[HN Gopher] FICO to incorporate buy-now-pay-later loans into cre...
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FICO to incorporate buy-now-pay-later loans into credit scores
Author : cebert
Score : 236 points
Date : 2025-06-24 00:03 UTC (22 hours ago)
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(TXT) w3m dump (www.axios.com)
| firesteelrain wrote:
| Credit scores will tank further
| ZYbCRq22HbJ2y7 wrote:
| Why?
|
| "The industry has long believed that consumers using BNPL
| responsibly should result in positive credit scores, as the
| majority of users are paying back in full and on time."
| steveBK123 wrote:
| Because "most people pay back fully on time" is not the
| metric.
|
| The real question is what are the delinquency and default
| rates for BNPL as compared to other forms of consumer credit.
|
| Given the previous understanding that it didn't hit your
| FICO, the retailer subsidy as a sales lead, and the types of
| products people were financing.. one might assume worse..
| firesteelrain wrote:
| Because it's shadow debt and it will show the person as
| overleveraged with a bunch of Affirm loans
| UltraSane wrote:
| If customers make every payment their score should improve.
| dh2022 wrote:
| What is the benefit for a consumer to use this type of loan
| and then pay it back on time versus using a credit card and
| then paying the card back on time?
|
| To me this seems like a new product that would target a
| different consumer than the one that makes payments on time.
| But I would like if someone challenges this view. Thanks!
| loeg wrote:
| > What is the benefit for a consumer to use this type of
| loan and then pay it back on time versus using a credit
| card and then paying the card back on time?
|
| Slightly longer repayment time frames. (Multiple months
| instead of just one.)
| dh2022 wrote:
| This sounds like a consumer that does not pay the balance
| each month...
| wildzzz wrote:
| CC gives me 30 days to pay it back interest free. BNPL
| gives me 2, 3, 6, or more months with very little or even
| no interest. If I know I'm not going to be able to pay it
| off in a month, I'd rather do a BNPL loan since it's so
| cheap. Additionally, you can have awful or no credit and
| still be approved for BNPL. It may be beneficial to have
| some repaid loans on your credit if you ruined your
| credit earlier in life like this credit builder CCs that
| have a super low limit.
| Ancapistani wrote:
| I'll add that I've found that the more you use Affirm at
| least, the better my options get.
|
| I started by always choosing the shortest "plan", which
| was 0% and no fees. After I'd paid off a few of those, I
| started getting offered plans of up to a year with no
| interest and very minimal fees.
|
| Now, while I don't use Affirm for luxury/unnecessary
| purchases, it offers better rates than any credit card I
| have, and better than a bank loan in many cases.
|
| I have three Affirm loans right now, for a total of about
| $8k. All three of those are business expenses, and all
| three have increased profit in our business significantly
| more than they cost us.
| loeg wrote:
| I should have specified those durations are both
| interest-free. If you don't pay your credit card off
| after one month, it accrues interest at fairly high
| rates.
| firesteelrain wrote:
| It's like layaway. Also you didn't really need credit
| before to get them.
| dh2022 wrote:
| I guess it would make sense for larger purchases that
| could not be paid within a month..,,
| UltraSane wrote:
| Lower interest because the seller pays the interest
| dh2022 wrote:
| But a lower interest expense is not relevant to a
| consumer that pays the balance on time...
| UltraSane wrote:
| If you put the cost on a credit card and paid it off over
| the same number of months you would pay a lot of
| interest.
| Tadpole9181 wrote:
| A CC gives 1% cash back. Your bank's savings give 4%
| interest. BNPL doesn't earn the cash back, but over a long
| term you make more in interest for some purchases.
|
| For small puchases with short repayment periods? Not a
| clue.
| Ancapistani wrote:
| Structuring.
|
| I've used them several times, mostly because they are
| relatively cheap forms of credit for short durations (<12
| months). I have plenty of credit available via traditional
| credit cards, but BNPL --- to this point --- haven't
| reported usage rates to the bureaus.
|
| Last summer our A/C went out. It ended up being about $4.5k
| to replace, and it was a heat emergency at the time. So I
| put the whole thing on Affirm for three months, at 0%
| interest. I paid about $50 in fees. That got us through the
| immediate emergency and gave me time to shop around for a
| better way to fund it.
|
| I ended up taking out an auto loan with my credit union.
| The rates were much cheaper than a personal/unsecured loan,
| and I have three vehicles in the driveway without liens.
| The loan was for four years, but I've already paid it off.
|
| In a tighter situation, BNPL not impacting your credit
| utilization rates is a _big_ benefit.
| firesteelrain wrote:
| Not if it shows a bunch of Affirm loans. You could look
| overleveraged for say getting a mortgage
| charcircuit wrote:
| Are people taking out a large number of large Affirm loans
| though?
| bitmasher9 wrote:
| 1. Maybe they are over leveraged, let a bank to decide with
| all the data.
|
| 2. BNPL often has short durations (3 months) so it's not a
| long term problem for people with BNPL if they pay it all
| back.
| firesteelrain wrote:
| Affirm can go up to 60 months on larger purchases
|
| A bunch of tiny loans does not loom good
| astura wrote:
| Urban myth.
|
| I successfully applied for a mortgage with ~30 credit
| cards open. Nobody batted an eye, or even commented on
| it. They looked at balances and credit score. Balances
| were almost all zero and credit score was excellent.
|
| A hundred small loans that were all paid off on time over
| the last decade is extremely helpful getting you a
| mortgage, it doesn't hurt.
| firesteelrain wrote:
| > Balances were almost all zero and credit score was
| excellent
|
| Not the same.
|
| > hundred small loans that were all paid off on time over
| the last decade is extremely helpful getting you a
| mortgage
|
| Again, not the same.
|
| Affirm can be worse than credit cards because credit
| cards are a single line of credit of X size. The people
| using it don't realize that a bunch of tiny lines of
| credit add up to a larger one ultimately and they can
| find themselves overleveraged.
| FireBeyond wrote:
| I wonder how it will be implemented. Because for me,
| Affirm shows my "purchasing power" almost like a credit
| card, even if it's currently utilized across multiple
| purchases. So I could see a difference between "making
| payments on an open balance of $X on an account with $Y
| purchasing power", even if those payments are subdivided
| into the original purchases, versus, "You have 7 open
| Affirm loans".
| Ancapistani wrote:
| Mortgages have always required you to disclose any BNPL
| plans to my knowledge.
| bediger4000 wrote:
| We don't really know that. The algorithm is secret.
| burnt-resistor wrote:
| That's an incomplete answer because it doesn't take total
| debt burden and history of payments into account over time.
| Score is fluid and should decrease while debt burden is high
| or increases. At the end though, score should improve
| slightly because they are slightly more trustworthy having
| repaid what was promised.
| jppope wrote:
| thats interesting. I was always wondering what the hustle was,
| guess that was it- it was outside of the credit system
| NewJazz wrote:
| It already shows up when mortgage lenders do their checks,
| AIUI.
| hopelite wrote:
| The irony is that it does not even really matter anymore at
| this stage, especially with mortgages. So you get a few
| points taken off because you have 800 vs 600 score, but it
| won't really make a difference when both are on the same out
| of control roller coasters where house prices have increased
| by 100% in 7 years.
| nradov wrote:
| US home prices haven't increased by 100% in 7 years. On a
| national basis, the Case-Shiller index has only increased
| by 65% (nominal dollars, not inflation adjusted).
|
| https://fred.stlouisfed.org/series/CSUSHPINSA
|
| In the short term, the difference in mortgage interest
| rates between prime versus subprime loans can have a major
| impact on borrower cashflow and the type of property they
| can afford.
| loeg wrote:
| The hustle is mostly just getting merchants to eat bigger
| discounts in hope of selling more volume. Instead of eating ~3%
| interchange on a credit card, merchants eat ~6% subsidizing
| short-term BNPL loans.
| banannaise wrote:
| Well, they're also doing the old "burn through VC cash in the
| name of growth" thing.
| ecshafer wrote:
| This would probably only affect the people with the worst credit
| scores I imagine. I just don't see a ton of 800+ credit score
| people deciding to spend 5 payments of $20 for a pair of $80
| shoes.
| loeg wrote:
| Plenty of people with good credit use BNPL loans; they are
| offered on much higher cost items than $80.
| quickthrowman wrote:
| 1.5% back on the purchase via CC rewards beats earning 1%
| over 3 months (4% yield) in a HYSA every time, anyone using
| BNPL is using them suboptimally.
|
| For a 3 month BNPL loan to be worth it, HYSA rates must be
| over 6%, and actually a bit more due to the time value of
| money; you get CC reward cash after the statement period but
| it takes 90 days (and up to ~120 days) to get three monthly
| interest payments.
| ZYbCRq22HbJ2y7 wrote:
| That would depend on the fees and interest, no?
| kurthr wrote:
| I have so much extra money just laying around that I take
| unnecessary risks and add complexity to my financial life for
| kicks and giggles.
| sodality2 wrote:
| I always thought it was interesting that the BNPL loans'
| interest is subsidized by the retailer, which pay the premium
| in order to improve the chance of a sale (hoping to hone in on
| those who can't afford it now and make it back on that extra
| spend). Which means high credit score, wealthy spenders could
| put everything they can on BNPL plans and profit the
| (minuscule) interest over time, but if you can do that on big
| purchases, maybe it'll add up. Same way credit cards work, if
| you have the cash flow and always pay them off in full, you can
| make a few bucks in a HYSA for the 40 ish days before the
| statement.
|
| I can see a future where a BNPL loan is not offered if the
| signals the checkout page collects indicates wealth, since they
| don't have an issue of cash flow stopping a purchase. Imagine a
| loan that has a credit score maximum, not a minimum.
| BrawnyBadger53 wrote:
| Discriminating wealthy customers increases the risk profile
| of the loans which is already questionably high. Retailers
| are used to paying extra for credit card transactions
| anyways. BNPL really is just meant to compete with credit
| cards by splitting the runway across more months for the
| loan. Equally predatory business model but credit cards are
| able to offer the same interest amortization that you can do
| with bnpl through the rewards programs. They're effectively
| the same.
| benmanns wrote:
| I'm not sure. I'm sophisticated enough to use BNPL and set
| aside the funds in a HYSA, but I never have as you miss out
| on: credit card rewards, credit card purchase protection,
| credit card extended warranties, credit card chargeback
| infrastructure. Additionally, I've seen BNPL offers where the
| first payment is in 2 weeks compared to 30-50 days for credit
| cards depending on when your statement closes and how soon
| you have to pay, so the extra interest is less than you might
| think. It could make sense for very large purchases, but
| then, that's also where credit card features can really come
| in handy.
| CPLX wrote:
| This is a theory, but it flies directly in the face of
| reality which is that nearly every retailer on the planet
| would prefer more wealthy customers.
| sodality2 wrote:
| Eh, in the same way a lot of retailers offer student
| discounts, they want to meet everyone at their maximum
| spending limit to capture more of the demand curve. It
| doesn't have to be one or the other; not offering BNPL
| loans to wealthy customers aren't likely to tangibly affect
| sales of that group.
| CPLX wrote:
| Students are future wealthy customers.
| Spivak wrote:
| Except it's 4 payments of $20. The whole selling point is that
| they're zero interest. It's CC float without the CC.
| etchalon wrote:
| A lot of BNPL loans are offered at 0% for X payments. Usually 6
| months, sometimes 12 months on larger purchases.
|
| Given current interest rates, I take that deal WHENEVER it's
| offered.
| p1necone wrote:
| Shifting a cost forward a couple months interest free is a
| great deal for people who are financially responsible,
| especially if you have some other loan (like a mortgage) that
| you could be paying off more of instead.
|
| It's no different to the practice of using a credit card for
| everything and then paying off in full a month later because
| the credit card interest is lower (often zero if you pay off
| within a month) than the mortgage interest.
| mNovak wrote:
| In the case of a 0% grace period sure I agree, but otherwise
| in no world is credit card interest cheaper than a mortgage
| over the same time period.
| p1necone wrote:
| You're right, I was misremembering - it's just the 0%
| interest when you pay off the full balance every month that
| makes this worth doing.
| dehrmann wrote:
| I briefly looked into this, but I wasn't convinced the juice
| was worth the squeeze. My cash is automatically getting ~4%,
| but there's too much fine print to make sure the BNPL rate
| really is 0%, I'm sacrificing 2% cash back, and missing one
| payment makes the whole endeavor negative ROI.
| kjellsbells wrote:
| > fine print
|
| I suspect this is where some buyers will get into trouble.
| Theyll think they made a payment, or they miss a
| notification that tells them to send this month's payment
| to servicer X not Y, and before they realize, boom they are
| in default and owe all the interest.
| firesteelrain wrote:
| A lot of young people where Affirm-ing their DoorDash etc. even
| though they had the money
| OptionOfT wrote:
| What's interesting here is that normally BNPL only does a soft
| check.
|
| I wonder if this is going to change.
|
| Equally, I find it weird that companies can ding your credit for
| not paying but have no obligation to report on-time payments. It
| should be both or none.
| hopelite wrote:
| Technically it is largely already built in as an assumption
| that payments are made on time. You also don't lend to a friend
| you will not be paid back by, will you? The credit score
| reduction is merely a diversion from norm, i.e., the
| expectation that you pay what you agree you owe.
|
| Ironically, there is actually zero reward for being a reliable
| person, there is only a punishment for being an unreliable
| person; and with all the money printing, even the punishment
| for being an unreliable person has been almost totally removed
| and being reliable and upstanding is effectively a punishment
| since you don't get to live like a king on a shoe string and
| then declare bankruptcy and have credit extended to you
| immediately afterwards because money is cheapened and
| consequences are void.
| DrillShopper wrote:
| > You also don't lend to a friend you will not be paid back
| by, will you?
|
| I don't lend to friends and family. It's not worth losing
| those bonds over. I'll help financially where I can, and I'm
| not going to stop anyone paying me back, but I'm assuming
| that money is just gone.
|
| Completely different calculus compared to credit.
| seatac76 wrote:
| It probably makes sense to do so. Not that I condone the FICO
| hustle. But small loans can add up quickly and delinquencies need
| to be measured for financial market stability.
| kurthr wrote:
| If you're paying for your food delivery on an installment plan,
| you're probably going to have a blow up.
|
| https://www.nytimes.com/2025/03/23/business/doordash-klarna-...
| hopelite wrote:
| The worst part is that it will equally affect all the
| responsible people when it blows up just like it is affecting
| them now when BNPL is just one more way in which demand is
| artificially created that drives up prices.
| 2OEH8eoCRo0 wrote:
| I don't understand people. If you need to use an installment
| plan why the hell are you using DoorDash which is a luxury
| ripoff?
|
| I can afford it but I don't use it because it's obscene.
|
| I'm tempted to say that some people are poor because they're
| imbeciles with poor financial sense.
| ProllyInfamous wrote:
| >using DoorDash ... is a luxury ripoff
|
| I live in a working-class neighborhood and it blows my mind
| how often DoorDash visits my neighbors (particularly
| considering there are dozens of restaurants within one
| mile).
|
| The only time I encourage delivery service is when we're
| too intoxicated to drive.
| pests wrote:
| I stayed with distant family for a bit around COVID when
| everyone was WFH. Him and his wife must have gotten 3-5
| DoorDash deliveries a day pretty reliably, I was blown
| away. Each ordering their own thing from different
| restaurants. Random "I want a donut from 711 at 1am"
| where I'm sure fees/tip were multiples of the actual food
| cost. Sometimes the different drivers would arrive at the
| same time and we'd have a little jam up on the porch.
| ProllyInfamous wrote:
| When COVID started my wealthiest elders decided to start
| eating out _for every meal_ in order "to support local
| businesses." Ironically, they did not leave any tips
| because "you don't tip unless you sit down in the
| restaurant." You're not helping in the way you think you
| are, Gramps.
| quitit wrote:
| Yes it's a bit odd that the article poses the question if this
| will help or harm credit seekers. The point of the system is to
| provide transparency.
|
| What does need to happen however is that these inputs are
| properly weighted such that those using FICO can make
| appropriate decisions. Similar to credit cards, numerous BNPL-
| purchases do not necessarily indicate that the debtor is in
| financial trouble. They could merely be using the services for
| the other conveniences they offer. Whereas seeking numerous
| loans is usually a negative metric.
| xyst wrote:
| > The point of the system is to provide transparency.
|
| FICO scoring is far from "transparent".
| PostOnce wrote:
| Theoretically, credit should be used for one thing: to make more
| money. (not less)
|
| However, instead of using it to buy or construct a machine to
| triple what you can produce in an hour, the average person is
| using it to delay having to work that hour at all, in exchange
| for having to work an hour and six minutes sometime later.
|
| At some point, you run out of hours available and the house of
| cards collapses.
|
| i.e., credit can buy time in the nearly literal sense, you can do
| an hour's work in half an hour because the money facilitates it,
| meaning you can now make more money. If instead of investing in
| work you're spending on play, then you end up with a time
| deficit.
|
| or, e.g. you can buy 3 franchises in 3 months instead of 3 years
| (i.e. income from the 1 franchise), trading credit for time to
| make more money, instead of burning it. It'd have been nice had
| they taught me this in school.
| Neywiny wrote:
| I think that's a bit disingenuous. It's not always delaying
| work. There's only so much time and there are some people who
| cannot afford to live with the time in the day, the skillset
| they have, and the market conditions (both income and
| expenses). Your tone and word choice shows you don't understand
| the problem at all.
|
| If somebody can BNPL or otherwise credit lifesaving medicine
| (such as the many people in the USA who die from inability to
| afford healthcare), that's not play money because they don't
| want to work.
| PostOnce wrote:
| Obviously there are edge cases. Debt can be a form of
| insurance for the individual.
|
| However, I stood in line behind someone who financed a bowl
| of noodles with afterpay, and it got me thinking. Those are
| the folks I'm talking about.
| Neywiny wrote:
| Sure, but could that not be an edge case? I'd imagine most
| people aren't sharing the sadder parts of their life. Or,
| is it possible they spent the rest of their money on
| everything more important? Could be argued they should cook
| at home but still.
| etchalon wrote:
| So you're using a single person you stood behind in a line
| for a massive generalization but calling one of the largest
| sources of consumer debt in the US an edge-case?
|
| Neat.
| janalsncm wrote:
| It's not an edge case. The vast majority of debt is
| mortgages and student loans. Things that people pretty much
| need, unless you happen to have the upfront cash.
| UltraSane wrote:
| I'm currently living off of investment gains from high interest
| consumer loans.
| candiddevmike wrote:
| For a lot of folks, credit is the only way they're surviving on
| something close to minimum wage. Or credit was the only "safety
| net" they had during a rough time. Almost none of these people
| have the kind of collateral needed to use credit to truly
| transform their lives, and the government assistance for that
| is seriously lacking in the US (SBA loans are terrible, and you
| need enough money to cover your own salary until your business
| gets up and running).
| gottorf wrote:
| > credit is the only way they're surviving on something close
| to minimum wage. Or credit was the only "safety net" they had
| during a rough time
|
| In my experience, the average American has no concept of
| saving money, and those below average even less.
|
| It's funny to me that America gets flak from all over the
| world for having no social safety net; if this was actually
| true, you'd expect to see people put aside a bit of their
| income, however meager it may be, out of an expectation that
| they will need it. What do you see in practice? You see
| people dashing over to the nearest rent-to-own rims shop. (If
| you don't know poor people, you may not know such businesses
| exist.)
|
| > Almost none of these people have the kind of collateral
| needed to use credit to truly transform their lives, and the
| government assistance for that is seriously lacking in the US
|
| I doubt that greater availability of credit, perhaps
| facilitated through government subsidy, is what precludes the
| majority of such people from transforming their lives.
| Arainach wrote:
| When everything around suggests that the system is rigged
| against you and care against you, it's no surprise that
| many people live for the moment and try to find some small
| bit of pleasure or joy in the moment without planning for a
| future that may not come.
|
| It's easy to say "why don't they save more?" from an upper
| or middle class stability, but when the price of everything
| keeps going up, the police are out to get you, and
| healthcare is just a fast track to debt that will take away
| any savings or assets you managed to have, what's the
| point?
| bluecalm wrote:
| It would be easier to buy that argument if it wasn't
| happening in countries where healthcare is not fast track
| to debt and police is not out there to get you. I come
| from such a country and a lot of financially struggling
| people overspent on status symbols all the time.
| hnbad wrote:
| Sure, because status matters more than finances. Getting
| rich may be extremely unlikely if not outright
| impossible. Looking rich to your peers (and "feeling
| rich") on the other hand may just be a few years worth of
| small affordable installments away - even if it's
| completely superficial and short-lived. And entire
| industries will literally spend your every waking second
| trying to convince you that buying their product will
| make you feel rich.
| klabb3 wrote:
| You don't even need an industry to convince you. Eg
| former Soviet countries were/are notorious for being
| obsessed with material luxury.
| bluecalm wrote:
| It has nothing to do with credit. The whole buy-now-pay-
| later, 0% rates or pay-day loans industry came much later
| here. The same goes for predatory marketing industry.
|
| When I went to elementary school everyone was poor as it
| was a year after communism collapsed. People were still
| spending their last money on shiny things back then even
| if those shiny things weren't as shiny as they are today.
|
| >>Getting rich may be extremely unlikely if not outright
| impossible
|
| Again, in communist and then post communist countries no
| one thought we could be rich. The things we thought about
| back then was being able to buy enough food and trying to
| educate ourselves as education was valued in itself in
| some families. Even back then a lot of people spent their
| last money on pointless shiny things.
|
| I feel Americans and some Western Europeans look for ways
| to justify dumb behavior and come up with all those
| theories that have nothing to do with human nature. If
| you grow up in a country where everyone is the same race,
| everyone is poor (at least for a few years), the police
| is not out there to get you and healthcare is free even
| if terrible and you still witness people making the same
| stupid decisions you realize it has nothing to do with
| those theories and everything to do with education,
| values and ability to make sensible decisions.
| scythe wrote:
| I think you're half right. But there _are_ cultures in
| which people save money. (You can just run a web search
| for "savings rate".)
|
| My hypothesis is that "human" nature does play a role,
| specifically a very general phenomenon in animal
| psychology called "observational learning". If you see
| people around you who saved money and it worked out for
| them, you're more likely to imitate those people. Saving
| money probably isn't instinctive for the vast majority,
| but that doesn't mean it's unattainable.
|
| Taking the contrapositive, if we look at cultures where
| people don't save money, it's probably because of a lack
| of successful role models. Saving money hasn't worked out
| for people in that culture in the past, so there's nobody
| to imitate. There are always going to be a few people who
| do save money, but if they get wiped out by medical debt,
| rampant hyperinflation, or some other systemic crises, or
| if the country's bankruptcy laws are so generous that
| their spendthrift counterparts ultimately live better
| than they do, then their behavior is less likely to catch
| on.
|
| In the US, savings culture has been decimated by years of
| QE and ZIRP, so the people who poured all of their money
| into housing and stocks did better than the cautious
| types. Skeptics have claimed for years that this will
| lead to an awful hangover. We'll see.
| barchar wrote:
| It has a lot to do with the structure of economies.
| Usually they're big exporters with fairly stable
| currencies. The differences in savings rates are super
| huge, even within cultural groups.
|
| Demographics also play a role as does inequality.
| lan321 wrote:
| This is a bit too romantic imo. From my eyes, it's
| mostly:
|
| "An old AMG at 20 is better than a new Ferrari at 60."
|
| There's a slider for how well you want to live your early
| vs late life. If you work hard, you'll be better off
| later, and if you go crazy early on, you'll be worse off
| later. However, there is a point in that you can't catch
| up on 20-year-old sex, getting drunk or drugged up out of
| your mind or general fun with friends at 60.
| barchar wrote:
| There is a ceiling on how much you can spend on these
| things. Generally it is not fun to get drunk or high that
| frequently, and in the limit you die.
| lan321 wrote:
| I'm not and never have been into drugs, alcohol and
| clubbing, so I don't know the limit.
|
| The most I've seen was a ~1k EUR monthly budget for drugs
| by a person I knew whose main hobby was drugs. It's not
| astronomical, but we were both students in ~300 EUR/month
| dorms. It also affected his career progress. Lectures at
| 8 AM don't mix well with coke the night before.
|
| With cars, the sky's the limit. I'm making 6 digits, and
| I can still ruin myself financially in a weekend.
|
| And it's not just financially. I love motorcycles because
| they're cheap, but if I have a proper accident, it'd set
| me back months if not forever.
| clipsy wrote:
| > It's funny to me that America gets flak from all over the
| world for having no social safety net; if this was actually
| true, you'd expect to see people put aside a bit of their
| income, however meager it may be, out of an expectation
| that they will need it.
|
| Congratulations, you've just discovered that human beings
| are not perfect rational actors.
| sorcerer-mar wrote:
| Economists hate this one weird trick!
| msgodel wrote:
| I mean I guess they get some perceived value out of the
| rims that makes the stability trade off worth it.
| hnbad wrote:
| Whatever you put aside is not going to be enough to
| prevent complete financial ruin if shit hits the fan. You
| might be able to cover smaller emergencies like an
| appliance breaking or your car needing repairs but
| literally just giving birth or being in an accident can
| bankrupt you in the US. I'm not at all surprised low to
| medium income Americans would just give up and accept
| their inevitable financial ruin instead of trying to be
| maximally frugal and socially ostracize yourself, forego
| most forms of entertainment/recreation and still not be
| able to get out of survival mode.
|
| Desperation is a good motivator - but not for rational
| actions. It triggers our survival instincts: hoard what
| you can, feed on what you can get, grow fat, make rash
| decisions. This is what the modern economy is built on.
| FOMO, impulse shopping, conspicuous consumption, high
| calorie fast food, deals and discounts on overpriced
| goods, planned obsolescence, etc. We need consumers to be
| perpetually desperate and starving. Credit just means we
| can circumvent Henry Ford's problem of them not being
| able to afford to buy anything because they still can't
| afford it but are able to pay for it until their credit
| line runs out.
| msgodel wrote:
| People need to stop moving out of their parent's house if
| they can't be stable. That's the root cause of a lot of
| the problems in the US.
| boroboro4 wrote:
| We need to change money flows and redistribute wealth so
| people can have a hope of saving some money, because they
| actually can make more money than they absolutely need.
| immibis wrote:
| And then you have the same people complaining about low
| birth rates...
| msgodel wrote:
| Does living independently before you get married make you
| more or less likely to have kids? That would be an
| interesting statistic.
| banannaise wrote:
| This assumes, among other things, that they come from a
| stable home that has space for them and access to the
| things they need to create and maintain an income stream.
| Whoppertime wrote:
| If you look at the home ownership rates of that
| generation it would be a fair assumption
| RiverCrochet wrote:
| This is now happening.
| danaris wrote:
| You can't individual financial education your way out of
| systemic poverty.
|
| Furthermore, the common pattern where poorer people spend
| money as soon as they get it is, in fact, rational when you
| look at it from their perspective rather than your own
| (which, as with most people attempting to moralize to poor
| people about their choices, appears to be a perspective of
| "you should be doing absolutely everything you can to
| maximize your net cash flow").
|
| First of all, people _need_ things like little luxuries. A
| Starbucks coffee here. A joint to smoke there. We are not,
| and cannot make ourselves, robots who live only to produce.
|
| Second of all, they know, from experience going all the way
| back to childhood, that if they have an opportunity to
| splurge a little _now_ and don 't take it, they'll lose
| that opportunity.
|
| Third of all, they similarly know that regardless of
| whether they splurge on an ice cream cone today because
| it's 90degF out, whatever financial trouble that comes
| tomorrow to eat up the little surplus that makes that
| possible _will still put them in debt_. Being in debt $150
| instead of $145 just doesn 't make that much difference.
| And if they wanted to avoid that particular debt entirely,
| they'd have to give up 30 separate instances of "I have an
| extra $5 today, let me get something to make life a little
| less shitty".
|
| The only solution to the problems that lead to people not
| being able to save is increasing the amount of money they
| get paid.
| pjc50 wrote:
| There's also family situations where liquid savings are
| at risk of being spent by somebody else. I don't think
| the marshmallow test people factor that in, you'd need to
| have a third option where the kid waits dutifully for the
| extra marshmallow but it gets eaten by someone else in
| the meantime.
| vintermann wrote:
| Yes. And that doesn't have to be an addict family member
| or a burglar, it can easily be e.g. a landlord who sees
| that you have more money, and charges you more money.
| There are a lot of people in a position to make you give
| up what you have, if they see that there's money to be
| squeezed.
|
| This is even more true collectively: as an individual,
| maybe you can get out by being 50% more frugal than the
| rest. But everyone can't be 50% more frugal than the
| rest. If everyone tries, it's even more likely that
| larger society claws it back through higher rents, lower
| wages etc.
| barchar wrote:
| Everyone can't be 50% more frugal than everyone else, but
| it's possible for "everyone else" to be something other
| than 3-4% (the current US savings rate).
|
| The money to sustain a high savings rate without a
| collapse in wages/demand ultimately comes from the
| government deficit, or deflation I suppose. This can be
| sustained even without productive real investment, if
| people just want savings the money will just sit around
| or repay debt without bidding anything up in the economy.
|
| > landlord who sees that you have more money, and charges
| you more money.
|
| You were getting a good deal then. Can happen with
| "affordable" housing I suppose.
| klabb3 wrote:
| This. If you're poor and get money, there are all kinds
| of people interested in getting a slice, and if you're a
| good person, you'll probably have family members who
| genuinely could use it for necessities. Govt/creditors
| can also apply systemic pressure like "oh you no longer
| qualify as poor this week, so we'll take back your
| benefits". Well thanks, now I'm poor again.
|
| Employers especially don't like when people break out of
| poverty, because as soon as they have a buffer they can
| make choices and bargain. So there's a lot of deep pocket
| incentive to keep people in their place.
| DragonStrength wrote:
| > You see people dashing over to the nearest rent-to-own
| rims shop. (If you don't know poor people, you may not know
| such businesses exist.)
|
| And many on this site don't recognize a racist dog whistle
| I guess.
| thrance wrote:
| I'm picturing you in my head as one of those 19th century
| Englishmen, writing about how being poor is a moral failure
| and the famine in Ireland is actually a punishment from God
| and thus nothing should be done about it.
| bonoboTP wrote:
| You can't really survive on that. It's a snowballing
| situation. It's perhaps a strategy to avert impending
| catastrophe but it's like pitching an airplane down to gain
| speed when the engine is stalling. If it gets you to restart
| the engine the brief nosedive may let you survive, but if you
| have to keep turning the nose more and more vertical, the
| you're gonna meet the ground.
| klabb3 wrote:
| Good analogy.
| barchar wrote:
| You need money to cover your expenses. Forgoing the rest of
| your salary is a very, very cheap form of leverage.
|
| For the risk to make sense you probably do already need
| enough, though.
| crazygringo wrote:
| > _Theoretically, credit should be used for one thing: to make
| more money._
|
| I disagree.
|
| You use credit to buy a car or buy a house when you don't have
| the cash to buy them up-front.
|
| It's not so you can use them to make money, it's so you can use
| them to _enjoy life_.
|
| > _At some point, you run out of hours available and the house
| of cards collapses._
|
| Only if you go too far. The point is to buy things knowing what
| they'll cost monthly and for how long, and to budget those as
| part of your monthly expenses. As long as you can always handle
| those, you will never run out of hours available and it's not a
| house of cards. Nothing collapses. You pay off your car; you
| pay off your mortgage.
|
| You seem to be treating this as something black-and-white when
| it's not. It's an incredibly useful tool when used with
| budgeting. Not "to make more money" but to have a better life
| for you and your family for when it matters the most. Nobody
| wants to wait until the kids have graduated from college to be
| able to buy their first house.
|
| And even with credit _cards_ -- yes you generally want to be
| paying them off in full monthly. But if you want to take a
| vacation a couple months before you could otherwise fully pay
| for it, it 's really nice to have that convenience too. Not to
| mention covering some expenses for a few months if you lose
| your job. They're a tool to be used responsibly.
| gottorf wrote:
| > They're a tool to be used responsibly.
|
| I used to hate to take the position that government should
| save people from themselves, but I've moderated a lot on it.
| Some people clearly cannot use credit responsibly.
| bonoboTP wrote:
| Societies used to understand this and put lots of limits
| around exploiting people, such as banning interest rates.
| But there is no unalloyed good. That ban also blocked rapid
| economic development as seen in the 19th century, where
| credit was absolutely critical for railroad construction
| and other infrastructure like electric or plumbing.
|
| It's a real dilemma with tradeoffs, where slogans and
| soundbites don't work. Having opportunity means you may
| squander it. Too many guardrails on life paths and behavior
| blocks meritocratic social mobility as well as
| opportunities and motivation.
|
| Since conditions are changing too fast there is no
| appropriate crystallized wisdom about it. There is no
| wealth of myths that would define how to live. The best we
| are able to say is the non-instruction to "be free" and to
| tap into your authentic self and author your life path with
| freedom and agency.
|
| In biology one can distinguish evolved traits and behaviors
| (instincts) from learned ones. The latter can adapt much
| faster to the situation. Even better than learning from
| environmental feedback over one's lifetime is planning and
| simulating possible futures and deciding based on that.
| Somewhere between the individual lifetime and the genetic
| evolution levels, there is also the level of culture that
| used to reshape much slower than a single lifetime, taking
| lessons and condensing them over generations into
| templates. But more amd more as we diverge from the
| ancestral environmental conditions of the savannah and
| hunting-gathering in tight knit tribes and clans, we can
| less and less rely on biological instinct, cultural
| bedrock, wisdom from the parents' generation, what you
| learned a decade ago, and so on. We are forced to adapt and
| outmaneuver the shifting landscape faster than ever. More
| and more things pulling in entirely opposite directions. A
| vortex of stimuli to cut through with a machete-like mental
| strength. But most people are not built for this, and even
| those who are, constantly have to gamble and guess and rely
| on luck and hindsight.
| bombcar wrote:
| Ban personal liability on loans (full recourse).
|
| If the lender can only take the _thing_ (like
| repossession of the car or foreclosure of the house) and
| can't go after the borrower for the difference, lots of
| problems solve themselves.
|
| Credit can still exist in various secured ways, business
| credit is barely impacted for real businesses, and people
| stop being able to go way below zero.
| anajskkdbf wrote:
| > Societies used to understand this and put lots of
| limits around exploiting
|
| They still do (at least in the US). Jewish people have
| access to Heter Iska loans according to their religion.
| They do not extend this to gentiles.
|
| Humans have known for a long time usury is inherently
| predatory. Nobody should profit off simply having money.
| BenjiWiebe wrote:
| And yet, the banker truly gives me value if I wish to
| start a business, or upgrade an existing one, and I don't
| have the capital to do so. I need money to make money,
| and am willing to pay for the privilege of using someone
| else's money.
| parpfish wrote:
| There's also a second order effect of the people using
| easy loans/credit money leading to higher prices for
| everybody else. The cheap options will disappear if
| there's a big chunk of the population that will go in
| debt to get the pricier option.
|
| Why sell $1 tacos when customers are willing to Klarna an
| $8 burrito?
|
| Why make a school with affordable tuition when students
| are willing to take out $100k loans?
| bonoboTP wrote:
| This definitely happens. It's like giving cheap loans to
| young couples who are having their first child, which was
| introduced in Hungary. But without more available
| housing, the market simply prices it in that suddenly
| people are able to pay more using this cheap credit, and
| supply and demand just makes it settle at a higher price.
|
| Credit is basically a loan from the future. Except that's
| obviously impossible. Time travel doesn't exist, so it's
| just economic fiction. In the end the math has to add up
| in terms of real material goods and services right now.
| People can only reshuffle the goods among themselves, any
| trade with the future may be a useful fiction to simplify
| accounting but is obviously just fiction.
|
| This is a bit like saving money for your retirement. It's
| a fiction. If there aren't enough young people working as
| nurses to put you in your diapers, then there simply
| aren't. A pensioner is not using the goods that they made
| decades ago. Their work dissipated there and then, and
| now decades later the only value they can consume is the
| one generated in real time by the actually existing
| working population.
| potato3732842 wrote:
| I think the problem is that we left exploitation of
| people under the umbrella of government open and so all
| the demand for exploitation has sailed under that flag.
|
| You've got the tire companies lobbying states to up the
| tread depth for their safety inspections. The HVAC people
| got refrigerant restricted so that you have to be a
| license holder to buy it (artificially increasing demand
| for their service). The plumbing trade groups have a
| dozen states convinced that you need a license to install
| a gas dryer, etc, etc.
|
| It's all the same "screw an extra buck out of the public"
| industry group and cartel behavior we had a century ago,
| but government just has a seat at the table and gets a
| cut this time around.
| hotstickyballs wrote:
| Both transportation and shelter are important to earn money
| Jcampuzano2 wrote:
| If you're using credit to buy a car, most people do so in
| order to get to and from their place of work for the majority
| of their driving time. In that way, using credit to buy a car
| still fits into their theoretical model. For example I know
| plenty of people who completely got rid of their cars when
| remote work became more common, or at the very least
| consolidated to smaller cars or to less cars for a family.
|
| Similar thinking for a house. A lot of people when buying a
| house go into it with the assumption that it is an
| appreciating asset that will gain value over time. Yes there
| are other factors of course like wanting to live closer to
| schools or in the suburbs/good areas, etc. But regardless
| this is commonly to facilitate a life that lends itself to
| you continuing to be able to make money comfortably.
|
| Regarding vacations, no financial expert recommends using a
| card without the intention of not paying for it. If your plan
| is to book the vacation on credit for anything other than the
| benefits of your credit card points systems you might as well
| not use it at all. And all recommend not using credit cards
| and instead an emergency fund if you lose your job.
| crazygringo wrote:
| No. You can rent and you can take the bus. Or rent and buy
| a crazy cheap old used car.
|
| A house and a decent car are not primarily about making
| money. They're about your quality of life.
|
| > _And all recommend not using credit cards and instead an
| emergency fund if you lose your job._
|
| And if you already used your emergency fund on, say, a
| medical emergency...?
| scarface_74 wrote:
| Yes because American public transit is so great and now
| you have to get up hours earlier and come home later -
| not great if you have kids or you actually want to spend
| time with your significant other.
|
| Also what happens when that cheap old car doesn't start
| in the morning when you need to get to work or pick your
| kids up from day care/school or need to be home when they
| get off the bus?
|
| Where are you going to get the money to fix that old car?
| JKCalhoun wrote:
| You present some very daunting problems that the young
| and working class have to deal with (I know, I was both
| of those decades ago and struggled myself).
|
| Credit to buy a new car though is still generally a bad
| solution. We should fix the other things you mentioned.
|
| I would like to see laws allowing extreme low-cost
| vehicles (equivalent to golf carts, I guess) allowed on
| designated roads. A special inexpensive insurance proviso
| for them.
|
| That you need something like $30K to buy a new car in the
| U.S. is insane.
| scarface_74 wrote:
| How are you going to safely have a golf cart on a
| highway? And what good is a car that can't get you
| everywhere you need to go?
| JKCalhoun wrote:
| To go between work and my apartment, I didn't need the
| highway. As I have said in another thread, I made do with
| a 10-speed bicycle, frcrisake. I don't expect everyone
| else to be able to do that though.
| kube-system wrote:
| > I would like to see laws allowing extreme low-cost
| vehicles (equivalent to golf carts, I guess) allowed on
| designated roads. A special inexpensive insurance proviso
| for them.
|
| These already exist! You maybe haven't heard about them
| because they're largely a failure beyond niche
| applications. They're mostly used for things like
| hospitality shuttles, facility maintenance, meter maids,
| etc.
|
| https://en.wikipedia.org/wiki/Low-speed_vehicle
|
| https://en.wikipedia.org/wiki/Neighborhood_electric_vehic
| le
|
| The problem is that they don't make sense for most
| people, e.g:
|
| 1. You can't operate them on high speed roads. The US has
| a lot of high speed roads, particularly in areas that are
| poorer.
|
| 2. They aren't cheaper than a used car. A street legal
| Cushman or GEM starts at about $16k. A _brand new_ Nissan
| Versa is only about $1-2k more, is wildly better
| equipped, and has more accessible financing. Good $10k
| used cars are available on every street corner in every
| poor neighborhood with extremely accessible financing.
|
| 3. They are weird. It is much more socially acceptable to
| drive a similarly priced used car.
|
| 4. They lack features that used cars have. Many control
| cost by omitting basic features such as doors and climate
| control.
|
| 5. The places where you can use them (low speed
| neighborhood roads) are already more likely to be
| accessible by alternative means of transportation.
| (busses, bikes, walking)
| JKCalhoun wrote:
| > A street legal Cushman or GEM starts at about $16k
|
| I see a business opportunity.
| kube-system wrote:
| Where? 'cause I'm not seeing it.
|
| I'm guessing you're taking issue with the price? Meh,
| that's just what it costs to make a decent product. You
| can (or at least used to be able to) get hot garbage
| manufactured abroad for less, but it doesn't meet the
| standards of what anyone would reasonably get, and they
| don't compare favorably to even a bad used car.
|
| You might find this interesting:
|
| https://www.youtube.com/watch?v=yRG0Wai4sR0
|
| I remember when you could get a $10k new car... but if
| you adjust for inflation, we still have those cars today
| (now they're $20k), and they're actually better than the
| $10k cars back then.
| lupusreal wrote:
| Lol what bus?
| JKCalhoun wrote:
| My daughter went a year to and from work by bus in Omaha.
| Yeah, it sucked. But we should instead be trying to fix
| that rather than just tell people "Let them eat credit."
| mrguyorama wrote:
| Fixing takes time. I need to get to work _today_ or else
| I 'm fired and homeless in a few weeks.
| Libcat99 wrote:
| 8 years ago I bought a house. My monthly rent was 1300
| and mortgage/escrow/repair savings were instead 2000.
| Rent went up $100-$200 a year.
|
| My son is looking for rentals in our same community and
| the equivalent rental to what I had is now around $3000.
|
| Even ignoring appreciation, in the long term there was a
| cash flow savings.
| RHSeeger wrote:
| > there was a cash flow savings
|
| ... in your case. There was a cash flow savings in your
| case.
|
| I've moved several times and done the math each time.
| Sometime it's been more cost effective to own, sometimes
| to rent. There are a lot of factors that go into that
| calculation, and the math doesn't always fall on the side
| of buying. That's especially true if you don't expect to
| be in a house for decades.
| DrillShopper wrote:
| > My son is looking for rentals in our same community and
| the equivalent rental to what I had is now around $3000.
|
| Good for you. Bad for your son or anyone living in your
| community.
| JKCalhoun wrote:
| Agree. I wonder though if the tone of your comment
| doesn't come across as casting blame on the person who
| got the mortgage years ago.
| DrillShopper wrote:
| It's not intended to, although it is intended to be
| blunt.
| JKCalhoun wrote:
| Yep, I have never taken a loan out to buy a vehicle --
| even though I have always needed one to make money.
|
| When I was working a pizza place, going to JuCo, I had a
| 10-speed bike for transportation. (Yeah, even in the shit
| Kansas winters, I was riding to JuCo along the just-
| plowed roads. Now get off my lawn!)
| bluGill wrote:
| The odds of two emergencies are low enough that you can
| ignore this. Not that it doesn't happen, but it isn't
| that common. If you expect two emergencies you should
| have more in the fund to cover it.
| crazygringo wrote:
| > _If you expect two emergencies_
|
| Emergencies are unexpected.
|
| And a lot of people simply don't have the money to build
| up that kind of fund. To suggest that they "should" is to
| be pretty out-of-touch with the realities of a lot of
| people. Sometimes they need to rely on credit, because
| there aren't any alternatives. So that credit becomes a
| lifeline, a good thing.
| bitmasher9 wrote:
| Let's say you finance $40,000 in auto debt over 5 years. With
| a low interest rate of 6% paying $6,300 in interest. That's
| over 15% of the amount borrowed! Many people have lager rates
| over longer periods.
|
| Now consider what would happen if you invested that $6,300
| for 30 years instead of spent it on interest. You're losing
| out on tens of thousands of dollars in total lifetime wealth.
|
| When you borrow money to "enjoy life" it can quickly end up
| costing 2x what it would if you spent the money outright,
| even if you borrowed at low rates.
| scarface_74 wrote:
| Well seeing that you need a car to go to work to have money
| to invest in the first place...
|
| And before you say "buy an old beater", then you have to
| contend with an unreliable car that may cause you to be
| late to work and get fired. It's also much easier and
| cheaper to get a car loan for a newish car than to borrow
| money to fix a car.
| bitmasher9 wrote:
| Im just encouraging people to do the math, and to
| consider borrowing smaller amounts of money over shorter
| periods of time.
| allenrb wrote:
| As a young person, I was in the "own an old beater"
| category for many years. That said, I knew how to
| maintain and repair most of what could go wrong. That
| stick shift 1995 Accord had over 300,000 miles when a
| school bus finally totaled it while parked.
|
| But for most people, maybe not the right answer. There's
| a middle ground. There are some very affordable vehicles
| out there with good warranties. Buy one and for a few
| hundred a month, you get five years free of worry.
|
| Of course, who does that? What I see are mostly SUVs and
| other "image" vehicles that cost more to buy and more to
| run. Frugality just hasn't been an American trait in
| recent years, though it seems to be changing in some
| groups.
| chasd00 wrote:
| I don't think you need to know a lot about cars to get
| good value out of them. I had an old ford ranger and all
| I did was get new tires when they tread wore off, get new
| brake pads when they started squeaking, and get the oil
| changed when the little sticker said to. I put 350k miles
| on that truck.
| scarface_74 wrote:
| And if you are already living check to check, buying an
| old beater they you don't know the condition of is more
| risky and harder to come up with the cash as things go
| wrong like the engine and the transmission.
|
| It's completely different than buying a slightly used car
| and keeping it forever where you know the wear and tear
| patterns on it and you know how you treat it.
| 7speter wrote:
| Its kind of funny how the people who don't want to work
| with "lazy," mangly, poor people with bad teeth are the
| first ones to tell poor people how they could've made
| interest on 6300 dollars over 30 years.
| bitmasher9 wrote:
| It's pretty rude to make personal assumptions based on a
| comment on the internet. My entire focus on the comment
| is providing education about the opportunity cost of
| borrowing money.
| eadmund wrote:
| The trick is to borrow $40,000 to buy the car at 6% and
| keep your $40,000 invested making more than 6%. Even at 7%
| annually, you'd make $16,102 over five years (1.075 x
| $40,000). For that matter, at 6.1% annually, you'd make
| $13,782 (1.0615 x $40,000). Heck, even at _5.9%_ , you'd
| make $13,277! The reason why you make more even with a
| lower rate is that you pay less interest each month with
| the amortising loan!
|
| The trouble is if one borrows that $40,000 to buy a brand-
| new car (which will lose $16,000 over five years), or if
| one borrows that $40,000 and doesn't have or doesn't invest
| $40,000, or both. Life's a lot easier if you already have
| the money.
| bitmasher9 wrote:
| Personally borrow and invest over shorter periods of time
| (less than 10 years) has too high of a risk portfolio for
| me, especially with a depreciating asset.
|
| What if there is a market downturn, and you're out not
| only the decrease in value of your assets but also the
| interest in your loan. I admit this is down to personal
| preference and risk tolerance.
| SirMaster wrote:
| Well if you can't survive a downturn and the risk then no
| you shouldn't do it. But if you can then you should and
| in the long run you will end up ahead.
| bregma wrote:
| This ignores the fundamental equation T =
| kM
|
| where "T" is time, "M" is money, and k is some constant.
| zajio1am wrote:
| > You use credit to buy a car or buy a house when you don't
| have the cash to buy them up-front.
|
| Still the same principle - you buy long-term asset that makes
| rent-equivalent money if you rented that otherwise. That is
| different than borrowing for immediate consumption.
| SirMaster wrote:
| You can't deny the strong ability to make money using credit
| or debt though.
|
| No it's not the _only_ way you can use it, but it 's a pretty
| big way that a lot of people do successfully use it.
| lxgr wrote:
| > > Theoretically, credit should be used for one thing: to
| make more money.
|
| > I disagree.
|
| > You use credit to buy a car or buy a house when you don't
| have the cash to buy them up-front.
|
| There's no contradiction with GP here.
|
| Financing a car or buying a house on mortgage might well save
| somebody money in the long term (e.g. by allowing them to
| take on a job to which they have to commute by car, or saving
| on future rent payments).
|
| If that's the case (and that highly depends on individual
| circumstances), this still counts as "making more money" -
| via spending less money.
|
| The real question is: How do you feel about borrowing money
| used to buy depreciating assets or consumables?
| ocdtrekkie wrote:
| I think my understanding has come to the fact that loans and
| interest can smooth out your financial situation: When I was
| single especially I had a lot of savings building, I was making
| interest and making money. Then when I had a kid, I end up
| paying that interest back, because expenses for a kid are way
| above what I can healthily operate in this economy, and I
| needed more financial products to cover that. But that's also
| not forever: As soon as a kid's in school and you aren't
| sending an entire paycheck a month to the daycare, you can
| establish a upward financial pattern again.
|
| It'd be nice if kids were an affordable choice for anyone
| expect Elon Musk, but you know, here we are. \o/
| ajsnigrutin wrote:
| This is all true if you have enough for the basics and are
| looking above the minimum survival costs.
|
| Just to make the money you are making now, you need some stuff,
| be it a phone or a car, home AC, oven or even a washing machine
| at home (you can't go to work hungry in dirty clothes).
|
| If you don't have the money to pay with cash, you'll be buying
| that oven/stove with whatever delayed/monthly payment option is
| available.
|
| Yes, if you're buying franchises you can do the "make more
| money" calculations, but if your kids are going to be hungry
| soon, you often have no choice.
| Jcampuzano2 wrote:
| You are literally describing using credit as a tool to make
| more money, just some in a slightly more indirect way, thus
| you are not in disagreement.
| thephyber wrote:
| You are conflating what actions would maximize the long term
| returns to the individual with the status quo which is that
| credit increases liquidity of the average family, who has most
| of their wealth tied up in home equity.
| janalsncm wrote:
| Not sure what you mean by the "average person" here but the
| biggest kinds of debt are mortgages ($12T) and cc debt, student
| loans, and car loans (roughly 4T total).
|
| Is your position that taking debt to buy a house is bad unless
| you can sell it for a profit? Is working for the mortgage
| lender to accomplish that not worth it?
|
| You can avoid it by renting, but then you're just working for
| the landlord, so there's no avoiding it.
| Jcampuzano2 wrote:
| Every single thing you mentioned outside of cc debt (though
| arguably you should never reach for a credit card outside of
| using it for the points systems they provide) could be
| categorized as something used as a tool to make more money.
| eptcyka wrote:
| Vast majority of new car sales will not let the new owner
| make more money and were financed with debt.
|
| If all of those buyers bought used for cash, nobody would
| be able to afford used cars for cash.
|
| It really is only businesses that can convert debt into
| income, most consumers do not want to. There is nothing I
| can spend on to get a higher hourly rate.
| john01dav wrote:
| You can buy investment properties to convert debt to
| income and get nice returns. While this is technically a
| business, there are ways to make it quite passive and
| thus more like an investment than a business. Margin
| stock accounts also exist, although I don't know enough
| to know what situations it makes sense to use them in.
| hnbad wrote:
| Don't ever look into where the money you make with
| "passive income" comes from, I guess?
|
| Passive income just means other people are working for
| your income. At some point, someone has to be poor enough
| to have to do the actual labor. You can abstract this
| away with as many financial constructs as you want but it
| boils down to that. If you can "make money" from mere
| ownership, we can't all own things that make us money
| because then we wouldn't have to pay anyone and nobody
| would have to pay us.
| azthecx wrote:
| There are arguments to be made, especially if you're
| young and just starting out to take a reasonable amount
| of margin and kickstart your compounding growth.
|
| Say you just started working, have no use for your money
| and are willing to bet 20k on index funds vs a 90% market
| drop, you should be able to take 2k in leverage and set
| up your position be auto closed.
|
| But of course as you have more money this type of market
| exposure starts shifting as you have shorter timer
| horizons to rebuild and are instead going into more of a
| wealth conservation mode.
| eptcyka wrote:
| You clearly are delusional if you believe that the people
| drowning in credit card debt are in ever in this
| position.
| avianlyric wrote:
| This has the rather tone deaf sound of "if you just had
| financial security, you wouldn't need to use loans to
| survive, then you could use them to invest!".
|
| Which rather misses the point that many people using
| these tools don't have financial security, and don't have
| the option to invest like that.
|
| Saying that mortgages can be used to buy investment
| properties doesn't change the fact that most people use
| them to provide basic physical security. I.e. a literal
| roof over their head, that they can't be taken away with
| little notice by their landlord for reasons completely
| beyond their control.
|
| I've you've never grown up in an environment where the
| roof over your head isn't a certainty, and indeed having
| a different roof over your head every few years is a
| certainty. Then it can be rather hard to understand why
| not everyone considers property just an investment
| opportunity.
| FireBeyond wrote:
| > I.e. a literal roof over their head, that they can't be
| taken away with little notice by their landlord for
| reasons completely beyond their control.
|
| Yeah. Before I bought my home four years ago, three of
| the last four landlords I'd had had promised long term
| stability, only to non-renew the lease after the first
| year (for "other" reasons: "Wife thought she'd like the
| country, we're moving back to the city", "We want a
| smaller mortgage payment on our primary home", We're
| going to renovate and sell"). It's a lot of fun moving a
| family every year. Especially when around here you also
| have to come up with first, last, security and other fees
| and can easily be looking at $10K+ just to move.
| api wrote:
| That's not technically a business, it is a business, and
| it can be a tough time consuming one. I've known more
| than one person who sold their investment properties
| because they were tired of being a landlord, which is a
| job.
|
| Not saying it can't work. It can. But it's a business and
| a job/sidehustle not magic free money.
| bonoboTP wrote:
| How can you factor in the aspect that a cool car might
| impress someone who might get you a better job? Or it
| allows you to "look the part" and "fake it till you make
| it"? People sometimes rent cars and watches and suits to
| appear higher class when talking to potential investors
| or other business partners.
|
| Having a better house might allow you to invite more
| people over for parties or dinner, which can have
| downstream effects in your social mobility and status.
|
| If you can keep up with the Joneses and chit chat about
| your vacation to some nice place, it may allow you to
| become an insider in some group.
|
| At least that's the "logic" (even if subconscious) to
| chasing status symbols. Though very often it fails
| because faking it is hard and you can easily be clocked
| as a tasteless tryhard. But if you don't take too large
| steps up, you might get away with it and reap the social
| benefits.
| eptcyka wrote:
| All of the above are reasons why people go into debt,
| some derive genuine pleasure and happiness from their
| purchases. None, however, are investments that one can
| put on a P&L sheet, and please, never let anyone think
| otherwise.
| immibis wrote:
| Space is expensive because of mortgages. If nobody could get
| a mortgage, nobody would need one. It's a race to the bottom.
|
| Buying a home from a landlord is still working for a
| landlord; you just pay the present value of future cash flow
| in a single lump sum, like an annuity.
| msgodel wrote:
| I tried using one of these offering a 0% intro APR to finance
| an upgrade to the boat I eventually moved into (saving me 10s
| of thousands in rent.) They wouldn't let me do it despite
| having an upper 700s credit score.
|
| It's not clear to me how they pick people to lend to.
| tonyhb wrote:
| It's not just the credit score - the APR offered is also
| chosen by the retailer.
|
| 0% financing costs the retailer 8%(ish) of the total amount,
| which is how the lender makes their money.
|
| So in your case, the retailer didn't want to lose that much
| of their margin.
| avianlyric wrote:
| Yeah a high credit score isn't what that lender is looking
| for. They don't make money of people who actually repay the
| loans, indeed they tend to loose rather a lot (cost of
| capital + cost of account admin).
|
| If someone is offering you a 0% APR loan, it's either because
| they're hoping you'll move your loans to them, and become
| unable to leave once the 0% period has ended. Or they're
| trying to sell something else (either more of something, or
| the same thing at a higher price), and want use consumer debt
| to artificially increase market demand.
|
| You upgrading a boat, so you can save money in the long term,
| is literally the opposite outcome they're looking for here.
| jack_riminton wrote:
| Exactly. The thing I always have to remind myself: issued
| loans aren't liabilities for companies, they're assets.
| Assets need a return!
| astura wrote:
| 0% intro APR offers are somewhat predatory in that they rely
| on a large portion of people keeping a balance after the
| intro period in order to be offered, or at least building a
| relationship with other financial products. It wouldn't
| surprise me that they would reject someone in the high 700s,
| they might have been looking more for people in the low to
| mid 600s.
|
| There's also a lot of reasons one might be rejected for a
| credit line that have nothing to do with credit score. Some
| lenders have specific policies in addition to credit score,
| like Chase's 5/24 rule. Some are also just looking for
| "relationships" and won't offer you their best products
| unless you have a bank account with them, etc.
| scarface_74 wrote:
| And this has nothing to do with buy now pay later since you
| aren't charged interest
| PostOnce wrote:
| Owing money you don't have has disadvantages _even without
| interest_.
|
| For example, if you make 5000 dollars a month and get a 5000
| dollar BNPL loan for a stereo, payment due in a month, then
| even without interest, you now either starve or default on
| the loan (or incur penalties, i.e. the interest you thought
| didn't apply).
| scarface_74 wrote:
| You realize almost every phone in the US that you buy
| through the major carriers has worked like this for
| decades?
| immibis wrote:
| Why would you buy your phone through a carrier? Is it the
| good old US lack of regulation so it's the only option
| carriers let you have? I get my phone and my SIM card
| separately.
| scarface_74 wrote:
| Why not? It's an iPhone the same as any other iPhone with
| no carrier bloatware. It usually comes at a discount with
| monthly credits.
|
| Even if I do buy directly from Apple using the Apple
| credit card, it's still 2 years with no interest and the
| same BNPL in all but name.
|
| And now it's all eSIM anyway. If I go to another country
| I just activate the second eSIM.
|
| And it was never about the phone makers not letting you
| have the phone. Some low end phones even today don't
| support all of the carriers frequencies and back in the
| day you had phones that had to support CDMA vs GSM and
| even then different parts of spectrum were used by
| different carriers.
|
| Mobile phones at first "free" with a two year service
| plan and later as a second line item has been the most
| popular way to buy phones in the US since I was selling
| them at Radio Shack in the mid 90s.
|
| I would get a commission based on a $300-$400 phone and
| the customer paid $1 up front.
| ProAm wrote:
| This is so wildly qrong I dont know how to start. Im assuming
| this person is not in America, where a lot of the population
| (unfortunately) uses these practices to buy things that are
| needed/non-essential) its a shell game the creditors were
| willing to pay. But now its a lot so its going to affect credit
| (which is should have to start).
| goldfishgold wrote:
| One flaw with this reasoning is that ignores the time value of
| money. A dollar today is worth more than a dollar a hundred
| years from now, if only because we'll all be dead a hundred
| years from now. From that perspective and with favorable terms
| it can make sense to sell the future to buy the present, if
| someone is willing to take that trade.
| lm28469 wrote:
| > the average person is using
|
| The "average person" is told from birth to consume as many
| things and experiences as possible as it if was the only thing
| that could give their life a meaning. The entire system is
| based on growth and consumption, I have a hard time blaming
| "the average person"
| john01dav wrote:
| I acknowledge that such telling exists, but there is still
| responsibility for people choosing to listen to it.
| Skepticism is vital. Beyond being skeptical of what you see,
| it is wild to me that we don't have approximately everyone
| blocking all ads, cable news, most social feeds, and other
| such transparently manipulative shit. Advertisement
| especially is literally industrialized and research-based
| psychological manipulation to make people do things that make
| no sense (see what Alfred Sloan did to GM, for an early
| example) -- it's toxic and should be absolutely avoided.
| mathgeek wrote:
| You can't block all of it all of the time, and children
| (some of the most vulnerable) especially can't.
| razakel wrote:
| And that's why government regulation was invented.
| datameta wrote:
| You mean corporations regulating the government? Oh
| wait...
| tnel77 wrote:
| True, and this is why you shouldn't just hand your kid an
| iPad and peace out. I'm all for technology and video
| games for my kids, but I'm vigilant to keep my kids' eyes
| away from ads. As a result, my kids aren't foaming at the
| mouth for the latest and greatest toys and games which
| was my experience as a child.
| wobfan wrote:
| Thing is, keeping children out of Instagram, Facebook, or
| whatever new social media is hyping currently will
| probably make them kind of weirdos in their bubble, e.g.
| in school. At least this would be my fear (don't have
| children). And good luck trying to use any of these ad-
| infested privacy-invading platforms while trying to avoid
| ads.
| geerlingguy wrote:
| It doesn't have to make them weird, especially if you're
| in a school district where there are no-phone policies.
| Otherwise it can be difficult, for sure.
| allenrb wrote:
| Learning how to stand on your own in school is good
| practice for doing the same thing in life. By which I'm
| absolutely not saying "don't have friends" but rather,
| you don't have to be like everyone else.
|
| My kids won't be on social media until they're not kids
| anymore. If none of us take a stand, nothing ever
| changes.
| nradov wrote:
| Your kids will create hidden social media accounts that
| you don't know about. That's what I would have done in
| their situation.
| olyjohn wrote:
| Their exposure will still be much less than someone who
| gives them free reign and lets them sit in the livingroom
| staring at a phone. They won't be staring at the phone
| distracted while they're hanging out with the family.
| kadushka wrote:
| Hiding things from parents is a far bigger problem than
| staring at a phone in a living room.
| andelink wrote:
| No it's not. Everyone hid things from their parents. I
| hid soooo much from my parents. It's fine. It's normal.
| It's far more important to have limited exposure to
| modern smart phones.
| allenrb wrote:
| Indeed, I might have done the same. At least that will be
| a challenge, lacking smart phones.
| RankingMember wrote:
| Being an outlier when the in-group is actively having
| their brains turned to mush seems like the better of the
| two outcomes.
| bigstrat2003 wrote:
| This argument is popular but doesn't hold water. If we
| suppose for the sake of argument that social media is bad
| for kids, then it is a parent's _duty_ to keep them off
| it even if that makes the kid unpopular. As an analogy,
| consider a kid whose social circle is all shooting
| heroin. Would it then become acceptable to let your kid
| do heroin? Of course not. Similarly, even if all the
| other kids are on social media, it doesn 't become
| acceptable to let your kid use social media (going with
| the assumed premise that it's bad for them).
| BolexNOLA wrote:
| It takes a lot of work to be a parent and also monitor
| all that media consumption/stop all ads. The "average
| person" isn't as tech savvy as most of us here and that
| stuff just doesn't come as easily to them.
|
| For instance I am very comfortable letting my kids play
| video games. I play a lot myself, I can make good
| judgments about what is appropriate for them, what is an
| appropriate amount of time to play, what is good/bad
| behavior when playing, what systems are a good choice or
| if online access (if any) is appropriate. I barely need
| to think about these things, but for some people this is
| an incredibly time-consuming, intimidating task.
| rangestransform wrote:
| Is it not ok that parents that spend more time and effort
| with their kids have better outcomes than parents that
| spend less time? I'd rather that than have the nanny
| state regulate everything bad for kids out of existence;
| we already know what kind of civil rights violations
| politicians try to justify with children.
| tr81 wrote:
| It is very hard work raising kids if you are interested
| in parenting and want to do your best.
|
| The thing is that not everyone's life goal is to be the
| best parent around. And there is pressure from the
| society/culture/government to reproduce for healthy
| economy.
|
| If we as a country want people to have more children,
| then we need to make their job easier. That may include
| censorship, age verifications, etc.
| BolexNOLA wrote:
| You're making this a very stark, binary choice. Reality
| is far more nuanced.
| tw04 wrote:
| Half of the country is teaching their kids to take
| religion literally and never question it, and that any
| news story that you don't like isn't real, simply because
| you disagree with it.
|
| Handing over an iPad is the least of the issues facing a
| large portion of our youth and frankly they might be
| better off if their parents did sit them in front of it
| and walk away.
| mrguyorama wrote:
| One of the important purposes of a society is to improve
| the raising of kids who might not be raised well by their
| parents alone, _because it is a valuable outcome to
| everyone_.
|
| You don't choose who you get born to, so if society
| chooses to say "If you get born to a shitty person, you
| will suffer immensely and we will do nothing about it",
| _that is a bad society_.
|
| Nobody deserves to suffer due to an accident of birth.
|
| Also, "It takes a village to raise a child" is not
| exactly metaphorical.
| xattt wrote:
| > children ... especially can't
|
| Worry about your own kids, teach them the right values,
| and use others' imperfect knowledge to the advantage of
| your family.
| suddenlybananas wrote:
| Yeah who cares about society?
| koakuma-chan wrote:
| How do you propose to at least get society off TikTok or
| Instagram? You will only face backlash if you try to
| utter in that direction.
| op00to wrote:
| I've never had anyone say anything other than "yes, that
| seems like a good idea, I wish I could do that" when i
| tell them I do not have a TikTok, instagram, twitter,
| facebook, etc account.
| koakuma-chan wrote:
| I guess they all need those accounts for their student
| visas.
| rayiner wrote:
| I'm not sure my kids have ever seen an ad except for
| little computer games, and they have laptops and iPads
| (but no network TV or cable). They are far less exposed
| to consumerism than when we were kids. My teenage
| daughter dresses like a hobo.
| neutronicus wrote:
| If they've seen Paw Patrol they've been exposed to ads. I
| don't mean "commercials" I mean that the entertainment
| itself is the ad - generating excitement for branded
| merchandise, but also normalizing the idea of kids
| accomplishing things and learning life lessons in
| 20-minute increments with the aid of a tremendous amount
| of _stuff_ that they just _have_.
|
| Maybe they haven't but the idea extends to most kids'
| entertainment.
| devmor wrote:
| Or you end up with the opposite end of the problem. I
| grew up in destitute poverty and was told all my
| childhood that credit was an evil trap - I should
| absolutely never use it.
|
| Well, spring forward to me starting a pretty good career
| as a software developer and wanting to get my first
| reliable car. I had no credit history and ended up with a
| 19% APR. That really, really sucked.
|
| It's been 10 years since then and I still get dinged for
| not having "enough" credit history despite having a
| couple car loans and several credit cards that I rotate
| bills on. The whole system feels like it's designed to
| punish anyone who doesn't fit into the role of a perfect
| consumer.
| potato3732842 wrote:
| You didn't get fucked with 19% apr because you had no
| credit history. You got fucked with 19% APR because
| either the parameters of the loan were really bad or
| there were some other circumstances. Income less existing
| obligations vs payment size account for the lion's share
| of interest rate on an auto loan or just about any other
| consumer loan.
|
| Credit history is massively over-sold as being impactful
| by the kind of idiots who live payment to payment.
| lokar wrote:
| I agree. My first use of credit was a car loan when I
| graduated. I had the offer letter to show income (I had
| not started yet) and some up front sign on / relocation
| money for the down payment.
|
| It was fine, I paid it off quickly.
| devmor wrote:
| No, I got 19% APR because I had no credit history. I know
| this because there is a big detailed letter full of
| reasons for your offered rate that you receive when you
| take out a loan.
|
| The fact that you don't know this suggests you probably
| don't know a lot about how loans work.
| hansvm wrote:
| Why'd that suck so much? As a software dev couldn't you
| just pay it off a month or two later?
| olyjohn wrote:
| That would depend on what car they bought.
| devmor wrote:
| I'm not sure what software devs make $15 grand a month in
| disposable income 2 years into their career, but I
| certainly was not one of them.
| 9rx wrote:
| _> I still get dinged for not having "enough" credit
| history_
|
| Maybe the data is wrong? I took out a few loans over the
| years with strange comments from the lenders like _" You
| don't have much credit history"_, but since it didn't
| impact anything I didn't think much of it. Somewhere down
| the line a lender was like _" I don't think this is
| you"_. Turns out that it wasn't.
| devmor wrote:
| What do you mean? Your credit report was someone else's
| credit history?
| 9rx wrote:
| As I understood it, it was a bit stranger than that.
| There was some minimal activity on the report that was
| actually me (a phone account, if I remember right), but
| my credit cards and whatnot didn't show up. But also some
| activity did that wasn't mine. I was somehow partially
| combined with another credit history, or something like
| that. I am not well versed in the technical details to
| truly understand what the problem was. I had to fill out
| some form to get it corrected and haven't thought about
| it since.
| beowulfey wrote:
| People aren't going to learn to be skeptical or think
| critically because we've been literally removing that from
| the curriculum in schools. How can someone be skeptical of
| something if they don't even know _how_ to be skeptical?
|
| Social media runs rampant with a form of skepticism, but I
| would call that closer to paranoia than critical thinking,
| and I don't think it's really being helpful in the same
| way.
| skeeter2020 wrote:
| >> Social media runs rampant with a form of skepticism,
| but I would call that closer to paranoia than critical
| thinking
|
| For my generation this was always refered to as a
| "healthy skepticism", but lately I've noticed many don't
| necessarily see this as a good trait - an example: any
| sort of measured, full-picture response to the impact of
| AI on software development.
| johnnyanmac wrote:
| As usual, it's a spectrum. The pettiest example is one of
| Reddit, where you see some random cat video, and the
| comments all go "this is fake" or "this is posted by a
| bot" or "how could you do that, you're torturing the
| cat!".
|
| 1. They may all be true, but yiy gotta pick your battles
| at this point. If you think all of reddit is bots, what
| use is there complaining in every post
|
| 2. Healthy skepticism is supported by observation and
| findings. The internet as of late has grown lazy on that
| overall and people just throw out accusations without
| explanation. That definitely comes more off as paranoia
| at best, or bad faith at worst.
| RankingMember wrote:
| I see this as directly correlated with the gradual
| denigration of liberal arts education, a core tenet of
| which is critical thinking.
| nradov wrote:
| Liberal arts education leaders haven't been doing
| themselves any favors. During the recent COVID-19
| pandemic we saw many college administrations abandon all
| critical thinking to enforce blind obedience and
| mandatory compliance with pointless and counterproductive
| policies around lockdowns and mandates. Scientists were
| condemned for daring to even discuss alternative views.
|
| I absolutely see value in classical liberal arts
| education. But popular denigration is inevitable when
| people see hypocritical academics casting aside true
| liberal thinking and using their platform to promote
| pernicious ideologies.
| RankingMember wrote:
| I think it's very easy to Monday morning quarterback
| administrative decisions about COVID-19 mitigation now
| that we're past it, when, at the time, we had very little
| information which led to a ton of hysteria. I'm not going
| to relitigate the COVID-19 pandemic response, but I will
| say I don't think it was inconsistent or ill-advised at
| all to err on the side of following national health
| guidance in an emergent situation like that. Even from a
| purely legal/lawsuit-aversion standpoint, you'd ignore
| federal guidance/mandates at your financial peril.
| nradov wrote:
| You're really missing the point. Many liberal arts
| college administrations went far beyond any sort of
| federal government guidance, and imposed lockdown and
| mandate policies with zero scientific basis. Or look how
| the Stanford University administration and fellow
| academics treated Dr. Jay Bhattacharya; that story was
| repeated at colleges all over the country. The level of
| hypocrisy and inconsistency makes it clear that they
| don't deserve any sort of benefit of the doubt.
|
| Classical liberal arts are wonderful, and have been a
| great benefit to all of humanity. But sadly many
| academics no longer live up to those ideals in thought,
| word, and deed. Instead they're more focused on
| indoctrination and political advocacy then a search for
| higher truth. If they want to restore public trust in
| liberal arts education then they need to start by
| reforming themselves. Otherwise no one will take them
| seriously, and many taxpayers will oppose public funding.
| enlightens wrote:
| >imposed lockdown and mandate policies with zero
| scientific basis
|
| The If Books Could Kill podcast just came out with an
| episode last week about how the phrase "lockdown and
| mandate policies [have] zero scientific basis" is almost
| technically true but is certainly incredibly misleading.
| The short version is that it would be incredibly
| difficult to ethically test many healthcare policies to
| the point that they have scientific support in the way we
| usually think of having evidence... but we can look at
| the preponderance of evidence we do have and understand
| that masks help block germs and viruses, staying home
| from work or school means I won't transmit contagious
| diseases to my colleagues, etc
|
| https://www.buzzsprout.com/2040953/episodes/17348825-in-
| covi...
| bigstrat2003 wrote:
| > at the time, we had very little information which led
| to a ton of hysteria
|
| If anything, this simply underscores GP's point. Getting
| hysterical when you lack information is a total failure
| of critical thinking, so to the extent that liberal arts
| educators did so, we _should_ be skeptical of their
| ability to think critically.
| Analemma_ wrote:
| No, that's not a correct conclusion in full generality.
| The first days of Covid where a case of decision-making
| under uncertainty: what if R _had_ been 10 and the
| fatality rate _had_ been 25%? We did not know at first,
| and these are not absurd numbers: they have existed in
| past pandemics and if they had held again, fatalities
| could have been in the tens of millions. Locking down
| until you can gather more data to rule out this
| possibility is a rational decision under that
| uncertainty, because there 's asymmetric downside risk of
| "tens of millions die" versus "chattering internet
| commenters are annoyed they can't go to the beach".
|
| There's more of an argument here regarding lockdowns
| going on longer than they needed to, but as much as
| people want to blame "the experts", most of _that_ was
| bottom-up from voters. To cite one example, despite how
| many times I 've heard to the contrary, the CDC never, at
| any point, recommended school closures: that was pure
| grassroots demand from parents.
| kiba wrote:
| Million of people die in the US. In a pool of 300 million
| people that might be a small minority but it could be
| much worse.
|
| I was diabetic and still am, and was obese. I was also
| young. There's no telling that a viral infection would
| have landed me in the hospital but I do have risk
| factors.
|
| COVID is definitely a risk. It would be foolish not to
| practice at least some measure of risk control.
|
| There's definitely some loss of trust in institutions,
| but if it weren't for RFK, I would still trust them more
| than some random skeptic covid. Now, I don't trust the
| FDA anymore, how ironic.
| vdqtp3 wrote:
| In Southern California, surfers were arrested for surfing
| on an empty beach. Parks were closed. This was hailed as
| a safety measure. I suspect these sorts of policies are
| what GP was talking about, rather than vaccines or
| masking.
| mapt wrote:
| These were completely valid short-term responses to a
| situation where an effectively quarantined country had a
| small outbreak in Venice Beach and we didn't know a lot
| about spread.
|
| But we were not that country. If the front door is wide
| open and there's a large sign above it saying "Free stuff
| - take what you want" because your spouse wants to
| embrace minimalism and throw away all your joint
| belongings, then triple deadbolting the back door and
| installing security cameras are not effective measures to
| protect your belongings.
|
| There are other policy areas where states can experiment
| with "Red state" vs "Blue state" policies and compare how
| they perform, but pandemic spread is not one of them. The
| most permissive line of defense is the decision that has
| been made for everyone, and all it takes is one person
| (we used to call these 'bioterrorists', now we call them
| 'Presidents') to decide to "get this over with before the
| election", and it renders any other sensible precautions
| moot.
|
| Areas where very aggressive precautions were implemented
| to counterbalance reckless policies elsewhere... didn't
| do that. You can't do that, without a very strong
| quarantine around the different policy regions.
|
| This does not offer any commentary on the idea of
| sensible precautions, in a vacuum. The politicization of
| COVID that happened very rapidly didn't need to occur,
| and it did not occur in most other pandemics in this
| country, or in many other countries during COVID.
| johnnyanmac wrote:
| You picked two odd examples. A beach is debatable as
| being capable of being opened and closed, and whether or
| not a person is tresspassing, but parks are generally
| managed by the state or country. Of course they can close
| down. They typically close from subset to sunrise.
| spacedcowboy wrote:
| The idea of a beach closing at night-time was novel to
| me, when I first came to the US. In the UK beaches are
| ... just beaches, their status is that of "beach", and
| access is not controlled at all.
|
| Generally there's a fine for being caught sleeping on the
| beach I think, but that's really to discourage people
| being swept away.
| bigstrat2003 wrote:
| > There's definitely some loss of trust in institutions,
| but if it weren't for RFK, I would still trust them more
| than some random skeptic covid. Now, I don't trust the
| FDA anymore, how ironic.
|
| I stopped trusting the institutions the moment that the
| CDC admitted that they lied to people about "masks aren't
| effective" in an effort to preserve supplies for
| hospitals. Even if their motivation was good, that
| doesn't matter in terms of trustworthiness. If they lie
| to me (as they indeed did), I'm not going to trust them
| any more.
| olddustytrail wrote:
| I would find that a little more convincing if the people
| complaining about being lied to about the efficacy of
| masks were also the people who were afterwards arguing
| most strongly in favour of masks.
|
| Strangely, it appears to be the opposite.
| johnnyanmac wrote:
| I don't know how any of that had to do with liberal arts.
| To give you the benefit of the doubt and assume you're
| interpretation is correct: do you blame the person when
| they panic in a major earthquake, as they watch their
| peers crushed around them?
|
| It wasn't normal times and abnormal times need
| preparation. It's a great thing the acting president
| during COVID removed the pandemic response team the
| previous year. It's not wonder we were chickens wandering
| about without our heads.
| mrguyorama wrote:
| > because we've been literally removing that from the
| curriculum in schools
|
| Do you have any actual evidence of this or is this just
| more parroting of vibes based history?
|
| Most of the people I know who say things like "School
| didn't teach me X" were just not paying attention. Turns
| out, if your society doesn't care about or _value_
| education, kids aren 't going to pay attention.
|
| Like, some states definitely have mediocre education in a
| lot of ways, but people will say shit like "Why didn't
| school teach me how to balance a checkbook" as if school
| didn't teach them basic arithmetic and the ability to
| read a single paper of instructions _included in your
| checkbook_ by middle school.
|
| Or you have people saying "Why didn't school teach me how
| to understand a loan" as if they didn't learn algebra and
| how to plug a couple numbers into a calculator right next
| to me in class.
| johnnyanmac wrote:
| The "vibes" are that the US government has been cutting
| funding from education since the 80's. I feel this is
| very well established, but if you really want a source I
| can fish up a few charts. As a fun fact, today we still
| spend about as much per student as we did in the 80's for
| university. The main difference is that funding cratered,
| so colleges need to make up for that out of pocket.
|
| >people will say shit like "Why didn't school teach me
| how to balance a checkbook" as if school didn't teach
| them basic arithmetic and the ability to read a single
| paper of instructions included in your checkbook by
| middle school.
|
| Not sure I agree with this interpretation. It's like
| responding to "why didn't they teach CS" with "well they
| taught you discrete math and binary". Specialized
| instruction on applied mathematics is well worth
| pursuing. It's arguably the big reason Al many students
| end up thinking "I'm bad at math". They get no context on
| what it's really used for.
| Whoppertime wrote:
| https://www.cato.org/blog/new-k-12-productivity-chart
| It's hard to believe that education is getting less
| funding. There seems to be a perception that spending
| more money on education will result in smarter students
| or higher test scores but that doesn't seem to be the
| case. Obviously if you spend $0 on education results will
| suffer, but there's a point of diminishing returns where
| $1 more in spending doesn't seem to have any impact on
| key metrics
| mrguyorama wrote:
| How much we spend on _school systems_ is not a meaningful
| indicator of how much we spend on _education_.
|
| American teacher income has barely tracked inflation over
| the past 30 years, and it sure as shit didn't start high
| in the 90s. Teachers still have to buy their own
| supplies, still rely on old material, and still basically
| can't afford to live.
|
| Gee, why is it so hard to get good teachers into the
| American school system when someone who is able to go
| through 4-6 years of college and is smart enough to
| manage and teach a room full of 30 kids can do pretty
| much anything else and make way more money? The money
| isn't going to education.
|
| So where's the money going?
| Whoppertime wrote:
| I think contemporary events force people to be skeptical.
| For one generation it was the Vietnam War, the dissonance
| between what generals were saying and what was happening
| on the ground. Another generation had that happen with
| WMDs in Iraq. I think many in this generation had it
| happen with "2 weeks to flatten the curve" and the
| dissonance between promises made about COVID, the
| efficacy of lockdowns or the efficacy of vaccines.
| jerf wrote:
| The system will never tell you how to escape from the
| system. Don't hold your breath waiting for that to
| happen.
|
| "Critical thinking" was never really taught in schools.
| It was always just training in how to dismiss any
| proposition by "criticizing" it selectively, with a heavy
| bias towards criticizing anything outside the system, and
| a token zone of approved disagreement to convince
| yourself that you really are free to disagree with
| things.
| lurk2 wrote:
| This is conspiratorial nonsense.
| DHPersonal wrote:
| It sounds very familiar to a fundamentalist Christian,
| taught in either private or home schools that fostered
| that sort of thinking.
| nobody9999 wrote:
| >>This is conspiratorial nonsense.
|
| >It sounds very familiar to a fundamentalist Christian,
| taught in either private or home schools that fostered
| that sort of thinking.
|
| That's as may be, but it doesn't make it any less
| "conspiratorial nonsense," does it?
| DHPersonal wrote:
| Maybe. For some reason it seemed like a more poignant
| reply at the time, but now I see it doesn't add much to
| the conversation. :)
| dredmorbius wrote:
| Something I'd stumbled across a few years back:
|
| _First, the universities were given the task of
| providing an unceasing supply of ideologically correct
| candidates for vital positions in government, church, and
| business. The state was able to make the faculties of the
| "venerable institutions" of higher education, or rather
| indoctrination, assume this duty because it controlled
| appointments and held the purse from which "emoluments"
| flowed into the coffers of academics. Hence the members
| of the university "hierarchy" made it their "business,
| the business for which they ... [were] paid," to "uphold
| certain political as well as religious opinions," namely
| those of the "ruling powers of the state" (J.S. Mill,
| Autobiography and Literary Essays, p. 429 (1981), J.S.
| Mill, Journals and Debating Speeches, p. 350. (1988) ).
| Thus the universities pursued with vigor their assignment
| to inculcate in their students those political and
| ideological views that were cherished by the power elite.
| The graduates of the ancient universities were,
| therefore, well prepared for employment in, and by, those
| institutions that were instrumental in perpetuating the
| existing maldistribution of income. All of this might
| come to naught, however, if the masses of the underclass
| should achieve anything approaching success in potential
| attempts at throwing off their fetters._
|
| The state devised a second educational strategy in order
| to prevent such a calamity from occurring. According to
| Mill, the "elementary schools for children of the working
| classes" were given the task of ensuring that the poor
| would continue to accept docilely their dismal station in
| life. It was very easy for the state to force the public
| schools to assume this role. It did so simply by failing
| malignantly to allocate sufficient funds for the
| operations of what Mill identified contemptuously as
| "places called schools" (J.S. Mill, Essays on England,
| Ireland, and the Empire, p.200; emphasis in original).
| These places were therefor understaffed. Moreover, the
| few teachers who were actually employed were completely
| "unfit for their work." The pupils therefore were so
| "wretchedly ill-taught" that they "did not ... even learn
| to read." And, said Mill with disgust, no attempt was
| "made to communicate ideas, or to call forth the mental
| faculties" of the children". (J.S. Mill, Public and
| Parliamentary Speeches, November 1850 - November 1868, p.
| 322 (1988). J.S. Mill, Essays on England Ireland, and the
| Empire, p. 200 (1982)).
|
| Hans E. Jensen, "John Stuart Mill's Theories of Wealth
| and Income Distribution" <https://web.archive.org/web/201
| 90828233020/http://www.tandfo...>. _Review of Social
| Economy_. Pages 491-507. Published online: 05 Nov 2010.
|
| Previously noted: <https://web.archive.org/web/2019082823
| 3020/https://old.reddi...>
| const_cast wrote:
| Critical thinking was taught in schools. That's English
| class and, to a lesser extent, history or social studies.
|
| Naturally a lot of engineer-types blew those off as
| subjective mumbo jumbo. But that's critical thinking.
| spacedcowboy wrote:
| You guys never did "This house believes that..." with
| random teams ? We had one lesson a week on it while
| English Language was compulsory in senior school (ages
| 11..16), and the winners got to choose the next week's
| topic.
| _DeadFred_ wrote:
| There are MILLIONs of human years of effort, by experts at
| manipulating people, put into making people feel this way.
|
| Saying bro, why can't your willpower overcome MILLIONS of
| years of experts trying to manipulate you is a pretty weak
| argument. It's basically the same as saying 'why can't you
| take on the top UFC fighters?' at this point. There is a
| battle to squeeze everything possible out of the sheep on
| one side, on the other side is us sheep that just want to
| chill, enjoy life a little. The sheep are f'd.
| ndriscoll wrote:
| GP isn't saying "why can't you take on top UFC fighters?"
| They're saying "why would you try to take on top UFC
| fighters?" It's exactly that one-sided battle that makes
| it so avoiding the engagement is necessary. A lot of
| effort is no doubt spent developing psychological weapons
| to use against me. Fortunately there are very few
| channels for any of them to use to reach me.
| GuinansEyebrows wrote:
| > but there is still responsibility for people choosing to
| listen to it
|
| yes, sure, this is easy to say, but hundreds of billions of
| dollars and uncountable person-hours go into this
| manipulation machine, and many peoples' lives and
| livelihoods depend on maintaining it. it's a lot to ask of
| _every_ individual to be _solely responsible_ for the
| negative impacts of advertising when we all have lives we
| want to live.
|
| i'm not saying personal responsibility doesn't play a part,
| but we shouldn't atomize - we should be organized and wield
| regulation more effectively against the profit motive.
| jstanley wrote:
| I don't think blame was being apportioned.
| mihaaly wrote:
| Believing what is told, trut all what is told, is something
| to be blamed about (here I am assuming we are talking about
| adults). Not like blame was allocated here, just since the
| topic was mentioned.
| lm28469 wrote:
| You're probably doing things every day without ever
| questioning them, things that other people would find
| extremely weird and/or brainwashed behaviours.
|
| Some of my friends became corporate drones when they moved
| to a country where most people are corporate drones, they
| don't see the problem even though they changed their entire
| personality to fit in, yet they are educated, cultured and
| smart
|
| If it was that easy the average Joe wouldn't be in such a
| bad mental and physical shape... the forces at play are
| much stronger than individual will, especially when said
| will is being worked against from the beginning.
| paxys wrote:
| Average *American
| SecretDreams wrote:
| Probably average "any country where it's common to own a
| car for less than 10 years" tbh.
| graemep wrote:
| and those that do not meet that criteria are going the
| same way.
| mantas wrote:
| Nah. More like everywhere besides North Korea.
| rayiner wrote:
| There is no "system." It's all just people making choices. My
| wife puts straws in the dishwasher to reuse them. She grew up
| in America the same as everyone else.
| lm28469 wrote:
| > It's all just people making choices.
|
| Yeah sure... and some people get together and make choices
| that impact other people ability to make choices, it really
| isn't rocket science.
|
| If you think Zuckerbeg spending hundreds of millions a year
| to get the top XXX behavioural scientists to work on how to
| milk your attention span has the same impact as "my wife
| puts the straw in the washing machine to reuse them" I have
| bad news for you
|
| idk how you call lobbies spending literal billions every
| year to make you think "cars are freedom", "debt is
| wealth", &c.
| LinXitoW wrote:
| There's no system the same way there's no Facebook, just
| some databases and servers. Or there's no Java language,
| it's all just UTF-8 characters. Or there's no government,
| there's just people voting for other people. Or there's no
| society, it's all just fancy apes existing and making
| decisions.
|
| It's quite frankly ludicrous to be a software engineer and
| pretend systems don't arise from "individual" "independent"
| elements.
| 9rx wrote:
| _> Or there 's no Java language, it's all just UTF-8
| characters._
|
| Some programming languages explicitly require UTF-8 in
| the language specification. Java is not one of them.
| lxgr wrote:
| As of Java 18, it is: https://openjdk.org/jeps/400
| 9rx wrote:
| That's not what your link says: The
| Java language allows source code to express Unicode
| characters in a UTF-16 encoding, and this is unaffected
| by the choice of UTF-8 for the default charset.
|
| Perhaps you pasted the wrong one by mistake?
|
| Not that such a change to the language for future code,
| even if only hypothetical, would bear any difference to
| this discussion anyway as legacy Java code encoded in
| other charsets is still Java code.
| lxgr wrote:
| Just one sentence after the one you quoted:
|
| > However, the javac compiler is affected because it
| assumes that .java source files are encoded with the
| default charset, unless configured otherwise by the
| -encoding option.
|
| Interestingly, in Windows, Java programs were supposedly
| encoded in CP-1252 before this...?
|
| > In JDK 17 and earlier, the default charset is
| determined when the Java runtime starts. On macOS, it is
| UTF-8 except in the POSIX C locale. On other operating
| systems, it depends upon the user's locale and the
| default encoding, e.g., on Windows, it is a codepage-
| based charset such as windows-1252 or windows-31j.
| 9rx wrote:
| 1. javac is an implementation, not a specification.
|
| 2. As noted in the very quote provided, said particular
| implementation accepts various encodings; naturally, as
| the language allows various encodings.
|
| That is quite unlike the languages that specify that
| anything other than UTF-8 is invalid code.
| rayiner wrote:
| As a former engineer, I would say a "system" is designed
| as a whole, like all of the things you mentioned (but
| unlike society). If we are talking about the interactions
| between separately designed things--e.g. various
| autonomous vehicles designed by different companies--then
| we'd talk about "emergent behaviors," not "systems."
| RankingMember wrote:
| The problem is some of us have way more weight to throw
| around than others, so in some cases one of those "people
| making choices" has as much impact as millions of people.
|
| As a side-note, putting straws in the dishwasher doesn't do
| a very good job of cleaning the insides of them.
| Unfortunately, you've gotta faff with those little brushes.
| etblg wrote:
| How does she prevent them from falling through the holes
| and hitting the heating element at the bottom? Does she
| throw them in the cutlery basket? Wouldn't it be light
| enough to fly around inside the dishwasher and land
| somewhere undesired?
| rayiner wrote:
| She puts them in the cutlery basket.
| fHr wrote:
| Consumer brainrot is real and declining education is not
| helping this cause either
| ljm wrote:
| Wages for the average person (working class) typically remain
| stagnant while cost of living increases, particularly through
| inflation. I imagine minimum wage would be 25-30 bucks an
| hour if it did track inflation and that would only serve to
| keep your purchasing power constant.
|
| Credit, in this sense, is also used to solve a cash flow
| problem. It's a bad sign when that credit (or Klarna Pay-in-3
| style setups) is applied to basic day to day expenses like
| buying groceries or other necessities.
|
| Basically the market's answer to increasing poverty: you're
| not getting paid more, so how about we give you a payment
| plan to spread things out?
| 9rx wrote:
| _> Wages for the average person (working class) typically
| remain stagnant while cost of living increases,
| particularly through inflation._
|
| If wages were stagnant, nominally, you'd be making like
| 25C/ per hour. Wages are stagnant[1] only in real terms
| (i.e. adjusted for inflation). Cost of living and inflation
| are very different concepts, but since you indicate that
| inflation is responsible for most of the cost of living
| increases, wages have kept pace anyway, so...
|
| [1] Technically not even. Wages are growing faster than
| inflation, but the margins are small enough that we accept
| calling it stagnant as a close enough approximation.
| bryanlarsen wrote:
| That's not true. Wages have generally outpaced inflation as
| long as we've measured inflation properly. Up until the
| early 1970s this was very palpable, since the early 1970s
| the delta has been much lower, wage increases have been
| very slightly above inflation.
|
| Why does it feel different? 1: the amount of stuff we buy
| has increased a _lot_. Anybody who owns what would be
| considered solidly middle class in the early 1970s will
| feel quite poor today. 2: financial security is way down.
|
| In the early seventies a middle class family of 6 would own
| a 1200 square foot house, a single car, a single TV and a
| single radio would be the sum total of the entertainment
| electronics they owned, they'd have less than a dozen
| outfits apiece, they'd eat out about once a month, a
| vacation to a neighboring state would feel like a splurge,
| et cetera.
|
| But they were relatively content. 1: they were much better
| off than their parents and grandparents, who experienced
| the depression & WW2. 2: they were "keeping up with the
| Joneses". 3: they had a feeling of financial security due
| to job security and the fact that serious health events
| were unlikely to financially devastating.
| kiba wrote:
| Average American household budgets are dominated by
| housing, transportation and taxes.
|
| Maybe some of that problem is about spending too much
| money, but it cannot be denied that housing are
| unaffordable and that transportation is inefficient and
| is a mess.
| 9rx wrote:
| _> Average American household budgets are dominated by
| [...] transportation_
|
| Huh? Doesn't the average American live in a city? The
| whole reason for accepting being squeezed in tightly with
| other people is so that you don't have to worry about
| transportation; enabling everything you could ever want
| and need to be found in short walking distance.
|
| Transportation is for people in rural areas. Yes, it is
| expensive, but that's exactly why most people left rural
| areas for the city long ago.
| smelendez wrote:
| Most American urban areas are dominated by suburbs where
| it's not practical to walk everywhere and public transit
| is very limited. So a car is necessary and often a car
| per working adult.
| 9rx wrote:
| Yes, but why would anyone want to live on what is
| effectively a farm, but without the benefit of separation
| from other people or land (read: income) that a farm
| offers? That completely defies the whole reason for the
| density. I'm not saying it doesn't exist, I question why
| people are doing it.
| acuozzo wrote:
| FWIW, I grew up in Brooklyn, NY. I know about both urban
| and suburban living. I now live in Columbia, MD: a suburb
| from the late '60s planned with high ideals.
|
| My three children each have their own room. They can ride
| their bicycles on our sleepy street without having to
| constantly worry about reckless drivers. They can explore
| the walking trails and wooded areas our community
| maintains. They can play baseball in one of the nearby
| fields without having to worry about breaking a car
| window in doing so.
|
| My wife has a large crafting area. I have an office. We
| have a home theater. We have a workshop in our garage. We
| have a large sunroom which opens to a large deck suitable
| for entertaining many friends at once.
|
| Getting even a fraction of what I described above in a
| city would cost a fortune.
| 9rx wrote:
| The benefits of living in the country are obvious. And
| since the land provides income itself, the extra cost of
| transportation one has to assume to live in the country
| is well offset anyway.
|
| Its the weird middle ground that has all of the downsides
| of the country and all of the downsides of the city all
| packed into one that we're talking about.
| acuozzo wrote:
| > And since the land provides income itself
|
| Hardly. Agriculture is hard work and not at all
| profitable unless the operation is at scale.
| 9rx wrote:
| _> Agriculture is hard work and not at all profitable
| unless the operation is at scale._
|
| You seem a bit confused. While that is more or less true
| for the farmer, it is that way because the landlord
| usually takes most of the profit. As is to be expected.
| They hold all the cards. You can't farm without land. But
| given that in this scenario you are the landlord, not the
| one doing the work...
|
| The key to farm profitability is to own your own land
| free and clear. But, of course, unless you have a high
| paying job doing something else instead of farming that's
| really hard to pull off, so most farmers end up renting
| (either to a landlord directly, or renting money from a
| lender). That's when you need scale to make up for the
| vast majority of the profit going to someone else.
| Whoppertime wrote:
| Some people really just want a back yard with a white
| picket fence their kids can play in
| 9rx wrote:
| Sure, but outside of where that backyard is wanted to be
| hundreds of acres, then there is the density necessary to
| introduce amenities like jobs, healthcare, shopping, etc.
| alongside the backyard. At which point you no longer need
| transportation as you have everything you need right
| there.
|
| But what happens in the places we're talking about is
| that the people accept a small backyard in order to keep
| everything close, but also work to ensure that amenities
| aren't welcome, only allowing other houses to be close.
| So you get all the downsides of the city, having to trip
| over your annoying neighbours, but also the downsides of
| living in the country, having to waste large amounts of
| time driving to do anything.
|
| What do people see in these strange middle places?
| vel0city wrote:
| > The whole reason for accepting being squeezed in
| tightly with other people
|
| That's the thing, a lot of Americans really don't like
| this idea of being squeezed in tightly. People really
| don't like having a shared wall. And it's not that people
| _like_ these tightly squeezed lot lines, they 'd prefer 1
| acre lots. These tiny lots are all they can afford while
| still being somewhat acceptable to them about commutes.
| Which Americans seem to really just not care about
| commute times when comparing to tradeoffs on house size
| and not having shared walls.
|
| And in the end, you can only buy what the cities and
| towns allow to have built. Which is chosen by those who
| live there at the time. The cities then make single
| family structures a requirement, have minimum setbacks
| and lot sizes, have rigid separations between residential
| and commercial spaces, etc. So even those people who
| would want to own an apartment over a commercial suite in
| what you'd consider an urban area can't make that choice
| because that choice is illegal.
|
| But people act like these zoning laws just come about on
| their own. The thing is, these zoning laws are popular.
| They get put into place because that's what the people
| who actually vote in local elections push for. I've seen
| proposal after proposal in cities around me to change
| zoning to allow density even in limited areas get fought
| tooth and nail by residents. I remember a project nearby
| where there was a proposal to build a mixture of 2-3 unit
| townhouses, some single-family narrow lots, and a tiny
| spot of commercial for like a coffee shop on land that
| was currently zoned industrial. All of this connected to
| the bike network, a large city park and a nature preserve
| nearby, and good transit connection at the end of the
| neighborhood. The neighborhoods around fought it tooth
| and nail and eventually the builder walked away after
| trying to negotiate for a few _years_. Well, the land was
| already zoned industrial, construction broke ground
| months later to build warehouses. Now instead of a nice
| neighborhood on my bike path there 's warehouses with
| semi-trucks rolling through all day long. Good job,
| NIMBYs!
| 9rx wrote:
| _> That 's the thing, a lot of Americans really don't
| like this idea of being squeezed in tightly._
|
| Sure, it isn't coincidence that the "American Dream" has
| always been portrayed the sizeable house on a large
| acreage out in the country surrounded by white picket
| fences. But we're talking about the people who are
| choosing to cram in beside one another, but aren't
| bringing the services and joy that such density normally
| offers to go along with it.
|
| _> These tiny lots are all they can afford while still
| being somewhat acceptable to them about commutes._
|
| I've lived in cities and on farms and the commute times
| end up being about the same if you ever have to leave
| your immediate community that is within walking distance.
| You have to drive further from the farm, sure, but the
| highway is surprisingly efficient. Is there some reason
| people are more concerned about distance than time?
|
| The city offers a clear advantage when you are travelling
| short enough distances that you can walk. But, that
| brings us right back to wondering what you need costly
| transportation for? The two dangly things beneath you are
| right there! (Yes, I know, some people hazve
| disabilities, but the discussion isn't about them)
|
| _> But people act like these zoning laws just come about
| on their own._
|
| Not at all. That's why we question why people are doing
| it. It is clearly their own choice. But why when we then
| hear them crying that the transportation costs are too
| high?
| vel0city wrote:
| > the commute times end up being about the same if you
| ever have to leave your immediate community
|
| People routinely leave their community for their job _all
| the time_ here. Go take a look at that map I shared
| earlier. Most of the people in that neighborhood probably
| don 't work in Princeton. They probably don't even work
| in McKinney or Fairview. Good chance they work in North
| Plano, Frisco, Addison, Dallas, maybe Garland. Most
| people living here are probably driving about an hour to
| their job, each way, _every day_. With a lot of those
| people with those kinds of commutes having that take
| place on a tollway.
|
| They do that because they can buy that 4-bedroom 3-bath
| 3-car garage ~2,400sqft with a gameroom house on its own
| lot for $375k. Meanwhile, a similar house within a few
| miles of their work (say, Frisco) is probably anywhere
| from $590k to $2M. Property taxes can be pretty steep
| here, so that $590k house gets like $14k/yr in property
| taxes in Frisco while that $375k house in Princeton is
| only $9k/yr, over $400/mo in additional taxes. They could
| _potentially_ accept a smaller and thus cheaper house,
| but to them it 's not worth the tradeoff. They _need_
| that 3-car garage, they _need_ that gameroom.
|
| My wife has coworkers who live in Forney and commute to
| jobs in Plano and Frisco. They do that commute 3-5 times
| a week and see nothing wrong with it. They value having a
| large home with tons of space, and with the kind of
| income they make there's little chance they could afford
| it anywhere near where those jobs are. Think a security
| guard and a building engineer (like an on-site
| maintenance tech for a commercial property) are going to
| own a $1M+ house? No. But they still want a 3 bedroom
| home with a pool and a spa and an outdoor kitchen, and
| they can get that for $300k in Forney.
|
| Just trying to share the follow on mindset. If you're
| having to leave your home by car every day for work, then
| you're absolutely going to have a car. If you already
| have the car, why go to the little grocery store at the
| edge of the neighborhood when you just spend a little
| more transit time and go to the big store that has
| everything else you'd want to buy?
| 9rx wrote:
| _> People routinely leave their community for their job
| all the time here._
|
| Sure, where the compensation is sufficient to cover your
| travel costs you would reasonably consider it. But then
| transportation costs aren't an issue, making the
| unaffordability idea that started this moot. But, if we
| want to move beyond the topic of cost, that just brings
| us right back to the point that travel time ends up being
| the same living in the city and living in the country, so
| what have you gained by living in the city?
|
| What one normally thinks you would gain is having other
| amenities, like bars, restaurants, healthcare, shopping,
| and just an all round vibrant community right there to
| enjoy when you get home from work. But the particular
| city homes we are talking about don't even have that.
| They are just houses upon houses upon houses all jammed
| up against each other with nothing in-between.
|
| And it is that way because people want it to be that way.
| They don't want the restaurants, shopping, healthcare,
| etc. to be anywhere nearby. Even though they cry that
| they afford to the transportation to get to them, funnily
| enough. But why? What compels one to be tripping over
| their neighbour, but at the same time not wanting to
| engage in a community with them?
| acuozzo wrote:
| > What compels one to be tripping over their neighbour,
| but at the same time not wanting to engage in a community
| with them?
|
| Children, among other things. Let's make this concrete.
|
| I live ~40 minutes from Washington DC and ~30 minutes
| from Baltimore. I have three children.
|
| I'd need, at minimum, a four-bedroom, two-bathroom
| property in the city. It will need to be zoned for a good
| school for obvious reasons.
|
| The 30y mortgage on my six-bedroom, 3.5-bathroom home in
| the suburbs is ~$3,500/month.
|
| Can you find a condominium in either city for this price
| or less?
|
| (For reference: my property value at the time of purchase
| was $575,000.)
| 9rx wrote:
| _> I 'd need, at minimum, a four-bedroom, two-bathroom
| property in the city._
|
| Check out a settler home sometime. They were tiny, one
| room houses that housed themselves and their eight+
| children just fine. You don't need this in any way,
| shape, or form. I do understand why you find it
| desirable, though.
|
| _> It will need to be zoned for a good school for
| obvious reasons._
|
| I don't live in crazy orange man land. What are the
| (unfortunately, not so) obvious reasons? It befuddles me
| that different school zones would be different in any way
| beyond their geographic positioning, which isn't usually
| a concern when it comes to schooling. I've never heard of
| such a thing before.
|
| _> Can you find a condominium in either city for this
| price or less?_
|
| What's wrong with where you already are? If you found the
| lack of jobs, restaurants, entertainment, healthcare,
| etc. in walking to be a problem, you'd have changed it
| already. Like we established, the only reason those
| things aren't found where you are is because you and your
| neighbours have decided you don't want it.
|
| I just don't understand your logic as to why you don't
| want it, but also don't want to live in the country.
| What's the benefit of living where you have all the
| downsides of the city and all the downsides of the
| country all wrapped up in one?
| vel0city wrote:
| > so what have you gained by living in the city?
|
| Jobs, hopefully paying a good bit more than minimum wage.
| If not for the city they wouldn't have any kind of
| income. They don't move to the city because they want
| some Parisian lifestyle, they move to the city because
| there are practically no jobs in the actually rural
| areas.
|
| > They don't want the restaurants, shopping, healthcare,
| etc. to be anywhere nearby
|
| Correct. They see these things as unsafe for their
| families to be around. They don't want to live within
| walking distance of a nightclub.
|
| > Even though they cry that they afford to the
| transportation to get to them, funnily enough.
|
| Most of the people arguing for better walkability and
| better transit access are absolutely _not_ the same
| people actively choosing to live in places like Forney
| and Princeton and what not. They 're generally fine
| having that commute and are fine driving to the Walmart
| when they need something that isn't just delivered to
| their home. Why even bother getting in the car to go to a
| restaurant, Uber Eats will bring the restaurant to them,
| and they don't have to deal with the crowds. Which, the
| few places with actual stores in these areas are
| _massively_ crowded, because it 's just oceans of houses
| around a few dots of shopping areas with giant parking
| areas surrounding them.
|
| > What compels one to be tripping over their neighbour,
| but at the same time not wanting to engage in a community
| with them?
|
| That they were willing to settle for the hour commute and
| not a two-hour commute, and that was the biggest single-
| family home they could afford in that hour commute radius
| and had a decent school district.
|
| You're looking at it in pretty much the opposite
| direction from how they're looking at it. You're looking
| at a community you want to live in and then decide the
| home you can afford. They're looking for the house they
| want to live in, and then find the community they can
| afford to buy in. People didn't choose to live in
| Princeton or Forney or Melissa or Anna (or dozens of
| other "cities" around DFW) because of city amenities,
| outside of maybe a school district. They live there
| because they could buy a big single house cheap.
|
| When I talk to friends about "if you could just move
| tomorrow, where would you want to live in DFW", their
| choices are rarely based in closeness to amenities. It is
| often about wanting more land, more space, more rooms. A
| family of four with a four-bedroom house with a dining
| room and two living rooms, too cramped. Need to move
| further out and get a bigger house. Definitely down to
| trade close access to the bike trails, walking distance
| to a large shopping area, walkable to the transit system
| to go all over the city, public parks with public
| swimming pools within walking distance, the elementary
| school around the corner and the middle school down the
| street for another few hundred square feet of land.
| 9rx wrote:
| _> Jobs_
|
| You haven't gained that, though. Not without travel, and
| once travel is in the picture then you can be located
| anywhere. Like was said in other comments, in practice,
| the time to get to a point in the city is the same if you
| start in the city, or if you start outside of the city.
| Cities build up as hubs for the surrounding area and the
| world at large, so getting things in and out of the city
| really fast is core to their design.
|
| _> no jobs in the actually rural areas._
|
| 1. The data clearly shows that rural areas, as a rule,
| have more available jobs. _But_ you aren 't apt to be
| able to work your way up to becoming a professional
| football player or CEO of a Fortune 500 in those jobs,
| so, granted, the jobs aren't appealing to the temporarily
| embarrassed superstar. I'll give you that.
|
| 2. I don't know where you think this walled city is that
| prevents anyone who doesn't live in the city from
| entering, but I can assure you that we're not talking
| about it. There is nothing that excludes you from city
| jobs if you live in the country, and likewise there is
| nothing that excludes you from working in the country if
| you live in the city.
|
| In fact, those Fortune 500 CEOs and professional football
| players often live in the country!
| vel0city wrote:
| > Like was said in other comments, in practice, the time
| to get to a point in the city is the same if you start in
| the city, or if you start outside of the city
|
| This is objectively, radically untrue. It takes my wife
| 10-15 minutes to get to that same office where it takes
| the people living in Forney an hour to get in. She'll
| spend 20 minutes of her day commuting, they'll spend _two
| hours_. I used to ride my bicycle to the office before I
| mostly worked from home and have it take me maybe 15
| minutes. Coworkers living in a town literally called
| Farmersville routinely took over an hour and a half each
| way. One person has to take a 30-mile trip, one person is
| taking a five-mile trip _which is essentially the same
| final five miles as the 30-mile trip_ , how could it
| possibly be the same time.
|
| > once travel is in the picture then you can be located
| anywhere
|
| They'd agree with this entirely. I already have to have a
| car to get to work, so why wouldn't I just use that to go
| to whatever restaurant or shop I want across the city,
| why limit myself to only where I could walk? Personally,
| I enjoy going to the restaurants right at the edge of my
| neighborhood, on the days I go into the office I like
| strolling through the parks and to the restaurants
| nearby. But lots of people wouldn't want to "limit"
| themselves to only a mile or two, when the shop they'd
| prefer to shop at is a similar time distance away but by
| car.
|
| > There is nothing that excludes you from city jobs if
| you live in the country
|
| Time. Time excludes you from those city jobs. You're
| eventually having to spend more and more time driving
| through all those seas of neighborhoods to those decent
| paying jobs, its eventually just not worth it. People
| aren't going to be willing to drive two hours each way,
| it's amazing they're even willing to put up with an hour
| each way.
|
| Once again, go back to that map of DFW. To really get an
| "affordable" truly rural place on that East side of DFW
| where you'd actually have dozens of acres without
| spending millions, you're probably looking at Josephine,
| Blue Rdige, maybe Westminister as a few examples. Go see
| what the commute time is starting at like 7:00 AM from
| there to Addison. Nearly two hours. Maybe you're going to
| work at a more industrial job in Garland. Nearly two
| hours. Are you willing to spend four hours of your day
| every day in your car?
|
| > The data clearly shows that rural areas as a rule have
| more available jobs.
|
| More available total jobs or more available comparable
| jobs? Please do share this data. Other than specific
| industries like oil and gas it's pretty much the opposite
| from what I can tell.
| 9rx wrote:
| _> More available total jobs or more available comparable
| jobs?_
|
| More actual opportunity, perhaps? Cities have lots of
| available jobs (assuming they aren't fake; that is a
| thing, apparently), and lots of people without jobs, but
| they never seem to align such that the people without
| jobs ever fill the open jobs. It's quite curious. As a
| result, people are much more likely to be without work in
| cities, as seen in the data. Yes, I'm sure you can find
| exceptions if you pick particular locations. We were
| never talking about a specific location.
|
| _> Please do share this data._
|
| I'm sure you can look it up just as easily as I.
|
| I was about to suggest that you can hire an assistant if
| you can't find the time to do it yourself, but whatever
| causes the above disconnect is apt to bite you too,
| assuming you are in a city. Oh well.
|
| _> You 're eventually having to spend more and more time
| driving through all those seas of neighborhoods to those
| decent paying jobs_
|
| What kind of jobs are trapped in these seas of
| neighbourhoods? Most businesses need to get supplies into
| the city and their product out of the city, so _usually_
| the jobs are located on the fast track in and out of the
| city. This means that, if anything, it is easier to
| access the jobs when you _don 't_ live in the city.
|
| Tech might be an exception to that. Maybe that's where
| your mind went, given the nature of this site. But tech
| doesn't require an in-person presence at all, so that one
| doesn't really fit our discussion.
| vel0city wrote:
| > Im sure you can look it up just as easily as I.
|
| Not any datasets that actually agree with your
| assertions. Most datasets showcase the hollowing out of
| rural job opportunities as globalization and automation
| has massively cut back on manufacturing job
| opportunities, automation has reduced farm jobs, rural
| depopulation leads to education closures, etc. So if you
| have a lot of data otherwise please do share.
|
| And once again it completely goes against everything I've
| personally seen in nearly a dozen metro areas. I've got
| family who live in absolutely rural areas and operate
| farms in the Midwest. I've lived in a few metro areas.
| I've got close coworkers in other metro areas from me.
| I've got close friends who came from other rural areas,
| and know many people who live on these fringe of
| metro/rural kind of spaces. They all see the rural areas
| getting hollowed out economic-wise and the only real job
| opportunities are moving closer into cities.
|
| I've driven through probably a dozen dead rural towns in
| Texas. Places that had what were probably lively town
| squares even in the 70s, probably had their last gasps in
| the 80s, and have been largely boarded up since then.
|
| https://www.federalreserve.gov/econres/notes/feds-
| notes/chan...
|
| > We were never talking about a specific location.
|
| I've absolutely been talking specific areas. Have you not
| been reading my comments and actually looking at the map
| in question? And then, this is still pretty similar for
| almost all the other, I dunno, top 30 or so cities by
| population?
|
| > What kind of jobs are trapped in these seas of
| neighbourhoods?
|
| Not _in_ those neighborhoods, _through_ those
| neighborhoods. Decades of continuously pushing the fringe
| suburb line further and further out has done this. The
| towns that were once the edge of the city are now 30+mi
| into the urban area, and they 've never been allowed to
| densify. Once again, it feels like you haven't actually
| looked at that map I linked once. It would be pretty
| obvious spending not even five minutes looking at that
| map to see what I'm talking about.
|
| > Tech might be an exception to that. Maybe that's where
| your mind went, given the nature of this site.
|
| No. My wife doesn't work in tech and those people in
| Forney I'm taking about are security guards and building
| engineers. That's not tech. Once again, are you reading
| my comments? Where are you going to get a commercial
| property building engineer paying nearly $100k in a rural
| area? Going to get a finance job with JPMorgan Chase in a
| rural area? Far easier finding a civil engineering job in
| a place where civil engineers are actually building
| things like skyscrapers and giant highway interchanges
| and what not than a place that barely has a stoplight.
| You're not going to have as well paid healthcare job
| working at a rural hospital struggling to stay open
| especially after this next round of Medicaid cuts
| compared to the giant hospital networks like Baylor,
| UTSouthwestern, Memorial-Hermann, etc, especially if
| focused on some speciality.
| 9rx wrote:
| _> Most datasets showcase the hollowing out of rural job
| opportunities_
|
| Hollowed out opportunity, or hollowed out available jobs?
| As noted earlier, there is a pretty big difference. My
| impression from your comment is that you are trying to
| say that there are fewer jobs available, which isn't what
| we were talking about.
|
| _> I 've absolutely been talking specific areas_
|
| What part of "as a rule" made you think this was about a
| specific area?
|
| _> Have you not been reading my comments_
|
| Can I assume this implies that you have diligently read
| mine? If so, in all seriousness, I'd really like to know
| what part of "as a rule" you took to mean that the focus
| was on a specific area. My intent was very much to try
| and avoid focusing on a specific area as I understand
| full well that conditions can vary from place to place.
| I'd like to understand how I failed to communicate that.
|
| But perhaps you were so busy trying to tell me your life
| story that you didn't actually read it after all.
| vel0city wrote:
| > What part of "as a rule" made you think this was about
| a specific area?
|
| As a rule that just happenes to not work in any of the
| large metros of the country in question. I've got a rule
| that a pen always rolls off on the left side of a desk,
| too bad it only works on my desk here that is missing a
| couple of legs!
|
| > Hollowed out opportunity, or hollowed out available
| jobs? As noted earlier, there is a pretty big difference
|
| Sure they'll go work minimum wage jobs at the highway
| fast food and gas stops. Buc-ees is iticing for jobs to
| sling BBQ sandwiches and scrub toilets! Big opportunity
| there. Once again, where's your data? I've linked mine,
| you're a foreigner going arguing against my lived
| experiences without even pointing to actual data, instead
| berating me and taking down to me about asking for you to
| actually give examples.
|
| > Can I assume this implies that you have diligently read
| mine?
|
| Yes, I have read yours. Have you actually read mine? I'm
| taking about one of the largest metro areas in the US
| trying to describe why people make the choices I do,
| showing real examples backed by federal reserve data and
| actual maps and housing costs and tax data. You're
| seemingly ignoring them and instead giving your own
| imagined ideas of transit times and job opportunities and
| property values not backed by any kind of data.
|
| You're giving assumed ideas while ignoring actual factual
| linked data and _multiple_ lived experiences in this chat
| while accusing me of not reading the data you refuse to
| share. You might want to re-evaluate who is going by gut
| assumptions.
| chasd00 wrote:
| Many people who live in those towns you describe work in
| McKinney, Plano and other parts of the suburbs. I'm not
| saying you're wrong because there certainly are those
| people that make those commutes. I personally know a dev
| who lives in Prosper and another who lives in Melissa and
| they both commute to Las Colinas! Their reasoning was
| home affordability, home value growth, and school
| quality.
| vel0city wrote:
| Many people do, I agree! I'm not trying to paint it as
| _everyone_ living there does have an hour commute, it 's
| true many don't.
|
| But yeah, go work a job in Addison, Las Colinas, deep in
| Plano, etc. You'll find a lot of coworkers living in
| Farmersville, Prosper, Melissa, etc.
|
| > Their reasoning was home affordability, home value
| growth, and school quality
|
| This is yet another set of data points showing what I'm
| talking about, thank you. These people live there because
| it was cheap when they bought it, they expect the
| metroplex to keep growing increasing the value of their
| eventually "closer in" home from where the outskirts will
| be in a decade, and schools are better than other places
| they might have afforded to buy. Am I wrong?
|
| In the end transit time to the American Airlines Center
| to watch a Mavericks or Dallas Stars game didn't matter.
| It didn't matter it wasn't the restaurant capital of the
| region.
|
| And I don't blame them, that was the choice they were
| given with the options presented. Housing in the US is a
| mess, and it seems few get what they'd _really_ prefer
| they just have to live with the tradeoffs of what 's on
| the market at the time.
| jimbokun wrote:
| > That's the thing, a lot of Americans really don't like
| this idea of being squeezed in tightly.
|
| I think it's a large and growing cultural divide.
|
| There is a growing class of predominantly progressive
| people who look to walkability scores and the variety of
| ethnic restaurants and music venues to evaluate the
| desirability of a place to live. And an older more
| conservative cohort who value what you describe.
| vel0city wrote:
| I agree there's a growing divide there, and even a decent
| middle ground there of people who value maybe having a
| yard but want a park and shops and what not within
| bicycle distance and not be entirely car dependent.
|
| I'm not entirely sure it's fully an age divide.
| Definitely age-weighted, I can agree. Other than family
| that grew up in NYC, most of my family >50 thinks I'm
| crazy for taking my kids on public transit and can't
| understand why I'd like to live closer in the city with
| kids compared to living in the sticks on a large property
| and a 15 minute drive to the grocery store. But there's
| also a lot of conservative younger-ish (millennial and
| younger) people who also seem to have that same mindset
| of wanting to live further out of the city and don't care
| or are against things like transit and tax dollars spent
| on city parks and bike lanes.
|
| That example of the family of four where a four bedroom
| house is just too cramped for their needs I gave
| elsewhere? They're barely 30. They're absolutely not
| alone in what they're looking for.
| danans wrote:
| > Yes, but why would anyone want to live on what is
| effectively a farm, but without the benefit of separation
| from other people or land (read: income) that a farm
| offers?
|
| They don't want complete separation from other people.
| They want conveniences of the city/metropolis (access to
| jobs, entertainment, and education) while having a lot of
| space around their home for recreation & privacy.
|
| They don't want farm work (required for that income)
| either - it's physically and emotionally hard and margins
| are thin and fragile depending on the weather.
| 9rx wrote:
| _> They want conveniences of the city /metropolis (access
| to jobs, entertainment, and education)_
|
| But not without having to travel. And once travel is in
| the picture, you can be to the same places just as fast
| from a farm as you can from another point in the city. It
| might be hard to appreciate if you have never lived on a
| farm, but once you do you'll realize that the highway is
| unbelievably efficient.
|
| Your point only holds for when that stuff is available
| within walking distance of one's home. But now we're back
| to not needing costly transportation, so...
|
| _> They don 't want farm work (required for that income)
| either_
|
| Where do you get the idea that farm work is a necessary
| condition to realize an income from farm land? Most
| farmers (in the legal sense) don't farm their own land,
| they have other farmers work it through
| sharecropping/rental agreements.
| danans wrote:
| > But not without having to travel. And once travel is in
| the picture, you can be to the same places just as fast
| from a farm as you can from another point in the city.
|
| Your phrase "having to travel" is painting with a very
| broad brush.
|
| There are naturally huge variations in transit time
| depending on where you live in a metropolis, where you
| are going, and how you are getting there.
|
| I can walk 15 minutes to a coffee shop and grocery store,
| drive 20 minutes to a Walmart, and take a train 35
| minutes to the office.
|
| All are very convenient and the latter two require
| transportation.
|
| > Where do you get the idea that farm work is a necessary
| condition to realize an income from farm land? Most
| farmers (in the legal sense) don't farm their own land,
| they have other farmers work it through
| sharecropping/rental agreements.
|
| Even if you aren't doing the hard labor, you have to want
| to manage that kind of business. Most people evidently
| prefer not to, and instead like urban jobs. The last 150
| years of urbanization isn't a fluke.
| 9rx wrote:
| _> I can walk 15 minutes to a coffee shop and grocery
| store_
|
| Not to make it sound like a competition, but I can do it
| in 5 _not_ living in a city. Why does it take so long in
| a place that should be optimized for keeping everything
| close by?
|
| _> drive 20 minutes to a Walmart_
|
| I can be to two different Walmarts given 20 minutes. That
| is also an unusually long time for a heavily populated
| area. Are you actually living in a rural area with a
| train and I misunderstood?
|
| _> and take a train 35 minutes to the office._
|
| Okay. You got me there. I don't have a train in my
| backyard. It would take me 20 minutes to get to the
| station.
|
| But, to be fair, when I lived in a big city downtown it
| also took me 20 minutes to get to the station, so perhaps
| your situation of having a train sitting right outside
| your door waiting on you is a bit unusual?
|
| That said, perhaps you have included, say, 20 minutes to
| get to the station, and a few minutes waiting on the
| train. But in that case is the 5-10 minutes of actual
| train time really that advantageous? In this scenario
| you're almost at your destination before you even get on
| the train. Presumably this isn't what you meant.
|
| _> you have to want to manage that kind of business._
|
| You'd have to report your income to the government. What
| else is there?
|
| The onus will be on the farmer working the land to do
| everything else. I know that well, because I'm one of
| those farmers. The industry is much too competitive to
| think you can make the landowner do anything.
| johnnyanmac wrote:
| Because it's cheaper, if we're bring frank. The middle
| class is slowly being priced out of urban sprawls.
| potato3732842 wrote:
| You've been mislead by an overloaded term. Urban in an
| academic context is a much lower bar than urban in a "any
| reasonably layman's meaning of the word" context.
|
| Pretty much any time you hear "city" or "urban" it's
| either a direct or indirect reference to US census data
| (or follow on research by other academics that uses their
| definitions) which play fast and loose with the word
| urban in a way that results in the population of even the
| most far out municipalities within a city's economic area
| being countable as urban in some capacity depending on
| what data set you want to use (some of the data sets draw
| economic distinctions rather than lifestyle ones, so a
| rural farmer who exists in the eoncomic gravity well of a
| major urban area will be counted as urban).
|
| This is all magnified by substantially less than honest
| people omitting the potentially misleading nature of the
| term when it suits them and the people who they've
| informed going on to parrot it without actually
| understanding it.
|
| INB4 nitpickers, it's been a decade since I've done any
| work with this data, if my knowledge is out of date and
| it's no longer misleading to the layman then good.
| 9rx wrote:
| _> Urban in an academic context is a much lower bar than
| urban_
|
| I said _city_ , not urban, trying to portray a high
| density, well populated area. I fully recognize that the
| US considers a community as small as 2,000 people to be
| urban. And, similarly, you need as few as 1,000 people in
| an area in my country to fall into what is considered
| urban. This is all well known and understood.
|
| That said, the 3,000 people strong town I live in has
| everything you need in walking distance, so the point
| still stands even for small urban too. But it remains
| that average American lives in larger, more dense
| communities than that, so the idea of needing
| transportation is quite strange and defeats the purpose
| of the density.
| danans wrote:
| > But it remains that average American lives in larger,
| more dense communities than that, so the idea of needing
| transportation is quite strange and defeats the purpose
| of the density.
|
| Generally, American suburbs (where most Americans live)
| are neither dense nor particularly walkable. Driving is
| the only option (since they also generally lack public
| transit).
|
| > That said, the 3,000 people strong town I live in has
| everything you need in walking distance, so the point
| still stands even for small urban too. But it remains
| that average American lives in larger, more dense
| communities than that, so the idea of needing
| transportation is quite strange and defeats the purpose
| of the density.
|
| If you live in a pre-car American town (like the kind
| that Strong Towns champions), it is likely far more dense
| than the typical American suburb, and built for walking
| access - since that was the default at the time they came
| into existence.
| 9rx wrote:
| _> If you live in a pre-car American town_
|
| Technically it was established before the automobile, but
| its tenth of a mile downtown commercial strip is the only
| remaining remnant of that. For all intents and purposes,
| it was built to "modern" standards, which is to say that
| its density is on par with the average American suburb. -
| To be fair, the streets and sidewalks are sensibly laid
| out. Some of those winding maze suburbs would take days
| of walking just to get out of the maze. That certainly
| helps.
|
| By definition, urban requires at least 1,000 people per
| square mile at minimum. Any less than that and a place is
| well and truly rural by every account. Even at that
| minimum density, unless the town is literally a straight
| line, most everything should still be reasonably
| walkable.
|
| The difference is really only that people in towns of
| 3,000 people want all the jobs, services, and amenities
| as possible. Whereas suburban folk fight tooth and nail
| to keep it all out. But the question is: Why? Why
| wouldn't you want those things nearby, most especially
| when you are complaining you can't afford transportation
| to those amenities where there are found elsewhere?
| What's the appeal of being shoved up tight against your
| annoying neighbour and to have nothing else?
| danans wrote:
| > The difference is really only that people in towns of
| 3,000 people want all the jobs, services, and amenities
| as possible. Whereas suburban folk fight tooth and nail
| to keep it all out. But the question is: Why? Why
| wouldn't you want those things nearby, most especially
| when you are complaining you can't afford transportation
| to those amenities where there are found elsewhere?
|
| Because the amenities usually require low income service
| employees, who then might want to live in that suburb, or
| just stay past their quitting time, which might then
| compromise some of the reasons you liked the suburb in
| the first place.
|
| > when you are complaining you can't afford
| transportation to those amenities where there are found
| elsewhere
|
| I don't think suburbanites complain about the cost of
| transportation. They complain about the time spent in
| traffic.
| vel0city wrote:
| This is an "urban" home in a "city" of nearly 40,000
| residents. Good luck telling this family they don't need
| to worry about paying for at least one automobile.
|
| https://maps.app.goo.gl/niLDDJkrkYJ1Hh4J7
| bryanlarsen wrote:
| That's a two-edged sword. Food, clothing, cars and all
| sorts of factory produced stuff are significantly cheaper
| today than they were 50 years ago. So they don't dominate
| budgets the way they used to 50 years ago.
| xeromal wrote:
| I remember reading years ago that food used to cost 30%
| of a family's income in the early 1900s
| johnnyanmac wrote:
| Yes, so why are we ignoring that housing is multiple
| times more expensive? Even with 5 times the luxury
| expenses, you're not going to end up cheaper than boomers
| who paid $1000 on a mortgage in a high COL area. Telling
| people to penny pinch on buying Netflix subscriptions
| while rent is 70% of their budget is just political
| theater at this point.
| bryanlarsen wrote:
| Rent per square foot per person as a fraction of income
| has been relatively constant. Rent has gone from 13% of
| income in 1970 to 30% of income today, but average house
| size has doubled and average family size has halved.
| BobaFloutist wrote:
| Taxes? That can't possibly be right. Average American
| household pays a small fraction of their income in taxes.
| Unless they somehow got a huge, expensive house and have
| the mortgage paid off, I don't see how their income could
| possibly be dominated by taxes over, say, healthcare, or
| food.
| drdec wrote:
| Income tax is not the only tax.
|
| First off there is payroll tax.
|
| Then there are sales taxes.
|
| And don't forget property tax.
|
| I am probably forgetting something.
| Whoppertime wrote:
| Well if they're buying gasoline in California, or
| cigarettes in Australia taxes can be a huge part of the
| pricetag even if they're not thinking of it as taxes. You
| can see various taxes and fees if you look at the receipt
| of an airline ticket or a bill from a Telecoms company. I
| admit the fee they add to fund 911 calls isn't typically
| large but every little bit adds up
| JamesBarney wrote:
| A family that makes 80k spends about
|
| - 9400 on federal income taxes
|
| - 12,000 on payroll taxes (including corp chunk b/c of
| economics)
|
| - 3000-9000 on sales/property/stage income taxes
|
| That's a pretty big chunk.
| BobaFloutist wrote:
| I guess I don't really count payroll taxes since it's not
| a line item in my budget. Anyway, that's certainly a
| bigger chunk than I was envisioning.
| jimbokun wrote:
| You left out health care and education.
| potato3732842 wrote:
| And in the 1870s the average middle class family wouldn't
| have owned nearly the same variety of finished wood and
| metal products. Industrialization changed that.
|
| You can't just say "but iphones" to hand wave away huge
| changes in the big items of a family's budget.
| WalterBright wrote:
| The amount of junk in my house is astonishing when
| compared to what was in the small house I grew up in.
| BobaFloutist wrote:
| I do wonder if there's hidden benefits to using Klarna to
| get, like, bulk discounts. Buy three months of toilet
| paper/chicken broth at once at Costco, pay it off over
| three months, save a few bucks each time.
| ndileas wrote:
| You don't need klarna for this. Credit cards already fill
| this need, and with careful use are free. Most people (in
| my circles) already do this type of thing
| johnnyanmac wrote:
| That "woth careful use" is carrying a trillion dollar
| industry on its back, sadly. Clearly society is in fact
| not careful.
| cyberge99 wrote:
| Not really. The people that pay interest on credit cards
| are the ones that pay for the luxuries/points/rewards of
| those who use credit cards wisely. If I get a 0% apr
| credit card for 18 months, i put all of my expenses on it
| for 16 months. I put that equivalent cash in to a high
| interest yield savings account (HYSA) and pay the card
| off before it's due. I pocket the difference since the
| bank just gave me a free loan.
| BobaFloutist wrote:
| Credit cards fill this need for a month of spend, but if
| you want to go three months at a time you need to figure
| out a different solution.
| ndileas wrote:
| When purchasing durable goods or bulk supplies, the
| difference is minimal. It might require saving before
| purchase, or gradually moving to the bulk model to
| preserve cash flow. But it's totally doable with a credit
| card on the household scale.
| GreenVulpine wrote:
| They had a $5 off a $20 purchase promo on eBay recently.
| I imagine they'd make similar offers on other platforms
| too.
| conradev wrote:
| I find meaning in understanding ever so slightly more about
| the world we live in, and so I love consuming as many things
| and experiences as possible to have a rich understanding of
| myself and to some extent, humanity as a whole.
|
| I don't like the word "consume" though. Am I consuming a
| surfboard or am I surfing? am I consuming a song, or am I
| listening to it? singing along to it? This perspective feels
| tired.
|
| The entire system (evolution) is based on growth and
| consumption. Blame agriculture! Too much free time to consume
| now - we are full-time entropy farmers.
| WalterBright wrote:
| > I have a hard time blaming "the average person"
|
| People still have agency and so are responsible for their
| decisions.
| darth_avocado wrote:
| > The "average person" is told from birth to consume as many
| things and experiences as possible as it if was the only
| thing that could give their life a meaning.
|
| The "average person" doesn't make enough money to pay rent or
| afford groceries. You're blaming the poor based on your idea
| of what an "average person" looks like, which is a
| representation of middle and upper middle class. The average
| person doesn't have the luxury to consume as many things and
| experiences as possible.
| joshuahedlund wrote:
| Doesn't "average" = "middle class" by definition?
|
| US median individual income in 2022 was $48k
|
| https://en.wikipedia.org/wiki/Personal_income_in_the_United
| _...
|
| > The "average person" doesn't make enough money to pay
| rent or afford groceries
|
| <1% of the US population is homeless, and ~10% receive food
| stamps. The average person makes enough money to pay rent
| and buy groceries.
| darth_avocado wrote:
| Just because people aren't homeless and don't qualify for
| food stamps doesn't mean they can afford things.
|
| You need to make less than $33k for a family of 3 to even
| qualify for food stamps and then get disqualified if your
| total assets are above $4.5K. If you're an adult without
| children, your food stamps eligibility is capped at 3
| months every 3 years. A lot of people who need food
| stamps, do not qualify for them.
|
| Credit card debt is $1.2T, out of which 10% is delinquent
| for more than 90 days. https://www.stlouisfed.org/on-the-
| economy/2025/may/broad-con...
|
| Student loan debt is at $1.7T.
|
| People are going into debt to buy groceries.
| https://www.cnbc.com/amp/2024/05/20/americans-are-going-
| into...
|
| The average American life is way worse than what people
| generally make it out to be.
| JamesBarney wrote:
| The median household income is 80k which is plenty to
| afford groceries and rent.
|
| How did you come to believe that half the people in the
| richest country in the world can't afford to eat or have a
| roof over their head?
| forrestthewoods wrote:
| > the average person
|
| I'm pretty sure the median American does NOT carry a monthly CC
| balance. They pay it off in full every month.
|
| But it's very close to 50%. And may swing one side or the other
| depending on how fubar the economy is at that moment in time.
|
| So what you said is true for roughly half of Americans. But not
| true at all for the other ~half.
|
| I think.
| dgfitz wrote:
| I looked it up, and most of the sources seem sketchy (quora,
| lendingtree), but they agree with your number.
|
| I think the kicker is, the ~50% of people who don't pay them
| off in full every month can have a massive amount of CC debt
| and struggle to even make a dent in it.
| vintermann wrote:
| Are you familiar with the boots theory of socioeconomic
| unfairness?
| bonoboTP wrote:
| That's basically a special case of the Matthew principle.
| andruby wrote:
| Do you also think that way about buying a house with a mortgage
| (credit)? I don't.
|
| A mortgage isn't used to make more money. It's used so people
| can own a house after saving for a few years, rather than
| waiting until they've saved for a few decades.
| leereeves wrote:
| Often, a mortgage is either used to make money (from rising
| house prices) or save money (when the mortgage is cheaper
| than rent).
| jltsiren wrote:
| Often, houses are depreciating assets that are expensive to
| maintain, but people take mortgage and buy them anyway.
| Often, renting is cheaper than buying, but people buy
| anyway, because they like the idea of owning their home.
| Often, people buy a home, because suitable homes are not
| available to rent.
|
| Money is only a means to an end. It has no inherent value.
| And very often, the subjective value of a thing is
| essentially unrelated to the monetary value.
| rwmj wrote:
| In addition, you get countries like the UK where renting
| is very precarious. You might be forced to move every
| year, after a year your landlord can turf you out with
| only a few months' notice, you aren't allowed to modify
| the house in any way even putting a picture-hook into the
| wall or redecorating a room, etc. Since most people
| cannot afford to buy a house outright, a mortgage is
| necessary to avoid this.
| JKCalhoun wrote:
| You can believe that if you like of course, but I am
| definitely not teaching my children that.
|
| Renting cheaper than owning sounds like a very short-term
| view.
|
| My dad explained to me the nice thing about a 30 year
| fixed mortgage in simple terms: 10, 20, up to 30 years
| later ... your "rent" is the same.
|
| It's a simple experiment to see what a person's rent was
| going for 30 years ago in your community and then see
| what a person with a typical 30-year mortgage would have
| paid each month 30 years ago. Because one of those two is
| still paying the same monthly amount today and about to
| have an asset they can pass along to their kids or spouse
| (or cash-out if they want to retire to live in a trailer
| in Eloy, Arizona).
| jltsiren wrote:
| There are plenty of places where many people can afford
| market-rate rentals, while there is nothing they can
| afford to buy. That includes some major cities, where
| land is inherently scarce, as well as other desirable
| locations, where the locals have chosen to ban sufficient
| housing.
|
| Rents are ultimately based on what people can afford to
| pay. Home prices, on the other hand, also reflect the
| viability of the home as an investment. If the market
| believes that housing will not become more affordable in
| the foreseeable future, homes in that area are low-risk
| investments, and investors will accept lower returns for
| their money. Home prices grow very high relative to
| rents. Taking a mortgage to buy then becomes the
| financial equivalent of taking a loan and putting the
| money in a savings account.
|
| The city where I live in California is one of those
| places. Before Covid, home prices were high but
| tolerable. Then the prices jumped due to WFH, while rents
| grew at a much slower pace. And then interest rates went
| up without making a dent in home prices, making homes too
| expensive for those poor enough to need a substantial
| mortgage.
| cbdumas wrote:
| NYTimes publishes a fantastic calculator [0] to help make
| this kind of rent vs. buy decision. It's not always that
| clear cut.
|
| [0] https://www.nytimes.com/interactive/2024/upshot/buy-
| rent-cal...
| lxgr wrote:
| > Renting cheaper than owning sounds like a very short-
| term view.
|
| That highly depends on where you live. In some
| countries/cities, buying really makes no sense both short
| and long term. In others, it absolutely might.
| FireBeyond wrote:
| There are maintenance requirements to home ownership,
| absolutely. And some are not cheap.
|
| But there is absolutely a segment on HN who will act like
| home ownership is nothing more than pulling out a card
| for the next four digit expense every month or more.
|
| "What are you going to do when (not if) you hot water
| dies? And then you need a roof? Oops your house needs
| painting and new appliances and now the AC is gone too,
| what about pest control, and hopefully your sewer line
| doesn't collapse? Can't handle all that happening to you?
| Can you realllly afford a house then?"
| IsTom wrote:
| You need to compare money paid for mortgage minus price of
| house against money paid for rent (when you're left with no
| assets after all the years of paying it).
| cbdumas wrote:
| NYTimes has a great calculator for doing just that
| https://www.nytimes.com/interactive/2024/upshot/buy-rent-
| cal...
| eadmund wrote:
| A mortgage doesn't make money, but it (can) enable spending
| less money. If you buy a place such that interest,
| maintenance, insurance, taxes and the opportunity cost of not
| being able to easily relocate are less than rent, then you
| have saved the difference.
|
| It's also a way to force saving, which is psychologically
| useful (and thus valuable).
| ta1243 wrote:
| If you buy a house for 500k on a 5% mortgage over 25 years
| when you are 25, and you plan to live until you are 85, you
| will live there for 60 years.
|
| It will cost you 35k a year for 25 years, or 875k a year
|
| After 25 years you have no more expenses.
|
| If instead you rent it for 20k a year, increasing with 2%
| inflation each year, by year 25 you're paying 33k a year in
| rent, and by year 60 you're paying 66k a year.
|
| Over 60 years you pay 2.4m in rent, or 900k in mortgage
| (you could also then sell that house for 1.6m with a 2%
| annual inflation).
|
| You'd have to invest the savings and get way higher than
| inflation returns to break even.
|
| Of course there's maintenance costs of the house too, but
| that's with rent far cheaper than the mortgage. In reality
| rent tends to be a similar amount as a mortgage (in the UK
| it tends to be higher - as people won't rent places out if
| they aren't covering their mortgage - at the very least the
| interest part of it). You'll likely find house prices
| appreciating more than inflation too - just like stock
| prices do. Rent tends to track income.
|
| Now you could argue that you'll get more by investing in
| high return growth stocks. And you might be right. In the
| 80s there was a whole "endownment" mortgage craze where you
| paid the interest on the mortgage, and then the rest rather
| than paying down the mortgage capital, instead was
| invested.
|
| This was a massive scandal as many investments didn't have
| enough to cover the mortgage amount upon maturity. With a
| mortgage you know that no matter what happens with
| inflation, growth, returns, stock crashes etc, you will own
| one house after X years.
| lesuorac wrote:
| > You'd have to invest the savings and get way higher
| than inflation returns to break even.
|
| You say that like it's a difficult thing to do.
|
| S&P500 is up 710% since 1996. Gold is up 92% since 2012.
|
| Personally, the rent control is the best part of a
| mortgage and even though renting is typically better, I'm
| fine paying a premium for that. That said, good luck
| getting somebody to loan you 900k so you can play the
| stock market; it's much easier to get that for a house
| though.
| ta1243 wrote:
| > Gold is up 92% since 2012.
|
| And housing is up 125% since 2012, so the sucker who
| bought gold instead of a house has lost out.
|
| We can all be rich in hindsight.
|
| (There's also other benefits to owning - like being able
| to have pets, not being able to be evicted, etc)
|
| But the biggest tell that housing is valuable is that
| nobody is spending $500k on housing to rent it out if
| they could make more money pumping $500k into the stock
| market.
| greedo wrote:
| You should look into how many homes are being purchased
| primarily for AirBNB/VRBO type income streams...
| phil21 wrote:
| > But the biggest tell that housing is valuable is that
| nobody is spending $500k on housing to rent it out if
| they could make more money pumping $500k into the stock
| market.
|
| Of course they are. I do. I do so knowing full well that
| my expected returns are going to be nowhere near my
| brokerage account invested in public equities. The past
| decade has followed that expectation.
|
| I and many others do it as a form of diversification.
| It's risk aversion in the end. Most people with capital
| don't want to be putting all their eggs into one basket,
| so for wealth preservation and diversified income streams
| it's a good option even knowing up front you are expected
| to lose money via opportunity cost.
|
| That ignores other benefits of housing being a privileged
| investment category by the current government and
| monetary/tax policy. If you seek cheap leverage this is
| probably one of your few options as a "two bit" player in
| the market at that $500k level.
| pmalynin wrote:
| If you put around 200-300k into IBKR (not affiliated) you
| can get portfolio margin which will give you just shy of
| $2,000,000 in buying power. Access to leverage isn't
| really an issue, but forced liquidation definitely is.
| The bank will not liquidate your mortgage if you end up
| underwater.
| lesuorac wrote:
| Yeah forced liquidation is a big problem for a long-term
| loan.
|
| IIUC, Musk et al take loans at 25% of their share's value
| to avoid this ever coming up.
|
| Also the average house price is 500k in the US so a 20%
| downpayment (which not everybody does) is still less than
| 200k.
| potato3732842 wrote:
| >After 25 years you have no more expenses.
|
| After 25-50yr (depending a lot on macroeconomic factors
| and your specific municipality) property taxes will
| likely be comparable to your mortgage payment.
| bluGill wrote:
| Property taxes tend to go up with inflation though, so
| while the numbers given are wrong, the point still
| stands.
| greedo wrote:
| No more expenses... Right!
|
| No property tax. No homeowner's insurance. No
| maintenance. Just living on easy street.
| ta1243 wrote:
| It seems unlikely you'd be able to rent somewhere for
| less than the cost of
|
| * maintenence
|
| * taxes
|
| * return on capital
|
| Because otherwise your landlord is subsidising you, and
| why would they do that?
| toast0 wrote:
| Rental prices are connected to costs, but not tightly.
|
| If I'm a landlord and my costs are $X, but I can find
| renters for $2X, I'm probably going to charge closer to
| $2X.
|
| If my costs are $X, but I can only charge $0.9X, I'll
| most likely rent it for that, because losing $0.1X is
| better than losing $X; unless I own a lot of units and it
| makes more sense to push the 'average rent' up, even if
| it means more vacancies. If the market conditions are
| like that for a while, I'll probably try to sell, but
| I'll take the loss for a while.
|
| Additionally, if local market conditions include
| something like California Prop 13, a landlord that has
| been holding property since before I was born most likely
| has a much lower property tax bill than if I purchase a
| similar property. In that case, renting could supply them
| with a nice return and me with a nice discount.
| maerF0x0 wrote:
| > Because otherwise your landlord is subsidising you, and
| why would they do that?
|
| Because they may have capitalized decades ago and the
| market only bears a certain price. They're not
| subsidizing you because their cashflow needs are actually
| lower than new entrants.
| maerF0x0 wrote:
| > people won't rent places out if they aren't covering
| their mortgage
|
| btw this is usually false, and mostly irrational.
|
| 1. Realize that every landlord has a different
| capitalization structure. Many likely bought decades ago
| and thus only owe a fraction of what the current market
| selling price is. Additionally we also have had a long
| period of ultra low interest rates so their interest rate
| is different than what new entrants are paying. Because
| their capital cost is lower they can actually offer for
| far less than the (Interest+Taxes+Insurance+Maintenance)
| costs that a home owner would have to bear.
|
| 2. The rational move of a landlord is to price
| competitively based on what the market can bear, even
| possibly losing a little money per month in cashflow (but
| less bad than the appreciation rate and cost of
| disposal/selling/defaulting).
| WalterBright wrote:
| > and mostly irrational
|
| I'd say it is quite rational. Real estate represents
| value, and value should be earning at all times. Owning
| it free and clear does not change that one iota. Rents
| are based on the value of the property, not the mortgage
| on it.
| maerF0x0 wrote:
| False, rents are based on what the market will bear. The
| value of the property is stickier than rents.
|
| Plus one can be "losing money" on cashflow but earning
| money in equity, so one can rent for less than the
| mortgage while the value of the asset is rising even
| faster than the monthly loss. Of course this only happens
| based on speculation and having free cash to "lose"
| monthly.
| WalterBright wrote:
| > rents are based on what the market will bear
|
| And that is the value of the property. I.e. the value of
| property is what income it will generate.
|
| When those two values diverge, then "arbitrage" steps in
| which converges them again.
| WalterBright wrote:
| > It will cost you 35k a year
|
| > If instead you rent it for 20k a year
|
| Some good numbers, but what is missing is the result of
| investing $35k-$20k=$15k per year. Let's say you earn a
| %7 real return on $15k/year invested for 60-25=35 years.
|
| Writing a little program: import
| core.stdc.stdio; void main() { double
| d = 0; foreach (i; 0..35) d =
| (d+15000)*1.07; printf("d: $%f\n", d);
| }
|
| Yields $2,218,701
|
| I would think twice about buying real estate as an
| investment.
|
| Personally, I own my home because I want to use it as I
| see fit, but I recognize that as an investment it's a
| lousy one.
| WalterBright wrote:
| somehow, I never learned to use a spreadsheet
| WalterBright wrote:
| 25 years ago, I sold my previous house. It recently sold
| for 4x what I sold it for, a 300% ROI. Was selling it a
| financial mistake?
|
| Consider that I didn't pay property taxes, insurance,
| maintenance, and squatter eviction costs for the last 25
| years.
|
| Consider that the S&P500 went up 561%.
|
| Buying a house is not a good wealth builder strategy.
| chasd00 wrote:
| Can't argue with the math but one thing about a mortgage
| is it takes no effort. Just pay the bill and time does
| the rest. With stock investment there's an emotional
| attachment to every major swing, should you buy or should
| you sell is never far from your thoughts. Using a home as
| an investment may not make the most return but it's easy
| as long as you can pay the bill.
| sagarm wrote:
| You can use a rent vs buy calculator to do the math for
| your situation:
| https://www.nytimes.com/interactive/2024/upshot/buy-rent-
| cal...
|
| The parent is minimizing a bunch of coats of owning:
| maintenance, property tax, included utilities, HOAs, and
| most importantly opportunity cost.
| Whoppertime wrote:
| https://www.npr.org/sections/money/2010/11/05/131105373/t
| he-... I still remember an old Planet Money podcast they
| did covering a Rent or Buy calculator, It didn't allow
| for the possibility that the value of a house might fall
| over time. If you put a negative appreciation rate it
| would spit out an error. Which in the immediate aftermath
| of 2007 meant the tool was unable to capture reality.
| jacekm wrote:
| I do. Housing prices are constantly rising, when you take a
| loan you are buying an asset which (with some luck) may
| appreciate in value more than mortgage interest rates. That's
| why in some countries it's worth taking a loan as soon as
| possible without saving for too long.
|
| Sure, without mortgage you may not be able to afford a house
| at all but it does not change the fact that mortgage is a
| "good" loan (i.e. you benefit from taking it)
| bboygravity wrote:
| Mortgages with low interest rates are also one of the
| (main) reasons houses are so "expensive" in the first
| place.
|
| The cheaper money (credit) is, the "higher" the prices will
| go.
|
| It's not so much that houses became expensive, it's more
| that money to buy a house (specifically mortgages) became
| relatively cheaper. Low interest rates did that.
| matthewdgreen wrote:
| This is a one-time effect, though. Or at least, an effect
| that only changes periodically (and should reverse) when
| interest rates change. 30-year mortgages have been
| standard in the US for most of my life, and houses have
| gotten a lot more expensive during that time.
| Retric wrote:
| Mortgage loans have been getting cheaper due to
| automation and the commoditization of loans / increase in
| surplus capital.
|
| That then pushes up home prices over time relative to
| inflation.
| matthewdgreen wrote:
| Home prices have doubled in most areas since 2009 (and
| worse in many areas.) when people complain about prices
| in 2025, this is what they're talking about. This is not
| driven by the novel existence of 30-year mortgages and
| interest rates are at a near-term high.
| Retric wrote:
| Half of that is inflation. Most of what remains is the
| anomaly in housing prices in 2009
| https://fred.stlouisfed.org/series/MSPUS
|
| Inflation adjusted median US home prices Q4 2024 where
| 419,300 vs Q4 2006 ~382,00 that isn't flat but the
| difference is far less interesting.
| Uvix wrote:
| The effect may _pause_ when interest rates change, but it
| 's unlikely to _reverse_ significantly. People who have
| homes now aren 't going to want to sell for less than
| they paid for them, so there's a lot of inertia against
| prices going down.
| schmidtleonard wrote:
| The home ownership rate in the USA is 65%. If house
| prices start going down, money will be printed until they
| start going back up.
| thechao wrote:
| House size, build "quality" (the details in the house),
| resource scarcity, and zoning policy are the drivers of
| cost. Cheap credit and lifetime loans allow the system to
| continue.
| potato3732842 wrote:
| Every time a municipality levies a requirement upon new
| development the price of everything that could be used
| the same way goes up by that amount since it's the "next
| best thing". I got told I need to spend $20-50k on
| engineered assessments and plans to clear an old farm
| field that was left to grown over for 30yr and is now
| considered "forest" by (a single unelected employee of)
| the municipality.
|
| Game out the economic implications of that sort of
| regulatory behavior across the entire real estate and
| housing sectors and suddenly a lot of stuff that makes no
| sense makes a lot more sense.
| Glyptodon wrote:
| I don't know about this - when I see quotes on build cost
| in my area they add up to more than similar properties
| sell for in some cases, and generally aren't a whole lot
| different than buying to the point that I've wondered why
| it's like that.
| bluGill wrote:
| People forget that houses tend to get bigger when people
| can afford it. Adam Smith observed this back in his
| famous book.
| RHSeeger wrote:
| > Housing prices are constantly rising
|
| Housing prices are _generally_ rising. It's entirely
| possible to buy a house and wind up selling it later,
| having lost money in it. Many times through no real fault.
| andruby wrote:
| I hope most people haven't forgotten about 2008 financial
| crisis and how it was caused by declining housing prices
| (and the banks/markets not taking that risk into account)
| JKCalhoun wrote:
| We do. And we remember the rebound some years later and
| are still kicking ourselves for having not scooped up
| real estate fire-sales in Las Vegas.
|
| I mean, hypothetically. Some people. Might be kicking
| themselves.
| gwbas1c wrote:
| > _Housing prices are constantly rising_
|
| Housing prices typically appreciate up with inflation over
| the long run, although local markets don't always follow
| the same pattern. (IE, Silicon Valley is a case where real
| estate appreciated faster than inflation.)
|
| Remember, it's over the long run. There can be periods
| where a house will appreciate faster than inflation, and
| other periods where the real value of a house doesn't keep
| up. If you understand this dynamic, you can make a lot of
| money. (IE, flipping and then becoming a landlord when the
| market turns.)
| JKCalhoun wrote:
| Since the not-yet-homeowner is no doubt paying rent, home
| appreciation can slip by some measure below the rate of
| inflation and still have been a wise investment.
|
| Of course there is home insurance and repairs to
| consider. But also there is the increase in rent to
| consider on the other side as well.
| bluGill wrote:
| Depends on how long the not yet homeowener will live
| there. If you live in the same house for the next 40
| years you are almost certainly better off owning it.
| However if you have to move after a year (which might not
| be in your control) you probably will lose money. 7 years
| is a good rule of thumb for minimum time you need to live
| in a house before it is better than renting, but exact
| circumstances can be very different.
| hk1337 wrote:
| - They're giving you a line of credit, money you don't have,
| to buy a house.
|
| - Why else would mortgage loans ave percentage rates if not
| to make money off lending you money?
| alpinisme wrote:
| The parent comment was about how you should only take loans
| if you expect a return on the investment greater than the
| interest. Not about the bank.
| walthamstow wrote:
| I think you've misread. The thread is about consumers of
| credit using it to make themselves money.
| JKCalhoun wrote:
| Of course they make money -- but they take on no real risk.
| The home owner (who is taking on the risk) likely stands to
| make much more money than the lender in appreciation.
|
| (Never mind the homeowner has to live somewhere regardless
| -- and anywhere but mom's basement [1] is going to charge
| rent which would, by comparison, be throwing money away.)
|
| [1] Okay, my mom charged me rent to live in her basement
| when I was 19 or 20 and needed a place over the summer.
| zblevins wrote:
| Yes, though I'd add that a house is generally viewed as an
| investment, unlike something like a car, which typically
| depreciates in value.
| QuadmasterXLII wrote:
| I bought a house when I did because the interest on a
| mortgage was lower than any reasonable prediction fir
| inflation, which seemed a lot like free money; but at the
| time it felt a lot more like a dirty hack taking advantage of
| terrible government policy than any idealistic system where
| credit is used to bootstrap productive capitalization.
| phkahler wrote:
| Low interest rates tend to just push housing prices up. The
| average expenditure on housing as a percent of income have
| been nearly constant in the US for 50 years.
| haiku2077 wrote:
| Yes but I get to keep the equity in the house. I don't
| keep anything I pay towards interest.
| SkyBelow wrote:
| Shelter (and, for many, transportation) are a need for
| maintaining their ability to make money. As such there is
| some minimum amount that must be spent on these, and loans
| costing up to that amount can be seen as ways of making
| money. Most people who make these purchases do buy even more
| than strictly necessary, and the extra spent above the
| strictly necessary line should be seen as luxury expenses.
|
| General advice for homes leads to buying a home that does
| follow the logic, given historic movement of home prices and
| rental prices. It rarely is put in those terms, but works.
| For vehicles, the financial recommendation generally is to
| buy less car as it is a depreciating asset. If you have cash
| for a luxury expense, then it is no different from any other
| large luxury purchase, but if you have to finance, go as
| cheap as possible (but making sure to account for the repair
| costs, fuel usage, and such, not just the initial cost and
| loan payments).
| varjag wrote:
| No, an average person uses it to improve liquidity atop overall
| solid fundamentals. Literally hundreds of million people
| worldwide do it with no adverse effects and improved quality of
| life. Irresponsible people are relatively a minority (although
| they tend to make the news). And aversion to financing is in
| itself a poverty marker more often than not.
| al_borland wrote:
| Of those who carry credit cards in the US, 60% of them carry
| a balance [0].
|
| There are also all those reports that have come out about how
| nearly 40% of Americans don't have $400 for an emergency [1],
| with the median being just $600.
|
| If the rule of thumb for an emergency fund is 3-6 months of
| expenses, and we can agree that paying interest on a credit
| card is a bad finical decision, then I'm not sure how the
| "average" person has solid fundamentals, where credit cards
| are being used as a strategic tool.
|
| People also tend to spend more when using credit cards [2],
| which negates most benefits someone may get from using credit
| card for the points. So even those with solid fundamentals,
| who are using it as a tool, are probably still losing, just
| in a less obvious way.
|
| [0]
| https://libertystreeteconomics.newyorkfed.org/2025/03/why-
| ar...
|
| [1] https://www.empower.com/press-center/37-americans-cant-
| affor...
|
| [2] https://link.springer.com/article/10.1023/A:1008196717017
| ndriscoll wrote:
| [1] is better interpreted as 40% of people who are willing
| to work for less than minimum wage answering marketing
| surveys don't have $400 for an emergency. It could still be
| true, but the bias in the methodology is obvious.
| tristor wrote:
| > Of those who carry credit cards in the US, 60% of them
| carry a balance [0].
|
| Carrying a balance is not automatically the worst choice. I
| have a massively positive net worth (for a working stiff),
| so could effectively have $0 debt at any point in time,
| inclusive of my mortgage, but all debt is not equal, nor
| are all investments. Credit card debt is clearly one of the
| worst forms of debt with the harshest interest rates, yet
| even in that case selling investments and paying taxes on
| them and forgoing future earnings on those investments to
| pay off a credit card immediately vs over a few months is
| not necessarily the right decision.
|
| Credit cards are about providing you float so you can
| smooth out cash flow. As an example, I am about to do some
| home renovations, I expect to spend ~$40k to do so, I also
| expect to earn and pay off that $40k over the following 4
| months. My options are I can carry a balance on a credit
| card, I can keep my home in a partially renovated state for
| longer to pay cash, or I can take our a HELOC which has a
| high origination cost and acts as a secondary lein on my
| house. The credit card + carrying a balance for 4 months
| and having my home back in a finished livable state faster
| is clearly the best choice, but it means I'm in that 60%.
|
| These choices aren't binary, the problem is that many
| people are not financially literate enough to consider
| their options and outcomes and choose the best choice, they
| either have a default choice with no consideration, or no
| real choice, both with negative outcomes.
| al_borland wrote:
| I suppose. I just did similarly priced renovations and
| chose to put off the whole thing until I could do the
| whole thing with cash. But everyone is in a different
| situation. While I've been at my job for nearly 20 years,
| the layoffs are frequent, and I've never felt any
| meaningful level of job security. This leads me to seek
| risk reduction, and part of that is eliminating as many
| financial obligations as possible. In theory I could
| probably make more investing (if we ignore the psychology
| aspects), but in practice it's had the side effect of
| dramatically increasing how much in invest on a monthly
| basis after getting all the debt eliminated (which was
| really only the house). The peace of mind comes more from
| those low fixed expenses than from the savings. If I had
| to, I think I could make ends meet working retail,
| without dipping into savings/investments. I think about
| this more often than is probably healthy.
| tristor wrote:
| I empathize with that situation, it's something that
| weighs on my mind a lot as well. One of my goals is
| definitely to get the mortgage cleared out sooner rather
| than later. In some ways I'm rolling the dice, but I also
| feel like I'm safe from layoffs at least one quarter at a
| time (e.g. I don't think it will be so sudden, it'll
| align with quarterly earnings), and anything I can pay
| off in a quarter of work is worth rolling the dice on,
| even though there's always some risk there.
|
| My plan of the moment is to get to a point where my
| expenses are minimized (e.g. house is paid off) and I can
| cover basic living necessities on investment income, and
| do some type of artisan home business. I keep thinking
| I'm going to really seriously get into carpentry, which
| has been a long-time hobby, or open a mechanic's shop (my
| other long-time hobby).
| stephenbez wrote:
| Another option is to do margin borrowing on some
| investment assets that you have. Because it is a secured
| loan the interest rates are much cheaper than credit
| cards. Schwab has a good set up, it can be configured to
| automatically do a loan if you withdraw more funds from
| your checking account than you have. They currently
| charge about 12% but there are other options around 6%.
|
| My friend used this set up for his emergency fund since
| he felt like it would be better to earn an investment
| return and take a loan in an emergency instead of sitting
| around having your money earn minimal amounts in a
| checking account.
| tristor wrote:
| Yes, borrowing on margin is a really good strategy,
| although it depends on your broker how that functions.
| I've had a good experience using this for smaller
| amounts, but given market volatility I'm concerned about
| borrowing this large of a sum on margin, as I don't know
| what clown stuff is going to happen in the next 6 months,
| a credit card feels lower risk to me, although the
| interest rate is higher. I actually considered this,
| using a credit card will cost me $530 in additional
| interest over taking margin, but has lower risks in my
| estimation. That $530 is not enough for me to feel it's
| worth it to do it via a margin loan.
|
| That said, margin is really useful as a tool because it
| lets you unlock the value of your investments without tax
| penalties in lower volatility markets.
| PicassoCTs wrote:
| For the average consumer, debt is selling its future self as
| slave.
| immibis wrote:
| Which is a good deal if the slave you sell is dead. When
| there's no future, selling the nonfuture for the price of a
| future is a good deal.
| otikik wrote:
| Only the bourgeoisie can be trusted to handle credit
| responsibly.
|
| The proletariat is too illiterate and short-term-focused to be
| trusted with it.
| fancyfredbot wrote:
| If you really believe the only responsible use of credit is
| to buy productive assets then this is a tautology. As soon as
| anyone uses credit buy productive assets they cease to be
| proletarian and become part of the capitalist class.
| otikik wrote:
| Try reading my comment again with a more sarcastic tone.
| potato3732842 wrote:
| I'm really sick of this sort of look down your nose at a huge
| fraction of consumers type behavior. It's the same sort of
| stupidity that underpins the famous "surely everyone else is
| wrong" behavior that is exemplified by principal skinner[1].
|
| I eat garbage by the standards of anyone who gives a crap about
| food and you don't see me going around looking down on everyone
| for wasting resources on fancy food ingredients and fancy
| cookware and whatnot. At the end of the day these unnecessary
| things bring enough perceived benefit to people's lives that
| they seem worth it, whether that's you overpriced LeDouchebag
| brand enameled dutch oven or a financing service for consumer
| garbage doesn't really matter. It's all a "needless"
| expenditure at the end of the day that people find worth it.
|
| I've never used these services and probably never will, nor am
| I saying the prevalence of these things is optimal at scale,
| it's probably not, but I'm not gonna sit there and act like 1
| in N consumers, probably hundreds of millions of people, is
| wrong or ignorant for using them or that I know better for not.
|
| -shitposted from my 8yo phone while driving my $500 car through
| traffic on bald tires
|
| [1] https://knowyourmeme.com/memes/am-i-so-out-of-touch
| suddenlybananas wrote:
| Le Creuset pots are genuinely great though
| eric_the_read wrote:
| Absolutely! But they're not, IME, 6x as great as a $50
| Lodge dutch oven. They don't solve a categorically
| different problem or solve the same problem in an
| innovative new way. They're just really nicely made, is
| all.
| tristor wrote:
| > shitposted from my 8yo phone while driving my $500 car
| through traffic on bald tires
|
| I mostly agree with you, but some of those "needless"
| expenditures have negative externalities when avoided.
| Whether that's processed foods causing heart disease and
| diabetes that strain public health resources, or your bald
| tires greatly increasing the likelihood of an automobile
| accident that could kill you or someone else. Your response
| takes an opposite extreme that none of this matters, when in
| fact much of it matters, but it's not like treating it like
| it matters makes you a better person. We need to eliminate
| moral value judgements from the equation, while still being
| reasonable.
| BolexNOLA wrote:
| I like to occasionally use BNPL to spread out big purchases for
| things even if I can already afford it.
| yobbo wrote:
| > the average person is using it to delay having to work that
| hour at all, in exchange for having to work an hour and six
| minutes sometime later.
|
| As long as inflation is higher than the interest rate, it means
| having to work less than an hour in total.
|
| (But it's unsustainable in the long run ...)
| ta1243 wrote:
| When I was in my 20s it would take me 20 hours work to earn 100
| units
|
| 15 years later it takes 3 hours work to earn the same amount
|
| If I borrow 100 units in my 20s at 4%, it cost 4 units per year
|
| I save 20 hours work, and it costs me 4 units a year. That's 48
| minutes work in year one, reducing to 8 minute after 15 years.
| Overall it costs an average 20 minutes a year for 15 years, or
| 5 hours of work, then I repay the capital which is 3 hours.
|
| I've spent 8 hours of work rather than 20 hours.
| Tangurena2 wrote:
| In some states, your FICO score is used to determine how much
| your electric utility charges you. Or whether you can be
| permitted to rent an apartment.
|
| Sample:
| https://www.wsj.com/articles/SB109469015834513166?gaa_at=eaf...
| game_the0ry wrote:
| I like to think of it as "debt productivity" - for every $1 of
| debt, the result of utilizing that should be more that $1 +
| interest.
|
| Consumer debt, obviously, almost never follows that logic.
| JKCalhoun wrote:
| > It'd have been nice had they taught me this in school.
|
| Yeah, even at a basic level, it should be made clear that cars
| depreciate and real estate, by and large, appreciates in value.
|
| One of those is "good money" and the other is "bad money". Kids
| should learn coming out of school to be able to distinguish
| which of the two they are throwing "good money" at.
| barchar wrote:
| Eagh, real estate depreciates too, just more slowly. Imo the
| actual difference is that (many) cars are a very expensive
| way to meet your transportation needs compared to
| alternatives.
| throwaway98797 wrote:
| sometimes you make money in lumps
|
| debt allows people smooth that out and lending companies take a
| fee for that service
|
| nothing evil or wrong about it
| BJones12 wrote:
| Yes. Or to rephrase, debt/interest is a way of moving money
| through time.
| DiscourseFan wrote:
| You forget that you don't pay taxes on debt.
| psunavy03 wrote:
| OK, we'll tell the average worker who can't afford a house or a
| car by paying cash not to responsibly use a mortgage or a car
| loan, because some person on the internet said so.
|
| And yes, I'm aware cars are depreciating assets, so spare me
| the lecture on financing one. I don't currently have a car
| loan.
| jvanderbot wrote:
| Credit _cards_ however, can be used to get free stuff from
| rewards.
|
| Credit _loans_ or _payment plans_ can also be used to get a
| higher credit score, making the first item easier.
|
| Conversely to your example of credit making cash, Cash can make
| you money through investing, so Credit can also be used to keep
| higher amounts of cash on hand when purchases are made. , e.g.,
| buying a car on credit and using the car money to invest. But
| we're saying the same thing there.
| kiba wrote:
| Credit card rewards are just discounts, discounts that are
| charged to the merchant. It's not a free lunch by any means.
| BenjiWiebe wrote:
| And as a merchant, yes it's annoying, but it's also nice
| when a customer pays with a credit card, because we
| actually get paid then.
| jvanderbot wrote:
| I think that's a technicality. From my perspective 100%
| discount is called "Free", and I get that a few times a
| year when flying (tickets, upgrades, etc)
|
| I calculate 100% based on the amount I get from my
| preferred airline for paying cash for groceries (0) vs the
| amount I get by using a card they issue (a few imaginary
| points/$). Then I trade those points for things I couldn't
| have had by paying cash. As long as I don't pay interest,
| we're in "Free" territory.
| lxgr wrote:
| No, you're still paying for all of that to some extent.
| Less than people carrying a balance and/or paying with
| cash or debit cards, sure, but more than zero. (It would
| be a pure redistribution from cash to card payers only if
| issuers made no profit or even a loss on never-balance-
| carrying cardholders, but if they didn't, why would they
| still have them as customers?)
|
| It's still the rational thing to do from an individual
| perspective, of course, which is why these rewards are so
| sticky.
| dragonwriter wrote:
| > Theoretically, credit should be used
|
| There are at least as many ways that this can be finished
| accurately (for some theory) as there are theories of what
| should guide human behavior, generally. But this one:
|
| > to make more money.
|
| Is really more apt to theories of appropriate behavior for
| arms-length business organizations whose only shared interest
| among their owners is profits than the common ones for
| individual people.
| _ZeD_ wrote:
| the goal is to die before you run out of hours
| whatshisface wrote:
| People living paycheck to paycheck need (in your "franchise"
| language) food and basic clothing as opex for their human
| capital, and possibly even entertainment, something that is
| provided to our troops. Trust me the military would not allow
| for leisure time if they did not think it had a purpose. Eating
| enough food and wearing a shirt without holes in it _does_ let
| people make more at work.
| ameliaquining wrote:
| Since no one has done so yet, I'll link to (without necessarily
| endorsing) patio11's defense of BNPLs:
| https://www.bitsaboutmoney.com/archive/buy-now-pay-later/
| RC_ITR wrote:
| >Theoretically, credit should be used for one thing: to make
| more money. (not less)
|
| This is prima fascia false. Credit, especially artificially low
| interest rate credit like this, can be used for a ton of
| reasons, including 'beating inflation.'
|
| I bring this up because _so_ many diligent savers in 2019 /2020
| got screwed by waiting to buy big tickets items.
| _DeadFred_ wrote:
| I bought a boat on credit. It was the dumbest financial thing I
| could ever do. It was the best thing spiritually/emotionally I
| ever did. All of those weekends/vacations boat camping with my
| kids when they were young. All those times going out after
| work. So many experiences I would not have gotten to enjoy if I
| waited until I was 60 to buy in a smart way.
|
| There is such a thing as opportunity cost. Putting dinner on a
| credit card is dumb. Putting a dinner on credit that ends up
| being a first date creating a memory and connection with your
| future spouse is life making. Or dinner with grandparents and
| kids that might not be around long.
|
| You have completely ignored opportunity cost in your factoring.
| And it is probably the most important 'human' factor and is
| just as tied to your 'time' argument. We have 60 some rotations
| around a star, and stages in life during that time. That needs
| to go into your 'optimization' as well.
| JumpCrisscross wrote:
| > _Theoretically, credit should be used for one thing: to make
| more money. (not less)_
|
| Credit moves money across time. That's it. (Analogous to paying
| a shipper to move stuff across space.)
|
| Not all consumptive debt is bad.(And not all consumptive loans
| are wealth destroying. I opted to borrow when I bought my car
| because the rate was so much lower than what I figured I could
| earn with the money.) And not all cash-flow positive wealth is
| good.
|
| We should be more scrutinising about how debt is used. But
| especially for folks with volatile incomes, accumulating debt
| for consumption is fine as long as it doesn't snowball.
| netbioserror wrote:
| This is what happens when interest rates are artificially
| suppressed. "Buy-now-pay-later" would not exist if the market
| were able to properly price the time value of money and wasn't
| backstopped by the Fed and nil reserve requirements.
| Guvante wrote:
| Buy now pay later at 0% is what these programs offer which does
| not align with what you are saying at all.
|
| Used properly these provide liquidity by spacing out payments.
|
| Certainly there are economic concerns about not being able to
| afford groceries today but liquidity (especially free
| liquidity) isn't fundamentally worthless.
| lxgr wrote:
| Used properly, BNPLs are strictly inferior to credit cards.
|
| That said, one of their practical advantages is that they're
| harder to use improperly than credit cards.
| janalsncm wrote:
| What is the functional difference between BNPL and credit cards
| that can explain why it's become popular? A credit card is
| literally "buy now pay later" so is it just the ease of
| onboarding?
| scarface_74 wrote:
| Fixed payment schedule and no interest being charged.
| SoftTalker wrote:
| For most of them, interest accrues from the date of purchased
| but is not charged if you pay on time. If you don't, you owe
| all the back interest from day one.
| Tadpole9181 wrote:
| Ah, that's the scam. Yet another poor tax, then? The rich
| get interest on money they already spent, the poor get an
| illusion of safety followed by even more destitution?
| scarface_74 wrote:
| That's not how BNPL works in its modern form with the
| third party companies. You pay late fees if you pay late.
| If you have a 3 month plan, they divide the payment into
| three equal installments and you pay it off.
|
| The parent poster is confusing BNPL with cobranded cards
| like Room 2 Go credit cards that have special promotions
| with "0% for x months". It's a regular credit card where
| the minimum payment won't guarantee that you pay the
| original amount off in "x" months, but you only have to
| pay 2% of the balance. These have always shown up on your
| credit report.
|
| They are "deferred interest" plans where if you don't pay
| the balance off in $x months it will charge you back
| interest.
| drexlspivey wrote:
| Ah yes, the big scam of offering zero interest unsecured
| loans to anyone without even running a credit check.
| These companies are bound to have big losses when things
| go south because they literally offer you free money.
| NewJazz wrote:
| They are already having big losses.
| barchar wrote:
| Beats the pants off a payday loan.
| Tadpole9181 wrote:
| BNPL is 0% interest over N months. A credit card is 20% APY
| over the total balance over minimum payment. And it's offered
| _by_ my CC providers.
|
| For some larger purchases on a 12 month plan, leaving the money
| in savings loses me 1.5% cash back but gains me around 3%
| interest (after accounting for the depleting principle).
|
| It would be stupid not to do it sometimes. I don't really get
| the financer's benefit. Though maybe it's because I _do_ pay
| it, and if I didn 't there would be 200% APY or something.
| eptcyka wrote:
| The seller benefits from the increased demand, the financier
| sells this as a service to the seller.
| dzhiurgis wrote:
| I bought tons of solar panels with 24 month 0% interest CC
| for my DIY installation. Kinda makes entire system free. I
| wish BNPL were offering longer payment periods, few months is
| not worth the risk at all.
| wildzzz wrote:
| Subprime borrowers use BNPL a lot and often don't pay it
| all back. Extending the terms would likely mean Klarna and
| Affirm will make back less money before the loan defaults.
| crab_galaxy wrote:
| Yeah, I'm not sure if BNPL loans have changed in the last
| decade at all but the financiers make money on the people who
| don't pay the balance by the end of the term. I've financed a
| couple expensive electronics when it made more sense in my
| younger days and the terms were such that if you don't pay it
| off by the end of the term, you owed ~24% of the total bill
| in interest.
| jabroni_salad wrote:
| The merchant pays a fee for it, and they do it to get a sale
| that they otherwise would have missed.
|
| If you decide to save $25/mo for a $100 product, that is 4
| months for you to change your mind, have an emergency suck up
| that money, or score a lower price by waiting for a sale. But
| for some segment of the population, they will close on a pay-
| in-4 right now instead of waiting, and that is guaranteed
| money.
| paxys wrote:
| - No application process. You are at a store's checkout page or
| sales kiosk and can sign up in a couple of clicks.
|
| - No credit checks.
|
| - Longer payment period - usually 2-3 months with no interest.
| 9rx wrote:
| A credit card is for gaining access to the electronic payment
| monopoly's network[1]. BNPL is explicitly a loan. Yes, a credit
| card transaction may effectively turn into BNPL if you fail to
| complete your end of the transaction in a timely manner, but
| that is a hindsight outcome, not the reason for choosing the
| method in the first place.
|
| [1] Nowadays you can often also use the network with other
| methods, like a debit card, but those alternatives still aren't
| universally accepted like credit cards are.
| bediger4000 wrote:
| FICO scores are a joke. They hint at what they use to calculate
| them, but the algorithms are kept secret. Fair Isaac can't reveal
| the algorithms, otherwise they'd get gamed. Incentives to keep
| bad info and wrong info in dossiers are strong, too. If allowed,
| Fair Isaac would put rumors and other bullshit on n your file,
| and never take it out.
| mritchie712 wrote:
| the score is easy to reverse engineer if you have the data and
| pretty much every big bank has the data.
|
| source: I worked at a big bank and did this, it was easy.
|
| Most of the stuff is obvious and intuitive (don't make late
| payments). One that's not terribly intuitive is credit line
| utilization. It has a big impact and most people don't think
| about it. For example, it's better to have 2k in credit card
| debt if you have 20k in credit lines vs. 1k in debt on 2k in
| credit lines.
| astura wrote:
| >the score is easy to reverse engineer if you have the data
|
| In fact, FICO even provides you with a tool to "reverse
| engineer" a credit score given the data.
|
| https://www.myfico.com/fico-credit-score-estimator/estimator
| xyst wrote:
| You forget the scoring is not based on individual performance
| only. It also includes your performance compared to those in
| similar groups or buckets.
|
| Ever wonder why your credit score goes down randomly in one
| month despite nothing changing?
|
| FICO's black box algorithm put you in a newer credit group of
| higher credit scores. In that group, your profile scored much
| lower compared to others. Thus you get a 10-20 point
| deduction.
|
| If you have a long history of good credit it probably doesn't
| matter. But if you are a young person looking for auto/home
| mortgages, that 10-20 pt dedication _could_ lead to slightly
| higher APRs depending on the underwriters own scoring
| algorithm.
| astura wrote:
| They don't really "hint at what they use to calculate them" so
| much as "tell you exactly what is used to calculate them, how
| it's calculated, and even include an estimation tool so you can
| calculate your score yourself"
|
| https://www.myfico.com/credit-education/whats-in-your-credit...
|
| >payment history (35%), amounts owed (30%), length of credit
| history (15%), new credit (10%) and credit mix (10%).
|
| https://www.myfico.com/fico-credit-score-estimator/estimator
|
| For fucks sake, at least keep your conspiracy theories somewhat
| believable.
|
| Absolutely nobody is worried about "gaming" credit scores
| because the activities to "game" credit scores are identical to
| the activities that make you likely to pay off debt in the
| future and that's what a credit score measures. So it doesn't
| matter if you pay off your bills to "game" or to be
| responsible, you're still paying off your bills.
| SirMaster wrote:
| I don't know that they are really that complicated... I just do
| the things that they suggest the scores are based on. Pay on
| time, have more accounts that have been opened longer, have a
| lower credit utilization, etc and I watch my score go up and
| up.
|
| My score started at around 670 when I was young and before I
| had done anything and I did the things and now it's around 820.
| wat10000 wrote:
| Why would they put rumors and bullshit in your file? The credit
| bureaus aren't out to get you. Their goal is to help their
| clients (lenders and similar) to make money by identifying how
| risky _their_ clients are. An accurate risk assessment is good
| for them. If you're a good risk, they want your score to be
| high. They don't gain anything by putting crap on your file to
| tank your score.
| fred_is_fred wrote:
| There are no incentives for Fair Isaac to promote or use "wrong
| info" because if the score they produce is deemed to be an
| inaccurate measure of credit risk, it would not be a useful
| product.
| mihaaly wrote:
| The security and privacy nighmare that the various credit score
| systems bring on by collecting and storing sensitive data on
| individuals some way somewhere with some sort of access for
| someones for something (a very real big brother in esence on
| essentials matters), is a good incentive keeping people away from
| loans. The less is more in this case. Avoiding avoidables.
|
| The crime is that in the very essential case of abode it is
| impossible to avoid for the generic population. Both renting and
| mortgages require you do disclose your life for organizations and
| sometimes individuals having financial incentives with you.
| Making you exposed and voulnarable, no choice is given. It is a
| must (you and your dependants cannot choose not to live
| somewhere).
|
| So they do not have to risk their capital gain, allowed to risk
| your most sensitive personal data.
| focusgroup0 wrote:
| Why do some ancient traditions ban usury?
| mcherm wrote:
| I suspect actually MOST ancient traditions ban usury (or ban
| lending altogether). Christianity banned usury, Islam banned
| essentially all lending, Hinduism banned some casts from
| lending and regulated the lending of others[1].
|
| I think the practice was found to be corrosive to societies and
| thus at one point or another many of them tried to ban it.
| (Lending is also very helpful for commerce, so most societies
| also reintroduced it. Actual practice varied at different
| points in history.)
|
| 1. https://www.sacred-texts.com/hin/sbe14/sbe1405.htm
| scarface_74 wrote:
| If you look up the various means of buying home without
| having all of the money up front that are compliant, it's
| just a mortgage by different name.
|
| https://www.guidanceresidential.com/resources/faith-based-
| fi...
| groos wrote:
| All Abrahamic faiths ban lending where the returned amount is
| greater than that borrowed, i.e. charging interest. Judaism
| "worked around" it by banning it amongs Jews but allowed
| lending on interest to non-Jews. Christianity originally
| followed Jewish law in this regard but abandoned it later on.
| Islam, adheres to banning interest strictly, but this is
| subject to different interpretations. E.g., buying an item at
| a higher price but paying in installments is allowed by some
| schools of jurisprudence, while others disallow it, while
| there is unanimous condemnation of a loan whose interest
| "doubles and redoubles" [explicit in the Quran], which is the
| typical credit card or mortgage. The main difference in
| buying at a higher price + installments from a conventional
| interest based lone is that the profit gets agreed to at
| sale, and it holds regardless of whether the full payment is
| made early or not.
|
| Muslims have got around the problem of not being able to pay
| for houses in cash by constructing a joint ownership scheme,
| where the lender and buyer enter into a joint ownership of
| the house; the buyer pays rent and adds extra to buy more
| equity, and the rent goes to both the buyer and lender in
| proportion to their equity as a business partnership. Over
| time, the rent part decreases and the equity buying
| accelerates. There are other models, but this is the most
| popular one. Due to Federal and state laws, such mortgages
| are often reported with interest rates even though,
| technically, interest is not being charged.
| bonoboTP wrote:
| There are regulations around it even today. It's not a complete
| free-for-all. https://www.paidnice.com/usury-laws-by-state
|
| But to answer the question, there's quite an instinctual
| aversion to earning money through apparent idleness. Same
| reason that people hate landlords who just get "passive income"
| simply for owning. (Of course the owner had to buy it in the
| first place, or had to inherit it - and indeed inheriting too
| much stuff also rubs people the wrong way - except if they
| themselves are blocked from passing on their things to their
| kids).
|
| Same reason that merchants were distrusted, since there was no
| concept of economics that would allow them to understand that
| in fact trading and arbitrage is actually valuable contribution
| for the market to properly price goods, and is a much better
| way to price things than gut feelings about "sentimental value"
| or the labor theory. But this was not well understood so making
| money through trade was seen as witchcraft. How come he can
| come to the village and buy our pig for X and then go sell it
| for X+Y in the city? I mean that's somewhat understandable, the
| transport etc. Income through interest doesn't even have that.
| Of course the real value proposition is again a kind of
| resource allocation cognitive processing. The lender's
| contribution is in the assessment of prospects of the
| profitability of a venture. That apparently this is not the
| case in many consumption credits is indeed some kind of system
| failure, and some perverse incentives set up by regulations,
| where somehow the financial companies are not punished by
| reality for misallocating. See 2008 etc.
| Yizahi wrote:
| They didn't before? It's a credit like any other type, increasing
| debt burden like any credit. Seems like corru... ahem, lobbying
| of course. :)
| Hamuko wrote:
| They can't keep up with techbros coming up with new names for
| debt.
| hobs wrote:
| Read the article and approach, the BNPL is going to be in
| effect like one credit card opened per transaction.
| fHr wrote:
| Yep you're onto something here but surely they operate within
| legal reasonable frameworks of the government surely.
| byteknight wrote:
| Regardless no one can make you buy anything
| therealpygon wrote:
| They also didn't destroy people's credit when they got upside
| down and had to return the $5k couch or $15k car they were
| talked into buying on their fixed income, but that's usually
| "other people" problems.
| ricardbejarano wrote:
| Being "talked into" is one hell of an excuse not to take
| accountability for your own purchases.
| cyanydeez wrote:
| If the DOD can't do it, why should poor people?
| https://americanmilitarynews.com/2024/11/pentagon-
| fails-7th-...
| toast0 wrote:
| I doubt most people would pass a financial audit, unless
| they had built their life around "proper accounting
| controls". Of course, if they had an incentive to do so,
| it probably would only take two or three years to get
| things in place and consistent. But then, most people
| don't have 1.3 Million active employees [1], who knows
| how many contractors and retirees. The DoD's finances
| were not designed around audit requirements and it takes
| time and consistent attention to retrofit accounting
| controls into a very large organization.
|
| [1] https://dwp.dmdc.osd.mil/dwp/api/downloadZ?fileId=136
| 507&gro...
| Hilift wrote:
| Your credit score can decrease if you pay off your credit card
| balance or pay it down too quickly. For example, paying off the
| last $10k on a home loan. The score is also a reflection of
| your value to them as a paying customer. How much money you can
| make them, and how reliable you are with regular payments based
| on past data. These types of businesses may seem off, but if
| the customer is reliable and makes you money, assigning a low
| score based simply on the business type is a recipe for
| litigation.
| jaxn wrote:
| That is true when you close an account (like paying off the
| last $10k on a home loan), but I don't think that is correct
| when paying a credit card down to a $0 balance and leaving it
| open.
|
| The reason is that your credit score is impacted by both your
| available credit (higher is better) and credit utilization
| (lower is better). When you pay of the last of a home loan
| and close that account, your available credit goes down and
| your credit utilization goes up (assuming you had any other
| debt). Both of those hurt you. When you pay the credit card
| down to $0 and leave it open, your available crediot stays
| the same and your utilization goes down.
| mattmaroon wrote:
| Yeah, paying $10k off your home loan makes your credit
| score go up if it isn't closing the loan.
| jjice wrote:
| > Your credit score can decrease if you pay off your credit
| card balance or pay it down too quickly
|
| It can have a short term impact, sure, but long term (a few
| years), your score will be fine. I paid my last student loans
| years ago and I did see a sudden score drop and not I'm
| sitting right below 800 with no debt.
| Quinner wrote:
| There's no lobbying necessary, because FICO isn't a government
| agency, its a private company. Why we have a private company
| determining such an important thing with minimal government
| oversight is certainly a question we could be asking.
|
| That being said, there's an innocent explanation for this
| specifically. BYPL is pretty new as a common type of debt
| (became popular in the last five years). They're putting it
| into FICO 10. The last time they updated FICO was FICO 9 which
| was released in 2014, before that there was FICO 8 in 2008... a
| lot of banks are still using FICO 8 or even earlier models.
| Banks are slow to change, and FICO moves slowly because banks
| don't want their models upended every year. Fwiw if the
| government was more involved in this I doubt it would be taken
| into account any faster.
| jajuuka wrote:
| It's crazy how many things that require credit are on a self
| report basis. And the only time they actually report is for a
| past due debt and not successful payments.
| eagerpace wrote:
| How long until my score goes down because I don't use these?!??
| ProllyInfamous wrote:
| Background: During the riskiest span of my life, financially, I
| used to have a 780+ score and an AMEX Gold (for about a decade,
| early 2000s); now I don't have any credit cards, my vehicles
| are entirely paid.
|
| My Conclusion: Credit scores demonstrate ability to re-pay
| interest (i.e. lender profits); it is a score that demonstrates
| how profitable you might-could-be, not necessarily
| representative of fiscal wisdom.
|
| Meditation: not caring about your credit worthiness is a
| fantastic approach to life, as long as you've already bought
| your house (or have alternate plans, not involving a mortgage).
| hk1337 wrote:
| This seems like it's going to harm more people than help.
| Encouraging fiscal irresponsibility under the guise of improving
| your credit score. All it's really going to do is give lenders
| another metric to deny you a loan, either because of delinquent
| accounts or too many accounts opened and closed.
| xyst wrote:
| Maybe not deny in case of too many accounts opened or closed
| but risk profile can change. So think higher APRs compared to
| people without bnpl.
| __mharrison__ wrote:
| Circular much?
| __mharrison__ wrote:
| For the downvoters... having worked in this industry, these
| loans are already heavily modeled with FICO scores. Who is
| wagging which tail?
| 9cb14c1ec0 wrote:
| Good, it will bring the stupid BNPL ecosystem back to earth, when
| people stop using it as free money.
| xyst wrote:
| yet another vague data point mortgage underwriters can use to
| deny your loan
|
| In corporate back room, "persons score is high enough to qualify
| and income is good enough but there's a strong history of bnpl
| usage. Over 200 accounts ranging from food to groceries and
| luxury items. Risk to default has increased, thus approval for
| slightly higher APR compared to peers with none to lower BNPL
| usage."
|
| Rinse and repeat this for hundreds of thousands of loans and now
| bank is raking in (more) profits
| wat10000 wrote:
| How do banks make more profit by issuing fewer mortgages?
| segmondy wrote:
| So are some of us going to get penalized for not having a buy-
| now-pay-later history?
| asdfasvea wrote:
| Depends on your definition of 'penalized'. FICO is all about
| identifying good ROI candidates.
|
| Say you are a lender, you want someone who constantly uses
| credit, always pays their bills and has the capacity take on
| new debt. That's what FICO is for.
|
| It's not some consumer reward system. It's not your score to
| game, it's a score on you for companies to game. Quit playing
| the game.
|
| Credit score NULL.
| benmanns wrote:
| IMO the game is to get the highest credit score while
| spending the least on credit. That way if you e.g. need to
| acquire housing, a reliable vehicle, business loans, even
| employment or insurance, you will be able to and can get a
| good deal. Sure, paying nothing saves you money, but it also
| costs you the opportunity cost between what you could
| earn/save by utilizing credit vs waiting months to years to
| save up and pay cash.
| hedora wrote:
| The easiest approach is to get high point credit cards and
| pay them off each month.
|
| That way, you don't pay anything (and are subsidized).
|
| Of course the money comes from people that don't do this,
| and vendors' margins.
|
| So, it's "Participate in the credit card racket or no house
| for you" on one side and "That's a nice shop you have
| there. It'd be a shame if something happened to it." on the
| other.
|
| The US really should abolish the credit rating industry.
| alkonaut wrote:
| Does anyone else live in a place where there isn't a visible
| "score" for how valuable you are, but rather only a "credit
| check" for how risky you are, which is performed if you apply for
| new credit (buying anything with an invoice, getting a credit
| card, or taking any other kind of loan)? Meaning that if you have
| a good income and no history of failing payments, you are
| basically passing the check with flying colors, and will have the
| same "score" as someone who has had tons of well-served credit
| before?
|
| This thing where the score as in "risk" and score as in "business
| opportunity for lenders" is intertwined, and creates weird
| incentives for consumers, is that only a US thing or do any other
| countries have something similar?
| ch4s3 wrote:
| Credit scores aren't a score of how valuable you are, they're a
| score of creditworthiness or how unlikely you are to default on
| a loan. The largest factors are age of credit and payment
| history. Utilization is also a factor. Someone who occasionally
| misses payments and has high utilization is going to be more
| profitable but higher risk to lend to.
| parpfish wrote:
| Just because that's what a scores is designed to do it
| doesn't mean that's what businesses use it for downstream.
|
| The fact people always debate what a credit score _really_
| means suggests that there are too many factors rolled up into
| a single number when we should really have a few distinct
| sub-scales. Anybody that has made a dashboard for a ceo with
| a short attention span that refuses to deal with nuance and
| just wants to see "a number" knows this problem all too well
| ch4s3 wrote:
| I agree in general, but a credit score absolutely DOES NOT
| tell you how profitable someone is to lend to, and in
| general someone with a very high credit score is a very low
| margin customer.
| nradov wrote:
| And that's where interest rates come in. Lenders will
| typically make similar profit margins on all types of
| customers regardless of credit score. They charge lower
| interest rates to borrowers with high credit scores so it
| all evens out when averaged over a large customer base.
| Most lending markets are highly competitive so any major
| differences quickly get arbitraged away.
| FireBeyond wrote:
| A score alone does not directly do so. But there is a
| report attached that will track balances and such. While
| balance tracking has no "history" in a credit report,
| lenders can make actuarial guesses based on DTI and other
| markers which are absolutely included. Which is why, when
| denied, you don't just get told "Your score is too low"
| but things like "existing balances are too high", "age of
| existing accounts is too new", etc.
| nradov wrote:
| Yes, which is exactly why Fair Isaac Corp. sells multiple
| different scoring models customized for different use
| cases. It's not just one FICO score. For example, auto
| lenders usually stratify borrowers in a different way from
| home mortgage lenders. Contrary to the naive hot takes on
| HN, lender CEOs are well aware of these nuances.
| bananalychee wrote:
| Credit scores in the US function similarly to this risk
| assessment you describe, with the caveat that there is no
| standard way to measure risk without a credit history. In my
| experience, it does not take very long to establish that
| baseline, and there are inexpensive vehicles to do so, such as
| secured credit cards. Small-scale lenders are likely to accept
| alternative documents like income statements or proof of
| payment history to qualify. FICO scores, as imperfect as they
| are, merely simplify the risk assessment process.
| alkonaut wrote:
| I suppose it may be related to the overall "looser" grip on
| who exists, and what counts as collateral. If I "default" on
| a loan, the lender is still pretty safe to get back most or
| all of it, since any loan is secured by my future income. So
| there's not as much need to prove my credit history - my
| income is public and always was, and my future income is
| collateral for any loan, including mortgages if my house is
| suddenly under water in a recession.
|
| That means that barring any failures to service credit in the
| past, I don't need a history of successfully servicing credit
| in order to get credit.
| charles_f wrote:
| For the line to go up you need people to keep buying more, and
| reducing costs. But when these costs are people's salary, you end
| up paying them less, so they can't buy more, thus credit.
|
| The overreliance on credit as a new step in the consumption cycle
| is an indicator that the whole system is collapsing, but somehow
| it's supposed to be good news that buying a burrito might be used
| against you to further drawn you down.
|
| The town is on fire but good news, your house being burned down
| will get you air-miles.
| thomascountz wrote:
| I left the U.S. several years ago and have completely forgotten
| about "credit scores" in this sense. I get reminded every once-
| in-a-while how things that used to feel so obvious and inevitable
| and necessary for society to function are completely artificial.
| lisper wrote:
| Society itself is completely artificial. Money, property
| rights, laws, taxes, even the words I'm using to write this
| very comment... all of these are just human inventions, reified
| mythology.
| thomascountz wrote:
| What struck me about credit scores is that, from the outside,
| it seems so obviously ripe for corruption and predation. But
| growing up, it just felt that it was the way things had to
| be; how could it possibly be different?
| jmcqk6 wrote:
| It's useful to remember this when tempted to make arguments
| that assume there is a Right Way to do things. We are
| exploring a massive possibility space where components
| interact in non-linear ways. There isn't a right way, there
| is no golden path. The reality of our society is an
| integration of each individual experience. We build theories
| as abstractions of that integration in order to manage and
| engage with that massive complexity. It can be useful, as
| long as we remember that they are abstractions. When we
| forget that our abstractions are only abstractions, we tend
| to cause additional problems on top of that which we were
| already trying to engage.
| tqi wrote:
| What's the process of vetting people for loans in your current
| country?
| thomascountz wrote:
| You can have debts totally only up to a certain percentage of
| your income. Banks require that you produce a monthly budget
| demonstrating that you have a certain amount left per month
| after all expenses and debts are paid. You have to be able to
| prove this by giving them access to your tax and financial
| records. Most rates for things like homes and cars are
| consistent from bank to bank across the country.
| nradov wrote:
| And how do lenders assess previous defaults when
| underwriting new loans?
|
| From what I've seen, most developed countries actually do
| have the equivalent of the US credit reporting agencies.
| It's just that the functionality goes by different names
| and is distributed across several different types of
| entities rather than being centralized in three credit
| reporting agencies (plus Fair Isaac Corporation / FICO
| which is a vendor to all of them).
|
| For better or worse, it's not really possible to have a
| modern economy with high growth rates unless lenders have a
| reasonably reliable way of quantifying borrower propensity
| to pay. Debt to income ratio is a piece of that, but some
| people are just deadbeats.
| thomascountz wrote:
| To be clear, credit reporting and tracking is not the
| only function of credit scores in the U.S. These
| functions do exist elsewhere and are often called
| "registries." They are not private companies, but instead
| public centralized institutions. Likewise, it is not
| possible for private companies to loan debt to citizens,
| even by proxy.
|
| For bankruptcies and defaults, there are similarly court
| records from public institutions, which you give a bank
| access to. They cannot search these sources without your
| consent, though of course they will then not loan to you.
| LeafItAlone wrote:
| Where are you now? And what is the system like there?
|
| From my extremely naive understanding, obtaining credit and low
| rates is, in general, much easier in the US than other places.
| So it makes sense to me that it has "artificial" tools to help
| determine risk. How do other countries handle this and provide
| the availability that can be found in the US?
| dsign wrote:
| Can't speak for every country, but in Sweden for example tax
| data to a certain level of detail (income by labor, income by
| capital) is publicly available for each citizen. Same for
| debts. And debts that go to the collection authority, which
| has a very dark name (kronofogden), are very public and
| somewhat worse than having to wear a scarlet letter. So
| credit institutes have enough of an idea of your finances to
| decide your rate.
| thomascountz wrote:
| Banks are required to prove their loans are affordable. They
| can only lend someone an amount that they can prove the
| borrower can afford.
|
| In my experience, rates are not low in the U.S. They are high
| because high risk loans are able to be granted.
|
| The availability of debt for things like housing and cars is
| very complicated, but high taxes, a high degree of education,
| livable minimum wages, and realistic employee rights helps
| increase stability and decrease risk. I don't say it to be
| flippant. It is more complex than even I understand. It's
| only to say that, given that these systems are designed
| artificial systems, there are multiple implementations that
| work under various constraints and incentives.
| bhelkey wrote:
| What country is this?
| highwayman47 wrote:
| The only appeal of these loans is that they weren't incorporated
| into FICO score. These companies will all fail once people start
| noticing their scores drop.
| Glyptodon wrote:
| That seems like it makes sense whatever one think of credit
| scores, it's actually surprising to me that a form of credit
| didn't show previously.
| veggieroll wrote:
| Ok, do rent next.
|
| Paying rent doesn't count towards your credit score (at least it
| didn't a decade ago when I was getting my mortgage). And it's a
| glaring signal of how the system isn't built for what it claims:
| evaluating your ability to pay obligations on time. No, the
| system is built to trap people in poverty and enrich the rentier
| class.
| nwah1 wrote:
| Landlords like the idea of incorporating rent payments into
| credit scores, since it adds extra incentive to pay on time.
| Or, phrased differently, extra punishment for failing to pay on
| time.
|
| Framing the current default as a help to the rentier class is
| just silly.
|
| The rentier class are indeed a major cause of stagnation and
| inequality in our economy, but they are innocent of this one.
| gamerdonkey wrote:
| The current default is that missing a rent payment can harm
| your credit score, but paying on time will never improve it.
|
| https://www.experian.com/blogs/ask-experian/can-late-rent-
| pa...
|
| This benefits the landlords for the reasons you outlined, and
| tenants must interact with the credit industry through
| additional (often predatory) means in order to build a credit
| history that may allow them to buy their own home. Further,
| landlords have an incentive against providing this positive
| feedback, as doing so makes it more likely that tenants would
| exit a relationship that is profitable to the landlord.
| daft_pink wrote:
| Is having your payments reported to a credit bureau really a
| benefit to you to allow you to have a better credit or is it a
| collection activity intended to help the creditor collect?
|
| The reason buy now pay it later is being added, is because
| those lenders are having trouble collecting, so they want to
| add it to the credit score so there is an additional
| consequence if they don't get paid. It's a collection activity,
| not something that's designed to help the payor.
|
| Adding rent is mostly a benefit to the landlord not to the poor
| people.
| x0x0 wrote:
| The shitty software my landlord used to use -- the Buildium /
| Realpage scum -- decided to put a popup on every rent payment
| trying to get _me_ to pay the Realpage scum $5 to $10 to report
| the rent payment to the credit bureaus.
| Y_Y wrote:
| A popup? How? If you can't pay by cash or bank transfer then
| wtf are they doing?
| lcnPylGDnU4H9OF wrote:
| Realpage offers payments on their website and landlords
| typically pass on the service costs to their tenants in the
| form of a $5 "service fee" as itemized by Realpage.
| Compared to a $10 fee to get a cashier's check to pay in
| person (because ACH is done by Realpage), you're saving
| $5/mo. (Cash is generally not accepted because they don't
| want to be storing cash on location.)
| ramoz wrote:
| Have seen this first hand. E.g. tenants with a terrible credit
| score, but 36mo of proof on-time rent payments. They've always
| made their future payments (in my experience).
| sathackr wrote:
| Just what we need, every sleazebag landlord who owns 3
| apartments and thinks he's hot shit holding his ability to fuck
| your credit up over your head.
| kylehotchkiss wrote:
| Aww so I can't use BNPL for my $10 California burrito anymore?
|
| I was looking forward to 4 $2.50 weekly payments!
| thebeardisred wrote:
| Man, I wish for a $10 California burrito. In Los Angeles I'm
| often looking at $5+ tacos.
| zoklet-enjoyer wrote:
| I always take on debt if it's an option at 0%. Or sometimes even
| if it's a low promo thing, like 3%.
| chasd00 wrote:
| I do that too, I actually get a kick out ripping off those
| predatory 0% interest traps. I had no idea the BNPL things
| didn't impact credit scores. If they're unsecured with no
| credit worthiness impact then why even pay them back?
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