Author Topic: Overheard at Work  (Read 10571591 times)

DarkandStormy

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Re: Overheard at Work
« Reply #19050 on: November 06, 2017, 03:14:56 PM »
My coworkers know I'm into finance stuff, and sometimes come to me for advice. A coworker did just that a few months ago. I crunched his numbers, and informed him that his net worth was approx negative 300k (granted it was mostly mortgage debt). He tells me a few weeks later that he is seriously considering buying an 85k custom full-sized pickup (he already has a nice full-sized pickup)...This guy is new at our work, and is making 50k or so, tops. It's almost painful to watch folks do stuff like this.

If you're factoring in home mortgage debt in the -$300k you also have to take into account the asset (house) that he owns.  No one is $300k under water on a mortgage, right??

zolotiyeruki

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Re: Overheard at Work
« Reply #19051 on: November 06, 2017, 03:51:43 PM »
But our cultural expectation for what constitutes a good standard of living has increased dramatically. People define "the good life" as eating out frequently, drinking at bars, fast fashion, cars that are fun to drive, new furniture, subscription boxes, etc.

Health insurance and housing (in many markets) have gone way up in relative terms, but so has our demand for fancier housing (laundry rooms, dishwashers, granite countertops, garages, closet space, etc) as well as way more square footage per person.
This is very, VERY true.  From the 70's to the 2010's, median home sizes have increased from 1500ish sq ft to about 2500 square feet.  At the same time, however, we've seen the real cost per square foot drop dramatically.  My parents built their 3,000 sq ft house 30 years ago.  We bought a similar-sized house six years ago for about the same cost.  Not only that, but energy costs have been pretty much flat (in real dollars) while homes have become more efficient.

RyanAtTanagra

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Re: Overheard at Work
« Reply #19052 on: November 06, 2017, 04:09:49 PM »
My coworkers know I'm into finance stuff, and sometimes come to me for advice. A coworker did just that a few months ago. I crunched his numbers, and informed him that his net worth was approx negative 300k (granted it was mostly mortgage debt). He tells me a few weeks later that he is seriously considering buying an 85k custom full-sized pickup (he already has a nice full-sized pickup)...This guy is new at our work, and is making 50k or so, tops. It's almost painful to watch folks do stuff like this.

If you're factoring in home mortgage debt in the -$300k you also have to take into account the asset (house) that he owns.  No one is $300k under water on a mortgage, right??
Well, he doesn't "own" the house, yet, the bank that holds his mortgage does. He had very little equity in the house, so he is 300k underwater.

No, if his house is worth 300k and his mortgage is 300k, it's a wash.  Yes he technically owns zero of the equity himself, but the house's value covers the mortgage.  You can't count the mortgage but not the value of what's being mortgaged.
« Last Edit: November 06, 2017, 04:11:27 PM by RyanAtTanagra »

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Re: Overheard at Work
« Reply #19053 on: November 06, 2017, 04:12:05 PM »
Just a short note that I'm going to miss adding to this thread as I'll be working from home as of today. I look forward to y'all's posts, I'll be living vicariously via my fellow Mustachians. Save On!

RyanAtTanagra

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Re: Overheard at Work
« Reply #19054 on: November 06, 2017, 05:05:40 PM »
My coworkers know I'm into finance stuff, and sometimes come to me for advice. A coworker did just that a few months ago. I crunched his numbers, and informed him that his net worth was approx negative 300k (granted it was mostly mortgage debt). He tells me a few weeks later that he is seriously considering buying an 85k custom full-sized pickup (he already has a nice full-sized pickup)...This guy is new at our work, and is making 50k or so, tops. It's almost painful to watch folks do stuff like this.

If you're factoring in home mortgage debt in the -$300k you also have to take into account the asset (house) that he owns.  No one is $300k under water on a mortgage, right??
Well, he doesn't "own" the house, yet, the bank that holds his mortgage does. He had very little equity in the house, so he is 300k underwater.

No, if his house is worth 300k and his mortgage is 300k, it's a wash.  Yes he technically owns zero of the equity himself, but the house's value covers the mortgage.  You can't count the mortgage but not the value of what's being mortgaged.
I'm sorry you guys are 100% correct. I wasn't thinking straight when I wrote that post. I should have said "he OWED 300k" instead of NW. My apologies.

Just make sure he knows :-)  If you told him his net worth was negative 300k he might have said 'fuck it!  too late now, might as well buy an 85k truck!'.

mm1970

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Re: Overheard at Work
« Reply #19055 on: November 07, 2017, 12:38:41 PM »
But our cultural expectation for what constitutes a good standard of living has increased dramatically. People define "the good life" as eating out frequently, drinking at bars, fast fashion, cars that are fun to drive, new furniture, subscription boxes, etc.

Health insurance and housing (in many markets) have gone way up in relative terms, but so has our demand for fancier housing (laundry rooms, dishwashers, granite countertops, garages, closet space, etc) as well as way more square footage per person.
This is very, VERY true.  From the 70's to the 2010's, median home sizes have increased from 1500ish sq ft to about 2500 square feet.  At the same time, however, we've seen the real cost per square foot drop dramatically.  My parents built their 3,000 sq ft house 30 years ago.  We bought a similar-sized house six years ago for about the same cost.  Not only that, but energy costs have been pretty much flat (in real dollars) while homes have become more efficient.

Depends very much on location.

My house is pretty much the same as it was when it was built in 1947.  1146 sf.

Cost per square foot when it was built? $54
Cost per square foot in approx 1984 when prior owner bought it? $108
Cost per square foot now? $687

Other areas that I'm familiar with, where there's not a lot of sprawl /new housing, have been similar (albeit not that bad).


zolotiyeruki

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Re: Overheard at Work
« Reply #19056 on: November 07, 2017, 01:22:29 PM »
This is very, VERY true.  From the 70's to the 2010's, median home sizes have increased from 1500ish sq ft to about 2500 square feet.  At the same time, however, we've seen the real cost per square foot drop dramatically.  My parents built their 3,000 sq ft house 30 years ago.  We bought a similar-sized house six years ago for about the same cost.  Not only that, but energy costs have been pretty much flat (in real dollars) while homes have become more efficient.

Depends very much on location.

My house is pretty much the same as it was when it was built in 1947.  1146 sf.

Cost per square foot when it was built? $54
Cost per square foot in approx 1984 when prior owner bought it? $108
Cost per square foot now? $687

Other areas that I'm familiar with, where there's not a lot of sprawl /new housing, have been similar (albeit not that bad).
*Your* house is the same, but the *median* home size has certainly increased.  Does that cost/sqft account for inflation?  What I've heard/seen is that in areas with crazy housing prices (e.g. SF Bay), it's not so much the cost of the home itself as it is the cost of the land it sits on.

RidetheRain

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Re: Overheard at Work
« Reply #19057 on: November 07, 2017, 03:20:45 PM »
This is very, VERY true.  From the 70's to the 2010's, median home sizes have increased from 1500ish sq ft to about 2500 square feet.  At the same time, however, we've seen the real cost per square foot drop dramatically.  My parents built their 3,000 sq ft house 30 years ago.  We bought a similar-sized house six years ago for about the same cost.  Not only that, but energy costs have been pretty much flat (in real dollars) while homes have become more efficient.

Depends very much on location.

My house is pretty much the same as it was when it was built in 1947.  1146 sf.

Cost per square foot when it was built? $54
Cost per square foot in approx 1984 when prior owner bought it? $108
Cost per square foot now? $687

Other areas that I'm familiar with, where there's not a lot of sprawl /new housing, have been similar (albeit not that bad).
*Your* house is the same, but the *median* home size has certainly increased.  Does that cost/sqft account for inflation?  What I've heard/seen is that in areas with crazy housing prices (e.g. SF Bay), it's not so much the cost of the home itself as it is the cost of the land it sits on.

I'm going to point out here that part (not all!) of the square footage gain is due to more households embracing the work-from-home lifestyle. The number of single-family homes and apartments with a specific office/den in the floor plan is on the rise. According to Statistician Google, the number of people telecommuting is rising 10% faster than the rest of the economy and 45% of Americans report working from home at least some of the time

Imma

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Re: Overheard at Work
« Reply #19058 on: November 07, 2017, 03:51:38 PM »
This is very, VERY true.  From the 70's to the 2010's, median home sizes have increased from 1500ish sq ft to about 2500 square feet.  At the same time, however, we've seen the real cost per square foot drop dramatically.  My parents built their 3,000 sq ft house 30 years ago.  We bought a similar-sized house six years ago for about the same cost.  Not only that, but energy costs have been pretty much flat (in real dollars) while homes have become more efficient.

Depends very much on location.

My house is pretty much the same as it was when it was built in 1947.  1146 sf.

Cost per square foot when it was built? $54
Cost per square foot in approx 1984 when prior owner bought it? $108
Cost per square foot now? $687

Other areas that I'm familiar with, where there's not a lot of sprawl /new housing, have been similar (albeit not that bad).
*Your* house is the same, but the *median* home size has certainly increased.  Does that cost/sqft account for inflation?  What I've heard/seen is that in areas with crazy housing prices (e.g. SF Bay), it's not so much the cost of the home itself as it is the cost of the land it sits on.

I think that one of the reasons the average size of the American home has gone up so much is because the available land is almost unlimited. You're always going to have places like Manhattan where everyone wants to live and are therefore extremely expensive, but the rest of the country is so vast that the land in itself isn't that valuable. I imagine building a home just *slightly*  bigger is hardly an increase in cost, just a few more bricks. I can see how it's tempting for people to just have that *slightly*  bigger home than the neighbours.

In contrast, where I live in Europe, 80% of the value of my property is probably the land. I have seen empty lots go for about the same amount of money as I paid for my home. Because the land is so expensive building a slightly bigger home is going to increase your cost massively - you'd need to buy more land for it.

My home is about 800 square feet and has three bedrooms. This is the standard 'older model' terraced home - it was built in the 1940s. Newer homes from the 70s onwards are probably closer to 1200 square feet. Anything over 1800 square feet is a mansion. My 800 square feet home stands on a 1200 sf lot, so any increase in size is hardly possible unless I'd buy out the neighbours. ( and this is an inner city neighbourhood with a bad reputation, not an expensive part of the country at all).

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Re: Overheard at Work
« Reply #19059 on: November 07, 2017, 08:35:00 PM »
A coworker just dumped unopened packs of food (crackers, cookies) in the trash today. expiration date sometime in 2018, at a quick glance. I was doubly mad as she didn't even care to sort her trash (plastic vs food).

It was also too awkward for me to dive into the trash (in a crowded area at the office) to salvage what could be salvaged.

JordanOfGilead

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Re: Overheard at Work
« Reply #19060 on: November 08, 2017, 06:24:34 AM »
I have a samsung s4 phone that doesn't charge the battery anymore. Phone is old but works fine aside from the battery problem. Luckily my sister gave me her own s4 when she upgraded hers but the screen on that one is broken. So I use that phone as a charger and just switch the batteries when the one on my s4 is depleted. A little strange I know but really not a problem.

I'm switching batteries at work today and my coworker asks what I'm doing. I explain and jokingly add I'm also a cheap bastard. She looks at me sad and says "no I know you just don't have any money. People don't do this to save money they do it because they don't have any. Young people today just don't have any money (I'm 32 she is 67) everything is so expensive especially with kids (I have two boys). I bet you don't have a single isk saved. Not one." She seemed really worried about me. I just said "oh really?" and changed the subject.

Funny enough, I had he exact same problem and used the exact same solution on both my Captivate Glide (an s2 with a fancy keyboard), my Rugby Pro (an s3 that you could bounce off of a brick wall without breaking it), and my s5 "Active" that couldn't withstand being in my pocket when I squatted.

Eventually I got smart and stopped buying Samsung phones.

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Re: Overheard at Work
« Reply #19061 on: November 08, 2017, 10:37:36 AM »
My boss and I were dealing with a difficult situation and she sighed and said to me "I hope I win the lottery one day."

And I had this moment of realization that even though she probably makes 2x my salary she probably doesn't have as much saved as I do. She has two kids that she sent to a fancy prep school bc it was family tradition and are now in college. Her husband is in a niche creative field and I get the feeling she makes more than he does, or at least has a more consistent income.

Before my husband and I started planning for FIRE I would have said "Yeah, me too!" but now...I was caught off guard and I just said "Ha!" and secretly felt bad for her.

Then she said "Hey, you better hope I win, I'll pay for your son's college!" And I immediately thought - we often wonder if we are putting *too much* in his 529. But I just said "Aww, thanks! We are saving some but also hoping the SUNY schools will still be free by then." If we weren't having a light hearted conversation, this might have given me away - in that the tuition is only free for students whose parents make 125K or less per year, and my boss knows my salary (~70K) and can probably guess my husband makes enough to put us over the top. However we'll probably be retired by the time he's 4 or 5 years old. But she probably wasn't calculating that in her head at the moment.

And then she made a joke about "Oh Sure! College will be free after I'm done paying for it for my kids!"

I think too much. :O

mm1970

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Re: Overheard at Work
« Reply #19062 on: November 08, 2017, 12:16:10 PM »
This is very, VERY true.  From the 70's to the 2010's, median home sizes have increased from 1500ish sq ft to about 2500 square feet.  At the same time, however, we've seen the real cost per square foot drop dramatically.  My parents built their 3,000 sq ft house 30 years ago.  We bought a similar-sized house six years ago for about the same cost.  Not only that, but energy costs have been pretty much flat (in real dollars) while homes have become more efficient.

Depends very much on location.

My house is pretty much the same as it was when it was built in 1947.  1146 sf.

Cost per square foot when it was built? $54
Cost per square foot in approx 1984 when prior owner bought it? $108
Cost per square foot now? $687

Other areas that I'm familiar with, where there's not a lot of sprawl /new housing, have been similar (albeit not that bad).
*Your* house is the same, but the *median* home size has certainly increased.  Does that cost/sqft account for inflation?  What I've heard/seen is that in areas with crazy housing prices (e.g. SF Bay), it's not so much the cost of the home itself as it is the cost of the land it sits on.
The point I was making is that housing is more expensive.

*Some* of that is because the median house is bigger

*Some* of that is that individual houses that AREN'T getting bigger also cost more than they once did.

BOTH result in housing costs being higher than they "used to be".

For example, a local company is thinking of opening a new office "somewhere else", and they are pretty open to where.  It has to be:
- near a university
- near a major airport
- near a major customer
- cheaper than their two current offices (So Cal and DC)

- The one possible location recommended?  Boulder.  Yah, I looked up Boulder.  It's not cheap. 

HOWEVER, it is cheaper PER SQUARE FOOT, but what I discussed with the employee who mentioned it was this:
- cost for a house there, same as here.  Difference is, there are plenty of 800-1100 sf 2 BR homes here, built in the 1920s to 1940s.  Houses in Boulder are newer (thus, larger).  Same price gets you a bigger house BUT you can't find a 900 sf house.

YES some people like bigger, nicer homes.  But plenty of other people are just stuck because of whatever is available.

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Re: Overheard at Work
« Reply #19063 on: November 08, 2017, 02:52:57 PM »
As our society overall becomes richer, the perceptions of standards become higher.  Remember when a "big" (36"+) TV was considered impressive?

That whole concept really becomes interesting when you head back to the mid-twentieth century. In 1954 the average TV cost $200, or $1795 in today's money. A 21" color TV that year was a grand, or about what a new four door car costs at the time.

zolotiyeruki

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Re: Overheard at Work
« Reply #19064 on: November 08, 2017, 08:36:44 PM »
Depends very much on location.

My house is pretty much the same as it was when it was built in 1947.  1146 sf.

Cost per square foot when it was built? $54
Cost per square foot in approx 1984 when prior owner bought it? $108
Cost per square foot now? $687

Other areas that I'm familiar with, where there's not a lot of sprawl /new housing, have been similar (albeit not that bad).
*Your* house is the same, but the *median* home size has certainly increased.  Does that cost/sqft account for inflation?  What I've heard/seen is that in areas with crazy housing prices (e.g. SF Bay), it's not so much the cost of the home itself as it is the cost of the land it sits on.
The point I was making is that housing is more expensive.

*Some* of that is because the median house is bigger

*Some* of that is that individual houses that AREN'T getting bigger also cost more than they once did.
Ah, thanks for clarifying!

kayvent

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Re: Overheard at Work
« Reply #19065 on: November 09, 2017, 04:08:03 AM »
This is very, VERY true.  From the 70's to the 2010's, median home sizes have increased from 1500ish sq ft to about 2500 square feet.  At the same time, however, we've seen the real cost per square foot drop dramatically.  My parents built their 3,000 sq ft house 30 years ago.  We bought a similar-sized house six years ago for about the same cost.  Not only that, but energy costs have been pretty much flat (in real dollars) while homes have become more efficient.

Depends very much on location.

My house is pretty much the same as it was when it was built in 1947.  1146 sf.

Cost per square foot when it was built? $54
Cost per square foot in approx 1984 when prior owner bought it? $108
Cost per square foot now? $687

Other areas that I'm familiar with, where there's not a lot of sprawl /new housing, have been similar (albeit not that bad).
*Your* house is the same, but the *median* home size has certainly increased.  Does that cost/sqft account for inflation?  What I've heard/seen is that in areas with crazy housing prices (e.g. SF Bay), it's not so much the cost of the home itself as it is the cost of the land it sits on.
The point I was making is that housing is more expensive.

*Some* of that is because the median house is bigger

*Some* of that is that individual houses that AREN'T getting bigger also cost more than they once did.

Iíve theorized, with little evidence, that a contributing factor to home price inflation is unmustachian behaviours:

- (many) People donít mind piling up debt or being house poor. Therefore, they are more inelastic to home prices

- Iíve heard on HGTV that the average homeowner lives in a home for 7-10 years. Some of those people who live for less than ten years in a home have twenty-five to thirty year mortgages with zero down. At a 7% interest rate (historically typical) only 15% of the principal is recovered after ten years.

- 0$ or low down payments. This triggers CMHC (or your countryís equivalent) which causes the previous point to be aggravated. 5% down payment on a home means only 11% of the principal is recovered after 10 years on a 25 year mortgage (5.5% after 7)

- People sell their homes to pay off debt

With these factors and others, I feel there is hefty pressure on prices for homes not failing whereas the resistance to home prices rising is alleviated by such things as (until recently) ever failing interest rates, long term mortgages, and government subsidies for mortgages (I.e. interest deduction).

So in summary, I think if we were all more mustachian, we could have the same size homes but be paying less.
« Last Edit: November 09, 2017, 04:10:10 AM by kayvent »

Just Joe

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Re: Overheard at Work
« Reply #19066 on: November 09, 2017, 08:07:39 AM »
With some of these new houses which have all the features of a McMansion including the price tag except the sq footage - I have to wonder if they are marketed like cars.

Its new! It has all the shiniest features! A warranty! And it'll appreciate (maybe). Low payments! Sign here....

Meanwhile just down the road is another neighborhood with home that have more sq footage for less money, far less traffic, and mature trees (shade which is important to me, our summers are hot), quiet.

I don't get it.

These new house owners aren't staying very long. One sold, one is for sale, and the other two might be close behind.

Imagine these to be very spendypants people: new house, new cars (customized $40K+ Jeeps), delivery trucks, time to move on to the bigger payment ---- er, house. ;)

Vast assumptions on my part I know. Not enough people playing the long game.

Dictionary Time

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Re: Overheard at Work
« Reply #19067 on: November 09, 2017, 08:10:34 AM »
Depends very much on location.

My house is pretty much the same as it was when it was built in 1947.  1146 sf.

Cost per square foot when it was built? $54
Cost per square foot in approx 1984 when prior owner bought it? $108
Cost per square foot now? $687

Other areas that I'm familiar with, where there's not a lot of sprawl /new housing, have been similar (albeit not that bad).

Are those inflation adjusted already?  If not, I put them in the CPI calculator and

1947's $54 =
1984 $262 =
2017 $620.

Maybe the big dip in the 80s is due to the high mortgage rates.

ketchup

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Re: Overheard at Work
« Reply #19068 on: November 09, 2017, 08:13:32 AM »
With some of these new houses which have all the features of a McMansion including the price tag except the sq footage - I have to wonder if they are marketed like cars.

Its new! It has all the shiniest features! A warranty! And it'll appreciate (maybe). Low payments! Sign here....

Meanwhile just down the road is another neighborhood with home that have more sq footage for less money, far less traffic, and mature trees (shade which is important to me, our summers are hot), quiet.

I don't get it.
I've got some of these near me.  I don't get it either.  Plenty of houses in my "less cool" older neighborhood have the same square footage as the brand new ones, and they're mostly updated too (same school district and just as suburbanly-far from the closest grocery stores/etc).  Only thing they truly have on my neighborhood apart from all being 0-5 years old is two car garages, but is that really worth an extra $200,000 to anyone (and I don't mean 700k vs 500k; it's more like 150k vs 350k)?
« Last Edit: November 09, 2017, 08:18:19 AM by ketchup »

zolotiyeruki

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Re: Overheard at Work
« Reply #19069 on: November 09, 2017, 08:49:39 AM »
With some of these new houses which have all the features of a McMansion including the price tag except the sq footage - I have to wonder if they are marketed like cars.
A couple weeks ago I was talking to a contractor friend who builds custom homes.  When building a home, the square footage of the house doesn't actually affect the cost very much.  The land still costs the same, the permit is the same, the utility hookups cost the same.  What really drives the cost difference between small homes and big homes is the number of bathrooms/kitchen(s), and the finishes.

Builders love to build big houses with few bathrooms--people generally expect a price of $X/sq ft, and since empty square footage is *really* cheap to build, the builder's profit margin goes up.

formerlydivorcedmom

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Re: Overheard at Work
« Reply #19070 on: November 09, 2017, 02:49:52 PM »
Not quite at work, but ...

My daughter is in middle school.  Every year in math class they have lessons on personal finance. Last year, they had to create a hypothetical budget and sort hypothetical bills into fixed costs versus variable costs.

My daughter and her teacher got into quite the argument on where electricity and water/sewer fit.  The teacher insisted that these were fixed costs.  My daughter was equally adamant that families control their usage and can therefore reduce their costs by as much as they need to.

The teacher laughed at that idea.

My daughter came home highly irritated because a) she didn't make a perfect grade, and b) "my teacher is an idiot"

dragoncar

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Re: Overheard at Work
« Reply #19071 on: November 09, 2017, 03:05:50 PM »
Not quite at work, but ...

My daughter is in middle school.  Every year in math class they have lessons on personal finance. Last year, they had to create a hypothetical budget and sort hypothetical bills into fixed costs versus variable costs.

My daughter and her teacher got into quite the argument on where electricity and water/sewer fit.  The teacher insisted that these were fixed costs.  My daughter was equally adamant that families control their usage and can therefore reduce their costs by as much as they need to.

The teacher laughed at that idea.

My daughter came home highly irritated because a) she didn't make a perfect grade, and b) "my teacher is an idiot"

There's usually some minimum fixed cost, assuming you aren't off the grid.  Connection fee, monthly minimum, etc.  There's there's a reasonable minimum consumption that you know you will never go under (e.g., you expect to always have a refrigerator and take a shower once a week = $x).  You can treat the remaining portion as variable.

But I sort of agree with the teacher that if I had to pick a category, I'd call it fixed because even for a frugal person it's not likely to change much on an annual basis.

DS

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Re: Overheard at Work
« Reply #19072 on: November 09, 2017, 03:13:35 PM »
Options too limited:

Definition: A mixed cost is an expense that has attributes of both fixed and variable costs. In other words, itís a cost that changes with the volume of production like a variable cost and canít be completely eliminated like a fixed cost.

https://www.myaccountingcourse.com/accounting-dictionary/mixed-cost

paddedhat

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Re: Overheard at Work
« Reply #19073 on: November 09, 2017, 03:28:08 PM »
Depends very much on location.

My house is pretty much the same as it was when it was built in 1947.  1146 sf.

Cost per square foot when it was built? $54
Cost per square foot in approx 1984 when prior owner bought it? $108
Cost per square foot now? $687

Other areas that I'm familiar with, where there's not a lot of sprawl /new housing, have been similar (albeit not that bad).

Are those inflation adjusted already?  If not, I put them in the CPI calculator and

1947's $54 =
1984 $262 =
2017 $620.

Maybe the big dip in the 80s is due to the high mortgage rates.

Can't speak for an individual place, but $54/ft would be off the charts in 1947. I grew up in a small town in PA. where the post war building boom double the size of the town. Most new homes were built in the last few years of the 1940s. They were all exactly alike, modest capes on a full basement, and the "old timers" claimed that they sold for $7K, or so, when new. That would put the cost at six or seven bucks a sq. ft.

mustachepungoeshere

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Re: Overheard at Work
« Reply #19074 on: November 09, 2017, 03:47:37 PM »
Husband claimed his monthly expenses through work.

Person responsible for expenses: Didn't we already pay this?
Husband to me: ?
Me to husband: >.<

He sent them a spreadsheet of his last six months' of expense claims - when they were lodged, how much, when they were paid, etc.

We keep better records than they do.

MgoSam

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Re: Overheard at Work
« Reply #19075 on: November 09, 2017, 06:50:14 PM »
Options too limited:

Definition: A mixed cost is an expense that has attributes of both fixed and variable costs. In other words, itís a cost that changes with the volume of production like a variable cost and canít be completely eliminated like a fixed cost.

https://www.myaccountingcourse.com/accounting-dictionary/mixed-cost

Yup, the accountant in me squirmed when I saw that they were only given the options of fixed vs variable. 

ACyclist

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Re: Overheard at Work
« Reply #19076 on: November 09, 2017, 08:04:16 PM »
Someone recently said "Why save?  I could die tomorrow."

People seem so defeated.  They just say F it and keep spending like there is no tomorrow.  I try to lend advice, and it falls on deaf ears.




WerKater

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Re: Overheard at Work
« Reply #19077 on: November 09, 2017, 10:25:26 PM »
Not quite at work, but ...

My daughter is in middle school.  Every year in math class they have lessons on personal finance. Last year, they had to create a hypothetical budget and sort hypothetical bills into fixed costs versus variable costs.

My daughter and her teacher got into quite the argument on where electricity and water/sewer fit.  The teacher insisted that these were fixed costs.  My daughter was equally adamant that families control their usage and can therefore reduce their costs by as much as they need to.

The teacher laughed at that idea.

My daughter came home highly irritated because a) she didn't make a perfect grade, and b) "my teacher is an idiot"
Your daughter will benefit from learning that teachers, as anyone else, can be clueless.

AnnaGrowsAMustache

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Re: Overheard at Work
« Reply #19078 on: November 09, 2017, 11:11:57 PM »
Not quite at work, but ...

My daughter is in middle school.  Every year in math class they have lessons on personal finance. Last year, they had to create a hypothetical budget and sort hypothetical bills into fixed costs versus variable costs.

My daughter and her teacher got into quite the argument on where electricity and water/sewer fit.  The teacher insisted that these were fixed costs.  My daughter was equally adamant that families control their usage and can therefore reduce their costs by as much as they need to.

The teacher laughed at that idea.

My daughter came home highly irritated because a) she didn't make a perfect grade, and b) "my teacher is an idiot"

You've just described my entire school career, from the age of 6 when I tried to explain to my teacher that there could be boy-ladies and girl-ladies. I distinctly remember the frustration at being laughed at when I knew I was right. My sympathies to your daughter. Thinking outside the norm brings with it a lifetime of bullshit.

kayvent

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Re: Overheard at Work
« Reply #19079 on: November 10, 2017, 04:02:18 AM »
Not quite at work, but ...

My daughter is in middle school.  Every year in math class they have lessons on personal finance. Last year, they had to create a hypothetical budget and sort hypothetical bills into fixed costs versus variable costs.

My daughter and her teacher got into quite the argument on where electricity and water/sewer fit.  The teacher insisted that these were fixed costs.  My daughter was equally adamant that families control their usage and can therefore reduce their costs by as much as they need to.

The teacher laughed at that idea.

My daughter came home highly irritated because a) she didn't make a perfect grade, and b) "my teacher is an idiot"

You've just described my entire school career, from the age of 6 when I tried to explain to my teacher that there could be boy-ladies and girl-ladies. I distinctly remember the frustration at being laughed at when I knew I was right. My sympathies to your daughter. Thinking outside the norm brings with it a lifetime of bullshit.

Debating how best to to classify a hydro bill when both sides have case is different than being wrong in your case.

DS

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Re: Overheard at Work
« Reply #19080 on: November 10, 2017, 07:15:33 AM »

Your daughter will benefit from learning that teachers, as anyone else, can be clueless.

Options too limited:

Definition: A mixed cost is an expense that has attributes of both fixed and variable costs. In other words, itís a cost that changes with the volume of production like a variable cost and canít be completely eliminated like a fixed cost.

https://www.myaccountingcourse.com/accounting-dictionary/mixed-cost

The parent, child, and teacher all have an opportunity to learn that no one is an "idiot" in this scenario. The options were just too limited. Both people have correct ideas.

Great learning opportunity for all sides to see how things devolve into barbaric name-calling instead of seeking solutions.

RidetheRain

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Re: Overheard at Work
« Reply #19081 on: November 10, 2017, 11:02:49 AM »

Your daughter will benefit from learning that teachers, as anyone else, can be clueless.

Options too limited:

Definition: A mixed cost is an expense that has attributes of both fixed and variable costs. In other words, itís a cost that changes with the volume of production like a variable cost and canít be completely eliminated like a fixed cost.

https://www.myaccountingcourse.com/accounting-dictionary/mixed-cost

The parent, child, and teacher all have an opportunity to learn that no one is an "idiot" in this scenario. The options were just too limited. Both people have correct ideas.

Great learning opportunity for all sides to see how things devolve into barbaric name-calling instead of seeking solutions.

I disagree. Electricity can absolutely be reduced down to zero. Take, for example, a family with solar panels that use less energy than is produced. In my state, an electric company will purchase a limited amount of this excess energy instead of charging the family. At worst they break even. That would be an electric bill of zero and 100% variable.

I think that for a middle school teacher to be teaching students that utilities are fixed and there is nothing to be done about it is a disservice to students that may not get good financial advise at home.

RyanAtTanagra

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Re: Overheard at Work
« Reply #19082 on: November 10, 2017, 11:18:39 AM »

Your daughter will benefit from learning that teachers, as anyone else, can be clueless.

Options too limited:

Definition: A mixed cost is an expense that has attributes of both fixed and variable costs. In other words, itís a cost that changes with the volume of production like a variable cost and canít be completely eliminated like a fixed cost.

https://www.myaccountingcourse.com/accounting-dictionary/mixed-cost

The parent, child, and teacher all have an opportunity to learn that no one is an "idiot" in this scenario. The options were just too limited. Both people have correct ideas.

Great learning opportunity for all sides to see how things devolve into barbaric name-calling instead of seeking solutions.

I disagree. Electricity can absolutely be reduced down to zero. Take, for example, a family with solar panels that use less energy than is produced. In my state, an electric company will purchase a limited amount of this excess energy instead of charging the family. At worst they break even. That would be an electric bill of zero and 100% variable.

I think that for a middle school teacher to be teaching students that utilities are fixed and there is nothing to be done about it is a disservice to students that may not get good financial advise at home.

I agree, from a mindset of how one should think about utilities, the teacher is 100% wrong.  I went from $120/mo to $25 month electricity bills by getting rid of a roommate that was horrible with power usage.  Maybe I couldn't get down to zero back then (though I do now, with solar), but electricity usage is HIGHLY variable.

jordanread

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Re: Overheard at Work
« Reply #19083 on: November 10, 2017, 11:28:46 AM »

Your daughter will benefit from learning that teachers, as anyone else, can be clueless.

Options too limited:

Definition: A mixed cost is an expense that has attributes of both fixed and variable costs. In other words, itís a cost that changes with the volume of production like a variable cost and canít be completely eliminated like a fixed cost.

https://www.myaccountingcourse.com/accounting-dictionary/mixed-cost

The parent, child, and teacher all have an opportunity to learn that no one is an "idiot" in this scenario. The options were just too limited. Both people have correct ideas.

Great learning opportunity for all sides to see how things devolve into barbaric name-calling instead of seeking solutions.

I'm now envisioning barbaric folks calling each other idiots.

formerlydivorcedmom

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Re: Overheard at Work
« Reply #19084 on: November 10, 2017, 12:03:51 PM »
We did have a discussion about the fact that some parts of the cost are fixed (e.g., water also includes sewer, which is a flat fee for each household) and some can be variable, and it would have been better to have another choice (mixed).

Daughter was on the right track, and she was praised for using her head and engaging the teacher in a discussion.  We also had a nice discussion on how to determine when to stand on your principles and when to conform.  (Anna, I hope you never conformed!)

Calling a teacher an idiot in person would have been an automatic grounding for a VERY long time.   Calling someone an idiot while debating with them - bad. Referring to the person who irritates you as an idiot while at home with your family, eh, that happens.

In the car this morning, same child turned to her younger sister and announced, "if we save a lot of money and don't buy junk we don't need, we can retire at 40!!!" 

TheGrimSqueaker

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Re: Overheard at Work
« Reply #19085 on: November 10, 2017, 12:08:55 PM »
Someone recently said "Why save?  I could die tomorrow."

People seem so defeated.  They just say F it and keep spending like there is no tomorrow.  I try to lend advice, and it falls on deaf ears.

My preferred response to "Why save? I could die tomorrow." is "But the overwhelming odds are that you won't, in which case you're going to need to provide for yourself and have something set aside for emergencies, instead of becoming a burden to others the first time something unexpected comes up."

DS

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Re: Overheard at Work
« Reply #19086 on: November 10, 2017, 12:20:30 PM »
We did have a discussion about the fact that some parts of the cost are fixed (e.g., water also includes sewer, which is a flat fee for each household) and some can be variable, and it would have been better to have another choice (mixed).

Daughter was on the right track, and she was praised for using her head and engaging the teacher in a discussion.  We also had a nice discussion on how to determine when to stand on your principles and when to conform.  (Anna, I hope you never conformed!)

Calling a teacher an idiot in person would have been an automatic grounding for a VERY long time.   Calling someone an idiot while debating with them - bad. Referring to the person who irritates you as an idiot while at home with your family, eh, that happens.

In the car this morning, same child turned to her younger sister and announced, "if we save a lot of money and don't buy junk we don't need, we can retire at 40!!!"

That's awesome. :)

dragoncar

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Re: Overheard at Work
« Reply #19087 on: November 11, 2017, 12:00:54 AM »

Your daughter will benefit from learning that teachers, as anyone else, can be clueless.

Options too limited:

Definition: A mixed cost is an expense that has attributes of both fixed and variable costs. In other words, itís a cost that changes with the volume of production like a variable cost and canít be completely eliminated like a fixed cost.

https://www.myaccountingcourse.com/accounting-dictionary/mixed-cost

The parent, child, and teacher all have an opportunity to learn that no one is an "idiot" in this scenario. The options were just too limited. Both people have correct ideas.

Great learning opportunity for all sides to see how things devolve into barbaric name-calling instead of seeking solutions.

I disagree. Electricity can absolutely be reduced down to zero. Take, for example, a family with solar panels that use less energy than is produced. In my state, an electric company will purchase a limited amount of this excess energy instead of charging the family. At worst they break even. That would be an electric bill of zero and 100% variable.

I think that for a middle school teacher to be teaching students that utilities are fixed and there is nothing to be done about it is a disservice to students that may not get good financial advise at home.

A family with solar panels now has a definite fixed, and sunk, cost.  You can count the solar panels up front or depreciate them over time but either way you canít reduce their cost

Feivel2000

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Re: Overheard at Work
« Reply #19088 on: November 11, 2017, 03:48:36 AM »
We did have a discussion about the fact that some parts of the cost are fixed (e.g., water also includes sewer, which is a flat fee for each household) and some can be variable, and it would have been better to have another choice (mixed).

Daughter was on the right track, and she was praised for using her head and engaging the teacher in a discussion.  We also had a nice discussion on how to determine when to stand on your principles and when to conform.  (Anna, I hope you never conformed!)

Calling a teacher an idiot in person would have been an automatic grounding for a VERY long time.   Calling someone an idiot while debating with them - bad. Referring to the person who irritates you as an idiot while at home with your family, eh, that happens.

In the car this morning, same child turned to her younger sister and announced, "if we save a lot of money and don't buy junk we don't need, we can retire at 40!!!"

At 40? Someone needs a lesson about setting ambitious goals and shoot for the moon!

Chraurelius

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Re: Overheard at Work
« Reply #19089 on: November 11, 2017, 11:21:47 AM »
The teacher is an idiot for being disrespectful to her student, not being wrong.

EngineeringFI

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Re: Overheard at Work
« Reply #19090 on: November 12, 2017, 08:36:10 AM »
We did have a discussion about the fact that some parts of the cost are fixed (e.g., water also includes sewer, which is a flat fee for each household) and some can be variable, and it would have been better to have another choice (mixed).

Daughter was on the right track, and she was praised for using her head and engaging the teacher in a discussion.  We also had a nice discussion on how to determine when to stand on your principles and when to conform.  (Anna, I hope you never conformed!)

Calling a teacher an idiot in person would have been an automatic grounding for a VERY long time.   Calling someone an idiot while debating with them - bad. Referring to the person who irritates you as an idiot while at home with your family, eh, that happens.

In the car this morning, same child turned to her younger sister and announced, "if we save a lot of money and don't buy junk we don't need, we can retire at 40!!!"

It might be difficult to explain to your child, but I think the real story here is the actual conversation happening below the surface between her and her teacher. I think her teacher felt like her authority in the classroom was threatened when your daughter disagreed with her. And so she took the opposite side of the argument and laughed at your daughter's reasoning, not because she actually disagreed with it, but because she had to be "right" in front of the class.

Goldielocks

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Re: Overheard at Work
« Reply #19091 on: November 12, 2017, 10:38:13 AM »
We did have a discussion about the fact that some parts of the cost are fixed (e.g., water also includes sewer, which is a flat fee for each household) and some can be variable, and it would have been better to have another choice (mixed).

Daughter was on the right track, and she was praised for using her head and engaging the teacher in a discussion.  We also had a nice discussion on how to determine when to stand on your principles and when to conform.  (Anna, I hope you never conformed!)

Calling a teacher an idiot in person would have been an automatic grounding for a VERY long time.   Calling someone an idiot while debating with them - bad. Referring to the person who irritates you as an idiot while at home with your family, eh, that happens.

In the car this morning, same child turned to her younger sister and announced, "if we save a lot of money and don't buy junk we don't need, we can retire at 40!!!"

It might be difficult to explain to your child, but I think the real story here is the actual conversation happening below the surface between her and her teacher. I think her teacher felt like her authority in the classroom was threatened when your daughter disagreed with her. And so she took the opposite side of the argument and laughed at your daughter's reasoning, not because she actually disagreed with it, but because she had to be "right" in front of the class.

Some teachers are not that smart... really.  Especially in elementary school and it involves basic understanding about math and life.
We just had Parent teacher interviews here, and my SIL was told by one (Grade 8 Socials) "why are you here? you are wasting my time, the parent teacher interviews are for kids that have trouble in class".   Um, no, the Fall interviews are when we parents get to find out if our kid's teachers are dicks or not, so we understand if we need to intervene when our teenagers complain.

Maenad

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Re: Overheard at Work
« Reply #19092 on: November 13, 2017, 11:55:00 AM »
Your daughter will benefit from learning that teachers, as anyone else, can be clueless.

It can also be a good opportunity to start learning about how to deal with someone who's clueless and also in a position of power over you. Dealing with that tactfully is an awesome skill.

Wish I'd learned it. :-D

mies

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Re: Overheard at Work
« Reply #19093 on: November 13, 2017, 03:41:34 PM »
My co-worker told me he bought an XBox One X, a 4K TV, and a dog over the weekend. He was chuckling about how he had already spent his tax return. He just replaced his iPhone 7 last week too with a Pixel 2XL with the nebulous "I just don't like Apple stuff anymore" excuse. It's hip to be a he-man Apple hater where I work. I'm guessing he felt some pressure to conform. I just wanted to put my fist through his face and scream at him, "You won't care about any of this shit in a month!". I didn't say anything, but I wish I could nudge him in the right direction. He doesn't make as much as I do, so I'm sure he's put most, if not all, of this stuff on his credit card.

marielle

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Re: Overheard at Work
« Reply #19094 on: November 14, 2017, 06:38:12 AM »
Not really financially related, but at work I told a contractor that I was from Ukraine and he asked if it was a communist country.

A Definite Beta Guy

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Re: Overheard at Work
« Reply #19095 on: November 14, 2017, 08:00:22 AM »
One of my co-workers is apparently a Mustachian. Or at least is familiar with the philosophy. He saw me cruising the forum.

Not terribly surprising. When Vanguard was in the office, he was the only other person who seemed to think "replace 85% of your income in retirement" was a bit silly.

hudsoncat

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Re: Overheard at Work
« Reply #19096 on: November 14, 2017, 08:51:46 AM »
I was joking about how very Monday of a Monday yesterday was with a co-worker this morning. Just one of those days where nothing terrible happens but a bunch of little things just don't go your way.

Me: and to top it off, when I got in my car after work, I realized I had a headlight out.
CW: Off to the mechanic for you, huh?
Me: No. It was just the bulb. I replaced it on my way home.
CW: By yourself?!
Me: Yes. It's super easy in my car. Your car too actually I bet! (We have the same car, though her car is a couple years newer.)
CW: Oh, I wouldn't even try to change it myself. I'd just take it to the mechanic.

I just can't imagine going to a mechanic for something as simple as a light bulb replacement. I get it if your car has a hard to reach headlight something of that nature, but I'd at least try it myself.

Just Joe

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Re: Overheard at Work
« Reply #19097 on: November 14, 2017, 09:00:09 AM »
On a similar theme I once visited Puerto Rico and someone asked if they spoke English there and whether the American dollar was widely accepted.

Just Joe

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Re: Overheard at Work
« Reply #19098 on: November 14, 2017, 09:01:31 AM »
I was joking about how very Monday of a Monday yesterday was with a co-worker this morning. Just one of those days where nothing terrible happens but a bunch of little things just don't go your way.

Me: and to top it off, when I got in my car after work, I realized I had a headlight out.
CW: Off to the mechanic for you, huh?
Me: No. It was just the bulb. I replaced it on my way home.
CW: By yourself?!
Me: Yes. It's super easy in my car. Your car too actually I bet! (We have the same car, though her car is a couple years newer.)
CW: Oh, I wouldn't even try to change it myself. I'd just take it to the mechanic.

I just can't imagine going to a mechanic for something as simple as a light bulb replacement. I get it if your car has a hard to reach headlight something of that nature, but I'd at least try it myself.

A bunch of the auto parts stores will replace the bulb for you for free. I wonder what a mechanic would charge.

RyanAtTanagra

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Re: Overheard at Work
« Reply #19099 on: November 14, 2017, 10:15:10 AM »
I was joking about how very Monday of a Monday yesterday was with a co-worker this morning. Just one of those days where nothing terrible happens but a bunch of little things just don't go your way.

Me: and to top it off, when I got in my car after work, I realized I had a headlight out.
CW: Off to the mechanic for you, huh?
Me: No. It was just the bulb. I replaced it on my way home.
CW: By yourself?!
Me: Yes. It's super easy in my car. Your car too actually I bet! (We have the same car, though her car is a couple years newer.)
CW: Oh, I wouldn't even try to change it myself. I'd just take it to the mechanic.

I just can't imagine going to a mechanic for something as simple as a light bulb replacement. I get it if your car has a hard to reach headlight something of that nature, but I'd at least try it myself.

A bunch of the auto parts stores will replace the bulb for you for free. I wonder what a mechanic would charge.

I worked in a garage, we'd do it for the cost of the bulb if it was a normal/easy replacement.  That's one of those things where it takes 2 minutes and the potential grateful, repeat customer is worth more than the few bucks you could change in labor.  Not all garages think that way though, unfortunately.