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Comment by chromacity | Hacker News Reader

Most people in the US are pulled into living on credit straight out of school. You get a student loan, then a car loan, then a credit card, then a mortgage. You finance vacations, appliances, kitchen remodels, smartphones - mostly to keep up with friends and coworkers who finance their lifestyles too. A lot of people are in non-stop debt from the age of 18 to 55, if not longer. By most estimates, only about 10-20% of US households are debt-free.

Spending and getting into debt are useful tools. But I don't have any friends in tech who need to be told "hey dude, you should be spending more". I have quite a few friends who would be better off spending less.

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For sure it's more common for people not to save enough. But for people who are frugal and save diligently for most of their lives, there often comes a point where they cross a threshold where they have met all of their financial goals, and the "problem" is no longer how save money but to enjoy spending it. And this can be a real challenge for people who have built up deeply ingrained saving habits.

My mother, for example, refuses to replace her iPhone SE with something with a larger screen despite 1) having failing vision and difficulty reading the screen, 2) using her iPhone every day, 3) easily being able to afford it. The idea of spending $1,000 on a phone is just something she is unable to bring herself to do, even though I think it would help alleviate a real source of frustration in her life.

My father, when he started shopping for his most recent car (and probably his final car), set out with the intent to buy a luxury car. But again, despite being able to easily afford one, all he was able to bring himself to buy was a well-equipped Toyota. Don't get me wrong - it's a great car and has served him incredibly well. But it makes me a little sad that he wasn't able to bring himself to finally treat himself to a luxury car after a lifetime of hard work and saving. They did a lot of long road trips together in that car in retirement, and I think they would have enjoyed something a bit more luxurious (though on the other hand, the reliability of the Toyota is not to be discounted).

I think what you're attributing to frugality might be a more a matter of age? Many older folks are just wary of change.

I'm not that old, but every time I upgrade my PC or phone, some of my workflows break and I need to pointlessly re-learn things I'd rather not re-learn. UI buttons get moved around, icons change, some settings are removed and others are added... this was exciting the first ten or twenty times, but it's just tiring now.

Basically, I'm at this stage in life where my reaction to systemd wasn't "oh wow, this is progress" but "ugh, I need to learn how to start, stop, or modify services again". In another ten years, I'll probably just say "no, I'm not doing this again, just let me use my old computer for as long as possible".

> my reaction to systemd wasn't "oh wow, this is progress" but "ugh, I need to learn how to start, stop, or modify services again"

I must be young at heart while >60 years old; my reaction was "why is everybody whining about it, it's pretty nice, I like it". Same with jj vs git, jj is amazing!

Never heard of JJ, why is it better than git, and how did you learn about it?

Lots of discussions on HN about it recently [1], [2], I heard of it right here. It works on git repositories, so it's very easy to try.

For me, the killer feature is updating some commit deep inside some feature branch, and all child commits and branches get auto-updated, no more faffing with endless rebases. Also conflict handling is so much more pleasant than git's.

[1] https://news.ycombinator.com/item?id=47763759

[2] https://news.ycombinator.com/item?id=45672280

It's definitely varies by person. I'm much more like the GP where relearning how to do basic things I already know how to do is one of the absolute last things I want to spend my time on, but I know plenty of people who are the opposite. Newness and novelty are genuine features for some, and that's totally fine.

The annoying thing is that the latter group is over-represented in tech and a lot of core products like phones force people into that path. Most of the non-tech people I know couldn't care less about the latest iphone/android update,they just want the damn buttons to stay the same so they can do the stuff they were doing yesterday. But the only two phone platforms both change their UX regularly and users just have to go along with it.

It’s net positive when there’s useful new functionality, but phone software has been mostly a wash for a while now.

I am with you on UI updates, just moving things around and re-skinning the UI without useful functionality additions make me mad often. But then I grind my teeth and bear it.

Possibly there’s an element to this. The iPhone SE still has the home button, which may have been a factor when she bought it. And my father was a bit put off by some of the bells and whistles on luxury cars.

I agree your mother should get a new phone with a big screen, but what qualifies as a luxury car? There are Toyotas that cost 6 figures USD.

I think he was considering a Lexus RX. I doubt he even looked at BMW, Mercedes, etc (not really his style).

His Toyota was probably under $40k. This was back when cars were quite a bit less expensive than now. Nice car for sure, but the Lexus probably would have been a bit more refined.

How old is your old man?

Or get a previous gen used iPhone, then she can have both a big screen and feel good about the cheap phone.

My own parents are in their late 90’s. Because they grew up in the wake of the Great Depression, I always assumed their extreme frugality was a function of the economic distress in their formative years. They also properly accounted for the fact that old-age care is very expensive. Parenthetically, most do not seem to anticipate that accelerated burn rate near the EOL. It’s also a phase whose duration is hard to predict.

It's made harder in that every aspect of services for the elderly is oriented at extracting all their wealth before they die.

When I started driving my car had vinyl seats that you had to peel yourself out of on a hot day, a plastic steering wheel that you could barely touch when the sun was out, hand wound windows, fixed seat belts and a handbrake that barely worked.

Even the cheapest car on the market feels luxurious now.

In comparison the difference between a Toyota and a Lexus is marginal.

Expensive cars are mostly about status signalling, we are long past good enough.

>Expensive cars are mostly about status signalling

Uhm, only if you are counting the most basic utility, then you're right.

However if you actually enjoy driving (A->A driving), there is a HGUE difference and it's not just signaling. It's that you probably can't tell the difference, or don't care.

There is no comparison between driving a new Porsche or Bentley vs a new Toyota or even a Lexus.

Can you explain why?

They cannot, because they are wrong. And I say this as a person who has owned no small number of fancy cars (but I got better).

A new base-model Prius is absurdly luxurious compared to a base model car of 1975 or 1985 or even 1995. If you have lived long enough to see this change, then dropping 2x or 3x or 10x the cost of the Prius self-evidently puts you wildly beyond the point of diminishing returns.

The Prius is going to have excellent climate control, and a phenomenal stereo. It's going to have adaptive cruise control, and will warn you when you drift out of your lane, or if you're about to run into an obstacle.

Outside of motorsports-sorts of things, what you get out of more expensive vehicles is of limited utility. Mostly, it's just showing off.

Now, if you want a track weapon, then yeah, you DO get more by spending. But for a regular person who wants to get from point A to point B comfortably and safely? The Prius is fantastic, and it's hard to justify spending more unless you're willing to admit that it's a keeping-up-with-the-Joneses kind of thing.

Even in motorsports, presumably it’s still mostly showing off? Unless you are a pro, you’d still lose any seriously comepetitivr race and have plenty to learn and enjoy driving a not-quite-top of the line sports car?

I don’t know motorsports, but in all the sports I do know it’s that way. Tennis, cycling… there are serious diminishing returns in all of those and most kit spending isn’t justified by performance as much as status or stamp collecting.

So much of our lives are taken up by worrying about tiny performance differences that really don’t matter. It makes me sad for the waste of life sometimes.

That's definitely true, and I have a whole other rant how my cycling pals and I love to poke fun at dudes who show up to the group ride on a brand new $10,000 bike and get dropped before the midpoint.

BUT! It's easier than you think to get a point in participatory motorsports where the difference between, say, a Cayman and a Miata is something you can actively use.

Curious what would you say is the sweet spot to pay for a bicycle before rapid diminishing returns?

I still feel like if you go out for a long ride on a Huffy from Walmart you might hurt yourself.

Doesn’t have to be long ride.

One time I bought a bike from Walmart and didn’t make it the 5km home before I lost a crank arm.

I only know road bikes.

The groupset would drive it for me. If I was buying a new bike, and I knew I wanted to be a rider, I wouldn't mess about with anything less than Shimano 105. At Specialized, the lowest end bike with the 105 groupset on it is $2100. That's the Allez Comp, which has an aluminum frame and wheels.

The next step up the ladder would be their "endurance" frame, which is carbon. It's called the Roubaix, and equipped with 105 it's $2800.

Either of those would be a good first "serious" bike.

If the question is more about diminishing returns, I'd offer my own bike, which is a Giant TCR Advanced. It's a couple years old. I have about $5500 in it, all in, but that includes the middle-grade SRAM electronic shifting group, carbon wheels, and a power meter. The meter is skippable if you're not doing serious training, but I did and do use power data for training. Subtract $800 if you don't want that.

I honestly think spending more is just showing off. If that's your jam, knock yourself out, but it's probably not making a big difference UNLESS you need a custom frame to be comfortable.

In the Uk it’s about £3-4k I think. Beyond that the differences in function are very small and would make no differences at all in an amateur road race. For time trials it’s a bit different and there clothing does make a measurable difference, although still v small relative to training harder!

>That's definitely true, and I have a whole other rant how my cycling pals and I love to poke fun at dudes who show up to the group ride on a brand new $10,000 bike and get dropped before the midpoint.

This has nothing to do with higher end cars or bikes being "signaling" this is just an anecdote between your skill and the next level.

You could say the same thing about a tour de france winner with any bike vs you and your pals.

If you are competitive, you get to a point where the differences do matter.

>This has nothing to do with higher end cars or bikes being "signaling" this is just an anecdote between your skill and the next level.

No, that's precisely what it's about.

>You could say the same thing about a tour de france winner with any bike vs you and your pals

In cycling, a TdF rider's bike isn't significantly more expensive or fancy than the highest-end bike available from any given maker. A novice rider rolling up on something one or two ticks away from the absolute top of the line is being a silly person. Novices in any discipline who opt for the high end of equipment are making foolish choices, and are frequently teased about it.

>If you are competitive, you get to a point where the differences do matter.

My guess is that you don't know very much about cycling. Pogi would be as very nearly as fast on my $5000 road bike as he is on his TdF bike. His comp bike is a little bit lighter, and it has components that are one tick higher up and thus lighter, but the differences at this level are tiny.

Nobody who isn't being paid to ride needs to go higher than $5k on a road bike. Going higher is just showing off, which is of course a totally reasonable thing to do, but don't pretend it makes a real difference.

In tennis I’m sure the real way to turn money into competitive gains is personalized coaching.

Not sure about cycling. But a general physical trainer wouldn’t hurt.

>Even in motorsports, presumably it’s still mostly showing off?

What, you mean like F1 where the rules of the engineering / tech of the car and shaving a second can mean 1st place vs not placing?

The context was a comment about a “track weapon” and normies buying cars.

>Even in motorsports, presumably it’s still mostly showing off? Unless you are a pro, you’d still lose any seriously comepetitivr race and have plenty to learn and enjoy driving a not-quite-top of the line sports car?

I was at a track day once, and you'd see guys rolling up with very expensive cars, and they were often clocked as noobs before anyone even spoke to them. The guy rolling up with a beat up 1st gen miata pulling a trailer with two sets of spare tires? Yeah, that guy got respect. Dude was scary quick in the turns.

Absolutely true that few folks who show up at track days or autocross sessions in high-end cars know what they're doing.

But the ones that do? Ho-leee shit.

How can I be wrong if this is all subjective in the first place?

I've owned a number of cars, and this isn't just about luxury. It's about the quality of the drive.

If you call HVAC and a Stereo luxury, then you haven't updated your definiteion relative to "1976 or 1985".

Again, all purely subjective. But there is a huge idfference between a Prius and a drivers car.

You appear to have some reading comprehension issues. Perhaps revisit my prior reply.

What specific benefits does a "driver's car" have over a "regular" car, praytell?

I'm not the guy you're asking, and you didn't need to be rude, but the difference is a fun driving experience. It's perfectly OK not to value that, but it's a valid priority.

I'm speaking here as an NA Miata owner. My car's waaay behind your Prius on the luxury scale: it's loud on the freeway, and rattles and bumps the whole time; there's no cruise control; the roof seals leak a bit if you don't close the windows / doors in just the right way; the AC's on the fritz at the moment, and I need to sand off and re-spray some peeling clear coat that makes it look dumb. I've put more time (and actual $$) into the car than its paper value should justify, but goddamn does dropping the roof and pulling out of the driveway put a silly smile onto my face every single time, and heel-and-toeing a downshift on a twisty road to hit the next corner just right never stops being a thrill.

"Upgrading" to a more expensive car would buy me the luxury and the fun together - together with a lot of engine power I don't need outside the track, and would frankly be scared of day-to-day - and (to the point of this thread) I'm kinda frugal, so I don't feel any need to do that. But "luxury" (even "comfort", sometimes) and "fun" are orthogonal values, in the automotive world, and you asked, so that's the answer.

>but the difference is a fun driving experience

I'm not convinced there's a materially more-fun driving experience to be had by spending gobs more money.

If you optimize for that instead of other aspects, then Prius money would get you a Miata with most of the same features and a sportier aspects. And you're still a long way from a six-figure car. That was the gist of my earliest point.

OK, thanks. I agree with you, then.

I think the gist of your point got missed by both me and the GP. It read like you didn't think / understand fun was any kind of a value at all. I mean, you did ask:

> What specific benefits does a "driver's car" have over a "regular" car, praytell?

You're dead right on about the Miata vs Prius comparison, though. If I wasn't, for all of its manifest inconveniences, unreasonably in love with my (at this point classic status) little car I'd "upgrade" to a newer Miata.

That said:

> a materially more-fun driving experience [isn't] to be had by spending gobs more money

Kinda isn't the case? I've driven a couple of $100k+ cars, and they were a fricking blast. Effortless power is intoxicating; you feel momentarily like a super-hero when you put the throttle down. I can only imagine that a proper racecar is another leap beyond that - albeit with a massive decrease in comfort.

The catch, however, is that you can't safely (or legally) drive high-performance cars anywhere near their limit in public, only on the track. So, 99% of the time 90% of the money you've spent is wasted. My Miata is 90% of the fun 100% of the time, at (mostly!) legal speeds, and if I want to actually push its / my limits I can do that on a cone course in an empty parking lot, no track required.

(Also, little kids smile and wave at me all the time, because it's cute, and hard-core gear-heads start conversations with me about it at petrol stations. That's all fun, too.)

I think I'm getting a lot more enjoyment per dollar or per mile than the $100k+ fools do.

Unless, of course, they're doing it for status signaling, which they mostly are. That's fair, I guess; I don't think my Miata ever got me laid, which (I'm told) their cars do. The rest of us just wish they'd be damn honest about it, that's all.

Fair.

The thing is all 100k cars are well past the point of diminishing returns.

I use to have a 993. It was a lot of fun. I also had a 2016 GTI. It was at least 85% of the fun for 20% the cost. It didn’t turn heads as much, though, which is what most people buying high end cars are after.

These days I get my zoomies on two wheels. I have a Triumph, so I’m very familiar with the gas station chat-ups. ;)

Totally agree, and you have superb taste in vehicles. :-)

I'm replying to the comment that expensive cars are mostly signaling. And it's false.

For people who don't like cars (/r/f*kcars is strong on HN) I understand their viewpoint. For people who LOVE cars, we see the details and appreciate the engineering, craftsmanship and art.

Will a Prius get you a->b the same as a "signaling car", yes. But for the hobbiest, it's the journey not the destination.

If you compare a Porsche SUV to a Lexus SUV, there's almost no difference.

If you compare a Porsche Boxster to a Toyota, the Porsche is much more of a driver's car and if you're the right kind of driver, there's simply no comparison. (We'll ignore the FT86 / 86 for the moment ;)!)

If you buy a Bentley... you probably pay someone else to drive it for you.

Something to remember in all of this is hedonic adaptation. Buying a Porsche will feel in the moment different from buying a Toyota. But a few months later, you will be driving "your car" and much of the time, you'll be thinking about driving, traffic, signs, speeds, lights, pedestrians, bikers, the song you're playing, your next turn, a dozen other things. For the most part, you won't be thinking about how much "better" your car is in comparison to the alternative. You'll be used to it. You'll have adapted.

Different cars are certainly different for a personality who is drawn to the merits of automobiles. My favorite car was a $20K used Mazda 3 hatchback. I liked it much better than some much more luxurious cars (including the Polestar 2 Performance Plus I have now.) But that wasn't because of luxuries (the Mazda had luxury and heated seats and climate control and swivel headlights and adaptive cruise control and... and...) but because I enjoyed pressing the clutch, pulling the gear lever into second, releasing the clutch, putting my foot down, and steering through a corner. (The Polestar has some merits as well, but they are very different merits.) The Mazda 3 had a whopping ~186 HP... but it was fun. (Don't get me started on my 2007 Honda Fit... oh the memories!)

I've owned or driven cars from almost every auto-manufacturer found in the US/EU. I can clearly say (subjectively) there is a HUGE difference between a Porsche Cayenne GTS, Turbo S or Turbo GT than Any F-Sport Lexus. Sorry, not the same league.

As far as the adaptation, maybe. But driving a Toyota never brought a smile on a twisty, ever. But it was reliable and always started :) The Porsche, every time, it never gets old [feeling] after many years.

When you actually get to drive it as it can be.

Maybe you live somewhere that's possible, or not too far from such a somewhere. Rare to find such places within 50 miles of a big city though, unless you're in Germany and have the autobahn.

I suspect most premium cars get to spend a tiny fraction of their mileage doing the kind of driving where they'd measurably beat a mid-market model.

Bah. I've driven luxury bmws, porches, and corvettes. You want to know what my daily driver is? A miata. Those other cars are faster, yes, but nothing else makes driving quite the occasion that a miata does. You don't have to go expensive to buy something you actually enjoy driving.

Miata is the exception, it is fun to drive... and it was engineered to be that way.

Yep, I've always said it's much more fun to drive a 'slow car fast' than a fast car slow. I drove a friends suped up vette and I could barely breathe on the gas pedal without breaking laws. Meanwhile I can rip my miata to redline in 3rd gear and not raise too much suspicion getting on the interstate.

I'm curious what the breakdown is. I definitely know people who buy nice cars just for the status aspect. My neighbor bought a Porsche recently and I was talking to them about which fun roads they've driven in around here (I bike and ride motorcycles so I've been on a lot of fun backroads) and they said they've only tried one road once.

I ended up asking them what they do with their Porsche and apparently it's mostly going to car meetups and saying that they have a Porsche and feeling good about owning a Porsche.

So yeah as a former Miata owner I know that expensive cars tend to just be more fun to drive but if you live in an HCOL area with people who are highly leveraged, you'll find a lot of people who buy nice cars only for status signaling. I suspect in HCOL areas more do it for status than the actual love of driving.

(FWIW I find this in a lot of hobbies. I can ride a loaner bike faster than a lot of riders around here decked out in fancy kit, clips, and the best groupsets. A lot of people in HCOL areas engage in hobbies as an excuse to nurse a shopping and status addiction.)

Which goes back to the root comment that a lot of tech people highly leverage their life because it enables them to have a lifestyle and status that they think they need or deserve.

I'm perhaps pathologically frugal myself. I've found for myself the best compromise is to force yourself to pick at least one feature other than cost. We've got a 17 year old Toyota Yaris that I tell myself is for fuel efficiency, and an old Ford Ranger because I wanted at least one of our vehicles to be able to move sheet goods. Technically I could probably walk onto most any lot and pay cash for whatever I wanted, but I know there's zero chance I'll ever do that.

With cars if you wanted to bias yourself towards newer cars you could prioritize safety features alongside cost.

A Yaris and a Ranger (who doesn’t love a Ranger!) are going to serve you well, but they’re not going to have the active and passive safety features of a more modern car. Put next to cost it makes it a bit harder to perform maladaptive frugality.

But what is 'luxury'? You may have in mind a Rolls Royce. But maybe he doesn't want that.

If they've been frugal their entire life, they aren't as far along the hedonistic treadmill, a new reliable car is a luxury.

If you're used to darning socks, buying new socks is a luxury.

If I buy a PS2 today, why is that not a splurge, if I didn't have one previously? Yes it doesn't have the best graphics but it's a step up from my PS1. Getting the latest and greatest just because, is keeping up with the Joneses. And that's a path to spending money, not happiness.

The knowledge that you have enough in your bank account if things go to pot, itself brings happiness

> The idea of spending $1,000 on a phone is just something she is unable to bring herself to do

She wouldn’t need to spend that much. You can get a perfectly fine refurbished iPhone 16e for $400.

Sounds like his money was better spent on the trips than spending more on a car that wouldn’t make the trips any better.

Are you sure they were deciding only or even primarily based on cost? I often find myself choosing cheaper options over more expensive ones, because I find them easier or more enjoyable to use. I think with expensive/luxury products, there tends to be more "curation" and opinionation, which can work well if your preferences line up but is a detriment if not. I also think a lot of times more expensive products are just "luxury-hacking," having focused on "building a brand" to the point where they are able to charge more for worse products. Example: Beats headphones adding weights inside just so that they "feel more premium" https://www.news.com.au/technology/home-entertainment/audio/...

  >  The idea of spending $1,000 on a phone is just something she is unable to bring herself to do

Your parents are smart. 1000 dollars for a phone is absolute nonsense. A luxury car is something you should be sure you will thoroughly enjoy, because they are a good way to set money on fire. If you do want one, buy it second hand, for it will cost hundreds of dollars per km for the first kilometers.

(EDITED)

Otoh, have a few friends in tech (and high finance) who need to be told "dude, we'd be better off if you worked less hard"

(Sorry.. I grew up deprived of data teaching me that "Schlep quickly compounds into Interesting Times")

Heavy debt is a part of the US culture. You can probably imagine the responses folks would have when they found out I was 40, a tenured professor with a family, and didn't own a house. Nobody had a heart attack but I'm sure some were close. I was just violating cultural norms too much by not going into debt to buy a house as anyone in my position was supposed to do. Then they'd find out I drove an old vehicle and didn't take expensive vacations...sometimes you have to go with the math rather than cultural norms.

Home debt has traditionally been seen as "good debt" for a bunch of reasons, but the big ones were that

(a) Home loans meant you were accumulating equity in an appreciating asset; and

(b) Mortgage interest was enough to allow most people to take a larger-than-standard deduction on income taxes; and

(c) The relationship between home prices and the equivalent rental market meant you could probably have a nicer place for a lower monthly payment in many markets.

These were generally slam-dunk truths for decades, but in the last 20 or so years they've stopped being true.

Home ownership isn't the guaranteed rocket-ship to wealth it once was. Appreciation is spotty, and varies wildly by market. My own view of this is that a lot of the gains are now baked in, and we're unlikely to see the kind of rise in value (in real dollars) that characterized, say, 1990 to 2015. Last year I sold a townhouse in Houston that I'd owned since 2000; I made money, but not the kind of upside that you wanna write home about.

Second, the tax law changes in Trump's first term dramatically raised the standard deduction -- enough so that we stopped itemizing. Part of this was that we were deep into the mortgage, so we were paying less in interest every year, but it's still a factor.

Third, rents may be high now, but home prices and interest rates are higher. When I bought in 2000, I went from renting a place for $1200 a month to OWNING a place at a bit under $2k (including taxes and insurance). This was with 20% down.

In my old neighborhood now, a nice rental is gonna be $2500-$3000, and housing is just unattainable. First, 20% now means probably $90K. Second, servicing the loan is going to be more than the rent, plus you've got another $450 a month in property taxes AND probably another $450 in insurance. And you've got to accumulate the $90K somehow while paying $2500 in rent. It's crazy. I have no idea how a young person who isn't making top-5% income can afford to buy without family help.

> Last year I sold a townhouse in Houston that I'd owned since 2000; I made money, but not the kind of upside that you wanna write home about

Sure but you made money. If you had rented you would have lost that money. Renting only makes sense if the opportunity cost is higher, e.g. if you think the time value of the money that would be put into the down payment is higher in the markets than it would have been on a home. The other thing is mortgages are risk uncorrelated with major equities, usually at least. If there's a major recession your equities may be underwater for a few years. Your fixed rate mortgage will stay the same.

I'm saying it made sense for ME in 2000. I'm saying it's less obviously a good move for a 30 year old in 2026.

I have a strong suspicion that housing is due for a correction. Appreciation requires demand, and housing is now so expensive that Gen Z can't get on the ladder. That plus the looming Boomer die-off seems to point to a reversal of some housing gains.

I think housing in the US is just such a complicated space (Fannie/Freddie backstopped loans, ridiculous zoning and building requirements (FAR, setbacks, etc), environmental laws, varying property tax regimes, prevailing wage requirements for building in places, etc that it's just really difficult to understand. It's like a ridiculously complicated layered system of public and private regs and incentives that lead to very inscrutable results.

For me, owning your own home is partly about (mostly) paying it off before retirement, that way most people won't need a large retirement income to pay the rent. Also in my country, aged care asks for a large refundable deposit, for example 600k, if it comes to that.

It doesn't pay for the increased medical expenses near the end. But it can pay them off if sold after death.

Yeah, we're 56 this year and have no mortgage anymore. That's nice.

In california I've noticed lots of other things. prop 13 might make apartments pay less taxes than comparable condos, and condos also have HOA fees that can easily be $2k. I've even seen HOA fees on single family homes.

HOA fees on freestanding homes are VERY common, but they're generally not as high as places with shared walls.

It's only in condos and whatnot that they get crazy, though. My sister has $2500 in monthly fees associated with her fully owned condo in Philly, for example.

> By most estimates, only about 10-20% of US households are debt-free.

This needs to be qualified with the fact that it doesn't make sense for many people to be debt-free if they are financially literate. I know many people, myself included, who carry debt they could easily pay off because it would be irrational to do so. Being debt-free would actually make them poorer.

This often holds true even when ignoring obvious cases like debt interest well below the Treasury rates.

*Cries in paid off 3.25% mortgage...

Minmaxxing your finances is maladaptive frugality. You have something even better than 1% extra interest in your account: you have no mortgage. You can do whatever the fuck you want to your house and your bank doesn't stick its nose in your business to ensure the value of the house stays up. You can do whatever the fuck you want with your career and you don't have to worry the bank will come and take your house back.

When does an existing mortgage lender get involved in a house remodel? (assuming you’re not trying to borrow more money for it)

I’ve owned houses for 30 years and no bank has gotten review of contemplated projects or anything other than appraisals during origination of a mortgage or refinance (which are entirely optional for me, of course).

being debt assumes appreciation on the asset you are holding under that debt which has been artificially inflated by the governments for yeeeeears now. you would never hold a debt on the house (even at 3.5%) if the house stayed the same price the day of the purchase and date of the sale. too many people are saying “some debt is good/great” which is only marginally true if you make certain assumptions which is exactly what they are - assumptions.

> being debt assumes appreciation on the asset

No it doesn't. The math works out the same regardless of changes in asset value. Paying cash has significant opportunity and liquidity costs. These can often exceed the cost of debt.

I had mortage on a condo for $460k. total money paid to pay it off via debt, little over $1m. I sell 30 years later for $460k I just lost $550k :) (I didn’t, paid it off in 5 years saving myself 100’s of thousands …)

ask yourself why “we” think that some debt (e.g. real estate) is great) while others (e.g. vehicle) is bad? it just might ge that one is looked at as appreciating asset while the other not so much.

comments like yours always remind of the stripper scene from the movie “big short”

having debt also makes you a forever slave (true capitalism at work). God forbid you lose your source(s) of income and don’t have FU money or significant stash, now you fucked. with no debt and roof over your head life is infinitely better even during trying times..

You aren't making a consistent or coherent argument. The math of e.g. interest rate arbitrage doesn't care whether you are buying a house or a car, you will profit the same regardless.

In many cases the risk is literally zero, the scenarios you are imagining where it has bad consequences don't exist as a real thing that can happen. If you have enough money to pay cash then you also have enough money to pay off the equivalent debt at any time of your convenience.

Many people believe many things that are not based in physical reality. Many popular beliefs about debt are no different and debt has no intrinsic moral significance.

> In many cases the risk is literally zero...

I presume this is hyperbole and that what you mean is almost or very near zero.

Let's say that each month I have an extra $1000. Should I use that money to pay down a 4% mortgage, or should I invest it in an index fund that is all but guaranteed to earn more than that?

> that is all but guaranteed to earn more than that?

say SP500 nominal avg is around 10% - no brainer, yes? but that is an avg of many 30-year windows. some 30-year windows might not be that kind to you. market crash in say first 5-6 years will hurt you a lot

so there is just no certainty here except we think (just like we expect appreciation on the house) we’ll end up on the “right” side of this.

and of course not to mention the most obvious, roughly 99.56% of people will not be investing this money to get more than 4%…

Even if the house prices stayed the same, it would make sense to keep the low interest debt and invest in other assets that have higher yield, like shares.

this again assumes a lot… it assumes that you can make up the money you are donating to lenders with some ficticious higher yield investments. I’d ballpark less that 5% of people would make out on the positive side of this.

We are debt-free, but it's because I paid off a mortgage the hard way, and then sold that house to buy another.

Depends on what "debt-free" means here: "not carrying any debt" vs "positive net worth" are different situations.

This really struck me when I bought a new car and my mother asked me how much it cost. I told her what we'd paid, and she said, but how much is it per month? The idea of just buying a car didn't compute.

At least I finally got her off the lease treadmill. Toyota helped a lot by not making anything she particularly liked. When I suggested she buy out her lease instead of getting a new one, it was a revelation.

Debt is also a way of normalizing, essentially, wage theft. You're encouraged to use credit to bridge gaps when what you're paid doesn't cover your necessities, let alone other expenses that you're expected to take on. When you can't pay back the debt you took out to live what is considered a normal or even frugal lifestyle, the justice system is used as a cudgel against you, often in the form of professional debt collectors and their attorneys suing you in small claims court (a venue which was established for laymen), where they abuse the lax rules to extricate full payment on a debt they bought for pennies on the dollar.

Somewhat related, here is a video from a guy trying to avoid just this sort of scenario by refusing to put his company's business expenses on his personal credit; follow-ups show the price he's paying.

https://www.youtube.com/watch?v=EFZIxJyKgE8

If society expects you to consume, you should be paid enough to support it. A system that leverages greater and greater amounts of its future to pay for the present eventually reaches a point where it is statistically unlikely that the debt will ever be paid back. That's when all hell breaks loose.

I have zero consumer debt and pay off any credit card at the end of the month.

But I don’t mind work expenses on my personal card? I get reward benefits for a sizable chunk of expenses that I’m directly reimbursed for?

n=1

That's a personal choice. You alone should be able to decide if that's worth the complications it introduces to your taxes and your relationship with your employer. However, the cleanest and most dignified route is to pay for expenses incurred in the course of business. And employees should have the right to refuse to put up their own money for such expenses, without consequence.

Having a credit card is like having a video game passive that makes everything permanently 2% cheaper. Everything should be put on a credit card for that discount as well as fraud protection provided you are disciplined enough to never ever ever ever ever ever carry a balance.

This is US-specific advice; EU capped merchant fees, and therefore you don't get a free 2% reward at their expense.

The fraud protection and insurance can be useful though.

You still get a 30 day interest free loan. Assuming you pay the full balance.

You get roughly the same level of fraud protection on both at this point. This is both due to converging legal protections in many places and due to market developments (both Visa and Mastercard require issuers to offer "zero liability" on debit cards just like on credit cards).

One advantage of credit cards is that you don't have to wait until the dispute has been at least accepted to get your money back, though.

I don't get the down voters, it is, or should be a tool.

Although we are talking about it being an issue. Which you have already covered.

Problem is, most people don't spend that much time thinking about it. So I suspect "don't get a credit card" or "only use it in emergencies" are generally good advice. Although perhaps we should just be better at teaching house hold type finance

The "provided" part is the reason I'm staying away from credit cards.

3% at restaurants is offset by 3% fee to use cards at restaurants. this benefit is evaporating.

not an argument for or against cards, but they are becoming closer to neutral than a discount.

Of course somebody is paying your 3%; there's no free lunch. To a large extent it's yourself (via interchange paid as part of the merchant's fees); part of it is however also other people paying cash and often not receiving a discount for doing so.

Regardless of all that, at the individual level, not using a credit card is still irrational. Not quite the tragedy of the commons, but it's pretty close.

The only way out is probably outright regulating the entire thing away, like the EU has successfully done; the market seems too inefficient and consumer behavior too sticky for card-specific surcharges (i.e. "you pay for your own points") alone to solve this.

It’s just a 3% surcharge at restaurants now. Maybe you haven’t experienced it in your area but most non chain restaurants have it by me.

Unfortunately it does so at a >2% average cost to everybody. At the individual level it makes total sense, though.

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