tag:blogger.com,1999:blog-219763032024-03-24T05:22:27.306-04:00OrthonomicsA blog dedicated to examining the economic and auxilary issues in the Orthodox community. A blog for those who value self-reliance , promotion of prosperity, and integrity. Reader input and guest posts are much appreciated. So please add your comments and email guest posts or items of interest to Orthonomics at gmail dot com.Orthonomicshttp://www.blogger.com/profile/07892074485262548496noreply@blogger.comBlogger929125tag:blogger.com,1999:blog-21976303.post-17387073158603076562013-08-26T11:07:00.000-04:002013-08-26T12:38:16.733-04:00Custodial Account BasicsI can't link to the imamother threads that have inspired this informational post (I've seen a few posts in the past number of months), but I do hope that it will be of service because there is clearly a lot of confusion as to how the accounts are to be utilized and hopefully my quick post will be of service. I happen to be a fan of custodial accounts, but one has to understand what a custodial account is and what the obligations of the parent is.<br />
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A very simple way to gift money to minors, as per federal statutes, and to take advantage of some tax saving strategies, is to place gifted moneyin a custodial account known more formally as Uniform Transfer to Minors Account (UTMA) or Uniform Gift to Minors Account (UGMA) depending on your state of residence. <br />
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This is a simple, nearly paperwork free, way of gifting money, but unlike a trust account, they offer less protection of the funds as the gift giver relinquishes control of the account upon maturity of the minor (i.e. your 18 or 21 year old can blow it all on clothing the day they take control). rusts offer more flexibility, protection, and control. UTMA/UGMA accounts are pure, unrestricted gifts.<br />
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A custodian of the funds is assign, normally a parent, who can direct the funds and exercises discretion regarding any withdrawals which must be used "for the use and benefit" of the child. They money should not be used for regular expenses or expenses that a parent is obligated to pay. We have custodial accounts for all of our children and have yet to actually spend any of that money. That said, if I were to make a withdrawal, my own standard would be 1) would rational and reasonable people believe that these expenses were for the child. 2) Is there a good chance my own child will see these expenditures in years to come as being for his/her benefit? Buying a textbook for a college math class my kid might take during high school: acceptable. Buying a simcha dress for an older sibling's wedding so everyone can match: unacceptable.<br />
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These accounts must be transferred to the child at the age of 18 or 21, depending on the state of residence. At that age, that money is the child's money. . . period. You must turn these accounts over and your child will receive a 1099 under their own name and be responsible for the interest, dividends, and/or capital gains on the accounts. <br />
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The money, once deposited, is non-revocable. In other words, you can't change your mind and take back the gift. Nor can you proceed to use the gift for your own purposes because you had messed up your calculations when giving the gift. Nor can you redistribute the funds from the custodial account of child A to the custodial accounts of children B, C, and D. Even if the child passes on, you do not have the discretion to redistribute the funds. The money is part of the child's estate and is distributed according to state law.<br />
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I happen to like custodial accounts for saving starter funds for children. It is a great way to save their birthday money and to gift them small amounts so they can get started when they are adults. I don't believe they are a good way to save for college, although in the past parents used them, lacking other better alternatives. A 529 offers far more control over college funds, as do Coverdell accounts. This is not the way to save for a child's wedding, although I understand people have used them as such. The adult and child's priorities may differ (perhaps for the good). I do think they are a nice way to save a bit on taxes, but that tax savings comes with risk of the entire principal and earnings. If you like control and want to exercise that control for years to come, this is not the account for you!<br />
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I hope this post will be of service to those considering custodial accounts or for those parents who have custodial accounts but simply don't understand the basics and the legalities.<br />
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<br />Orthonomicshttp://www.blogger.com/profile/07892074485262548496noreply@blogger.com31tag:blogger.com,1999:blog-21976303.post-79948687318139442782013-08-14T00:47:00.001-04:002013-08-14T09:41:14.656-04:00Follow Up "Distance Your Money Can Buy You"Queen Bee asked if I can address some specific items from the link for which my last post "<a href="http://orthonomics.blogspot.com/2013/08/overestimating-distance-your-income-can.html">Overestimating the Distance Your Money Can Buy You</a>" and I'm happy to oblige. <br />
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She first asked me what my hunch was where this family should begin to cut back. I had mentioned that without a complete picture it is difficult to advise or even guess, especially regarding more complicated areas like the medical insurance and co-pays. That said, I do believe that many families spend more than they need to on clothing, food, and other basic commodities.<br />
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Another overlooked area, often addressed by financial columnists is childcare. Childcare is simply an overwhelming expense for families. It is well worth evaluating various types of care to see if there is a less expensive way to provide the car needed. I know families who have worked out different work schedules to make this accommodation. At $400 a week shared between two families, I have to wonder if there is not another arrangement that can provide the hours needed for less.<br />
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Utilities in old homes are expensive. A poster suggested solar. Another suggested replacing appliances with more energy efficient appliances. I will warn people that often the benefit is overblown. I'm favorable to saving up cash to pay for newer appliances. I would not start with something big like windows. The payback period is long and I think it is often overblown. I would start (cash in hand) with smaller things like moving to energy efficient lightbulbs which can be had on nearly full rebates from time to time or even replacing a washing machine. Our own washing machine, replaced about 5 years ago, has paid for itself twice over I'd estimate. The other bonus is that it holds more laundry, saving us time and physical energy. When it comes to bigger systems, yes, they can pay for themselves, but I would not jump on whatever trend is out there in hopes of saving, especially when you don't have the funds to "invest." Stick to the smaller efforts and don't underestimate old fashioned things like turning the heat down a few notches and turning off lights.<br />
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<b>And now for the real meat of the post: </b> queen bee asks about this advice and if it is legit.<br />
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<span style="background-color: #deeaf4; font-family: Verdana, Tahoma, Arial, sans-serif; font-size: 12px;">Another route we tried that didn't work for us but may work for you, from the advice of an accountant, is to ask your employers to make you a type of employee that is essentially self employed (I forget the name) it can be applied to certain professions like someone who sells life insurance. That allows for greater tax write offs. Or perhaps registering a company that operates out of your home, even if it makes the minimum allotted amount would give you other kind of tax write offs on your home expenses. Perhaps worth it to speak to an accountant. </span></blockquote>
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What this amother refers to, I believe, is either converting from a regular employee to either a 1) statutory employee or 2) a contractor. <br />
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A statutory employee is a very specific type of employee and chances are you aren't one! And if you do happen to be one (Do you pick up and deliver laundry? Do you distribute beverages, but not milk? Are you a full time life insurance sales agent working primarily for a single company?), there is a good chance that the business owner's accountant has put a good amount of time into worker classification on your behalf. <br />
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The classification of contractor vs. employee depends on three main factors: Behavioral Control, Financial Control, and Relationship Type. There are fairly severe penalties for misclassification. An employer retains the right to control how work is performed. An employee is generally paid a regular, fixed wage whereas a contractor is paid by the project and is employed on an as-needed basis (for professional services, the contractor is customarily paid hourly for the project). The relationship type between an employee and a contractor is significantly different and therein lies the rub.<br />
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I tend to have a bad feeling when an employee (and even their own personal accountant perhaps) start to agitate over how they can save some tax dollars by doing this or that to their employment status. Maybe there is an advantage to being a contractor, thinks the employee who sees his businessman neighbor pull up in a leased car for business? Hey, I want to be able to write off my car lease he thinks! And I'd love to be able to write off my IPhone and data plan. And wouldn't it be great to be able to write off those wedding gifts this wedding season?<br />
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In certain instances, an employer can convert a regular employee into a contractor. Perhaps an employer even has an incentive to convert an inquiring employee into a contractor because of the onerous legal regulations for larger employers and your inquiry will be very welcome. It might be very tempting to become a contractor because contractors are often paid more for their work (often to make up for the additional employment taxes they will incur as a contractor, but also for their own investment in equipment, etc). <br />
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That said, a contractor is far different than an employee and when you become a contractor, even if it is an "arrangement" you really are a contractor and should expect to be treated as one. Understanding your new status is key.. One of the determining factors between an employee and a contractor is the intent of the relationship and its (implied) permanency.<br />
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An employee is generally someone you employ and expect to have a continuing, ongoing relationship with and an investment in. An employer has little investment in a contractor beyond the work they are contracted to do. An employer will generally expect the contractor to know it or figure it out. Continuing education: your responsibility. Professional development: your responsibility. I've had plenty of interaction with contractors (and contracted companies) and contractors are expected to perform and produce or the relationship will come under question fairly quickly. Employees are also, of course, expected to perform, but there is a different type of investment in an employee and given the closer proximity a different type of investment. An employee that maybe isn't strong in this or that area, might be moved over to a different department. An employee with some time on their hands might be asked to try something new or experimental that could prove very successful. The contractor doesn't usually have the same proximity as an employee and isn't operating in the same day-to-day work environment.<br />
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Get hurt on the job? You aren't covered by workman's comp. Get laid off? Well, you don't really lay off contractors, you just don't take them on for new projects and no, you aren't covered by unemployment insurance. Company decides to award a bonus or open up a certain benefit program like pre-tax transportation dollars? Well, you don't get benefits. Worse yet, you are an accounts payable so get in line for payment. Did the employer not like the result of your project or find a defect in the work? You might be fighting this one out in court, unpaid. Severance pay? Maternity Leave? LOL in text-speak.<br />
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I certainly would not discourage a person who has great services to offer the world to go out there and make their way b'hatzlacha. But I would not turn in an employer-employee relationship with good potential and with the many legal protections it provides-a window seat into an industry-for a seat outside the window in exchange for some deductible mileage or a home office deduction. And, by the way, many successful business owners/contractors got where they did by being employees. Don't walk from industry too early for a tax deduction alone!<br />
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Regarding the idea of registering a company that operates out of your home for the tax deduction, is that legit? Let's take a step back. A person may take certain business expenses when running a business. What is a business? In short, something that you are engaging in with the intention of turning a profit. Merely "registering a company" that operates out of your home does not a business make. If you want to take a home office deduction, you need a home office. If you want certain write offs, you need certain current profitability. You also are walking a fine line if you are finding something to call a business that could be considered a hobby and are taking losses. So, the advice gives me pause.<br />
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Decreasing taxes does not the bottom line make. Ultimately, when a person runs around with this idea and that idea to save themselves some money, they are using their energy and their time and that investment should be profitable. So the question for a family in financial distress should not be how much can I decrease my taxes, but how can I significantly improve my current situation and my long term situation? If starting a business is a viable pathway, great. If not, don't bother upshlugging the Internal Revenue Code. Look towards other investments for your time.<br />
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Lastly, queen bee asks my opinion regarding the wealthy amother's following assertion:<br />
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<span style="background-color: #eff5e4; color: #4b6320; font-family: Helvetica, Arial, Verdana, 'Trebuchet MS', sans-serif; font-size: 13px; line-height: 18.1875px;">the way to build wealth is through entrepreneurship rather than having a job, and she's a big believer in taking financial risks. </span></blockquote>
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There is no one path to wealth except discipline. You must spend less than you earn. You must continue to spend less than you earn for many, many years on end. You must balance risk with common sense and discipline. And you must have a long term financial outlook. The amother from that thread struck me as someone with "new money." She criticized the Dave Ramsey conservatism, believing him too risk adverse. Her risk has paid off for her in the present. That doesn't eliminate the accumulated data on business failure which is a highly interesting study. Nor do we know if she could have got where she is with less risk. And, by the by, one reason why start up businesses often fail: lack of financial responsibility and awareness. So even where you take risk, you eventually need to turn the corner towards conservatism for the long term.<br />
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So that is my take, queen bee, happy you asked.Orthonomicshttp://www.blogger.com/profile/07892074485262548496noreply@blogger.com20tag:blogger.com,1999:blog-21976303.post-69365875307093612422013-08-05T18:28:00.001-04:002013-08-05T20:29:27.091-04:00Overestimating The Distance Your Income Can Buy You<a href="http://imamother.com/forum/viewtopic.php?t=221795">Every few months a thread similar to this goes up at imamother. </a>A family has broken the 6 figure income mark (combined), feels they are making good money, and wonders what in the world is going wrong. They are living month to month, have some debt, and are not able save, and can't make heads or tails of why not. <br />
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Granted, not every stage in life is one where you will be able to get ahead. There will be times in the Circle of [Financial] Life where everything that comes in, goes out. However, I do think it is problematic if that time is when your children are not yet even elementary school age. Not to be a party pooper, but I am absolutely certain that the norm is that children get more expensive, not less. And, that is regardless of the price that can be fanagled with the future day school/yeshiva. I really should write more about the Circle of [Financial] Life because it is good to understand what the trends are in terms of increasing and decreasing expenses.<br />
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Sadly, six figures earned between two income earners, paying full time daycare (and in this instance, tremendous health care costs), is not "we both have we well-paying jobs" but rather, baruch Hashem we are employed. It is really wonderful to see people pleased with their lot, but their lot simply can't justify a $1,600 mortgage payment + associated utilities, $1,500 in monthly babysitting costs (which I always deduct from the lower income taxed at the marginal rate), car payments, $1,600 monthly mortgage, and 10% maaser (G-d bless them). And it is duly noted that these type of budgets that leave the family hand-to-mouth generally lack other costs that many (myself included) would deem fairly necessary including life insurance. This scenario is a change from what I see on the other side of the spectrum where a couple making a combined $200,000 feels the are not well-paid, feels unfortunate in their incredible lot, and also lives hand-to-mouth.<br />
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We have to be realistic about what our earning power, debt, and any amassed savings mean in terms of realistic spending for our own situation. So many people overestimate their buying power, thinking their earnings are sufficient, but they really don't have a handle on what their earnings mean both in the present and in the future. I am still of the opinion that a realistic spending plan (not including costs that are tied to a second income or are actually optional, even if seemingly socially obligated) should fit comfortably within the single, higher income. Where that is not the case, some changes should be made to accommodate the reality. Naturally, it is impossible to advise based on a post that does not even include an income breakdown or without knowing enough about the couple.<br />
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Lest anyone think that overestimating spending power is limited to people with average or slightly about average incomes, (hashgacha pratit) is the <a href="http://imamother.com/forum/viewtopic.php?t=221836">next post on imamother</a> in the finances section. This couple has 13K left per month for savings and is trying to buy a home where they need a 400K downpayment. They are currently renting a home as they don't like their old neighborhood and their own home is overleveraged and is currently rented out. They considered a loan modification, but they can't get one (well, of course not, there is no equity and now it is rented) and she worries if they are undersaving for retirement at 2K per month (yes if you are double income with a 2 million dollar home!). Goodness, my head is spinning. If you have 13K a month left over after paying your expenses, you are in a fantastic position, but there is a lot to consider. My own rule of thumb is that your mortgage payment should be easy to support at the income level you can expect over a lifetime. When buying an insanely expensive home, your home, by definition, is generally not a liquid asset in the least. It also will not generally increase in value over time, leaving you with equity, as a more average home. These are just the facts on the ground. You must be able to pay the mortgage payment easily with the income you can easily expect not just today, but tomorrow. Most high paid athletes eventually blow out their knee, and I believe people who hit the jackpot wealth wise will often blow out their figurative knee so to speak eventually. If you are in the financial sector, you also need to consider that overleveraging yourself endangers your own career and your earning ability.<br />
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I have no real problem with wealthy people buying very pricey homes, but I do think they are better off paid for or mostly paid for. Start smaller and trade up, rolling the savings along the way and the proceeds into the next property. Or, if you choose a massive mortgage, have a lot of that in cash to tide you over in a rought spot. If you are talking about saving for the downpayment on that type of home while renting yourself (and renting out an overleveraged property), you just aren't there yet. With $156,000 to play with annually, you can get there. . . but come back in 10 years! <br />
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Well, now we've seen that you can be both very average and have quite tremendous earning power and be out of touch with the distance your income can buy you.<br />
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(Typing fast, please excuse any errors. I can make corrections later).Orthonomicshttp://www.blogger.com/profile/07892074485262548496noreply@blogger.com22tag:blogger.com,1999:blog-21976303.post-39263067887122350572013-08-05T15:24:00.000-04:002013-08-05T15:24:05.127-04:00Why Mainstream?I caught a <a href="http://www.vosizneias.com/137874/2013/08/05/rockland-county-ny-ilegal-monsey-yeshiva-hopes-luxury-cruise-will-provide-funds-to-correct-building-violations/">story from VIN news</a> regarding a Yeshiva that opened illegally and is trying to make it right. While the commentators hash out the issue of opening without permits, I will leave that issue alone. I'm a t crosser and an i dotter. The culture of just doing without getting all the ducks in order is foreign to my way of thinking.<br />
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However, I have to say that I absolutely loved what I saw on the posted video (it is in Yiddish, but you should get the gist regardless). These boys are learning in a different format, but they are also taking care of their yeshiva and each other through gardening, cooking, vocational projects, sports, and more. When it comes to modern, conventional (aka traditional) education, it is fairly clear from most of what I've read, that education is built for girls, not boys. When I see a school with kids out doing with their hands and with their bodies, in addition to book learning, as a parent of boys, I'm intrigued and inspired myself. How nice it is to see boys taking care of their environment, taking responsibility for food preparation, lawn mowing, gardening, etc, etc.<br />
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And yet, the goal remains to "mainstream" these boys as evidenced in the VIN article: "Berko estimates that the yeshiva has an 85 percent success rate. Almost 100 students have gone on to mainstream yeshiva." Personally, I'd consider it more of a success if the "mainstreaming" were in the opposite direction, i.e. watching "mainstream" yeshivot adopting some of the practices seen on the video! <br />
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<br />Orthonomicshttp://www.blogger.com/profile/07892074485262548496noreply@blogger.com12tag:blogger.com,1999:blog-21976303.post-40871387603714127472013-07-11T10:12:00.001-04:002013-07-11T15:16:12.994-04:00What's in it for the "Girls?"<div>
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<a href="http://www.youtube.com/watch?feature=player_embedded&v=vbVOlF87pfI#at=66">This video from the Chof K, supporter of NASI, is givings me a terrible, visceral gut reaction.</a> The video looks to promote boys marrying 'older' girls. It is clear what is in it for the boys:<br />
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*Shadchan quote: "She is a great girl, with a stable<b> job</b>, and a lot of life experience."</div>
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*Shadchan quote: "She is much more grounded and prepared for marriage."</div>
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*Bochur/later in the video Married Man quote: "<b>Her</b> maturity brought so much to our marriage" (emphasis mine)</div>
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Where couples meet as peers, perhaps age is 'just a number', although historical patterns show that woman have always gravitated to older men and there are studies that show marriage is more stable with some age gaps than others. I do believe that where couples meet younger [in the course of living their lives], the age gap is generally much closer. After all, how many seniors are interested in freshman? </div>
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Unlike a meeting by chance on an internship or in a chem lab, in shidduchim, meeting is not by chance, but by design and normally a shidduch date is set up after interested parties have decided the other person has something to offer. NASI is trying to re-design the desirable, and puts forward a 'utilitarian' case as to why young men should consider those who are older than them (6 entire months!!). But, pray tell, do these young men offer to the "mature" young ladies with "stable jobs"? </div>
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And, is this really the type of marketing needed to expand people's horizons regarding "acceptable" dating? </div>
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Your (3-weeks-appropriate) thoughts?</div>
Orthonomicshttp://www.blogger.com/profile/07892074485262548496noreply@blogger.com40tag:blogger.com,1999:blog-21976303.post-10675753037917544472013-06-27T10:08:00.003-04:002013-06-27T10:08:46.663-04:00Stop Kvetching and Seize the OpportunityI believe I have routinely expressed my opinion that kvetching about how expensive living an Orthodox is highly detrimental. I believe it was none other than Rav Moshe Feinstein zt"l who said that the phrase "it's hard to be a Jew" killed an entire generation. I think that assigning regular costs to "Orthodoxy" is similarly damaging.<br />
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This isn't to say that we can ignore the elephant in the living room known as tuition because tuition affordability must be at the top of out communal agenda, but with the exception of tuition, the Orthodox affordability factor really should not be a cause for great heartache as it is with this young married wife who writes <a href="http://blogs.forward.com/just-married/178701/the-cost-of-being-orthodox/?utm_source=Sailthru&utm_medium=email&utm_term=Opinion&utm_campaign=Opinion%25202013-06-17">a column in the Forward: The Cost of Being Orthodox</a> which could be more accurately titled Young, Sheltered, Married with a Single Income, and Financially Ignorant. <br />
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I'm not criticizing the author for being financially ignorant. Most Americans are similarly clueless. What saddens me is that she believes Orthodoxy is a cause of her financial woes (which it really is not at this point!), completely ignoring the fact that much of her woes come from cultural factors which are not "Orthodoxy" but just poor financial chinuch. <br />
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The column starts: "As an Orthodox couple, we have even more financial expenditures than the average couple." This is where she bemoans the cost of kosher food and the cost of making Shabbat which is like "Thanksgiving every week." [Note to any new readers: with the exception of meat and cheese, most the regular non-trief foods on the market are either inherently kosher -- think rice and beans or fresh produce-- or have a kosher certification already -- yogurt, cottage cheese, pasta, tuna, crackers, canned tomato products]. She also addresses the cost of clothing, particularly hats to which I respond that spending too much on consumer goods is a common mistake and just slow down and get some good advice from savvy shoppers. None of this needs to put you in the poor house.<br />
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The second paragraph reveals the real issue: the author was allowed to live in a fantasy land where necessities were provided via the route of Daddy's credit card and her own earners were transformed into 100% disposable income: "My parents supported me all through college, something that, while incredibly generous, was also guilt-inducing. I never had a set allowance, but was handed a credit card when I was old enough to drive places on my own. I could buy groceries or reasonably-priced clothing for myself, but other luxuries --Broadway shows or trips to Europe or Israel--I paid for with money from my summer jobs."<br />
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Parents, don't make the mistake of letting your children's income be 100% disposable. If they are living with you and earning money, require them to save for their future. If they are in college and you are supporting them, consider the allowance route where they have to buy necessities first and budget the remainder for fun and extras. Make sure that they don't marry without some unsolicited advice about budgeting, shopping, etc. I am still of the belief that how a young person spends and saves when they are young sets the stage for their future financial life. I hope this couple quickly realizes that they have great opportunity in their Orthodoxy (more community and great gemilut chassadim means a lot of sharing and available advice, no "need" to spend on Saturday entertainment, no pressure to join friends at this wine tasting and that restaurant, etc, etc, etc). <br />
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Stop kvetching and seize the opportunity!<br />
<span style="font-family: 'Lucida Grande', Lucida, Verdana, sans-serif; font-size: 13px;"></span>Orthonomicshttp://www.blogger.com/profile/07892074485262548496noreply@blogger.com29tag:blogger.com,1999:blog-21976303.post-90616391294293880042013-06-15T23:03:00.001-04:002013-06-15T23:03:44.147-04:00Hard to Believe this Needs a PSA<div class="separator" style="clear: both; text-align: center;">
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Hard to believe that in the year of 2013 we even need to discuss measles. Going into summer and the camp season, parents should be aware of the latest outbreak. Here is a video of doctors speaking to some of the NY community representatives regarding the issue. Orthonomicshttp://www.blogger.com/profile/07892074485262548496noreply@blogger.com9tag:blogger.com,1999:blog-21976303.post-56033761540412794272013-06-02T10:14:00.000-04:002013-06-03T02:47:49.348-04:00Those with Less Need to Pay MoreIn my last post I examined the idea of [day school tuition paying] "middle-class" tuition capping and received some great comments regarding the applicability, the elasticity of the market, the complications of capping tuition or offering abatement in regards to having a strict cutoff where the stronger earner ends up with a disincentive. Personally I don't think that abatement programs or tuition capping programs can be explored before expanding the budget via cost cutting and revenue creating programs. <br />
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In all the time I've been blogging, I've read about grand plans to court the wealthiest among us to fund "the system.". Personally I'm convinced the wealthiest are mostly mythical characters. But, it sure feels good to believe that they are out there, awaiting their opportunity to save us from ourselves. I've also read commentary, much of with which I agree, regarding the spending habits of the community, implying that there is more money out there for tuition. I completely agree that our spending as a whole is out of control. I don't think that it necessarily follows that there would be "extra" money for tuition given that so many families are underfunded in the savings department and carry debt loads. I've read plenty of commentary that grandparents aren't doing their part and that funding schooling should be a lifetime endeavor. I think those with this war chant are ignoring the great contributions that so many grandparents are making to their children and grandchildren both directly and indirectly. Perhaps the direct support isn't going to the schools in the form of a check, but money is fungible as we all know. And the indirect support is harder to value, but when bubbe runs carpool and zaide is the emergency babysitter, please don't tell me that grandparents are recalcitrant. When I'm in the pharmacy or the grocery store mid-afternoon, I'm running into bubbe with the grandkids. And you can't ignore the fact that bubbe and zaide are the funders of other community functions and institutions. Schools aren't the only function out there!<br />
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The demographic that never seems to get guilt tripped by article-writing problem solvers is those "with the least!" As a commentator mentioned in the last post, "you can't squeeze water from a stone." Basically, we continue to assume that this demographic is basically helpless or "tapped out" and they are not addressed in a serious way. Given the fact that so many young people are delayed in gaining financial independent and that we generally push marriage regardless of the ability to support a family, this is a growing population and simply cannot be ignored. I think this population is the one that actually needs addressed most urgently and I believe that addressing this population through various means (creating an anti-debt culture, financial education for all demographics but especially for young people so that they don't make major mistakes early on that are so hard to recover from, institute some serious minimum tuitions to phase in over the next decade, bring down the community standard in so many areas, putting the financial ability to support a family back the top of the shidduch questionnaire) can only strengthen the financial resolve of this demographic as well as help schools in the long run. <br />
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I'm going to stop this post right here so I can get back to my most urgent duty in life--making more money to keep paying my increasing tuition :) --and just leave you with a few thoughts: 1) this population is far larger than many people imagine and 2) addressing this population isn't an effort for naught as many people and Rabbonim I've spoken to seem believe. Orthonomicshttp://www.blogger.com/profile/07892074485262548496noreply@blogger.com37tag:blogger.com,1999:blog-21976303.post-75691977541713470992013-05-22T12:35:00.001-04:002013-05-22T12:52:42.995-04:00But Exactly Who Will Pay the Bills?<a href="http://www.thejewishweek.com/editorial-opinion/opinion/putting-cap-day-school-tuitions">Source: Putting a Cap on Day School Tuitions</a><br />
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The newest Avi Chai day school affordability proposal for "middle class" yeshiva/day school families, i.e. families in the top 10% of American earners, is to cap tuition as a percentage of income and require less paperwork and income verification. The idea stems from a pilot program at a Solomon Schechter school. Certainly for the yeshiva family paying far more and breaking their backs to do so, such a proposal sounds like a welcome proposal. I'm not so sure this has the potential to lay out well in Orthodox Schools with a preference for larger families and a day-school-or-bust mentality.<br />
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But I have to wonder, where is the created budget shortfall to come from? After all, someone has to pay the bills and the basic current operating policy for Orthodox schools (even articulated at points in this long "discussion") is to continue raising tuition annually because someone will pay. Some families will find additional jobs or income sources. Some families will seek gifts from grandparents. Other families will curtail savings. Other families will refinance the house. Other families will dip into savings. Other families might turn to credit cards. The families that can make it work, do, and the schools continue with the annual raises because it works for them to an extent. Therefore, we see tuition going up and up, but families that are already on tuition assistance generally are not expected to pay additional monies as tuition increases and number of children enrolled increases.<br />
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I simply can't see how extending this method of operation to families that are "making it work" is sound financial policy barring other ideas that raise tuition on families who are not "middle class". The articles makes mention that a policy would result in "modestly" lower tuition in the short term, but the supports believe that this will be made up for in the long term (for schools with empty seats) through two means:<br />
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1. Retaining larger families.<br />
2. Spurring enrollment of new families.<br />
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I certainly agree that a tuition cap of 15% of income will help retain larger families in the system. In fact, I'd argue that such a policy might even spur a "baby boom" (<a href="http://orthonomics.blogspot.com/2013/05/fear-mongering-guilt-tripping-and.html">perhaps even fueling the fire of the age-gap people, oy vey!</a>). If the 3rd child for the $200,000 family in the given example is free, why not enroll 4 children? While I think it would be nice to see the families with 2 and 3 children who have imposed their own cap, have more children where desired, I don't see where tuition will increase in the long term here. Perhaps someone can explain it to me? The larger families aren't generally the full payers, rather the 2-3 kid families are the full payers and the ones to absorb the annual increases. Perhaps I'm unaware of a new trend of larger families leaving day schools and yeshivot? Maybe while my blog was in hiatus there was a mass exodus?<br />
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I imagine that those who believe in this policy really are putting their bets on #2: spurring enrollment and filling "empty seats." I'm not sure there is a consistent definition of an empty seats and my understanding from teachers and administrators is that not ever "empty" seat is equal. In other words, an empty seat can be filled by a fantastic student whose only cost is another desk while at the same time another few students can tax the staff enough that the school fills the need to hire more staff. Perhaps there are more potential families from the "middle class" payers and I grossly underestimate, but I'm doubtful. Of those who are a natural fit for day school, but are not enrolled in day schools, is the decision financial or based on other factors? Where it is based on other factors, what are those other factors and will a changed tuition structure for the "middle class" bring them back? <br />
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Let's hear from you my dear readers.Orthonomicshttp://www.blogger.com/profile/07892074485262548496noreply@blogger.com16tag:blogger.com,1999:blog-21976303.post-47230317113993661132013-05-21T08:47:00.000-04:002013-05-22T08:53:30.835-04:00Kollel Stipends and TaxabilityUPDATE: I found an article on<a href="http://www.youngisrael.org/content/PDFs/Rabbinic/kollelpay.pdf"> kollel pay in Hamodia from 2010 posted at NCYI's website</a> which looks at the same issues, draws basically the same conclusions except that it also looks at scenario #1 from the perspective of the school and admits the risk. It looks more from the perspective of what the school should do, although the problem is that the institutions don't always provide the guidance leaving the receipent wondering just what to do with the pay which is where my brief piece came in). Of course, none of this should be considered tax advice and all should consult their own people.<br />
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An interesting subject came up on<a href="http://imamother.com/forum/viewtopic.php?t=215547"> imamother</a> and it is clearly the subject of much confusion, so I thought I would give my educated take on tax treatment of kollel stipends [updated: where the checks came and no 1099 or W-2 was provided and the recipient of the stipend is wondering what they need to consider next].. Personally I think it much behooves the schools themselves to treat these payments with more formality in order to clear up confusion as I have heard all of the following scenarios when it comes to the treatment of kollel stipends:<br />
<br />
1. They simply aren't claimed as income.<br />
2. They are treated as self-employment income.<br />
3. They are treated as a fellowship/scholarship.<br />
4. They are treated as parsonage. <br />
<br />
With the exception of #1, the other scenarios could qualify as proper treatment. Scenario #1 is highly problematic especially if the taxpayer claims welfare credits on their 1040. <br />
<br />
Scenario #3 is probably the most favorable under normal circumstances. Here the taxable portion of the stipend is subject to federal tax, but not employment taxes. Included in income is the portion of the stipend that was not used to pay for required course tuition, fees, equipment, and materials. The hitch however is that the academic institution need to be a college of sorts: maintaining regular staff, curriculum, awarding degrees and the recipient must be a degree candidate. Night kollelim that are connected to synagogues or community kollels normally would not qualify while recognized kollelim could where the recipient is a degree candidate. One difficulty is that many yeshivot really don't have a straight forward degree program making it challenging to figure out if the student is a degree candidate even where the institution itself awards semicha and other degrees. <br />
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A commentor at imamother mentioned that the if a recipient has certain duties the income is parsonage. I disagree with the interpretation because a recipient of a stipend cannot, unilaterally, declare something to be parsonage. Certainly a religious institution can pay parsonage, however, the parsonage can only be paid to someone who qualifies to receive parsonage and parsonage must be declared as parsonage in advance of payment of parsonage. Absent these qualifications and absent the ability to treat the stipend as a fellowship or scholarship, the logical default is self-employment income which, under normal circumstances, would be the least favorable tax treatment, but in the case of low income and a few kids could potentially be the most favorable tax status.<br />
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However, if the institution is not a college and the taxpayer is non-Rabbinic but is being required to maintain certain hours and responsibilities, the candidate can report the income as income and file a form declaring that the institution never provided him with a W-2. However, this is probably the quickest way to lose one's stipend. <br />
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Personally I'd encourage the institutions to make the determination of tax treatment for each kollel member based on appropriate (and highly consistent) factors and eliminate confusion. Orthonomicshttp://www.blogger.com/profile/07892074485262548496noreply@blogger.com11tag:blogger.com,1999:blog-21976303.post-86360176758195193372013-05-17T20:08:00.002-04:002013-05-18T22:35:00.736-04:00Fear Mongering, Guilt-Tripping, and ShidduchimI declare that my blog is back. I have a lot I've wanted to write about and little time and inspiration, but I will thank LIBBI Lemaan Bnos Yisroel from providing that inspiration. . . and as a mother and an aunt of many bnot yisrael, I wish I could take your double page fear mongering advertisements that appear in major Jewish publications and make sure they never see the light of day again.<br />
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I can't think of anything more damning and damaging to young ladies and other young readers than the emotions and consequences that these ads surely have the potential to embed into young minds. I simply can't figure out how these advertisements can be printed in publications that supposedly have Rabbinic input and it makes me very sad for our girls, our daughters, our nieces, our grandchildren (pick your' our'). And I really think that as parents we much rise up and say something. We seem intent on banning everything we don't like. How about these ads? It is unbelievable that at the same time Jewish educators debate whether or not competition in sports, educational settings, etc, is appropriate for Jewish girls (and boys), that that we can be crushing those of shidduch age by publishing advertisements such as the one LIBBI is publishing. And worse, I've yet to see a peer-reviewed published study of the "age gap" theory, and yet it is touted as the truth and there is a tremendous push to change how things operate based on this and Rabbis that I know as quite intelligent have lent their names to this fear mongering and it just a sad commentary. <br />
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The ad reads as following:<br />
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The above picture illustrates the sad truth of the current shidduch tradegy [picture of one girl with her head down looking sad and 9 brides]<br />
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<b>1 out of every 10 girls may r"l never get married</b> [bold large print]<br />
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Why? The current trend is for boys to go to Bais Medrash for 3-4 years, then one year in Eretz Yisroel, and only start shidduchim after they get back. Average starting age of shidduchim for boys is 23. <br />
<br />
The girls generally start shidduchim at age 19.<br />
<br />
Each year there is a 3-4% baby population increase. Therefore, there are approximately 12% more girls than boys starting shidduchim every single year. This causes the AGE-GAP problem. <br />
<br />
Currently, there are every single year, approximately 2,200 Bais Yaakov girls entering shidduchim at age 19, and approximately 2,000 boys entering shidduchim at age 23, (let's call it entering Shidduch Island).<br />
<br />
Even the most dedicated shadchanim cannot possibly find a match ofr 2,200 girls, if there are only 2,000 boys. The tragic result is that 200 may r"l never get married (and remain on Shidduch Island) This is the AGE_GAP problem and the Shidduch Crisis.<br />
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What about next year's boys? Well, for the next year's 2,000 (+3%) boys starting shidduchim there is an additional 2,200 (+3%) girls starting, and the problem just continues on and on (leaving 200+ on Shiduch Island). <br />
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The AGE-GAP is the problem! [Larger print]<br />
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Parents: They key to solving the shidduch tragedy IS IN YOUR HANDS [bold and large print]<br />
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*The problem will iy:h be fixed if parents enable their bochurim to begin shidduchim when they are really ready to do so [snarky comment: like when they have actually have a job and have put a few bucks in the bank to demonstrate that they might be on a trajectory to supporting a family?], as opposed to being delayed by the current systemic obstacles [snarky comments: oops, the powers that be want the boys to date earlier as in when they are (physically) "ready"].<br />
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*Every bochur who stays in a US Yeshiva after age 21, is taking part in saving 1,000 young women from staying single forever.<br />
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*On the other hand, every bochur that goes to eretz Yisroel after age 21, is perpetuating the cause of the shidduch tragedy in out community. [Snarky comment: you do something different than the norm and it (whatever it will be) is all your fault].<br />
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*If your son has reached age 21, have him stay in Yeshiva in the US. That will allow him and you to listen to shidduchim when he, you and his Rebbeim deem appropriate. <br />
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*Do NOT send your son to Eretz Yisroel after age 21. [Snarky comment: at this point a person like me is wondering is this about Yeshiva enrollment and learning or is about a shidduch crisis].<br />
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*Encourage your friends to do the same with their bochurim.<br />
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*Your bochur cannot possibly begin to understand the pai of an unmarried daughter, but you do. [Snarky comment: there's a selling point for these young gents].<br />
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*The girl that is saved from becoming an agunah forever, may very well be your own daughter. [Time to pull out the strong language and start calling the never married agunot. Goodness gracious].<br />
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Some myths worth discrediting<br />
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Myth There are more girls born each year than there are boys.<br />
Truth Statistically, slightly more boys are born each year than girls.<br />
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Myth It is bashert for 10% of the girls to stay single.<br />
Truth ABSOLUTELY FALSE! (and cruel)<br />
This is a self inflicted wound because, the boys start shidduchim so much later than the girls. <br />
[And this type of fear mongering and guilt tripping isn't cruel?]<br />
<br />
FACT: Girls of Bnei Torah in Eretz Yisroel, in Europe, & Chasidim: (where boys start shidduchim younger)<br />
-Do NOT have a Shidduch Crisis<br />
-All are in demand & All girls get married<br />
-Are treated like royalty, as is befitting Bnos Yisroel<br />
[Snarky comment: isn't it fun to believe in the Jewish Disneyland, isn't it?]<br />
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Myth The bochurim are immature before age 23. [I will save any comment here].<br />
Truth Your son will NOT begin dating UNTIL you and he feel he is ready. <br />
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Myth My son needs the two year in ERETZ YISROEL to be a better husband<br />
Truth The extra time spent with little or no responsibility might do more harm than good to his ability to be a future caring husband and father. [No snarky comment here. I agree completely. But I see no call to get these young gents into the workforce, just to change their location of learning].<br />
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Myth My son may not be able to get a shidduch if he does not first go to Eretz Yisreol<br />
Truth Your son will be inundated with shidduchim as soon as he begins to listen to shidduchim [Snarky comment: let's tell the girls they have no hope as 10% of them aren't getting married, but they boys, they are wanted, needed, and oh so wonderful].<br />
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Myth The Gedolim have not approved bochurim getting married at such a young age.<br />
Truth Many Gedolei Eretz Yisroel and more than 50 Roshei Yeshiva and Rabbonim in the US have recently signed a letter urging boys to marry at a younger age. [Snarky comment: Daas Torah. . so get on board quickly and get those boys dating at 19]!<br />
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There are over 2,500 single girls over the age of 25! [Big print] [And as a single you will forever be a "girl" but now we can call you an aguna too]<br />
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Project of LIBBI<br />
21libbi@gmail.com (if you write a letter, please print it in the comments)<br />
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<br />Orthonomicshttp://www.blogger.com/profile/07892074485262548496noreply@blogger.com19tag:blogger.com,1999:blog-21976303.post-72494804500200418042013-01-28T10:01:00.003-05:002013-01-28T10:40:37.538-05:00Segulah Guarantees<span style="font-size: large;"><b>I'm so tired of blogging about segulot after almost 7 years of covering this ridiculous segula followed by the next abuse, that when the latest guarantee hit my email box, I barely noticed. I saved the email just in case I got back on the blogging train, but it didn't phase me much.</b></span><br />
<span style="font-size: large;"><b><br /></b></span>
<span style="font-size: large;"><b>In fact, the only reason I returned to the email this morning is that the Partial View and Kallah Magazine informed me that Rosh Yeshiva have made an announcement that this is an abuse, a desecration and if anyone pledged, they can rescind their pledge I figured I'd post it.</b></span><br />
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<span style="font-size: large;"><b>The original text of the email is below. <a href="http://thepartialview.blogspot.com/2013/01/roshei-yeshiva-protest-desecration-of.html">You can see a Hebrew letter of condemnation at TPV signed by Roshei Yeshiva.</a> I hope this is sign that times are a changin'. But, I'm fairly certain that this sort of snake oil is par for the course and the outcry won't make much of a change in the scheme of things after a decade of more and more of this. Let's hope I'm totally and completely wrong!</b></span><br />
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<span style="font-family: 'Times New Roman', Times, serif; font-size: 22px; font-weight: bold; line-height: 28.88888931274414px;">The holy tzaddik Rabbi Yechiel Abuchatzeira, shlita, has revealed the unconditional</span><br />
<span style="color: red; font-family: Arial, Helvetica, sans-serif; font-size: 55px; font-weight: bold; line-height: 72.22222137451172px;">SECRET:</span><br />
<span style="font-family: 'Times New Roman', Times, serif; font-size: 28px; font-weight: bold; line-height: 35.55555725097656px;">If you – or anyone you know – desperately needs a shidduch (to find your soul-mate) – your time is LESS THAN A MONTH AWAY!</span></div>
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<span style="font-family: 'Times New Roman', Times, serif; font-size: 19px; line-height: 24.44444465637207px;">There are 5 reasons why good, deserving men and women like you are locked in a prison of loneliness, desperate, as their best years slip away like grains of sand between their fingers.</span><br />
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<li style="line-height: 16.666667938232422px; margin: 0px 0px 3px;"><span style="font-family: 'Times New Roman', Times, serif; font-size: 19px; line-height: 24.44444465637207px;">Your Mazel is blocked</span></li>
<li style="line-height: 16.666667938232422px; margin: 0px 0px 3px;"><span style="font-family: 'Times New Roman', Times, serif; font-size: 19px; line-height: 24.44444465637207px;">Ayin Hara (evil eye) was put on you by someone jealous or angry (they are not even aware they did it to you!)</span></li>
<li style="line-height: 16.666667938232422px; margin: 0px 0px 3px;"><span style="font-family: 'Times New Roman', Times, serif; font-size: 19px; line-height: 24.44444465637207px;">You are terrified of “pulling the trigger” on the decision</span></li>
<li style="line-height: 16.666667938232422px; margin: 0px 0px 3px;"><span style="font-family: 'Times New Roman', Times, serif; font-size: 19px; line-height: 24.44444465637207px;">Pressure from family or peers is paralyzing you</span></li>
<li style="line-height: 16.666667938232422px; margin: 0px 0px 3px;"><span style="font-family: 'Times New Roman', Times, serif; font-size: 19px; line-height: 24.44444465637207px;">You are worried that “No one will want you” because of<br style="line-height: 24.44444465637207px;" />your appearance, or your health, or your less-than-perfect<br style="line-height: 24.44444465637207px;" />past</span></li>
</ul>
<span style="font-family: 'Times New Roman', Times, serif; font-size: 19px; line-height: 24.44444465637207px;">Any one (or more) of the above reasons is enough to keep you from ever getting married and starting a family. Without removing these reasons you simply cannot move ahead – <strong style="line-height: 24.44444465637207px;">and each and every one of them will be removed this Tu Bishvat, Motzoei Shabbos, January 26th.</strong><br style="line-height: 24.44444465637207px;" /><br style="line-height: 24.44444465637207px;" />On this day, the Adm”or, the Rabbi Abuchatzeira, shlit”a, the illustrious miracle-worker son of holy Baba Chaki, nephew of the holy Baba Sali, may the memory of tzaddikim protect us, will conduct the special Kabalistic rectification “<strong style="line-height: 24.44444465637207px;">Tikkun 1,000 Shofaros</strong>” for the removal of any – or all! – of the five reasons that are blocking the path to happy, complete Jewish life for people like you.<br style="line-height: 24.44444465637207px;" /><br style="line-height: 24.44444465637207px;" />The holy tzadik revealed that, according to Kabbalah, the rare and unique<strong style="line-height: 24.44444465637207px;">Tikkun 1,000 Shofaros</strong>, performed at the gravesite of the saintly Tanna, Rabbi Yonasan ben Uziel, is the complete tikkun for people blocked from getting married. The tikkun, performed with <em style="line-height: 24.44444465637207px;">kavanos</em> (Kabbalah meditations and divinations) of the holy Ariz”l and the Rasha”sh, is the total rectification <strong style="line-height: 24.44444465637207px;">even for people who could not be helped by anything before!</strong><br style="line-height: 24.44444465637207px;" /><br style="line-height: 24.44444465637207px;" />In addition 257 people who participate in the tikkun will also receive FREE a special package of <em style="line-height: 24.44444465637207px;">segulos</em>; amulets (<em style="line-height: 24.44444465637207px;">kamei’os</em>) and proven Kabbalah remedies for them to find favor in the eyes of others, protect them from present and future Ayin Hara, and open their path to an easy, quick and successful <em style="line-height: 24.44444465637207px;">shidduch</em> (match). </span><br />
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<span style="font-family: 'Times New Roman', Times, serif; font-size: 22px; font-weight: bold; line-height: 28.88888931274414px;">The holy <em style="line-height: 28.88888931274414px;">tzadik</em> HaGaon HaRav Yechiel Abochateira shlit”a said:</span><br />
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<img alt="I have no doubt that anyone who will receive..." height="163" src="http://64.69.34.172/jmgleads/amuka/1/middle.gif" style="line-height: 16.666667938232422px;" width="525" /></div>
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<span style="font-family: 'Times New Roman', Times, serif; font-size: 19px; line-height: 24.44444465637207px;">The Adm”or Abuchatzeira shlit”a will perform the tikkun praying at the gravesite of Rabbi Yonasan ben Uziel along with 1,000 shofar-carrying Jews who will circle the gravesite, blowing the shofar with the <em style="line-height: 24.44444465637207px;">kavanos</em>(intentions) of the Rashash. The holy Rabbi Abuchatzeira will bring with him a list of the people registered to participate in the tikkun. He will look at your name and that of your mother, know from it the nature of the exact obstacle that is blocking your mazel, <strong style="line-height: 24.44444465637207px;">and pray for you <em style="line-height: 24.44444465637207px;">personally</em>by name</strong>.<br style="line-height: 24.44444465637207px;" /><br style="line-height: 24.44444465637207px;" />Please be aware that just 257 “match sets” were prepared by the Rabbis and Kabbalists of the Yeshiva Yeshuos B’Amuka. In view of the many people clamoring to participate, those packages will be given away FREE to people who register on a first come-first serve basis ONLY. Don’t miss out.</span></td><td style="line-height: 16.666667938232422px;" valign="top" width="30"></td><td style="line-height: 16.666667938232422px;" valign="top" width="17"><img height="1820" src="http://64.69.34.172/jmgleads/amuka/1/right.gif" style="line-height: 16.666667938232422px;" width="17" /></td></tr>
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Orthonomicshttp://www.blogger.com/profile/07892074485262548496noreply@blogger.com19tag:blogger.com,1999:blog-21976303.post-47984086715122098222013-01-16T08:44:00.001-05:002013-01-16T15:48:49.668-05:00501c3's: Not for AmatuersMy last post, a light piece on the (tax) implications of picking and winning a Chinese Auction or Raffle prize, received a lot of much more heavy comments than anticipated. The touch of irony being that I fell off the grid while I was working with clients at year end on bringing them into compliance with various reporting requirements.<br />
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There is a common assumption that if a business is a 501c3, or tax-exempt, organization that they therefore not only do not have to pay tax, but they are not subject to "stuff" for-profit businesses are subject to like pesky tax reporting requirements. There is a lot of confusion regarding the tax-exempt status. One common area of confusion is why a tax-exempt organization has to pay FICA and/or state unemployment for their employees, report payroll quarterly, and engage in other reporting and withholding requirements. Another area of confusion is why organizations are subject to tax reporting requirements such as reporting miscellaneous non-employee compensation for all attorneys and medical providers, independent contractors such as accountants, consultants or all types, graphic designers, etc or reporting prize earnings from auctions or report various benefits as compensation or bartering where there is a business relationship is an area of vast confusion (and not just for non-profits). Another area of confusion is UBIT, or unrelated business income tax. Yes, not every function or fundraising activity engaged in is in fact tax exempt. Beyond the tax requirements there are numerous requirements, varying state to state and county to county, regarding gaming and licensing, solicitations, etc.<br />
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The idea that an Exempt Organization can do what they want is a fairly commonly held notion I've run into, and nothing could be further from the truth. The mix of employees and volunteers doing their good work, often with no understanding of legal and tax compliance, is a quick way to end up in a pickle. What many people fail to understand is that there are serious implications when an organization is found to lack compliance, especially if that compliance is considered a result of negligence or disregard. A regular business that takes unallowable expenses and lacks compliance at the end of the day will be hit with a tax bill and a large headache and a big bill from their accounting firm. If $10,000 of expenses are disallowed, there will be a bill for a corresponding amount. On the other hand, if an organization has the bad luck of having their tax exempt status pulled, the tax bill (potentially) can be calculated based on all revenues ever generated, with no expenses allowed. Have I heard of that happening? No, not personally. However, it underscores the point of my title which is that organizations should engage reasonable professional management, they should not allow volunteers to rule the roost, and they should not assume that because they are tax-exempt they have a free pass. If anything, they have a larger responsibility to get it right.Orthonomicshttp://www.blogger.com/profile/07892074485262548496noreply@blogger.com21tag:blogger.com,1999:blog-21976303.post-78719994917948224032012-12-23T00:09:00.001-05:002012-12-23T00:09:03.340-05:00A Little, But Important Footnote (Or, how to pick where you place your raffle tickets)While much of my professional life is spent reading and interpreting the small print, it really is much more fun to look at the (big) picture. Here I refer to the big glossy pictures of all the things a girl could possibly dream of, featured in the most recent Chinese Auction catalogs that arrived in my home and didn't make it to the recycling bin before Thing #2 discovered them and sat down to peruse. <br />
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While Thing #2 was drooling over some jewelry prize "we" could win ($4500 of it), I had a chance to share with her in a very condensed form why we don't participate in these very popular auctions: <br />
1. We prefer to just give tzedakah, 2. The organizations that we give to regularly don't have such fundraisers, and 3. if there is something we really want in life, we can just buy it and satisfy the desire quickly.<br />
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But we all like to dream and I am no exception, so the idea of throwing five, ten, or fifteen dollars into a pot in hopes of winning something I probably won't ever get around to indulging in is tempting. . . but then there is the small print. <br />
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At the end of the catalog is the print that every accountant see in large font: the taxes on any winnings are your responsibility. And this is really what everyone needs to understand before entering into a raffle. <br />
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If you are entering to win a non-cash prize, you best not be cash strapped. The $10,000 living and dining room suite could cost an average taxpayer a nice chuck of change (a good $3,300-$3,500 for the 25-28% marginal payers after federal and state taxes). I think even the most frual among us go through phases where we want to get something really nice or enjoy a wonderful experience. At least for me, dropping a little money can usually satisfy that desire. Drool-inducing silver and jewelry won in an auction would cost me nearly $1,500 and a good $500 in blow money would more than satisfy any consumer itch.<br />
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For those that enjoy the auction, does the small print make a difference when entering?Orthonomicshttp://www.blogger.com/profile/07892074485262548496noreply@blogger.com58tag:blogger.com,1999:blog-21976303.post-50742814446012037942012-11-27T18:05:00.003-05:002012-11-27T18:52:30.494-05:00Attorney Disabarred over saving himself $22,830 in Tuition <span style="font-family: arial, verdana, sans-serif; font-size: 13px; line-height: 18.200000762939453px;"><i><b><span style="color: magenta;">Reflect on three things and you will never come to sin: Know what is above you--a seeing eye, a hearing ear, and all your deeds recorded in a book. (Pirkei Avot)</span></b></i></span><br />
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<span style="font-family: Arial, Helvetica, sans-serif;">The <a href="http://riverforest.suntimes.com/news/16544711-418/former-river-forest-attorney-disbarred.html">Sun Times</a> (<a href="http://www.forbes.com/sites/kellyphillipserb/2012/11/27/attorney-disbarred-for-submitting-falsified-tax-returns-for-financial-aid/">via Forbes</a>) is reporting an unbelievable story that defies all rational explanation. The only rational explanation is mental illness. An attorney was disbarred for "conduct involving dishonesty, fraud, deceit or misrepresentation" on November 19. Mr. Golden had submitted false tax returns to his child's private school in 1999-2000 and 2002-2003 and in <a href="http://jonathanturley.org/2011/08/24/illinois-officials-seek-disbarment-of-ex-mcdermott-partner-who-allegedly-lied-on-school-financial-aid-form/">2011 Illinois officials sought disbarrment</a>. The total benefit of the fraud was $22,830 over three years ($6,160, $7,884, $8,786 for school years 01-02, 02-03, and 03-04). There is no IRS case, and the statue of limitations for the IRS has long passed, but that didn't prevent other examination of data. He understated his income by over 90% for the sole purpose of evading tuition. </span><br />
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<span style="font-family: Arial, Helvetica, sans-serif;">No, thankfully Mr. Golden's children to not attend Yeshiva, rather some fancy prep school. But this story is EXTREMELY compelling and should not be ignored. Some take aways:</span><br />
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<span style="font-family: Arial, Helvetica, sans-serif;">*One should NEVER submit a different tax return to a tuition committee or any other financial aid agency than is submitted to the IRS. I have heard of people and accountants who would create one return for the IRS and another (more 'honest' return, term used loosely) for the yeshiva. This story is proof that one shouldn't try to dance at two weddings. With the speed of technology, I imagine there will be more synchronization making dancing at two weddings more difficult.</span><br />
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<span style="font-family: Arial, Helvetica, sans-serif;">*Financial committees should do a little bit of homework. By the time this man was applying for aid, he was not a Partner in a big law firm, but he misrepresented income by 90%. In a world of cross-pollination between tuition committees, industry, and big firms, catching major misrepresentations of income should be something doable. </span><br />
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<span style="font-family: Arial, Helvetica, sans-serif;">*There is no statue of limitations when it comes to your sins being revealed. I'm struck by the timeline in this story. </span><br />
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<span style="font-family: Arial, Helvetica, sans-serif;">Also a note from Forbes' blogger taxgirl:</span><br />
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<span style="line-height: 24px;"><span style="font-family: Arial, Helvetica, sans-serif;">But this issue is one that I receive emails about on a disturbingly regular basis though usually the target is financial aid for college and not private elementary school as is the case here. As the cost of education skyrockets, parents feel trapped to pay for school – and some of them consider lying in order to get financial aid. And yes, financial aid forms require that you submit supporting documentation, usually pay stubs or federal income tax returns. Here’s where folks get into trouble: they lie on their tax returns in order to skew the numbers for financial aid. Sometimes it’s overstating deductions (bad) or omitting income (really bad). Other times, it’s lying about dependents, exemptions and in some instances, marital status (really, really bad). In almost every instance, one lie leads to another because it’s hard to keep up. Just like with Golden.</span></span>Orthonomicshttp://www.blogger.com/profile/07892074485262548496noreply@blogger.com11tag:blogger.com,1999:blog-21976303.post-40662770473937326692012-11-21T21:01:00.003-05:002012-11-21T21:06:21.622-05:00Hurricane Sandy Hardship Withdrawals(Despite a comment on my last post, this blog has not been "shut down", but blogging is rather slow. I make no apologies, I've been running around like I can't remember when. Nonetheless, hopefully I will get some posts up, especially a short and timely right now).<br />
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On Friday, November 16, the IRS put out a late <a href="http://www.irs.gov/pub/irs-drop/a-12-44.pdf">Announcement 2012-44</a> regarding hardship withdrawals from 401(k), 403(b), and eligible 457(b) plans. Lest anyone be baffled by the alphabet soup, these are retirement plans for private industry and non-profit or governmental agencies. Each of these plans allow for loans and withdrawals under certain conditions and the announcement eases some of the requirements for documentation and other requirements for both businesses and victims. Those outside the disaster area but with a child, parent, grandparent, or dependent in a hardship area may also take loans or distributions with less red tape. Hardship withdrawals based on "unforeseeable emergency" for those is defined geographic areas can be made between now and February 1, 2013.</div>
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Lest anyone get too excited and run to withdraw money (with such a need for funds, it is easy to jump head first), let's just consider a few things:</div>
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*The IRS has <b>not </b>lifted the 10% penalty for early withdrawal. When the announcement came to my email box late Friday before candle lighting, I almost assumed it was easing the penalty as well as documentation requirements. I revisited the subject today and there will be a penalty to withdraw.</div>
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*Does that mean someone should not make a withdrawal? Well, not particularly. While I generally oppose dipping into a retirement funds and searching for other solutions to cash crunches, having seen photos of the terrible destruction and knowing how many families need to get back onto their feet and will need money to do so even with all of the wonderful chessed that is being done to alleviate the devastation, there are very good arguments for those have saved for retirement to dip into available funds despite the additional 10% penalty if that is the best solution after considering their big picture.</div>
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*Something to consider is the timing of the withdrawal(s) if you choose this route taking part of the withdrawal in 2012 and 2013. Remember that when you take money from a retirement plan such as a 401(k) before age 59 1/2, you owe tax at your highest marginal rate (federal and state/local) in addition to the 10% penalty. It might make sense to consider withdrawing some for this year and some next year. </div>
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Remember to consult someone for professional advice before making this decision. This blog post is informational, not authoritative. </div>
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Orthonomicshttp://www.blogger.com/profile/07892074485262548496noreply@blogger.com10tag:blogger.com,1999:blog-21976303.post-14943642950284846362012-11-06T13:01:00.002-05:002012-11-06T13:01:49.049-05:00Link: How to keep a natural disaster from becoming a financial disasterI apologize to my regular readers that I have no time to blog currently. But I do want to share an article from the Journal of Accountancy on <a href="http://www.journalofaccountancy.com/News/20126783.htm">How to keep a natural disaster from becoming a financial disaster.</a> I know many of our brothers and sisters have been hurt by Hurricane Sandy and so I want to share this article although I'm unable to blog for the time being. <br />
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Some important tips:<br />
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*Make your claim quickly, but don't settle quickly. Get professional estimates before settling.<br />
*Make temporary repairs to prevent further damage.<br />
*Don't enter into a contract until you know what the insurance settlement will be.<br />
*Make contact with contractors, rather than rely on those who come door to door. <br />
*Get multiple bids.<br />
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<br />Orthonomicshttp://www.blogger.com/profile/07892074485262548496noreply@blogger.com9tag:blogger.com,1999:blog-21976303.post-86885996410282851432012-10-21T23:53:00.000-04:002012-10-21T23:53:02.148-04:00PSA: Brooklyn Job Fair October 24, 2012 12-3 PM<br />
Meet Employers, Discover Opportunities<br />
Wednesday, October 24, 2012<br />
12 noon – 3 pm<br />
Sponsored by<br />
Marks JCH of Bensonhurst, FEGS & Met Council<br />
Brooklyn<br />
Job Fair<br />
To Register or for More Information<br />
CALL: 646-449-6178<br />
WEB: Visit www.JCHB.org, then click “Brooklyn Job Fair”<br />
Please bring copies of your resume and dress in business attire.<br />
Meet recruitment professionals from a<br />
broad range of companies and staffing<br />
firms, including financial institutions,<br />
health care, retail, and others<br />
Speak with employers and improve your<br />
networking skills<br />
Connect-to-Care staff can give advice on<br />
services available, as well as employment, legal and financial issues<br />
Orthonomicshttp://www.blogger.com/profile/07892074485262548496noreply@blogger.com2tag:blogger.com,1999:blog-21976303.post-89891513550493106492012-10-16T12:08:00.002-04:002012-10-16T12:09:30.496-04:00Taking Sides<span style="font-family: Arial, Helvetica, sans-serif;">(My blogging is behind, so please forgive me as I go back to a few posts that are dated). </span><br />
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Mr. Schick, over at Cross-Currents writes a very brief post: <a href="http://www.cross-currents.com/archives/2012/09/05/a-question-of-tuition/">A Question of Tuition</a>. Here is a excerpt regarding the tuition issue of admissions and minimum/minimal tuition [emphasis mind]:</span><br />
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<span style="font-family: Arial, Helvetica, sans-serif;">I write in the middle of what is always the worst week for me in the entire school year. School is open at the five schools that comprise the Rabbi Jacob Joseph School and, of course, in hundreds of institutions across the country. In shul this morning, a fellow asks about a rebbi he knows whose son is being refused admission to a yeshiva because the father cannot afford the minimum tuition that is required. Shortly before this was written, a person prominent in Jewish life emailed about a divorced father in Brooklyn whose daughter is being refused admission on tuition grounds. These situations are just the tip of the iceberg as I am inundated by admission issues at the schools for which I have a measure of responsibility. </span></blockquote>
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<span style="font-family: Arial, Helvetica, sans-serif;"><b>My inclination is to side with the parents and not with the schools, even my own, and not because I think all parents are being fair about tuition, but because the children – their emotional health, their educational progress and their Judaic growth – should be what we are most concerned about. It is far better as a rule that some parents should cheat – and I believe that most do not – than children should be hurt.</b> </span></blockquote>
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<span style="font-family: Arial, Helvetica, sans-serif;"><br />Yet, I know that my intervention in these wrenching situations comes at a cost. Yeshivas and day schools are with few exceptions these days under enormous financial pressure. There are major schools that are behind in payroll and certainly most yeshivas underpay their staff. <b>When I side with the parents I always wonder whether I am siding against those who teach Torah to our children.</b></span></blockquote>
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<span style="font-family: Arial, Helvetica, sans-serif;">I must lack the proper something because I just simply can't wrap my own head around why there is a "side" beyond the overall health of the institution (and by health I mean fiscal health, relationships between students and staff, staff and staff, parents and staff) which allows the institution to be able to achieve its purpose. If a school can strike the balance needed AND provide a spot for a student who cannot make a minimal payment, great. If a school cannot strike that balance then it would be irresponsible to put the health of the institution on the line. And hopefully with that understanding the parents that can't be accommodated for whatever reason, money or otherwise, can come to the same understanding because they too believe in the mission of the institution </span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">I can't remember where I spotted an article about tension over a science and math magnet program. The program is made up of children of mostly immigrants and hence there are very advanced science, math, and engineering classes, but also ESL classes. There are children who are shut out of the program who have better overall admission scores on all subjects, but lower science and math scores. Because of the makeup of the population and the size of the magnet program, it didn't seem there is any fiscal impact to the policy to most heavily weight math and science scores. But what if this was a (small) private high school with a different demographic was choosing their applicants within the constraints of tuition the market can bear, price of specialized staff, etc.? Would it make sense to take weight scores as the public school does?</span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">Ultimately the real issue is how to structure what we've got to be able to accommodation as many as possible while maintaining overall health in the short term and in the long term. I don't think we are any closer to solving that issue today than we were yesterday.</span></div>
Orthonomicshttp://www.blogger.com/profile/07892074485262548496noreply@blogger.com56tag:blogger.com,1999:blog-21976303.post-70485625789343278802012-09-27T10:28:00.001-04:002012-09-27T11:48:54.413-04:00Make Kiddush, Wash, and Eat a Yom Tov MealA story hit the New York Times <a href="http://www.nytimes.com/2012/09/25/nyregion/ailing-yom-kippur-fasters-are-helped-by-iv-drips.html?_r=0">"Yom Kippur Made Easier with Help of IV"</a> which I quite frankly could not believe until I visited <a href="http://imamother.com/forum/viewtopic.php?t=195635&postdays=0&postorder=asc&&start=0">Imamother where posters were relating their experiences</a>! Others saying "are you kidding?" as goes against basically everything they've learned regarding the halachic process. <a href="http://www.vosizneias.com/114097/2012/09/25/brooklyn-ny-yom-kippur-fast-made-easier-with-the-help-of-iv-infusions/">VIN News also posted a highly abbreviated version of the story</a>, leaving off any actually discussion of the subject at hand including a statement from the OU's Rabbi Genack.<br />
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Sadly, the story is to be believed and is another dangerous chapter in going beyond halacha in order to "feel good" psychologically. When Ashkenazim need to eat on Yom Kippur, they drink/eat a prescribed amount every so many (prescribed) minutes. When Sephardim need to eat on Yom Kippur, they make kiddush, wash netilat yadaim in the proper form, and eat a yom tov meal inserting be yom kippurim ha zeh at yaaleh v'yavo. I had to confirm what I had learned on the subject and <a href="http://www.dailyhalacha.com/displayRead.asp?readID=2215">Rabbi Mansour did not confirm regarding making kiddush in his daily halacha post regarding those who must eat on Yom Kippur</a>, but confirmed regarding eating. Our eating children have always made a kiddush for themselves before eating on Yom Kippur.</div>
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Others might not consider this story a big deal, but I most certainly do. Our obligations in life are not determined by our emotions. Sometimes our obligations in life change and we need to deal with that. And yet here emotions are dictating a practice unheard of in previous decades. Even the organizer of the beds in Bobov says as much: </div>
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<span style="font-size: x-small;"><i>Some 200 people took advantage of [the] service last year.</i></span><span style="font-size: x-small;"><i>. . . . said he consulted with three “big rabbis” who certified his program as halachically permissible. He is careful to point out that this practice is not a religious loophole. “Everyone is a difficult case. It’s not a loophole. It’s not considered eating if it goes through a vein,” he said. “You’re not supposed to take anything though the mouth or stomach. Anything. <b>Even if you’re allowed to, nobody wants to eat. It’s very hard for a person who has always fasted to face the reality of a situation where they have to eat,” he continued. “This way they still feel they fasted and halachically, they didn’t eat. The mouth is still dry.”</b></i></span></blockquote>
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How much communal energy and goodwill is being used up over absurdity? </div>
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I remember once a man collapsed in the synagogue on Shabbat and the Rabbi insisted that he, not someone else, run to the phone line to make that call. As he explained later, he wanted all to understand that an obligation is an obligation. </div>
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Orthonomicshttp://www.blogger.com/profile/07892074485262548496noreply@blogger.com37tag:blogger.com,1999:blog-21976303.post-17184157207356016772012-09-19T01:52:00.001-04:002012-09-19T01:54:04.120-04:00Community Incentive Programs: A Wise Investment?An short article appeared in the <a href="http://www.nytimes.com/2012/09/19/nyregion/jewish-groups-across-us-paying-families-to-relocate.html?pagewanted=1&_r=1&smid=tw-share">New York Times about cash incentives</a> many communities--Reform to Orthodox--are offering to get a community off the ground, expand a community, or bring in new blood. From $625 a month (the subsidy that is offered by Young Israel of Pelham Parkway of the Bronx) to a $50,000 relocation package (in Dothan, AL), these incentive programs aren't cheap. <br />
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OU Chairman Savitsky calls these programs a "proven model" but I'm not really sure what has been proven. Unless I'm mistaken, the incentive programs aren't long standing and have yet to prove their longevity. <br />
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A number of years ago, we were told about an incentive program and took brief interest, but I don't like strings . . . and there were plenty of them. Personally speaking, anything that ties us educationally is a non-starter, and ultimately we weren't so hard up that even a more generous grant would have made a difference over a life of a 30 year mortgage. I can't imagine too many communities would want families that are seriously struggling.<br />
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So readers, your thoughts? Would anyone be willing to share their experience with taking a grant/loan? Would you recommend it to a friend? Was it a good decision or shortsighted? The article mentioned three families that moved into the featured community without taking any incentive funds. Have you made a similar decision and what drove that decision? And the professional in me wonders about the tax treatment of outright grants. I would think the grant would be taxable, but I haven't done any research on the matter.<br />
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On the flip side: are you involved or have you been involved in administering an incentive program? Has it performed as expected? What are the advantages of the program? What are the disadvantages? If you were initially supportive/unsupportive, do you maintain the same position today?<br />
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<br />Orthonomicshttp://www.blogger.com/profile/07892074485262548496noreply@blogger.com10tag:blogger.com,1999:blog-21976303.post-3419562738373750772012-09-03T18:11:00.003-04:002012-09-03T18:45:20.945-04:00StartupChutzpahA reader wrote asking me what I think of <a href="http://www.beyondbt.com/2012/08/21/startupchutzpah-a-frum-bootcamp-to-learn-about-entrepreneurship/">"Startup Chutzpah-A Frum Bootcamp to Learn About Entrepreneurship"</a>, which is a knockoff of <a href="http://startupweekend.org/">"Startup Weekend"</a> and "<a href="http://3daystartup.org/">3 Day Startup</a>". My reader thought it "promising." <br />
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Startup Weekend is a global network featuring a "54-hour event where developers, designers, marketers, project managers and startup enthusiasts come together to share ideas, form teams, build projects, and launch startups." Startup Chutzpah claims that it will "solve a lot of issues, create immense skills and opportunities for those searching for a parnassah, and most of all, be a Kiddush Hashem to create Torah infused companies created and managed by young people." <br />
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I wanted to do my homework, so I did some basic research regarding the program that is being rolled out and which is seeking comments and feedback and I am at a complete loss: The <a href="http://startupchutzpah.com/">Startup Chutzpah website</a> is an empty template, <a href="http://quanby.com/">the online pet supply company that was created does not exist in cyberpace</a>, and no one will "solve a lot of issues" or "create immense skills and opportunities [in the frum community] based on a 54 hour weekend. <br />
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Secondly, it is high time we part ways with the hailing of miracles and downright flawed logic. Yes, <a href="http://en.wikipedia.org/wiki/Bill_Gates">Bill Gates (Microsoft)</a> dropped out of Harvard. Yes, Mark Zuckerberg (Facebook) also did. Each of these great successes had tremendous skill set that they had been developing since childhood and they had experienced great success with their tinkering and ventures up until leaving college. They had contacts, mentors, and known human resources. They weren't "dropouts", they were more like NFL players that grabbed the money before graduating and ran with it. Sometimes an opportunity only comes up once and if you are ready to face the opportunity, great. But that doesn't render your education or training "neutral". <br />
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Programs like Startup Chutzpah certainly capture the imagination, but they are for the seasoned, for those who can lose time and money, and they most certainly should not be promoted to the masses of yeshiva bochurim. We don't need bootcamps to launch companies, we need solid skill building in elementary, middle, and high school. We need a <a href="http://www.catholicnews.com/data/stories/cns/0704854.htm">Christo Rey</a> program for young people where they can explore industries, get hands on experience in industry, and develop skills that make them valuable employees (and maybe even successful small businessmen and women when they the skills they've built over the years and then launch their business). I don't oppose entrepreneurship or self-employment (in fact, I've successfully created a fine supplemental income for yours truly), but quite honestly I really think we need more employees and less "entrepreneurs." I believe that the frum community has more people "in business" than other populations and many of them are "in business" prematurely.<br />
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I second DD's comment, although I'm not familiar with the book referenced: "promoting entrepreneurship for unqualified workers is actually counterproductive and delivers worse ROI than becoming an employee." This sound and dance has been doing on for quite a while now and the "shortcut" method speaks for itself. If the shortcuts were working, we wouldn't be having this conversation, would we?Orthonomicshttp://www.blogger.com/profile/07892074485262548496noreply@blogger.com75tag:blogger.com,1999:blog-21976303.post-50591821760353101312012-08-25T23:06:00.000-04:002012-08-25T23:06:08.493-04:00Is it really appreciated?A light post for now. . . . .<br />
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Over at <a href="http://kallahmagazine.blogspot.com/2012/08/shidduch-dating-tips.html">Kallah Magazine, Ariella points</a> to a list of dating tips for females posted at Saw You at Sinai that hits Yahoo news. Guess we are an interesting bunch! One of the tips jumped out at me because a long while back, when I once offered to pay for my own coffee, it was. .. . uh. .. not well received. <br />
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<span style="background-color: white; color: #444444; font-family: Georgia, Times, 'Times New Roman', serif; font-size: 14px; line-height: 22.450000762939453px;"> Offering to pay for part of the date, even if the man has no intention of letting the woman pay, is still acknowledged and appreciated nonetheless.</span>
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I'd be curious to hear from my readers of all ages what they think of the girl/young lady/woman offering to pay for all or part of the date. Is there really a consensus on the issue in the same way the advice to say "thank you" is given? Is this a generational thing and us old fogies should get on board rather than giving "outdated" advice like some of us might have received from our parents?<br />
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On a much less light note. . . . Kallah Magazine also reports that the market rate for shadchanus is $2,000! Cheaper than <a href="http://orthonomics.blogspot.com/search?q=NASI">NASI's price inflation</a> (any news on the NASI front?), but pretty pricey nonetheless. . . .especially if the chatan/kallah hasn't yet launched. Orthonomicshttp://www.blogger.com/profile/07892074485262548496noreply@blogger.com17tag:blogger.com,1999:blog-21976303.post-14375848845390894382012-08-21T15:09:00.001-04:002012-08-21T21:18:01.453-04:00A Three Pronged Approach to DesperateThis post is related to the last post. What does one do when they are desperate for money/income? <a href="http://imamother.com/forum/viewtopic.php?t=192822">This is just the latest post asking for advice on imamother: expenses exceed income, husband can't sleep as he is burdened with worry, wife has to working because she doesn't want to "kill herself". After all, where do you find the perfect job that fits right into one's schedule?</a><br />
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Here is where I like to say, "let's start at the very beginning." The beginning is not at all where any of the imamother posters started, although to be fair they were addressing ideas for income, not an approach to desperation.</div>
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First some notes:</div>
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*This approach is a healthy approach not just to current desperation, but to other financial hits from unexpected health issues to necessary big ticket purchases that drain resources you'd rather have on hand.</div>
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*While I believe that too much work and too little time with family is not great for family life, when the financial situation spins out of control as evidence by tremendous worry that impacts on mental health (and likely the physical health) of one spouse, concerns about neglecting the house, the kids, and oneself are misplaced. Financial damage is real damage and impacts the home in a very real way. Barring extreme circumstances, I think that putting the financial house back in order will ultimately strengthen the household, even where it is weakened in the short term.</div>
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*A team approach is a healthy approach. I noticed that this post and similar posts have an "I" approach not a "we" approach which points to a deeper issue. Since the impact is on the whole, all hands should be on deck to stay above water and hopefully steer the ship to dry land.</div>
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<b>Step 1:</b> <b>Free up money now.</b> Generating more income is certainly important, but when you are sinking, making money should be a secondary priority, not a primary priority. Freeing up real money now with help clear the mind and offer important respite. </div>
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Determine how much money needs to be freed up and piece together a plan to free up funds now, biting off a small bite at a time. Take a look at your spending habits, your eating habits, your entertainment habits, the services you pay for and try to trim from every area of your budget in a methodical way. Move quick enough to gain momentum and slow enough that you don't hit a brick wall. And do organize your home because it clears your mind and you might uncover stuff that if sitting waiting to be used (or stuff you can sell for a few bucks while you clear your mind).</div>
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<b>Step 2: Find an hourly or salary job.</b> Once you have freed up some funds, you can begin to think clearly about a job. It is tempting to try and generate some quick income, but "quick income" like suggested by so many of the imamother posters seems to come with an investment of sunk time and resources the desperate can ill afford to part with. The $55 you might be able to generate writing for a website, the $5 you might pick by writing a poem for someone, the dollars you might be able to earn down the line through a blog portfolio and affiliate marketing in the long term, the money you could generate with an energy company that will remain unnamed here (please, oh please, do not get involved with that!) are going to take away precious time and money from your emergency situation. The goal here is to find more money and improve the mental situation in the home, not sink time and money chasing an unknown entity.</div>
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A note on work: I'm not sure when it was decided that you have to work in a field you can excel in, where it was decided that you should enjoy work, or how it was decided that certain skills aren't ones you excel in. Yes, it is wonderful to enjoy the work you do, but often enjoyment falls under the Yaakov vs. Yitzchak conundrum. Should you love someone before you marry them, or can you build love? When it comes to marriage, I recommend marrying a person you call friend. But when it comes to work. . . well, work need not be forever. Unlike marriage, it is a-ok to take on an hourly job that you don't "see" out of desperation. You don't need to marry the job, just use it for whatever it is worth: making money primarily, discovering talents, getting an employee discount on food, and building some skills, a resume, and some contacts.</div>
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<b>Step 3: The Side Hustle </b></div>
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After all of that, the reader might think I don't respect the side-hustle. Nothing could be further from the truth so long as the business model isn't predicated on bothering friends, relatives, and random people that had had a shlamazel moment and said hello to you. I've seen personal and academic interests turn into successful businesses. I've seen real estate experiments turn into a great additional sources of income. I've seen hobbies turn into nice secondary and even primary sources of income. </div>
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But, if you want to turn a passion or interest into a business, do so with a clear mind. And you can't have a clear mind when people in your home can't sleep at night. So, get yourself onto two feet, put a few dollars in the bank, and then decide what side-hustle you want to pursue and do so b'simcha. </div>
Orthonomicshttp://www.blogger.com/profile/07892074485262548496noreply@blogger.com62tag:blogger.com,1999:blog-21976303.post-25580254423154723832012-08-21T00:08:00.001-04:002012-08-21T00:08:02.362-04:00A Sickening DiseaseI guess it is that time of the year again. . . . <a href="http://orthonomics.blogspot.com/2011/05/have-you-no-shame-frum-peddler-of-mha.html">It has only been a bit over a year since my last Get Rich Quick in the frum community post went up when a company MHA collapsed. </a><br />
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Three Ponzi schemes in a week have hit the news and my accounting journal emails. Seems that one in particular, Zeek Rewards, has hit many in the frum community. Those of us who go to work and take our savings and stick it in CD's, IRAs, and diversified mutuals funds and basically forget about it since we won't need it for 10-40 years anyways probably aren't hearing about all of these irresistible opportunities. <br />
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The "get rich quick" mentality is alive and well and it is a cancer that destroys wealth, time, and all moral compass. My heart aches to read comments over at <a href="http://collive.com/show_news.rtx?id=21424&alias=many-duped-by-zeek-rewards">COL Live </a>and it should be a number one priority of leadership to nip this "get rich quick" disease in the bud. Of course, it is more fun to fill up a baseball field to yell and scream about the internet! Nipping this cancer in the bud isn't going to be easy and it isn't going to be fun because it involve real soul searching and a 180 degree turn in the relationship to money.<br />
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I'm going to cut and paste a few of these diseased comments for educational purposes and in hopes that leaders can start to understand this mentality and the destruction that it brings and I hope and pray that when <a href="http://www.vosizneias.com/111966/2012/08/18/raleigh-nc-feds-zeekrewards-com-allegedly-a-huge-ponzi-scheme-on-verge-of-collapse/">VIN reports the next ponzi scheme</a>, the first comment won't be about one about people in Israel or America losing their bucks.<br />
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<span style="background-color: #f2f4f7; font-family: Arial; font-size: 12px; line-height: 17px;">Timing is everything! You gotta know when to buy and when to sell. I went into this company, made a small fortune, and got nearly everything out. I only left a small amount. Right now, I am ahead over $25,000! It's like everything else - nothing lasts for ever.</span>
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No, timing isn't everything. A well diversified portfolio takes advantage of cost averaging and the investor can take a vacation knowing that things will generally be just fine.<br />
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<span style="background-color: #f2f4f7; font-family: Arial; font-size: 12px; line-height: 17px;">Like #2, I also made money. So did some of my friends. I told everyone to get out and those who listened didn't lose a dime, a few even made some money. The GREEDY ones stayed and lost everything. The stock market is also a gamble and you make money off the other guy who buys your stock for much more than you paid. The real estate market is the same. You sell your land for much more than you paid. Sometimes the stock or real estate market collapses, no one knows in advance.</span><br />
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Oy vey. Where do you start with this drivel? <br />
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<span style="background-color: #f2f4f7; font-family: Arial; font-size: 12px; line-height: 17px;">A ponzi scheme is like a lottery. People put in money on the hopes of a payback. A few win, most lose their money and the organizers get the windfall. </span><br style="background-color: #f2f4f7; font-family: Arial; font-size: 12px; line-height: 17px;" /><br style="background-color: #f2f4f7; font-family: Arial; font-size: 12px; line-height: 17px;" /><span style="background-color: #f2f4f7; font-family: Arial; font-size: 12px; line-height: 17px;">Whether a government run lottery or a tzedakah lottery, they all work the same way. They promise the chance of being a big winner knowing full well that nearly everyone will lose their money. The winners are getting a piece of the lost money of the "investors" into the lottery! </span>
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<span style="background-color: #f2f4f7; font-family: Arial; font-size: 12px; line-height: 17px;">If you play in lotteries and think that is okay, why not play in Ponzi schemes too? </span><br style="background-color: #f2f4f7; font-family: Arial; font-size: 12px; line-height: 17px;" /><br style="background-color: #f2f4f7; font-family: Arial; font-size: 12px; line-height: 17px;" /><span style="background-color: #f2f4f7; font-family: Arial; font-size: 12px; line-height: 17px;">By the way, casinos also work on the same scheme - paying out to a winner from the losers money while the house always keeps most of the money.</span>
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No, a ponzi scheme is not like a lottery. The lottery is a game of chance and is not billed as an investment. It has no investors, just people voluntarily parting with their money. Same with casinos.<br />
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<br />Orthonomicshttp://www.blogger.com/profile/07892074485262548496noreply@blogger.com15