A Sad Financial Reality

[Apollet]

After a recent discussion with a fellow engineering, I came to a sad realization regarding the new Health Care laws and growing government:

As an entry level engineer who just entered the job market, I can make about 50k a year, pay about 15k away in taxes, have decent benefits, and live a quality lift as a young adult. But, with the new health care law, my health insurance rates will likely double or triple, cutting further into my bottom line.

The problem is: I devised a very simple scenario in which I can live a very competitive lifestyle with absolutely no debt to worry about. Recently, a close friend decided to buy a motor from china and put it on his bike. It worked amazingly and rode it every day to class through senior year of college and into his young professional life. He always has inquiries on where to get it, how much it is, etc. What did it take? About 10 hours of labor and $150 bucks. Since it is a college campus, there is also a ton of food delivery jobs.

Here's the scenario: service small motors for bicycles for college students & other interested customers at a rate of about 1 per week while working at a delivery place. Now, since you can do everything from your motorized pedal bike that gets 120 mpg, you can work just a few shifts a week and make bank doing fast deliveries (With little maintenance cost). Plus, since tips are almost always cash with small deliveries, it can all be pocketed.

So, he makes his ~$15/hr delivering and upgrades bicycles at a leisurely pace at $200 profit per week, and can do other small things like donate plasma and work less hours total than me as an engineer and essentially take home the same after tax income (since his technical I-9 income is below the poverty line).

Now normally this wouldn't be a big deal, but with the new health care laws going into effect, he can get full coverage health insurance for free due to government subsidy (with his W-2 income under 11k) while receiving food stamps.

The point I'm making here is what sort of motivation should I have to get a 4 year degree (albeit in something I love), go into debt, and essentially have identical income to my friend, when I could instead just go out and manipulate the system so easily?

P.S. Don't take this as me bashing on public assistance, as I'm not, I'm addressing a huge gaping flaw in the current proposed system.

[Deleted]

As an entry level engineer who just entered the job market, I can make about 50k a year, pay about 15k away in taxes

here in denmark u would pay 48% if the american goverment wasn't so corrupt it could work like that, but i think it only works in denmark because we are such a small country

[Spectral]

The point I'm making here is what sort of motivation should I have to get a 4 year degree (albeit in something I love), go into debt, and essentially have identical income to my friend, when I could instead just go out and manipulate the system so easily?

Long run earning potential.

[Catta]

here in denmark u would pay 48% if the american goverment wasn't so corrupt it could work like that, but i think it only works in denmark because we are such a small country

Size really doesnt stand much in the way of it working like ours. They have 60 times our population but that means 60 times as many tax payers. Whats stands in the way is the mentality, corruption and apathy I say.

[serenka]

his way doesn't have much potential for growth, the income for that won't really increase much most likely.
if you can get 50k as an entry job, there are probably more opportunities and likely pay increase over the years. basically in the long run, yours will pay off and likely earn a lot more.

[chrisberb]

You'd also miss out on a more comfy retirement (social security), buying a house, and as Spectral said, it might not be feasible in the long run.

[Catta]

You'd also miss out on a more comfy retirement (social security), buying a house, and as Spectral said, it might not be feasible in the long run.

And it could be boring as hell...

[Reg]

Or you could actually see the facts that the states that have started to release the costs of their health care plans are seeing prices go down. That seems to be the underlying snarky attitude of this post, the whole THANKS OBAMA! mentality.

http://www.nytimes.com/2013/07/17/he...anted=all&_r=0

[Stir]

Well; first of all: Your job as an entry-level engineer is a job that stays. His motor-sales will fall (eventually), and he can't continue his life as a delivery person; there's no durability. Besides: You will start earning more... Or you should, anyway. And as a nice aside: Food delivery is just poor work, to be honest. While you'll be doing awesome and interesting stuff, your friend will be delivering pizzas and installing one engine a week (if you friend's very lucky).

You can try negotiating for a better salary; it seems the thing to do.

Also: Your friend is making a handsome sum of money illegally. That's something to recognize in this situation as well. Your friend is dodging income tax on the engines, and crime most certainly does pay if it's allowed to run its course. Not only is your friend dodging income tax, but your friend's income is not on poverty level at all, which means that your friend is committing welfare fraud.

[Endus]

It also helps his bottom line that he's committing tax and welfare fraud. You sort of glossed over that part.

[boogie]

The point I'm making here is what sort of motivation should I have to get a 4 year degree (albeit in something I love), go into debt, and essentially have identical income to my friend, when I could instead just go out and manipulate the system so easily?

You are looking at the very short term, I can almost guarantee that if you both continued down the paths you are on, you will be much better off in 10 years than he is.

[Grizzly Willy]

Long run earning potential.

Right. An education isn't just something you get and have fun with. It's an investment in one's future.

[Puremallace]

Or you could actually see the facts that the states that have started to release the costs of their health care plans are seeing prices go down. That seems to be the underlying snarky attitude of this post, the whole THANKS OBAMA! mentality.

http://www.nytimes.com/2013/07/17/he...anted=all&_r=0

Facts need not apply in these threads. Only Koch brothers talking points are allowed.

[FathomFear]

Plus, since tips are almost always cash with small deliveries, it can all be pocketed.

I found your post a little difficult to follow, but if a large portion of his income is coming from tips--and he is not reporting that as income--then the main issue is that he's breaking the law.

As far as taxes go, you'll get used to it. I'm in Canada and pay around $45,000 a year in taxes. And I go to the doctor for a quick check-up maybe two times a year. I don't mind it. I like living in a country that values universal access to healthcare.

[Sunseeker]

Ah the American dream: taking advantage of the system to make a quick buck at other's expense.

[time0ut]

Long run earning potential.

More than likely, unless this guys friend is an entrepreneur.

If you are competent, you can easily be making around six figures after 5 years in most engineering fields. I started at $55k and am at $120k after 5 years myself. That's in an area with a low cost of living, too. I have friends from school who are making 30% more already in hot areas like the bay and Boston.

[Killadrix]

Long run earning potential.

Well, unless the friend was to build his repair and delivery business into something larger.

Overall, OP - I think you need to make decisions that are best for you, your family and career, and not worry too much about people gaming the system until your next local, state or presidential election, then let your vote decide.

[Auloria]

The point I'm making here is what sort of motivation should I have to get a 4 year degree (albeit in something I love), go into debt, and essentially have identical income to my friend, when I could instead just go out and manipulate the system so easily? .

Going into debt for college without a plan is a bad idea, and a lot of people are finding that out the hard way. Unless you need the degree (STEM for example) and the job outlook is positive, you'll do just fine with something like trade school.

College degrees are way overrated for most people's (completely legitimate!) career paths.

[chrisberb]

Going into debt for college without a plan is a bad idea, and a lot of people are finding that out the hard way. Unless you need the degree (STEM for example) and the job outlook is positive, you'll do just fine with something like trade school.

College degrees are way overrated for most people's (completely legitimate!) career paths.

Trade schools can be quite expensive, and yield just as shitty job prospects.

[Themius]

So... he's not reporting all that extra income?

I just think that if you're an engineer and you're worried about money, move into finance.