tuscl

Do you feel the majority of people understand financing and debt?

Estafador
BIG APPLE
Wednesday, October 17, 2018 7:14 AM
So a month ago, I learned people are willing to go into debt for the iPhone. Here's some links: [view link] [view link] Do you think majority of people really are ignorant of debt and finance?

39 comments

  • Estafador
    •
    6 years ago
    The links may both say Google but the first link is nypost and the other is Apple watch website
  • twentyfive
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    6 years ago
    ^ Short answer yes.
  • Cashman1234
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    6 years ago
    Ok, they used a sample of 480 Americans to derive these statistics. That’s one point of discrepancy. Also, I’d like to see the question asked, that allowed them to conclude folks would go into debt. If they are asking if they would take on debt to buy a new iPhone - that simply means they would make monthly payments on a new phone. They also spelled debt - debut - in the second article. That’s not a good sign. So, I’d withhold my opinion until a better study is conducted.
  • Salty.Nutz
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    6 years ago
    My only rule for financing is dont buy depreciating assests--> for example cars. However, everything you finance now is depreciating including your house and the money you save due to inflation. So thats why i like to purchase experiences that can be bought in a strip club (women/alcohol).
  • woodstock
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    6 years ago
    I'm sure every single credit card issuer on the planet would reluctantly admit that they profit greatly from the majority of people not being able to resist going into debt, to the tune of ~25% interest a year on CC balances. There is a reason the industry calls people "deadbeats" who pay no interest on their cards.
  • Dominic77
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    6 years ago
    Ignorant of debt and finance? Yes. Some of the books and f2f instruction out there is akin to reading about Strip Clubs in Cosmo. Bad advice, toxic advice, plus masked advice that exists only to complete a sale. The bad influences often drown out the sane influences. Other parts of are just abstract. Instant gratification is very tempting. Some people are raised on "no" their lives so it's tempting to say yes to something. Esp. if those people don't know how to improve their situation. That's really the crux of the matter. You're in a good position that you're wise about all if this and can delay gratification, Estafador. The hopelessness just causes them to say, fuck it. Bad for them. Good for the old(-er) guys with AAPL stock. Unless you had a really good upbringing, the masses will just need to fall on their faces a few times, before they teach themselves, if they ever learn at all. I know I'm correcting my illiteracy. I fell for some really bad advice that seems reasonable. I was dumb. At least I can own it. Not everyone is smart like someone who buys a 1 day used 2 calls used iPhone 6 with a cracked screen for free on CL, then just replace the screen at an Apple Store. Still works 4 yrs later, knock on gorilla glass. Pay cash for a depreciating asset.
  • Dominic77
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    6 years ago
    @Cashman, It would be nice to see the questions asked on wallethub from this survey. That way we could see if their conclusions are reasonable. I bet no alternatives were given on the survey, like maybe a maybe pay cash for a sub$100 or sub$200 phone. Many Android phones out there but people might not know that or somehow think those are unsuitable when really nothing is further from the truth. And that's just one example. This also could be a reflective symptom of something like internet addiction, and the phone is just one part of that. The other one is just living for the monthly payments. Or lack of discipline or financial protection to save without having one's savings depleted (e.g. expected or unexpected medical bills, not understanding how to haggle $$$). All financial literacy 101 type stuff.
  • Estafador
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    6 years ago
    @Salty.Nutz yeah true however, if there was a car you wanted and you had 10x it's value INCLUDING tax, 6 mo. insurance and fees, buying the car for you is like buying a toy. Its yours outright and you can run it into the ground because its yours and you bought it not to make money on it, but because you want to drive it. So I'd say if you can afford it 10x, depreciation shouldn't be an issue for you. @Dominic77 thanks.Being poor all your young life, you kind of just get fed up and look for ways to grow.
  • digrii
    •
    6 years ago
  • Cashman1234
    •
    6 years ago
    Everyone sets their own individual thresholds, and financing a depreciating asset isn’t a bad thing. You must examine the financing rates and terms, and weigh them against the rates of return on the money you have invested. If you are making significantly more on your invested assets, and you will pay capital gains when withdrawing funds, then an auto loan isn’t a bad choice. A heloc can be a better choice. I use that type of comparison in many buy vs finance choices for large ticket purchases. Financing a purchase by using a high interest credit card is always a bad choice. It’s one step above a pay day type of loan.
  • Salty.Nutz
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    6 years ago
    @Estafador...true but i thought we were discussing financing and not liquid cash. anyways it crazy that some credit cards offer a higher cash back rate on purchases then an actual savings account.... After all your expenses are paid, Housing, food, savings, retirement....and you have between +3K to blow, and your networth is not more then 2 million, i dont think youll will feel much happier then the guys just scraping buy that have less then $150 of disposible income after all your basic expenses are met. Sure the guy with $3k to blow will have a little more piece of my but he wont necessarily be happier then the guy with only 150 to blow.
  • Jascoi
    •
    6 years ago
    i’ve made some stupid decisions in the past... experiencing beautiful girls is NOT one of them.
  • Salty.Nutz
    •
    6 years ago
    @cashman...to further clarify youre saying to use a heloc to purchase a car? i know with this strategy you can also right off the interest.
  • skibum609
    •
    6 years ago
    In 36 years of family law practice I have probably reviewed 15,000 financial statements. The short answer is the average american is a financial moron who doesn't understand finances at all. The idea banks caused the last financial crisis is idiotic, because all they did was take advantage of people's greed and failure to protect themselves. Less than 10% of the people I represent gross more income than I do. 100% spend more money than I do. I see people who make 75k a year buying a 400,000 house and I am amazed. The few people I represent that know me in real life, when I mention that their house is too expensive for them, always retort about it being worth less than mine. If it makes them feel better, fine, but they have no idea how much I make and don't know we bought our house 20 years ago for 182,500, so I didn't pay 400k for it when I made such little money.
  • twentyfive
    •
    6 years ago
    @Cashman you’re correct these types of purchases after taking into account, the cost of money and the lost opportunity the cash represents financing a depreciating asset is the only way to go, one last point to be considered when you purchase anything is the future payments are cheaper than the present payment when you start factoring the cost of inflation.
  • mark94
    •
    6 years ago
    It’s all about impulse control. The few who have it live comfortably and happily within their means. The majority without it are willfully ignorant of common sense financial rules.
  • nicespice
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    6 years ago
    Definitely not in my my social circle. But even aside from my more...erm, degenerate people I’m surrounded by... “half of Americans (50th percentile) have almost no savings ($5,000). Meanwhile, the 90th percentile family had $274,000, and the top 1 percent of families had $1,080,000 or more” Source: [view link]
  • ime
    •
    6 years ago
    A lot of people want things immediately and do not have the ability for delayed gratification. When that is the case someone or company will always be there to take advantage.
  • Salty.Nutz
    •
    6 years ago
    Its not just people but also: [view link]
  • twentyfive
    •
    6 years ago
    ^I said that yesterday
  • Mate27
    •
    6 years ago
    To answer the OP, they don’t grasp their own emotions when managing money. Intelligent people can intellectually understand finance, but when things become personal, then they choose to ignore proper attention to it due to fear and greed (emotions). I’ve seen some blue class working ditch diggers become millionaires because they stayed disciplined and spent below their means. They weren’t highly intellectual, but persisted with their plan and stayed the course.
  • Salty.Nutz
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    6 years ago
    The thing about staying disciplined is time. i think the best years of your life are between your 20s through 40s. i rather blow 1K at strip club or any other carnal pleasure then invest in a retirement account. sure, my money could grow due to compound interest , but i rather blow it now before i have to take viagra and my health starts to decline.
  • skibum609
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    6 years ago
    Why would you assume that life can't be better, but different when you get older Salty? I was in college when the drinking age was 18; single and working part-time until 32 and now that I am 61 I am enjoying life just as much as before and don't miss my 40's which were great at all. As far as Viagra? Its a medication that can make your life better. If my back hurts I can suffer, or take advil, so on ocassion I take advil. If I want my regular 61 year old erection i can have it, but if I want a trip down memory lane erection I can take 25 mg of vitamin V and other than making it much harder to cum, its fun.
  • twentyfive
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    6 years ago
    @Salty Nutz adding to what Skibum said you’re going to get older or die whether you like it or not, assuming you’ll get older, with your attitude Ill bet you ain’t gonna enjoy your retirement years.
  • Dblednmike
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    6 years ago
    Understanding finances is important, but having a balance is also important. You can’t squander everything for enjoyment now, but you shouldn’t be miserable in the here and now so you can enjoy your golden years. After all the time you’re guaranteed is right now. Tomorrow may not come for all of us.
  • Cashman1234
    •
    6 years ago
    The stats that NiceSpice mentioned are important to grasp, as they should scare the crap out of most folks. Folks don’t save money - regardless of income. They have minimal discipline - and extreme entitlement. It’s crazy to me, as I’ve saved since I was in high school. It is a discipline, and it’s best developed young. It’s not easy to decide to save later in life, as you’ve become dependent on more net income in each paycheck. As we age, the chances for unexpected and expensive medical crises increase, and a little savings can be wiped out quickly. It’s a gamble, if you choose to not save, but think you will save later. When you are young, it’s ok to live meagerly. Everyone is starting out and they have less. But as you age, you might need certain things more. It’s easy to shovel snow in your 20’s - but when you are 60 and have a bad back and bad knees, it’s not easy to clear the driveway of the house you had to have!
  • Salty.Nutz
    •
    6 years ago
    @Ski & 25 i completely understand my mortality, Fathertime always wins. i just feel my health is going to deteriate, and i wont be able to do as much stuff alone without someone having to care for me. taking viagra is more of an ego thing for me, eventually i will get over.
  • shadowcat
    •
    6 years ago
    My ex wife was their teacher. She would buy something that we didn't need because it was on sale for 10% off and then put it on a credit card at 20% interest.
  • Papi_Chulo
    •
    6 years ago
    ^ LOL That's as bad as some stripper-logic :)
  • Dominic77
    •
    6 years ago
    @Dblednmike posted: "Understanding finances is important, but having a balance is also important. You can’t squander everything for enjoyment now, but you shouldn’t be miserable in the here and now so you can enjoy your golden years." These were the two examples I had growing up. One was a Depression survivor who stressed acetic life and saved everything and her children whom seemed frivolous. I thought I struct the balance between the two but even I goofed it. As disciplined as grandma was she was constantly miserable, complaining, everything was Sin, etc. I should have been more like her. She was more right than my young self gave her credit.
  • Dominic77
    •
    6 years ago
    salty.nutz is 100% about the happiness between the $3K/mo & 2mil guy versus the $150/mo family. I've learned that. Live simply.
  • Dominic77
    •
    6 years ago
    "Do you feel the majority of people understand financing and debt?" Estafador, I think one thing people may not understand is there are lower priced options. Like with my house. Simply I paid too much at the wrong time. I knew that but felt it was the least terrible option. I didn't think it or **any** house was worth over $100K to me at the time (I made $32K, bought 123K house), but I couldn't find anything under that threshold unless I bought inner-city Cleveland. Which is where I also rented and split rent 2-3 ways on a house rental. All of my GFs and my wife hated those homes and the areas. L-E-A-F-Y--N-E-I-G-H-B-O-R-H-O-O-D they all said. No landlords, no more roommates they said. I was dumb to go along. My fault. Not being able to afford mortgage on 15 year, no DP, double my faults. I knew these were overpriced (2004) based on household incomes and a market correction was inevitable. My fault for signing. I knew financing and debt but felt there wasn't an option that would shut-up most American women (mistake #4 or 5 at this point). Other ways it could have gone down and should have gone down. I knew better but chose to be weak. I wonder if my situation is that unique?
  • twentyfive
    •
    6 years ago
    ^ Mean while your expenses are lower, to live there than in comparable rental housing, and the cost through is based on 2004 pricing. You should still be coming out ahead.
  • Dominic77
    •
    6 years ago
    Doing better? I think so. I did get a raise to $40K when I moved in, otherwise the budget wouldn't have worked. I do like the leafy neighborhood. Expenses are lower on some things and higher on others. I used to joke HR must have sent a text each time I got a raise to alert someone to raise local taxes, raise insurance. Because every raise got vacuumed up. Or it felt that way. Esp. with my credit score and history. House will be paid off in 2043. can't wait. I had to get a loan restructure in 2013 when I went through foreclosure. I wished I would have just worked 2-3 jobs and got a 15 yr loan like I wanted. Can't change the past.
  • Papi_Chulo
    •
    6 years ago
    I've generally been a all-or-nothing type person and never shot for.the middle or thought the middle was ok, due to my personality - thus when I was a bit younger I struggled with the "live for today" vs "saving for tomorrow" paradox - being a all-or-nothing type person I thought I had to choose one of the two and for the most part I've tended to be conservative and.always lived below-my-means and often bypassed on indulgences I could o/w afford. None of us have a crystal-ball to know what the future will bring (good or bad) and these days I'm of the thought that most of us have no choice but to play it down the middle when it comes to the "living for today" vs the "saving for tomorrow" paradox (i.e. perhaps best to do a healthy amount of both while not getting into either extreme).
  • RandomMember
    •
    6 years ago
    @SkiBirther wrote: "the idea banks caused the last financial crisis is idiotic, because all they did was take advantage of people's greed and failure to protect themselves." ____ Horseshit. But you don't need to be a great thinker in family law.
  • Mate27
    •
    6 years ago
    Hey Salty, to echo 25 and Skibum sentiments, life is a marathon-not a sprint. Don’t be a shooting star and fizzle out. I remember just a couple years ago thinking “I’m about to turn 40” and thinking I was going to be over the hill. Truth be told I’m in better shape now and making more money, enjoying life way more than I ever did in my 20’s and 30’s. They say youth is wasted on the young, and if I only knew then what I know now I wouldn’t have wasted all my time and money on stupid things I thought was important, like cars-houses - sex - drugs- rock n roll- fancy vacations. The point is when you waste all that time and money you realize the best things in life are family, friends, simple meals with a roof over your head and being secure in your finances so you can give the boss the one finger salute and only need to listen to yourself. The things most enjoyable in life cost time, not money. Spending money doesn’t make you happy, it only keeps you caught in a perpetual loop of working for the man. Every young person should blow some money on stupid things to blow off steam, it’s creating a balance to stash some away for later in life, and budget some for entertainment, too. I think balancing between wants and needs is confusing to emotionally needy people. They want that new IPhone, even though they only need a cheap flip phone. Stick to the needs when your young and you’ll get what you want with women later in life.
  • mark94
    •
    6 years ago
    If invested in a diverse stock fund, the value might double every 10 years. So, a $40,000 BMW purchased at the age of 25 means $640,000 less money at normal retirement age. It doesn’t take many decisions like that before you find yourself a Walmart greeter at age 80.
  • san_jose_guy
    •
    6 years ago
    I think most people do understand. Much lending is predatory. And the Financial Literacy Movement is a mind fuck. SJG
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