Author Topic: Overheard at Work  (Read 6427572 times)

Dave1442397

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Re: Overheard at Work
« Reply #18800 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.

Kay-Ell

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Re: Overheard at Work
« Reply #18801 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 #18802 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 #18803 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 #18804 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. 
Follow along on my journey toward becoming (semi) mustacian :) http://forum.mrmoneymustache.com/journals/economista's-journal/

dragoncar

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Re: Overheard at Work
« Reply #18805 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 #18806 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 #18807 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 #18808 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 #18809 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 #18810 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 #18811 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 #18812 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 #18813 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 #18814 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 #18815 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 #18816 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 #18817 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 #18818 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.

A Definite Beta Guy

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Re: Overheard at Work
« Reply #18819 on: October 04, 2017, 09:35:14 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.

I might try that route if they bring up the Oracle again. Dude is closer to a Private Equity firm than he is a day-trader.

Probably won't work. These guys romanticize finance. They need to get into currency trading so they can lose all their hair and realize how stupid it is, lol.

MgoSam

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Re: Overheard at Work
« Reply #18820 on: October 04, 2017, 10:03:22 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.

I might try that route if they bring up the Oracle again. Dude is closer to a Private Equity firm than he is a day-trader.

Probably won't work. These guys romanticize finance. They need to get into currency trading so they can lose all their hair and realize how stupid it is, lol.


I'm glad that others have caught on that Warren Buffett isn't a day trader. When my company had a showroom in Chicago I spoke to a bunch of salesmen and women whose company's had showrooms there. Nearly all of them were day trading and I just had to shake my head at them. I really wish I could find out how much more money they would have had if they had simply put their investments into index funds instead of moving them around from one hot stock to another. I imagine transaction fees were eating up any return they got. Quite a few of the salesmen are in their 50s and 60s whereas I was in my mid-20s and likely making nearly as much as them.

Digital Dogma

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Re: Overheard at Work
« Reply #18821 on: October 04, 2017, 10:15:17 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.

I might try that route if they bring up the Oracle again. Dude is closer to a Private Equity firm than he is a day-trader.

Probably won't work. These guys romanticize finance. They need to get into currency trading so they can lose all their hair and realize how stupid it is, lol.
I see the same types trading crypto-currency, the real winners are the exchanges. These guys stress over every little choice and you never hear a peep about losses, but the second they double up they're self appointed gurus.

nick663

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Re: Overheard at Work
« Reply #18822 on: October 04, 2017, 10:51:22 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...

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.
I put a 4k down payment for a car on a CC.  Varies by dealer and most have a limit because they don't want to absorb the fees.

Good way to meet the minimum spend for a CC bonus. :-)

LennStar

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Re: Overheard at Work
« Reply #18823 on: October 05, 2017, 02:43:49 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!" 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.

Actually bike lanes make it more dangerous on average.
Granted, that is based on european studies. I would not be surprised to hear that both the US road system and road users make it even more dangerous then that.


Quote
They just all idolize Warren Buffet and think they can beat the market by trading actively
Hah?????

They idolize someone who says you should invest in index funds and hold for decades and then do the opposite?

Imma

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Re: Overheard at Work
« Reply #18824 on: October 05, 2017, 03:06:13 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!" 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.

Actually bike lanes make it more dangerous on average.
Granted, that is based on european studies. I would not be surprised to hear that both the US road system and road users make it even more dangerous then that.


Do you have a source for that? I'm a European and a frequent user of bike lanes and I just can't see how on earth they would make things more dangerous. I feel very safe on a bike lane and most accidents I've witnessed happened with cyclists on smaller main roads, especially when those roads are frequently used by buses or trucks.

Playing with Fire UK

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Re: Overheard at Work
« Reply #18825 on: October 05, 2017, 03:08:42 AM »
I wonder if the study looked at bike lanes that are demarcated by a line of paint rather than proper bike lanes that have a physical barrier.

It doesn't fit with my experience either.

kayvent

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Re: Overheard at Work
« Reply #18826 on: October 05, 2017, 04:06:31 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.

I wonder if these people realize that Berkshire Hathaway doesn't buy stocks. They buy companies. They own dozens of companies outright and have large shares (double digit percents) of many others. I assert that it is not only because they buy good companies that they do so well; it is also because they are able to influence the companies.

Rollin

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Re: Overheard at Work
« Reply #18827 on: October 05, 2017, 05:16:24 AM »

This is the same boss who is leasing two vehicles for his family at $700+/month - minivan for mom/kids and a sedan (Camry? I forget) for him.  His justification is that Toyota Care covers the first two years of the lease, meaning he only has to pay for one year of maintenance before it's time for the next lease.

That makes sense. Brand new Toyota's under warranty are extremely expensive to maintain.

Yes, like maybe $30 for an oil change (DYI of course)?
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UKMustache

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Re: Overheard at Work
« Reply #18828 on: October 05, 2017, 06:27:21 AM »
Today I heard a colleague making a furious phone call to (I presume) her husband. 

She asked if he was using her credit card.. he must have said yes.

She started shouting at him, the bank had just e-mailed her to say she was over her limit. 
Rather than tell him to stop buying things, she said he should use 'one of the cards that isn't maxed out'.

We got paid 6 days ago, if they've run out of money already it's going to be a long month for them.

Panly

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Re: Overheard at Work
« Reply #18829 on: October 05, 2017, 06:29:02 AM »

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...

that was the situation a few years ago around here. 

But then prices doubled, if not tripled.

Tell me, who looks "unquestionably stupid" today?    The ones like you and me, renting forever, or the now millionaires pocketing 800k without having lifted a finger. 



merula

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Re: Overheard at Work
« Reply #18830 on: October 05, 2017, 06:36:53 AM »
that was the situation a few years ago around here. 

But then prices doubled, if not tripled.

Tell me, who looks "unquestionably stupid" today?    The ones like you and me, renting forever, or the now millionaires pocketing 800k without having lifted a finger.

They still do. It's speculation. Sure, sometimes it works out, but I can show you many, many more examples when it didn't.

And anyway, "speculation" and "pocketed $800k" assumes that they sold the house and moved somewhere cheaper. That's the best-case scenario. It's more likely that they are using that massive gain as a piggy bank.

Panly

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Re: Overheard at Work
« Reply #18831 on: October 05, 2017, 06:37:06 AM »


I wonder if these people realize that Berkshire Hathaway doesn't buy stocks. They buy companies. They own dozens of companies outright and have large shares (double digit percents) of many others. I assert that it is not only because they buy good companies that they do so well; it is also because they are able to influence the companies.

before they own a lot of stock, they have to buy a lot of stock.   It seems you haven't realized that.

Panly

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Re: Overheard at Work
« Reply #18832 on: October 05, 2017, 06:46:24 AM »
that was the situation a few years ago around here. 

But then prices doubled, if not tripled.

Tell me, who looks "unquestionably stupid" today?    The ones like you and me, renting forever, or the now millionaires pocketing 800k without having lifted a finger.

They still do. It's speculation. Sure, sometimes it works out, but I can show you many, many more examples when it didn't.

And anyway, "speculation" and "pocketed $800k" assumes that they sold the house and moved somewhere cheaper. That's the best-case scenario. It's more likely that they are using that massive gain as a piggy bank.

indeed, that's how the ones who didn't benefit attempt to rationalise it.






BiochemicalDJ

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Re: Overheard at Work
« Reply #18833 on: October 05, 2017, 06:57:53 AM »

that was the situation a few years ago around here. 

But then prices doubled, if not tripled.

Tell me, who looks "unquestionably stupid" today?    The ones like you and me, renting forever, or the now millionaires pocketing 800k without having lifted a finger.

Well, I'll tell you that I look "unquestionably stupid" for wimping out and not buying Bitcoin when it was trading at $126 CAD after watching it skyrocket up from $25 CAD within a few months. It's now trading at $5385.91.

Except then you put on your mustachian thinking cap and you remember that hindsight is 20/20, and gambling is a really, really stupid way to plan for retirement.

In Canada, the real estate bubble hasn't burst yet. We haven't had our housing crisis. Once it does and these prices normalize, then I'll consider buying- But the data in my city suggest that housing hasn't "Doubled" or "Tripled". In fact, the gains have been incredibly modest over the last 30 years. Since 1978, the average increase in house prices has been 5.04% per year1  Inflation over that same time period averaged out to 3.27% per year2.

So, people can enjoy their 'mad gainz' on real estate in this city of a fat 1.77%/year.

I'll just sit on my couch potato funds and twiddle my thumbs... Not lifting a finger.

1 (http://www.agentinottawa.com/1956-present-prices.php), retrieved 2017-10-05
2 (http://www.bankofcanada.ca/rates/related/inflation-calculator/), retrieved 2017-10-05
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MrMoogle

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Re: Overheard at Work
« Reply #18834 on: October 05, 2017, 07:03:57 AM »
I wonder if the study looked at bike lanes that are demarcated by a line of paint rather than proper bike lanes that have a physical barrier.

It doesn't fit with my experience either.
My guess is that they looked at roads with bike lanes vs roads without.  Roads with bike lanes are probably more congested, hence the reason it needed a bike lane.  If you look at a per mile of road basis, my guess is roads with bike lanes have more wrecks than roads without.

If this is true it's one of those cases of: there's lies, damn lies, and statistics.  I've learned I can take data and come up with any conclusion I want.  Overcoming your biases is really hard, even with hard data in front of you.

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Re: Overheard at Work
« Reply #18835 on: October 05, 2017, 07:55:53 AM »

that was the situation a few years ago around here. 

But then prices doubled, if not tripled.

Tell me, who looks "unquestionably stupid" today?    The ones like you and me, renting forever, or the now millionaires pocketing 800k without having lifted a finger.

Well, I'll tell you that I look "unquestionably stupid" for wimping out and not buying Bitcoin when it was trading at $126 CAD after watching it skyrocket up from $25 CAD within a few months. It's now trading at $5385.91.

Except then you put on your mustachian thinking cap and you remember that hindsight is 20/20, and gambling is a really, really stupid way to plan for retirement.

In Canada, the real estate bubble hasn't burst yet. We haven't had our housing crisis. Once it does and these prices normalize, then I'll consider buying- But the data in my city suggest that housing hasn't "Doubled" or "Tripled". In fact, the gains have been incredibly modest over the last 30 years. Since 1978, the average increase in house prices has been 5.04% per year1  Inflation over that same time period averaged out to 3.27% per year2.

So, people can enjoy their 'mad gainz' on real estate in this city of a fat 1.77%/year.

I'll just sit on my couch potato funds and twiddle my thumbs... Not lifting a finger.

1 (http://www.agentinottawa.com/1956-present-prices.php), retrieved 2017-10-05
2 (http://www.bankofcanada.ca/rates/related/inflation-calculator/), retrieved 2017-10-05

The Canadian housing crisis, when it hits, is unlikely to be as widespread a phenomenon as it was in the USA. Definitely cities like Calgary, Toronto, and Vancouver will be affected, which will have an impact on the immediate surrounding areas within easy commuting distance, however there aren't as many incentives for people to borrow or leverage themselves heavily as there were in the USA prior to our housing bubble. The biggest difference that comes to mind, for me, is the way mortgage interest on a primary home was (and still is) a tax deductible expense in the USA. That's a subsidy for borrowing toward a home and for refinancing to pull equity out in order to spend it on other things. Furthermore, with a home mortgage, if a Canadian defaults a creditor can legally attach other assets besides the home itself. Simply walking away from an upside-down loan isn't as easy of an option as it is State-side. Bundling high-risk mortgages and securitizing them, from the bank's perspective, isn't an option because banks aren't allowed to sell mortgages. The mortgage industry is creditor-friendly but very tightly regulated.

Banking in Canada is radically different from in the USA. When I moved down here it took me years to adjust. Although the two nations look economically and culturally similar at first glance, once you scratch the surface there are significant differences that, long-term, have been moving the two nations in different directions economically.
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Rife

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Re: Overheard at Work
« Reply #18836 on: October 05, 2017, 08:15:39 AM »
Real estate can be a tough call cause you are trying to guess where the market is going. We ran out and bought a house with a VA no money down loan in 2012. My friend who introduced me to this site at the time lectured me about how I should be saving up a down payment etc. The market was at a bottom, we paid no PMI, got a 3.50% interest rate. There was no reason to be so cautious and now 5 years later we have about 40% equity. That said, as much as prices have risen, it is very unlikely rents can keep going up so right now patience is probably best, but I don't think rising prices=coming crash.

I agree that Warren Buffet buys companies and then influences their direction. The lesson he teaches is about value investing and holding certainly far from day trading or speculation. He is really against buying on speculation cause you overpay based on a chance of a big score.

I came here though about conversations about HSAs. Our company started deducting for health insurance this year, but the HSA is still "free". The deductible is 2600 of which the company contributes 2050. The traditional plan deductible is 900. Otherwise the plans are now very similar. I said they obviously want everyone to switch to the HSA. Most people still don't want to cause of the high deductible.

What was actually very surprising about this is the idea of saving money in an HSA has zero impact. Few people care about anything other than this years cost. They really just see no value in having the money saved if it is past this year. I have mentioned this in a past post so sorry if this is more of a rehash but the conversation just ended and I needed a sympathetic audience ;). I don't push the issue, but am just surprised people are turning down 2050 dollars to pay 100 a month.




« Last Edit: October 05, 2017, 08:17:49 AM by Rife »
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A Definite Beta Guy

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Re: Overheard at Work
« Reply #18837 on: October 05, 2017, 08:18:33 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!" 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.

Actually bike lanes make it more dangerous on average.
Granted, that is based on european studies. I would not be surprised to hear that both the US road system and road users make it even more dangerous then that.


Quote
They just all idolize Warren Buffet and think they can beat the market by trading actively
Hah?????

They idolize someone who says you should invest in index funds and hold for decades and then do the opposite?


Yes, they are not very smart, but think they are very smart. They are just smart enough to get themselves in trouble and lose a lot of money unnecessarily.

I have one work buddy that has no idea what the Efficient Market Hypothesis means or implies. Like, we are expected to have sales increase in Fourth Quarter, because its Christmas season. Therefore, he thinks our stock will go up. That's already priced in...I don't have the heart to tell him that his idea makes no sense.

I have no heart to tell them that buying the company stock WITHOUT the company discount is INCREDIBLY stupid.


MrMoogle

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Re: Overheard at Work
« Reply #18838 on: October 05, 2017, 09:08:46 AM »
The biggest difference that comes to mind, for me, is the way mortgage interest on a primary home was (and still is) a tax deductible expense in the USA. That's a subsidy for borrowing toward a home and for refinancing to pull equity out in order to spend it on other things.

Around here, the only people I know who are actually using mortgage interest for tax deductions are those who are giving 10-20% to charity.  You can get ~2500 sqft homes without that beating the standard deduction (and I think that is for single people).  That might be why the cost of houses was mostly unaffected by the crash around here.

Maenad

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Re: Overheard at Work
« Reply #18839 on: October 05, 2017, 11:17:03 AM »
I'm starting to get concerned now about a stock market bubble, since it sounds like people are starting to think they're smarter than they are!

One of my young coworkers has been angsting over buying a house, and one of the older guys was giving him all the classic arguments, e.g.:
Old guy: Renting is so much more expensive than buying
Me: It can be. Buying a house comes with maintenance and other expenses
OG: Like what?
Me: What happens when your water softener dies?
OG: That only happens if you buy an old place
Me, turning to young guy: Just make sure you assess all the expenses in home ownership.

Later I sent him a link to JLCollins' post on the fallacies of homeownership. Hopefully he takes it to heart. I've already lost a couple who just had to buy new BMWs with their first "real engineering jobs".

solon

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Re: Overheard at Work
« Reply #18840 on: October 05, 2017, 02:49:10 PM »
Out-of-town Boss came into town this week. He's not really a bad guy, but it's clear he lives in a different world.

At lunch the other day we were talking about cable TV. He said he pays $210 a month, "and then there's Netflix, Hulu, and ..." I mentioned I dropped cable TV completely and just have internet now, and my bill went from $105 down to $67. I only watch what comes over the antenna (and even then not very much) and I don't have any streaming services. He just got a confused look.

Later he and I were having a one-on-one meeting, where we can bring up concerns, questions, or whatever is on our minds. It's kind of a slow time right now, so I mentioned I was worried about not being completely useful to the company. He said, "Oh don't worry, if anybody gets cut I'll get cut before you do, since my salary is so much bigger." Thanks.

ETA: 1000 posts!

LennStar

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Re: Overheard at Work
« Reply #18841 on: October 06, 2017, 01:03:49 AM »
Actually bike lanes make it more dangerous on average.
Granted, that is based on european studies. I would not be surprised to hear that both the US road system and road users make it even more dangerous then that.


Do you have a source for that? I'm a European and a frequent user of bike lanes and I just can't see how on earth they would make things more dangerous. I feel very safe on a bike lane and most accidents I've witnessed happened with cyclists on smaller main roads, especially when those roads are frequently used by buses or trucks.

I wonder if the study looked at bike lanes that are demarcated by a line of paint rather than proper bike lanes that have a physical barrier.

It doesn't fit with my experience either.

That is one part yes, and one of the reason why in the Netherlands there are so many painted bike lanes.

Basically the difference is as Imma said, but the other way round:

Bikes on the street are seen by the car drivers.
Bikes on a bike lane, especially if it is a bit away and maybe behind trees, is not seen by car drivers or trucks.
They turn right and bike and car smash together.
They come out of a garage etc. and crash!

It is unintuitive that bikes on the streeet are (in most cases) safer, but its known for 20 years now.

A bike lane is basically as if you would build a street like this:
https://www.mtb-news.de/forum/proxy.php?image=http%3A%2F%2Fsiggis-seiten.de%2Fa%2FPrinzi1.jpg&hash=e308d3e754b58efee8caadfc7d911624

Playing with Fire UK

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Re: Overheard at Work
« Reply #18842 on: October 06, 2017, 01:11:32 AM »
But the bike lanes that I use most are many metres away from traffic, and only cross the roads at junctions with lights. In order for me to get hit by a truck on the lane, someone would need to be moving a truck by helicopter and accidentally drop it. [I can't view your image, so we may be talking about different types of lanes]


Half-Borg

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Re: Overheard at Work
« Reply #18843 on: October 06, 2017, 01:23:38 AM »
Accidents at junctions count towards accidents on your bike lane, at that's excatly where all the accidents happen

former player

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Re: Overheard at Work
« Reply #18844 on: October 06, 2017, 02:46:52 AM »
[then you put on your mustachian thinking cap and you remember that hindsight is 20/20, and gambling is a really, really stupid way to plan for retirement.

In Canada, the real estate bubble hasn't burst yet. We haven't had our housing crisis. Once it does and these prices normalize, then I'll consider buying- But the data in my city suggest that housing hasn't "Doubled" or "Tripled". In fact, the gains have been incredibly modest over the last 30 years. Since 1978, the average increase in house prices has been 5.04% per year1  Inflation over that same time period averaged out to 3.27% per year2.

So, people can enjoy their 'mad gainz' on real estate in this city of a fat 1.77%/year.

I'll just sit on my couch potato funds and twiddle my thumbs... Not lifting a finger.

1 (http://www.agentinottawa.com/1956-present-prices.php),
2 (http://www.bankofcanada.ca/rates/related/inflation-calculator/), retrieved 2017-10-05
Ah, but you then need to add in the benefits of leveraging that 95% mortgage, right?  Owning property in a rising market is more profitable the more debt you have (cue all the people here who follow the mathematically advantageous practice of borrowing on your house to invest in index funds).
Be frugal and industrious, and you will be free (Ben Franklin)

dandarc

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Re: Overheard at Work
« Reply #18845 on: October 06, 2017, 07:27:31 AM »
Nothing to do with money, but just heard "First time shame on me.  Second time . . . I guess I'll just hang myself."

Boss man - it is just work.

RWD

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Re: Overheard at Work
« Reply #18846 on: October 06, 2017, 08:44:48 AM »
A bike lane is basically as if you would build a street like this:
I assume you were trying to link to this image?
http://siggis-seiten.de/a/Prinzi1.jpg

401Killer

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Re: Overheard at Work
« Reply #18847 on: October 06, 2017, 11:12:10 AM »
Not 1 minute ago, I'm on a conference call with about 20 other people. They were talking about a person that just retired, the person running the meeting said "huh, I never would have guessed he was old enough to retire...". 

BOOM!

I laughed(phone muted).


Rollin

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Re: Overheard at Work
« Reply #18848 on: October 06, 2017, 12:44:22 PM »
One of my colleagues strongly believes that it is less expensive to run his A/C the whole day while he's at work, than to turn it off when he leaves, then back on again.

Because, he says, it uses more energy to start the cooling process over again and cool the room, than to maintain a given (cold) room temperature. I'm pretty sure that's ignoring very basic principles of thermodynamics. Appreciate if any of you have a concise, yet authoritative site on the topic.

"The EPA says it's better to shut off the air conditioner if you will be away for more than a few hours."
https://www.acdoctor.com/blog/turn-off-ac-or-leave-it-on/

* Assuming you live in a non-ridiculously hot area. I live in the desert and if I turn off the a/c while I'm at work then my fridge has to work overtime because of the heat. I end up with a ridiculously high bill because of the fridge and any food in the door goes bad (I hide dairy in the back corner to this day). For me, just cooling the place is cheaper although I do have different temps for when I'm home vs not home.

No fucking way this is true.  It doesn't even make sense.  You just had a malfunctioning fridge that couldn't keep cold enough, or the efficiency difference between your fridge and AC unit was so disparate that no one should have been using that fridge (ie it was clearly malfunctioning). 

I also call bullshit on anyone saying it takes 3 days to recool their house or anything else.  It takes less energy to turn the AC or heater off/down while you are away and only run it while you are home, absolutely no exceptions.   You can make the argument that you are more comfortable for some short period by keeping a constant temperature rather than turning the unit off then back on and waiting for it to reach your ideal temperature, but leaving it on uses more total energy absolutely no exceptions ever.  That's just the laws of thermodynamics.
It could be true if it was severely malfunctioning. In that case the solution should have been a fridge replacement but the AC was used instead. Possibly the coils were severely dust laden, a good cleaning would fix it, that's my guess for poor heat transfer. Maybe the guy had empirical evidence, but holy CRAP! What kind of electric bills would show much difference? Is the guy saying he can notice changes in his bill, which is lower, when the AC is on? HOLY Heatwave Batman, how large are the electric bills when AC causes them to appear smaller? This requires more electricity to be used in running the pump then in the actual heat transfer, its ridiculous.

Although extremely silly, never underestimate the ability of people to need a face punch. Instead of fixing problems, like dirty coils that need a good vacuum or replacement, some people will turn up the AC to have their whole house operate as a fridge.

OP - Clean your fridge coils. If that doesn't work, get a new fridge, yours is broken.

In addition, if your fridge is older than 8 years (that's the number I heard a number of years ago, so it may be a higher number now that more efficient fridges are out) it is like running a 1,000 watt space heater inside your home for 4 hours per day!!
« Last Edit: October 06, 2017, 04:37:24 PM by Rollin »
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marielle

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Re: Overheard at Work
« Reply #18849 on: October 06, 2017, 12:53:44 PM »
One of my colleagues strongly believes that it is less expensive to run his A/C the whole day while he's at work, than to turn it off when he leaves, then back on again.

Because, he says, it uses more energy to start the cooling process over again and cool the room, than to maintain a given (cold) room temperature. I'm pretty sure that's ignoring very basic principles of thermodynamics. Appreciate if any of you have a concise, yet authoritative site on the topic.

"The EPA says it's better to shut off the air conditioner if you will be away for more than a few hours."
https://www.acdoctor.com/blog/turn-off-ac-or-leave-it-on/

* Assuming you live in a non-ridiculously hot area. I live in the desert and if I turn off the a/c while I'm at work then my fridge has to work overtime because of the heat. I end up with a ridiculously high bill because of the fridge and any food in the door goes bad (I hide dairy in the back corner to this day). For me, just cooling the place is cheaper although I do have different temps for when I'm home vs not home.

No fucking way this is true.  It doesn't even make sense.  You just had a malfunctioning fridge that couldn't keep cold enough, or the efficiency difference between your fridge and AC unit was so disparate that no one should have been using that fridge (ie it was clearly malfunctioning). 

I also call bullshit on anyone saying it takes 3 days to recool their house or anything else.  It takes less energy to turn the AC or heater off/down while you are away and only run it while you are home, absolutely no exceptions.   You can make the argument that you are more comfortable for some short period by keeping a constant temperature rather than turning the unit off then back on and waiting for it to reach your ideal temperature, but leaving it on uses more total energy absolutely no exceptions ever.  That's just the laws of thermodynamics.
It could be true if it was severely malfunctioning. In that case the solution should have been a fridge replacement but the AC was used instead. Possibly the coils were severely dust laden, a good cleaning would fix it, that's my guess for poor heat transfer. Maybe the guy had empirical evidence, but holy CRAP! What kind of electric bills would show much difference? Is the guy saying he can notice changes in his bill, which is lower, when the AC is on? HOLY Heatwave Batman, how large are the electric bills when AC causes them to appear smaller? This requires more electricity to be used in running the pump then in the actual heat transfer, its ridiculous.

Although extremely silly, never underestimate the ability of people to need a face punch. Instead of fixing problems, like dirty coils that need a good vacuum or replacement, some people will turn up the AC to have their whole house operate as a fridge.

OP - Clean your fridge coils. If that doesn't work, get a new fridge, yours is broken.

In addition, if your fridge is older than 8 years (that's the number I heard a number of years ago, so it may be a higher number now that more effect fridges are out) it is like running a 1,000 watt space heater inside your home for 4 hours per day!!

I found this hard to believe so I did some research.

A 2004-2008 energy star efficient refrigerator uses about 1400 watts a day.

A CEE Tier 3 (after 2010) refrigerator uses 1160 watts a day.

Not an insignificant difference, no. It saves you $15 in electricity over the course of a year. But the technology isn't growing THAT quickly.

https://michaelbluejay.com/electricity/refrigerators.html