Spanky
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That's only 0.1%. Is that enough?
0.10%
The Invisible Rich
- Thread starter roadkill
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0.10%
mickeyd
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Well, I'm not married to the concept. I suppose one could save more.
citrine
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I agree with Milton....why would anyone sign away their life for a mortgage worth thousands of dollars, if they didn't understand the loan/terms? It is common sense for god's sake!
As for the bailout....I don't think it is a good idea....what about accountability for your actions? I don't feel bad for the people....not one bit...maybe they need to learn a hard lesson of not over-extending themselves to live like the Jonses!
As for the bailout....I don't think it is a good idea....what about accountability for your actions? I don't feel bad for the people....not one bit...maybe they need to learn a hard lesson of not over-extending themselves to live like the Jonses!
Milton
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He said "simple", not "sufficient".
Anyway, putting aside as little as 0.1% is still doing better than the average American, who has a negative savings rate [Hooray for the Low Savings Rate!].
ladelfina
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I feel somewhat bad about the mortgage crisis (not bad enough, necessarily, to jump at the chance to bail out greedy buyers OR greedy banks..), only because I think Americans (and not only) are basically innumerate.
We are talking about people who have to push the button with the hamburger or do a scan rather than ring up a price, and who struggle to make change. They are sold stuff based on the monthly payments because that's a yardstick they can understand, while the fine print may be intentionally obscure. Buying a car for cash makes the salesman's face fall, 'cause they know they make a bundle on the financing. Not exactly the same with a house, but then there's only a select few that can buy a house for cash in the US. Mortgage brokers can screw you; banks can screw you. Few people are mathematically equipped to deal with the most important purchase in their lives despite the fact that most people undertake it. Look at how easily they rack up CC debt at what can become double-digit rates.. they're not gonna be figuring what a 1% or 2% mortgage interest rate rise means until it's too late. Those numbers sound puny until they materialize at some "far-off" possible future date. Who knows that they might be thinking.. at 5% or 6%.. "hey, it could go up.. OR DOWN!!"
As shown on the "Get Rich Fast (You Chump)" thread.. even relatively sane people can get be tempted into thinking they can replicate the Real Estate Winner stories that even the fairly smart folks on the board can't seem to agree about philosophically... (just a matter of numbers? business savvy? dumb luck? location? people skills?).
Dbldoc is right in that the real "culprit" is the liberal secondary market. In Europe, where loans are generally kept in house (and examined more closely for ability to pay), the problem exists to a much lesser degree (and mortgages are harder to obtain). If you're broke, they lose; when instead you shunt the risk onto someone else, the sky is the limit. Everyone in the chain was convinced they could have their cake and eat it, too: the borrowers, the intermediaries, and the secondary debt-purchasers. The Nobel-Prize-winner types goofed up just as much as the high-school dropouts, but somehow I have an idea they'll be feeling less direct pain.
Gumby, I think the analog to Household Finance is Rent-a-Center. Geez, there was one near me, and the stuff was so crappy you could have done far better at the Salvation Army if you invested in some stain remover. They did have wide-screen TVs, though!
We are talking about people who have to push the button with the hamburger or do a scan rather than ring up a price, and who struggle to make change. They are sold stuff based on the monthly payments because that's a yardstick they can understand, while the fine print may be intentionally obscure. Buying a car for cash makes the salesman's face fall, 'cause they know they make a bundle on the financing. Not exactly the same with a house, but then there's only a select few that can buy a house for cash in the US. Mortgage brokers can screw you; banks can screw you. Few people are mathematically equipped to deal with the most important purchase in their lives despite the fact that most people undertake it. Look at how easily they rack up CC debt at what can become double-digit rates.. they're not gonna be figuring what a 1% or 2% mortgage interest rate rise means until it's too late. Those numbers sound puny until they materialize at some "far-off" possible future date. Who knows that they might be thinking.. at 5% or 6%.. "hey, it could go up.. OR DOWN!!"
As shown on the "Get Rich Fast (You Chump)" thread.. even relatively sane people can get be tempted into thinking they can replicate the Real Estate Winner stories that even the fairly smart folks on the board can't seem to agree about philosophically... (just a matter of numbers? business savvy? dumb luck? location? people skills?).
Dbldoc is right in that the real "culprit" is the liberal secondary market. In Europe, where loans are generally kept in house (and examined more closely for ability to pay), the problem exists to a much lesser degree (and mortgages are harder to obtain). If you're broke, they lose; when instead you shunt the risk onto someone else, the sky is the limit. Everyone in the chain was convinced they could have their cake and eat it, too: the borrowers, the intermediaries, and the secondary debt-purchasers. The Nobel-Prize-winner types goofed up just as much as the high-school dropouts, but somehow I have an idea they'll be feeling less direct pain.
Gumby, I think the analog to Household Finance is Rent-a-Center. Geez, there was one near me, and the stuff was so crappy you could have done far better at the Salvation Army if you invested in some stain remover. They did have wide-screen TVs, though!
Milton
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Sad but true. Only in the good old USA would you find a market for something like this: Koloroo » TipKalc: Clever tip calculator widget for your iPod.
packrat44
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Many years ago when the nearby Ernst Hardware store was going out of business they had a clearance with everything marked 90% off. The young female clerk was having a tough time calculating the final price so my DW rattled off the prices to the clerk. The clerk was amazed how DW could figure the price so fast and without the add of a calculator. It is a said state when people don't have basic skills.
ladelfina
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oohhh Milton.. I thought the damn thing was FREE.. but it's TEN BUCKS!
(You gotta assume, too, that we can all work the iPod in the first place!)
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I think I told elsewhere here a story my sister recounted: She was in a store and had a purchase at the counter, but there was a power outage or the register didn't work or some such. She wanted to buy the merch. and get out. Because the shop gals couldn't trust themselves to figure out the tax, the change, etc., the (cash) sale was lost. Sis had even offered to help them write down the details of the sale and calculate the tax! No dice. Oh well.
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also, Gumby, P.S. .. I recall in Jr. High (1970s) going though exercises that mimicked the "Household Finance" scenarios.. with an eye towards giving us some minimal tools and awareness of predatory lending practices. Have they done that in the last 20 years --systematically-- in the schools, or not? I'd be curious to know.
(You gotta assume, too, that we can all work the iPod in the first place!)
---
I think I told elsewhere here a story my sister recounted: She was in a store and had a purchase at the counter, but there was a power outage or the register didn't work or some such. She wanted to buy the merch. and get out. Because the shop gals couldn't trust themselves to figure out the tax, the change, etc., the (cash) sale was lost. Sis had even offered to help them write down the details of the sale and calculate the tax! No dice. Oh well.
--
also, Gumby, P.S. .. I recall in Jr. High (1970s) going though exercises that mimicked the "Household Finance" scenarios.. with an eye towards giving us some minimal tools and awareness of predatory lending practices. Have they done that in the last 20 years --systematically-- in the schools, or not? I'd be curious to know.
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We are talking about people who have to push the button with the hamburger or do a scan rather than ring up a price, and who struggle to make change. They are sold stuff based on the monthly payments because that's a yardstick they can understand, while the fine print may be intentionally obscure. Buying a car for cash makes the salesman's face fall, 'cause they know they make a bundle on the financing. Not exactly the same with a house, but then there's only a select few that can buy a house for cash in the US. Mortgage brokers can screw you; banks can screw you. Few people are mathematically equipped to deal with the most important purchase in their lives despite the fact that most people undertake it. Look at how easily they rack up CC debt at what can become double-digit rates.. they're not gonna be figuring what a 1% or 2% mortgage interest rate rise means until it's too late. Those numbers sound puny until they materialize at some "far-off" possible future date. Who knows that they might be thinking.. at 5% or 6%.. "hey, it could go up.. OR DOWN!!"
An interesting point of view ladelfina. But I guess my question to you would be... do you beleive that these people are truly stupid (meaning of a very low intelligence), or just lazy (able to learn how do things, but just choose not to)? I guess I am a bit more optimistic about people than you are. I believe that most people are capable to earn their own way in the world, and are intelligent enough to govern their own lives. If people are truly stupid (low intelligence), then I guess that these people do need some help, but I would think this is a very low percentage of the population.
I have watched attempts at trying to save people from themselves and it usually does not work, and those that try (while a noble effort) are often hated for interfering. I think the best that anyone can do is offer help and advice when asked, try to point out bad things that could happen, and then just sit back. Most people that seem to get "screwed over" as you put it, are those that were trying to get something for nothing. I mean it is certainly fraud when a con-man offers to sell you the brooklyn bridge. But at the same time, it was the thought of "easy money" that hooked him in the first place. If a man offers to sell you a new BMW for $4000, you should not be shocked and surprised to learn later that the car is stolen, or has some major problems with it. The claim of "well how was I supposed to know that" just does not hold water.
ladelfina
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I didn't say "stupid".. I said "innumerate", which I think is due to in part to intellectual laziness and in part because math life skills are probably not emphasized and valued in school. So aside from the truly mentally challenged, we have a whole passle of "average" people who don't have the tools to seriously assess their CC or mortgage contract. They can easily be distracted by the shiny object: the $40k car at $299/mo. vs. the $30k car at $399/mo.? Pick one.
The entire society is filled with anti-intellectualism. Do you want to hang with the jocks or the nerds? Do you want a president that's "wonky" or one "you can have a beer with"? I think a lot of kids experience peer pressure to NOT excel. Homework is for chumps and stooges. Being a "know-it-all" is uncool and makes others feel insecure, so they'll try to drag everyone down to a comfortable level.
Sis wrote me:
I think girls and women sometimes sell themselves short because 'ditzy' is more acceptable and cute and non-threatening. I think guys sometimes have chips on their shoulders and are more likely to have an unrealistic picture of their financial or intellectual skills.
I don't know how or why there are so many barely functional people out there, but someone is taking care of them, graduating them, paying them, promoting them...
This is not just in the US btw.. In Italy, I was told by a friend of DH that I had a "character defect" because I wanted to know what the Italian word for "barnacle" was. Barnacles are all over the world. They cause billions of dollars in damage and slowdowns for shipping. For a few days I asked everyone we came across, probably about 50 Italians, and no one could give me a name either in Italian or in a local dialect. We were vacationing in a town that was very near the sea!!! They said "oh, you mean mussels?".. or they said "yeah, I know what you're talking about.. they're mineral incrustations!" I even drew pictures for them! The majority was completely incurious and just shrugged, a few seemed a little embarrassed for not knowing, and a couple, like DH and his friend, were downright irritated. Why did I need to know that? It was not "useful". I was defective, not them!
As far as finances go, generally speaking Italians buy houses or leave their money in the bank at 1%. The stock market is "too risky"!
They also like annuities.
The entire society is filled with anti-intellectualism. Do you want to hang with the jocks or the nerds? Do you want a president that's "wonky" or one "you can have a beer with"? I think a lot of kids experience peer pressure to NOT excel. Homework is for chumps and stooges. Being a "know-it-all" is uncool and makes others feel insecure, so they'll try to drag everyone down to a comfortable level.
Sis wrote me:
I think girls and women sometimes sell themselves short because 'ditzy' is more acceptable and cute and non-threatening. I think guys sometimes have chips on their shoulders and are more likely to have an unrealistic picture of their financial or intellectual skills.
I don't know how or why there are so many barely functional people out there, but someone is taking care of them, graduating them, paying them, promoting them...
This is not just in the US btw.. In Italy, I was told by a friend of DH that I had a "character defect" because I wanted to know what the Italian word for "barnacle" was. Barnacles are all over the world. They cause billions of dollars in damage and slowdowns for shipping. For a few days I asked everyone we came across, probably about 50 Italians, and no one could give me a name either in Italian or in a local dialect. We were vacationing in a town that was very near the sea!!! They said "oh, you mean mussels?".. or they said "yeah, I know what you're talking about.. they're mineral incrustations!" I even drew pictures for them! The majority was completely incurious and just shrugged, a few seemed a little embarrassed for not knowing, and a couple, like DH and his friend, were downright irritated. Why did I need to know that? It was not "useful". I was defective, not them!
As far as finances go, generally speaking Italians buy houses or leave their money in the bank at 1%. The stock market is "too risky"!
They also like annuities.
MikeD
Full time employment: Posting here.
According to Google
It's cirripede.
Mike D.
It's cirripede.
Mike D.
Milton
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According to Babel Fish, Italian for barnacle is: "barnacle".
Milton
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Firsthand evidence supporting your point: on a recent thread [http://www.early-retirement.org/forums/f30/need-some-guidance-30146.html], we have a new member who says he has a mortgage but confesses that he has no idea how to calculate his net worth.
Fireup2020
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Easy on women and the math topic... Some of us "ditzy chicks" have several years of college calculus through diff-e-q (differential equations for the non engineering geeks) and all the cool mech engineering and physics stuff behind us - but when it comes to "financial" math, well, honestly it bores the bejeezus out of me (right along with statistics) where is the smiley for eyes glazed over?...and I do rely on existing formulas and calculators for specific calculations. But is that not the case for most mathmetical calculations?
ladelfina
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MikeD.. a barnacle is a cirripede, which is a Class (actually a subclass) of animal.
It's like saying a whale is a cetacean. True but not useful.
Loosely:
Cirri-pede => hairy foot
The Class is Maxillopoda => jaw foot
Milton: exactly!! Plus who can count all the perfectly smart people here who tell stories of parents and siblings in deep financial trouble?? Shows that genetics and environment aren't at fault, so what is it?
It's like saying a whale is a cetacean. True but not useful.
Loosely:
Cirri-pede => hairy foot
The Class is Maxillopoda => jaw foot
Milton: exactly!! Plus who can count all the perfectly smart people here who tell stories of parents and siblings in deep financial trouble?? Shows that genetics and environment aren't at fault, so what is it?
