...Owning a home offers many benefits not available as a renter such as pride with ownership, qualifying for special tax breaks, and saving money. Renovating property is one example of expressing the freedom available to a homeowner that renters do not have. Many tax breaks are only available to homeowners for many reasons including deductions for mortgage interest, First-Time Home Buyers’ Tax Credit and deducting expenses by having a home-based business. The amount of money saved considerably outweighs the money spent on renting a house or apartment. Not only does one save money , but the money is equally invested. Money saved by owning a home grows in many ways. Additional benefits not relating to money, such as a feeling of worth or inclusion in community decisions are positive reasons for owning a home. Spending money on rent when one can afford to buy is not the best financial decision. Though renting property relinquishes the renter of most responsibilities the benefits are few. When a person saves money to buy a house, that person takes pride in the amount of hard work accomplished to attain the goal of purchasing the house. Owning property “instantly” makes the owner a part of the neighborhood and community, along with its social advantages” (Hudson Valley Business Journal, 2/25/2008 Supplement, Vol. 19, p4-4, p. 1). One may choose to make valuable decisions when becoming part of a new neighborhood that help mold the area into a safer community. Such decisions effect...
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...Spasojevich I have been faced with the decision of whether to purchase a new home or not. Making this decision has taken a lot of thought and planning. I had to look at the principals of economics, the marginal benefits and cost associated with my decision, and the economy. These are all factors that play a vital role in making a decision that I will be committed to for thirty years. One of the most difficult decisions that I had to consider was facing trade-offs. I had to ask myself what I am willing to give up to purchase this new home. I wanted to purchase a new home in a ritzy part of San Antonio but quickly realized that I could not afford to purchase a home in that area. So, I began looking in a nice middle class subdivision that was more affordable for me. I also had the desire to purchase a home with an in ground swimming pool. Unfortunately, this was not an option due to the community pool. I had to determine what was more important to me and I chose to change the geographical location that I wanted to live in and the swimming pool was not that important to me. I was not able to have a pool put in and live in the ritzy part of town, but I am able to have upgrades to my home and it is affordable. When my husband and I first looked at purchasing our home we had to look at our budget and see what we could afford and what we were willing to give up in order to purchase this new home. We had to cut back on going out to dinner three times a week to once a week...
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...A dream is an idea or vision that is created in your imagination and that is not real. If a dream is just a figment of the imagination then there is no way that an American’s dream for ones’s life can be surreal, right? Nowadays, being a stay at home parent is a phantom of the mind, money is peoples’ happiness, and unemployment is becoming more and more prevalent. Dreaming about the way one wants their life to be one day is simply just a dream. At sometime in a person’s life everyone dreams of being a stay at home parent: taking care of the kids, having the house cleaned, and dinner cooked on the table when their significant other gets home from a long day at work. Being a stay at home parent is not as common as it use to be. If an American...
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...time. Purchasing a home is one of the biggest financial decisions that any one person can make. The strength of the economy can give you good information as to when to buy and when not to buy. Timing can be very beneficial for a buyer and understanding how to make the decision when to buy can have long term financial consequences for the buyer. In this case the buyer is me. When making a decision to buy a new house I will look at the principles people face tradeoffs, the price of something is what you give up to get it, rational people think at the margin, and people respond to incentives. While I want to buy a new house there are several different areas that I will look at before making the purchase. How much each home costs plays a role in my decision. It is important for me to live within my means of money so making the right choice will benefit me the most. Looking at new homes there may be two that are different in space, number of bedrooms, and price. I personally am looking for the most amount of space for the price that I can afford. I currently own the house that I have now and in order for me to buy it will have to be beneficial for me to give up what I have at the moment. I face tradeoffs of buying a new house verses keeping the one that I own now. Getting more space over keeping the amount of space I have at the moment. Having three kids in a three bedroom house can get congested at times. I know that a four bedroom home will make it to where all...
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...to purchasing a new home. I say “People Face Trade-offs” because in order to buy a house I will have to make sacrifices and give up certain things I like to do so that I can spend that time researching and looking for the perfect home. I chose 2 “The cost of something is what you give up to get it” because not only will I have to sacrifice some of the fun things I like to do but I will have to refrain from spending money on unnecessary things like Starbucks in order to save money. Buying a house is a big step and it will take lots of time and money to close a deal on a house. From researching the right community, home, schools that are close by as well as the miles to and from work. It will take a lot of time. Not only will purchasing a new home take up time but also saving money will be a must. I will have to cut back on certain things and save every bit of cash that I can in order to buy the home that I want. That way when I finally find a house that I like I will have a good amount of money for a down payment. Then I will have to figure out what I will need to sacrifice in order to make the payments. 2. Provide an example for each about decision-making, interaction, and the workings of the economy. * Decision-making is the actions that you decide to do in order to get something done. In the scenario of buying a home, the decision-making would be what house is best to buy, where it is located, and how can I afford it. The decision to save money and sacrifice my time...
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...apartment is small and far from schools and local services. You have decided to move. There are many factors that come into play when making such a large and weighty purchase. Examine the decision-making process from the perspective of an economist. In your Final Project, you use these principles and other factors to make a final decision whether to buy a house. Purchasing a home for the first time can be overwhelming. A house can be the largest investment someone makes. It can provide advantages, but it can present disadvantages as well. The following principles can be used when deciding to purchase your first home, “People Face Trade-offs” (Mankiw, 2007) or “The Cost of Something Is What You Give Up to Get It” (Mankiw, 2007). When deciding to purchase a home, the principle “People Face Trade-offs” can be applied to help make a final decision. The making of the decisions requires trading off one goal against another (Mankiw, 2007). The buyer must sacrifice a little to gain a lot and a first time home buyers must realize that it takes a lot of money to purchase a home. The buyers must sacrifice things such as vacations, movies, special occasions, and extracurricular activities to save money. The money you save is important to provide the down payment, home insurance, taxes, and mortgage. The buyer’s time is also sacrificed when searching for a home and corresponding with the lender. Acknowledging life’s trade-offs is significant because people will make high-quality decisions...
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...Financial Statement Part 1: The Home Depot, Inc. Brenda Ocampo ACC 497 November 25, 2013 Rick Kwan The Home Depot, Inc Annual Report The Home Depot, Inc. had their retail sales decline by 7.8 percent. Even though there was a bad economic time for all stores this store strived to provide better customer service, invested in the sales associates, and rebuilt their supply chain. These decisions helped optimize their capital allocation and allowing them to concentrate more on efforts on the core business. In the first quarter of 2008 The Home Depot, Inc decided to close 15 underperforming stores and still making an operating profit and $41 billion in assets. Any business needs to be able to look at and analyze their Income Statement, Balance sheet, and Statement of Cash Flow to help determine if they are successful and if they need to make any adjustments to the business operations to make it more successful. Income Statement The Consolidated Statements of Earnings tells how the business is doing in performance and profit. This statement shows the gross profit growth, operating expenses, operating income, and earnings from continuing operations before provision for income taxes, and the earnings from continuing operations. The statement for The Home Depot, Inc. shows how the business had a decrease in fiscal year 2008 of 7.8% and a decrease in Net sales. The Home Depot, Inc. reported Net Earnings of $2.3 billion in fiscal year 2008 compared to...
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...eliminate money because if we have money it could cause negativity, also people would want power and control and that clearly causes big problems. One other thing is to have every child have parents and a home. Negativity is not only an attitude but can cause long-term damage to the environment. Negativity would have to be gone because it causes a lot of pain and long term damage. I believe this because everything that causes negativity in the world affects a lot of people around us for a very long time. For instance, 9/11 caused great damage for a lot of people the family's...
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...A New Home XECO/212 September 22, 2012 Jan Cohen A New Home When deciding to purchase a home my husband and I had to ask ourselves how the government bodies affect the housing market. The answer to that question is it the government body plays a big part. The strength of the economy at the time will make us feel comfortable or uncomfortable about the purchase of a new home. We realize a new home will be a large amount of money and time devoted, the stability of the economy is a big factor. The use of marginal benefits and costs will help us determine if it is the correct time to make the purchase. Marginal benefit gives us the satisfaction of our purchase, with the maximum amount we are willing to pay for it. For example if purchasing a three bedroom house costs much more than a two bedroom but we are happier with the three bedrooms then it is a marginal benefit. Marginal cost is the theory that the more houses being built at the time, the lower the cost will be. (Marginal Costs and Benefits, 2009) In times when it is called a buyers’ market shows us that the marginal benefit is better than the marginal cost. During economy hard times we are more concerned with marginal cost than marginal benefit. The government decides the interest rates and tax deductions for consumers when purchasing a home. The lower the interest rate, the bigger the tax deduction, will increase the probability that we will purchase a home. This affects the marginal cost and marginal demand by...
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...is perfect for us in its own right, is coming now, after a lot of hard work and sweat, not to mention a lot of planning and decision making. Locating a house in an area we want to live in is the easiest part of looking for our new home. My husband and I have chosen to stay in the area we are currently living in and renting a home. Everyone here is close and we all look out for one another. My parents are not far, so they can get our children from school and watch them until we get home from work. The local elementary and middle school is within walking distance from the houses we are looking at, as well as the local hospital, fire and police departments, church and local health clinic. Before we move any further in buying our home we need to sit down and make a list of the pros and cons for buying and renting. This is now the biggest decision we are facing in our lives and what we decided will affect us for a long time to come. We need to make sure we consider all of our options and make the best choice for our family for this day and the future. Taking...
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...sum payment of $300,000 for his work plus an additional $25,000 for pre-paid expenses. He wants to know how this money will be treated for tax purposes. John’s company is what is known as an LLC or Limited Liability Company, and for U.S. federal income tax purposes, an LLC is treated by default as a pass-through entity. Since John is the only person in the company, the LLC is treated as a “disregarded entity” for tax purposes, and an individual owner would report the LLC’s income or loss on Schedule C of his individual tax return. According to the IRS, Taxable earned income includes: • Wages, salaries, tips, and other taxable employee pay • Union strike benefits • Long-term disability benefits received prior to minimum retirement age • Net earnings from self-employment • Gross income received as a statutory employee (What is Earned Income?, 2012) According to the IRS description above, John earned a total of $325,000 from the case that would be considered taxable income. The $25,000 is included as income for the expenses that John has incurred over the past two years. However, John will only be able to deduct expenses that occurred during the current year and any prior year expenses should have been deducted in the tax year that they were incurred. If this was not completed, he should amend any previous year’s return to reflect the deductions. This money is reported as income and should be reported as such on John and Jane’s personal income tax return. John and his...
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...ORMAN Debt Mistakes to Never Make Again We all make mistakes. What’s important is learning from them. This section teaches you strategies for dealing with debt problems you may already have, and how to steer clear of common debt mistakes in the future. 1 Never borrow more than you absolutely need. There are some good reasons to take on debt: your education, for example, or to buy a home. But even if you are borrowing for a good reason, make it your goal to borrow the least amount possible. The less you owe, the more flexibility you have to focus on other money goals. Don’t be seduced by a lender who tells you how big a loan he can get for you. For example, let’s say you know you can buy a terrific home in a neighborhood you like, and your mortgage will be $800 a month. A mortgage lender says you can qualify for a larger mortgage, for which the monthly payment will be $1,000 a month. “Great!” you think. “We can afford a house with an extra bedroom and a renovated kitchen!” Not so fast. By opting for the less-expensive mortgage, you free up $200 a month to put toward another goal. That’s $2,400 a year you could invest in a Roth IRA for your retirement, for example. In 30 years—the typical time it takes to pay off a mortgage—the $200 a month you managed to save in your Roth IRA could be worth nearly $170,000 at an average annual rate of return of 5%! Debt Mistakes to Never Make Again (cont.) pg. 1 Debt Mistakes Never to Make Again 2 Don’t charge more...
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...decision to purchase a home. Would be the First Principal the Principal that people face trade off, when you make any kind of a decision to buy you always face tradeoffs. A Trade off is a decision to give something up so you can obtain another thing that you feel is more important in the long run after weighing the options. An example of a trade off to purchase a home would be the choice to downsize a car so that you can purchase the home of your dreams. Or if you have to work more hours to be able to afford your new home that would also be a trade off because you are giving up your time for the new home and time is one of the most important assets a person has. The next principle is the cost of something is what you give up to get it. This is similar to a trade off in the way that you are giving up something to get something, but with a tradeoff sometimes you can do less of the other and still have it, but when you give up something completely that is different. Things you might have to give up when purchasing a home would be going on a vacation twice a year. You might have to give up going on a vacation twice a year and reduce it to once a year. Even the little things can count when giving up something, like getting a cheaper brand of certain products and foods that will save you money. Another principle I am considering before buying the new home is thinking at the margin, this is very hard for me to do. I like to spend money like I have a lot more money than I do. So sometimes...
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...life. The fictional novel Lyddie by Katherine Paterson is a story about a poor girl who had to leave her home to work in a factory. Lyddie finds that people aren’t very fond of the factory’s working condition. There is this petition floating around that is trying to change these conditions, but the problem is, if she signed it,she could lose any job, anywhere. This makes her wonder if she made the right decision moving to Lowell. She has her little sister to care for now and debts to pay off back home. Lyddie is only a teenager and is forced to act very mature in this situation. While some people believe that Lyddie should sign the petition, it would leave Lyddie without any money or a place to go. Lyddie is in need of money, for this purpose, she should not sign the petition. In fact,¨I´m going to be a factory girl, Triphena. I´m free… I can go to Lowell and make real money to pay off the debt so I could go home.” (45) Lyddie finds this great...
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...Jaime Medina Purchasing a home is life changing and a big decision. This is a decision I am currently being faced with at the moment. I have been living in a one bedroom apartment for the last two years, but now it is time for a change. My girlfriend and I are expecting our baby to arrive this June. This of course will require a bigger space and moving into a bigger apartment is not an option. A lot of people believe buying a home is finding the home you fall in love with, have a good credit score, and save money to put down on the house. In reality a lot more needs to be considered when purchasing a new home. The principles of economics are something people should consider because it gives food for thought. I think all ten principles of economics are important and beneficial when making the decision of purchasing a home. I have printed them out as a reminder of what to keep in mind when purchasing a home. The first principle people face trade-offs is one that will impact my decision. For the last four years I had been working a full and part time job. The last two years I have been in school and as class got tougher it required more time for education. In 2012 I had to stop working my part time job to focus on school which has the overall greater impact. Towards the middle of the year my company promoted me to a higher level. My progress in school helped me to get my promotion and that was the trade off. I lost a little money temporarily but make more than I ever did. Principle...
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