Price shocks in formative years scar consumption for life
knowledge.wharton.upenn.edu
knowledge.wharton.upenn.edu
So unlike so many people today, I don't make 12 trips a day to stores/friends/whatever when I can just make one or two if I actually think 5 minutes ahead. That applies whether gas is $1 or $5 per gallon.
I also try to make good use of what I own and not discard things that are functional simply to get the new shiny.
I can't fucking wait to retire, and spend time doing what I actually want to instead of useless work.
While I'm on my 4th trip out for the day I'll bet he's already back home watching TV.
Joking aside, I've definitely see the cost/hr add up by purchasing new things that still have bugs to work out. The price might be $500, but I'll spend another $700 of time working on issues. I'm fine being a few months late to the party so I can conserve time for more important things.
In the words of the characterized OP: "If it ain't broke, don't fix it"
Forget gas: This type behavior is a waste of time! The most precious resource of all.
a toy with optional batteries obviously requires less battery use than a thing which requires a battery. it's tautological.
Throwing things away is so difficult these days that I try to make purchases that avoid it. But like...we still have my 5 year olds car seat in our garage because no place will take them (I have to make a trip to the dump, or get a junk hauler to come by with a big load for them and a few hundred bucks).
The 1980s are funny, because, the early 1980s were one of the periods of highest sustained gas prices in history, while the late 1980s and 1990s are the lowest ever.
Our garbage system allows us two "bulky item" pickups per year with our regular garbage if we call in advance where they'll take anything in a 3x3x6 volume.
For everything else, I just destroy it with old power tools.
This seems like a bit of a straw man. I live in a pretty suburban area and drive my car probably 2-3 time a week. I've rarely seen my neighbors, even the ones with a bunch of kids drive more than 2 or 3 times a day.
If you've known people that "make 12 trips a day" they might be a very rare anomaly, I don't think this is normal behavior from what I observe.
I don't like planning, and I forget things. So I sometimes leave the light on when I leave the house, forget something when I have to do groceries at the store so I have to go back, if I have half a meal left, I throw it out rather than freezing it, etcetera.
I've learned that, for me, accepting that gives me more peace of mind than trying to plan every part of my life. It also wastes less time than being super organised with my groceries, and I also end up throwing out less if I just shop for a single meal at the time.
Still, my spending is not that high, and my ecological footprint is not big. I switch electricity companies each year, taking advantage of their sign-up bonus. I make sure to double check that I've turned of the heating when I leave the house. I only have LED-lights in my house. I invested in solar panels, which will take a long time to earn back. I bought a house that is 20% cheaper than what I could afford. When buying the house, important factors were that it was well isolated, and that my commute is short, cheap and fast (20 minutes by bus). I compromised on its garden and square footage. I buy a phone that's 300 euro rather than 700 euro and use it until it breaks.
To me, 'don't be wasteful' is best applied selectively, both ecologically and economically. I approach it like an optimization problem: Identify the bottlenecks and attack those.
Edit: Because it is essentially celebrating the fact that you are at least in part measurably dysfunctional. It's part of the zeitgeist, but there is such a thing as taking it too far.
This is most likely caused by those oil shocks.
If anything, our family culture of thrift came from parents who were small children during WWII rationing and grandparents who were children in the Great Depression. I sometimes can even imagine there is an epigenetic factor here, leading to more obsessive (compulsive?) planning, optimizing, and risk management behaviors...
Also, I don’t think people would want to waste all that time making 12 trips a day whether they care about the price of gas or not.
Source: kid from the 80’s.
It makes you penny wise and pound foolish, adverse to taking risks in your career and investments, can destroy your confidence in yourself, while always having to look over your shoulder monetarily speaking.
Habits that even after you remove poverty from your live, you still feel the the anxiety and triggers in your head.
On one hand these people are a pain to deal with, but in most cases its not their fault either.
I work with ultra-privileged people who by all accounts are “well adjusted” and I find them harder to deal with than people I grew up with from home. Many of them have no history of and don’t understand trauma, and as a result they’re unempathetic to what the literal majority of people experience.
Edited for clarity
Financial issues aren't the only trauma in life, by a long shot. Plenty of people in that group have trauma. What makes people unempathetic is often that they don't come to grips with their own trauma; they deny it and thus deny it for others - if it's too painful to admit to yourself, think how dangerous other people's trauma could be!
It’s not just the trauma of being poor, it’s trauma of growing up in a dangerous area, or of your parents getting divorced, or of getting sexually assaulted, or of young friends or family members dying. All of which get far more likely the poorer you are.
Obviously I’m not saying that there aren’t wealthy, Ivy League educated people with trauma. But if we’re looking at the stats it’s not even close.
Could you explain what you mean? I grew up pretty poor, single income PhD student/post-doc salary family with two kids. Eventually my father got a proper position at a university, but until then we were pretty poor. My parents used to sleep on the floor, we had almost no furniture(I remember playing football in our living room with my dad since it was entirely empty) with most of our stuff coming from charities.
I wonder if I exhibit the behavior you talk about or not.
It makes it easier to dig yourself out, but depending on the circumstances it can also cause its own issues. For example, my mother ran away from an abusive but well-off home, so I was regaled with tales of upper-middle and well-off hypocrisy and all their problems, which makes it really hard to want to fit in/keep my mouth shut in spaces that I share with those people.
Still, I'm not sure how much difference that upper-middle-adjacent socialization makes when it comes to poverty thinking.
Sure.
I realize I waste a lot of time in supermarkets, shops or online stores, browsing/walking around and comparing prices just to penny pinch on low value things, when the savings I would make would have no meaningful impact on my yearly net worth, but the time and mental energy wasted browsing/walking around comparing prices could have better return on investment if used on other things like learning a new skill, reading a book, etc.
I avoid any kind of subscription services (Netflix, Spotify, cloud-storage, phone contract, etc.) to the disbelief of my friends ("But it's only 10 Euros a month!, Why don't you have it?"), preffering instead to spend my time building my own self-hosted solutions for cheap, which probably explains how I got into tech in the first place.
I own a cheap old car and prefer to fix it myself if I can, rather than paying someone to do it, even though the time I spend learning how to fix it, buying the parts, then actually fixing it, is probably worth more than a professional would have cost.
I'm afraid to make investments fearing that the market could crash the second I enter it, and erase my money, leaving me vulnerable to being homeless or dependent on doing shitty jobs I hate just to stay afloat, so I just hoard cash like an idiot as that makes me feels safe and lets me sleep well at night.
I think I might not be good enough for some bold career steps, like giving up my tech job and risking everything to start my own business of a coffee cart in the city center or pivoting to something other than tech that's less well paid, like being a teacher.
I spent too much of my youth studying hard at useless subjects on the pressure from my parents that "education will get you far in life, so beat those books and get good grades", only to realize far too late in life that I could have gotten in the same spot with 20% of the effort, leaving me time to actually enjoy my youth.
Sure, I'm working my way out of these habits slowly, but the Pavlovian impulses are still in my brain. Complex things these minds of ours.
Interesting, I've always hated shopping for food, but I happily waste money on takeaways/restaurants. I think for me it is more about food waste and the mental energy wasted planning all my ingredients to make sure nothing goes to waste rather than saving money. I spend money now to not have to worry about it as much.
> I'm afraid to make investments fearing that the market crash or something like that would erase them leaving me vulnerable to being homeless or dependent on doing jobs I hate.
Yeah, I'm pretty risk averse when it comes to investments, which is screwing me right now with inflation as high as it is :(.
This just isn't true for me. Comparing pennies on flour is extremely stressful. At one time - a time when I couldn't pay for natural gas for proper heat nor hot water - I cried because I spent 25 cents more on a product I liked a whole heck of a lot better. That quarter might have been the difference between going to the laundry or washing clothing in the sink (with water heated on a hotplate). Or at least, this was what was in my head.
I generally don't count pennies for flour as much anymore, but it took years, divce, remarriage, and a move to another country to even get to that position. I still get pretty panicked about spending money. Usually it happens on things more than approximately $50-$100 (after exchange rate). Occasionally I just go without a haircut or don't buy new clothes despite a few holes/being a bit threadbare, though.
>I'm afraid to make investments fearing that the market could crash the second I enter, and erase my money, leaving me vulnerable to being homeless or dependent on doing shitty jobs I hate just to stay afloat, so I just hoard cash like an idiot as that makes me feels safe and lets me sleep well at night.
I am terrified I won't have money when I need it, worried it won't be there or accessible. I've learned over time that there is no amount of money in my savings account that can alleviate this.
When I was a kid there was never enough money and disaster was one unexpected bill away. As an adult I know that's not true of my situation now, but I am incapable of getting out of that mindset.
Then consider things as "one time purchases" instead of monthly obligations - buy Disney+ for a year, once, and immediately cancel. Then if something goes wrong, there's no upcoming bill to pay.
Maybe. Actual cost savings are observable now, with very high probability. Maybe that book or skill is useless; in other words, there's a broad distribution on possible outcomes. Who actually measures this stuff to assess ROI? It's not obvious that most people get a good ROI out of university degree, or at least at the same levels as in the past. At best I've seen some average measures, but not bottom 10 percentile measures, you know, essentially guarantees that one's time and energy and money isn't wasted. It should be of significant concern that even a CS degree isn't an effective guarantee of a job offer that requires the knowledge gained from that CS degree. It's as if a lot of the actual skill an employer requires is learned outside school, which is insane and conflicts with the broad everyone-must-graduate-college narrative in the US and Canada.
The US has has the privilege($$$) to import the minds and workforce it needs, thereby skipping the need to invest in local education, and offshoring this burden to brain-drain countries in the process.
So, the US is actually doing both: doing its best to brain-drain other developed countries while also spending more than anyone else on education. Is college the best place to train people to function better in teams? Or would Amazon be better served in funding lots of youth sports teams and recruiting from those?
If you haven't already, look into Certificates of Deposit ("CD") at your local bank. They're FDIC insured (so if the bank goes under, you're covered, up to something like $250k) and you don't have to worry about losing the principal amount you put in. If you ever need to withdraw that money in case of an emergency, you only risk losing out on the interest. Instead of dumping a ton of money into a single CD, look into CD laddering wherein you setup multiple CDs that expire in 3 months, 6 months, etc or some other cadence that you're comfortable with.
You can only buy $10k per person per year, but as a married couple, you could build up 100K in savings over 5 years, and even faster if you hold them in a trust.
One limitation of buying I Bonds is the annual purchase limit. Each person can buy a maximum of $10,000 per calendar year as the primary owner.
In addition, if you have a trust, you can buy another $10,000 per year under the name of the trust. A lawyer created a revocable living trust for us back in 2018. It was surprisingly easy when I opened an account for the trust at TreasuryDirect last month. It took only 15 minutes to open a new trust account and buy another $10,000 of I Bonds.
So it lets you double the amount you can buy.
The main benefit of cash recently is losing less value each day than stocks!
A friend of mine worked on superyachts which were £400k a week to rent. He said that without fail the owners would be penny pinching at the end over a few £ here and there (on food, drink, suncream etc.) Same with upper-class Brits who had hundreds of years of intergenerational wealth but won't turn their heating on until November.
Not sure what to make of this; I've often wondered if it is a form of bell curve.
Poor penny pinching is often about doing what's necessary to survive, even if it's a terrible outcome in the medium term.
"Wealth does not last beyond three generations"
https://www.nasdaq.com/articles/generational-wealth%3A-why-d...
Now if by "owners" you mean the owners of the yacht, then it makes more sense as it's a business and they're controlling costs, especially the ones they see as "variable".
In India at least, this is a time tested way to escape poverty. Doing well in academics and get into STEM you will greatly increase your odds. Not for nothing India has millions of coaching centres and some of the most valued ed-tech startups. The poor can and do mortgage their house, land etc., to send their kids to good school and college.
Of course it pales in comparison to cashing out your overpriced McMansion in some Karen infested suburb of a major metro with nice schools and moving to rural Idaho or switching jobs for a new one with "senior" in the title. But have you ever actually run the numbers? Cheaping out and/or reducing consumption has a huge impact on weekly or monthly finances if it is applied with any breadth. Monthly finances have a huge impact on money available for savings/investment.
Blended funds! You can choose what % of your money is invested at various risk levels. Choose a fund that puts only a fraction of your money in stocks, money markets, CDs, etc., and finally cash.
Maybe! It all depends on whether or not you would actually do something more productive with the time. If you were to write a book or work on your company or take an extra job with those hours, sure, pay the professional. But if, instead, you were going to be watching TV instead, then you are way ahead. You have learned a skill, which can save you in the long run, even if you pay (you know if you are getting a good service and not being gouged, etc).
Having a cheap car – as long as it's not a lemon – is a good thing.
> I'm afraid to make investments fearing that the market could crash the second I enter it
Ok, that is a problem. Keep hoarding cash if it makes you feel better but take a portion and invest. Once you have managed to save enough to have 3-6 months expenses covered, you should be investing the rest. That's how you get out of shitty jobs, specially later in life. Markets generally recover and have for a century. If this stops we'll have bigger problems (and not investing doesn't shield you from them).
I basically agree with everything else you said.
That's a feeling I know well. It's even more irrational when it's a habit inherited from parents who weren't particularly poor, so you grow up living in quite a nice house that a lot of time and money has been spent extending, but a 50p ice cream is considered decadent. And after you've made a whole bunch of career choices not optimising for income, saved loads without investing it well, you still find yourself avoiding buying icecreams or coffees when out unless you've got company and comparing cheese prices per kg in a cheap supermarket, not because it's necessary or because you aren't aware that negotiating the price of your next house will save you more than three lifetimes of cheese price comparisons, but simply because doing anything else feels like being ripped off.
Also, not buying a holiday until well into my 20s. I still feel like it's mostly not worth it, even though I can pay for it and it's probably sensible to take a break from time to time.
• 5 Things Nobody Tells You About Being Poor, May 27, 2011: https://www.cracked.com/blog/5-things-nobody-tells-you-about...
• The 5 Stupidest Habits You Develop Growing Up Poor, January 19, 2012: https://www.cracked.com/blog/the-5-stupidest-habits-you-deve...
• 4 Things Politicians Will Never Understand About Poor People, February 21, 2013: https://www.cracked.com/blog/4-things-politicians-will-never...
https://www.cracked.com/blog/6-harsh-truths-that-will-make-y...
Easy solution
take a few hundred from the bank and physical set it on fire
keep doing it until you don’t care
it’s illegal but it works
That sounds bad. Why not give it to a homeless guy or to charity or something?
>it’s illegal
Honestly, the central banks can go to hell. They can print way more money than you can ever burn, which they do, even far too much of it, bringing us to where we are today.
There is no "natural" amount of money.
there can’t be any value
These days I realize I have nearly everything I need, so if I'm buying something I figure I can't really afford it unless I'm getting the "best" out there. Best for me means researching the best performing/quality/etc. item in the category. If I'm replacing a broken item I also take the opportunity to upgrade.
For example I needed a carpet shampoo cleaner recently. Instead of heading to Walmart to buy whatever consumer gear was slapped on the shelf, I spent a few weeks deeply researching the ecosystem and ended up with something about 4-5x the expense - but with performance to match. The difference in quality makes it almost a pleasure to clean my carpets these days.
It's easy to spend money simply on fancy and not get much out of it. But I feel pretty satisfied when I make an absurdly expensive purchase like the above but still feel great about it a year later due to the value/increased quality of life it bought me. In the moment if feels ridiculous paying many multiples more than I would have in the past, but over time these little incremental improvements add up.
It's the spending that I do like a "poor person" that bothers me the most - just buying crap on impulse, or "collector" behavior. I find I need to actively mitigate both impulses or I'd end up on a hoarding TV show.
If you pay it off every month, credit cards have a negative cost (to you) and a fair amount of convenience (for renting cars, hotels, booking flights, etc).
Nobody cares about your data (unless you're high profile), but -- for example -- hedge funds and the like will spend big bucks to get aggregate sales data before this quarter's financial reports are written.
Sometimes you have to identify your weakness and ruthlessly cut them out of your life.
As with everything, during childhood impressions are stronger and effect your life more, but being really poor in your 20s has quite a similar effect.
You can learn to cope with the anxiety better if you talk to a therapist but it will never fully go away.
So yeah, I dislike the idea of being mortgage slave, but if I didn't optimize my income I wouldn't mind taking one to buy investment apartment, so I had to invest money in stock.
But the funny thing is I will refuse to buy something I consider overpriced even when total sum makes absolutely no difference at my income, I just don't like the idea of wasting my money on something which can be bought cheaper, so some people may think I am poor or cheap although I don't mind spending money on something I consider worth the money. For instance almost nobody here in Czechia has AC, but I am one of those few people who have one, because I value my comfort at home more than having newest smartphones and other crap.
Even though I have a great job now and have for years, I still find myself shying away from good things that I really can afford, or buying cheap shoes when dropping a Benjamin is better even in the immediate term.
I just want to say that if allowed to happen you can really be a force together, a moderation force coming from your side and your SO. She buys higher quality trash bags and tires (lol) now and I don’t splurge on stuff all the time now, and don’t waste as much money.
I really appreciate the perspective being with her has given me.
If I had a nickle for every time someone said something about the poors being scarred or broken and then in short order started spewing nonsense about how the poors have minimal agency, need guidance or protecting from themselves, are doing it wrong, etc, etc. I would be a very wealthy man. And a hell of a lot of HN would be poorer in $.05 increments.
Did you (in general, not personally) ever think that maybe it's all the upper middle class types who are doing it wrong and the only reason we get away with it is because we have money to sustain the lifestyle?
People who act like cheapskates, buying $500 cars, $20 Walmart jeans, while their peers sneer about the $2k Camry, and $50 Levis being a "better value", seem to do well at all levels of the economic ladders and even frequently improve their lot in life.
I scraped by on ~ $600 / mo in disability until I graduated college in my mid 20s in 2008. My spending habits, my hobbies, everything was ingrained around that age.
Today I make 25x as much, and barely spend 2x. It's hard to change early habits.
it is like saying: ohhh my mommy was so bad to me and now i have issues, ohhh my mommy was so good to me and now i have issues.
victim mentality
There's great power in understanding where you came from, and how that affects your behavior today.
You could also say being poor in childhood teaches you how to be frugal. I regard this as a healthy habit and better discipline I wish I had with money (coming from a middle-class family).
Another way to look at frugality is just an aversion to spending money on whatever it is that society or mass media tell you you have to buy, an important and healthy attitude one can have, IMO.
You are also right in that there are plenty of people who are high earners, but never get to actually build wealth because they spend it all. This can often be the curse of living in a high cost of living area. You see all the wealthy people driving in nice cars and living in luxury homes, and this makes it difficult to consciously deny yourself these things and live (relatively) modestly but build long term wealth instead.
Second order frugality: Buy it for life. Quality over quantity.
Third order frugality: This inert matter is not nearly as interesting as the people who wish to sell it to us want us to believe.
This of course after having spent too much on high quality "stuff" with little use.
It's definitely happened to me multiple times. And I don't think it's just a coincidence, with any new hobby or skill you will start out improving very quickly and then eventually hit a plateau. The first thing you think when you hit the plateau is "I would be a little bit better/have a little bit more fun with this if I had better gear", and it's usually true and you do get a slight boost. But then a little while after that you hit a sustained plateau anyway and that's the point where you'll often lose interest.
A term I've seen bandied about for the collective symptoms is having a Scarcity mindset and it's based on insecurity/fear of unexpectedly running out of money (which was a frequent event in childhood)
John Scalzi's classic "Being Poor" blog post[1] details the effects of poverty in detail.
Never been poor; me and my whole family have always done this. I just forced them to get rid of their standalone DVD player. They have remote controls for devices going back to the 90's.
The cellphone example is even better; you'd be a fool to immediately dump your old phone. It's small and easy to store, and if your new phone craps out or gets lost or stolen you may very well have a use for another phone that works right now. I have phones going back 2 generations.
This is just frugality and contingency planning.
Scarcity mindset is more like, "I have $300, I need to spend it before it goes away". That's what keeps people poor.
So what basis do you have for commenting on the experience of it?
> me and my whole family have always done this.
I'm sure there are other things that both your family and poor families have done, but that doesn't have explanatory value.
You don't have to be/(have been) poor to be a hoarder. On the old cellphone, my emphasis was a drawer full of backup-to-a-backup-to-a-backup devices that are now 10 years old and is running Android 2 and are potentially a fire hazard while charging and are not fit for use - they are emotional support devices. Keeping one generation of backup device is rational, 3+ means there's something to unpack.
I'm curious about how your family tradition came to be: a high number of people who experienced the great depressions in their formative years are/were compulsive hoarders in latter years.
Being poor is what keeps poor people poor; costs of necessities go down the richer you get; being poor is expensive
That turns out to be the opposite of frugality.
You could say anything, but what's true is that it's not frugality. Where do you get that?
It's a traumatic experience with lifelong consequences. I know that from many people who have experienced it.
In order to help with it, we have a bank account that our bills come out of that has a little more than 6 months worth of all our bills (mortgage payment included) just sitting there, collecting zero interest. Every time a bill is paid, we top it up to the target amount. If we stop making money today, we don't have to do anything differently for 6 months.
It's not logical or financially wise, but it means that she doesn't worry about money as much. I consider the opportunity cost on the interest we might collect on that money as a bill that I'm happy to pay.
And once you do that you can find yourself suddenly feeling much more free - knowing that even if everything goes south room and board is taken care of can give you the courage to take risks you'd not otherwise take, such as starting a business, a family, even moving.
The main thing about "living paycheck to paycheck" that scares me is that feeling of being trapped.
Sure, the money isn't generating more wealth, but that amount is finite. It's a cushion that should effectively indefinitely and every dollar beyond is vigorously invested. And, should something happen to employment, you use it as a buffer (assuming no severance) and replenish as soon as you're employed again.
I have a friend who helped me get where I am. He makes even more than I do, but financially, I'm more well off than he is because he thinks that every single dollar needs invested -- to the point that despite making the top 2-3% of income for our entire region, he regularly is paying off revolving credit card interest because he isn't equipped to pay a $500 unexpected expense.
Sure, if you invest every single dollar, it's always earning 7-10% on average. But if you have to then pay 20%+ APR on credit cards because you can't handle unexpected expenses, it begs the question whether you're really getting ahead.
Betterment recommends 30% margin: https://www.betterment.com/resources/funding-a-safety-net-ca...
Neither of those are stocks.
Bonds are (usually) less volatile than stocks, but yeah, be careful about using them for short-term emergency funds.
With our system, our bills get paid with the money we have, and then when we make more money, it just goes back to the buffer account. Overflow goes into investing.
As someone who went through two recessions, survived multiple layoffs, and had a few medical things, this seems like crazy talk. The general rule of thumb is 6 months of savings. I've known many that didn't follow this rule, and ended up in very bad debt.
We have a decent amount sitting in our savings account, but not six months worth. But I can liquidate assets to get us the rest of that six months if necessary, and it would take about a week to get that into our bank account.
yeah, so you're still ahead of the game if you had it saved.
Also that 20% loss will most likely recover in time. Inflation almost never reverses itself, it only slows down.
There's a reason rich people park most of their money in assets, and not in savings accounts. If they got more returns by keeping it in savings accounts, they would do that.
6 months of basic living expenses isn't "most of their money" for rich people. Ideally it wouldn't be for the rest of us either.
You seem to be thinking I'm against investing altogether - I'm not, but there is a significant risk avoidance in having an emergency fund that is 100% liquid and not tied to market risks.
Personally I have 2 years in cash because I like to take 6+ month sabbaticals between jobs, but even that is a negligible amount due to my expense/income ratio.
Even Warren Buffet always keeps at least something like a fifth of his investments in cash. Otherwise how the hell are you going to buy low?
It is common advice to have an emergency fund equal to several months of expenses in cash.
What is the alternative ? Having no emergency fund?
Your strategy means that the best time to buy assets correlates with when your net worth dips then lowest.
In the USA unexpected expenses (beyond monthly savings) can completely wipe a three month savings in a heartbeat.
Add to that getting laid off during a recession and you’re in for real pain.
I guess it’s just been 12 years since people ever had to deal with a bad economy.
Let's say you get 3% in an instant savings account, and 3.5% in a three months' notice savings account. If you never touch that money until your retirement in 30 years, that would give you 0.5 months worth of expenses extra interest.
Compare that to the hassle, extra work to keep track of several savings account, and the added risk in the unlikely event that you do need the money quicker (eg. A broken car, an unexpected medical emergency, whatever). Surely the trade-off must than tip in favor of simply having a bit bigger emergency fund?
(e.g. I would say for most people a car probably costs more than three months' expenses, so having that much extra in instant access probably doesn't shift you from "can't buy a new car in cash" to "can buy a new car in cash". Realistically you're (hopefully) insured and you're quite likely to finance your replacement car.)
I've had an "instant access" savings account take 2 months to pay out my money - some kind of AML issue, supposedly. Conversely, a lot of "three months' notice" accounts aren't "you physically can't take money out with less than three months' notice" but rather "if you withdraw with less than three months' notice you sacrifice one year's interest" or similar. I don't find the "hassle of an extra account" to be significant when it's two accounts at the same bank under the same login, but if you do then I would seriously consider having only a notice-requiring savings account.
It's absolutely both of those things. It's financially unwise to take any risks at all with your emergency funds and operating expenses, so having 3-6 months worth locked up is absolutely the best thing you can do.
In high school, I went to a friend's house for lunch. Their father served a mountain of food. My friend said, a bit exasperated, 'Dad - why do you always serve so much food?!'
Dad said, caringly but directly: 'Remember that I grew up in a refugee camp in Palestine. It is very important to me that nobody ever runs out of food to eat in my home.'
An eye-opening moment for a teenager.
I've seen this in action: e.g., clipping coupons but not paying down debt faster than the schedule.
I mean, the generation who went through the Great Depression did pretty damn well in terms of savings, investment and a lack of waste.
This is how I know that, even if we miraculously fixed our medical system tomorrow and outlawed private health insurance by a constitutional amendment, we'll still have, thirty years from now, 60-year-old Millennials dropping dead of preventable causes. The American healthcare system has already killed millions, but it's also killed future millions.
Care to explain it to non native speaker from Europe? Is it some bakery chain and she took home some cheap/free leftover bread?
It might be buttery, lightly seasoned bread or something like rolls, usually fresh-baked.
I read "breadbasket home" as a compound noun and guessed it was some kind of food bank or something, but "home" was really an adverb modifying took. So what was meant was something like "My grandma ... always took [home] the bread from a [restaurant] breadbasket..."
Yup. As a child of immigrants it gets passed down a very long way.
Pass it down far enough and it just becomes “culture” and “tradition”.
My intent was to show that while electronic payments are nice and convenient, I still like the peace of mind of knowing I have a resilient payment method like cash on me.
It apparently comes from a survey [52] which says:
"53% could manage an unforeseen expense of $500 without worry"
What that actually means isn't directly stated - but people read it as "half of Americans can't afford $500" which isn't what it's stating.
https://www.personalcapital.com/assets/public/src/2022-Wealt...
If we needed to leave due to an emergency, some cash may help for a hotel, probably, assuming it's far enough away to have power/water.
If there's earthquake/hurricane/etc with resulting power outages, most of the places I'd go to wouldn't be able to even open their POS systems to take cash in the first place.
Businesses or anyone wanting to get paid will figure out an alternative. Dealing with cash is not complicated.
Cards require a machine, some kind of network connectivity, and an account. It's actually a lot easier to deal with as a small business. Most of the people I know who go to conventions as vendors prefer cards because it greatly simplifies their logistics.
In the case of getting paid something versus getting paid nothing, I am guessing most merchants will opt to put in the work to accept cash rather than shut down.
There are attacks where bad guys will disable a gas station's dish (by covering it with foil among other methods) and then rack up a bunch of gasoline sales with a stolen card. They've got generally got a limited window so they have to hit a bunch of local stations quickly, but meth users aren't known for high dollar scores.
2 hrs later, the regional manager - WHO HAD TOLD US IN NO UNCERTAIN TERMS THAT WE HAD TO REMAIN OPEN DESPITE NOT HAVING POWER - came in and chastised me for 1) not wearing the full uniform (we had no AC and it was July, so I took off the tie) and 2) handling money without a register. "You can't guarantee your numbers are right - that's what computers are for". "But... they're down, and you said to stay open and keep selling". "That doesn't change the fact that you might be making mistakes!"
Insanity.
1. leave me with cash
2. not affect the ability of shops, hotels, etc to process those cash payments and render goods and services
3. prevent me from driving to the next town, county, etc
I also did not have time to drive 1+ hours for supplies, especially when roads were not necessarily cleared of trees and whatnot, and I had elderly to take care of at home.
Also, gas itself was challenging to get with very long lines so driving an hour was not a guarantee to getting it (since everyone else has the same bright idea, you can’t just shift 10M+ vehicles worth of demand overnight to surrounding areas).
Or at least that's my experience from living in an area where hurricanes sometimes take down power for 2+ weeks.
When things shut down for a long time the government usually sets up free distribution of MREs and water and already having gas in your tank is more valuable than having cash to buy gas at the theoretical gas station with power to pump but not payment network access.
Charging for saving lives. Price discriminating to save lives.
What happens when they make a mistake in what someone is able to pay?
EDIT (I tried replying but can't yet): The basic solution to make medicine cheaper is supply more medics.
In Chile anybody who wants to be a doctor can go to some medical school and make a pretty decent wage (but less than 20x what an American doctor makes) and help people in some role, some specialty, if that's what she really wants to do.
No quota on helping people.
And they get better results, lower infection rates than American hospitals, longer life expectancy, and medical school is shorter and much cheaper, like night and day. In particular maternity care is like the best in the world--I can't corroborate that but I've heard that.
Lowest medicine costs in the OECD, blows every other developed country out of the water. America is the most expensive and Chile is the cheapest.
Most first world countries have a solution for this already. It is baffling that the US does not.
Even second and third world countries have implemented this solution.
https://www.fraserinstitute.org/studies/waiting-your-turn-wa...
All healthcare systems impose some sort of rationing. Canada rations care by imposing long queues for non-emergency cases, with significant variations between provinces. Affluent Canadians frequently travel to the US as medical tourists and pay for treatment out of pocket in order to skip the lines.
There are also major differences in MRI scanners. A 3.0T unit can produce higher resolution images than a 1.5T unit, and this makes a difference in patient care quality. Countries like Chile are more likely to have the cheaper units.
The Fraser institute is a libertarian think tank so even if their data is right I don’t trust their conclusion. So what if 3% of people are waiting on a procedure? This needs to be apples to apples compared to other countries, per capita healthcare spending, life expectancy before drawing conclusions
There should be flying ambulances, like international flights taking emergency patients to where they can be treated economically instead of getting signature after signature squeezed out of them, one per hour starting inside the ambulance.
This is exacerbated in the US itself, where only the top 10% have access to expensive and timely medical treatment.
I would argue that, at the very least, Canada does offer medical treatment to everyone.
10x cheaper, and longer life expectancy.
I just happened to have this RAND corporation ranking of "most expensive insulin in the world" from 2018 handy; America is first, Chile is second.
https://worldpopulationreview.com/country-rankings/cost-of-i...
That, BTW, is a consequence of the system responsible for selecting and influencing those in power and not any particular individual, so voting in someone new won't change anything. And that goes for much more than just health care.
But I don't know, did you try the municipal pharmacy in Recoleta? Way cheaper.
[1] Note for admins: this is not the same as calling someone a shill on the forum, I went and gave my account and signed an affidavit in the complaints and suggestions book, with the help of the guard who also witnessed the shill, and backed by a third witness who conversed with the shill like I did. I told them by all means use this in court, I'll vouch on the witness stand, and I'm doing this with the same moral authority and motivation of being a hero according to Roman Law, in a very similar set of conditions that led to my actions and consequent recognition as a hero by the victims in the spur of the moment, ten years ago.
The only real solution is to completely abolish privatized healthcare. No more discrimination between the poor and the rich when it comes to something as critical as that. When everyone has to row the same boat, then the rich will finally have a good reason to make sure the poor don't drown.
EDIT: I don't remember Chile having that much cheaper healthcare, either. I lived there for 14 years and it was just as much of a constant drain on my salary as it is here in the US. And those who couldn't afford good insurance were pretty much screwed, just like here in the US. And the real costs were buried deep and obscured by insurance waffle, just like here in the US.
It's shocking how little this is talked about... This is so obviously the root of the problem. People like to blame the free market but there is no free market in medicine. Corporatism is to blame for artificially restricting the supply of doctors and artificially restricting who is allowed to render medical services, both of which benefit the corporate members, the doctors. Of course, those anti-competitive measures are always sold under the guise of protecting the population.
https://www.ama-assn.org/press-center/press-releases/ama-fun...
Fighting residency expansion: http://www.usatoday.com/news/health/2005-03-02-doctor-shorta...
Fighting expansion of care to other types of practicioners: https://www.ama-assn.org/practice-management/scope-practice/...
Why would you believe the AMA's line on this? Do you think the professional association that represents all doctors, one of the highest paid and influential professions in the country, has no power to control the amount of residencies are funded by the government? They have no reason to increase the number of doctors, absolutely none. They benefit in every way from having constrained supply.
By the way, that expansion of 15000 residency positions barely puts a dent in the number of doctors we are lacking[2]. But yeah, a press release from 3 years ago really absolves them of guilt for sure.
[1]: http://www.cnn.com/HEALTH/9708/24/doctor.glut/ [2]: https://www.washingtonian.com/2020/04/13/were-short-on-healt....
Most other private sector professions don't require nearly as much postgraduate training before being allowed to work. Prospective lawyers usually take the bar exam less than a year after graduating from law school. Medicine is simply more complex.
What would you propose as an alternative to the status quo? The AMA has proposed a number of improvements, but perhaps there are alternatives?
Also blaming "corporatism" is basically just a meme at this point, because it is just used by libertarians when someone criticizes capitalism. Its the same when communists say "true communism has never been tried".
In case of life or death emergencies, your insurance or ambulance driver would send you to a reasonably priced doctor, and doctors that charge unreasonable prices would go out of business. But my guess is that life or death emergencies do not account for most doctor visits.
> Also blaming "corporatism" is basically just a meme at this point, because it is just used by libertarians when someone criticizes capitalism. Its the same when communists say "true communism has never been tried".
Well, I don't feel like arguing about semantics. Feel free to call the problem I described however you like.
Again, what incentive would there be to lower prices? New doctors could just be bought out and the prices jacked up. There are a lot of industries where there is little barrier to entry (for example tech), where the big companies just buy anyone trying to "get in on their territory".
Also, why would the "unreasonable prices" (what would that even look like?) doctors go out of business? They could just provide some kind of "luxury deluxe" ("no poor people here") state of the art care for people who can afford it.
[0] https://www.healthcare.gov/health-care-law-protections/docto....
Emergency services are only like 5% of costs, anyway [367]:
> The percentage of U.S. health spending attributable to the ED has increased from 3.9% (CI, 3.9%-3.9%) in 2006 to 5.0% (CI, 5.0%-5.0%) in 2016.
So the other 95% is more flexible. I know when looking at birthing costs they could vary wildly but it didn't really matter because who cares, they're all in-network anyway.
[367] https://journals.plos.org/plosone/article?id=10.1371/journal...
There is no cost problem in "tech". In fact, many services are literally free of charge. Despite Google having a near-monopoly on search, it is unable to charge users for it. Demand for software developers has grown massively in the past decades and yet, wages have only slightly gone up.
Anyways, I didn't mean to start a debate on the merits of free enterprise. I was hoping that we could at least agree that artificial limiting the supply of doctors causes medicine to be more costly, regardless of the economic system.
But Google can charge their "actual" users, i.e. advertisers quite a bit, and it is much harder to do any advertising without also advertising on Google Platforms, such as Search, Maps, Youtube, Adwords, etc. The wages may have only slightly gone up, but the profits definitely have gone up quite a bit, which shows that amount of workers and their pay has little to do with how much money can be made (which I believe is perfectly fine, because tech is not a place where I think free markets create a detriment to society).
I don't want to start a debate on free enterprise in general, just to show that free enterprise is not a once size fits all solution. My argument was just that the supply of doctors has very little to do with the price of medicine, because the market forces that determine price and can lead to lower prices in some markets do not work correctly in this market.
The statement is a reaction to blaming free market economics when the reality is a scenario of the opaque third party payer system in a highly regulated environment. Consumer gets no price transparency, state regulatory boards made up of current market suppliers control market entry - say what you want about it’s appropriateness but the US medical industry hardly resembles a free market.
“Corporatism” may be a ham-handed way to call this out, but it’s not helping society to lay the medical industry’s problems at the feet of capitalism. This problem of cronyism in markets (especially) exists in communist economies as well. It’s throwing out the baby with the bath water.
Yeah. Because rescue workers, fire fighters, EMT's, nurses, etc., etc. don't count. (As if the ways in which America's medical establishment treats those people didn't make that obvious enough. And the alpha sociopath in the room always deserves 100% of the credit for anything good happening...right?)
My impression is that other countries (ones not poisoned by the AMA) don't have this particular problem nearly so much.
Some days I feel like driving up to McLean and burning banks down.
EDIT: I'm out of comment quota but dymk I'm so tired of hearing that, here's my reply: Oh fuck off. I make six figures and work remotely. My family lives in a rural part of a small state and I can't afford a house within driving distance of them.
EDIT2: Asset price inflation pops an asset price bubble? Who taught you economics? They should be fired. Also, that's not a bubble this time, it's the market equilibrium. We aren't building enough housing and it's so bad the cost of labor to build more housing is going up. The entire US is the bubble this time.
EDIT3: Is that your solution? Send all the children to therapy for being kicked out of their own country? How do you expect that to work?
EDIT4: corrral: when the upper middle class ends up in "lower class" conditions you usually get guillotines.
Ultimately, we can do both (fixing healthcare and housing). But honestly more countries have solved healthcare than housing.
I stand by my statement, healthcare is much easier to solve (we have examples of places doing it right). AND we can try to tackle both.
Edit: No Australia is mostly White with the largest minority (5%) being Chinese. Try again. Also, I'm done empathizing; I'm warning/threatening everyone.
Australia, for one, does a massively wonderful job with healthcare. My friends there, young by the way, love the healthcare there. But, like us, the housing market is awful. Well, worse honestly.
And this is one of many countries who have great social healthcare.
I don't think you're talking to me in good faith though given you've fallen back to "most of us get by just fine without healthcare". I'm young, like you, and I need healthcare. Plenty of my friends do too, especially some with rare conditions like narcolepsy.
Did you honestly accept in an earlier comment that plenty need healthcare?
It sounds to me like you want someone to confirm your viewpoints rather than to talk / learn / empathize with others.
As someone who is (a) a millennial and (b) has a chronic medical condition, I need medical care WAY MORE than I need to own a house. Or even rent a house. A crappy apartment will do. Right now I live in a relative’s basement.
I’ve learned to settle on living situations that I don’t love because medical care takes priority.
That being said we are strained to buy a 3-bedroom house like that of my single Mother who only has a high school education to her name.
Given our success, we don’t have the “burn it all down” mentality but I fear it building in many of my friends and totally understand the sentiment of this being a #1 problem for younger generations.
I don't even worry about this anymore; I look forward to it.
https://wtfhappenedin1971home.files.wordpress.com/2021/12/un...
/s but only sort of
Decent properties, in suburban areas, at ~$1M.
Ir rural areas, yeah, they're cheaper … and salary would get "adjusted" the moment I try that.
I guess if you're somewhere insanely expensive and won't go somewhere that's not, then... you're gonna pay a lot for housing. Go figure. "Here's the 97% of the country that's not like that, just throw a dart at a US map and you'll probably hit a place with much cheaper housing"—"No, I won't, because reasons"—"Uh, OK then, kinda sounds like a choice, good luck"
https://apps.realtor.com/mUAZ/313q9jxa
That's just one example but you can find thousands of similar listings all over the country. Outside of high-cost coastal areas, housing is still fairly affordable in most of the country.
Anyway, the point is that people on HN who have relatively high incomes and job skills, and still complain about lack of affordable housing are mostly just being picky about location. There are options available but it might mean living in a area with shitty weather or not being able to walk to trendy restaurants or among neighbors who don't share your political views. The real housing crisis is hitting people with much lower incomes who are being squeezed out.
That particular property falls pretty squarely in the "exception proves the rule" territory for me; it's a 135 y/o dwelling, so I expect you'll be paying more than the immediate price tag. Like too many listings, it doesn't come w/ a floorplan, and with what photos it gives I'm a bit suss on the 3bd/3ba (piecing together the photos, I think we've converted a second story apt.'s LR into a BR?). It's certainly seen a remodel (although … IDK about the taste of the remodel. But let's say taste is unimportant!) No driveway. The backyard is … well it needs work. You're still batting $2k/mo in Cleveland.
I'd almost hazard a guess that my CoL adjust would be >$500/mo, but I don't get to know these things, being an employee.
There are a few intangibles in my situation that make "move to Cleveland" a "it's not going to happen".
There's a point where one needs to step back and ask oneself, if that's what's affordable on SWE's salary, what's affordable on a baker's salary?
From that perspective, nothing's changed except that some people living in those expensive places are starting to realize the same thing, and the people experiencing that are a bit higher up the economic ladder than before. Welcome to the lower classes, folks. Don't worry, you've got plenty of company.
Fight club: people fed up with the system decide to blow it up, release date movie 1999, book 1996.
Millenials: people born 1981-1996, thus a critical mass hits adolescence when Fight Club is released.
Millenials, except the affluent or very early ones before '83, were also the generation to see the 2008 financial crisis undo their entire Life's hard work (several times now) due to a broken and rigged economic system and were left to internalize how rather than address the corruption and malfeasance the very people who destroyed the Global economy were rewarded with bonuses and golden parachutes. Corporations were bailed out while people were forced to default on loans and forced into bankruptcy and were literally forced out of their homes: some who had already paid for them no less, because of arcane investments instruments like MBS and CDO that were so over-leveraged that they made the entire world' economy implode.
What's really f'd was that some of us who had to take time from our studies to focus on this saw it coming: I probably broke that 10,000 hour mark on studying Global finance and economics in 2007 by the time I was taking my upper division courses in my undergrad. I couldn't make sense of my degree because I realized by my junior year we were not just going to enter another temporary recession but that the entire economic model was based on short term thinking and gambling: derivatives and (re)hyptohetication were all that made the credit expansion possible. Unfunded liabilities, derivatives Markets and dark pools exceeded the Global GDP by many times!
Instead of focusing on the adverse affects of cytokine production in my experimental models, I was learning about Basel I. Instead of focusing on the long term implications of RNA-synthetase in possible therapeutics I had learn what the Glass-Steagall Act act was and why it would have to be violated to keep Goldman Sachs afloat etc...
I can keep going, but the point is: this wasn't about being an Edgelord quoting Tyler Durdan this was about the systematic and wanton destruction of the institutions we were FORCED into since birth; people also seem to forget that millennials represent the most Schooled generation that is walking this planet, I was coaxed into a head-start of sorts at age 2 and almost never had a semester where sports or extra curriculars/Summer School weren't involved until I left University at 23 as we were told this was the only way to get ahead in Life. We were also the first generation unable to expunge our University debt, all previous generations could and routinely did in order to get ahead for their advanced degrees, and these were for seemingly trivial sums compared to the immense increase in costs from that period assuming their were any costs at all: many universities in the CSU system were no cost for residents most of its existence.
This had cascading effects all over the World and with the advent of ubiquitous wifi connectivity we could see first hand the devastation of it happening in real-time.
I still recall with great clarity how austerity being imposed on Greece had children having nothing to eat and literately passing out form mal-nutrition while the EU stripped it's public assets away while rushing to get to my biochemistry finals because I had to work in catering in order to feed myself because I couldn't eat more than once a day otherwise.
I remember how JP Morgan, led by Blythe Masters, were consolidating their stronghold in the Global commodities Markets that spiked the cost of food that led to the Arab Spring after having been bailed out years before with NO ONE going to jail.
I also called the largest bankruptcy in US History (at the time) in 2007 a year before it occurred in what can only be called regulatory capture and blatant corruption by the SEC/FDIC and JP Morgan when it took over Washington Mutual: who I was a customer of.
So, your over simplification is not just vapid, it's insulting to our collective intelligence: we have more in common with our grandparents in terms of being scarred by artificial crisis after manufactured ones that only end up enriching and serving the most corrupt amongst us: to this day the fact that Nancy Pelosi still hasn't been indicted is testament of who this system really serves.
Sure. But you also have to realize that a loaf a bread cost a nickle and that cards didn't exist. People carried around change because you could actually buy meaningful stuff with it and there wasn't really an alternative to cash (sure someplaces give credit but much different than using a card today).
Another thing (and that actually matters much more) is that tax is not included in the prices there are excuses about it that tax is different in different areas, but it's just yet another way to lie to a customer.
Even after I graduated and got a series of increasingly high-paying engineering jobs, I couldn't shake the scarcity mindset, and I would scrimp and save (although I didn't skip meals any longer!). In time (with a whole lot of help and encouragement with my wife), I was able to largely overcome it. We're still very conservative with our money--we're probably in the top 10% of Americans with respect to income, but we spend like we're median (or lower) Americans and save the difference. However, now it's because we want to retire early or pursue other loftier goals (some combination of traveling the world, buying a hobby farm, and/or starting a small business) rather than my debilitating anxiety.
(Since we're getting a little political) It also makes it hard to sympathize with my peers who didn't work, skipped class, lived in the dorms, paid for meal plans and still went out to eat several times a week, bought daily $7 lattes, and majored in some art history or leisure services or (non-teaching) English Literature when they insist that the government should forgive their enormous student loan debt (I'm fine with universal education, but no one should be surprised that they have to repay the debt that financed their unsustainable lifestyle or demand that society foot the bill).
There's truth to that point, but it's interesting to see which topics slide into skepticism and critiques of method, and which take results at face value and build a discussion on top of them.
[1] https://news.ycombinator.com/item?id=31746980 [2] https://news.ycombinator.com/item?id=31747822
"Scar consumption" as a phrase assumes that consumption in the American style is a healthy activity to begin with, and this outcome is damaging or ugly. "Permanently reduce consumption" would be more worthy of an academic setting, that title is clickbaity. Perhaps some will overdo avoidance of something because of fear of expense. Better than masses overdoing from building their lives around unsustainable inexpensive consumption. Look where we are for sprawl and emissions.
Very few people want to "consume gas". They want to be able to live decently and have meaningful jobs. Unfortunately, in today's market, that usually means a shit-ass load [1] of driving.
----
[1] You don't want to know how much time I spent deciding whether to use the more conventional hyphenization ("shit-ass-load") or the version with better cadence.
It’s not a question of “cadence” but of grammar. “Shit-ass“ is an adjective modifying the noun “load”. Your choice is grammatically correct.
Absolutely. Had the GGP wrote “shit-ass-load” the whole hyphenated string would be a noun, which is also grammatically correct.
But “shit-ass load” is a bit more evocative and digestible than “shit-ass-load”.
I would have gone your direction with “assload” (no hyphen) which is a satisfying single noun with no adjective.
I guess this applies more to those who drive from the suburb.
I lived in a dense city with great transit. I miss the commute, which forces me to walk a bit, starts myself up, and helps me compartmentalize my time.
Well, not really. The basic problem is that production has to equal consumption. And so there are three possibilities:
1. People consume all of their income 2. People work less 3. People work, but get paid less
In a fair economy, the third point won't happen. In a country that wants an internationally competitive economy, the second point can't happen. And so people have to consume 100% in order to work 100%; this choice maximizes tax revenue.
You assume people don't even consider saving somehow. Why is that?
In particular, the smaller the GDP, the less military spending the country can support. If the country can not support a sufficient military spending owing to a lack of consumption (production), it will be conquered by someone who can, a bit like private equity buying out an unprofitable company with good potential. (c.f. Ukraine - very poor GDP, but decent possibilities for growth w.r.t. arable land, supply of young human capital, seaports, industry etc, thus currently undergoing hostile takeover)
> You assume people don't even consider saving somehow. Why is that?
There's no such thing as saving; if I save money, it's to consume it in the future eventually. So this has to cancel out over the long term.
If people are saving money and never withdrawing (e.g. never using the freedom bought by the past work to avoid future work), that's fine too, but if they withdraw it, it decreases national production, so it only works if people are prevented from withdrawing savings, at which point nobody would keep them.
Basically, people have to work, and this is the fundamental premise. That being said, the basic nature of the consumption is irrelevant. This is why digital services, gambling, and financial services are so important - it's much more socially efficient for people to dispose of $100 worth of money through slot machines or Netflix subscriptions or overdraft charges (all of which are effectively free to "produce" in terms of national resources) than by e.g. buying a new car, which requires actual steel and semiconductors and rubber and ... which require the expenditure of resources (land, labour, capital) in order to produce.
You seem to be applying a macroeconomic template. Individuals can and do behave somewhat differently. I don't have any responsibility to prop up your economy with my spending and you have no responsibility to prop up mine, but please do. If I spend less and you spend more, I hope you spend it on my services and goods, so I get your money and you get my designer throw pillows or whatever. The vast majority of the wealth of the wealthy is in unrealized gains which may be spent someday, it sounds like you're calling them economically unproductive.
I hope to pass my savings on to my heirs, and they can spend it or not as they see fit. I can also spend less on f**ing petroleum and spend more on something else, which is the point of this whole thread. Desiring not to spend, and desiring not to earn, are vastly different.
Correct. Theft is included in GDP, as is spoilage. As I said, it doesn't matter how 'good' people's consumption is, only that they consume. This being said, theft isn't ideal, because it could depress the prices for the items later on. Loss would be better.
> You seem to be applying a macroeconomic template. Individuals can and do behave somewhat differently.
That's correct, which is why the state - if it wishes to remain relevant - has to get them back in line, lest it be consumed by someone who does.
> I don't have any responsibility to prop up your economy with my spending and you have no responsibility to prop up mine, but please do. If I spend less and you spend more, I hope you spend it on my services and goods, so I get your money and you get my designer throw pillows or whatever.
You don't understand - it's not about "propping up an economy" - it's about making sure that people work. If you stop spending, there's a risk that it would cause you to stop working. This is the risk; the consumption itself is damaging for the economy, and it would be preferable that people lose their wages to less damaging forms of consumption (e.g. buying scalable forms of entertainment services)
> The vast majority of the wealth of the wealthy is in unrealized gains which may be spent someday, it sounds like you're calling them economically unproductive.
The money isn't economically unproductive, because money isn't what makes production, but people can be unproductive, and this is the risk.
In practice, the losses from this are very small, because it's held by a rather small billionaire elite, and so the losses to rentiers don't actually end up in a lot of real-world consumption.
> Desiring not to spend, and desiring not to earn, are vastly different.
Different, perhaps, but they are brothers. Spending = earnings + borrowing, or, conversely, earnings = spending + saving. If you don't consume, your net saving goes up, and those savings are like a ticking time-bomb that can be sprung on the economy at any time to seriously cut the GDP.
It's correct to say that you can spend less on petroleum and more on other stuff. It's even more correct to say that, from the macro-economic view, you have to. (And if you don't want, you will be forced to)
> It's not worth the anxiety to not-have.
Yes, but having too much stuff can also cause anxiety. There's a line in there somewhere that I strive to meet.
A better mentality is to always think: "Do I really need this product/service, or can I make do with things on hand that I can rebuild/repair/reuse in some manner, and am I sure this purchase isn't just for the dopamine reward?"
Sometimes the answer will be yes, and a simple purchase can have a lot of positive knock on effects - good tools, for example, allow you to repair things that would otherwise cost much more to replace, and last much longer than cheap tools.
The claim that economic growth relies on consumer confidence (high levels of consumption) is also pretty suspect and relies a lot on how you define 'growth' - what's wrong with a steady-state economy with a stable human population and fixed levels of demand for goods and services, anyway?
We don’t have a stable population. It’s growing.
We like things to get better even if we don’t have “more”. I don’t have multiple cars just for me. But the car I have now has adaptive cruise control. It costs more, it makes my driving experience better, and I’m glad I have it.
Both of these, among many other factors, influence economic growth.
The rate of growth is declining, though. So it's not unreasonable to foresee peak population in the near future (most estimates are around 2060, and it's not going to increase much between 2050 and then).
Because there's no such thing as a steady-state economy. You might as well ask why people need to breathe in and out, why can't they just hold their breath?
Breathing in and out actually sounds like the respiration equivalent of exactly a steady state economy. Like, I don’t continue to grow in size with each year, thus requiring more breath than the previous year. I grew a lot as a kid/teenager, then a tiny bit as an adult, and now I am more or less the same size (and relatively same breath size) as I will ever be.
Take a moment, when you leave your house next, and find anything upon your travels/commute/walk, man-made, which is trying to NOT get you to spend (time/attention/money).
Our entire civilization is built around programming consumerism, and lauding profiting from the inability to NOT spend.
In one word, debt. The debt must be paid, which requires growth.
(I guess one could argue that the growth demands debt.)
on a micro level, most people would prefer for their QOL to increase over time. I was happy to live like a college student when I was in college, but I wouldn't be happy to live that way as a 35 yo. this can't happen for everyone without some amount of growth.
you rightly call out that people often spend money on temporary kicks that don't actually improve their QOL. but if you take a more intentional approach to spending, there are lots of opportunities to exchange money for less stress or more free time. for example, not everyone can afford an in-unit washer/dryer, but it sure is nice to have one.
and then on a macro level, there is the unfortunate reality that we are a tribal species, constantly locked in a prisoner's dilemma with the other tribes. the more tribes onboard to the "steady state" model, the greater the incentive to defect and outgrow/dominate the others.
SUVs that look like school buses and people commuting to an office job in full size trucks is madness.
I think we still have a lot to figure out with our charging infrastructure, in cities where often it's hard just to park. I want an EV badly, but it'd be a constant struggle to keep it charged.
There's also an issue with car companies generally not making the cars I want anymore, though I understand this is a me problem. There's not a nice plug-in hybrid small convertible, even if I could charge it.
Decades later when she had plenty of money she still refused to ever throw anything away. Her huge house was stuffed full of balls of old string, used popsicle sticks, ancient newspapers and wire.
One of which is they would never take the last item of anything from out of the fridge (eggs, cheese slices etc) and would become irate if anybody else did. They (much like your grandmother) were also unable/unwilling to throw anything out 'just in case'.
They may be quite old!
Deprivation and poverty, on the other hand, fuck people up severely--often, through no fault of their own--and there's tons of empirical evidence showing this.
Remember, most people are comparatively poor: the wealth histogram is heavily skewed toward zero and with a wide tail toward infinity.
It's impossible for everyone to be relatively wealthy and relatively high status. It is possible for everyone to have absolute wealth (or at least income) beyond a fixed absolute level, yet still widely disparate status.
Instead of clipping the knees of the productive, realize that envy can encourage the unproductive to imitate the habits of the productive to themselves become productive. We all benefit indirectly thereby.
> but, like you, decided that such differential wealth displays were to be shunned. Not needing those displays caused them in part to lose motivation to obtain wealth
I don't think you'll find any evidence to support this. No one decides that since they don't need a Benz to show off, that they would like to live in a hovel and work until they are 75.
> Instead of clipping the knees of the productive, realize that envy can encourage the unproductive to imitate the habits of the productive to themselves become productive
An equally plausible scenario is that the envy leads unproductive people to spend every last penny they can earn on the displays, leaving them in a much worse financial position than someone who eschews the displays and invests their money in productive enterprises.
edit: just realized I posted this from my phone which has a different account signed on...opsec fail, just a heads up googlryas=oh_sigh
Materially, the most spoiled generation ever, through no fault of their own. Material abundance, cheap goods, instant gratification and very liberal parenting. Mediocre work ethic, a something for nothing attitude, if I may exaggerate a little. Peak individualism.
...until they move out and meet actual life. The contrast is quite cruel, so I wonder if "for life" always applies.
Frankly, what happens is people learn the value of prudence early in life which then saves them a ton of money, time and anguish.
I grew up in hard times, and spend to solve problems was rarely the right answer.
Each new skill mastered was worth an awful lot of money! I picked up many and have broad competence today. The savings are still compounding.
If you ask me, the current emphasis on consumption and so damn many things made to fail hard and or be replaced rather than serviced, refused or repurposed is morbid!
Gluttony on parade.
A lot of people need work and or to live on not a lot of money too.
Right to repair plus some way for people to learn, maybe learn together would put a dent in many businesses. I get that, but which is it?
Pay them more to actually consume, or maybe we all should not be surprised when large numbers of people begin to really walk that rugged individualist talk.
The other area is colour ink. Printing in colour as a kid was a big deal. I think think I'm going to get in trouble at work when I print in colour... like the massive organization I work for is going to care about 5 pages of full colour document.
1. the cotemporaneous rise of (this iteration of an) environmental movement during exactly the same time period as the "price shocks" for gasoline that it considers. This has almost certainly had a significant impact on the zeitgeist for the cohort the study is considering, and it doesn't take much imagination to believe that it is a much more substantive impact.
2. studiously avoids an international comparison. The 78-80 "shock" caused by the Iranian revolution had impacts on gasoline prices everywhere, and even if (as the paper notes) the USA is a much more car-centric culture than elsewhere, certainly people were driving a lot in Europe during that period too. If the effect is real, you should be able to demonstrate it there too.
A "vrek" is the dutch word for somebody that is extraordinarily frugal in unhealthy ways. The vrekken culture embraces this as a quality and then escalates it to Olympic standards. Not even out of necessity, instead as an avenue for creativity.
Here's one such vrekken news paper of the "Saver of the Fatherland": https://www.vrekkenpagina.nl/
I'm unsure if there's international versions of this culture?
Called Extreme Cheapskates
Is there something wrong though with keeping your spending habits low instead splurging on stupid things and risking potentially you will have to adjust them, if you lose job? I find it better to just keep them pretty much stable no matter how high is the income. Though I would not touch second hand clothes, but would not have problem to buy second hand phone and I consider people buying brand new cars crazy, you will lose lot of value just after leaving the dealership.
It probably helps my wife is (stereo)typical Chinese who will reuse everything and has problem to throw away anything, that's even more extreme than me not buying overpriced goods when I know they are cheaper elsewhere (I'm actually supporting price competition this way, sadly most of the people are lazy and don't give a F about few cents causing inflation for everyone). I love especially expiring food with 60-70% discounts, finding best possible deal makes me probably more happy than products itself.
I don't really think she would literally spend extra 30 minutes to save 1 GBP, seems like exaggeration and I also doubt she is really allocating time to those activities. She can be constantly tired more likely because she is burned out (my case, not taking any vacation in years besides bank holidays when they often bother me anyway) than because of time spent on saving money.
This is for me one key to understand this effect. I was a small kid in the 70ies, I didn't have any idea about gas prices and how much a driving license costs - I didn't even know that my toys did cost something - but I grew with parents who would scold me whenever we left some light on for no reason, or a door open for too long when it was cold outside, or opening the fridge for too long.
I remember I was witnessing the exact opposite behavior in the American TV shows of that time. The "traditional" food battles were in particular not entertaining at all, but rather we were disgusted by the huge waste of food - this, although we were a middle class family that certainly had less money problems than your friend.
To this day I still turn off unused stuff and close doors as soon as possible. And I try not to waste water too. And I check the price-per-weight rather than the unit price. Despite the fact I could afford to not give a huck to all this.
Sounds like a good thing in a world where we over-consume almost everything?
I can't agree with some of the commentary in this thread about risk, drive and early poverty. Some of the wealthiest people started out dirt poor. They didn't like it and resolved to become rich. Plenty more started out spoiled rotten and grew up to be lazy minded with mediocre life outcomes.
"Brewster's Millions" is still a great film on this theme of growing a healthy relationship with money.
Anecdata: I hate driving. I'd much rather take a bus or light rail, but that battle was lost in the 1940's[1], along with asinine city planning that was pro-car, anti-community that still exists today.
[1] https://en.wikipedia.org/wiki/General_Motors_streetcar_consp...
1) How the article focuses entirely on fossil fuel consumption rather than something much more damaging, like housing
2) The author's key takeaway is this is great and we should use it to manipulate people into consuming less fossil fuels by making their usage punishingly expensive.
In particular, 1) is a societal wrecking ball, because no home means no stable environment to raise children, means more trouble in the pipeline for the next generation. Many people in the generation won't even have children and others will have fewer than replacement rate. 2) makes me think the same sort of people are behind the housing crisis. They believe in overpopulation and therefore they want to curtail it by making housing punishingly expensive.
My late grandmother, whom lived to the respectable age of 99 years, experienced the Dutch hunger winter. A period of famine during WW2.
For the rest of her lengthy life she could not tolerate any type of food waste. As an example, she'd buy a cabbage and then eat cabbage the entire week, even as it increasingly goes bad.
She had zero interest in food quality or nutritional value, just food in itself. Behavior learned during the famine where you don't have the luxury to discriminate. As an example, she once babysat me and my brother and made an abundance of snacks. Just way too much. Quite soon we were full, but the single word "finish..." and her stare told us all we needed to know. We finished, with stomach cramps. Out of respect.
Also, she had 9 children and survived 7 (genetic blood disease). She survived two husbands. In her extended family and friends, she survived...everybody.
We have a single photo of her childhood, where she stands in front of her house. Which was...made from clay and reed. An astonishing reminder of how even in today's developed nations, wealth for common people is brand new. Despite plenty of opportunities in her lifetime, she rejected material wealth outside some basics. Zero material desires.
Despite all this, not once in her life have I seen her sad or complain or moan. If us grandchildren did something bad or stupid, she didn't give a shit. You're still alive, in health...so what's the problem? Carry on.
She didn't eat very healthy, smoke a pack a day and didn't exercise. And still she made a daily trip on her bicycle to get her own groceries. Or make two trips in a row if needed. Up to the age of 98.
The collapse was short and sudden. After a hospital stay she was returned home to die. As she got carried out of the ambulance she saw my dad's work: her front-garden completely replanted with hundreds of blooming flowers, a sight to behold.
"That looks nice"
She was never very generous with compliments. And those were her last words. I'd call her Iron Lady, but it's an insult really. Iron is too soft to describe her.
She lives on as my compass for life. When I worry, see darkness in the world, contemplate about world events and threats, I think of her.
I'm alive, and I'm eating. I'm fine. Her scars are my lesson, and it's liberating.
She lived in an occupied country, ate grass and flowers, whilst nearly freezing to death. She encountered enough personal loss to fit several lifetimes. And still lived a full life and remained positive throughout.
So if at one point I have to cancel my Netflix, yeah...I think I'm going to be fine.
She actually was a good cook, a lot of her dishes rode the line between simple and fancy. She had either the oldest fancy stove or the fanciest old stove I'd ever seen, and she treated every glass jar she met as a reusable container (to this day the majority of glass jars on store shelves are the same dimensions and threading as a Ball Mason Jar lid), had odd collections of belongings and many of her wide, wide variety of plants seemed to have come from an extensive network of barter and gift economy.
We spent one trip to her house clearing her entire pantry of expired food, because my mom found one can, asked some questions and did not like any of her answers. Some of it was bad. Rob you and leave your body in a ditch bad.
Half the food in their house is expired. They have this lifelong habit of needlessly stocking lots of food as well as opening a food package and then not finishing it for way too long.
Our parents never experienced a famine yet did experience a different culture of food logistics. Very large families (my mother has 8 siblings) so you need lots of food. Food being more seasonally available only, so stock up. Older houses having deep cold cellars to store food, whilst modern houses don't tend to have that, but they don't unlearn the behavior.
Yes, I too have found lots of food expired by years. The most shocking thing is that quite a lot of it looks exactly like it was bought including a salad with an egg on top of it. When you slice a freshly boiled egg and put it at room temperature, it turns dark in an hour. This egg is 8 years old and looks brand new.
That it was another generation before obesity became a huge issue probably says more about how many manual chores the boomers still had to do. You can suck up an extra 500 calories a day pretty easy, pushing things around and hauling them in and out of storage. An extra thousand or two if you're on a farm.
I can't find the paper, but when they say "born earlier or later" are they still looking at rate of driving in the year 2000?
If so, aren't they just comparing ages? People born earlier or later would just be younger or older in the year 2000, which likely impacts driving too.
Oh economics! You keep calling yourself a science, but you need to start acting like one!
They are literally comparing people who are older and younger with the cohort in question, so confounding results with how driving changes at various ages.
The first major sentence under data:
“The decennial census asks questions about commuting mode and time. ‘Journey to Work’ questions appear in the 1980, 1990, and 2000 censuses, and in the American Community Survey (ACS) (Ruggles et al. 2020). We use data from these three censuses, as well as the 2006/10, 2011/15, 2016, and 2017 ACS” [1].
Confirmation bias much [2]?
[1] https://cseveren.github.io/files/FormativeExperiences_Paper_... bottom of page 6
I cannot be sure, but I have this feeling that it is due to my formative years in that kind of environment.
With the recent crash, the stock went down over 50% and it turns out that my strategy yielded me an average loss of 22% from peak.
I feel like it is more optimal to have those scars to be cautious earlier than later. That being said, there is also a truth in taking more risks earlier in life.
There is a balance to be achieved.
https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=e...
Not sure how that change would amount to NEARLY doubling...
I do tend to be hoardy and my clever technique has been to just buy more houses, so not a great role model in that regard.
but the way our society is built we need people to consume to keep the economy afloat
It is possible though.
If we accept that events in life can scar or even just affect you for life (as this article claims) then why stop there? These people have children. Do you think that habits that form out of trauma, housing insecurity, food insecurity or were in fear of their lives don't subconciously impact their children?
We don't even have to imagine that. We have physical evidence that the conditions a woman faces can impact her grandchildren [1]. Remember that a cis-woman is born all the ova she'll have so pregnancy conditions can affect grandchildren.
But even if you ignore the physical, you'll find cultural and psychological effects on children from people who, say, fled a war zone or survived the Holocaust or whatever.
If you accept all that you've then accepted that generational trauma is real (which it is).
So what do you think that slavery did to people long after chattel slavery (officially) ended?
[1]: https://www.science.org/content/article/moms-environment-dur...
Even if you limited it to some way to only US blacks who could prove lineage to an actual enslaved individual, suffering is difficult, if not impossible, to quantify. So... why action on this topic is politically impossible. I think color-blind welfare policies based on economic resources would be much more feasible, but... good luck raising taxes to increase the size of the welfare state.