Author Topic: Extend Rendon  (Read 65987 times)

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Offline Dave in Fairfax

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Re: Extend Rendon
« Reply #1200: December 06, 2019, 09:23:21 PM »
I'm having a bit of trouble following this thought, could you clarify?

As an example of my confusion, I would think Florida has a lot more than 4.9% more pro athletes residing there than say Vermont.  Maybe 1500% more.
It's not a percentage. It was 4.9 times the national average.

https://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2015/3/02/the-most-unique-job-in-each-state-in-one-map

Offline bluestreak

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Re: Extend Rendon
« Reply #1201: December 06, 2019, 10:41:14 PM »
When you're talking about over 10 million a year being deferred, that's a significant amount of money.

Also, taxes don't "compound." You only get taxed on the money you make. So you get taxed once on the 10 million, and then only on the percentage you make beyond that. The state doesn't get to re-tax the principal.

I can’t decide if you are being intentionally obtuse or not.  Taxed money is money you cannot otherwise invest. The effect of not having this money compounds over years. You don’t just lose the 8 percent that was paid in tax, you lose out on the interest that you would have made every year which would have compounded.

Deferred money eventually gets paid. The only thing you lose out on is the interest you could have made on that money. Which also would have compounded (which is the point I assume you were making originally).

If you want a real world example look at the projected payouts of an index fund or 401(k) with just a 1% increase in fees (which are a just a tax that is paid to the fund manager instead of the government). The difference in the payoff amounts over years is many multiples of what was actually paid in fees.  Because of compounding...

It’s the exact same thing.

Offline Mathguy

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Re: Extend Rendon
« Reply #1202: December 07, 2019, 03:18:42 AM »
You're talking about Slate here - of course he's being obtuse

I can’t decide if you are being intentionally obtuse or not. 

Offline Slateman

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Re: Extend Rendon
« Reply #1203: December 07, 2019, 08:29:47 AM »
I can’t decide if you are being intentionally obtuse or not.  Taxed money is money you cannot otherwise invest. The effect of not having this money compounds over years. You don’t just lose the 8 percent that was paid in tax, you lose out on the interest that you would have made every year which would have compounded.

Deferred money eventually gets paid. The only thing you lose out on is the interest you could have made on that money. Which also would have compounded (which is the point I assume you were making originally).

If you want a real world example look at the projected payouts of an index fund or 401(k) with just a 1% increase in fees (which are a just a tax that is paid to the fund manager instead of the government). The difference in the payoff amounts over years is many multiples of what was actually paid in fees.  Because of compounding...

It’s the exact same thing.
If deferred money were a good investment, every player would do it. Particularly players from the high tax areas.

Theres a reason every halfway decent money manager will tell you to take a lump sum payout with the lottery and not an annual amount.

Offline bluestreak

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Re: Extend Rendon
« Reply #1204: December 07, 2019, 10:25:09 AM »
If deferred money were a good investment, every player would do it. Particularly players from the high tax areas.

Theres a reason every halfway decent money manager will tell you to take a lump sum payout with the lottery and not an annual amount.

I didn’t say it’s a good investment. I said it literally cost them millions to have money deferred. What I did actually say is that if they ignore the tax part but care about deferred money, then they are being dumb because they are basically the same thing. And if they have even halfway decent money managers, they are telling them the same thing.

Online HalfSmokes

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Re: Extend Rendon
« Reply #1205: December 07, 2019, 10:34:18 AM »
And if they have even halfway decent money managers, they are telling them the same thing.

That’s a questionable assumption

https://www.investopedia.com/financial-edge/0312/why-athletes-go-broke.aspx

Offline Slateman

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Re: Extend Rendon
« Reply #1206: December 07, 2019, 10:54:34 AM »
I didn’t say it’s a good investment. I said it literally cost them millions to have money deferred. What I did actually say is that if they ignore the tax part but care about deferred money, then they are being dumb because they are basically the same thing. And if they have even halfway decent money managers, they are telling them the same thing.
Lol, they are not the same thing. Not even close.

Scherzer's initial deferred payment of 15 million would be worth 24 million if he had not gotten deferred money with a return rate of 10%.

This is why Scherzer got 210 million instead of ~175. Deferred money is a loser for the player, regardless of tax rates. If it werent, every Cali and New York team would sign all their players to deferred money.

Players arent picking where they play based on taxes. They make more money than god. They dont care. Their agents dont care because they get paid a percentage before taxes. Money is a status symbol. Overall worth and AAV are all that matter.

Online HalfSmokes

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Re: Extend Rendon
« Reply #1207: December 07, 2019, 11:10:37 AM »
Lol, they are not the same thing. Not even close.

Scherzer's initial deferred payment of 15 million would be worth 24 million if he had not gotten deferred money with a return rate of 10%.

This is why Scherzer got 210 million instead of ~175. Deferred money is a loser for the player, regardless of tax rates. If it werent, every Cali and New York team would sign all their players to deferred money.

Players arent picking where they play based on taxes. They make more money than god. They dont care. Their agents dont care because they get paid a percentage before taxes. Money is a status symbol. Overall worth and AAV are all that matter.

So with a madoff level of return and ignoring taxes :lmao:

Offline Natsinpwc

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Re: Extend Rendon
« Reply #1208: December 07, 2019, 11:11:29 AM »
Deferred money is a financial issue. So are taxes. Doh. Who knew that? 

Offline Slateman

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Re: Extend Rendon
« Reply #1209: December 07, 2019, 11:13:46 AM »
So with a madoff level of return and ignoring taxes :lmao:
10% is conservative the last 5 years. Especially when you can afford to be aggressive.

Not be able to invest ~10% of your income is better than having half of it depreciate for years before you can invest it.

Offline Slateman

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Re: Extend Rendon
« Reply #1210: December 07, 2019, 11:16:09 AM »
Deferred money is a financial issue. So are taxes. Doh. Who knew that? 
No one has argued anything else. The question is what is the significance. The answer is not a whole lot for taxes, but it's pretty significant when discussing deferred money. Hence why deferred money usually requires the club offer significantly more overall salary.

Offline Natsinpwc

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Re: Extend Rendon
« Reply #1211: December 07, 2019, 12:09:19 PM »
No one has argued anything else. The question is what is the significance. The answer is not a whole lot for taxes, but it's pretty significant when discussing deferred money. Hence why deferred money usually requires the club offer significantly more overall salary.
As I noted a couple of days ago state taxes are more significant now because you can’t deduct them on your federal taxes anymore after $10K (which includes real estate taxes). So before if you played in a state with a 10 percent rate it really was only 6 percent because you could deduct at your 39.5 percent tip federal rate. Not anymore.

I agree the deferred money is more significant and that’s why the total contract dollars have to be higher. I mean that’s kind of obvious.

Online HalfSmokes

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Re: Extend Rendon
« Reply #1212: December 07, 2019, 12:17:18 PM »
10% is conservative the last 5 years. Especially when you can afford to be aggressive.

Not be able to invest ~10% of your income is better than having half of it depreciate for years before you can invest it.

10% was what madoff promised long term- if you think that’s sustainable and that’s what you’re using for your own calculations, good luck

Offline Natsinpwc

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Re: Extend Rendon
« Reply #1213: December 07, 2019, 12:29:20 PM »
10% was what madoff promised long term- if you think that’s sustainable and that’s what you’re using for your own calculations, good luck
That’s what the average SP 500 return over the past 90 years has been.

https://www.cnbc.com/2017/06/18/the-sp-500-has-already-met-its-average-return-for-a-full-year.html

Offline nfotiu

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Re: Extend Rendon
« Reply #1214: December 07, 2019, 01:56:37 PM »
10% is conservative the last 5 years. Especially when you can afford to be aggressive.

Not be able to invest ~10% of your income is better than having half of it depreciate for years before you can invest it.
I would think an athlete who makes all his life  income in a very short period of time is the least likely to be aggressive investing it.  If I made 100 million over my 10 year career, there is no way o am putting it in something that could lose half it’s value in the next financial crisis. 

Offline Slateman

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Re: Extend Rendon
« Reply #1215: December 07, 2019, 02:07:55 PM »
I would think an athlete who makes all his life  income in a very short period of time is the least likely to be aggressive investing it.  If I made 100 million over my 10 year career, there is no way o am putting it in something that could lose half it’s value in the next financial crisis. 
Again, any halfway decent financial manager will tell you to be aggressive when you're young. Actually, a financial crisis benefits young, wealthy people the most. They will be just fine and can use their remaining wealth to buy low, thus increasing their wealth when the crisis ends.

Offline nfotiu

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Re: Extend Rendon
« Reply #1216: December 07, 2019, 02:25:13 PM »
Again, any halfway decent financial manager will tell you to be aggressive when you're young. Actually, a financial crisis benefits young, wealthy people the most. They will be just fine and can use their remaining wealth to buy low, thus increasing their wealth when the crisis ends.
Young in terms of career age.   A 30 year old baseball player is more like a 55-60 year old regular employee.   

Offline Slateman

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Re: Extend Rendon
« Reply #1217: December 07, 2019, 02:26:46 PM »
Young in terms of career age.   A 30 year old baseball player is more like a 55-60 year old regular employee.   
Wat


Is that like Coors math?

Online JCA-CrystalCity

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Re: Extend Rendon
« Reply #1218: December 07, 2019, 04:04:08 PM »
Wat


Is that like Coors math?
earning capacity.   

Offline Slateman

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Re: Extend Rendon
« Reply #1219: December 07, 2019, 06:41:30 PM »
earning capacity.   
They can still get jobs after baseball.

Offline RyanZimsKazoo

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Re: Extend Rendon
« Reply #1220: December 07, 2019, 07:15:47 PM »
it might be just me but...

I genuinely dont think Anthony wants to come back.

He won a title. Now he can go play where he wants. The game isnt a passion for him.

I thank him for his contributions but it just seems like he has mentally checked out of DC.

99 to 1 odds says he signs with the Rangers.

Offline aBaltoNat

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Re: Extend Rendon
« Reply #1221: December 08, 2019, 01:34:15 AM »
it might be just me but...

I genuinely dont think Anthony wants to come back.

He won a title. Now he can go play where he wants. The game isnt a passion for him.

I thank him for his contributions but it just seems like he has mentally checked out of DC.

99 to 1 odds says he signs with the Rangers.

I tend to agree. Well know soon.

Offline Kevrock

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Re: Extend Rendon
« Reply #1222: December 08, 2019, 06:38:38 AM »
I tend to think he would have signed here if we offered him the contract he was after. It was probably not market value or heavily deferred.

Offline aBaltoNat

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Re: Extend Rendon
« Reply #1223: December 08, 2019, 07:25:05 PM »
Boras says he wants a 7 yr deal.

I think Rendon will age well, but yikes...he'd be 36 at the end with a massive price tag stuck to him.

Offline Slateman

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Re: Extend Rendon
« Reply #1224: December 08, 2019, 08:07:34 PM »
Boras says he wants a 7 yr deal.

I think Rendon will age well, but yikes...he'd be 36 at the end with a massive price tag stuck to him.
If that's what he wants, do it. Easy decision is easy. Rendon's swing will age nicely.