taking things for granted

[FLBiker]

I had a couple of conversations recently that reminded me how much I take my mustachian ways for granted.  I've been living on less than 50% of my income all along (I'm 39, married, kid).  We're not rich (I earned little until my mid 30's, wife wasn't frugal til we met) but we've certainly got enough.

Over the holidays, my brother (37) had some flooding in his basement and was concerned about the $1000 deductible.  I didn't say anything rude, but I was shocked that 1) a deductible would be so low and that 2) $1000 would be an issue.  My brother is married w/ two kids in a fairly modest house (that may have been bought more towards the peak than the valley).  Their income is probably ~$80K per year.  Turns out, the sewer department paid their $1000 deductible so they were able to get a new HD TV.

Yesterday, I was talking to a coworker about dental stuff.  He told me how a denial of an insurance claim led to $1700 on a credit card and finance charges.  Sincerely confused about why it meant finance charges, he told me "It's not like I have $1700 to pay an unexpected dentist bill."  His tone implied that only millionaires had that kind of extra cash.  He makes ~$65K, single, 35, no kids.  In the same conversation, he said he goes to Starbucks once or twice a day.

And I was recently talking to my boss about my wife being on an unpaid leave of absence, and he said that "That's fine for a year or two, but you can't live on your salary."  I make $75K.  Wife makes $40K for 9 mos, currently on 1 year leave.  Not only are we living on my salary, we're continuing to fully fund both a 403b and a 457.  (In fairness, though, it might be close.)  And then when I mentioned retiring early, he said I couldn't retire until my daughter (10 mos) was through college.  When I said that I didn't need to work through her college graduation, I just needed to have enough money to support her during that time, he looked at me like I had two heads.  He recently bought a Mercedes coupe because "he deserved it".

I don't say this to point and laugh.  These are good, kind, intelligent people.  But I can't get my head around the idea that, after working from 16 to your mid-30s, having 1 or 2 thousand dollars for an unexpected expense is a challenge.  And my boss makes ~$175K, and still feels the need to keep working until his kids (youngest is 16) are through college.  I feel very fortunate that (for a variety of reasons) consumerism never appealed to me, and it's great having a community like this to share ideas and experience with.  Thanks!

[Scubanewbie]

Agreed on the "emergency" bit.  It constantly astounds me that a relatively small amount of money is hair-on-fire emergency for so many.  That is one of my motivations in being mustachian, I don't know that I'll RE but knowing that I have insulated our family from as many "emergencies" as I can gives me financial peace (am I mixing my communities here?!?). 

What amazes me more is the stuff one can see coming.  Oh no, we need a new roof (our shingles are 20+ years old) so I guess we'll have to take out a HELOC or put it on the CC.  Um...my shingles are currently nearing that point on my 20-ish year old house...so I'm saving for the eventuality.  That's an extreme example but so many others...new car tires (CC), Christmas (don't even get me started), etc.  These are part of normal life, save for them!!!

[Mr. Green]

I used to think that it wasn't possible for people to not understand what they were doing, like really, deep down, they knew they didn't have to live that way. I now know better. For some folks it's literally like a light switch that is off. There is zero comprehension and zero curiosity that there might be anything beyond the financial viewpoint they've established. It blows my mind too. Sadly it's an almost impossible situation to change, like Galileo trying to tell everyone the world isn't flat.

[big_slacker]

I used to think that it wasn't possible for people to not understand what they were doing, like really, deep down, they knew they didn't have to live that way. I now know better. For some folks it's literally like a light switch that is off. There is zero comprehension and zero curiosity that there might be anything beyond the financial viewpoint they've established. It blows my mind too. Sadly it's an almost impossible situation to change, like Galileo trying to tell everyone the world isn't flat.

This is it. Lots of folks really don't know any other way than living paycheck to paycheck. It's totally outside their comprehension that each pay period's funds should be 100% depleted, sometimes in the first week after receiving it.

[TheBeardedIrishman]

one of the best things I was ever told about money was...ITS EASY TO TEACH SOMEBODY TO MAKE MONEY...ANYBODY CAN MAKE MONEY..ITS HARD TO TEACH SOMEONE TO SAVE MONEY..NOT EVERYONE CAN SAVE MONEY....It is mind blowing to me as well that I have manager's, boss that make 3X me and have nothing to show for it besides more debt...I have one boss that made over 200k last year and told me he only saved 5000, but he did buy a 25k boat, new house, new trailer....what I have found is that most people don't want to here about our MMM ways because it makes them upset they are either unwilling to save like that or even save a little...they are too caught up with the Jones...which not saying those ppl are bad ppl or lesser of a person..its just sad seeing someone make that much money and then having nothing to show for it bc of being so influenced by consumerism

[Northwestie]

Sad but true.  Personally, growing up in a family with not much money made me acutely aware of finances early.  I'm not sure why the light bulb doesn't go on for some folks.

[Mr. Green]

Sad but true.  Personally, growing up in a family with not much money made me acutely aware of finances early.  I'm not sure why the light bulb doesn't go on for some folks.

I think it's a psychology thing. There are studies out there on delayed gratification where they find a certain percentage of people are basically incapable of choosing the option that does not result in immediate gratification. Doesn't matter how the information is presented, some folks (the majority) always choose the reward now.

[thedayisbrave]

I'm lucky that I was raised by an immigrant, single mother. 

My old boss was like your manager.  New car every year.  After he and his wife split up, they BOTH went out and got houses that were the same size and same price as the one they lived in while they were married (face punch).  I was very close to the family for a long time so I got a front row seat to watching it all unfold.  He created a budget for her (I guess he always handled the finances) and she went over it with me and was complaining that he didn't give her enough money and that she spent more than $50 on gas a month.  I wanted to tell her a) then do your own damn budget, it's not that hard, you have a graduate degree b) it's insane to be complaining about how "poor" you are when you have a house cleaner that comes once a week.

He was telling me that I needed a "real" job (this was after I no longer worked for him and was working on building my real estate business).  I'd just recently closed my first transaction as a real estate agent.  My commission was around $2,000.  He said, "That's fine and dandy but how long does that $2K last you?" I said "about two months" and his jaw dropped and he literally was speechless.  I suspect $2K is probably about half of a mortgage payment for him.

I also remember a time I picked up a dollar bill off the floor of his office.  He said "you can have it, put it toward your car payment" - I said "I don't have a car payment" - his eyes about bugged out of his head.

He's a smart guy.  MBA in Finance.  But spending out of his control, and at age 62 still unable to retire.  I don't understand.

[FLBiker]

I think it's a psychology thing. There are studies out there on delayed gratification where they find a certain percentage of people are basically incapable of choosing the option that does not result in immediate gratification. Doesn't matter how the information is presented, some folks (the majority) always choose the reward now.

Interesting point.  Even as a kid, I was OK w/ delayed gratification (saving the food I like best for last, etc.).  I learned recently that delayed gratification was a more common trait among introverts.  Not sure why.

[opnfld]

Agreed on the "emergency" bit.  It constantly astounds me that a relatively small amount of money is hair-on-fire emergency for so many.  That is one of my motivations in being mustachian, I don't know that I'll RE but knowing that I have insulated our family from as many "emergencies" as I can gives me financial peace (am I mixing my communities here?!?). 

It's an amazing feeling, never to worry about money.

[nybeccaboo]

This thread came at the perfect time.  Over the weekend, I had a kitchen pipe burst in my 4th floor apartment and couldn't turn the water off fast enough (needed extra help and a wrench). Naturally the water went through the floor to the apartments below. After everything was mopped up I was slightly freaked out thinking the damage is going to be thousands and thousands of dollars. Turns out, it'll be about $1,000 or so.  When I updated my co-workers on the amount, everyone was relieved that at least insurance would cover it. They were shocked when I said I was covering it with cash and that my deductible was $1,000 (so high!)  I was so confused by their shock that I may have blurted out, "who doesn't have $1,000 for emergencies?!"

That night I realized that I was lucky to have parents that taught me to save and that I actually did it. And how scary it would be if I had to worry about such a small amount of money.

[coppertop]

When my kids were small and I was a SAHM, we did live pretty much hand to mouth and I've never forgotten it.  I lived on a budget but it was so tight that there wasn't much left to save after all the bills were paid.  This lasted for a few years until my ex moved up the ladder and began making more money.  I like the security better of knowing that I have some money in the bank in case anything goes wrong.  Delaying gratification is a small price to pay to have that secure feeling ... but obviously everyone does not feel this way or we'd all FIRE. 

[FLBiker]

This thread came at the perfect time.  Over the weekend, I had a kitchen pipe burst in my 4th floor apartment and couldn't turn the water off fast enough (needed extra help and a wrench). Naturally the water went through the floor to the apartments below. After everything was mopped up I was slightly freaked out thinking the damage is going to be thousands and thousands of dollars. Turns out, it'll be about $1,000 or so.  When I updated my co-workers on the amount, everyone was relieved that at least insurance would cover it. They were shocked when I said I was covering it with cash and that my deductible was $1,000 (so high!)  I was so confused by their shock that I may have blurted out, "who doesn't have $1,000 for emergencies?!"

That night I realized that I was lucky to have parents that taught me to save and that I actually did it. And how scary it would be if I had to worry about such a small amount of money.

That reminds me -- a couple of months ago, we had two windows broken in our car.  Replacing them was ~$500.  Both the cop and my FIL said "well, at least insurance will cover it".  Needless to say, we have a higher deductible than that.

[TheBeardedIrishman]

 I'd just recently closed my first transaction as a real estate agent.  My commission was around $2,000.  He said, "That's fine and dandy but how long does that $2K last you?" I said "about two months" and his jaw dropped and he literally was speechless.  I suspect $2K is probably about half of a mortgage payment for him.

[/quote]

my boss asked what my mortgage was I told him 650/month...his jaw dropped and said his was 2400/month almost 3x mine...im completely 100% commission based too so I see a lot off people freaking out if they are not making any sales/money BUT oddly enough once they have just a little money they are buying everyone drinks at the bar or talking about what they just bought...they always ask me why im never worried about money..and as most of here we plan ahead so we have more freedom and less stress

[Parizade]

When my kids were small and I was a SAHM, we did live pretty much hand to mouth and I've never forgotten it.  I lived on a budget but it was so tight that there wasn't much left to save after all the bills were paid. 

I also had enough tough years that I don't take too much for granted these days. It is so good to have a strong financial foundation. I hit a deer last fall and totaled my car (fortunately I was not hurt). Within a few days I found an acceptable certified pre-owned car, still under manufacturers warranty, and just wrote a check to buy it. No stressing over getting approved for a loan, no sleepless nights worrying about making payments, just a minor annoyance over the hassle. The impact to my FIRE timeline was negligible, so I can just relax and enjoy the newer car.

The mustachian life is good!

[HenryDavid]

So one thing "taken for granted" by so many folks is the idea that they "can't afford to save."
Talking to a friend recently about retirement and pensions, I said I was "lucky" to have a DB pension that I can take at 55, but that on the other hand, it really just amounted to forced savings of 35% or more of my total pay over the last couple decades.
When I said "if everyone just stashed 35% a lot of people would be happier about retiring," she said "well sure but you can't afford to live if you do that."
Ummm . . . . OK, I didn't say "what part of forced savings did you not hear." And I didn't say "well I never relied on just the pension plan. Obviously I added savings of my own above that, because, well, it's obvious."
Nope. Didn't say any of that.

[CATman]

I'm a reformed "spend your entire paycheck and what you can't afford put on credit" type and I can honestly say that for most people that mindset is 100% normal. Now that I've realized the error of my ways I look back and I'm amazed at exactly how I made it this far in life. I was one bad hospital bill or car accident away from being in serious trouble.

The bigger issue is that most people don't even realize they have a problem until it's too late. It's also cyclical. I could never understand these people who talked about "thoughts becoming reality", but it's exactly what you're describing. Most people follow thought patterns that keep them in a cycle of living on the edge of a financial disaster. You however operate because you have a different thought pattern completely. Save money, have a higher deductible, avoid paying higher premiums. Just a small example of how thinking like a person with wealth keeps you wealthy.

I'll admit, when I first realized that's all that was keeping me in my former position of being perpetually broke it blew my mind. I'm happy to have join the rest of the enlightened folks here and happy to say I've been applying those new thought patterns with fabulous results.

[Parizade]

The bigger issue is that most people don't even realize they have a problem until it's too late ... Most people follow thought patterns that keep them in a cycle of living on the edge of a financial disaster.

The saddest part of this for me, especially in an election year, is how so many people think the answer to their financial problems is in the hands of politicians ("If only so-and-so gets elected, all my financial woes will go away" or "when such-and-such law gets passed, I won't be broke anymore"). On the lower income side, it's about raising the minimum wage. On the higher income side it's about lowering taxes. But both sides are maxing out their credit and living beyond their means.

So few people are willing to look at their own behaviors and make a change from within. It's senseless and sad.

[Apples]

I take for granted that I know how math works when it comes to finances.  I have college friends who didn't realize the interest rate on their student loans is divided into monthly chunks (ok daily, but I wasn't going into that with them) and applied to the remaining balance, so more of your payment goes to the loans over time as there is less interest due on the dwindling balance.  Two so far thought the bank (lender) "just takes all the interest first" and then "lets" you pay down the balance faster later.  So you sort of just have to pay your dues up front, no matter how fast or slow you're paying the loan down.  Several thought it takes negotiating to pay less interest later in the loan (on a loan with the same actual interest rate, just smaller balance).

Also, I take for granted that I innately understand compound interest and how it impacts my finances.  I don't think most people just intuitively "feel" it's impact in their choices.

[FLBiker]

So few people are willing to look at their own behaviors and make a change from within. It's senseless and sad.

That encapsulates so much!  The problems are always someone or something else.

I can't put my finger on what was different for me.  My parents are pretty good with money, but my dad makes ~$300K so they're also pretty spendy.  And he's almost 70 and not retiring.  I remember very vividly, though, being in high school and realizing that every dollar I didn't spend was time I didn't have to work.  That has always stuck with me.

[spokey doke]

I think it's a psychology thing. There are studies out there on delayed gratification where they find a certain percentage of people are basically incapable of choosing the option that does not result in immediate gratification. Doesn't matter how the information is presented, some folks (the majority) always choose the reward now.

Interesting point.  Even as a kid, I was OK w/ delayed gratification (saving the food I like best for last, etc.).  I learned recently that delayed gratification was a more common trait among introverts.  Not sure why.

Ah...marshmallows...

https://www.youtube.com/watch?v=QX_oy9614HQ

Having parents who grew up during the Great Depression helped to hard wire frugality in me to some extent (although it also made me critical of my parents' version of frugality, that often focused on getting something for cheap, rather than investing in quality).

I find all sorts of parallels in just seeing how so many other people live, especially all the incredibly unhealthy things people eat on a regular basis...but, uh...variety is the highly processed fat/sugar/salt of life(?!) So to each their own...

[Bucksandreds]

The bigger issue is that most people don't even realize they have a problem until it's too late ... Most people follow thought patterns that keep them in a cycle of living on the edge of a financial disaster.

The saddest part of this for me, especially in an election year, is how so many people think the answer to their financial problems is in the hands of politicians ("If only so-and-so gets elected, all my financial woes will go away" or "when such-and-such law gets passed, I won't be broke anymore"). On the lower income side, it's about raising the minimum wage. On the higher income side it's about lowering taxes. But both sides are maxing out their credit and living beyond their means.

So few people are willing to look at their own behaviors and make a change from within. It's senseless and sad.

It's a proven fact that it's impossible to support a family of 4 or more in a way that is safe and healthy on even 2 full time minimum wage jobs. Besides that part, I agree with your post.

[Parizade]

It's a proven fact that it's impossible to support a family of 4 or more in a way that is safe and healthy on even 2 full time minimum wage jobs. Besides that part, I agree with your post.

If the minimum wage is $7.25, 2 adults working full time would earn about $29,000 per year. I believe there are families on this board living happy healthy lives on less than that, but I could be wrong.

[StartingEarly]

It's actually $30,160. In some areas it would not be possible, in some it would be comfortable. Most people working minimum wage jobs aren't full time though because the employer doesn't want to pay for healthcare.

[Parizade]

It's actually $30,160. In some areas it would not be possible, in some it would be comfortable. Most people working minimum wage jobs aren't full time though because the employer doesn't want to pay for healthcare.

I subtracted 2 weeks on the assumption that they would not get paid time off and would likely need at least that much.

In the example of a 2 parent family with 2 kids, I would say starting a family before gaining the vocations skills needed to support said family was not a good decision. Raising the minimum wage won't help these parents become better decision makers, which is what they desperately need. Short term financial help combined with financial counseling and job skills training would be more effective IMHO.

[La Bibliotecaria Feroz]

It's a proven fact that it's impossible to support a family of 4 or more in a way that is safe and healthy on even 2 full time minimum wage jobs. Besides that part, I agree with your post.

If the minimum wage is $7.25, 2 adults working full time would earn about $29,000 per year. I believe there are families on this board living happy healthy lives on less than that, but I could be wrong.

I think that a lot of the families living on that little, like Pete and his family, are living in a paid-off house. Add in rent--not to mention daycare and/or after-school care and other work-related expenses, like commuting costs, and the picture becomes grim indeed.

[Bucksandreds]

Anyone who thinks $29,000 per year when you have 2 kids and pay rent is enough for a healthy and safe life is kidding themselves. People who fire on that little don't pay for housing and benefit by less expense with transportation and daycare.

[Parizade]

Anyone who thinks $29,000 per year when you have 2 kids and pay rent is enough for a healthy and safe life is kidding themselves.

I agree that anyone who starts a family thinking they can thrive on minimum wage with no savings is probably kidding themselves.

[Gin1984]

It's a proven fact that it's impossible to support a family of 4 or more in a way that is safe and healthy on even 2 full time minimum wage jobs. Besides that part, I agree with your post.

If the minimum wage is $7.25, 2 adults working full time would earn about $29,000 per year. I believe there are families on this board living happy healthy lives on less than that, but I could be wrong.

But you also have subtract FICA bringing it down to $27853.

[Bucksandreds]

Anyone who thinks $29,000 per year when you have 2 kids and pay rent is enough for a healthy and safe life is kidding themselves.

I agree that anyone who starts a family thinking they can thrive on minimum wage with no savings is probably kidding themselves.

I'm so happy for you that you never had a child accidentally and were smart enough and in a position to be skilled enough to not be stuck in minimum wage work. Virtually all of us on this website had a better background than the people that were talking about.

[DocMcStuffins]

I am lazy and don't want to figure the numbers but............let's look at this theoretical "couple on minimum wage"

First when it comes to child care, that would be needed only for the first 3 years of age since they fall under the poverty level and in the US would qualify for their children to go to pre-school / daycare likely for free.  If not then because they both have minimum wage jobs, they likely live in their same home town where family such as a mother / sister / brother / father could help during the day. This is assuming that they both work during the day and didn't cut their expenses by having one work the day shift and another work the 3rd shift.  From a food standpoint, they qualify for govenment assistance (ie food stamps) and their children get free breakfast and lunch at school.  Thus they cut their amount of healthy meals per day into 1 during the working week.  Commuting could obviously be reduced dramatically by living close to work.  The kids would take school buses when they age.  They likely also qualify for govenment housing assistance and their housing expenses are dramatically reduced.  So to say it is impossible, I think is naive.  Obviously the types of folks who both have minimum wage jobs usually don't make the types of decisions that make it possible for them to live on their salaries but to say it can't be done is short sided.

 FYI, a mother on SSI with 5 children living in the projects can still raise 3 doctors, 1 teacher, and 1 nurse.  A good life ? No but one where they still live in the USA and can climb any socioeconomic ladder through grit / determination. 

[Yaeger]

I'm so happy for you that you never had a child accidentally and were smart enough and in a position to be skilled enough to not be stuck in minimum wage work. Virtually all of us on this website had a better background than the people that were talking about.

I'm so happy we live in a society that punishes bad decision-making, lethargy, and unskilled labor. Virtually everyone here has a financial education and savings ethic beyond the norm despite disparate socioeconomic backgrounds.

[Bucksandreds]

I'm so happy for you that you never had a child accidentally and were smart enough and in a position to be skilled enough to not be stuck in minimum wage work. Virtually all of us on this website had a better background than the people that were talking about.

I'm so happy we live in a society that punishes bad decision-making, lethargy, and unskilled labor. Virtually everyone here has a financial education and savings ethic beyond the norm despite disparate socioeconomic backgrounds.

I see that in your mind intelligence, education, circumstance and any other factor out of someone's control never effect a person's outcome.  I am around some of the lowest of society (dentist in prison)  and plenty of these inmates are lazy scumbags. Plenty of them aren't. Lack of intelligence and lack of parents who gave a shit as well as the influence of the people around them when they grew up played a large part.  I can guarantee you one thing.  It's not as cut and dry as the narrative that you're preaching.

[Yaeger]

I'm so happy for you that you never had a child accidentally and were smart enough and in a position to be skilled enough to not be stuck in minimum wage work. Virtually all of us on this website had a better background than the people that were talking about.

I'm so happy we live in a society that punishes bad decision-making, lethargy, and unskilled labor. Virtually everyone here has a financial education and savings ethic beyond the norm despite disparate socioeconomic backgrounds.

I see that in your mind intelligence, education, circumstance and any other factor out of someone's control never effect a person's outcome.  I am around some of the lowest of society (dentist in prison)  and plenty of these inmates are lazy scumbags. Plenty of them aren't. Lack of intelligence and lack of parents who gave a shit as well as the influence of the people around them when they grew up played a large part.  I can guarantee you one thing.  It's not as cut and dry as the narrative that you're preaching.

I agree with you somewhat. Yet, I don't agree that the factors you've listed above are completely out of someone's control. Nor do I think that we need some entity to redistribute earnings to chase after some shifting target of 'fairness'. Our Constitution doesn't discriminate based on salary, nor should it. I support an equal process, not an equitable process.

I'm a believer in a system where the 'lowest of society' can better themselves by having opportunities available to them. Right now all they can hope for are low paying jobs with no chance to move up, because that's all the jobs the US economy is creating (see latest jobs report below). Until we improve our economy by attracting producers, manufacturing, and industry they're going to be poor no matter how much we vilify the rich. JFK once said "a rising tide lifts all boats". Capitalism has been the greatest anti-poverty system in history.

http://www.bls.gov/news.release/empsit.nr0.htm

[Bucksandreds]

I'm so happy for you that you never had a child accidentally and were smart enough and in a position to be skilled enough to not be stuck in minimum wage work. Virtually all of us on this website had a better background than the people that were talking about.

I'm so happy we live in a society that punishes bad decision-making, lethargy, and unskilled labor. Virtually everyone here has a financial education and savings ethic beyond the norm despite disparate socioeconomic backgrounds.

I see that in your mind intelligence, education, circumstance and any other factor out of someone's control never effect a person's outcome.  I am around some of the lowest of society (dentist in prison)  and plenty of these inmates are lazy scumbags. Plenty of them aren't. Lack of intelligence and lack of parents who gave a shit as well as the influence of the people around them when they grew up played a large part.  I can guarantee you one thing.  It's not as cut and dry as the narrative that you're preaching.

I agree with you somewhat. Yet, I don't agree that the factors you've listed above are completely out of someone's control. Nor do I think that we need some entity to redistribute earnings to chase after some shifting target of 'fairness'. Our Constitution doesn't discriminate based on salary, nor should it. I support an equal process, not an equitable process.

I'm a believer in a system where the 'lowest of society' can better themselves by having opportunities available to them. Right now all they can hope for are low paying jobs with no chance to move up, because that's all the jobs the US economy is creating (see latest jobs report below). Until we improve our economy by attracting producers, manufacturing, and industry they're going to be poor no matter how much we vilify the rich. JFK once said "a rising tide lifts all boats". Capitalism has been the greatest anti-poverty system in history.

http://www.bls.gov/news.release/empsit.nr0.htm

Capitalistic democracy is ideal. Unfortunately the U.S. is racing towards Oligarchy hence the call for change by so many.

[Paul der Krake]

Some posters have brought up the idea that their financially challenged upbringing shaped their perceptions of money, eventually leading them to this very website.

I had the complete opposite experience, having had the privilege of growing up in a wealthy family. My parents were no Rockefellers, but let's just say it took me an awfully long time to realize that the average household doesn't have a stay at home mother AND a house cleaner that comes twice a week. Or a company luxury car. Or a vacation home. Or takes all four children skiing every year, sometimes in other friends' vacation homes that are large enough to accommodate two families with children. Or having an expansive network of friends and acquaintances scattered around the world. Or that babysitting other wealthy kids for $17/hour is a completely normal teenager occupation.

I have strange memories of my family stopping at highway stops (the great class equalizer of any nation with a road system!) on the way to preppy vacation spots, and just be shocked at how different people were from us or our friends. They dressed, spoke, even walked differently! That's confusing as hell when you're a teenager only starting to understand how the world works, and your small world bubble bursts wide open with possibilities. Being exposed to problems that you have never given one thought to. What do you mean, people struggle to put food on the table?

Anyway, I truly believe that my childhood completely desensitized me to luxury. Got it out of my system early on, been there done that. The value traps become much more visible.

[Parizade]

Anyone who thinks $29,000 per year when you have 2 kids and pay rent is enough for a healthy and safe life is kidding themselves.

I agree that anyone who starts a family thinking they can thrive on minimum wage with no savings is probably kidding themselves.

I'm so happy for you that you never had a child accidentally and were smart enough and in a position to be skilled enough to not be stuck in minimum wage work. Virtually all of us on this website had a better background than the people that were talking about.

I am happy and grateful for that every day, and while I don't quite understand how one can conceive, carry a child for 9 months, and choose not to give it up for adoption "accidentally" I do understand that people without adequate education or intelligence are not equipped to make the best decisions. I'm not saying we shouldn't help them, I'm saying the help should be directed at the underlying problem of poor decision making. Raising the minimum wage won't help that at all, and in fact might only make the problem worse.

[Parizade]

I'm so happy for you that you never had a child accidentally and were smart enough and in a position to be skilled enough to not be stuck in minimum wage work. Virtually all of us on this website had a better background than the people that were talking about.

I'm so happy we live in a society that punishes bad decision-making, lethargy, and unskilled labor. Virtually everyone here has a financial education and savings ethic beyond the norm despite disparate socioeconomic backgrounds.

It's reality that punishes bad decision making, and it's how most of us learn to make better decisions. I allowed my son to make many bad decisions as a child so he could learn that there are consequences to foolishness and make better decisions as he grew. Taking away the consequences of bad decisions ensures that no learning takes place, which is the worst thing you can do to someone who needs a cosmic face-punch.

[Yaeger]

Capitalistic democracy is ideal. Unfortunately the U.S. is racing towards Oligarchy hence the call for change by so many.

Capitalistic democracy - that could mean anything. That could mean crony capitalism, where the businesses are involved with the government, like we have now. When you mention the 'Oligarchy', the problem isn't business, it's government. Take away government influence in the economy and you'll remove money from politics, remove corporate influence in government, and get rid of this 'Oligarchy'. I'm continually puzzled as to the left's inability to see that more regulations, more laws, more meddling in the economy will create more crony capitalism. To reduce an Oligarchic system we need more competition in the market, which means less restrictions and regulation.

It makes sense on a real level. If you're a politician making a law, let's say 'reigning in Wall Street', you use experts on Wall Street to come up with a tailored bill to achieve your goal. Politician's aren't experts in finance or investments, so they need lobbyists to help draft legislation. Larger companies are all too willing to impose restrictions on the industry as the only major threat to their company is competition, and restrictions will have a greater impact on their smaller competitors. We've seen this with the To-Big-to-fail banks getting bigger since 2008 despite legislation to prevent that. It's just a smaller version of NIRA (National Industrial Recovery Act) committees during the Great Depression that used wage and price controls to destroy their competition.

[Bucksandreds]

Capitalistic democracy is ideal. Unfortunately the U.S. is racing towards Oligarchy hence the call for change by so many.

Capitalistic democracy - that could mean anything. That could mean crony capitalism, where the businesses are involved with the government, like we have now. When you mention the 'Oligarchy', the problem isn't business, it's government. Take away government influence in the economy and you'll remove money from politics, remove corporate influence in government, and get rid of this 'Oligarchy'. I'm continually puzzled as to the left's inability to see that more regulations, more laws, more meddling in the economy will create more crony capitalism. To reduce an Oligarchic system we need more competition in the market, which means less restrictions and regulation.

It makes sense on a real level. If you're a politician making a law, let's say 'reigning in Wall Street', you use experts on Wall Street to come up with a tailored bill to achieve your goal. Politician's aren't experts in finance or investments, so they need lobbyists to help draft legislation. Larger companies are all too willing to impose restrictions on the industry as the only major threat to their company is competition, and restrictions will have a greater impact on their smaller competitors. We've seen this with the To-Big-to-fail banks getting bigger since 2008 despite legislation to prevent that. It's just a smaller version of NIRA (National Industrial Recovery Act) committees during the Great Depression that used wage and price controls to destroy their competition.

Less regulation leads to a better system? Like when Wall Street was deregulated and then the world economy crashed due to the securitizing of subprime mortgages? Sorry, the last time less regulation was introduced the bankers nearly took us back to the Stone Age. Not sure why the right doesn't recognize that?

[Yaeger]

Less regulation leads to a better system? Like when Wall Street was deregulated and then the world economy crashed due to the securitizing of subprime mortgages? Sorry, the last time less regulation was introduced the bankers nearly took us back to the Stone Age. Not sure why the right doesn't recognize that?

Read about Glass-Steagall, try to stay away from partisan articles, since I'm assuming that's what you're referring to. Glass-Steagall was repealed because it wasn't effective, hadn't been for decades. It also had little to no bearing on the 2008 crash, as the vast majority of financial institutions were still Glass-Steagall compliant (why restructure their organizations?). People that use the repeal of Glass-Steagall desperately want to show how government tried, but failed. However, anyone that talks about Glass-Steagall and doesn't mention CRA, HUD, expanding Fannie Mae and Freddie Mac, the decades long push for 'affordable housing', and doesn't want the role of government (perhaps THE primary contributor) to be widely known. I tried to find a good, non-partisan example about it below.

Banking regulators actually punished banks for not lending enough to riskier home-buyers.

http://www.investopedia.com/ask/answers/050515/did-repeal-glasssteagall-act-contribute-2008-financial-crisis.asp

[MonkeyJenga]

Anyway, I truly believe that my childhood completely desensitized me to luxury. Got it out of my system early on, been there done that. The value traps become much more visible.

Me too. It took me a while to challenge my base assumptions about what is truly normal, and that process is still going on, but I grew up knowing that the excess around me was wasteful and unnecessary. I have no desire to buy fancy status symbols, because they symbolize a life I didn't want, whereas I know people who grew up in unstable financial circumstances and take pride in being able to buy lunch out, buy new clothes, buy groceries that they end up throwing out because they can afford it, etc.

[Bucksandreds]

Less regulation leads to a better system? Like when Wall Street was deregulated and then the world economy crashed due to the securitizing of subprime mortgages? Sorry, the last time less regulation was introduced the bankers nearly took us back to the Stone Age. Not sure why the right doesn't recognize that?

Banking regulators actually punished banks for not lending enough to riskier home-buyers.

http://www.investopedia.com/ask/answers/050515/did-repeal-glasssteagall-act-contribute-2008-financial-crisis.asp

Lol. Not sure the truth is on your side.

http://www.forbes.com/sites/stevedenning/2011/11/22/5086/#75138b3d5b56

[Yaeger]

Less regulation leads to a better system? Like when Wall Street was deregulated and then the world economy crashed due to the securitizing of subprime mortgages? Sorry, the last time less regulation was introduced the bankers nearly took us back to the Stone Age. Not sure why the right doesn't recognize that?

Banking regulators actually punished banks for not lending enough to riskier home-buyers.
http://www.investopedia.com/ask/answers/050515/did-repeal-glasssteagall-act-contribute-2008-financial-crisis.asp

Lol. Not sure the truth is on your side.

http://www.forbes.com/sites/stevedenning/2011/11/22/5086/#75138b3d5b56

That doesn't dispute my point. In fact it shows how little Glass-Steagall repeal affected the market. The CRA, which I mentioned above from the same source "New CRA regulations in 1995 required banks to demonstrate that they were making mortgage loans to undeserved communities, which inevitably included borrowers whose credit standing did not qualify them for a conventional mortgage loan."

http://www.forbes.com/2009/02/13/housing-bubble-subprime-opinions-contributors_0216_peter_wallison_edward_pinto.html

Also, if you're curious: "portions of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 indirectly affected the CRA practices at the time in requiring Fannie Mae and Freddie Mac, the two government sponsored enterprises that purchase and securitize mortgages, to devote a percentage of their lending to support affordable housing."

https://en.wikipedia.org/wiki/Community_Reinvestment_Act

[Bucksandreds]

Less regulation leads to a better system? Like when Wall Street was deregulated and then the world economy crashed due to the securitizing of subprime mortgages? Sorry, the last time less regulation was introduced the bankers nearly took us back to the Stone Age. Not sure why the right doesn't recognize that?

Banking regulators actually punished banks for not lending enough to riskier home-buyers.
http://www.investopedia.com/ask/answers/050515/did-repeal-glasssteagall-act-contribute-2008-financial-crisis.asp

Lol. Not sure the truth is on your side.

http://www.forbes.com/sites/stevedenning/2011/11/22/5086/#75138b3d5b56

That doesn't dispute my point. In fact it shows how little Glass-Steagall repeal affected the market. The CRA, which I mentioned above from the same source "New CRA regulations in 1995 required banks to demonstrate that they were making mortgage loans to undeserved communities, which inevitably included borrowers whose credit standing did not qualify them for a conventional mortgage loan."

http://www.forbes.com/2009/02/13/housing-bubble-subprime-opinions-contributors_0216_peter_wallison_edward_pinto.html

Also, if you're curious: "portions of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 indirectly affected the CRA practices at the time in requiring Fannie Mae and Freddie Mac, the two government sponsored enterprises that purchase and securitize mortgages, to devote a percentage of their lending to support affordable housing."

https://en.wikipedia.org/wiki/Community_Reinvestment_Act

Yeah it does. It shows that the vast majority of risky loans were provided by private banks that had no mandate or pressure to provide loans to less worthy buyers. They were doing it and packaging the loans as securities and selling them so as to profit highly.

[Yaeger]

Yeah it does. It shows that the vast majority of risky loans were provided by private banks that had no mandate or pressure to provide loans to less worthy buyers. They were doing it and packaging the loans as securities and selling them so as to profit highly.

Private lenders ARE NOT banks. Fannie Mae and Freddie Mac, in response to the CRA and HUD, started gobbling up these risky securities, what do you think was going to happen? They were essentially gambling with taxpayer monies. You're focusing on the 'greed' of these private companies and not looking at what drove it, the government created a demand and private lender companies popped up to fill it. Without the mandate for government agencies to buy up risky securities in the name of 'affordable housing', there was no way private companies would shoulder that risk without government programs mitigating it.

[Bucksandreds]

Yeah it does. It shows that the vast majority of risky loans were provided by private banks that had no mandate or pressure to provide loans to less worthy buyers. They were doing it and packaging the loans as securities and selling them so as to profit highly.

Private lenders ARE NOT banks. Fannie Mae and Freddie Mac, in response to the CRA and HUD, started gobbling up these risky securities, what do you think was going to happen? They were essentially gambling with taxpayer monies. You're focusing on the 'greed' of these private companies and not looking at what drove it, the government created a demand and private lender companies popped up to fill it. Without the mandate for government agencies to buy up risky securities in the name of 'affordable housing', there was no way private companies would shoulder that risk without government programs mitigating it.

Considering far more mortgage securities in the mid 2000s were privately purchased outside of Fannie And Freddie than through them, again I don't think the facts back your argument.

https://en.m.wikipedia.org/wiki/Mortgage-backed_security#/media/File%3AMortgage-backed_security_issuances_over_time.png

[Yaeger]

Considering far more mortgage securities in the mid 2000s were privately purchased outside of Fannie And Freddie than through them, again I don't think the facts back your argument.

https://en.m.wikipedia.org/wiki/Mortgage-backed_security#/media/File%3AMortgage-backed_security_issuances_over_time.png

Yet you never ask why, you never explain the underlying causes, just that it happened. A 2nd grader level of understanding. If you want to keep your head in the sand, please feel free. Here are the concerns from the Bush Administration to Democrats about the runaway subprime problem years before it developed into a problem. It cites multiple reports and concerns about the housing issue impacting the financial markets and foreshadowing a crisis.

http://georgewbush-whitehouse.archives.gov/news/releases/2008/10/20081009-10.html

Thanks for the conversation, I'm done posting.

[tobitonic]

Anyone who thinks $29,000 per year when you have 2 kids and pay rent is enough for a healthy and safe life is kidding themselves.

I agree that anyone who starts a family thinking they can thrive on minimum wage with no savings is probably kidding themselves.

Fifty percent of pregnancies in this country are unplanned. Scorning half of the parents in this country, as well as their children, isn't the way to a better society. And for the record, there are a number of countries where the minimum wage *is* high enough for families to live well with, rather than scrape by at the bottom of society and fuel the next generation of poverty. This is the entire point of a living wage.

[Parizade]

Anyone who thinks $29,000 per year when you have 2 kids and pay rent is enough for a healthy and safe life is kidding themselves.

I agree that anyone who starts a family thinking they can thrive on minimum wage with no savings is probably kidding themselves.

Fifty percent of pregnancies in this country are unplanned. Scorning half of the parents in this country, as well as their children, isn't the way to a better society. And for the record, there are a number of countries where the minimum wage *is* high enough for families to live well with, rather than scrape by at the bottom of society and fuel the next generation of poverty. This is the entire point of a living wage.

I'm confused, you seem to be implying that every parent whose pregnancy was unplanned ends up trying to raise that child on minimum wage. That doesn't seem accurate to me. I suspect that a large percentage of unplanned pregnancies end in abortion or adoption when the parents accept that they can't afford a baby. I suspect another large percentage make a responsible decision to do whatever is necessary to become good parents, such as training for a job that will support their family. Such people do not deserve scorn. I would not ever scorn people who made a mistake and then took responsibility for correcting it.

But when a person makes a decision to have unprotected sex, then makes a decision to carry the resulting child to term without preparing to support that child, then makes a decision to keep the child they can't support, they should not blame their employer for the financial predicament they find themselves in. A low minimum wage is not the cause of their problems.

And I don't think forcing a person to face the bad decisions they have made is "scorn".