Mopeds

I have been looking into buying a new moped for a few weeks and I have found they aren't as cheap I would like. I think I will end up paying around $600 for one. I originally anticipated to get one for about $400 but that doesn't seem realistic at this point. Despite the higher price I think that it will still be a wise investment as gas looks ot be increasing this summer and without a moped I would be driving a 1998 suburban that gets about 14 miles to the gallon compared to a moped that gets upwards of 75 miles to the gallon.

College Visit

I was visiting a college this weekend and realized a few things about college life that I never realized before. I met with a professor in the business school and he explained a lot of things to me I didnt really expect to hear when I talked to him. He talked about long term and short term abalysis and used the specific example of a switch for a fan. The switch had five buttons each corresponding to a different amount of time to leave the fan on for. He was impressed by this particular switch and wanted to buy some more for other spots in his house. He made great efforts to find the switch and finally he called the company who in turn told him they no longer made it. He asked why and was told by a representative of the company that a cost/benefit analysis was conducted on every product the company produced and that particular product did not check out. He was maddened by this and did his own research, at least he claimed, and found that the short term profit would not have been very good, but in the long run the product would have been worth keeping. Im not sure what I'm trying to say other than it was interesting going on a college visit and getting a lesson in economics.

Barack Obama Free Trade

http://en.wikipedia.org/wiki/CAFTA
http://www.ontheissues.org/Barack_Obama.htm#Free_Trade

The two articles above show Barack Obama's stance on Free Trade and specifically a treaty called the Central American Free Trade Agreement. I think this agreement is a good idea as it will allow all economies involved to become more efficient, as free trade always does. Barack Obama does not support this agreement saying that it will affect the labor and environmental standards. He makes a valid point, and creates a good argument on what is more important. On one hand a stronger economy can be built with more free trade while on the other hand there is poor labor laws and environmental problems. What is the solution?

Taxes

http://www.ustreas.gov/education/faq/taxes/taxes-economy.shtml

I recently did my taxes and I found this article rather intersting and confusing. The first confusing part that caught my eye was the marginal tax that they attempted to explain. I interpreted it as there are intervals on ones income that they have to pay a certin percent of that income as tax. So say there is a cut off at 6000 dollars, and at 6000 the rate jumps from 10 to 15 percent. This would mean that a person earning 6001 dollars per year would pay 10 percent of 6000 and 15 percent of 1 dollar as their marginal tax.

The article also states that this type of marginal taxing discourages new businesses and new ideas requiring large investments as even if a new business is succesful, the owner will end up paying a higher percentage of that profit back due to the marginal taxing.

Opportunity Costs

http://www.nuwireinvestor.com/articles/top-5-reasons-why-timeshares-are-horrible-investments-51227.aspx


This article discusses the 5 leading reasons that timeshares are horrible investments. The first reason is listed as "Time Value of Money". They say this because if one invests their money in what they believe to be a wise investment (a timeshare) it is tied up and cannot be invested in other things which can be a very high opportunity cost depending on the timeshare that is being invested in. The site states that most people do not know what they are getting into when they purchase a time share and thus are disappointed to learn that they have wasted their money on the timeshare when they would have been better off spending it elsewhere.

With timeshares a chunk of cost is required immediately after purchasing a timeshare. This is similar to prepaying for a vacation which can be very risky as if somehting prevents the vacation from being taken, the money is lost entirely. People sometimes choose to finance their timeshares but this too is not wise as interest rates can fluctuate and cause more money to be lost.

Timeshares seem to be an extremely high opportunity cost for something so uncertain. I don't think it seems right to pay for a vacation long before you take that same vacation.

My First Post

This is the first time I have posted on my blog.