Monday, February 9, 2009

What's Better, to Save a Dollar or Earn a Dollar?

Would you rather earn a dollar for your products or services, or save a dollar when buying or not buying something?  Sure this seems silly but the implications and ramifications of this question extend beyond just one dollar.  

Lets say you save a dollar.  Ok that's one dollar less I would've spent. Simple. 1$ = 1$.

Now lets look at earning a dollar.  I have one more dollar in my pocket right?  Well, actually no.  That dollar you earned is actually taxable.  You'll have to pay income taxes, social insecurity taxes, fica, etc.  Your dollar earned is actually worth only $0.80 or so.

Now instead of a dollar make it $10,000 or $100,000.  It makes a big difference eh?

ps. The trick here is earned.  There are some ways you can make a dollar without paying taxes or at least deferring them indefenitely.




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