Panorama Community Schools

Chris Webner » Money Matters: Living & Building Wealth in Guthrie Co.

Money Matters: Living & Building Wealth in Guthrie Co.

1st & Last Name:_________________________  Date: ___/___/____ Grade: 9 10 11 12

Worry About Your Salary Less If You Know How to Manage Your Money

For example; “I would love to be a science teacher but I could make a lot more money working as a physicist, so probably will not be a teacher.” Freedom to do work that you want and making money can happen at the same time. Below are activities to help you understand how to be self sufficient and build wealth.

 

  1. A) Living with your “Living Wage” pay while doing occupation of your choosing -
  • Choose a Family Size (up to 4 or 5 on below chart):  _______________
  • Identify Living Wage for Chosen Family (chart below)    ______________
  • Future Possible Occupation used for this scenario is ___________________
  • Annual Wage 10th Percentile (beginner)   ______________
  • Annual Wage 50th Percentile (median)     _____________
  • Annual Wage 90th Percentile (expert)   ____________
  • Summary Sentence: ____________________________________________________

Example: Working as an Interior Designer (https://www.bls.gov/oes/current/oes271025.htm), living wage to take care of family with 2 adults & 3 children with a living wage is $26.45. - that’s almost a realistic wage at the 50th Percentile [$24.76], realistic at 90th Percentile [$45.09], but not realistic with 10th Percentile beginner [$13.10]). Summary: As a beginning Interior Designer I probably need other adult to have a wage like mine or higher.

Fact: The average size of an Iowa Family is 3 people (https://www.iowadatacenter.org/quickfacts).

Chart Below is Iowa, Guthrie County, Living wage (http://livingwage.mit.edu/counties/19077)

  1. B) Use weblink to see chart (also below) & select necessary costs of living in Guthrie Co. &

Compare your chosen costs and wages.

  • WIll your wages cover your costs or will you need additional Income? Explain: ____________________________________________________________________
  • When could your projected wages best match your costs (think of lower 10%ile as beginner, smaller family size to begin with, etc.)? Explain: _____________________________________________________________________

Hourly Wages

1 Adult

1 Adult 1 Child

1 Adult 2 Child

1 Adult 3 Child

2 Adults (1 Works)

2 Adults (1 Works) 1 Child

2 Adults (1 Works) 2 Child

2 Adults (1 Works) 3 Child

2 Adults (1 Works Part Time) 1 Child*

2 Adults

2 Adults 1 Child

2 Adults 2 Child

2 Adults 3 Child

Living Wage

$10.84

$23.46

$26.56

$33.26

$18.03

$21.20

$24.29

$26.96

$16.40

$9.02

$12.63

$14.90

$16.96

Poverty Wage

$5.00

$7.00

$9.00

$11.00

$7.00

$9.00

$11.00

$13.00

 

$3.00

$4.00

$5.00

$6.00

Minimum Wage

$7.25

$7.25

$7.25

$7.25

$7.25

$7.25

$7.25

$7.25

 

$7.25

$7.25

$7.25

$7.25

 

  1. C) Retiring with Wealth Regardless of Our Pay

Regardless of our salary, we all can take advantage of the compounding interest that is part of our economy.

The classic example to help  us understand compounding interest is the “Choose a Penny Doubled Every Day for 1 Month (30 days) Or Choose a Million Dollars. What you would choose? Here is the math explaining the doubling penny scenario (http://mathforum.org/dr.math/faq/faq.doubling.pennies.html).

The U.S. stock market has increased people's money an average of 10 percent when they buy and leave money invested to grow over time (https://www.nerdwallet.com/blog/investing/average-stock-market-return/), or lower and closer to 7 percent if investors are not as patient. At the lower 7 percent annual interest it takes one decade (10.2 years) for money to double (Rule of 72, Investopedia), so an average American who works until age 65 can see their investment double 4x's (graduate from university and start investing by age 25 and retire at age 65).

Well known and controversial financial adviser (time.com/money, 2013 online article), Dave Ramsey (books, radio talk show, public shows, et.) encourages all of us to invest and take advantage of our economies' growth with up to 12% interest.

Play with the below variables for possible money you can accumulate using Dave Ramsey retirement calculator (which advises investing in more successful business sector, referred to S & P 500 at up to 12 percent return each year). Write down scenario variables and outcomes you think best for yourself. Here are the fields you enter your data for a calculated total:

Current Age (or age you plan to begin building wealth) _____

Age You Plan to Retire  ____

How Much You Already Have Saved for Retirement  $_____

How Much You Will Contribute Monthly   $_____

What Do You Think Your Annual Return (Interest Rate) Will Be  ___%

Amount Contributed:   $____

Amount Grown (Growth):   $____

Total Wealth:   $___

RETIREMENT LIVING: Use your 90th Percentile occupation wage... multiply it by 0.7, (thus matching typical retirement spending at 70 percent of pre-retirement spending)*.   Divide your Total Wealth by this “salary” to determine how many years until it is all spent (we all hope we save enough to live many years in retirement).

Share your summary analysis thoughts with a sentence:

___________________________________________________________________________

 

  1. D) Look & Then Talk about your strategy to "let your money work for you instead of you working for your money" through long term investing in the U.S. Stock Market. IF you share a goal, it takes on more meaning in your life!).
  1. $100 monthly for 40 years at 7 % = $422,747 ($56,400 invested, $366,346 grew/compounding interest)
  2. $100 weekly (Mr. D. Nordquist challenged upperclassmen in Spring of 2018, or $400 monthly) for 40 years (maybe Age 22 to 62) at 7% interest is $1,025,340 (your a millionaire!)
  3. Could you invest $467 monthly if you lived at home for an extra year or two to help your wealth get started? Consider that most jobs pay $10/hr, after taxes usually take home $7/hr., $7.00/hr, 6 days per week ($7 x 48 hr/wk. = $336/wk, multiply by 50 of 52 weeks in year = $16,800/year). Could you live and invest (build your wealth)? Most likely -YES! If you continued to build wealth $5,600 per year for 10 years, age 19-29 (making 8% interest) builds $81,000. Then from ages 30 to 65 never add to that $81,000, just let it grow at 8% each year...by age 65 you could have over $1 million dollars ($1,197.612).
  4. Proof the Dave Ramsey Retirement Calculator using this governmental retirement plan tool: (investor.gov) https://www.investor.gov/additional-resources/free-financial-planning-tools/compound-interest-calculator

Living Wage Calculation for Guthrie County, Iowa

The living wage shown is the hourly rate that an individual must earn to support their family, if they are the sole provider and are working full-time (2080 hours per year). All values are per adult in a family unless otherwise noted. The state minimum wage is the same for all individuals, regardless of how many dependents they may have. The poverty rate is typically quoted as gross annual income. We have converted it to an hourly wage for the sake of comparison.

For further detail, please reference the technical documentation here.

Hourly Wages

1 Adult

1 Adult 1 Child

1 Adult 2 Children

1 Adult 3 Children

2 Adults (1 Works)

2 Adults (1 Works) 1 Child

2 Adults (1 Working) 2 Children

2 Adults (1 Works) 3 Children

2 Adults (1 Working Part Time) 1 Child*

2 Adults

2 Adults & 1 Child

2 Adults 2 Children

2 Adults 3 Children

Living Wage

$10.84

$23.46

$26.56

$33.26

$18.03

$21.20

$24.29

$26.96

$16.40

$9.02

$12.63

$14.90

$16.96

Poverty Wage

$5.00

$7.00

$9.00

$11.00

$7.00

$9.00

$11.00

$13.00

 

$3.00

$4.00

$5.00

$6.00

Minimum Wage

$7.25

$7.25

$7.25

$7.25

$7.25

$7.25

$7.25

$7.25

 

$7.25

$7.25

$7.25

$7.25

*Documentation for families with an adult working part-time is available separately, here.







Typical Expenses in Guthrie County, 2018

These figures show the individual expenses that went into the living wage estimate. Their values vary by family size, composition, and the current location.

Annual Expenses

1 Adult

1 Adult 1 Child

1 Adult 2 Children

1 Adult 3 Children

2 Adults (1 Working)

2 Adults (1 Working) 1 Child

2 Adults (1 Working) 2 Children

2 Adults (1 Working) 3 Children

2 Adults (1 Working Part Time) 1 Child*

2 Adults

2 Adults 1 Child

2 Adults 2 Children

2 Adults 3 Children

Food

$3,050

$4,489

$6,755

$8,966

$5,592

$6,953

$8,975

$10,932

 

$5,592

$6,953

$8,975

$10,932

Child Care

$0

$6,985

$9,426

$11,868

$0

$0

$0

$0

 

$0

$6,985

$9,426

$11,868

Medical

$2,266

$6,291

$6,011

$6,068

$4,698

$6,011

$6,068

$5,738

 

$4,698

$6,011

$6,068

$5,738

Housing

$6,792

$9,888

$9,888

$13,404

$8,028

$9,888

$9,888

$13,404

 

$8,028

$9,888

$9,888

$13,404

Transportation

$4,173

$8,624

$9,053

$10,868

$8,624

$9,053

$10,868

$10,827

 

$8,624

$9,053

$10,868

$10,827

Other

$2,877

$4,652

$5,131

$6,563

$4,652

$5,131

$6,563

$6,088

 

$4,652

$5,131

$6,563

$6,088

Required annual income after taxes

$19,159

$40,929

$46,264

$57,737

$31,593

$37,036

$42,363

$46,988

 

$31,593

$44,021

$51,789

$58,856

Annual taxes

$3,397

$7,867

$8,978

$11,453

$5,913

$7,051

$8,160

$9,089

 

$5,913

$8,509

$10,183

$11,696

Required annual income before taxes

$22,555

$48,796

$55,242

$69,190

$37,506

$44,087

$50,523

$56,077

$51,161

$37,506

$52,530

$61,972

$70,553

 

Typical Annual Salaries

These are the typical annual salaries for various professions in Guthrie County..

Occupational Area

Typical Annual Salary

Management

$82,349

Business & Financial Operations

$59,686

Computer & Mathematical

$73,113

Architecture & Engineering

$67,681

Life, Physical, & Social Science

$56,775

Community & Social Service

$39,514

Legal

$59,296

Education, Training, & Library

$44,454

Arts, Design, Entertainment, Sports, & Media

$34,430

Healthcare Practitioners & Technical

$56,478

Healthcare Support

$28,915

Protective Service

$40,826

Food Preparation & Serving Related

$19,670

Building & Grounds Cleaning & Maintenance

$25,031

Personal Care & Service

$23,134

Sales & Related

$25,123

Office & Administrative Support

$33,702

Farming, Fishing, & Forestry

$32,677

Construction & Extraction

$42,363

Installation, Maintenance, & Repair

$43,224

Production

$33,979

Transportation & Material Moving

$33,425\



Recent History of Iowa’s Most Common Jobs

 

*What percent of your salary do you typically spend in retirement? Depends on what lifestyle you want during retirement =