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Norway28707 Posts
On August 11 2016 04:33 Gorsameth wrote:Show nested quote +On August 11 2016 04:24 Liquid`Drone wrote:On August 11 2016 04:08 Gorsameth wrote:
Kwark's point is very simple. You cannot spend money you do not have.
And your pension (in the form of a 401k), for all intents and purposes is money you do not have (right now).
Yeah, it's a simple point to make, but it fails to address the pressing situation of 'I absolutely need to fix this right now'. Like, if this was the 'take personal responsibility megathread', kwark's posts would be entirely on point. But 'take personal responsibility for yourself and your future' is not a viable policy suggestion because we have a whole lot of empirical evidence suggesting that people at large are either incapable of or unwilling to fully take personal responsibility for themselves - at least unless they have the necessary education/knowledge/mental aptitude/discipline. (Where I am personally of the opinion that people cannot be personally blamed for their lacking education/knowledge/mental aptitude or discipline). Large swaths of the population can't ask friends or family for 5-digit dollar numbers and don't have that type of money saved up as dispensable money. I mean, extending the argument that your ultimate goal should be to build as much capital for the future post-work society then why have any money not tied into long-term investments anyway? Is it okay to spend $30k on fixing your roof if you have $80k, but not if you have $40k? Basically to me this sounds like someone having a logically well founded philosophical theory on how people should best spend their money but that they lack the necessary insight in either people's financial situations and life situations and mental dispositions to relate to actual problems real people might encounter through their actual lifetimes. If you go deeper you just go into "why do you own a house without connection to the water mains if you cannot afford to fix a broken pump" or 'why are you not renting so its someone else's cost to pay". Unexpected expenses happen. Its what we have insurance for.
Yeah and that's why I was earlier alluding to thinking homeowner insurance should be socialized (up to a certain point). I think people being able to own their own homes should be a political goal (as I find Kwark's post-work-the-future-is-decided-by-your-current-capital-scenario truly horrific, even if it's a valid prediction of the future).
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Getting a 10 K loan is no problem in the US, and that's actually the kind of thing that push so many household in poverty. In Europe, it's impossible to get a loan that surpass a certain % of your income. In the US, consumer debt has always been some kind of way to finance the "american dream", with good and bad results.
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On August 11 2016 04:40 Liquid`Drone wrote:Show nested quote +On August 11 2016 04:27 Gorsameth wrote:On August 11 2016 04:13 IgnE wrote:On August 11 2016 04:08 Gorsameth wrote:
Kwark's point is very simple. You cannot spend money you do not have.
And your pension (in the form of a 401k), for all intents and purposes is money you do not have (right now).
Wow what? You know credit is the foundation of today's economy right? So borrow money to repair your pump and don't touch your pension... But people who have no disposable money other than their pensions will rarely be able to get good conditions on loans? I'm no expert here - but it's my impression that the 'get a $10k loan today no security required' loans usually have pretty hellish conditions, and then someone living on median or slightly below median wage might 'need' something like 2 years to actually save up $10k. And then when I'm looking online at 'get 10k loan with bad credit' I'm being linked to pages where they're offering instant loans of a couple thousand dollars, all they want is 20% of the sum as a one time fee and 4% of the loan sum every month. And sure, it's still preferable to touching your pension, but this seems to be one of those ways lots of people who economically find themselves in the bottom half of society end up being totally totally fucked, especially if they happened to be slightly financially irresponsible in the first place- which is true for many people.
I'm certainly not saying you should resort to such cut throat loans. They are terrible, but then if you are unable to borrow the money to repair your pump and living on a medium or below wage, why do you own a house instead of renting?
Americans have a very high rate of home ownership when their salary cant afford it.
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Norway28707 Posts
On August 11 2016 04:39 WhiteDog wrote:Show nested quote +On August 11 2016 04:36 OtherWorld wrote:On August 11 2016 04:17 WhiteDog wrote:On August 11 2016 04:14 Velr wrote:On August 11 2016 03:24 WhiteDog wrote:On August 11 2016 03:04 Deathstar wrote:
There's nothing wrong with working until you die. Working energizes people and makes them sharper and healthier. It gives you purpose. It gives you an opportunity to interact with people you normally wouldn't. Retirement is an idealized and unsustainable model from a booming time period and it shows because most boomers have an expectation of at least part time work.
Putting money away now that you won't see for another 30-40+ years is truly a sad thing to see. What a waste. Live your life and use your money while you have the vitality to enjoy it. You don't want to be that old guy that goes golfing every single day because he has nothing to do with his life and is just thinking of how to use the money he saved up before dying. Depend heavily on the type of work. Blue collar labor break your body. I'm a teacher and work 18 hours a week, I can work up to the end without a worry. Just to be clear, this isn't a 100% job in france? Right? It's 100 %, even more depending on your grade and the type of competitive exam you passed, the number of extra hour you make and where you teach. At the university level, it's 12 hour a week, and in "classes préparatoires" it's 9h. It's specific to teacher, we have the highest life expectancy in the country, we're parasite. Aren't hours of "lesson preparation" counted as work though - and thus paid -, up to some point (at least at university level)? Well it's a bizarre thing, I have a salary for my status not for the hour I work. In this status it is said that I must teach 18h per week before kids, but I have other obligation that takes times (correcting copies, prepare lessons, etc.) and I am only paid for 10 month, which are divided in 12 month due to the two month of holidays in july and august.
Teaching in Norway is much the same, but very few teachers would admit to only working 18 hours. :D We only have to actually teach something like 18-22 hours per week (depending on school level) - but then you're supposed to roughly double that to get the actual amount of work required by a teacher- be it through preparing future classwork or grading tests or having teacher parent conferences or updating yourself on recent curricular evolutions.
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If we're in a post work society how the hell are you going to pay for property taxes, let alone other taxes and costs of holding onto a fully paid off mortgage. At that point it's going to be government managed housing redistributed to the population.
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United States43219 Posts
On August 11 2016 04:39 IgnE wrote:Show nested quote +On August 11 2016 04:35 Plansix wrote:On August 11 2016 04:33 Gorsameth wrote:On August 11 2016 04:24 Liquid`Drone wrote:On August 11 2016 04:08 Gorsameth wrote:
Kwark's point is very simple. You cannot spend money you do not have.
And your pension (in the form of a 401k), for all intents and purposes is money you do not have (right now).
Yeah, it's a simple point to make, but it fails to address the pressing situation of 'I absolutely need to fix this right now'. Like, if this was the 'take personal responsibility megathread', kwark's posts would be entirely on point. But 'take personal responsibility for yourself and your future' is not a viable policy suggestion because we have a whole lot of empirical evidence suggesting that people at large are either incapable of or unwilling to fully take personal responsibility for themselves - at least unless they have the necessary education/knowledge/mental aptitude/discipline. (Where I am personally of the opinion that people cannot be personally blamed for their lacking education/knowledge/mental aptitude or discipline). Large swaths of the population can't ask friends or family for 5-digit dollar numbers and don't have that type of money saved up as dispensable money. I mean, extending the argument that your ultimate goal should be to build as much capital for the future post-work society then why have any money not tied into long-term investments anyway? Is it okay to spend $30k on fixing your roof if you have $80k, but not if you have $40k? Basically to me this sounds like someone having a logically well founded philosophical theory on how people should best spend their money but that they lack the necessary insight in either people's financial situations and life situations and mental dispositions to relate to actual problems real people might encounter through their actual lifetimes. If you go deeper you just go into "why do you own a house without connection to the water mains if you cannot afford to fix a broken pump" or 'why are you not renting so its someone else's cost to pay". Unexpected expenses happen. Its what we have insurance for. Home owners insurance doesn’t cover well pump failure. I would love if they did. They really should, those things last 30 years. On August 11 2016 04:35 IgnE wrote:On August 11 2016 04:21 brian wrote:On August 11 2016 04:13 IgnE wrote:On August 11 2016 04:08 Gorsameth wrote:
Kwark's point is very simple. You cannot spend money you do not have.
And your pension (in the form of a 401k), for all intents and purposes is money you do not have (right now).
Wow what? You know credit is the foundation of today's economy right? wait so for this you are selling credit as something you're into, but for the $10k water pump you find it impossible to afford and also contribute to a 401k and want us to buy that too? apologies if I missed sarcasm somewhere. I'm having a hard time keeping up tbh. The practical question you might want to ask is whether it's better to borrow $10k to fix the pump or crush your 401k. Its better to borrow, but you need someone to lend you the money. And in the case that brought that up, it was 45K of surprise expense in the span of 2 months. You think a bank makes a loan to Joe Six Pack at a low interest rate to fix his water pump? Do you think 10k plus penalties in your 401k outpaces interest on a credit card?
If you have a big ongoing risk then you self insure by depositing premiums into a liquid form of low yield investment. If the event happens then ideally you have the $ ready but if not then you at least have some $ ready and the premiums can become payments against the principal borrowed to get you the rest of the way. If you have a number of low likelihood high cost possibilities then you can actually group them together in a self insurance policy which is much more efficient because it evens out the variance. "the insurance company didn't offer that policy" isn't an excuse to believe that the event would never happen and not prepare.
As for $10k + penalties, yes, for two reasons. Firstly if you cash it out you'll never pay it back in, there is always something, especially if you view it as extra spending money which you apparently do. People don't typically repay it. Secondly, yes, because even if you were to put it on a credit card credit card companies are very happy to loan considerable amounts of money for periods over a year completely interest free. You don't even need especially good credit.
So you use whatever you saved so far to pay as much as you can and put the rest on the credit card and then use what you continue to save towards the event to pay off the credit card.
The point that it ultimately comes down to is that the system tries very hard to get even poor working Americans a cut of the economic growth and there has been an awful, awful lot of economic growth under the Obama administration. This idea that the working poor have been kept from all the extra $ by the system is absurd, they're offered double and triple matches just to buy in. Poor financial literacy, incidentally something Igne is trying very hard to promote, is letting them commit cardinal sins but there is no institutional reason why someone making half median income cannot ride the same wave as the 1%ers and indeed they'd have to turn down free extra money if they wanted to refuse to.
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On August 11 2016 04:48 Liquid`Drone wrote:Show nested quote +On August 11 2016 04:39 WhiteDog wrote:On August 11 2016 04:36 OtherWorld wrote:On August 11 2016 04:17 WhiteDog wrote:On August 11 2016 04:14 Velr wrote:On August 11 2016 03:24 WhiteDog wrote:On August 11 2016 03:04 Deathstar wrote:
There's nothing wrong with working until you die. Working energizes people and makes them sharper and healthier. It gives you purpose. It gives you an opportunity to interact with people you normally wouldn't. Retirement is an idealized and unsustainable model from a booming time period and it shows because most boomers have an expectation of at least part time work.
Putting money away now that you won't see for another 30-40+ years is truly a sad thing to see. What a waste. Live your life and use your money while you have the vitality to enjoy it. You don't want to be that old guy that goes golfing every single day because he has nothing to do with his life and is just thinking of how to use the money he saved up before dying. Depend heavily on the type of work. Blue collar labor break your body. I'm a teacher and work 18 hours a week, I can work up to the end without a worry. Just to be clear, this isn't a 100% job in france? Right? It's 100 %, even more depending on your grade and the type of competitive exam you passed, the number of extra hour you make and where you teach. At the university level, it's 12 hour a week, and in "classes préparatoires" it's 9h. It's specific to teacher, we have the highest life expectancy in the country, we're parasite. Aren't hours of "lesson preparation" counted as work though - and thus paid -, up to some point (at least at university level)? Well it's a bizarre thing, I have a salary for my status not for the hour I work. In this status it is said that I must teach 18h per week before kids, but I have other obligation that takes times (correcting copies, prepare lessons, etc.) and I am only paid for 10 month, which are divided in 12 month due to the two month of holidays in july and august. Teaching in Norway is much the same, but very few teachers would admit to only working 18 hours. :D We only have to actually teach something like 18-22 hours per week (depending on school level) - but then you're supposed to roughly double that to get the actual amount of work required by a teacher- be it through preparing future classwork or grading tests or having teacher parent conferences or updating yourself on recent curricular evolutions.
Yeah in the first years, you actually work a lot more than average to prepare lessons and all that, but after a few year it's pretty chill 
I'm not the type of teacher that refresh its data every year like it's relevant.(lol)
The point that it ultimately comes down to is that the system tries very hard to get even poor working Americans a cut of the economic growth and there has been an awful, awful lot of economic growth under the Obama administration. This idea that the working poor have been kept from all the extra $ by the system is absurd, they're offered double and triple matches just to buy in. Poor financial literacy, incidentally something Igne is trying very hard to promote, is letting them commit cardinal sins but there is no institutional reason why someone making half median income cannot ride the same wave as the 1%ers and indeed they'd have to turn down free extra money if they wanted to refuse to.
At every possible level it is always better to be rich ; you don't get foodstamp, but you have better interest rate, better way to maximize your benefit on the financial market (I know a few people who work in finance and who told me that they can settle me for life if I have 1m € up front, easy life).
The system that you seem to favor is in fact one of the very reason why inequalities are that high. It's not only a question of knowledge.
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On August 11 2016 04:47 Gorsameth wrote:Show nested quote +On August 11 2016 04:40 Liquid`Drone wrote:On August 11 2016 04:27 Gorsameth wrote:On August 11 2016 04:13 IgnE wrote:On August 11 2016 04:08 Gorsameth wrote:
Kwark's point is very simple. You cannot spend money you do not have.
And your pension (in the form of a 401k), for all intents and purposes is money you do not have (right now).
Wow what? You know credit is the foundation of today's economy right? So borrow money to repair your pump and don't touch your pension... But people who have no disposable money other than their pensions will rarely be able to get good conditions on loans? I'm no expert here - but it's my impression that the 'get a $10k loan today no security required' loans usually have pretty hellish conditions, and then someone living on median or slightly below median wage might 'need' something like 2 years to actually save up $10k. And then when I'm looking online at 'get 10k loan with bad credit' I'm being linked to pages where they're offering instant loans of a couple thousand dollars, all they want is 20% of the sum as a one time fee and 4% of the loan sum every month. And sure, it's still preferable to touching your pension, but this seems to be one of those ways lots of people who economically find themselves in the bottom half of society end up being totally totally fucked, especially if they happened to be slightly financially irresponsible in the first place- which is true for many people. I'm certainly not saying you should resort to such cut throat loans. They are terrible, but then if you are unable to borrow the money to repair your pump and living on a medium or below wage, why do you own a house instead of renting? Americans have a very high rate of home ownership when their salary cant afford it.
Well let me tell you. You buy the house when both people have good jobs and health care. Then one of you loses the job due to their employer being complete morons. Then the medical problem that arises is not covered by shitty unemployment health insurance. If all that shit happened 6 months later, it would have been a non-issue.
That is how it happens.
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United States43219 Posts
On August 11 2016 04:44 Liquid`Drone wrote:Show nested quote +On August 11 2016 04:33 Gorsameth wrote:On August 11 2016 04:24 Liquid`Drone wrote:On August 11 2016 04:08 Gorsameth wrote:
Kwark's point is very simple. You cannot spend money you do not have.
And your pension (in the form of a 401k), for all intents and purposes is money you do not have (right now).
Yeah, it's a simple point to make, but it fails to address the pressing situation of 'I absolutely need to fix this right now'. Like, if this was the 'take personal responsibility megathread', kwark's posts would be entirely on point. But 'take personal responsibility for yourself and your future' is not a viable policy suggestion because we have a whole lot of empirical evidence suggesting that people at large are either incapable of or unwilling to fully take personal responsibility for themselves - at least unless they have the necessary education/knowledge/mental aptitude/discipline. (Where I am personally of the opinion that people cannot be personally blamed for their lacking education/knowledge/mental aptitude or discipline). Large swaths of the population can't ask friends or family for 5-digit dollar numbers and don't have that type of money saved up as dispensable money. I mean, extending the argument that your ultimate goal should be to build as much capital for the future post-work society then why have any money not tied into long-term investments anyway? Is it okay to spend $30k on fixing your roof if you have $80k, but not if you have $40k? Basically to me this sounds like someone having a logically well founded philosophical theory on how people should best spend their money but that they lack the necessary insight in either people's financial situations and life situations and mental dispositions to relate to actual problems real people might encounter through their actual lifetimes. If you go deeper you just go into "why do you own a house without connection to the water mains if you cannot afford to fix a broken pump" or 'why are you not renting so its someone else's cost to pay". Unexpected expenses happen. Its what we have insurance for. Yeah and that's why I was earlier alluding to thinking homeowner insurance should be socialized (up to a certain point). I think people being able to own their own homes should be a political goal (as I find Kwark's post-work-the-future-is-decided-by-your-current-capital-scenario truly horrific, even if it's a valid prediction of the future).
It's certainly a reason I'm trying as hard as I am right now. I'm suspicious that rather than go full Star Trek in the post scarcity economy we'll adapt the capitalist model to pay universal basic income with a lot of dividends going to those with a share of the still privately owned means of production. And when that happens I know which side of the equation I want to be on. And thankfully I was lucky enough to be born in the western world with enough privilege to give me a platform to bootstraps the rest of the way.
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Norway28707 Posts
On August 11 2016 04:47 Gorsameth wrote:Show nested quote +On August 11 2016 04:40 Liquid`Drone wrote:On August 11 2016 04:27 Gorsameth wrote:On August 11 2016 04:13 IgnE wrote:On August 11 2016 04:08 Gorsameth wrote:
Kwark's point is very simple. You cannot spend money you do not have.
And your pension (in the form of a 401k), for all intents and purposes is money you do not have (right now).
Wow what? You know credit is the foundation of today's economy right? So borrow money to repair your pump and don't touch your pension... But people who have no disposable money other than their pensions will rarely be able to get good conditions on loans? I'm no expert here - but it's my impression that the 'get a $10k loan today no security required' loans usually have pretty hellish conditions, and then someone living on median or slightly below median wage might 'need' something like 2 years to actually save up $10k. And then when I'm looking online at 'get 10k loan with bad credit' I'm being linked to pages where they're offering instant loans of a couple thousand dollars, all they want is 20% of the sum as a one time fee and 4% of the loan sum every month. And sure, it's still preferable to touching your pension, but this seems to be one of those ways lots of people who economically find themselves in the bottom half of society end up being totally totally fucked, especially if they happened to be slightly financially irresponsible in the first place- which is true for many people. I'm certainly not saying you should resort to such cut throat loans. They are terrible, but then if you are unable to borrow the money to repair your pump and living on a medium or below wage, why do you own a house instead of renting? Americans have a very high rate of home ownership when their salary cant afford it.
Isn't estate considered one of the best ways of investing? So for poor people who want to escape their poverty, home ownership is a very reasonable choice to make, one that we should want to enable? Like, I'm not talking about the 'fresh out of college engineer' poor who should just rent for a couple years before fully establishing himself, but more like the 'parents of two children aged 5 and 8 who work slightly below median wage jobs and who have no real prospect of ever making much more than median wage' - isn't it really good that these groups of people can own their home, so their monthly mortgage downpayment ends up benefiting them in the future?
I must add the caveat that I really don't know much about economy so if I say anything that's flat out wrong then please bear with me..
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On August 11 2016 04:40 IgnE wrote:Show nested quote +On August 11 2016 04:38 brian wrote:On August 11 2016 04:35 IgnE wrote:On August 11 2016 04:21 brian wrote:On August 11 2016 04:13 IgnE wrote:On August 11 2016 04:08 Gorsameth wrote:
Kwark's point is very simple. You cannot spend money you do not have.
And your pension (in the form of a 401k), for all intents and purposes is money you do not have (right now).
Wow what? You know credit is the foundation of today's economy right? wait so for this you are selling credit as something you're into, but for the $10k water pump you find it impossible to afford and also contribute to a 401k and want us to buy that too? apologies if I missed sarcasm somewhere. I'm having a hard time keeping up tbh. I'm not surprised you aren't keeping up based on your past posting history. But I'm not advocating credit so much as describing its irreplaceable role in the economy. The practical question you might want to ask is whether it's better to borrow $10k to fix the pump or crush your 401k. lol that unbased personal attack and I love it. if it's a question, practically, that I need a water pump so badly that I can't wait for the insurance check to come in or save up the 10k, then yes, you borrow? See, I said based on your posting history. It's entirely well-founded. But logic isn't your strong suit. I know this based on your posting history.
you're an ignorant douche(edit: based on your posting history. obviously. didn't want to leave room for interpretation, as I'm still not sure what your strong suit might or might not be.), but I was hoping to actually hear out how you think is best to spend money. I guess your douchebaggery not-withstanding, if you have nothing to say that's actually to the point at least we both know where we stand both personally and on the topic of how to spend money.
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I know some people who insisted that socialized healthcare wasn't necessary because if someone who is poor were sick, then the community would obviously raise money to pay whatever the bills would be. This "should have planned for the future" approach to people who develop debt troubles seems to be borne of the same out-of-touch mentality of people who both have never had money troubles, and don't see the circumstances under which others would.
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United States43219 Posts
On August 11 2016 04:54 Liquid`Drone wrote:Show nested quote +On August 11 2016 04:47 Gorsameth wrote:On August 11 2016 04:40 Liquid`Drone wrote:On August 11 2016 04:27 Gorsameth wrote:On August 11 2016 04:13 IgnE wrote:On August 11 2016 04:08 Gorsameth wrote:
Kwark's point is very simple. You cannot spend money you do not have.
And your pension (in the form of a 401k), for all intents and purposes is money you do not have (right now).
Wow what? You know credit is the foundation of today's economy right? So borrow money to repair your pump and don't touch your pension... But people who have no disposable money other than their pensions will rarely be able to get good conditions on loans? I'm no expert here - but it's my impression that the 'get a $10k loan today no security required' loans usually have pretty hellish conditions, and then someone living on median or slightly below median wage might 'need' something like 2 years to actually save up $10k. And then when I'm looking online at 'get 10k loan with bad credit' I'm being linked to pages where they're offering instant loans of a couple thousand dollars, all they want is 20% of the sum as a one time fee and 4% of the loan sum every month. And sure, it's still preferable to touching your pension, but this seems to be one of those ways lots of people who economically find themselves in the bottom half of society end up being totally totally fucked, especially if they happened to be slightly financially irresponsible in the first place- which is true for many people. I'm certainly not saying you should resort to such cut throat loans. They are terrible, but then if you are unable to borrow the money to repair your pump and living on a medium or below wage, why do you own a house instead of renting? Americans have a very high rate of home ownership when their salary cant afford it. Isn't estate considered one of the best ways of investing? So for poor people who want to escape their poverty, home ownership is a very reasonable choice to make, one that we should want to enable? Like, I'm not talking about the 'fresh out of college engineer' poor who should just rent for a couple years before fully establishing himself, but more like the 'parents of two children aged 5 and 8 who work slightly below median wage jobs and who have no real prospect of ever making much more than median wage' - isn't it really good that these groups of people can own their home, so their monthly mortgage downpayment ends up benefiting them in the future? I must add the caveat that I really don't know much about economy so if I say anything that's flat out wrong then please bear with me..
Excluding Japan, it's fucking great. Few reasons. Firstly, it's an investment that produces ongoing direct value to you through the ability to live in it. That's a monthly dividend effectively paid out in cash (immediately offset against your housing costs but still, you're your own landlord). Secondly, it's a society approved easy to borrow against asset. The government sees home ownership as a big net social good so they effectively subsidize the loans and the perceived stability of the market means that the asset itself acts as almost all the collateral. Thirdly, the low down payments effectively act as a wealth multiplier through leverage. If you put down 10% of the money and the bank puts down 90% and the asset appreciates, as houses reliably do over time, you get 100% of that appreciation. Of course that can backfire in crashes because if the house is the only investment you have then you take all of the loss which means that if the house loses 10% of its value you lose 100% of your equity in the house. But over a long enough period houses are amazing ways of building wealth for a family.
They're not right for every situation though, you need a stable source of income, an emergency fund, a long term hold plan and so forth. But yeah, estate is pretty much the only area you're allowed to massively overleverage and then walk away if things get bad. If I went to a bank and asked to borrow $1,900,000 to buy $2,000,000 of Coca Cola stock ($100,000 of my own money) and told them that the Coca Cola stock would be the collateral for the $1,900,000 I owed them because everyone knows that Coca Cola is rock solid and won't lose more than 5% overnight so even if it does lose a few % all of the loss can be eaten by my $100,000 cut, well, they certainly wouldn't be giving me the 4% I could get on a home purchase. But we're allowed to do it on homes and when the market rises everybody looks like a fucking genius.
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On August 11 2016 04:49 KwarK wrote:Show nested quote +On August 11 2016 04:39 IgnE wrote:On August 11 2016 04:35 Plansix wrote:On August 11 2016 04:33 Gorsameth wrote:On August 11 2016 04:24 Liquid`Drone wrote:On August 11 2016 04:08 Gorsameth wrote:
Kwark's point is very simple. You cannot spend money you do not have.
And your pension (in the form of a 401k), for all intents and purposes is money you do not have (right now).
Yeah, it's a simple point to make, but it fails to address the pressing situation of 'I absolutely need to fix this right now'. Like, if this was the 'take personal responsibility megathread', kwark's posts would be entirely on point. But 'take personal responsibility for yourself and your future' is not a viable policy suggestion because we have a whole lot of empirical evidence suggesting that people at large are either incapable of or unwilling to fully take personal responsibility for themselves - at least unless they have the necessary education/knowledge/mental aptitude/discipline. (Where I am personally of the opinion that people cannot be personally blamed for their lacking education/knowledge/mental aptitude or discipline). Large swaths of the population can't ask friends or family for 5-digit dollar numbers and don't have that type of money saved up as dispensable money. I mean, extending the argument that your ultimate goal should be to build as much capital for the future post-work society then why have any money not tied into long-term investments anyway? Is it okay to spend $30k on fixing your roof if you have $80k, but not if you have $40k? Basically to me this sounds like someone having a logically well founded philosophical theory on how people should best spend their money but that they lack the necessary insight in either people's financial situations and life situations and mental dispositions to relate to actual problems real people might encounter through their actual lifetimes. If you go deeper you just go into "why do you own a house without connection to the water mains if you cannot afford to fix a broken pump" or 'why are you not renting so its someone else's cost to pay". Unexpected expenses happen. Its what we have insurance for. Home owners insurance doesn’t cover well pump failure. I would love if they did. They really should, those things last 30 years. On August 11 2016 04:35 IgnE wrote:On August 11 2016 04:21 brian wrote:On August 11 2016 04:13 IgnE wrote:On August 11 2016 04:08 Gorsameth wrote:
Kwark's point is very simple. You cannot spend money you do not have.
And your pension (in the form of a 401k), for all intents and purposes is money you do not have (right now).
Wow what? You know credit is the foundation of today's economy right? wait so for this you are selling credit as something you're into, but for the $10k water pump you find it impossible to afford and also contribute to a 401k and want us to buy that too? apologies if I missed sarcasm somewhere. I'm having a hard time keeping up tbh. The practical question you might want to ask is whether it's better to borrow $10k to fix the pump or crush your 401k. Its better to borrow, but you need someone to lend you the money. And in the case that brought that up, it was 45K of surprise expense in the span of 2 months. You think a bank makes a loan to Joe Six Pack at a low interest rate to fix his water pump? Do you think 10k plus penalties in your 401k outpaces interest on a credit card? If you have a big ongoing risk then you self insure by depositing premiums into a liquid form of low yield investment. If the event happens then ideally you have the $ ready but if not then you at least have some $ ready and the premiums can become payments against the principal borrowed to get you the rest of the way. If you have a number of low likelihood high cost possibilities then you can actually group them together in a self insurance policy which is much more efficient because it evens out the variance. "the insurance company didn't offer that policy" isn't an excuse to believe that the event would never happen and not prepare. As for $10k + penalties, yes, for two reasons. Firstly if you cash it out you'll never pay it back in, there is always something, especially if you view it as extra spending money which you apparently do. People don't typically repay it. Secondly, yes, because even if you were to put it on a credit card credit card companies are very happy to loan considerable amounts of money for periods over a year completely interest free. You don't even need especially good credit. So you use whatever you saved so far to pay as much as you can and put the rest on the credit card and then use what you continue to save towards the event to pay off the credit card. The point that it ultimately comes down to is that the system tries very hard to get even poor working Americans a cut of the economic growth and there has been an awful, awful lot of economic growth under the Obama administration. This idea that the working poor have been kept from all the extra $ by the system is absurd, they're offered double and triple matches just to buy in. Poor financial literacy, incidentally something Igne is trying very hard to promote, is letting them commit cardinal sins but there is no institutional reason why someone making half median income cannot ride the same wave as the 1%ers and indeed they'd have to turn down free extra money if they wanted to refuse to.
The consumption by the "poor" is what is ultimately driving the returns. All the poor start saving and you enter an unvirtuous downward spiral. These are the contradictions in the system. We want the poor to save but only so that we can say it's their fault that they don't.
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On August 11 2016 04:52 Plansix wrote:Show nested quote +On August 11 2016 04:47 Gorsameth wrote:On August 11 2016 04:40 Liquid`Drone wrote:On August 11 2016 04:27 Gorsameth wrote:On August 11 2016 04:13 IgnE wrote:On August 11 2016 04:08 Gorsameth wrote:
Kwark's point is very simple. You cannot spend money you do not have.
And your pension (in the form of a 401k), for all intents and purposes is money you do not have (right now).
Wow what? You know credit is the foundation of today's economy right? So borrow money to repair your pump and don't touch your pension... But people who have no disposable money other than their pensions will rarely be able to get good conditions on loans? I'm no expert here - but it's my impression that the 'get a $10k loan today no security required' loans usually have pretty hellish conditions, and then someone living on median or slightly below median wage might 'need' something like 2 years to actually save up $10k. And then when I'm looking online at 'get 10k loan with bad credit' I'm being linked to pages where they're offering instant loans of a couple thousand dollars, all they want is 20% of the sum as a one time fee and 4% of the loan sum every month. And sure, it's still preferable to touching your pension, but this seems to be one of those ways lots of people who economically find themselves in the bottom half of society end up being totally totally fucked, especially if they happened to be slightly financially irresponsible in the first place- which is true for many people. I'm certainly not saying you should resort to such cut throat loans. They are terrible, but then if you are unable to borrow the money to repair your pump and living on a medium or below wage, why do you own a house instead of renting? Americans have a very high rate of home ownership when their salary cant afford it. Well let me tell you. You buy the house when both people have good jobs and health care. Then one of you loses the job due to their employer being complete morons. Then the medical problem that arises is not covered by shitty unemployment health insurance. If all that shit happened 6 months later, it would have been a non-issue. That is how it happens.
I'm sorry to hear that and hope your doing better now.
But to make a point, this is why us Europeans are so happy with our social safety nets. Because they help to ensure stories like this do not happen so easily.
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United States43219 Posts
On August 11 2016 05:03 LegalLord wrote:
I know some people who insisted that socialized healthcare wasn't necessary because if someone who is poor were sick, then the community would obviously raise money to pay whatever the bills would be. This "should have planned for the future" approach to people who develop debt troubles seems to be borne of the same out-of-touch mentality of people who both have never had money troubles, and don't see the circumstances under which others would.
I take the opposite view, the assumption that money isn't something that needs to be actively managed, stewarded and accounted for is a privilege of never learning that you don't have enough. It's people who know money is precious, finite and hard to come by who think about it.
Very few rich kids I've met budget. What'd be the point?
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On August 11 2016 04:54 Liquid`Drone wrote:Show nested quote +On August 11 2016 04:47 Gorsameth wrote:On August 11 2016 04:40 Liquid`Drone wrote:On August 11 2016 04:27 Gorsameth wrote:On August 11 2016 04:13 IgnE wrote:On August 11 2016 04:08 Gorsameth wrote:
Kwark's point is very simple. You cannot spend money you do not have.
And your pension (in the form of a 401k), for all intents and purposes is money you do not have (right now).
Wow what? You know credit is the foundation of today's economy right? So borrow money to repair your pump and don't touch your pension... But people who have no disposable money other than their pensions will rarely be able to get good conditions on loans? I'm no expert here - but it's my impression that the 'get a $10k loan today no security required' loans usually have pretty hellish conditions, and then someone living on median or slightly below median wage might 'need' something like 2 years to actually save up $10k. And then when I'm looking online at 'get 10k loan with bad credit' I'm being linked to pages where they're offering instant loans of a couple thousand dollars, all they want is 20% of the sum as a one time fee and 4% of the loan sum every month. And sure, it's still preferable to touching your pension, but this seems to be one of those ways lots of people who economically find themselves in the bottom half of society end up being totally totally fucked, especially if they happened to be slightly financially irresponsible in the first place- which is true for many people. I'm certainly not saying you should resort to such cut throat loans. They are terrible, but then if you are unable to borrow the money to repair your pump and living on a medium or below wage, why do you own a house instead of renting? Americans have a very high rate of home ownership when their salary cant afford it. Isn't estate considered one of the best ways of investing? So for poor people who want to escape their poverty, home ownership is a very reasonable choice to make, one that we should want to enable? Like, I'm not talking about the 'fresh out of college engineer' poor who should just rent for a couple years before fully establishing himself, but more like the 'parents of two children aged 5 and 8 who work slightly below median wage jobs and who have no real prospect of ever making much more than median wage' - isn't it really good that these groups of people can own their home, so their monthly mortgage downpayment ends up benefiting them in the future? I must add the caveat that I really don't know much about economy so if I say anything that's flat out wrong then please bear with me..
homeownership is only really beneficial because of tax incentives; it's not good social policy to encourage homeownership, for various reasons (regressive taxation, mobility issues, lack of diversity).
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On August 11 2016 05:06 Gorsameth wrote:Show nested quote +On August 11 2016 04:52 Plansix wrote:On August 11 2016 04:47 Gorsameth wrote:On August 11 2016 04:40 Liquid`Drone wrote:On August 11 2016 04:27 Gorsameth wrote:On August 11 2016 04:13 IgnE wrote:On August 11 2016 04:08 Gorsameth wrote:
Kwark's point is very simple. You cannot spend money you do not have.
And your pension (in the form of a 401k), for all intents and purposes is money you do not have (right now).
Wow what? You know credit is the foundation of today's economy right? So borrow money to repair your pump and don't touch your pension... But people who have no disposable money other than their pensions will rarely be able to get good conditions on loans? I'm no expert here - but it's my impression that the 'get a $10k loan today no security required' loans usually have pretty hellish conditions, and then someone living on median or slightly below median wage might 'need' something like 2 years to actually save up $10k. And then when I'm looking online at 'get 10k loan with bad credit' I'm being linked to pages where they're offering instant loans of a couple thousand dollars, all they want is 20% of the sum as a one time fee and 4% of the loan sum every month. And sure, it's still preferable to touching your pension, but this seems to be one of those ways lots of people who economically find themselves in the bottom half of society end up being totally totally fucked, especially if they happened to be slightly financially irresponsible in the first place- which is true for many people. I'm certainly not saying you should resort to such cut throat loans. They are terrible, but then if you are unable to borrow the money to repair your pump and living on a medium or below wage, why do you own a house instead of renting? Americans have a very high rate of home ownership when their salary cant afford it. Well let me tell you. You buy the house when both people have good jobs and health care. Then one of you loses the job due to their employer being complete morons. Then the medical problem that arises is not covered by shitty unemployment health insurance. If all that shit happened 6 months later, it would have been a non-issue. That is how it happens. I'm sorry to hear that and hope your doing better now. But to make a point, this is why us Europeans are so happy with our social safety nets. Because they help to ensure stories like this do not happen so easily.
Thanks, we are fine, it worked out. (#Thanks Obama) It just opened my eyes to how sideways shit can go. And we don’t even have kids.
Yeah, well we are a stupid country that thinks poverty stuff like this a sign of personal weakness and social safety nets are part of the nanny state. The instant we try to set one up, someone creates a poster child of free loaders abusing the system. But we all agree homelessness is bad.
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On August 11 2016 05:05 IgnE wrote:Show nested quote +On August 11 2016 04:49 KwarK wrote:On August 11 2016 04:39 IgnE wrote:On August 11 2016 04:35 Plansix wrote:On August 11 2016 04:33 Gorsameth wrote:On August 11 2016 04:24 Liquid`Drone wrote:On August 11 2016 04:08 Gorsameth wrote:
Kwark's point is very simple. You cannot spend money you do not have.
And your pension (in the form of a 401k), for all intents and purposes is money you do not have (right now).
Yeah, it's a simple point to make, but it fails to address the pressing situation of 'I absolutely need to fix this right now'. Like, if this was the 'take personal responsibility megathread', kwark's posts would be entirely on point. But 'take personal responsibility for yourself and your future' is not a viable policy suggestion because we have a whole lot of empirical evidence suggesting that people at large are either incapable of or unwilling to fully take personal responsibility for themselves - at least unless they have the necessary education/knowledge/mental aptitude/discipline. (Where I am personally of the opinion that people cannot be personally blamed for their lacking education/knowledge/mental aptitude or discipline). Large swaths of the population can't ask friends or family for 5-digit dollar numbers and don't have that type of money saved up as dispensable money. I mean, extending the argument that your ultimate goal should be to build as much capital for the future post-work society then why have any money not tied into long-term investments anyway? Is it okay to spend $30k on fixing your roof if you have $80k, but not if you have $40k? Basically to me this sounds like someone having a logically well founded philosophical theory on how people should best spend their money but that they lack the necessary insight in either people's financial situations and life situations and mental dispositions to relate to actual problems real people might encounter through their actual lifetimes. If you go deeper you just go into "why do you own a house without connection to the water mains if you cannot afford to fix a broken pump" or 'why are you not renting so its someone else's cost to pay". Unexpected expenses happen. Its what we have insurance for. Home owners insurance doesn’t cover well pump failure. I would love if they did. They really should, those things last 30 years. On August 11 2016 04:35 IgnE wrote:On August 11 2016 04:21 brian wrote:On August 11 2016 04:13 IgnE wrote:On August 11 2016 04:08 Gorsameth wrote:
Kwark's point is very simple. You cannot spend money you do not have.
And your pension (in the form of a 401k), for all intents and purposes is money you do not have (right now).
Wow what? You know credit is the foundation of today's economy right? wait so for this you are selling credit as something you're into, but for the $10k water pump you find it impossible to afford and also contribute to a 401k and want us to buy that too? apologies if I missed sarcasm somewhere. I'm having a hard time keeping up tbh. The practical question you might want to ask is whether it's better to borrow $10k to fix the pump or crush your 401k. Its better to borrow, but you need someone to lend you the money. And in the case that brought that up, it was 45K of surprise expense in the span of 2 months. You think a bank makes a loan to Joe Six Pack at a low interest rate to fix his water pump? Do you think 10k plus penalties in your 401k outpaces interest on a credit card? If you have a big ongoing risk then you self insure by depositing premiums into a liquid form of low yield investment. If the event happens then ideally you have the $ ready but if not then you at least have some $ ready and the premiums can become payments against the principal borrowed to get you the rest of the way. If you have a number of low likelihood high cost possibilities then you can actually group them together in a self insurance policy which is much more efficient because it evens out the variance. "the insurance company didn't offer that policy" isn't an excuse to believe that the event would never happen and not prepare. As for $10k + penalties, yes, for two reasons. Firstly if you cash it out you'll never pay it back in, there is always something, especially if you view it as extra spending money which you apparently do. People don't typically repay it. Secondly, yes, because even if you were to put it on a credit card credit card companies are very happy to loan considerable amounts of money for periods over a year completely interest free. You don't even need especially good credit. So you use whatever you saved so far to pay as much as you can and put the rest on the credit card and then use what you continue to save towards the event to pay off the credit card. The point that it ultimately comes down to is that the system tries very hard to get even poor working Americans a cut of the economic growth and there has been an awful, awful lot of economic growth under the Obama administration. This idea that the working poor have been kept from all the extra $ by the system is absurd, they're offered double and triple matches just to buy in. Poor financial literacy, incidentally something Igne is trying very hard to promote, is letting them commit cardinal sins but there is no institutional reason why someone making half median income cannot ride the same wave as the 1%ers and indeed they'd have to turn down free extra money if they wanted to refuse to. The consumption by the "poor" is what is ultimately driving the returns. All the poor start saving and you enter an unvirtuous downward spiral. These are the contradictions in the system. We want the poor to save but only so that we can say it's their fault that they don't.
Shouldn't it be the middle class that primary drives consumption in an ideal world? since they should be able to afford to spend their money while holding back enough for a rainy day? As well as being numerous enough to have their consumption be a major impact.
The poor should be a small enough group that them saving instead of spending should not have a significant detrimental effect on the economy.
It might be the poor who are driving the system at the moment but as you said yourself, that is a contradiction and not healthy.
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On August 11 2016 05:12 Plansix wrote:Show nested quote +On August 11 2016 05:06 Gorsameth wrote:On August 11 2016 04:52 Plansix wrote:On August 11 2016 04:47 Gorsameth wrote:On August 11 2016 04:40 Liquid`Drone wrote:On August 11 2016 04:27 Gorsameth wrote:On August 11 2016 04:13 IgnE wrote:On August 11 2016 04:08 Gorsameth wrote:
Kwark's point is very simple. You cannot spend money you do not have.
And your pension (in the form of a 401k), for all intents and purposes is money you do not have (right now).
Wow what? You know credit is the foundation of today's economy right? So borrow money to repair your pump and don't touch your pension... But people who have no disposable money other than their pensions will rarely be able to get good conditions on loans? I'm no expert here - but it's my impression that the 'get a $10k loan today no security required' loans usually have pretty hellish conditions, and then someone living on median or slightly below median wage might 'need' something like 2 years to actually save up $10k. And then when I'm looking online at 'get 10k loan with bad credit' I'm being linked to pages where they're offering instant loans of a couple thousand dollars, all they want is 20% of the sum as a one time fee and 4% of the loan sum every month. And sure, it's still preferable to touching your pension, but this seems to be one of those ways lots of people who economically find themselves in the bottom half of society end up being totally totally fucked, especially if they happened to be slightly financially irresponsible in the first place- which is true for many people. I'm certainly not saying you should resort to such cut throat loans. They are terrible, but then if you are unable to borrow the money to repair your pump and living on a medium or below wage, why do you own a house instead of renting? Americans have a very high rate of home ownership when their salary cant afford it. Well let me tell you. You buy the house when both people have good jobs and health care. Then one of you loses the job due to their employer being complete morons. Then the medical problem that arises is not covered by shitty unemployment health insurance. If all that shit happened 6 months later, it would have been a non-issue. That is how it happens. I'm sorry to hear that and hope your doing better now. But to make a point, this is why us Europeans are so happy with our social safety nets. Because they help to ensure stories like this do not happen so easily. Thanks, we are fine, it worked out. (#Thanks Obama) It just opened my eyes to how sideways shit can go. And we don’t even have kids. Yeah, well we are a stupid country that thinks poverty stuff like this a sign of personal weakness and social safety nets are part of the nanny state. The instant we try to set one up, someone creates a poster child of free loaders abusing the system.
Clearly you just need more bootstraps /s
In all seriousness though, glad it worked out for you 
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EPT
