008 and 2020. I also experienced three years since then when I could see the life of the wealthy, the retired, and the families who suffer from low revenue.

Copyright© Schmied Enterprises LLC, 2023. Artificial Intelligence Generated Arts.

Problem. What is the amount of salary you should accept when you move?

Solution. Well, if you earn below the standard GDP of the state, you will lower it. If you accept an offer under the GDP impact, it will lower it. Why would they hire you then to worsen the statistics?

Problem. What is the number?

Solution. This means, if you come alone, you may expect $66000 per year based on GDP. This is a number that is already lowered with the current account balance of a negative exports discounted with imports. Anything that you can export to China or Germany for example may not just increase the GDP by the work you do, but it also increases the average. Scale is what managers and government officials want.

Problem. What if I come with my family?

Solution. GDP is calculated per resident and not the working population. This means that a family of four has the impact of four times the number, that is $264000. Should you earn as much, if you are the head of household? Technically yes, especially if you are in an in demand job in San Francisco or New York city. Two earners and a family of four should have the impact of $132000 each. Anything less would reduce the GDP of the country.

Problem. How can I justify a higher salary compared to a single unmarried employee?

Solution. One way to do so is capital gains. Many companies provide a lower base salary and shares in the company vested in four or five years as total compensation. You may just earn $80,000. Your shares bonuses of additional $20,000 may be worth $52,000 in four years, when you sell them. Families tend to make longer term decisions, so they may accumulate such shares in the long run. They may also keep real estate longer accumulating gains on the price of the house. Families cash in on stability and recurring spending that companies like.

Problem. How about taxes?

Solution. GDP per capita includes taxes, so all numbers above include income tax of the Federal Government and the state where you live. It can be significant, but it is still lower than in other countries. You also pay a sales tax of 0-5-20% depending on lots of factors. All taxes are redistributed to support essential services or subsidies that substitute essential services. Solar subsidy may not be essential. It replaces grocery chains for example that are essential but affordable and reliable as a private enterprise.

Problem. Do taxes vary by state?

Solution. It varies a lot. Some states like Washington have no income tax but a higher sales tax. Some others like Oregon have no sales tax but higher income tax. You can go to a state and save, and spend your money somewhere else later.

Problem. Is it safe to save?

Solution. The United States has strong laws that protect your savings. It is easy to invest and the banking and financial system is more stable and transparent than in other countries.

Problem. How can I lose?

Solution. The most risky decision people make is whether to buy a home, and what home to buy. Be careful to set the timing and do not jump in by the pressure of others. The real estate market is heavily regulated. Regulation helps the customer with licensing requirements for realtors, or enforcement of transparent public for-sale signs. Many realtors require a 6% fee for the sales, so think about keeping such a property in the long run.

Problem. How about commercial real estate?

Solution. Indeed, there are many other business decisions that are larger than a single family home. However, those decisions are usually made with licensed financial advice by a team. Both decrease the risk compared to a personal decision.

Problem. Is this the annual salary I need to ask for?

Solution. Not really. Employers have to provide health insurance in general that may cost $1000-$6000 a year per person. Health insurance and other employer benefits are included in the GDP per capita but they are not usually part of the annual compensation in the employee agreement.

Problem. What are the expenses?

Solution. The quickest way to see your expenses is to prorate a monthly salary based on the day that earns that expense.

Monday. You earn transportation. Car loans or depreciation may cost $500-$1000 per month with or without insurance. You can spend up to $100 a week if you commute to work on gas. Maintenance and tires can be an additional $1500 per year. This can add up to $12500-$18500 per car a year. Two cars cost double, car insurance also depends on your coverage. It is an additional expense of thousands of dollars unless it is part of a long term rental agreement.

Tuesday. You earn housing. Rent or mortgage can be around $2500-$5000 per month including the obligatory insurances and interest payments. This can add up to $30000-$60000 a year.

Wednesday. You earn healthcare. An insurance can cost from $300-$700 a month per person depending on coverage. The state Affordable Care Act site usually offers adequate information on coverages. This does not include deductibles paid before the insurance starts paying. Deductible is an annual number. Copayments are a percentage that must be paid all the time for certain services or prescription. You also need to buy dental and vision coverages separately. Some states allow tax-deductible healthcare accounts that can be spent on certain expenses years later. This can add up to $15000-$35000 a year. However, employers may take care of the significant portion.

Thursday. Education. A full time student may pay $15000 in fees a year on top of the other costs that you see above. Parents sometimes bear some costs. Also, elementary, middle and high school education is usually paid from a significant portion of local taxes not built into mortgages that may add up to $10000-$20000 or 1%-2% of the value of a property. Professional education may also cost thousands of dollars. Many professions like finance, realtor, electrician require local or state licensing and certificates.

Friday. General living expenses like groceries, furniture, appliances, insurance, interest payments can add up to a similar amount to other days, especially with leisure travel. Make sure you keep savings to invest for future expenses and retirement. Many employers match 401k or IRA plans that can be invested into various financial instruments. Local licensed financial experts can help with details.

These are approximation numbers for individuals or families with double income with two children. Please consult with local professionals for accurate and timely pricing.

Problem. Can you really expect this salary?

Solution. No. The United States is one of the countries with the highest income inequality. Many professions earn less, especially in servicing like janitorial, car repair, manufacturing, etc. where the revenue is proportional to the labor invested. The mean salary is higher than the median as a result. Also, higher earners earn a lot sometimes. A percentile graph may show a large income on the right received by the highest earners. Many earn more for just a short while. Share bonuses may have capital gains. A business may be sold. All these are one time revenues.

Problem. Is this bad?

Solution. Not necessarily. While the annual income gaps are high, the opportunity to change the income is also one of the highest in the world. As I mentioned I also experienced years similar to retirement, the wealthy and the long term unemployed, when my business had a small revenue. Income inequality may be experienced by the same person during their lifetime. You have many options to start a business, buy a franchise, do an invention. You may calculate a base number higher than the GDP for a period as a result, especially if you seek a role in demand. The reason I started Founders' Review is to discuss the case of a minority like mine, who are small country immigrants with ties to multiple communities, and no government relationship.

Problem. Is there social security?

Solution. Yes, there is advanced social security like pension and healthcare to the retired. Healthcare is supported for the low income families. Bureaucracy may be large to drive people back to employment. Whether this is good or bad, I let you decide.

Problem. Is this data accurate?

Solution. Well, it depends. I had strange situations applying for unemployment benefits after an educational period. I had to fill in numerous checkboxes to ignore the education time again and again for each week of a year until the current date is reached. I did not finish. They declined my application. Paperwork makes your life harder.

The aggregate of such a system will show lower unemployment rates than the academic definition. The rate decisions of the Federal Reserve Bank are decided based on such information. Bureaucracy may distort the economic picture. It helps to drive back to employment on the other hand. Many states report numbers, so there are checks to ensure that the picture is trustworthy.