Comments on: It’s Not Just Another Raise: Turning That Cost Of Living Increase Into Your Dreams

By: Connie

Connie — Tue, 20 Mar 2007 20:14:40 +0000

I do not know who that nit-nut is who thinks the COLA is excess, but he/she/it must not have a family or pay the bills very often. I am retired, ex-postal(SSA, not civil), and a widow. I do not have that kind of money to play with. I know our servicemen and women do not get that much to play with,either. The Congressmen all do, though. Interesting?

By: 'Neeks

'Neeks — Sun, 11 Feb 2007 08:32:07 +0000

While you do make some good points, I’m just not sure how valid your basic premise is, regarding expenses not going up as much as our raises.

I don’t know where you live, but in most places, homeowners’ property taxes have skyrocketed in recent years, My own have quadrupled in the past 6 years, while the actual assessed value has only increased by about 30%. In many parts of the country, homeowner’s insurance has jumped dramatically too. Since most people pay these bills from an escrow account via their monthly mortgage, it has made what most consider to be their house payments swell tremendously.

Other examples: My trash collection bill has tripled in the past 5 years. Electricity has doubled, as has gasoline. Medical Insurance premiums have soared to 4 times what I paid just 5 years ago, and the co-pays have at least tripled!!

All of these combined make it very hard to put away even raises of up to say, 10% a year!

By: Trent

Trent — Fri, 12 Jan 2007 21:48:25 +0000

If you’re thirty, and you invest the amount of your cost of living raise this year and repeat that investment every year (you’re investing the raise itself, not just one year’s worth), you’ll end up with that amount.

By: Chris

Chris — Fri, 12 Jan 2007 18:21:01 +0000

I have recently done this on a grand scale. I graduated college, and while in school I was making X dollars/year. After graduating and getting a full time job, with a significant pay bump, I’m making 3X dollars per year. I’m putting a full 1X towards debt payments and savings. I will be free of interest bearing debt in only a few months, and totally debt free a few months after that.

Investing and saving a windfall is almost always the right choice. Since I am so young, I will be ready for retirement at 55 (or maybe a bit younger) since I’m planning ahead for it. Nothing like taking YEARS off my forced working life, not that I’ll stop, just not be so tied down to it.

By: Marc

Marc — Fri, 12 Jan 2007 18:07:53 +0000

I like that the KitchenAid stand mixer always makes a regular appearances in your posts.

By: James

James — Fri, 12 Jan 2007 18:04:32 +0000

Where do you get the $268k figure by just investing the cost of living raise from one year until age 65 at 8%?

I’m showing $1,200 turns into $17,742 after 35 years at 8%.

To get $268,429.22 after 35 years at 8% Joe would need to start with a much more substantial $18,155.09

By: Daniel

Daniel — Fri, 12 Jan 2007 17:51:50 +0000

Lol, but the iPhone looks SO COOL!

By: Martin

Martin — Fri, 12 Jan 2007 16:49:27 +0000

This is a great article, and I always tell myself I am going to take the difference in my raise and try to do something with it (I never do). This year I did not get a raise, but I should be getting a nice raise around March as I will be hired on full-time. My goal is to take about 1/2 the difference to pay off student loans and the other 1/2 to start an emergency fund.