Author Topic: Overheard at Work  (Read 8088725 times)

kayvent

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Re: Overheard at Work
« Reply #18700 on: September 27, 2017, 05:09:55 PM »
Of course nothing is guaranteed when having your own child, but it is costing us nothing (Canada), and we have the support in place if the child were to have a disability or other issues.
I'm going to put my pedant hat on for a moment.  It *does* cost you something, it just doesn't cost you anything extra on top of the taxes you're already paying :)

It may not cost them much compared to be single without children.

I'm a single teenage parent (25 now but I think that term still applies) and every year I do a calculation to see what my child probably costs. This is for pure curiosity.

Compared to someone who is single, most years my child is an economic benefit. For example, my income taxes go down 4,200$, I collect child support (~5$/year), and the CCB gives me over 4500$. There are other benefits but those three alone match most of my child's costs. Over 18 years that is 160K, more than double MMM's frugal number. Some years it is a gain. Some years it is a small loss.

rdaneel0

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Re: Overheard at Work
« Reply #18701 on: September 27, 2017, 06:26:50 PM »
...

There's something so unique to the MMM experience for me about someone complaining about how they can't do something you're doing, even when you're in nearly identical situations. This person lives in my neighborhood, commutes on the same train, same job title, etc. They could easily get to work just as early as I do and pack breakfast and lunch and then LEAVE EARLY.

*sigh*

People do limit themselves a lot by thinking and talking about what they "can't" do when in reality they are perfectly capable of making different choices.

I recall a conversation with a co-worker who declared that he and his wife and kids "couldn't" make up a bunch of casseroles and freeze them in order to have healthy home-cooked meals that could be easily reheated. None of the "I can't do that because" statements made sense. Eventually I came to the conclusion that the guy liked the feeling of being trapped into making the decision he wanted to make, which was to get carry-out several nights per week and bitch about how expensive it was. He was making a dumb choice, and he knew it, but feeling trapped by the "impossible" other options allowed him to give himself permission.

Human beings do things for one reason, and for one reason only: to get what they want. This is composed of an intellectual part and an emotional part. The intellectual part is easy to understand: an action is either pleasant or desirable for its own sake, or it is a necessary step toward some other goal. The emotional part is more subtle. In order to set the action in motion the person has to give himself or herself permission to act. The action must feel reasonable, justifiable, or even necessary. That's where all the excuse making and bitchass logical fallacy comes in.

People rationalize, make excuses, and occasionally sabotage their own options to create circumstances wherein they "have no choice" except to take a particular course of action. It's one of the reasons why people "ostrich" (I stole that verb from someone else's thread, I forget whose) and refuse to take action until a decision is moot and only one option remains available. The default option, the most expensive option, or the only remaining option is the one they truly want, however they are unwilling to admit it. So they selectively ignore opportunities and shoot down alternate suggestions until the only course of action available is the one they've already decided on. In my colleague's case, he simply wanted to get take-out and bitch about the expense. He didn't want to actually save money and eat better. Now he was a generally mealy-mouthed individual who refused to own his own actions and decision making, preferring to blame his decisions on others or on circumstances he chose to believe were beyond his control.

Yes! You articulated that so well. I don't think I fully made that connection before now. Spot on!
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Civex

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Re: Overheard at Work
« Reply #18702 on: September 27, 2017, 06:34:04 PM »
I have a great one that really encapsulates the whole MMM-spirit, not just money.

Yesterday I left work at 3:15 ish, normal for me. We can work any hours we like and I come in early so I leave early. (Background: at my work we have to clock out for lunch, so we are not paid during lunch).

CW: You're so lucky you get to leave early.
Me: Well I got here at 7:00!
CW: Yeah and you never take lunch.
Me: What? I take a lunch break every day.
CW: Yeah, but yours aren't as long because you bring your lunch. I have to go out to buy something so I'm clocked out longer. Plus I hit rush hour coming here.
Me: Well yeah, that's part of why I work early hours, to avoid rush hour and cut down my commute. 
CW: *puzzled expression*

There's something so unique to the MMM experience for me about someone complaining about how they can't do something you're doing, even when you're in nearly identical situations. This person lives in my neighborhood, commutes on the same train, same job title, etc. They could easily get to work just as early as I do and pack breakfast and lunch and then LEAVE EARLY.

*sigh*

We don't clock out, but get a 30 minute unpaid lunch and two of my coworkers drive me crazy with it. They almost always eat out, and often are running back into the office 15 minutes late (delaying other employee lunches or meetings) and then proceed to eat their lunch at the their desk over the next 15. As they walk in, "Oh Subway was so busy, I had to wait in line for 15 minutes...) The rest of us who aren't crazy pack our lunches, eat them in ~15 minutes, and relax for 15 minutes before returning to work.

The two offenders also make >$130k and are always, "broke." Well, if you didn't spend ~$15/day for lunch...

KelStache

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Re: Overheard at Work
« Reply #18703 on: September 27, 2017, 06:52:13 PM »
Of course nothing is guaranteed when having your own child, but it is costing us nothing (Canada), and we have the support in place if the child were to have a disability or other issues.
I'm going to put my pedant hat on for a moment.  It *does* cost you something, it just doesn't cost you anything extra on top of the taxes you're already paying :)

I mean, yeah, I understand taxes, but we're talking about adoption versus birth costs here. I pay my taxes regardless of which option we choose.

lifeisanadventure

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Re: Overheard at Work
« Reply #18704 on: September 28, 2017, 03:55:31 AM »
Colleague bought a new car for $32,000 and with their loan package paid a total of $92,000 in interest/fees etc for this car over 5 years!

Finished paying off this loan so went and got a new $65,000 car, on loan!

JordanOfGilead

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Re: Overheard at Work
« Reply #18705 on: September 28, 2017, 06:26:42 AM »
I appreciate all of the feedback and information on the adoption situation. It's not as cut and dry as I assumed and my ignorance shows.
I will say, however, that my attitude toward this particular individual has a lot less to do with the IVF over adoption decision and more to do with how he talks about it. Everybody knows he didn't really want to have kids and it was all his wife's doing. He loves their daughter to the end of the world, but very little of the process had genuine input from him and he is out $45k in credit card debt for it. Blows my mind.

DarkandStormy

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Re: Overheard at Work
« Reply #18706 on: September 28, 2017, 06:52:30 AM »
Colleague bought a new car for $32,000 and with their loan package paid a total of $92,000 in interest/fees etc for this car over 5 years!

I call B.S. on this.  $92K over 60 months on a $32K car = ~50% interest rate.  New car loans typically have interest rates under 2% currently.
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Raenia

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Re: Overheard at Work
« Reply #18707 on: September 28, 2017, 07:19:03 AM »
Colleague bought a new car for $32,000 and with their loan package paid a total of $92,000 in interest/fees etc for this car over 5 years!

I call B.S. on this.  $92K over 60 months on a $32K car = ~50% interest rate.  New car loans typically have interest rates under 2% currently.

Unless you have really bad credit and/or are rolling over debt from being underwater on the loan on your trade-in?  I can see some ways to end up in that situation, for people who are that bad at managing money.

Playing with Fire UK

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Re: Overheard at Work
« Reply #18708 on: September 28, 2017, 07:20:54 AM »
Colleague bought a new car for $32,000 and with their loan package paid a total of $92,000 in interest/fees etc for this car over 5 years!

I call B.S. on this.  $92K over 60 months on a $32K car = ~50% interest rate.  New car loans typically have interest rates under 2% currently.

2% is for someone with reasonable credit, if the credit was poor it could have been far higher. Or a previous car debt rolled in? Or they went crazy with the options and extended warranty as soon as it was combined into a monthly payment?

DarkandStormy

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Re: Overheard at Work
« Reply #18709 on: September 28, 2017, 07:33:06 AM »
Colleague bought a new car for $32,000 and with their loan package paid a total of $92,000 in interest/fees etc for this car over 5 years!

I call B.S. on this.  $92K over 60 months on a $32K car = ~50% interest rate.  New car loans typically have interest rates under 2% currently.

2% is for someone with reasonable credit, if the credit was poor it could have been far higher. Or a previous car debt rolled in? Or they went crazy with the options and extended warranty as soon as it was combined into a monthly payment?

Even so...40% interest rate?  Still doesn't pass the smell test.
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Playing with Fire UK

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Re: Overheard at Work
« Reply #18710 on: September 28, 2017, 07:47:53 AM »
Even so...40% interest rate?  Still doesn't pass the smell test.

If there was debt rolled in then it wouldn't be 40%, and if there were late fees, or a penalty interest rate?

My in-laws were paying 59% on a loan. Their credit is ... not good.

economista

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Re: Overheard at Work
« Reply #18711 on: September 28, 2017, 09:31:26 AM »
Even so...40% interest rate?  Still doesn't pass the smell test.

If there was debt rolled in then it wouldn't be 40%, and if there were late fees, or a penalty interest rate?

My in-laws were paying 59% on a loan. Their credit is ... not good.

My sister's current interest rate is 38% and she was $3k underwater on the car she traded in.  Once she rolled the tax and title fees into the loan she ended up with a $12k loan for an 8k used car....at 38% interest.   
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JordanOfGilead

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Re: Overheard at Work
« Reply #18712 on: September 28, 2017, 01:29:23 PM »
Even so...40% interest rate?  Still doesn't pass the smell test.

If there was debt rolled in then it wouldn't be 40%, and if there were late fees, or a penalty interest rate?

My in-laws were paying 59% on a loan. Their credit is ... not good.

My sister's current interest rate is 38% and she was $3k underwater on the car she traded in.  Once she rolled the tax and title fees into the loan she ended up with a $12k loan for an 8k used car....at 38% interest.

That sounds like it deserves it's own post in the "relatives that just don't get it" thread.

God knows they need something to pull them out of politics over there.

Babybalrog

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Re: Overheard at Work
« Reply #18713 on: September 28, 2017, 01:39:48 PM »
I don't know if I'm more shocked at the original math, the 50% interest rate, the skeptical BS call, or the testimony that, yes people do have rates that high....

And I did some research not long ago into subprime auto lending, and the huge percentage of people rolling unpaid debt from an old car into the new loan. Effectively, they are underwater from day 1.
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Ze Stash

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Re: Overheard at Work
« Reply #18714 on: September 28, 2017, 06:15:47 PM »
This one is actually overheard from my dads work but is too juicy not to tell.

My dad works at a relatively small company and is one of the partners there. Due to them being small and competing against much bigger firms they need everyone to pull their own weight. They are severely overstaffed in some departments though. In one of those departments they employ a married couple who have been with the firm for close to 15 years. The husband was hired shortly after he successfully battled cancer and therefore had disability status. This grants employees special rights such as 5 additional paid days off and basically full protection from being laid off.

Throughout the years his performance became gradually worse and several other employees complained about work not being done in time and their work suffering because of him. This got to the point where they had one intern look back through the time management system only to find out that through a combination of sick days (which they would take at the same time) and home office (also taken at the same time) him and his wife only spend 40% of official work hours actually in the office. Management suggested to reduce his hours but he was not interested and due to him being protected by his status it was decided that more drastic action could not really be taken.

This kept going on for a few years until at another partner meeting it was suggested to check whether his disability status was actually still in place, with the cancer now being more than 15 years in the past. Turns out that he lost his disability status and therefore the special rights in 2009, which he was required by law to communicate to the firm. He proceeded to tell the boss that he told the secretary and she must have forgotten (a lie). His next move was to not show up for work since then, claiming to be sick. He is now being fired.

On top of using all additional paid days of and hiding behind the status of being unfireable he also lead the firm to commit fraud, because employers are required to employ a certain percentage of disabled people or pay a yearly fee. Since the firm thought they achieved that percentage they didnít pay the fee for years.
And all of this behavior in a situation where he really canít afford to lose his job. They have 3 cars, 2 motorbikes and a huge mortgaged house which they could barely finance to begin with. It's like they intentionally dug a huge hole that is really difficult to dig out of again and then went ahead and threw away their shovel.

dragoncar

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Re: Overheard at Work
« Reply #18715 on: September 28, 2017, 06:56:46 PM »
This one is actually overheard from my dads work but is too juicy not to tell.

My dad works at a relatively small company and is one of the partners there. Due to them being small and competing against much bigger firms they need everyone to pull their own weight. They are severely overstaffed in some departments though. In one of those departments they employ a married couple who have been with the firm for close to 15 years. The husband was hired shortly after he successfully battled cancer and therefore had disability status. This grants employees special rights such as 5 additional paid days off and basically full protection from being laid off.

Throughout the years his performance became gradually worse and several other employees complained about work not being done in time and their work suffering because of him. This got to the point where they had one intern look back through the time management system only to find out that through a combination of sick days (which they would take at the same time) and home office (also taken at the same time) him and his wife only spend 40% of official work hours actually in the office. Management suggested to reduce his hours but he was not interested and due to him being protected by his status it was decided that more drastic action could not really be taken.

This kept going on for a few years until at another partner meeting it was suggested to check whether his disability status was actually still in place, with the cancer now being more than 15 years in the past. Turns out that he lost his disability status and therefore the special rights in 2009, which he was required by law to communicate to the firm. He proceeded to tell the boss that he told the secretary and she must have forgotten (a lie). His next move was to not show up for work since then, claiming to be sick. He is now being fired.

On top of using all additional paid days of and hiding behind the status of being unfireable he also lead the firm to commit fraud, because employers are required to employ a certain percentage of disabled people or pay a yearly fee. Since the firm thought they achieved that percentage they didnít pay the fee for years.
And all of this behavior in a situation where he really canít afford to lose his job. They have 3 cars, 2 motorbikes and a huge mortgaged house which they could barely finance to begin with. It's like they intentionally dug a huge hole that is really difficult to dig out of again and then went ahead and threw away their shovel.

Wow, which country is this? 

WerKater

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Re: Overheard at Work
« Reply #18716 on: September 29, 2017, 12:19:33 AM »
Wow, which country is this?
I am guessing: Germany.

Ze Stash

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Re: Overheard at Work
« Reply #18717 on: September 29, 2017, 04:45:58 AM »

MonkeyJenga

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Re: Overheard at Work
« Reply #18718 on: September 29, 2017, 06:23:45 AM »
On top of using all additional paid days of and hiding behind the status of being unfireable he also lead the firm to commit fraud, because employers are required to employ a certain percentage of disabled people or pay a yearly fee. Since the firm thought they achieved that percentage they didnít pay the fee for years.

This right here is on the company. They should be checking the status every year to ensure they are in compliance. Do they have a regulatory/compliance officer? I'm curious what else they might be non-compliant with and not realise it.

What's happening with the wife?

Linda_Norway

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Re: Overheard at Work
« Reply #18719 on: September 29, 2017, 06:41:47 AM »
Today we got a presentation of the new pension system our company wants to introduce. Mandatory for all new employees. We who already work here need to make a choice.

One of my young colleagues (under 30): I have never thought about pension. I am saving money to buy a Tesla.

I told her a bit about index funds and she wants me to show her sometime. That is a start.

jadd806

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Re: Overheard at Work
« Reply #18720 on: September 29, 2017, 01:24:19 PM »
All of my 20-something coworkers rushing to buy houses is so cringe-worthy.

One is 27. She can't seem to make ends meet without working overtime. She is obsessed with buying a house and constantly talks about how she needs to build equity instead of wasting money on rent. Her solution? A 0% down, 6% interest mortgage. The mortgage is advertised as "no PMI," but she doesn't seem to realize that a lower interest loan with PMI would end up cheaper. I tried to point that out, along with the fact that she won't be building much equity during the first several years of the mortgage due to the payments being mostly interest.

Seeing the type of people who are buying houses right now has kinda scared me away from real estate.

JoJo

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Re: Overheard at Work
« Reply #18721 on: September 29, 2017, 01:34:40 PM »
All of my 20-something coworkers rushing to buy houses is so cringe-worthy.

One is 27. She can't seem to make ends meet without working overtime. She is obsessed with buying a house and constantly talks about how she needs to build equity instead of wasting money on rent. Her solution? A 0% down, 6% interest mortgage. The mortgage is advertised as "no PMI," but she doesn't seem to realize that a lower interest loan with PMI would end up cheaper. I tried to point that out, along with the fact that she won't be building much equity during the first several years of the mortgage due to the payments being mostly interest.

Seeing the type of people who are buying houses right now has kinda scared me away from real estate.

Here we go again.  At least it's not interest only?

mtn

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Re: Overheard at Work
« Reply #18722 on: September 29, 2017, 02:30:50 PM »
All of my 20-something coworkers rushing to buy houses is so cringe-worthy.

One is 27. She can't seem to make ends meet without working overtime. She is obsessed with buying a house and constantly talks about how she needs to build equity instead of wasting money on rent. Her solution? A 0% down, 6% interest mortgage. The mortgage is advertised as "no PMI," but she doesn't seem to realize that a lower interest loan with PMI would end up cheaper. I tried to point that out, along with the fact that she won't be building much equity during the first several years of the mortgage due to the payments being mostly interest.

Seeing the type of people who are buying houses right now has kinda scared me away from real estate.

Does it have MIP though?

In all fairness, we (26 and 27 when we bought, 27 and 28 now) bought a house because we could no longer afford to rent. Seriously. Once you factored in the equity into the equation, we broke even after 2 years.

Of course, there are a ton of other factors that go into this, and in a slightly different situation we *could* have rented cheaper... but for us, after factoring in our commuting costs (including time) and everything else, it was cheaper to buy. Seems crazy to me too.

frugalnacho

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Re: Overheard at Work
« Reply #18723 on: September 29, 2017, 02:45:09 PM »
All of my 20-something coworkers rushing to buy houses is so cringe-worthy.

One is 27. She can't seem to make ends meet without working overtime. She is obsessed with buying a house and constantly talks about how she needs to build equity instead of wasting money on rent. Her solution? A 0% down, 6% interest mortgage. The mortgage is advertised as "no PMI," but she doesn't seem to realize that a lower interest loan with PMI would end up cheaper. I tried to point that out, along with the fact that she won't be building much equity during the first several years of the mortgage due to the payments being mostly interest.

Seeing the type of people who are buying houses right now has kinda scared me away from real estate.

Does it have MIP though?

In all fairness, we (26 and 27 when we bought, 27 and 28 now) bought a house because we could no longer afford to rent. Seriously. Once you factored in the equity into the equation, we broke even after 2 years.

Of course, there are a ton of other factors that go into this, and in a slightly different situation we *could* have rented cheaper... but for us, after factoring in our commuting costs (including time) and everything else, it was cheaper to buy. Seems crazy to me too.

I bought a 3/2 with garage and basement and my mortgage was around $600/mo, which was cheaper than anything I could rent (houses or apartments, even a dinky 1 bedroom shit hole on the shitty side of town).  The only thing cheaper would have been renting a room from someone, and not by much.  I didn't really understand the whole "rent vs buy" thing until well after I bought my house and talked to people in different geographic regions via the internet.  I always thought it was a stupid comparison because buying was the best option 100% of the time by a wide margin everywhere in my region (detroit metro).  Comparing apples to apples (ie house to house, not buying house vs renting apartment or something) renting was always at least twice as expensive as owing.  The only reason anyone  would ever rent is if they couldn't qualify to buy.  Or if you were going to live here short term and didn't want the hassle of buying and selling a property for the short term and were ok with spending thousands extra in rent over that period.  Even then in made sense IMO to buy and resell in 2-3 years and just eat the transaction fee since you'd still come out ahead .  Those were the only possible explanations of why someone would be renting in my area. 

We have friends renting a smaller house than ours less than a mile away in the same city and their rent is about $7k/yr more than my mortgage/insurance/taxes on my house.  Of course houses have appreciated some since we purchased, but it's still cheaper to buy.

BiochemicalDJ

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Re: Overheard at Work
« Reply #18724 on: September 29, 2017, 02:54:05 PM »

... buying was the best option 100% of the time by a wide margin everywhere in my region (detroit metro). 

I think the anti-mustachian bit refers to people desperate to buy houses in areas where it would be unquestionably stupid to do so. For example, where I am, the average value of a house (AVERAGE!) is about $426,000. That's for detached. Condos are $209K plus condo fees. So even attempting to follow the '1%' rule of renting (if you were buying for investment) means you'd need to rent it out for $4.5K. Which is unheard of where I am- I'm currently renting a house worth about 380K for 1.5K/month. (Make sure not to tell the landlord he's made a terrible decision...)

So buying a house in Detroit metro is a very mustachian decision. Not necessarily everywhere, for sure.

I know I get super annoyed with co-workers giving me the weird looks when I tell them I still live with students and I'm full time employed. But for me, it's whatever builds the 'stache...
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Ze Stash

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Re: Overheard at Work
« Reply #18725 on: September 29, 2017, 03:43:00 PM »
On top of using all additional paid days of and hiding behind the status of being unfireable he also lead the firm to commit fraud, because employers are required to employ a certain percentage of disabled people or pay a yearly fee. Since the firm thought they achieved that percentage they didnít pay the fee for years.

This right here is on the company. They should be checking the status every year to ensure they are in compliance. Do they have a regulatory/compliance officer? I'm curious what else they might be non-compliant with and not realise it.

What's happening with the wife?

I generally agree. They are however really small and have a rather informal company culture. It was expected that the employee would inform the company if there were any changes to his status, the same as all other employees try to act in the best interest of the company. They should have been more careful in checking that though. They have a flat hierarchy and a very reasonable person as CEO. If the employee had come to him at any point in the last 8 years, came clear that he lost his disability status and didn't tell them yet, explained the sitatution and apologised they 100% would not have fired him and tried to work something else out. He chose to hide that fact though and then when it was revealed tried to blame someone else that wasn't even involved.

The wife is fine. Despite the suspicious home office scheduling her work doesn't seem to suffer and there are no complaints from other employees about her work, so no reason that she shouldn't continue to work there. So far only the partners and the one accused secretary know of the whole drama with the husband though. I suspect the other employees who had to pick up the slack because of him will not be very warm towards her when they find out.

aperture

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Re: Overheard at Work
« Reply #18726 on: September 29, 2017, 06:04:24 PM »
Guy in the office next to me had a seizure at his desk yesterday. Today we found out he had experienced a hemorrhagic stroke. Presently he remains in a coma - status unknown.  I helped search his office for the keys to his brand new crew cab Toyota Tundra sitting out in the parking lot. 

Sad, scary, ironic. Best wishes to all you, aperture.
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chaskavitch

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Re: Overheard at Work
« Reply #18727 on: October 01, 2017, 07:33:21 AM »
All of my 20-something coworkers rushing to buy houses is so cringe-worthy.

One is 27. She can't seem to make ends meet without working overtime. She is obsessed with buying a house and constantly talks about how she needs to build equity instead of wasting money on rent. Her solution? A 0% down, 6% interest mortgage. The mortgage is advertised as "no PMI," but she doesn't seem to realize that a lower interest loan with PMI would end up cheaper. I tried to point that out, along with the fact that she won't be building much equity during the first several years of the mortgage due to the payments being mostly interest.

Seeing the type of people who are buying houses right now has kinda scared me away from real estate.

Here we go again.  At least it's not interest only?

I have a young coworker with three children who just purchased a house.  She had some emergency medical issues right before they started looking, which depleted their downpayment fund, so she was worried that they wouldn't qualify with such a small downpayment percentage.  Since it was their first house, they did qualify even with something like a 2.5% downpayment, but then they went out and bought all new furniture so their house would look grown-up.  I'm not certain at all where the money for all the furniture is supposed to come from :(

Raenia

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Re: Overheard at Work
« Reply #18728 on: October 01, 2017, 09:01:34 AM »
All of my 20-something coworkers rushing to buy houses is so cringe-worthy.

One is 27. She can't seem to make ends meet without working overtime. She is obsessed with buying a house and constantly talks about how she needs to build equity instead of wasting money on rent. Her solution? A 0% down, 6% interest mortgage. The mortgage is advertised as "no PMI," but she doesn't seem to realize that a lower interest loan with PMI would end up cheaper. I tried to point that out, along with the fact that she won't be building much equity during the first several years of the mortgage due to the payments being mostly interest.

Seeing the type of people who are buying houses right now has kinda scared me away from real estate.

Here we go again.  At least it's not interest only?

I have a young coworker with three children who just purchased a house.  She had some emergency medical issues right before they started looking, which depleted their downpayment fund, so she was worried that they wouldn't qualify with such a small downpayment percentage.  Since it was their first house, they did qualify even with something like a 2.5% downpayment, but then they went out and bought all new furniture so their house would look grown-up.  I'm not certain at all where the money for all the furniture is supposed to come from :(

Sometimes I worry if we'll be able to get a 20% downpayment together when we want to buy (most of our savings is currently going into tax-deferred options, and I don't want to pull anything out of that if possible), and we start nervously discussing if we'd be comfortable going ahead with 15% or even 10% down.  Then I read something like this, and feel better about myself :P

bigalsmith101

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Re: Overheard at Work
« Reply #18729 on: October 01, 2017, 11:31:32 AM »
Sometimes I worry if we'll be able to get a 20% downpayment together when we want to buy (most of our savings is currently going into tax-deferred options, and I don't want to pull anything out of that if possible), and we start nervously discussing if we'd be comfortable going ahead with 15% or even 10% down.  Then I read something like this, and feel better about myself :P

I have quite a few friends that have tackled 20% down payments on their respective homes. Each one was always focused on removing any prospective PMI payments.

However PMI is based on credit-worthiness, and the required payments can vary quite a huge amount, and is definitely based on how close the actual downpayment is to 20%.

In our case, we put down 10% on a $450k home. Our PMI payment is $101/mo or $1212/yr or ~2.7%. The mortgage is 3.625%. Combined that is 6.325%

The effective overal interest rate on our home is 3.895% for the next 7 years, until the PMI drops off.

If I had an additional $45k, would I have put it down against my home to remove PMI? Maybe...
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Pooperman

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Re: Overheard at Work
« Reply #18730 on: October 01, 2017, 01:43:49 PM »
Sometimes I worry if we'll be able to get a 20% downpayment together when we want to buy (most of our savings is currently going into tax-deferred options, and I don't want to pull anything out of that if possible), and we start nervously discussing if we'd be comfortable going ahead with 15% or even 10% down.  Then I read something like this, and feel better about myself :P

I have quite a few friends that have tackled 20% down payments on their respective homes. Each one was always focused on removing any prospective PMI payments.

However PMI is based on credit-worthiness, and the required payments can vary quite a huge amount, and is definitely based on how close the actual downpayment is to 20%.

In our case, we put down 10% on a $450k home. Our PMI payment is $101/mo or $1212/yr or ~2.7%. The mortgage is 3.625%. Combined that is 6.325%

The effective overal interest rate on our home is 3.895% for the next 7 years, until the PMI drops off.

If I had an additional $45k, would I have put it down against my home to remove PMI? Maybe...

Our PMI is about $70 on a 200k loan. It was 5% down with a rate of 3.25%.

Dave1442397

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Re: Overheard at Work
« Reply #18731 on: October 01, 2017, 01:44:35 PM »
Sometimes I worry if we'll be able to get a 20% downpayment together when we want to buy (most of our savings is currently going into tax-deferred options, and I don't want to pull anything out of that if possible), and we start nervously discussing if we'd be comfortable going ahead with 15% or even 10% down.  Then I read something like this, and feel better about myself :P

I have quite a few friends that have tackled 20% down payments on their respective homes. Each one was always focused on removing any prospective PMI payments.

However PMI is based on credit-worthiness, and the required payments can vary quite a huge amount, and is definitely based on how close the actual downpayment is to 20%.

In our case, we put down 10% on a $450k home. Our PMI payment is $101/mo or $1212/yr or ~2.7%. The mortgage is 3.625%. Combined that is 6.325%

The effective overal interest rate on our home is 3.895% for the next 7 years, until the PMI drops off.

If I had an additional $45k, would I have put it down against my home to remove PMI? Maybe...

We only put down 5% on our house (mainly a timing issue), and had PMI of around $125/month. I was able to refi after two years and get rid of the PMI as well as reducing my mortgage rate by a couple of percent. We did have credit scores in the 800s.

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Re: Overheard at Work
« Reply #18732 on: October 02, 2017, 09:06:36 PM »
A couple of years back, I refinanced my house to get a better interest rate.  I mentioned it to one of my co-workers who was incidentally also refinancing her house.  She said "Don't you just love refinancing?  We do it every year and take out as much money as we can.  One of the perks of owning your own home, I guess."  I am quite certain my eye is still twitching at the memory.

dbm

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Re: Overheard at Work
« Reply #18733 on: October 02, 2017, 11:45:59 PM »
Even so...40% interest rate?  Still doesn't pass the smell test.

If there was debt rolled in then it wouldn't be 40%, and if there were late fees, or a penalty interest rate?

My in-laws were paying 59% on a loan. Their credit is ... not good.

My sister's current interest rate is 38% and she was $3k underwater on the car she traded in.  Once she rolled the tax and title fees into the loan she ended up with a $12k loan for an 8k used car....at 38% interest.

Wow, I'm guessing the US doesn't have Usury laws?  Maybe people would see that as impinging on their freedom...

marielle

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Re: Overheard at Work
« Reply #18734 on: October 03, 2017, 06:19:19 AM »
Even so...40% interest rate?  Still doesn't pass the smell test.

If there was debt rolled in then it wouldn't be 40%, and if there were late fees, or a penalty interest rate?

My in-laws were paying 59% on a loan. Their credit is ... not good.

My sister's current interest rate is 38% and she was $3k underwater on the car she traded in.  Once she rolled the tax and title fees into the loan she ended up with a $12k loan for an 8k used car....at 38% interest.

Wow, I'm guessing the US doesn't have Usury laws?  Maybe people would see that as impinging on their freedom...

Looks like it varies wildly by state, and some states don't have a limit. http://www.loanback.com/category/usury-laws-by-state/

Credit cards are often 24%+. I have a good credit score and I still have credit cards that high (not that it matters). People sometimes even pay down payments with credit cards, though some dealerships may not allow it. Not sure.

It's pretty rare for a dealership to turn a customer down. You would have to have REALLY bad credit, and be trading in a car with a much higher payoff than what it's worth. It can happen if the car has transmission problems or something early in its life.

economista

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Re: Overheard at Work
« Reply #18735 on: October 03, 2017, 08:32:06 AM »
Even so...40% interest rate?  Still doesn't pass the smell test.

If there was debt rolled in then it wouldn't be 40%, and if there were late fees, or a penalty interest rate?

My in-laws were paying 59% on a loan. Their credit is ... not good.

My sister's current interest rate is 38% and she was $3k underwater on the car she traded in.  Once she rolled the tax and title fees into the loan she ended up with a $12k loan for an 8k used car....at 38% interest.

Wow, I'm guessing the US doesn't have Usury laws?  Maybe people would see that as impinging on their freedom...

Looks like it varies wildly by state, and some states don't have a limit. http://www.loanback.com/category/usury-laws-by-state/

Credit cards are often 24%+. I have a good credit score and I still have credit cards that high (not that it matters). People sometimes even pay down payments with credit cards, though some dealerships may not allow it. Not sure.

It's pretty rare for a dealership to turn a customer down. You would have to have REALLY bad credit, and be trading in a car with a much higher payoff than what it's worth. It can happen if the car has transmission problems or something early in its life.

Interestingly enough, my sister has been turned down twice!  The first time she got a car loan it was a $5k used car but she had nothing to put down on it and really bad credit.  My grandparents co-signed for her and my grandpa was smart about it and made the payments himself each month, with her reimbursing him.  Unfortunately, she didn't always make the payments to him like she was supposed to.  Around a year later she still owed $4k on it and something was really broken with it (I don't remember the details).  They would only offer her $1k to trade it in and she needed a working vehicle, but once again she didn't have any cash for a down payment and she was $3k underwater on the car.  The first dealer she went to talked her into a brand new, 2017 Honda Fit but she was there late enough in the day that they couldn't run her credit or anything.  She took pictures with the car and posted them on Facebook and got tons of comments about how hard work pays off and everyone was so proud of her.  The next day she went back and they ran her credit - the score was around 510 or 515 and she had 3 accounts sitting in collections.  They turned her down flat and my grandfather didn't have any interest in helping her out this time.  That afternoon she went to a really shady used car dealer and got the 38% loan. 
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dragoncar

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Re: Overheard at Work
« Reply #18736 on: October 03, 2017, 09:41:05 AM »
Even so...40% interest rate?  Still doesn't pass the smell test.

If there was debt rolled in then it wouldn't be 40%, and if there were late fees, or a penalty interest rate?

My in-laws were paying 59% on a loan. Their credit is ... not good.

My sister's current interest rate is 38% and she was $3k underwater on the car she traded in.  Once she rolled the tax and title fees into the loan she ended up with a $12k loan for an 8k used car....at 38% interest.

Wow, I'm guessing the US doesn't have Usury laws?  Maybe people would see that as impinging on their freedom...

I looked them up for California once and the exceptions were mind boggling.  They donít apply to banks for example.  WTF kind of useless usury law doesnít apply to the majority of lenders

MgoSam

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Re: Overheard at Work
« Reply #18737 on: October 03, 2017, 10:47:47 AM »
Even so...40% interest rate?  Still doesn't pass the smell test.

If there was debt rolled in then it wouldn't be 40%, and if there were late fees, or a penalty interest rate?

My in-laws were paying 59% on a loan. Their credit is ... not good.

My sister's current interest rate is 38% and she was $3k underwater on the car she traded in.  Once she rolled the tax and title fees into the loan she ended up with a $12k loan for an 8k used car....at 38% interest.

Wow, I'm guessing the US doesn't have Usury laws?  Maybe people would see that as impinging on their freedom...

I looked them up for California once and the exceptions were mind boggling.  They donít apply to banks for example.  WTF kind of useless usury law doesnít apply to the majority of lenders

Sacramento is I believe the third largest market for lobbyists (behind DC and Albany, NY). Bankers have a lot of money to spend on lobbyists....

Debts_of_Despair

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Re: Overheard at Work
« Reply #18738 on: October 03, 2017, 03:15:52 PM »
Leaving work on my bike, I get many genuine "be careful!" warnings.  This is coming from people who do absolutely zero physical activity and probably haven't been on a bike since they were 12.  I almost want to tell them "be careful of getting heart disease!" as they climb into their SUVs.

TreesBikesLove

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Re: Overheard at Work
« Reply #18739 on: October 03, 2017, 03:53:03 PM »
"We just signed up for 25 year extended repayment plans on my [over $100k] student debt. Now my payment is half what it used to be!"
me: "But isn't the interest rate the same?"
"Well we really want to buy a house [long tirade about annoying 'ethnic' apartment neighbors] and couldn't afford to save while paying off debt."

Later I was walking back from the meeting with another coworker and she said, "wouldn't you want to pay off student loans faster, not slower?" She's going to do alright.

Leaving work on my bike, I get many genuine "be careful!" warnings.  This is coming from people who do absolutely zero physical activity and probably haven't been on a bike since they were 12.  I almost want to tell them "be careful of getting heart disease!" as they climb into their SUVs.

This behavior is common among humans: exaggerating immediate danger and ignoring delayed danger. Luckily I am a robot.

AnnaGrowsAMustache

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Re: Overheard at Work
« Reply #18740 on: October 03, 2017, 04:32:50 PM »
Leaving work on my bike, I get many genuine "be careful!" warnings.  This is coming from people who do absolutely zero physical activity and probably haven't been on a bike since they were 12.  I almost want to tell them "be careful of getting heart disease!" as they climb into their SUVs.

Being on a roadway is a dangerous activity. Doesn't matter if you're walking, biking or driving. Few people walk on the road. Drivers are frequently protected by cars. I'd say biking is the most dangerous things you can do on a road. You're hard to see sometimes, some cyclers feel entitled to do things that increase their risk (like riding two abreast), and you're likely to have very serious injuries if you do get into an accident. Only thing worse you could do is be a motorcyclist, which is only really adding speed to the already dangerous cycling activity. Of course, if you have dedicated cycle lanes, that assessment changes. In this country, cyclists are on the main carriage way, with all the other traffic for the most part. There are cycle lanes at some intersections, but that's about it.

mustachepungoeshere

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Re: Overheard at Work
« Reply #18741 on: October 03, 2017, 05:38:01 PM »
Colleague paid $125 per kid for her son and daughter to go to a show by a YouTube 'star', then an extra $125 per kid for a two minute meet-and-greet with him. Her daughter then spent $100 of her own money on merchandise.

mustachepungoeshere

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Re: Overheard at Work
« Reply #18742 on: October 03, 2017, 05:39:02 PM »
Oh my god, she just rationalised it by saying they enjoyed it much more than they would have enjoyed 10 $50 presents.

ಠ_ಠ

ereamrod

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Re: Overheard at Work
« Reply #18743 on: October 04, 2017, 12:23:37 AM »
"I guess you need a really fancy car when you sit in traffic for that long to make it bearable". 🤦🏽‍♀️

ereamrod

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Re: Overheard at Work
« Reply #18744 on: October 04, 2017, 12:27:31 AM »

Leaving work on my bike, I get many genuine "be careful!" warnings.  This is coming from people who do absolutely zero physical activity and probably haven't been on a bike since they were 12.  I almost want to tell them "be careful of getting heart disease

This behavior is common among humans: exaggerating immediate danger and ignoring delayed danger. Luckily I am a robot.

A Robot who has their investment contributions on autopilot!!

Linda_Norway

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Re: Overheard at Work
« Reply #18745 on: October 04, 2017, 12:50:02 AM »
At our job we will need to make an individual choice to swap to another kind of pension system.

One of the colleagues in my room said that he and his wife had both been saving for pension privately. He talked about 15.000 NOK (approx 1600 USD) per year each. He also said he wanted to retire early. I said that maybe he should save more than that sum per year. But I'm not sure what he had in mind with early retirement, what age he was thinking of. He is now 50. Maybe he just thinks of 62, which is the earliest age for us to get paid out our saved pension.

A Definite Beta Guy

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Re: Overheard at Work
« Reply #18746 on: October 04, 2017, 07:39:27 AM »
Co-workers keep bothering me to start investing in stocks. I tell them they I do, through my 401(k), in index funds.

A lot of the young guys are avid  stock pickers, and don't see why you would both want to read business news (like I do) and not want to stock pick (which I don't).

They also buy the company stock, but refuse to buy the company stock THROUGH THE COMPANY which offers a 10% discount, because of the 1 year vesting period.

Index funds, index funds, index funds. They look at me like I just told them to invest all their money in gold (except some of them probably think that's uber-smart).

Linda_Norway

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Re: Overheard at Work
« Reply #18747 on: October 04, 2017, 07:43:41 AM »
Co-workers keep bothering me to start investing in stocks. I tell them they I do, through my 401(k), in index funds.

A lot of the young guys are avid  stock pickers, and don't see why you would both want to read business news (like I do) and not want to stock pick (which I don't).

They also buy the company stock, but refuse to buy the company stock THROUGH THE COMPANY which offers a 10% discount, because of the 1 year vesting period.

Index funds, index funds, index funds. They look at me like I just told them to invest all their money in gold (except some of them probably think that's uber-smart).

You have other colleagues than I do. When I recently at the coffee table mentioned to a young colleague who wanted to know more about investing, that she should be buying index funds, no one at the table said anything against it.

My DH has several times made quite good money by investing in his own company, the stock bought with employee discount and sold for a lot more later.

A Definite Beta Guy

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Re: Overheard at Work
« Reply #18748 on: October 04, 2017, 08:36:39 AM »
Co-workers keep bothering me to start investing in stocks. I tell them they I do, through my 401(k), in index funds.

A lot of the young guys are avid  stock pickers, and don't see why you would both want to read business news (like I do) and not want to stock pick (which I don't).

They also buy the company stock, but refuse to buy the company stock THROUGH THE COMPANY which offers a 10% discount, because of the 1 year vesting period.

Index funds, index funds, index funds. They look at me like I just told them to invest all their money in gold (except some of them probably think that's uber-smart).

You have other colleagues than I do. When I recently at the coffee table mentioned to a young colleague who wanted to know more about investing, that she should be buying index funds, no one at the table said anything against it.

My DH has several times made quite good money by investing in his own company, the stock bought with employee discount and sold for a lot more later.

I'm hoping it's just a small group of my coworkers and not everyone. These are usually smart young guys that want to be in the know about business. They just all idolize Warren Buffet and think they can beat the market by trading actively (and frequently) and are way too confident in their abilities.


Really hope most of my coworkers aren't in this boat.... :(

merula

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Re: Overheard at Work
« Reply #18749 on: October 04, 2017, 08:37:59 AM »
I'm hoping it's just a small group of my coworkers and not everyone. These are usually smart young guys that want to be in the know about business. They just all idolize Warren Buffet and think they can beat the market by trading actively (and frequently) and are way too confident in their abilities.


Really hope most of my coworkers aren't in this boat.... :(

Would it help to point out that Warren Buffet doesn't actively trade? He buys at a discount and holds forever.