It's 10 P.M. Do you know where you money is?

Walter Hinteler wrote:

the total borrowed now exceeds the entire value of the economy

Yet another sensational exaggeration. The annual GDP is only a small fraction of "the entire value of the economy". If the Independent's sports reporter made mistake of this severity about important things like cricket, they'd fire him in a microsecond. But hey, this is just a business reporter, writing about trivialities like material basis of Great Britains existence ...

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Chai wrote:

I disagree - I think you have a very different definition of the word rich. Rich is not eating foi gras every day and hiring someone whose only job is clipping your toenails. Perhaps that is part of why you have this instinctive (but misplaced) feeling toward the "rich", because you're only thinking of the "idle rich"

Uhmm, no. After all, I wrote:

In fact, there's many rich people who live like that, just spending with only a rough idea of their current balance -- [..] just like there's rich people who know the whereabouts of their every last penny.
I dont think of the rich only as the people who spend without thinking; I think of the rich as well, the rich. Those who have a lot of money compared to most other people. End. They include fastidious budgeters, and they include lazy spendthrifts. I'm not sure what you're saying on that count - do you disagree, really?

I think there's also poor people who are spendthrifts as long or as soon as they get some money, just like there are poor people who are absolutely meticulous with money, and indeed have to be in order to survive, keep a roof over their head and food on the table.

Like I said - I just dont see how you can extrapolate how I described my instinctive feelings about rich and poor people towards some kind of judgement about people who watch their money carefully. There's little correlation.

Chai wrote:

OK, nimh...define specifcally what is "rich" to you....

Depends greatly on where you live. Being rich in Hungary is not the same as being rich in the Netherlands is not the same as being rich in the US.

I dunno - top 20% of the population in terms of wealth?

(Thats wealth not wages; the richer people are, the less their wealth derives, relatively, from wages.)

Chai wrote:

But, your chances of getting to your destination is vastly improved if you have a plan.

Sure. But in practice, generally not enough to lift you from the bottom 10% of society to its median, or from its median to the top 10%, unless you've had a share of good luck mixed in as well. Like I said, there's plenty of people who are meticulous about their financial planning and are still poor. There's plenty of people who are spendthrifts who still remain rich.

In short: hard work and fastidious planning, though surely useful and important, in this society makes up only a small part of where in the socio-economic pyramid you'll find yourself, alas.

Chai wrote:

For instance, it's all well and good to say money isn't important to you...but seriously, do you not think of what your standard of living will be 20, 40, 50 years from now?

Yes, money is important. I just dont have much of a grasp on it. And of course I worry. I never said I was proud of my lack of grasp.

I just dont see the parallel you're trying to draw with our previous discussion about how I feel towards the rich, and towards the down-and-out, in our countries.

Bad instinctive feelings towards the rich does not correspond with any specific feeling towards the fastidious and well-planned, as the groups are hardly the same - some rich people are fastidious, others are not. Likewise, instinctive sympathy for the poor does not correspond with any feeling toward those who are bad or careless at managing money; I think it would be naive to suggest any equation. I dunno - the link you're making between the two conversations is just not there.

Chai wrote:

I don't obsess about or live in the future, but I'm aware it's there.

Good for you (add exclamation mark or whatever is needed to avoid impression I'm being sarcastical or whatever).

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Thomas wrote:

Walter Hinteler wrote:
the total borrowed now exceeds the entire value of the economy

Yet another sensational exaggeration. The annual GDP is only a small fraction of "the entire value of the economy". If the Independent's sports reporter made mistake of this severity about important things like cricket, they'd fire him in a microsecond. But hey, this is just a business reporter, writing about trivialities like material basis of Great Britains existence ...

Quote:

THE scale of Britain's personal debt mountain has come into sharp focus with new research showing a record number of households are facing serious debt repayment problems, and that Britons owe more money than the entire economy can generate in a year.
[...]
Research from accountants Grant Thornton shows that the total stock of consumer debt owed by British families is larger than Britain's gross domestic product (GDP). Bank of England figures show that Britain's consumer debt stands at £1,345bn - higher than the size of Britain's annual output of £1,330bn, according to the Office for National Statistics.

- The Guardian, page 19: Consumers' debt overtakes gross domestic product,
- Daily Mail, page 80: Consumer debt grows to £1.3trillion,
- The Herold, page 3: Britons owe more than they earn,
... ... ...

I do agree, however, that all that might well be "another sensational exaggeration".

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A lot of this depends on how you define your balance sheet.

We're carrying debt right now, but that's because T's staying home to raise our kids. She could earn a lot of money working as a therapist, but our kids would be raised by the teachers at the pre-school.

So, we carry some debt. If we get into straits we can always get more income.... T's got a Ph.D. I can work overtime or weekends.

Time with our kids when they're little? I'll spend some time in debt-slavery for that....

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As for buying a house: it is the most important investment you can make. Even borrowing. Perhaps especially borrowing.

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Same here. And it'll pay you dividends.

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I'm also amused by the choices in the poll...

You have to know within $5 or you're clueless?

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I almost didn't choose that one because it's more like within $20 to $100 for me. But then again, I look online regularly precisely because I allow myself such a big margin of error.

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See FreeDuck, that's why you're not rich. You had it coming.

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You got it, Thomas. It's because of my weak character. If I were upright and moral I'm sure by now I'd be rolling in it.

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Well, it's always good to check online if all transactions are kosher.
My bank's tellers are primarily students for $ 8/hour and some are
more challenged than others. I've had deposits disappear, and only
my receipt saved me from losing it. Even the branch manager had
a hard time locating the funds (which were found in the students
drawers).

Bottom line is what you do with your money and how you invest it
to accumulate more funds. Saving up to buy something that depreciates
fast, is not very wise in my book.

Having real estate (despite a mortgage) is always a good investment,
the resale values are just too good to pass up, depending in what part
of the country you live.

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I'd like a coupla other options on that poll. A penny to $5 really seems like one choice; and the other 3 seem like a set-up to "you're a yutz".

I've got a good general idea of what's where, financially, though I'm horrible at actual pieces of paper.

I probably use my actual physical credit card less than 20 times a year. I should probably use it more for stuff like dental bills, where I wouldn't have to actually pay until about the time I get the money back from the health plan.

However, the debit card gets a steady workout. I don't check the balance hourly or daily, but I try to keep about 2 full paycheques in float between a couple of accounts. This month is weird as it's a 3 paycheque month, with my anniversary bonus in there as well. Time to offload a bit.

~~~

Who's rich? I'd define it as the top 2 - 5 % of the population (in terms of financial holdings) in a particular country.

but, according to the SEC, it's the top 1%.

Quote:

A Million's Not Enough To Be Considered Rich

Clearly, the federal government believes that, if you really want to consider yourself wealthy and sophisticated, having a million dollars just doesn't cut it anymore. In its defense, the SEC says it's just trying to keep up with inflation and booming asset prices.

And there is no doubt that total wealth has been soaring in the U.S.

According to the Federal Reserve Surveys of Consumer Finance, 8% of total households in the U.S. have a net worth of $1 million or more, if you include home equity.

Unfortunately, the new definition of rich - a net worth of $2.5 million (excluding home and business equity) - applies to just 1% of the American population.

the definition of rich

(bank tellers? that seems to be particularly American - very few Canadians go into banks anymore)

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CalamityJane wrote:

Even the branch manager had
a hard time locating the funds (which were found in the students
drawers).

This made me laugh. It must be a southern thing.

Yeah, I've met my fair share of banking morons. My favorite was a bank I had when I lived in Toilettown whose policy it was to hold your money for two days whenever you deposited it. In order to do this in their system, they would first subtract the deposit from your balance and then add the deposit, then go back in later and remove the debit. The first time they told me I was overdrawn for making a deposit I read them the riot act. It still burns me up just thinking about it -- incompetent, backwards-ass, technology idiots.

Ah, but that's a subject for another thread.

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CalamityJane wrote:

Bottom line is what you do with your money and how you invest it to accumulate more funds. Saving up to buy something that depreciates fast, is not very wise in my book.

And paying interest on a loan on something that depreciates fast is wise?

There's definitely an opportunity cost associated with having your money tied up in a car. It just depends on whether you think you can make more than the interest a car loan costs.

Cars are just an expense. The goal is to pay the expense as cheaply as possible.

One can save, gain interest, pay cash.

One can borrow, pay interest.

One can invest, earn interest, borrow, pay some interest but earn more on the investment....

(Or lose one's shirt if you don't know what you're doing....)

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DrewDad, it depends on your individual situation. I'm working for myself,
thus lease my cars and have a better tax advantage, aside from not paying
any maintenance for the car.

I can put my money to better use, yes Laughing

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Quote:

According to the Federal Reserve Surveys of Consumer Finance, 8% of total households in the U.S. have a net worth of $1 million or more, if you include home equity.

Some of my neighbors would fall into that category, as their piece of
real estate has appreciated over the years to over $ 1 million. However,
they're retired and are struggling financially to make ends meet.
So, it's all relative (as I said previously).

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heh...of all crazy things in this world....I think cj and I actually are quite similar in our thinking about money.

When she said she didn't buy cars outright...I made the assumption and leased them, and I was sure she had a good reason for doing that, like a tax write off.

oh...as far as my choices for the poll...

I was simply thinking of walking around money...not what you've got in your checking account and paying for bills.

More like the kind of dough where you buy a burger and fries, or run in the drug store for shampoo...I guess that's what I consider walking around money.

hmmm..maybe it wasn't even about the dollar amount per se...for instance I charge for the points....but, if you asked me "what have you bought in the last several days, I could quickly say...

Some almond milk, about $2
Ornatmental grasses to plant this weekend...between $50 and $55
Whole Foods, sushi.....About $8
Ulta...sale on Nair...about $10 for 4 bottles
Gas....about $30

I'm 99% sure that's all...

I guess I was more thinking about how many people wouldn't remember what they had made purchases of at all.

Didn't mean to make anyone look like a yutz...

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CalamityJane wrote:

Quote:
According to the Federal Reserve Surveys of Consumer Finance, 8% of total households in the U.S. have a net worth of $1 million or more, if you include home equity.

Some of my neighbors would fall into that category, as their piece of
real estate has appreciated over the years to over $ 1 million. However,
they're retired and are struggling financially to make ends meet.
So, it's all relative (as I said previously).

and these folks aren't considered rich - it's 2.5 million excluding equity

so - 2.5 million in walking-around money

~~~

The yutz thing, chai, probably comes from a reaction to an aunt of mine who was/is (?) a notebook keeper. She kept a little book where she not only recorded every purchase (to the last matchbook), but her mood at the time of purchase. An interesting woman, but not too understanding of any other approach to finances.

~~~

Cars. Like houses, the financial situation's a bit different in Canada. The thing I've learned is that it simply doesn't pay to buy or lease a brand-new car up here. 30% depreciation the minute you drive off the lot (learned that my first week working for an auto insurer), and taxes (re leasing) aren't as friendly as they are in the U.S.

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beth, my friend's ex-girlfriend kept (unbeknownst to him) a detailed notebook with every last coffee they ever had together, or meal... even when they'd cook at home- she knew exactly who bought what. They were engaged and lived together...so it was a loooooong detailed list. When they broke up, she busted out a 'receipt' of what he owes her for the last five years, or however long it was since their very first date Shocked

! he was so shocked that he paid about triple the amount and high tailed out. it's funny now.

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It's 10 P.M. Do you know where you money is?

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