Author Topic: 5 Money Myths that are Financial Nonsense  (Read 16285 times)

Will

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5 Money Myths that are Financial Nonsense
« on: January 20, 2014, 08:28:26 PM »
There is a whole lot of nonsense going on in this article!

http://finance.yahoo.com/news/5-money-myths-that-are-financial-nonsense-185526791.html

yahui168

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Re: 5 Money Myths that are Financial Nonsense
« Reply #1 on: January 20, 2014, 10:01:47 PM »
There is a whole lot of nonsense going on in this article!

Yeah, apparently saving money is a myth.

"The real key (to wealth) is earning," Siebold says.

How is it that billionaires can go broke?

Stache In Training

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Re: 5 Money Myths that are Financial Nonsense
« Reply #2 on: January 20, 2014, 10:05:30 PM »
Holy crap.  that was just sad.  At least even the comments there had the same thought.

sheepstache

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Re: 5 Money Myths that are Financial Nonsense
« Reply #3 on: January 20, 2014, 10:08:11 PM »
Yet those are some of the most intelligent comments I've ever seen on a Yahoo article.

galliver

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Re: 5 Money Myths that are Financial Nonsense
« Reply #4 on: January 20, 2014, 10:30:49 PM »
Well, #1, 3, and 4 were decent advice.

Which only makes the failure of #2 and #5 worse...

Glad I found MMM for my financial strategy advice.

Richard3

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Re: 5 Money Myths that are Financial Nonsense
« Reply #5 on: January 20, 2014, 11:15:10 PM »
There is a whole lot of nonsense going on in this article!

Yeah, apparently saving money is a myth.

"The real key (to wealth) is earning," Siebold says.

How is it that billionaires can go broke?

Because they stop earning - I mean DUHHHHH!

wtjbatman

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Re: 5 Money Myths that are Financial Nonsense
« Reply #6 on: January 21, 2014, 12:05:47 AM »
From the article... "Unfortunately, if you are making $50,000 per year, it will be nearly impossible to accumulate large sums of money, even if you save all your extra pennies."

Ok, what is a large sum of money? And is a large sum of money for one person the same as a large sum to another? Not to mention, what is the point of simply accumulating a large amount of money? After all, I make $35,000 a year, I'm clearly doomed to live in abject poverty and never retire. Well, except that I live in a very low COL area, I live within my means, I take advantage of extra earning opportunities, and I save a high percentage of my salary. By my projections in 15 years I will be earning enough from my investments that I could replace 100% of my current take home pay. Although to be fair to that quote... I do save more than just my extra pennies.

fantabulous

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Re: 5 Money Myths that are Financial Nonsense
« Reply #7 on: January 21, 2014, 03:51:18 PM »
From the article... "Unfortunately, if you are making $50,000 per year, it will be nearly impossible to accumulate large sums of money, even if you save all your extra pennies."

Ok, what is a large sum of money? And is a large sum of money for one person the same as a large sum to another? Not to mention, what is the point of simply accumulating a large amount of money? After all, I make $35,000 a year, I'm clearly doomed to live in abject poverty and never retire. Well, except that I live in a very low COL area, I live within my means, I take advantage of extra earning opportunities, and I save a high percentage of my salary. By my projections in 15 years I will be earning enough from my investments that I could replace 100% of my current take home pay. Although to be fair to that quote... I do save more than just my extra pennies.

I wonder if that was a really poorly worded "don't be penny wise and pound foolish" by the author. The "[t]he solution is not to cut back on the lattes you drink, but to get a higher-paying job" quote makes it mostly read as "work work work, spend spend spend" but there is the hint of "look at the long term" to the overall point as well. Sure, it pretty much states that changing your consumption isn't part of that "looking at the long term". That's probably a hard pill to swallow for the target audience, harder than increasing their income.

sheepstache

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Re: 5 Money Myths that are Financial Nonsense
« Reply #8 on: January 21, 2014, 06:29:55 PM »
I mean, people have been fed the myth that skipping their daily lattes will lead to untold, fabulous wealth, so it is fair to debunk it if that's what they're referring to.

(http://badmoneyadvice.com/2009/05/the-end-of-the-latte-era.html)

LalsConstant

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Re: 5 Money Myths that are Financial Nonsense
« Reply #9 on: January 22, 2014, 06:21:27 AM »
1 contradicts 5 somewhat.  Don't keep everything in cash, but don't diversify either!

Quote
In fact, most fortunes can be created almost overnight, if you have the "right idea at the right time," Siebold says.

Seriously?  No Shit Sherlock?  Let me get back into my time machine and invent the right things in the right eras, I'll be rich in no time.

Here's a clue:  new ideas and products developed by people with incredible intelligence, working thousands of hours to propel them forward in the market, economically FAIL every day.

3&4 are basically fine.

5. is silly, diversification is trivial to accomplish now even if you only have a small amount of money.

odput

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Re: 5 Money Myths that are Financial Nonsense
« Reply #10 on: January 22, 2014, 06:28:37 AM »
I mean, people have been fed the myth that skipping their daily lattes will lead to untold, fabulous wealth, so it is fair to debunk it if that's what they're referring to.

(http://badmoneyadvice.com/2009/05/the-end-of-the-latte-era.html)

This article makes $173k (inflation adjusted) sound like it is chump change...while I agree that it is not fabulous wealth, it is one hell of a nice chunk of change.  Articles like these that abandon good advice are just feeding into what most Americans are looking for - justification that their being broke is not their fault.

eyePod

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Re: 5 Money Myths that are Financial Nonsense
« Reply #11 on: January 22, 2014, 06:48:41 AM »
"Now, if you want to live there forever and this is your true retirement home, it's OK to pay it off for peace-of-mind sake," he says. "(However), one should still weigh the cost of debt versus the rate of return earned (on that extra money) elsewhere."

I've never actually seen anyone who owns a house do this.  Ever.  They just spend the extra money.  I'm sure there's some mustachians or other financially savvy people who do invest the difference, but using it as a reason to not pay down the mortgage is stupid.  Paying off the mortgage has a HUGE emotional boon on top of the benefit of it being a SMART goal.  You can see the time line you owe money being reduced and think of the extra $1000+ you'll be keeping in your pocket once it's paid off!

Angelfishtitan

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Re: 5 Money Myths that are Financial Nonsense
« Reply #12 on: January 22, 2014, 01:36:28 PM »
Point two is bad, but five is absolute garbage. Also the author apparently likes getting quotes from people who are really good at making bad analogies for this piece.

But most Americans don't have enough money for that kind of diversification, and even if they did, it isn't the best strategy for them, says Chris Miles, "cash flow expert" at MoneyRipples.com.
...
"Find one or two things that you know a lot about and love … then invest," Miles says.

Uh, most of the ETFs I have at Vanguard are around $100 bucks or less a share and are already diversified! You only have to buy one share to diversify more than this joker is saying. The second part in that quote is how plenty of people lose plenty of money...any bubble ever? This is why "cash flow expert" is in quotes.

Barbaebigode

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Re: 5 Money Myths that are Financial Nonsense
« Reply #13 on: January 22, 2014, 01:54:40 PM »
I mean, people have been fed the myth that skipping their daily lattes will lead to untold, fabulous wealth, so it is fair to debunk it if that's what they're referring to.

(http://badmoneyadvice.com/2009/05/the-end-of-the-latte-era.html)

This article makes $173k (inflation adjusted) sound like it is chump change...while I agree that it is not fabulous wealth, it is one hell of a nice chunk of change.  Articles like these that abandon good advice are just feeding into what most Americans are looking for - justification that their being broke is not their fault.

I think it's way more than 173k. He forgot that inflation also affects lattes.

edit: spelling
« Last Edit: January 22, 2014, 01:58:23 PM by Barbaebigode »

Paul der Krake

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Re: 5 Money Myths that are Financial Nonsense
« Reply #14 on: January 22, 2014, 01:55:34 PM »
Judging from the author's LinkedIn page, it's not difficult to see that this not much more than the product of a content farm. People will print the most ridiculous things to garner clicks and have readers shout back and forth in the comments, it's pretty sad.

It wouldn't be a surprise if she wrote this piece in 5 minutes on her way to the grocery store.

The Guru

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Re: 5 Money Myths that are Financial Nonsense
« Reply #15 on: January 22, 2014, 08:52:07 PM »
"In fact, most fortunes can be created almost overnight, if you have the "right idea at the right time," Siebold says."


"Diversifying is like buying many brands of TVs in case one of them doesn't work after a few months," Miles says. "Shouldn't we research it out first, then buy one TV?" Too many people throw money into things they don't understand or care about, he says.

"Find one or two things that you know a lot about and love … then invest," Miles says.



This sounds like the old Monty Python sketch featuring a fictitious show called How To Do It, a collection of ridiculouisly oversimplified solutions for everything. Eg. "How To Play the Flute- well, you blow in one end and move your fingers up and down the outside".


"Many people believe that scrimping to save and hoarding money will make them wealthy. Not true, says Steve Siebold, author of "How Rich People Think."

"The real key (to wealth) is earning," Siebold says."


Ah.  This is why you never hear of professional athletes or entertainers going broke.

odput

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Re: 5 Money Myths that are Financial Nonsense
« Reply #16 on: January 23, 2014, 06:36:04 AM »
"Many people believe that scrimping to save and hoarding money will make them wealthy. Not true, says Steve Siebold, author of "How Rich People Think."

"The real key (to wealth) is earning," Siebold says."


Ah.  This is why you never hear of professional athletes or entertainers going broke.

+1

Well done!

sheepstache

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Re: 5 Money Myths that are Financial Nonsense
« Reply #17 on: January 24, 2014, 03:37:19 PM »
I mean, people have been fed the myth that skipping their daily lattes will lead to untold, fabulous wealth, so it is fair to debunk it if that's what they're referring to.

(http://badmoneyadvice.com/2009/05/the-end-of-the-latte-era.html)

This article makes $173k (inflation adjusted) sound like it is chump change...while I agree that it is not fabulous wealth, it is one hell of a nice chunk of change.  Articles like these that abandon good advice are just feeding into what most Americans are looking for - justification that their being broke is not their fault.

Right, I was responding to the yahoo article's attitude about "untold wealth," which is what the post addresses.

Another user, Dragoncar, posted in another thread about antimustachianism:
Quote
I never understand why these articles always say "they rarely go out to eat ... and yet they struggle to get by."
I think the Latte trope is so strong in current thinking about personal finances that it deserves more examination than it gets.  People seem to think you can live in any huge McMansion with any ridiculously long, gas-inefficient commute yet so long as you don't go out to eat, you are thought to be leading a modest existence and therefore ought to be rolling in the green stuff.  The bad math sort of reduces an important principal to something more like a get-rich-quick scheme unless you get the broader understanding.

(ps. I agree about the inflation thing, although David Bach has further exaggerations the post doesn't touch on such as the fact that you have to have some sort of replacement cost for breakfast even if you're eating at home, plus people buying it every single day including weekends and holidays when work-days-only is much more realistic.)

Anyway, didn't mean to go off on a tangent.  Yes, the yahoo article is crazy.

CCGStache_01

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Re: 5 Money Myths that are Financial Nonsense
« Reply #18 on: April 24, 2017, 04:02:19 PM »
I read this and thought it would be a good mustachian article after reading the first, but the second completely threw me off the rail.

SwordGuy

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Re: 5 Money Myths that are Financial Nonsense
« Reply #19 on: April 24, 2017, 04:27:57 PM »
I mean, people have been fed the myth that skipping their daily lattes will lead to untold, fabulous wealth, so it is fair to debunk it if that's what they're referring to.

(http://badmoneyadvice.com/2009/05/the-end-of-the-latte-era.html)

This article makes $173k (inflation adjusted) sound like it is chump change...while I agree that it is not fabulous wealth, it is one hell of a nice chunk of change.  Articles like these that abandon good advice are just feeding into what most Americans are looking for - justification that their being broke is not their fault.

In my town, I could buy 3 houses, repair them, and rent them out for $800 a month (or more).   Profit after all the correct subtractions from gross rents would be about $14,400 a year.   

AND I would have a $23,000 kitty to handle unexpected repairs or other expenses...

That isn't chump change!

Oh, and those repaired houses would increase my net worth by $90,000.

Average SS annual income is $16,320.  So that "trivial" amount would nearly double the typical person's retirement income.   Plus they would have nearly a quarter of a million dollars worth of real estate to leave to their heirs.


Greenback Reproduction Specialist

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Re: 5 Money Myths that are Financial Nonsense
« Reply #20 on: May 03, 2017, 11:44:27 AM »


Yeah, apparently saving money is a myth.

"The real key (to wealth) is earning," Siebold says.

How is it that billionaires can go broke?
[/quote]

And here I am thinking the key to wealth is in the art of keeping the money I earn... strange

MgoSam

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Re: 5 Money Myths that are Financial Nonsense
« Reply #21 on: May 03, 2017, 12:02:06 PM »

Another user, Dragoncar, posted in another thread about antimustachianism:
Quote
I never understand why these articles always say "they rarely go out to eat ... and yet they struggle to get by."
I think the Latte trope is so strong in current thinking about personal finances that it deserves more examination than it gets.  People seem to think you can live in any huge McMansion with any ridiculously long, gas-inefficient commute yet so long as you don't go out to eat, you are thought to be leading a modest existence and therefore ought to be rolling in the green stuff.

Completely agree. I mean I am a frugal/cheap person, but my overall expenses are still way higher than what my dad was spending when he was my age. I can't imagine what the average person my age is spending!

That said, I don't understand the hate that the latte factor is getting. A few buddies work at coffee shops and will mention how many of their customers come on a daily basis. I imagine a good chunk of those regulars are people that have trouble saving money or feel like they are underpaid, and yet they are spending $3-$5 a day on a luxury item. Sure they won't get rich off investing their latte money, but there are few people out there that wouldn't feel better with an extra $15-35 a week in their pockets.

aasdfadsf

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Re: 5 Money Myths that are Financial Nonsense
« Reply #22 on: May 04, 2017, 12:54:42 AM »
Quote
Myth No. 3: My home is a good investment

Not these days, Cardone says. "This is a complete lie," he says. "A house is not the American dream; it is a nightmare."
...
This doesn't mean you shouldn't own a home. Just be aware that your house should be looked at as "an expense, not an investment," Cardone says. "It is merely a place to live."

Merely a place to live! That's kind of like saying that owning food is merely a way to eat, or having access to oxygen is merely a way to breathe.

I'm pretty sure that having a place to live is something of value to most people, something that can be translated into actual monetary value. If only there were some means of figuring out what that value was. Like, if maybe, there were a market in which people who owned houses could charge others for living in them. We could call it "rent". Then we would know what you were effectively earning each month from owning you own home as opposed to paying someone else to live in theirs.

Nah, too advanced for someone who gets paid to write about personal finance.
« Last Edit: May 04, 2017, 12:59:02 AM by aasdfadsf »

CargoBiker

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Re: 5 Money Myths that are Financial Nonsense
« Reply #23 on: May 04, 2017, 04:55:18 AM »


Yeah, apparently saving money is a myth.

"The real key (to wealth) is earning," Siebold says.

How is it that billionaires can go broke?

And here I am thinking the key to wealth is in the art of keeping the money I earn... strange

You're missing the point. It's implied that if someone created wealth "by earning", that they'd be keeping it.

Not sure why this thread is bashing on #2.  Earning more money is an effective way to accumulate wealth. And it will generate wealth faster than earning less money.


This was the only stupid part of #2:

"Cardone agrees. He says that many middle-class money woes don't stem from big spending, but from not enough income being generated by members of the household."

Clearly, big spending, IS the source of most people's woes.
« Last Edit: May 04, 2017, 04:59:13 AM by CargoBiker »

Heart of Tin

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Re: 5 Money Myths that are Financial Nonsense
« Reply #24 on: May 04, 2017, 10:04:30 AM »
I don't understand why the author created the false dichotomy of prioritizing reduced spending versus prioritizing increased earnings in number 2, other than to give the article it's "listicle" format. Ideally, both reduced spending and increased earning can be achieved simultaneously.

MDM

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Re: 5 Money Myths that are Financial Nonsense
« Reply #25 on: May 04, 2017, 01:02:23 PM »
...
Heart of Tin, welcome back!  Just noticed your return after ~2 year hiatus. :)

Heart of Tin

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Re: 5 Money Myths that are Financial Nonsense
« Reply #26 on: May 04, 2017, 01:09:18 PM »
Thanks, MDM!

Spud

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Re: 5 Money Myths that are Financial Nonsense
« Reply #27 on: May 05, 2017, 05:39:36 AM »
Quote
"People need to stop always looking at the expenses portion of their budget. … It is usually the shortage of income that gets people into trouble," Cardone says.

Cardone agrees. He says that many middle-class money woes don't stem from big spending, but from not enough income being generated by members of the household.

"The solution is not to cut back on the lattes you drink, but to get a higher-paying job," he says.

What planet does this guy live on? Middle class money woes don’t stem from big spending?

Earning more is the key to wealth?

What does it depend on?
Applications and interviews in a competitive job market, spending time and money learning new skills in order to get a new job, relocating to another area that may not be a LCOL area. There’s more to it than that, but those are my initial thoughts. You’ll note that all of these things are only things you have some control over. Sure you have complete control over you resume/CV and what you write on an application etc, but you have no control over whether or not you’re going to really hit it off with you potential new boss in the interview etc. If everyone could get $100k a year job today just by asking, we’d probably all I have done it already.

Reducing Expenses.

What does it depend on?
Nothing. It's in your complete and direct control and you can start making changes right now, regardless of what the job market or the economy are doing and regardless of what skills you have or how much money you have. As long as you have the essentials covered it’s entirely up to you how extravagant and expensive your lifestyle is. Whether you’re on $200k a year or $20k a year it’s your choice as to what size house you have, what type of car you have, how much you drive it, whether you eat out, whether or not you need the latest smartphone and a whole load of pointless apps. Reducing expenses has the added bonus of conditioning you psychologically to be fine with living on less money and being perfectly happy and content with it. This is only going to help when it comes to retirement. Basically it builds those “frugality muscles”, whereas earning more does nothing for frugality muscles.

----

In fact, in my experience, based on the actions of friends who have received large increases in pay, earning more weakens your frugality muscles because you develop that false sense of abundance and financial security which leads to spending going up and up.

Of course, if you’re already a hardcore mustachian, then a big payrise, if you do get it, will also be banked and invested in your index fund.

Regarding the point about diversification, if you investing in index funds then your portfolio is already pretty well diversified without you having to really think about it.

aasdfadsf

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Re: 5 Money Myths that are Financial Nonsense
« Reply #28 on: May 08, 2017, 11:56:38 PM »

Not sure why this thread is bashing on #2.  Earning more money is an effective way to accumulate wealth. And it will generate wealth faster than earning less money.

I think it's because it's stating the obvious. If anyone could just flip a switch and earn more money, of course we would all be doing that. In the real world, earning more money requires either that you move into a more remunerative profession, or you spend ever more of your life working. These things can be done, but they exact costs on your life and can be extremely difficult due to pathway dependence.

Reducing spending, on the other hand, is something anyone can do at any time. Telling a 40-something construction worker that he should have been a lawyer is useless. Showing him how to shave $50 a month off his utility bill is advice he could actually use.

CargoBiker

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Re: 5 Money Myths that are Financial Nonsense
« Reply #29 on: May 09, 2017, 04:14:22 AM »
I think it's because it's stating the obvious. If anyone could just flip a switch and earn more money, of course we would all be doing that. In the real world, earning more money requires either that you move into a more remunerative profession, or you spend ever more of your life working. These things can be done, but they exact costs on your life and can be extremely difficult due to pathway dependence.

100% false.

The author was talking about creating a money generating system, i.e. a business.

"Those who want to have a large nest egg need to stop thinking in terms of trading time for dollars, Siebold says. Instead, acquiring wealth is a "nonlinear process and comes from generating ideas that solve problems," he says."

Anyone has in their power to do this, and the upside is unlimited pending the time/effort/skill you choose to put into the business.

Pathway dependence?  That sounds fucking miserable.  Everyone is 100% in control of their life and their choices, whether they believe it or not.

Quote
Reducing spending, on the other hand, is something anyone can do at any time. Telling a 40-something construction worker that he should have been a lawyer is useless. Showing him how to shave $50 a month off his utility bill is advice he could actually use.

Of course cutting expenses is immediately actionable and beneficial.

People work incredibly hard on this forum to continually optimize saving a few bucks a month on this or that. Nothing wrong with that.

However, these same people like to jump on anyone who suggests taking steps to dramatically improve their income, as it goes against their version of the MMM gospel.
« Last Edit: May 09, 2017, 04:16:48 AM by CargoBiker »

CareCPA

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Re: 5 Money Myths that are Financial Nonsense
« Reply #30 on: May 09, 2017, 07:00:59 AM »
...Sure you have complete control over you resume/CV and what you write on an application etc, but you have no control over whether or not you’re going to really hit it off with you potential new boss in the interview etc. If everyone could get $100k a year job today just by asking, we’d probably all I have done it already...
Just jumping in to say, maybe we should stop relying on others to give us a job, pay, and work environment we like. Maybe we should take control of our own income stream. There are ways to increase income other than taking another job. Solve problems, create products, offer better services than those out there - fill a need.

sw1tch

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Re: 5 Money Myths that are Financial Nonsense
« Reply #31 on: May 09, 2017, 09:29:32 AM »
I read the article as #1 and #2 being related.  I'm assuming that "saving" usually means putting your money in the bank (at close to 0% interest) or God-forbid under your mattress.  Or, as many people do, giving the government a 0% loan for a year.  You would need an insane amount of cash saved in order to survive in the long run with this approach.  If this is the case then the ONLY way to get ahead is to earn more.

We here on MMM for the most part equate saving to "investing".  I assume that the "average joe" does not do this.  When saving, they're shoveling money into places where it loses value due to inflation.  Or, only putting money away to spend it later on some face-punch worthy expense.  With that definition, technically, we aren't saving, we're putting our money to work for us through investing.  CargoBiker's personal experience equates this to starting your own business - I just invest mine into existing businesses.  Either way, we're investing into businesses and not just letting our money sit.  Tomatoe, tomaatoe.  Along the same lines, I'd consider education as an investment in bettering yourself (if it's actually applied and gets you better employment) - so it doesn't quite fit into the "average joe" definition of saving, either.

aasdfadsf

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Re: 5 Money Myths that are Financial Nonsense
« Reply #32 on: May 12, 2017, 01:54:51 AM »
100% false.

The author was talking about creating a money generating system, i.e. a business.

Lol. Okay, maybe that's what you thought he was talking about, but he didn't actually mention starting a business. What he actually said was a bunch of vague and useless platitudes. So, let's see:

"Instead, acquiring wealth is a "nonlinear process and comes from generating ideas that solve problems," he says."

Christ, this is just gibbering nonsense. And "nonlinear" was a nice touch. I suspect he has no idea what the term actually means, and is betting that enough readers don't either. 

Quote
Anyone has in their power to do this, and the upside is unlimited pending the time/effort/skill you choose to put into the business.

In the real world, no, people can't just willpower themselves to unlimited income. Telling random people that they should start a business is terrible advice, given that the vast majority of businesses fail, usually destroying vast chunks of wealth in the process.

And it fails to make basic economic sense. In an efficient market, people will do whatever is most productive, and if it were actually the case that everyone is most productive by starting their own business, then there wouldn't be any businesses of a size greater than one. No Apple, no Ford, no Wal-Mart. Clearly, it can't be the case that everyone, or even most people, should be starting their own business. If this is your idea of sound personal financial advice, you really should not be giving anyone advice.

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Pathway dependence?  That sounds fucking miserable.  Everyone is 100% in control of their life and their choices, whether they believe it or not.

You'd make good a cultist. This is where a buzzkill like myself explains that research has repeatedly shown that most people think that they have more control over events than they actually do, and are not as good at things as they think they are. But hey, willpower!

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However, these same people like to jump on anyone who suggests taking steps to dramatically improve their income, as it goes against their version of the MMM gospel.

I challenge you to show me anyone who thinks that "dramatically improving your income" is a bad thing. People opposed to magical thinking, yes. If you can't understand the difference, that's your problem.
« Last Edit: May 12, 2017, 02:43:32 AM by aasdfadsf »

CargoBiker

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Re: 5 Money Myths that are Financial Nonsense
« Reply #33 on: May 12, 2017, 05:53:01 AM »

"Instead, acquiring wealth is a "nonlinear process and comes from generating ideas that solve problems," he says."

Christ, this is just gibbering nonsense. And "nonlinear" was a nice touch. I suspect he has no idea what the term actually means, and is betting that enough readers don't either. 

It's not gibberish at all.

Business at it's core = Ideas that solve problems.

Nonlinear = exponential. If you stretch out a typical index fund investment over the span of 30-40 years you start to see some exponential returns on your initial investment. In the short-term though, it's nearly linear. A business can generate exponential returns quickly, which is what he was getting at.

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In the real world, no, people can't just willpower themselves to unlimited income. Telling random people that they should start a business is terrible advice, given that the vast majority of businesses fail, usually destroying vast chunks of wealth in the process.

There are smart ways to start a business that can greatly increase your odds of success. But let's not talk about those, because most businesses fail.


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And it fails to make basic economic sense. In an efficient market, people will do whatever is most productive, and if it were actually the case that everyone is most productive by starting their own business, then there wouldn't be any businesses of a size greater than one.

Not sure what you're getting at here. People tend to do what is easiest and most comfortable, not what is most productive.

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If this is your idea of sound personal financial advice, you really should not be giving anyone advice.

What advice do you have to share to someone who wants to generate lots of wealth in the short-term?  Is there another method that I'm not aware of?

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research has repeatedly shown that most people think that they have more control over events than they actually do

So let's continue to preach "get a job, save save save" to people who have no control over whether or not they will keep their job, and no control over what the market will do with their savings. Hell, let's just not give anyone any advice, because our paths are pre-determined by past choices, and it doesn't matter. 

Sure, our paths are influenced in general, as an effect of previous choices, but don't make the mistake of thinking these paths are narrow and rigid indefinitely. They are narrow in the short-term and the future options and possibilities become wider and wider over time.

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I challenge you to show me anyone who thinks that "dramatically improving your income" is a bad thing. People opposed to magical thinking, yes. If you can't understand the difference, that's your problem.

TIL that successful business owners are magicians.
« Last Edit: May 12, 2017, 06:07:51 AM by CargoBiker »

Dicey

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Re: 5 Money Myths that are Financial Nonsense
« Reply #34 on: May 15, 2017, 07:21:58 AM »
TIL that successful business owners are magicians.
Medical Definition of TIL. : tumor-infiltrating lymphocyte
Today I Learned something new, lol!
THX!

RWD

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Re: 5 Money Myths that are Financial Nonsense
« Reply #35 on: May 15, 2017, 08:29:58 AM »
Nonlinear = exponential.

Or logarithmic. Or sinusoidal...

CargoBiker

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Re: 5 Money Myths that are Financial Nonsense
« Reply #36 on: May 16, 2017, 03:16:43 AM »
Or logarithmic. Or sinusoidal...

You're right, given the context, he was probably talking about sinusoids.

meghan88

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Re: 5 Money Myths that are Financial Nonsense
« Reply #37 on: May 16, 2017, 11:43:10 AM »
Here's the real reason Millenials can't afford houses:  Avocado toasts.

http://www.esquire.co.uk/culture/news/a14937/australian-property-tycoon-avocado-toast-house-prices/

MgoSam

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Re: 5 Money Myths that are Financial Nonsense
« Reply #38 on: May 16, 2017, 01:15:02 PM »
Here's the real reason Millenials can't afford houses:  Avocado toasts.

http://www.esquire.co.uk/culture/news/a14937/australian-property-tycoon-avocado-toast-house-prices/

That guy is full of shit. He went to a private school and some of his mates had parents that were successful developers (connections) and he got the money for his venture from his grandfather. He reminds me of a Mitt Romney whose advice to students was, "Take a shot, go for it, take a risk, get the education, borrow money if you have to from your parents, start a business."