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It would be good to include some mental models for attitude towards money. Things I have noticed about myself: No problem paying for something that absolutely needs to be done. E.g. repair a leak in the roof. Replace something. Don't notice money spent on regular monthly payments. E.g. mortgage. Don't notice $1000 spent as 50*$20 but more frightening to spend $1000 at once. Fear of loss when investing is big. It feel…
Earn $1000 = $500 after taxes. :)
It would be good to include some mental models for attitude towards money. Things I have noticed about myself: No problem paying for something that absolutely needs to be done. E.g. repair a leak in the roof. Replace something. Don't notice money spent on regular monthly payments. E.g. mortgage. Don't notice $1000 spent as 50*$20 but more frightening to spend $1000 at once. Fear of loss when investing is big. It feel…
Earn $1000 = $500 after taxes. :)
Earlier quoted context omitted.
Depends on the country. In US, it seems that everybody does their taxes and all salaries and income are discussed as "before tax"; in Russia, for example, all taxes and payments for employees are done on employer's side and all salaries and income are usually discussed as "after tax" - people don't even usually know how much are they earning "before tax".
How can you handle more complex scenarios without knowing your before tax salaries? For example, working two jobs.
Earlier quoted context omitted.
Depends on the country. In US, it seems that everybody does their taxes and all salaries and income are discussed as "before tax"; in Russia, for example, all taxes and payments for employees are done on employer's side and all salaries and income are usually discussed as "after tax" - people don't even usually know how much are they earning "before tax".
Same here in the UK. You can look at how much tax you've paid on your payslip, but you never feel like that money was yours in the first place since it never hits your bank. I had to complete a tax return for the first time last year, although it's completely illogical (and I'd budgeted the number so knew what it would be well in advance), it felt more painful paying the ~£_,000 of extra tax I owed than paying the ~£…
It is the same in the US - however, if you get a job offer in the US for a given salary - that is a pre-tax number. I believe the grandparent was making the point that in Russia, salary and wages are discussed purely in after-tax terms.
Nice. This is a good addition to "List of cognitive biases", a Wikipedia article I've liked to read from time to time ever since I discovered it, years ago. https://en.wikipedia.org/wiki/List_of_cognitive_biases As a Stoic, it's good food for thought to improve your "perception" of life and the world.
Most of these are really good, especially productivity and time estimation. Some I do not agree with (although perhaps the model presented is useful depending on desired outcome). -Efficient market hypothesis: Markets are not fully efficient and the state of the world is not optimal. Thus opportunities exist. It's our job as engineers (and business people/humanitarians/writers/philosophers etc.) to recognize and corr…
Of course, it's also important to reflect on your thinking and be able to spot the exception that proves the rule. But it's unrealistic to be constantly vigilant about your own analysis of things. You need abstractions (eg. mental models) to be efficient, but leaky abstractions will ruin you.
Earlier quoted context omitted.
Depends on the country. In US, it seems that everybody does their taxes and all salaries and income are discussed as "before tax"; in Russia, for example, all taxes and payments for employees are done on employer's side and all salaries and income are usually discussed as "after tax" - people don't even usually know how much are they earning "before tax".
How can you handle more complex scenarios without knowing your before tax salaries? For example, working two jobs.
Otherwise, many of the models may seem contrived and practically useless.
Earlier quoted context omitted.
Earn $1000 = $500 after taxes. :)
Depending on where you live, that extra 5 hundred means that the streets are safe, you have clean drinking water on tap and if you get hit by a car crossing the stree you'll probably make it. And defence and welfare and such and such. suck it up. Taxes have a point.
Your comment feels completely out of line.
This comment thread is talking about mental models about money. The GP comment isn't complaining about taxes. Most likely, the observation about taxes is to say that earning an additional $1000 income does not translate into the same amount that could be spent. Or something similar, related to the mental model topic they're talking about.