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> I don't pay for anything other than my car/ house on monthly payments and nobody should

You should if there's no additional cost for doing so, because that's a free loan. The same quantity of money a few months down the road will be worth a little less than it is today, so you should give it to them then instead of now when you can do slightly more with it. If you can get either 1X and 2Y now or 1X now and 1Y later, you'd be foolish to do the latter.

And if you're thinking "but prices go down, not up", you're both wrong on average and also probably thinking about the exact category of goods (tech gear) that tends to offer interest-free financing.

Only if 1) you are certain you have the means of repayment, and 2) the time to fill out the application is free.

depends on how good you are with your finances.

You can easily get too much debt if you are not careful doing those kind of things. Most people just check that the debt payments fit in their budget, but they forget their budget might shrink.

US families are drown into debt, in fact most families live paycheck to paycheck, so i wouldn't give that advice of using debt event without interest. I would only give such advice to people I already know that can take care of themselves financially. (As in know how to actually manage money, not about being rich or poor)

And there is another benefit of paying in the act: its off your mind, one less thing to worry about. Might not be the most efficient but is the the one that makes you worry less.

> You should if there's no additional cost for doing so, because that's a free loan.

On the small time scales that interest free financing works, you're probably better off using a rewards based credit card and getting 2% back on purchases rather than handle the overhead of tracking eventual payoff date on various expensive on household items, or risk missing those and paying very high interest and penalties. A credit card payed off at the end of the month is after all a short term interest free loan.

After all, if you kept $1K in your investments by borrowing interest free for 1 year for a TV purchase, how much are you realistically going to make in the best of conditions on that $1K? 4%? So $40.

Not worth the overhead of managing it IMO, to say nothing of the credit damage that comes from excessive borrowing.

I mean it's "smart" and "efficient" but it's also fragile. The simplest way to manage your finances is to avoid debt wherever possible (especially consumer debt). Very hard to go into bankruptcy when you don't owe anyone anything!

The "smartest" way to manage your finances is to use credit cards that give you points and pay you back via a few hundred dollars worth of free flights a year. But there's a bunch of opportunity costs associated with pursuing that route, and a level of diligence that frankly most people do not have.

The best thing about debt is that it lets you move really really quickly - if you don't have $2k for that furniture set, you can just finance things and pay it off over 2 years. But that's the worst thing about debt as well - you now have a monthly obligation that's going to be a line item expense for the next 24 months. If you'd spent 12 months saving up for that furniture set and paid cash, the day you buy the goods is the day your financial obligations start and end.

I am not opposed to debt entirely, and think it can be a great strategic lever (I used a credit card to finance my initial move to America which has done wonders for my income and my career, far exceeding the interest costs that I paid). However I think for most consumer purposes it's less of a help and more of a hindrance. Take the new 84 month car loans. That's 7 years! That's a long time to assume that your life will have no material changes, or that nothing will go wrong.

Yeah, this is smart.

The most dangerous thing about debt is the tacit assumption you can keep making money as a functional adult. Full stop.

If you pay attention to the life stories of everybody who lives around you, that's actually a very dangerous assumption - it's about as dangerous and unreliable as a farmer assuming he'll never, ever, have crop failure. Some really informal guesstimation for me actually gives kinda comparable rates - 1/10 or 1/5 chances of it blowing up, every year. Just this very year, in fact, I've watched it blow up on half of my coworkers as they got laid off in the pandemic. They may have to default on their mortgages - loans that assumed the "working adult" party would just go on uninterrupted.

Yikes.

Debt can be useful, but man, people really need to only "sail out of sight of land" with a damn good reason. Don't just do it casually to pay for routine things like houses and cars.

Yeah that's 100% the truth. You also have to assume that multiple things happen at the same time - what happens if you buy a house two weeks before you get laid off at work and that's swiftly followed by your wife finding out that she's pregnant. Suddenly having 6 months worth of cash in the bank gives you a TON of breathing room.

The more we specialize, the more life becomes fragile, and the smaller the gains become. A Formula One car is incredibly fast, but the amount of attention and money each car requires is orders of magnitude higher than say a Ferrari road car, which is comparatively simple to manage.

Spending a large amount at once can also be fragile. They say many families don't have a few thousand set aside for emergencies. If you have a few thousand and spend it on a dining room all at once, you won't be able to handle an emergency even if your income would have easily handled the monthly payments.

Obviously, it's preferred to have both the thousands saved as well as the thousands needed to buy a new car or furniture, but one might not be able to delay forever.

> If you have a few thousand and spend it on a dining room all at once, you won't be able to handle an emergency even if your income would have easily handled the monthly payments.

Just as a single purchase can wreck your short term budget, a purchase spread over multiple months can wreck your long term budget. If that same family has an emergency that causes them to go into debt, they are now saddled with 2 debt burdens and can't pay rent/ make car payments/ eat.

If buying a choice dining room set will wreck your ability to handle an emergency, you are almost certainly better off not buying it either way. There are plenty of options for buying inexpensive furniture that isn't going to threaten your emergency funds.

> You should if there's no additional cost for doing so, because that's a free loan.

Any time you take out a loan, you are making a promise your future self must deliver on. The implicit assumption when you base your decision solely on interest rates is that your future self will always be capable of fulfilling that promise.

> The same quantity of money a few months down the road will be worth a little less than it is today,

If you are talking about furniture here, we're talking about saving a few pennies, maybe a couple bucks at most. Also, often places where you can get "zero percent interest", there are string attached. The perfect example is when you get a smartphone from your carrier and they don't charge you interest. You save a couple bucks over the length of the contract, but now you can't change carriers or upgrade your phone for the life of the deal.

TANSTAFL... or free interest either.

Yeah, his "Inefficient, but Smart" argument doesn't seem smart, it seems painstakingly luck-based.

In the US, we used to call this "knowing a guy" or "fallen off a truck" purchasing. It's highly inefficient, super unpredictable (in both cost, delivery time, quality, etc), and is highly inequitable. (What if you don't know a guy? What if your guy doesn't like you?). Your Craigslist description is a perfect example of this from the buyers side too -- sometimes you find a great deal, but sometimes the seller is crazy and threatens you with physical violence, or raises the prices after you already agreed and arranged to pick it up, or sometimes they sell you something with bedbugs in it.

This style of purchasing "works" if you are a wealthy expat with tons of time to play with (as a StrongTowns blogger living in Ecuador would be). But it sure doesn't seem "Smart" in any way.

Having a dishwasher and clothes washer and dryer can mean the difference between having time to work and not. Labor-saving devices bought on loan make perfect sense to me. From my perspective it's funny that you give yourself permission to buy a car on credit since to a car-free person that's nuts, but to a person who needs a car to access their place of work it's obviously sensible.

The argument is definitely there for a laundry machine, but a lot of people buy sofas and TVs on monthly payment plans as well.

I agree that going into debt to buy a new car is nuts. Some places are terrible to live car-free though, and not everyone is willing or able to relocate.

> Having a dishwasher and clothes washer and dryer can mean the difference between having time to work and not. Labor-saving devices bought on loan make perfect sense to me. From my perspective it's funny that you give yourself permission to buy a car on credit since to a car-free person that's nuts, but to a person who needs a car to access their place of work it's obviously sensible.

If buying on credit or going without were the only choices, I'd agree with you in a heart-beat. But they aren't. You can get a decent, running washer/ dryer on craigslist for about $150 each. Dishwashers are even less. Buying new and financing is going to cost someone $40-60/ month for 2+ years which is a pretty big burden for someone who is struggling.

> From my perspective it's funny that you give yourself permission to buy a car

I'd love to be car free, it's a great choice if you are urban, but we've lived semi-rural for quite a while.

Also, since I almost always keep cars for well past the end of the loan (or in some cases bought used for cash) I usually don't have a car payment.

Most US cities have or at least used to have the same scenario of a few furniture stores in the same district where you can browse several selections. I remember Schenectady having several stores in one spot each dedicated to lighting (and exhaust fans and doorbells, because of NuTone's business).

The big box thing is, in my opinion, relatively recent, and I felt like it started with Home Depot. That was the cause of the closing of the independent hardware stores in Schenectady, such as the venerable Wallace Armer. In other places they attribute it to Walmart's but that came late to the Northeast.

Now, small stores tend to carry boutique items and everything costs a lot more than the big box stores. On the one hand we have a very efficient furniture-making-selling system in the big boxes, that produces stuff that can be set up once but usually does not survive a move well. On the other we have expensive, one-of-a-kind type crafts that are able to become heirlooms but are out of the price range for most people who just want a coffee table or a couch.

> Most US cities have or at least used to have the same scenario of a few furniture stores in the same district where you can browse several selections. I remember Schenectady having several stores in one spot each dedicated to lighting (and exhaust fans and doorbells, because of NuTone's business).

The impression I got from this article is that most of the stuff he bought was second hand. There are a lot of decent ways to buy second hand goods in every city I've lived in.

>In Ecuador public Transportation and casual truck rental works. In the US, it's quite a bit tougher to exist without a reliable car or truck.

We have that. It's called Uber pool/Lyft Line. I argue with people on my city's reddit about this. Ad hoc point to point transit is the future but they want to spend billions on rail that won't be operational for decades.

I'm curious about your arguments for how Uber/Lyft is preferable to rail.

I don't presume to know the right answer to this question, but it seems unlikely that Uber/Lyft will continue to exist in their current form indefinitely. Rail, on the other hand, appears to be a proven solution in many large cities.

> I'm curious about your arguments for how Uber/Lyft is preferable to rail.

There's just not the density to support rail at a level to make the system fast an reliable. To make it work you need trains every ~10 minutes or so and enough coverage where people only have one transfer. Otherwise, your commute time becomes too variable based on your luck missing the connection and it becomes too long on average because of transfers. The infrastructure to create that coverage is extremely expensive and only makes sense if you can keep the trains mostly full. It's also sometimes flat out impossible because if you add stops to increase coverage you get slower travel times due to increased stoppage and loading time.

In short, to make a rail system work you need ~100 people going from point A to point B at any given time. For an Uber/Lyft style system to work you only need ~10.

When I was in Tunisia a while back I experienced the low-tech variant of Uber/Lyft.

We wanted to visit another city, and ended up in a kinda bus depot except it was filled with cars. One lane per destination. We paid, got in the first car in "our" lane, and when the car was full the driver headed off.

It was cheap (in local terms) and flexible. Waiting time was reasonable, and the driver stopped when people wanted off.

Meanwhile back here in Norway they're talking about expanding the railroads around the capital. The projected cost is just insane, and I'm 100% confident the estimates are not at all realistic due to difficult terrain, and politicians not being sure about exact placement of certain track segments yet. Should it go through town, or on the outside?

The cost of labour in Tunisia is not comparable. The environmental impact is also an issue. Capacity is also an issue.

Of course, it's not close to an apples to apples comparison. But it struck me as being not entirely disimmilar to Uber/Lyft in principle. Don't forget rail is _heavily_ subsidized here.

Capacity is certainly a strong point for rail though.

I guess I wasn't clear. What I meant to ask was, how is Uber a better option after they go out of business because their business model is fundamentally unsustainable? If the TNC model eventually reaches some steady state, the cost per mile will be significantly higher than the prices that Uber customers are currently accustomed to. That is not a viable solution for everyone.

Uber/Lyft's business model is fine. Both earn money on providing rides and Lyft will probably become profitable this year.

Even if their model is not profitable, public transportation in my city is subsidized to the tune of half a billion a year. So there's plenty of room for subsidizing.

And even if we end up spending more money it's worth it for a system that people actually want to use. With a viable alternative to car ownership more people will give up their cars and use public transport. That will spur demand and maybe make a train system justifiable in the future.

> We have that. It's called Uber pool/Lyft Line.

In big cities where congestion is a problem, you have to look at space efficiency. Cars—including Uber & Lyft—are extremely inefficient in terms of the amount of space required to move a person from one place to another. In a big existing city, it's impossible to add traffic capacity, the roads just can't get wider. The only way to increase capacity is by using more space efficient forms of getting around. Buses, trains, bicycles, scooters, and foot traffic are space efficient. Uber and Lyft are not.

Uber and Lyft are also not economical for a lot of people which is one of the other big reasons you don't see them taking off in many places.

>In big cities where congestion is a problem, you have to look at space efficiency

At least in my city we don't need to go from 100 cars -> 1 train to solve the issue. Going from 3 solo drivers -> 1 Uber/Lyft will cut congestion to 1/3-1/2. That's enough to alleviate the worst traffic.

>Uber and Lyft are also not economical for a lot of people which is one of the other big reasons you don't see them taking off in many places.

The shared services are pretty comparable to what public transport costs in my city. A single bus/train trip costs ~$5 when taking all taxes/fares into account. Most journeys from point A to B require a transfer so the cost is more like $10. $10 in a Uber/Lyft shared ride gets you pretty far.

Even if it nets out to be more expensive it's at least something that people will use. The current riders are mostly those too poor to own a car and have no other choice.

> At least in my city we don't need to go from 100 cars -> 1 train to solve the issue. Going from 3 solo drivers -> 1 Uber/Lyft will cut congestion to 1/3-1/2. That's enough to alleviate the worst traffic.

This isn't true. Even if you assume every Uber Pool ride is full, you aren't achieving anywhere near a 50% drop in congestion. Legs where there are 3 passengers are offset by legs where the driver is alone.

> The shared services are pretty comparable to what public transport costs in my city. A single bus/train trip costs ~$5 when taking all taxes/fares into account. Most journeys from point A to B require a transfer so the cost is more like $10. $10 in a Uber/Lyft shared ride gets you pretty far.

I have no idea where you live, but your numbers seem way off. Pretty much everywhere I've lived, bus/ subway/ BART pricing is way cheaper than Uber. I can get an in-town day pass for $3.50 and can to the next town 20 miles away for less than $5. In the California Bay Area, you can take BART from one end of the line to the other for under $8. Uber's fare estimate for that same route is over $50. Oakland to SF? $3.70 versus $26. There is no single route were the prices are remotely close.

> Even if it nets out to be more expensive it's at least something that people will use. The current riders are mostly those too poor to own a car and have no other choice.

My original point here was that in Ecuador, bus service does work and it's crap in the US.

>This isn't true. Even if you assume every Uber Pool ride is full, you aren't achieving anywhere near a 50% drop in congestion. Legs where there are 3 passengers are offset by legs where the driver is alone.

This is just quibbling about exact numbers. You don't address the main point that we don't need the space efficiency of trains.

> Pretty much everywhere I've lived, bus/ subway/ BART pricing is way cheaper than Uber. I can get an in-town day pass for $3.50 and can to the next town 20 miles away for less than $5

BART's farebox recovery rate is 2/3 so up those by 50% to get a better idea of actual cost.

And yes, long trips on the train are likely cheaper than Uber. But most trips aren't that. At least, in my city they aren't. If you look at something in the 3-4 mile range the price of mass transit and shared Uber/Lyfts are pretty close.

> This is just quibbling about exact numbers. You don't address the main point that we don't need the space efficiency of trains.

I gave your hand-wavy explanation of how Uber reduces congestion more credit than it deserves. Most evidence suggest that Uber actually increases congestion, not the reverse.

> And yes, long trips on the train are likely cheaper than Uber. But most trips aren't that.

There is no trip by Uber which is less than twice as expensive than BART or 3 times as expensive as a bus here in Oregon. A short hop on BART is about $2.00 versus the $5.80 base rate on Uber. If your Uber gets stuck in traffic which is common in the Bay, the math gets even worse.

And again, this is in a country with rather mediocre public transportation options. Other countries have vastly better funded and run public transportation which is even more cost effective.

Also, regular commuters would typically buy travelcard, and pay a flat monthly rate for unlimited number of rides.

>I gave your hand-wavy explanation of how Uber reduces congestion more credit than it deserves. Most evidence suggest that Uber actually increases congestion, not the reverse

Ok, well let me know if you want to actually address the point.

>There is no trip by Uber which is less than twice as expensive than BART or 3 times as expensive as a bus here in Oregon. A short hop on BART is about $2.00 versus the $5.80 base rate on Uber. If your Uber gets stuck in traffic which is common in the Bay, the math gets even worse.

(1) The BART may be different than my city

(2) You're looking at the fare and not the actual cost. What's the actual cost of providing those short trips?

(3) You're not looking at the cost to develop new service. What would the actual cost be of creating a new line in the heart of the city?

> We've always had the option to pay in cash and not deal with the financing, it's just a bit less convenient.

Yes, true. But from watching what happens at those stores, it seems to me that most people do debt. Perhaps they don't have to, but they do.