- Most Likely to Succeed, by Malcolm Gladwell: I first heard about this article on The Simple Dollar, but I wanted to wait until my issue of the magazine showed up in the mail (I guess I’m not ready for a Kindle just yet…). Anyway, this is an engrossing look at education and its “quarterback problem.” Why does this appeal to me? I’m intrigued in how one teacher can be considered “better” than another and because I’m obsessed with the backup-quarterback position in the NFL. That jump from college football to the NFL is one that I love reading about. So if you’re a teacher or you love football (or if you’re both like me), this one is right up your alley. This is really really good stuff.
- How Are Retirees Losing 50% of Their Portfolio? Check this one out over at GenXFinance. I was also wondering this very same question because I’ve heard a lot of people talking about it. If you’re near retirement, why would you have so much of your portfolio in stocks? Because the person handling your money told you to? Or because you wanted to ride the bullish wave we’ve been on since 2002? Either way, it’s a good topic to ponder a little…or a lot, depending on how old you are.
I know some teachers and I’ve always been jealous of their schedules—having three months a year off is one of the big attractions of the profession. At least to me.
But recently I’ve wondered about how they get paid during those three months. Turns out they can choose to have their salary evenly distributed throughout the year (an equal paycheck every week of the year) or they can get a paycheck only during the nine months they are actually working.
Now, the first time I thought about it, I thought that getting a paycheck when I’m relaxing by the pool with a good book would be pretty sweet.
Now that I’ve thought about it, I would choose the other option. I would take the larger paycheck, automatically deposit the excess amount in an high-yield account (ING Direct), and have my money make me some more money during those nine months.
Sure, it takes a little bit (very little) discipline and it can be scary for people who don’t trust themselves to not touch that money, but it’s the most financially nifty way of doing it.
With a salary of $50,000 and a tax bracket of 25%, here is the difference is weekly pay (roughly) of a pretend teacher:
Year-round pay: $721
9 months: $937
Now, according to my calculations, if you took that excess $216 and automatically placed it into an ING account (which is at 4.3% right now), at the end of the nine months you would end up with around $8,800, which is about $220 dollars of interest. Now you have the money you need to live the three months you won’t be working and some extra spending money. Is it worth it?
So, it there are any teachers out there or if you know of any teachers, what do you think about this? I recently asked a teacher and she told me the most popular option is to get paid year round as opposed to running this little scheme. What does this say about teachers and how they view their finances? Strictly speaking, getting paid year round is the most responsible, conservative choice, so can you really blame them?