Signing bonuses aren't tax-free.
TodayHello wrote: ↑Oct 16th, 2012 9:06 pm...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
Jan 21st, 2014 10:55 am
Signing bonuses aren't tax-free.
TodayHello wrote: ↑Oct 16th, 2012 9:06 pm...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
Jan 21st, 2014 10:57 am
Jan 21st, 2014 11:00 am
Well, now there's too many fantasy restrictions in place. You can always find another job. You can always improve your own human capital and therefore increase your compensation. You can get fired. For all those reasons, Job 2 would likely be better.techcrium wrote: ↑Jan 21st, 2014 10:52 amYes pretty much, except that the premise is that you cannot just "find" another job that paid more than $50K.
Note: 200K signing bonus is tax free of course.
Let's say you are worth $10 an hour and somehow magically landed this crazy job offer. If you were to leave both offers on the table, you would go back to your McDonald's wage job.
Jan 21st, 2014 11:08 am
Jan 21st, 2014 11:12 am
The $200K can't just go "in the bank" though. It must be used to try to generate income at a minimum 8% average annual return. And considering all the (bad) choices I made at age 18-20 when first trying to play in the stock market... at that age I would easily have lost half the $200K lol. So that's why I said to take the higher salary.bruizeman wrote: ↑Jan 21st, 2014 10:49 amI agree that most are risk averse, but don't quite agree with your conclusion that most would choose the $71k option. Having $200k in the bank is a safer option than having a higher salary.
The way the OP phrased his question, assuming you are starting off at 18 years of age, with $0 in the bank, you have basically 2 job options:
Job 1: $71k annual salary
Job 2: $200K signing bonus + $50k salary
Which would you choose?
Jan 21st, 2014 11:17 am
What happens to the $200k afterwards is irrelevant. You can leave it in a savings account, you can invest it in stocks, you can buy a house, you can buy toys, you can do anything you want with it. Even if you immediately "lost" half of it, you'd still have $100k vs $0 had you chose the $71k job.rob444 wrote: ↑Jan 21st, 2014 11:12 amThe $200K can't just go "in the bank" though. It must be used to try to generate income at a minimum 8% average annual return. And considering all the (bad) choices I made at age 18-20 when first trying to play in the stock market... at that age I would easily have lost half the $200K lol. So that's why I said to take the higher salary.
Of course if this question was for me today, and I had the investment experience i do now... I would take the slightly lower salary and $200K in a heartbeat.
Jan 21st, 2014 11:38 am
Not according to OPs hypothetical situation. The $200K must be used to generate income at around 8% per year as the idea is to have the same "lifestyle" or yearly net income as the higher salaried person.
Jan 21st, 2014 11:39 am
Jan 21st, 2014 12:27 pm
Jan 21st, 2014 12:34 pm
Jan 21st, 2014 12:58 pm
Jan 21st, 2014 1:35 pm
The only time you would include investments as part of your income is if it's in the form of interest income, capital gains or dividends. The original principal does not form part of your income.Mike15 wrote: ↑Jan 21st, 2014 12:58 pmI believe the dilemma being explored in this thread is really an attempted simplification of terminology. "Income" and "wealth" are appropriately two distinct terms, with two distinct meanings.
Historically, landed gentry could refer to their 'income' from their estates and investments of their wealth, though that legitimately referred to income coming in, not just unrealized market gains. In my opinion in this scenario, the $50k is income, and the $200k is accumulated wealth.
Jan 21st, 2014 3:07 pm
neither should capital gains
Jan 21st, 2014 3:13 pm