more lifetime license questions

[Scoot]

I've lived in MN since April last year. I didn't bother getting my MN drivers license until June. I believe I became a resident in April, regardless of when I got my license, is that right? Can I get a lifetime license in April of this year?

Also, my son was born this past Nov. If you need to be a resident of a state for one year, can I not get him a lifetime license until his first birthday? The age ranges are from 0 to whatever, so I assume I can get him a license anytime, is that right?

Anyone have a phone number that I can call to the appropriate MN agency to speak to somebody who'll have these answers? I think I might be best getting it "from the horses mouth".

Thanks,

[hoggs222]

Your son won't need a license until he is 16 years old. But, you could get one now I guess, since they seem to go up every year.

[ZapBranigan]

Think this thing through carefully. Because just like timeshares there is a good reason why the party selling them has the advantage. $18.00 per year will definatly go up but in real dollars the licenses have not really gone up faster than the cost of living. The present value of money vs. future value of money. That's what it's all about. I think I ran this through the tables a few years back when this was first available and it was a wash on savings. So now it's just a matter of will you ever move. But why take that risk. Since you are not effectivly saving any money. It's a gamble of what will interest rates do. The higher they go the better that money would have done just going into bonds and buying the License every year. If you cannot earn $20.00 on interest especially on a safe 10 type bond (simple savings bond) then you may look towards buying one. But really folks for the cost you should be able to net $20.00. Also in the calculation is how long you expect to live. But really it's how long will you be able to continue to use the license not how long will you live. Also should factor in reduced cost for Senior Citizens. I cannot justify sinking several hundred dollars in a speculative peice like this when I could buy a savings bond and earn more with the same money plus at the end of it I still have my money.

Think it through cause there is no refund.

[Guest]

I have to TOTALLY dissagree with Zap on this one.

I bought my lifetime sportsmans license the first year they came out and spent $615 (or so, cant quite remember).

Anyhow, If I fish and hunt till I'm 75...hopefully longer, and keeping the license fees at the same rate, which we all know will go up, I will have saved a little over $500. If you figure in increases in fees and cost of living over 43 years, the savings go up even more.

So say it's a wash is just plain wrong. And since seniors no longer get a break on license fees, the savings are even better.

Now, take your 1 year old son for instance. You do not know if he will get into fishing and hunting when he gets older, but if you pay the $357 now, and he fishes and hunts till he's 75 (hopefully longer) that investment, once again keeping all fees at their present rate, will have saved your son $1,177, which once again taking into account rate increases, etc, ets, will be substantially more. If you wait till he's 4 to 15, you'll pay an extra $100 or so, but the savings will still be huge. And since he will not have to spend the money to buy the license, he would be able to take that money and place it somewhere else if he so chooses, money he would not have if he had to buy one.

What a perfect gift. If I had kids, that would be one of their very first presents.

[sunnyj]

A perfect gift? You bet. I plan on getting my son the lifetime lic. for his 1st birthday in april and its not the cost or the savings thats doing it for me. When he grows up, he may just move away from his old man, but when he comes home we can hit the lake with no extra work, just fishing

[Guest]

Yep,

That was kind of my point. Look at it as a gift that will have far more benifits than just saving money. Actually when you think about it, it's pretty priceless.

[bigbucks]

I've thought about it too, but I disagree that there's a big cost savings based on the cost of laying down all that money ahead of time. I strongly considered it when they first came out, but decided against it.

I don't think you're totally right on the no cost break for seniors either. I was told just last week that a senior, not sure of the age, 65 I assume, can buy their license at full price, but then take it to the courthouse & get their money refunded to them. I suppose it's possible it's just a Todd County thing, but I don't think so.

[Scoot]

Tom and sunny,

I agree with both of you and thank you for your input. Also, in response to the earlier reply, I am unfortunately going to be moving to the "other side of the river".

However, I'm not looking for people's general opinion on the lifetime license. I'm looking for specific answers to the questions I posted. Anybody have answers or the number for the person I need to contact to get those answers?

[Guest]

Scoot-

651-296-6157

hope that helps

[efgh]

Just a question on this life time license< if you get one and move out of state is it still good when you return, or do you have buy a non res. license to fish? I assume if you move back to minn. it will be good again.

[ZapBranigan]

Ok you save 500 bucks assuming the 615 dollars you spent today is worth only 615 dollars 20 years from now. But money doubles in value due to compound interest approx every 7 years so in 21 years the 615 is worth 615X2X2 or $2460.00. So in the next twenty one years are you going to spend 2460.00 dollars in your licenses? Not 615.00. Not 615+500 or 1115.00. the 1115.00 seems really cheap. So even if prices go up 4 times as much evenly over the next 21 years you will not save a dime. Also the younger you buy into it for say a new born son it gets even worse. because 0-74 is 75 years.

lets just calculate 70 years. 615X2X2X2X2X2X2X2X2X2X2. Wow. your money doubles 10 times. Roughly 629,000. bucks. whereas even if you spent 615 every year it would only be 43,000. This is why rich people stay rich and we keep paying their taxes. Nuff said. You would give him a much greater gift to invest 615 bucks when he was born.

[BK19]

efgh, yes it is good in mn even if you move out of state

[LocalGuide]

Yep, If you move out of state after you purchase a lifetime license you can come back and don't have to buy a non-res. Thats another appealing point to lifetime license.

I got one for my 16th birthday (got it when I was 15 actually so it was only $300). I think its the best gift I can get. I will never have to buy one license ever.

As Zap said, It might not be worth it. But somethings in life are worth spending that kind of money for. And BTW who has spent $300 in more stupid ways? And to look at it this way is that money it going into wildlife/fishing funds so no harm done there. And who knows (I dont) maybe that $300 or $600 dollars (w/e) you spend on that license gets put to use by the state right away, so in a sense they arent making money on it if they spend it.

[river rat316]

Zap you and my father inlaw should get together you would be perfect together

[spearchucker]

I don't like giving the state or federal government anymore money at one time than I have to. I agree that they would be a nice gift for a son/daughter or grandkids, but why let the government have your money for so many years without a return.

Would you prepay your light or gas bill for 20 years to save money from price increases? I don't have a problem with the lifetime license, but they are not for me.

[Jarrod32]

This is probably more detail than you want, but...we economists can't resist sometimes. I apologize in advance.

The above analysis by Zap is on the right track, but is still a bit too simplistic…you have to factor in the ‘time value of money’ at a selected discount (interest) rate. $383 dollars today is expected to be worth much less in 10 years. We can figure out the present value of a stream of payments with the following formula:

Present Value = Annual Equivalent Amount * Discount Factor

We can also conversely figure out the Annual Equivalent Amount by taking Present Value divided by the Discount Factor.

The discount factor is derived from the following (time value of money) formula:

df = 1/r - 1/[ r(1+r)n ]

where r = interest or discount rate, and ‘n’ = the number of years to calculate for.

So…lets figure this out. We have to make a couple of assumptions, and we also need to have a good calculator to figure out the exponential portions of our equation.

Lets assume an interest rate of 3%. This can be looked at as the annual increase in purchasing power, or it can be looked at as your opportunity cost (if you put your money into a CD instead of buying a lifetime license). Then, let’s assume 20 years of licensing.

DF = 1/.03 - 1/(.03x(1.03)^20)

DF = 33.33 - 1/.054

= 33.33 - 18.52

= 14.81

Now, we have our discount factor, and we know the Present Value that the DNR wants for the lifetime license ($383).

The Annual Equivalent Amount is $383 divided by 14.81 (our discount factor)

Annual Equivalent Amount = 20 annual payments of $25.86.

Showing us that it is not such a good deal for residents (unless you assume that the resident license fee will increase significantly over the next few years), but if you plan on moving out of state, it is a pretty sweet deal. Of course, different assumptions would give different results (assuming 30 years, or a higher or lower interest rate assumption).

And yes, it is a slow afternoon at work.

[kevfish]

some people dump that kind of money in the casino every week! i say if u got it- spend it

Got perch?

[iffwalleyes]

You bet the stay current after moving out of state. I bought both the deer and fishing license once I moved out of state. I will break even on the deer hunting license this fall. The fishing will take longer but I figured in the long run I will come out ahead on that one as well give it a few more years. So if you are moving out of MN it would be well worth it.

[who are those guy]

J32 - I did the same calculations concerning the life sports license. However, I assumed the license fees would increase equivalently to inflation @ 3% & at 5% thinking fees will rise faster than inflation. The last hike in fees was 97' I think - & that was close to 15%. But they increase only so often. Anyway I was 25 in 01' the first year offered & figured the breakeven is a little over 20years - annualized vs lump sum. (depending on ROI %). So when I am 50 I am in the money.