The Federal Minimum Wage increases $0.70 per hour on Tuesday – from $5.15 to $5.85.
Here are some facts about the current Federal Minimum Wage:
- The minimum wage will increase 70-cent on July 24 for each of the next two years, capping in 2009 at $7.25 an hour. That equates to just above $15,000 annually before taxes for a 52-week work year.
- Earning the new Federal Minimum Wage of $5.85 an hour equates to an income of $12,168 a year before taxes. This is just above the federal poverty level for singles which is $10,210. The level for couples is $13,690, and a family of three is $17,170.
- At least 25 states and the District of Columbia have minimum wages higher than the federal rate. Individual cities can also set their own minimum wage. The highest state is Washington at $7.93, the highest city is Santa Fe, New Mexico at $9.50. Here is a list of U.S. state minimum wages.
Why raising the minimum wage is a good thing: The last time the minimum wage was raised was over a decade ago and this raise is long overdue. Many minimum wage workers are currently living near or below the poverty level, and many work multiple jobs to make ends meet. After taxes there is not much left to pay for essentials such as food, shelter, clothing, etc. When you add the fact that a gallon of gasoline costs over half of what a minimum wage earner takes home per hour, you get a good idea that $5.15 per hour is not very much money.
Why raising the minimum wage is controversial: The controversy that surrounds raising the minimum wage comes from the argument that raising the minimum wage will lead to rising costs for food and consumer goods and eliminate jobs. Well, in my opinion, the costs of food and consumer goods have been rising steadily for some time now… it’s called inflation! I don’t think this raise in the minimum wage will have a big effect on the number of jobs either. Businesses will always find a way to make things work. What this hopefully leads to is increased efficiency from a business and management perspective.
I support raising the federal minimum wage. Granted, $0.70 is not a huge increase, but to those who earn minimum wage, it makes a big difference. People deserve to earn a decent wage, and I think this series of raises is a good step in the right direction.
I was reading No Credit Needed (NCN is one of my favorite personal finance blogs) yesterday and his latest article was a reflection on his last three years of blogging, and a look toward his future.
One section in particular grabbed my attention:
One of the coolest things that happened while I was getting out of debt was receiving an unexpected check from the state of Florida. Read this post Found Money!! Wowser to learn more about my long-lost paycheck and the website Missing Money.
On a whim I went to the website Missing Money, and I typed in my state and last name. No, I didn’t have a paycheck waiting for me, but my brother did! The information provided by the website includes the person’s name, partial address, and where to contact to retrieve the money. The site also list the amount as under $100, or unknown. In my brother’s case, the amount is less than $100, but it’s still nice to get! I’ll have to let him know! 
Find Unclaimed Properties: When paychecks are not picked up by the employee, the business turns them over to the state as unclaimed. The National Association of Unclaimed Property Administrators assists states in the distribution of these unclaimed paychecks and other unclaimed properties.
According to the NAUPA website:
Common forms of unclaimed property include savings or checking accounts, stocks, uncashed dividends or payroll checks, refunds, traveler’s checks, trust distributions, unredeemed money orders or gift certificates (in some states), insurance payments or refunds and life insurance policies, annuities, certificates of deposit, customer overpayments, utility security deposits, mineral royalty payments, and contents of safe deposit boxes.
Another method of finding unclaimed property is contacting the state’s unclaimed property office.
Important Note: This is a free search! There are many companies out there that use the freedom of information act, in conjunction with sites such as Missing Money to find missing property for people. They sometimes charge a lot to do this!
From the NAUPA website Q&A:
I have received a notice that property has been found, but there is a fee to obtain it.There are many business firms, sometimes called finders or locators, which find legitimate lost property for owners and offer to inform them of how to obtain it for a fee, usually a percentage of the total (many states limit the fee to 10 percent). Sometimes, companies will hire these firms to find you before they turn the funds over to the state. Ultimately the finder will ask you to sign a contract. The majority of firms that provide these services work within the law, but there are also many unclaimed property scams across the United States. Before signing any contract from a firm of this type, we recommend that you be cautious and contact the unclaimed property office in your state for more information.
I recommend doing a search for your name. You might just be surprised at what you find! I know my brother will be! 
There were a lot of great posts this week in the world of personal finance blogging. Here are a few of my favorites you everyone to read and enjoy:
- Clever Dude – 50 Tips For New Personal Finance Bloggers. Clever Dude put together a great list to help out anyone writing a personal finance blog (and just about any other kind of blog as well!). Use this list in conjunction with Jim’s 25 Steps to a Wildly Successful Personal Finance Blog, and you will be well on your way to having a great blog!
- The Frugal Law Student – Massive Personal Finance Resource List. Brett put together a great list of on-line money management tools. Almost all of them are free and can help you manage and keep track of all of your finances.
- Blunt Money – Receipt for Your Payment to… (What Payment?). Blunt Money’s PayPal account was mysteriously raided. Luckily, he noticed quickly and PayPal has already responded.
- The Simple Dollar – A Perfect Case for Making Things Automatic. Trent helps out a military couple who is getting a large reenlistment bonus. Trent offers up some very good advice. I recently helped a friend decide what to do with his reenlistment bonus.
- The Consumerist – Man Dodges Taxes for 10 Years, Wins in Federal District Court. The man in question is an attorney… that might have helped a little with his preparation for his case! Still, dodging taxes is not something I would advocate.
- My Two Dollars – Why Pay for Satellite Radio? Listen at Home or Work For Free Anytime. David informs his readers that you can listen to select XM Radio channels via AOL Radio on the Internet – for free.
- Generation X Finance – Observations From an Employer’s Benefits Fair Reveal Attitudes Toward Saving Money. Jeremy writes about his work experience at a benefits fair and based on his observations, puts people into 5 different categories in regards to saving and investing money – which are you? I am “The Saver,” but without the decent company match!
- Money, Matter, and More Musings – Made $650 On The Junk Car. Golbguru lists information on how to junk a car, and who may or may not pay you to take it away.
- Free Money Finance – Earn $1 Million by Not Watching TV. FMF wrote about an article on Yahoo Money about how to earn $1 million dollars by not watching TV. I read the same article and decided I would take the same concept, but I would Earn $10 Million By Not Building Model Trains. To his credit, FMF opened this up as a conversation and asked for his readers’ opinions. I took a more whimsical approach.
Check out some or all of these articles. They are all good reads! 
I was listening to the radio last night and I heard about a casino that lost almost $1 million because one of their slot machines had the incorrect software installed and automatically gave 10 credits for every dollar inserted. The slot machine should have only given 1 credit, and this error resulted in an automatic 10 fold win for the gambler without them even playing the slots. The casino lost a lot of money before the problem was discovered and reported – ironically, by honest patrons who alerted casino authorities.
I couldn’t find a reference for this most recent instance, but something very similar happened last summer when an Indiana slot machine gave 10 credits for 1. It seems as though there is a switch on he machines that compensates for other currencies. That flip of a switch and subsequent moving of the decimal cost the casino almost $500,000 before the problem was discovered and resolved.
On the radio last night, they mentioned the authorities were reviewing video from this most recent incident to identify the casino patrons who took the money without alerting the casino. They were going to arrest anyone they could accurately identify, and press charges for theft.
I am not familiar with gaming laws, but I’m not sure if they have a legal leg to stand on. The mistake was the casino’s (I’m sure someone lost their job on that one!), but was the casino patron breaking the law? Can the casino prove the gambler knew they were improperly receiving 10-1 on their money and didn’t think they won on a lucky pull of the slot machine? Maybe the gambler thought it was a promotional giveaway? Conversely, does the casino apologize or give back money they take from their patrons? No way!
Legalities aside, this does raise other issues:
Today’s ethics and money question: If a casino makes an error where their software incorrectly pays out 10-1 and the patron benefits from this and does not report it to the casino, is it stealing?
I think people can make a convincing argument for both sides.
- Obviously, the right thing to do would be to alert a casino guard and not let anyone else use the machine until it was taken out of commission. This would save the casino thousands, if not hundreds of thousands of dollars, and would probably net the patron a free night’s stay, or at least a buffet dinner. (More importantly, the patron could leave with their conscience unscathed.)
- The other argument is to take the money and run. Oh, and be smart about it, too… Don’t take too much or the casino would notice, and you would ruin a good thing!
What would I do? I occasionally enjoy small stakes gambling for entertainment purposes. I don’t play slot machines unless it is to empty out the two or three quarters I have in my pocket. There are so many versions of the slots out there, I don’t think I would notice if my $0.25 turned into $2.50 and I would probably think I either won or it was a special promotion designed to get me to put more of my money into the machine. In that case, I would take the money and leave. It would be the same thing if I put$1 into a slot machine and it showed I had $20. I would probably think it was weird, but that I won. Then I would cash out and leave. I won’t put $20 into a slot machine, I only use them to clean out my loose change, which is exactly what the casinos like!
Would I use the slot machine as a personal ATM? I don’t think so. If I saw others standing in line, putting in their money, getting their claim ticket, and leaving, I would know something was wrong and I would probably let someone know. Yeah, I guess I am a party-pooper! But, I don’t think I could stand there and watch a lot of people take the casino for hundred of thousands of dollars, and I don’t think I would have a clear conscience if I were to do that myself.
I’m interested to hear what others think.
Did that get your attention? Good. Now you have to read the rest of this article to understand the title!
A recent article, How to Earn $1 Million by Not Watching TV (note, this article is no longer available), was posted on Yahoo Finance, and attributed to TheStreet.com. This article states that people can earn $1 million or more over the course of their lives by giving up TV and its associated costs and instead investing the money they do not spend on TV. The listed costs of owning a TV and paying for the extras included the TV itself, monthly cable subscriptions, entertainment cabinet system, pay-per-view, movies, DVD/DVR, Gaming System, Games, Energy, Commercials, and Opportunity Costs.
This article holds a certain level truth for those who spend extravagant sums of money on TVs and associatated expenses, but it is definitely not true for everyone. My wife and I have basic cable and a small TV that was purchased years ago for cash. We have a nice entertainment center, a DVD player, and some DVDs, all of which are paid for. Our TV costs are relatively low.
Their arguments are technically correct, but for the most part, they are flawed.
- TV expense: This is true. TVs can be very expensive, but they do not have to be. They assume an initial $2000 TV expenditure. Most people do not spend anything close to that.
- Entertainment cabinet system: I don’t think this is a valid argument. For all intents and purposes this is a piece of furniture. Even if people didn’t have a TV, they would probably place another piece of furniture in the space where a TV would have been.
- Cable: Not necessary to watch TV.
- Pay-per-view: Most people never order pay-per-view, and if they do, it is usually not very often. I have never once ordered pay-per-view.
- Movies: I agree. Purchasing or renting movies is an expense. But many people just watch regular TV.
- DVD/DVR: Needed to watch movies or record TV shows – if you want to do so.
- Gaming System/Games: I do not use either of these, and a substantial amount of people with TVs do not either.
- Energy: They quote a minimum of $10 per month for TV associated energy costs. That really depends on how much TV you watch. Changing the level of your thermostat can have a larger effect than this.
- Commercials: C’mon, spending $525 a month based on commercials! No way! (see article quote below for how they add up the cost of TV).
- Opportunity Cost: “Another cost often overlooked when considering the price of watching TV is the opportunities forfeited when you choose viewing over something else. You could start a business, take on a part-time job or take care of your garden so you don’t have to pay someone else to do it. Assuming that your time is worth at least the minimum wage of $5.85 per hour, your opportunity cost is $737 a month if you view the average amount of TV.” Uh-huh… So, people are machines who need to work every waking hour for the sake of money? Please. There was an opportunity cost of me reading that article, or taking a walk, reading a book, or doing anything else that does not directly earn me money.
Here is how TheStreet.com breaks out the cost of watching TV:
So what does this all add up to? Say you’re 25 years old and you initially spend $2,000 for your TV, DVD player, entertainment cabinet and gaming system after getting your first job. Add in monthly costs of $100 for cable, $10 for electricity use, $20 for renting movies, $25 for buying games and $20 for an occasional pay-per-view event, and you’re looking at $175 a month. Add in another $525 a month extra you spend due to the influence of commercials if you are the average person, and you are costing yourself $700 a month watching TV.
If you instead invested this money and received a return of 8% compounded annually over 45 years until you’re 70 years old, you would have more than $3.7 million in your account.
There is no way I spend $700 a month watching TV, or associated spending based on commercials! They also forgot to add the opportunity cost of $737 a month, so it is very likely this sum is well over $10 million. I would figure out the exact sum, but the opportunity cost of doing so is just too high for me to do that right now.
This article is written only to have an eye-catching headline. I’m sure it will be all over CNN and the local news as a “great new way to save for your future!” But then, wouldn’t everyone watching those shows immediately call their cable company to cancel their subscriptions, thus putting the news anchors out of a job?
TV can be expensive, but so can so many other things. You could write the exact same article and substitute computer for TV. There are many other hobbies that are even more expensive than watching TV, but I guess none of them make for great headlines.
But, I have to admit this article did inspire me. Here is my new plan to become a multi-millionaire:
- I will not build and collect model trains. The associated expenditures such as purchasing new model trains, settings, accessories, subscriptions to Model Train Monthly, energy costs, lost opportunity costs, and the spending I would do based on the advertisements in Model Train Monthly would add up to millions of dollars over the course of my lifetime. If I were to forego those expenditures and instead invest my money accordingly, I would have well over $10 million by the time I reach retirement age. I know it is a huge sacrifice, but that is what I am doing. And I will watch TV instead.
