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Old 12-28-2010, 09:27 PM   #21
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I work with a lot of young people in their 20's -- they view they cost of a capital purchase as "how much per month" additional to their CC balance.

I don't get it.
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Old 12-28-2010, 09:31 PM   #22
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Originally Posted by Delawaredave5 View Post
I work with a lot of young people in their 20's -- they view they cost of a capital purchase as "how much per month" additional to their CC balance.

I don't get it.
it might actually be a good end-of-life mindset
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Old 12-28-2010, 09:33 PM   #23
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Yeah, I have a dear friend who is usually sensible about his money who traded his 3 year old truck in perfect condition with less than 25k miles for a new truck (same make/model/trim as the old truck).
I wonder if he realized that one of this board's posters would have paid him more for the "old" truck than he got on the trade-in.
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Old 12-28-2010, 10:12 PM   #24
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Along these lines, it bugs me when people pay their insurance (house, car, life, etc) monthly instead of lump sum for the six months or year. Many policies end up costing you $30-40 to stretch the payments out on a monthly basis.
Why does that bug you? The more people who pay more in interest and such, generally the better the deals are for the people who aren't stupid
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Old 12-28-2010, 11:03 PM   #25
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My BIL was like that when we first met.... he would trade in a car and get a lower payment and think he was ahead of the game.... it took me many years to convince him that have 18 more months of payments that are $50 per month more is better than 60 months that are 'less'....


Car salesmen are the biggest culprits of this monthly mindset... and can use it to sale more car or at a higher price than someone wants... just spread it out over 72 months and PRESTO, you can afford this car at full price....
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Old 12-28-2010, 11:55 PM   #26
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Buyer Beware!
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Old 12-29-2010, 01:45 AM   #27
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I always try to be aware of my own economic hyperopia --- the real danger is that I don't want to wake up one day having realized that I saved well but I have no time left to spend it.

Very good point. One of the reasons I'm good at saving is because I'm rather good at delayed self-gratification. In fact, I'm a bit too good at it and have to be careful that I'm not denying myself pleasure and enjoyment. However, I think a lot of people on this board enjoy their lives and have figured out the balance.
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Old 12-29-2010, 08:37 AM   #28
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Why does that bug you? The more people who pay more in interest and such, generally the better the deals are for the people who aren't stupid
It mainly bugs me when it is family or a friend that complains of being broke perpetually, then wastes a lot of money on breaking a six month premium into six monthly payments. When I point out, hey you can just pay the other $250 right now and save yourself $30 in fees over the next fix months, they just say they don't have $250. By they "don't have $250" it means they want to spend it on something else or they just spent it on something else.
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Old 12-29-2010, 09:28 AM   #29
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By they "don't have $250" it means they want to spend it on something else or they just spent it on something else.
This type of attitude is how we refurnished our house via Craigslist... I think lightly-used furniture depreciates even faster than a Yugo.
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Old 12-29-2010, 09:54 AM   #30
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I have been paid a monthly salary ever since I got out of college. I ran into a (to me) mind blowing example of this mindset when I was put to work in the shop during a strike in the early 90's. There were a few union folks who crossed the line and it was always interesting talking to them during lunch or breaks. They were paid weekly and several of them had long discussions with me about how they couldn't deal with not having money coming in every week. One of them commented that they liked the weekly paycheck because if they were a little behind, he could work a little more overtime to make it up. These were people who (with overtime) could probably make about $100k/yr so it wasn't a question of only having money for the necessities.
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Old 12-29-2010, 10:27 AM   #31
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Former co-w*rker was like that. He had excellent credit, but everything he owned was bought on credit and his finances were computed on being able to make the monthly notes and to heck with how much he paid when everything was totaled up.
Sounds like he plans to just "rent his future".

I guess you just can't cure stupidity...
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Old 12-29-2010, 10:56 AM   #32
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I always find it a bit sad when I hear about people having car loans stacked on top of old car loans

couldn't imagine driving and paying for a new (used) car while I was still paying for the old used car that found a home at the salvage yard

before I got to that point, I would take the bus
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Old 12-29-2010, 10:58 AM   #33
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Tenants often act like deposits are spent money rather than $$$ they can get back.
When I relocated earlier this year I researched temporary housing in case it became necessary (it didn't). I dropped by an apartment complex to ask the price of rent. When the discussion turned to fees and deposits I was told there was a "non-refundable security deposit." Huh? I told the young lady that wasn't a "deposit," that was a "fee." "Oh, no!" she insisted, "it's a DEPOSIT; it's just not refundable."

I, too, am a bit frustrated by coworkers who describe the prices of their new toys as "$xxx per month." I suppose that's why they're so incredulous when I mention I'm within 5 years of FIRE at age 50, and that DW has already FIRE'd at age 55. (And on the topic of another thread, yes, I've learned to keep my mouth shut about that, too!)

I had a friend a while back who was looking forward to getting a new job so he could take what little 401(k) savings he had with his old employer and spend it on a new toy. I pointed out that besides the fact that he'd be pissing his future away, he'd have to pay taxes and substantial penalties on that money. His reaction was that was OK because he had enough in the 401(k) to cover the taxes and penalties and still get his toy (but barely), and besides, he'd never be able to save enough to retire anyway (which he was demonstrating was certainly true in his case).

We live in a different world than some of those around us, that's for sure!
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Old 12-29-2010, 11:06 AM   #34
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His reaction was that was OK because he had enough in the 401(k) to cover the taxes and penalties and still get his toy (but barely), and besides, he'd never be able to save enough to retire anyway (which he was demonstrating was certainly true in his case).

We live in a different world than some of those around us, that's for sure!
Don't worry about your friend, GB- with SS means testing just around the corner, they'll reduce the benefit you were promised to make sure he can retire in the style to which he has become accustomed.
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Old 12-29-2010, 03:16 PM   #35
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I can never understand the people who think that they (or I) should book the deluxe hotel room at a conference because "it's a tax deductible expense anyway". The cost of the basic room is still tax deductible and a corporate expense still impacts on the bottom line.
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Old 12-29-2010, 03:37 PM   #36
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Here's another one: "I save money by not using a credit card."
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Old 12-29-2010, 03:58 PM   #37
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Here's another one: "I save money by not using a credit card."
While this is certainly false for me, I am not so sure about the general population, especially after reading this:

http://www.chicagofed.org/digital_as.../wp2010_19.pdf
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Old 12-29-2010, 04:15 PM   #38
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Here's another one: "I save money by not using a credit card."
Along those lines - I like getting a big tax refund because it helps me pay down some debt, buy some things I want and maybe save a little in March every year.
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Old 12-29-2010, 06:27 PM   #39
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Along those lines - I like getting a big tax refund because it helps me pay down some debt, buy some things I want and maybe save a little in March every year.

That's my sister - makes interest free loans to the government every year - intentionally! - so she can get a tax refund.

Whereas I bought state Business Energy Tax Credits sufficient to pay our state taxes for the next 5 years when we sold a little house. Won't get any refund, but the internal rate of return makes me feel like a corporate fat cat. That little tax loophole has been made less attractive by far, but my credits are still usable. Of course I don't get checks from the government after tax time and normally have to write checks to them....
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Old 12-29-2010, 07:09 PM   #40
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Along those lines - I like getting a big tax refund because it helps me pay down some debt, buy some things I want and maybe save a little in March every year.
I prefer to mail them a check by snail mail, postmarked just before midnight on the 15th of April.
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