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RE: The Wealthy You #3: Why Spending Less Beats Earning More
Hey, good to find another FIRE guy on Steemit.
Here is another reason why saving a $1 is worth more than earning a $1.
To actually put a $1 in your pocket, you technically have to earn alot more than a $1 because of taxes.
Out of a $1 that you make, you get 22% taken out in federal tax(depending on tax bracket), 15.3% in FICA tax (your employee might pay half of that for you but if they didn't have to don't you think they can pay you more?), and something between 0-13.3% taken out by the state. You are left with something like 60cents out of your dollar when it's all said and done.
Hey ChronogN,
Thanks for reading and commenting! You make a very good point indeed. In that way, saving 1$ is effectively equivalent to earning $1.65 or so depending on your specific tax rate. Another great reason to think twice before buying something :)
Cheers!