I think even 401K loans are bad idea and anything that makes it easier to steal from yourself is bad idea. What on earth are these financial institutions thinking? They are pushing people toward poverty.
Never borrow against you 401K... ever. It should only be done in the most exteme emergency. A death maybe. Don't even do it for a foreclosure. You're just burying yourself deeper into debt when you can't afford the debt you have.
For Adfecto, I find that comment about "The wealthy man would have had a much lower chance to acquire his money in nearly any other country" extremely niave and short-sited. There are plenty of wealthy people in lots of other countries and plenty of opportunities in those countries as well. I have lived (and worked) in other countries and visited far more, as well as hosted many people from other countries who have visited here. I certainly did not get the impression that the people of these countries lacked more opportunities than those of us in the USA. As for taxes... in the other countries that I lived in, I did pay a lot higher taxes, however I saw my tax dollars at work and felt I benefited, as a resident, FAR more than I ever have living/working in the USA. Therefore, I did not resent it. I didn't even miss it. There were so many more free amenities available to me within the cities that I lived, provided by tax dollars, that it made them great cities to live in.
I am a public school teacher, and I would probably put my kids in private school. I do feel the teachers in public schools are generally better. They are required to complete more education and are provided with (almost too much) extra staff development. However, the behavior of the students is horrible. There is a lack of respect for the teachers, the school, and for education in general. And since children are required by law to attend school, there is little that can be done about it. Students are given detentions. They don't attend. Then they are assigned a Saturday School. They don't attend. It would be easy to say, well go to the next step and suspend the students, and then if that doesn't work expel them. But there are so many students that don't follow the consequences, that it is impossible to do this. As a parent, I would be more worried that my kids are around that kind of attitude so much of the day.
Plus, students simply don't do the work. I will give an assignment and most of the time over half of the class won't complete it. Forget about homework. It's impossible to have class discussions about anything because only three or four students will have know what is going on. I give failing grades, but they don't care. And neither do their parents. I can't get some of these parents on the phone to save my life! Or I call to tell them about their child's failing grade and they say, "Okay, thank you. I will talk to him/her," but nothing ever changes. When I hear the media talking about our failing schools, I want to scream! It's the parents of these kids who are failing. I'm doing my job as best I can. I can't physically make a child read or write.
Private schools have the option of booting the kids who do nothing. And parents have an extra incentive to make sure their child is doing the work because they are paying for it. I think public schools should fine parents for their children's poor behavior and lack of effort. Our tax dollars pay for the desk, books, and supplies these student are wasting. Let the parents pay for it if all it is is childcare.
The wealthy man (or class) is also receiving more services with the money he pays. They're getting government assurances on their investments - cue what the American government did for investors in Argentina, or the Middle East...
...or the subprime scandal. The poor person loses his or her home, but the government talks about bailing out the banking industry. (Which reminds me of the savings and loan bailout in many ways.)
I think the more appropriate analogy is the software package. A software developer charges wealthier people more for the same software package, but they get personalized technical support that makes sure the software works for them, even modifying the source code to make it easier for their usage. Sometimes this makes the software more usable for those who are charged less, sometimes it makes things harder.
When a price break is announced, combined with additional change requests requested by the wealthy (including bankruptcy "reform"), those paying less get a little upset.
Another nice thing about store cards is that quite often, you have a year or more of no interest and no payments. Bank credit cards, even when they have 0% offers, still require monthly payments and often have a 3% transaction charge upfront. After we moved into our current house, we needed some new furniture, and between Macy's, Rooms to Go, and Home Depot, we floated about $10,000 in purchases for a year and a half. We could have just paid for the stuff with the cash we got from selling the old home, but instead we were able to let it sit in money market accounts and earn about 5% interest. We also got a discount for opening the Macy's card. Finally, any detriment to our credit scores caused by these cards was irrelevant, since we had just gotten a mortgage and wouldn't be applying for any other credit anytime soon.
Scott forgot to tell you that the 10th man risked everything to start the company. He worked for 2 years at no pay. He borrowed against his credit cards to buy supplies. He also paid his employees fairly. If he didnt they would have quit.
Now he is successful and his risk taking, brains and business knowledge is being rewarded.
Short vs. long term. Store credit dings you in the short term. But it can build your rating over the long haul. But, if I'm going to take a ding in the short term, I'd rather have the flexibility of something like an AmEx Blue Cash than a Gap card. Flexibility is good.
I think mileage cards are generally terrible. You get locked to one airline and it's partners, and the rewards for miles have been steadily dropping. You look at the spend through for many rewards, particularly mileage, and you're better off just buying the reward in the first place. Not always, but many times.
"When I take my car in for repairs, the mechanic never tells me that my older model car is "no longer supported,""
You have aparently never owned a car as old as I have. After trying all the local auto stores for a part only yo be told over and over again it was dealer only a trip to the dealer was where I was told "its too old we don't make that part anymore"
Get back to us after you've started having kids! Before you've had them you never fully understand how having children upsets all your best laid plans...
Many of you missed the closing bit on who paid for the beer. Through it all, the tenth man paid more than half of the total bill. He got a proportionate share of the price break and was still proportionately paying the majority of the bill.
If you think that a poor person will use a windfall to do something responsible, then you have not spent much time living in a poor neighborhood. I have. Let me enlighten you as to the primary behavior pattern of poor people. The majority of poor people are selfish and short sighted as well as ignorant and stupid. The poor resent anything that comes in the way of the immediate, personal gratification of any thing they want. Those that are not these things, don't stay poor. How else do you think the payday advance and rent to own leeches stay in business?
As for buying a "paper" investment that has no benefit for any of the downtrodden masses, you haven't stopped to consider where the payment for that paper went. What did the seller do with that money, and if he invested in yet another piece of paper, what did that seller do with their money? That money goes round and round through the economy in many ways, it does not cease to exist with the first purchase!
Do I have paper investments? Yes I do. I was paid for some of my labor in the form of stock. This stock is now part of a retirement fund that I will use to buy goods and services when I am retired.
Learn some economics. Preferably not from a college professor who demonstrates radical leanings to the left or the right. Those kind of people have always spelled trouble at any time for any group of people that listens to them.
The nine poorest men worked for the tenth man. They all worked hard, paid their taxes, raised their families, and obeyed the law.
The company they all worked for(owned by the tenth man) was making huge profits because of their labor. Over the past ten years the tenth man's income went up 150% while he (making a good business decision) continually cut the health benefits and retirement benefits of his workers(to keep up with the increasing costs).
During this time the tenth man outsourced two of the men's jobs overseas and layed them off and gave his remaining employees just enough of a raise to help them keep up with inflation. At the same time increasing his own income.
Thus making it so that in the past ten years those left working for the company had no real increase in income eventhough the company they worked for was making huge profits; all of which was going to the tenth man.
The moral of the story is: We don't need a government that can give us tax breaks. We need employers ethical enough to let everyone share in the profits of the company they help build. Barring that we need a government big enough to make employers do the right thing.
The roofing company example is a good one. However, the conclusions are not correct. I own a small company and just sold stock (paper?) in my company to several rich guys. Here is how it works. First 100% of their investment goes to growing the company - if I sell something only the profit portion goes to fund growth.
In the roofing example, that investment allows the roofing company to expand into siding and hire more people. In addition to the siding workers, he hires another office person to answer the phone, send out bills and generally keep track of things.
Even for a publically traded company, when you buy stock, some of that stock is being sold by the company to raise money for operations and growth. If it was just people trading money, companies would not care so much about stock price.
This is a good article (like usual) coming from you! I especially like that you brought up store credit. While I had never considered this being a bad product before, I now can see why it can be for some people. An example is when I had a Von Maur account as a youngster... the worst part of it is that is was my ONLY line of credit. I would buy underwear at $25 a pair, not because I needed or wanted them, but because it was the only way to buy them on credit. Had I thought about it more, I could have saved up $4 and snagged a 6-pack of Hanes at Walmart.
They also never required that I had my card on me. By just telling them my social and showing them I.D. I could charge whatever I wanted, whenever I wanted. (Even though I had shredded the card in an attempt to curb spending months ago....)
Yes, be grateful for the $3 in the bank and minimum wage. The most stirring example I've seen of someone with the right attitude was the marine who was just on Extreme Makeover (the show with Ty Pennington).
That man lost his leg in combat, but he did not focus on what he lost. He was grateful that he was still alive so he could see his children every day.
It sucks that he lost his leg and needs an artifical limb and wheelchair, especially when he was used to being a very healthy and active man. But he never once coomplains about it, he just lets everyone know how happy he is to still be alive.
Don't think about the money you don't have, or the things you want - be happy for the things you do have. If you can't find anything it's your attitude that needs to change, not your financial situatiuon.
Citibank, one of the worst crooks ever, ( I used to be a Citibanker - a secretary - till they fired me for two cheaper women), lowered my rate two points cause I called to ask. Can't hurt to ask. Not that I'm using the card! I use cash.
Citibank, one of the worst crooks ever, ( I used to be a Citibanker - a secretary - till they fired me for two cheaper women), lowered my rate two points cause I called to ask. Can't hurt to ask. Not that I'm using the card! I use cash.
One packet of yeast is plenty, no matter how big of a batch you make. (The yeast is alive; it'll grow.)
You can make smaller batches and leave the ratio the same. If you buy fancy brewer's yeast from the wine-making store, you can go with a higher sugar-to-water ratio. (The reason that ratio is good is that the yeast runs out of sugar to eat right at the same time that it dies from alcohol poisoning, so you don't waste any sugar. Brewer's yeast will survive a higher alcohol content, so you can use more sugar.)
Fruit will have sugar in it (varying amounts depending on kind)--and, of course, will have water in it. So, adding fruit will affect the ratio of water and sugar in complex ways. There are ways to figure out just what you've got, and then to adjust it. You can find the details in any wine making book.
I can't believe I'm the first one to bring up 'Office Space' here... I, too, learned a lot from this post and appreciated. I'm glad to not be like the poor dudes who had to try to look up money laundering in the dictionary. :)
I also had to chuckle at the fellow who accused another commenter of being too dumb to go read about these things... then used the wrong "your/you're" homophone. Ah, blissful ironies.
As a technical writer, my start-up and running costs appear to be very low BUT: There is nothing worse than having a potentially huge client asking you to take their money while at the same time not having the immediate cash to replace faulty hardware so that your computer actually works well enough to do the job!
I cut it way to fine in my first year and suffered losses as a result. Bad cash-flow planning and poor liquidity lost me some good deals. I made it though and the experience was worth it.
The only other thing I can say is that it really pays to specialise. If I were still working as a copywriter, business writer and technical writer, I would still be competing with three times as many people in the same trade (probably more as good copywriters abound in Cape Town).
Since I pared down to just technical writing I can spend more time and effort marketing to software houses and other product creators instead of trying to be all things to all people. I also have more energy to dedicate to research and learning new open source tools that help me create really usable documents at way lower costs.
Oh yes, you'd better get used to skimping on sleep on occasion. You can always catch up after your deadline!
I can see where Matt's coming from in terms of paper investments. If you buy a stock that's already in circulation (as opposed to at the IPO), the company doesn't actually get any of that money. The only way the company can benefit from higher share prices is by issuing new shares at the new price. They don't get any money off of the trading of their stock in the public market.
To further Matt's point (horribly oversimplified, mind you):
- A poor person gets a tax cut and hires a roofing company to fix his leaky roof. The company gets revenue.
- A rich person gets a tax cut and invests funds in the roofing company's stock, which is already listed on a public exchange. The company gets no revenue.
Whether buying paper assets indirectly stimulates production, I can't say, but it doesn't stimulate production the same way buying the company's product or service does.
Oh, and a definition check: what's BNP? Did you mean GNP (gross national product)?
a 401k debit card has to be the most unethical thing I've heard in a LONG while! I recently posted too how to stay away from those payday loans. It really irks me that they are outside every military installation ad nauseum.
I'm with you all the way. In scoping out our living room I realize that three objects were trash picked, five gotten at second hand places, two given, one from a yard sale and three purchsed with money (on sale). Plus personal knick knacks arranged nicely. Old English furniture polish, paint, rewiring and in one case recovering made them functional and bring the pieces together. I think if you're true to your own likes and dislikes your stuff works together.
I think even 401K loans are bad idea and anything that makes it easier to steal from yourself is bad idea. What on earth are these financial institutions thinking? They are pushing people toward poverty.
Never borrow against you 401K... ever. It should only be done in the most exteme emergency. A death maybe. Don't even do it for a foreclosure. You're just burying yourself deeper into debt when you can't afford the debt you have.
For Adfecto, I find that comment about "The wealthy man would have had a much lower chance to acquire his money in nearly any other country" extremely niave and short-sited. There are plenty of wealthy people in lots of other countries and plenty of opportunities in those countries as well. I have lived (and worked) in other countries and visited far more, as well as hosted many people from other countries who have visited here. I certainly did not get the impression that the people of these countries lacked more opportunities than those of us in the USA. As for taxes... in the other countries that I lived in, I did pay a lot higher taxes, however I saw my tax dollars at work and felt I benefited, as a resident, FAR more than I ever have living/working in the USA. Therefore, I did not resent it. I didn't even miss it. There were so many more free amenities available to me within the cities that I lived, provided by tax dollars, that it made them great cities to live in.
I am a public school teacher, and I would probably put my kids in private school. I do feel the teachers in public schools are generally better. They are required to complete more education and are provided with (almost too much) extra staff development. However, the behavior of the students is horrible. There is a lack of respect for the teachers, the school, and for education in general. And since children are required by law to attend school, there is little that can be done about it. Students are given detentions. They don't attend. Then they are assigned a Saturday School. They don't attend. It would be easy to say, well go to the next step and suspend the students, and then if that doesn't work expel them. But there are so many students that don't follow the consequences, that it is impossible to do this. As a parent, I would be more worried that my kids are around that kind of attitude so much of the day.
Plus, students simply don't do the work. I will give an assignment and most of the time over half of the class won't complete it. Forget about homework. It's impossible to have class discussions about anything because only three or four students will have know what is going on. I give failing grades, but they don't care. And neither do their parents. I can't get some of these parents on the phone to save my life! Or I call to tell them about their child's failing grade and they say, "Okay, thank you. I will talk to him/her," but nothing ever changes. When I hear the media talking about our failing schools, I want to scream! It's the parents of these kids who are failing. I'm doing my job as best I can. I can't physically make a child read or write.
Private schools have the option of booting the kids who do nothing. And parents have an extra incentive to make sure their child is doing the work because they are paying for it. I think public schools should fine parents for their children's poor behavior and lack of effort. Our tax dollars pay for the desk, books, and supplies these student are wasting. Let the parents pay for it if all it is is childcare.
The wealthy man (or class) is also receiving more services with the money he pays. They're getting government assurances on their investments - cue what the American government did for investors in Argentina, or the Middle East...
...or the subprime scandal. The poor person loses his or her home, but the government talks about bailing out the banking industry. (Which reminds me of the savings and loan bailout in many ways.)
I think the more appropriate analogy is the software package. A software developer charges wealthier people more for the same software package, but they get personalized technical support that makes sure the software works for them, even modifying the source code to make it easier for their usage. Sometimes this makes the software more usable for those who are charged less, sometimes it makes things harder.
When a price break is announced, combined with additional change requests requested by the wealthy (including bankruptcy "reform"), those paying less get a little upset.
"right wing propaganda?" really? Please point out the flaw in the argument instead of spouting nonsensical trolls.
Sell it quickly!
Another nice thing about store cards is that quite often, you have a year or more of no interest and no payments. Bank credit cards, even when they have 0% offers, still require monthly payments and often have a 3% transaction charge upfront. After we moved into our current house, we needed some new furniture, and between Macy's, Rooms to Go, and Home Depot, we floated about $10,000 in purchases for a year and a half. We could have just paid for the stuff with the cash we got from selling the old home, but instead we were able to let it sit in money market accounts and earn about 5% interest. We also got a discount for opening the Macy's card. Finally, any detriment to our credit scores caused by these cards was irrelevant, since we had just gotten a mortgage and wouldn't be applying for any other credit anytime soon.
Scott forgot to tell you that the 10th man risked everything to start the company. He worked for 2 years at no pay. He borrowed against his credit cards to buy supplies. He also paid his employees fairly. If he didnt they would have quit.
Now he is successful and his risk taking, brains and business knowledge is being rewarded.
No one got screwed or taken advantage of.
Short vs. long term. Store credit dings you in the short term. But it can build your rating over the long haul. But, if I'm going to take a ding in the short term, I'd rather have the flexibility of something like an AmEx Blue Cash than a Gap card. Flexibility is good.
I think mileage cards are generally terrible. You get locked to one airline and it's partners, and the rewards for miles have been steadily dropping. You look at the spend through for many rewards, particularly mileage, and you're better off just buying the reward in the first place. Not always, but many times.
Wow, Olivia...that is true decorating on the cheap. Did you have to get the one piece recovered or did you do it yourself?
"When I take my car in for repairs, the mechanic never tells me that my older model car is "no longer supported,""
You have aparently never owned a car as old as I have. After trying all the local auto stores for a part only yo be told over and over again it was dealer only a trip to the dealer was where I was told "its too old we don't make that part anymore"
Get back to us after you've started having kids! Before you've had them you never fully understand how having children upsets all your best laid plans...
Many of you missed the closing bit on who paid for the beer. Through it all, the tenth man paid more than half of the total bill. He got a proportionate share of the price break and was still proportionately paying the majority of the bill.
If you think that a poor person will use a windfall to do something responsible, then you have not spent much time living in a poor neighborhood. I have. Let me enlighten you as to the primary behavior pattern of poor people. The majority of poor people are selfish and short sighted as well as ignorant and stupid. The poor resent anything that comes in the way of the immediate, personal gratification of any thing they want. Those that are not these things, don't stay poor. How else do you think the payday advance and rent to own leeches stay in business?
As for buying a "paper" investment that has no benefit for any of the downtrodden masses, you haven't stopped to consider where the payment for that paper went. What did the seller do with that money, and if he invested in yet another piece of paper, what did that seller do with their money? That money goes round and round through the economy in many ways, it does not cease to exist with the first purchase!
Do I have paper investments? Yes I do. I was paid for some of my labor in the form of stock. This stock is now part of a retirement fund that I will use to buy goods and services when I am retired.
Learn some economics. Preferably not from a college professor who demonstrates radical leanings to the left or the right. Those kind of people have always spelled trouble at any time for any group of people that listens to them.
What the author didn't tell you...
The nine poorest men worked for the tenth man. They all worked hard, paid their taxes, raised their families, and obeyed the law.
The company they all worked for(owned by the tenth man) was making huge profits because of their labor. Over the past ten years the tenth man's income went up 150% while he (making a good business decision) continually cut the health benefits and retirement benefits of his workers(to keep up with the increasing costs).
During this time the tenth man outsourced two of the men's jobs overseas and layed them off and gave his remaining employees just enough of a raise to help them keep up with inflation. At the same time increasing his own income.
Thus making it so that in the past ten years those left working for the company had no real increase in income eventhough the company they worked for was making huge profits; all of which was going to the tenth man.
The moral of the story is: We don't need a government that can give us tax breaks. We need employers ethical enough to let everyone share in the profits of the company they help build. Barring that we need a government big enough to make employers do the right thing.
The roofing company example is a good one. However, the conclusions are not correct. I own a small company and just sold stock (paper?) in my company to several rich guys. Here is how it works. First 100% of their investment goes to growing the company - if I sell something only the profit portion goes to fund growth.
In the roofing example, that investment allows the roofing company to expand into siding and hire more people. In addition to the siding workers, he hires another office person to answer the phone, send out bills and generally keep track of things.
Even for a publically traded company, when you buy stock, some of that stock is being sold by the company to raise money for operations and growth. If it was just people trading money, companies would not care so much about stock price.
This is a good article (like usual) coming from you! I especially like that you brought up store credit. While I had never considered this being a bad product before, I now can see why it can be for some people. An example is when I had a Von Maur account as a youngster... the worst part of it is that is was my ONLY line of credit. I would buy underwear at $25 a pair, not because I needed or wanted them, but because it was the only way to buy them on credit. Had I thought about it more, I could have saved up $4 and snagged a 6-pack of Hanes at Walmart.
They also never required that I had my card on me. By just telling them my social and showing them I.D. I could charge whatever I wanted, whenever I wanted. (Even though I had shredded the card in an attempt to curb spending months ago....)
Thanks for the link-love!
Linsey Knerl
Yes, be grateful for the $3 in the bank and minimum wage. The most stirring example I've seen of someone with the right attitude was the marine who was just on Extreme Makeover (the show with Ty Pennington).
That man lost his leg in combat, but he did not focus on what he lost. He was grateful that he was still alive so he could see his children every day.
It sucks that he lost his leg and needs an artifical limb and wheelchair, especially when he was used to being a very healthy and active man. But he never once coomplains about it, he just lets everyone know how happy he is to still be alive.
Don't think about the money you don't have, or the things you want - be happy for the things you do have. If you can't find anything it's your attitude that needs to change, not your financial situatiuon.
Citibank, one of the worst crooks ever, ( I used to be a Citibanker - a secretary - till they fired me for two cheaper women), lowered my rate two points cause I called to ask. Can't hurt to ask. Not that I'm using the card! I use cash.
Citibank, one of the worst crooks ever, ( I used to be a Citibanker - a secretary - till they fired me for two cheaper women), lowered my rate two points cause I called to ask. Can't hurt to ask. Not that I'm using the card! I use cash.
One packet of yeast is plenty, no matter how big of a batch you make. (The yeast is alive; it'll grow.)
You can make smaller batches and leave the ratio the same. If you buy fancy brewer's yeast from the wine-making store, you can go with a higher sugar-to-water ratio. (The reason that ratio is good is that the yeast runs out of sugar to eat right at the same time that it dies from alcohol poisoning, so you don't waste any sugar. Brewer's yeast will survive a higher alcohol content, so you can use more sugar.)
Fruit will have sugar in it (varying amounts depending on kind)--and, of course, will have water in it. So, adding fruit will affect the ratio of water and sugar in complex ways. There are ways to figure out just what you've got, and then to adjust it. You can find the details in any wine making book.
I can't believe I'm the first one to bring up 'Office Space' here... I, too, learned a lot from this post and appreciated. I'm glad to not be like the poor dudes who had to try to look up money laundering in the dictionary. :)
I also had to chuckle at the fellow who accused another commenter of being too dumb to go read about these things... then used the wrong "your/you're" homophone. Ah, blissful ironies.
As a technical writer, my start-up and running costs appear to be very low BUT: There is nothing worse than having a potentially huge client asking you to take their money while at the same time not having the immediate cash to replace faulty hardware so that your computer actually works well enough to do the job!
I cut it way to fine in my first year and suffered losses as a result. Bad cash-flow planning and poor liquidity lost me some good deals. I made it though and the experience was worth it.
The only other thing I can say is that it really pays to specialise. If I were still working as a copywriter, business writer and technical writer, I would still be competing with three times as many people in the same trade (probably more as good copywriters abound in Cape Town).
Since I pared down to just technical writing I can spend more time and effort marketing to software houses and other product creators instead of trying to be all things to all people. I also have more energy to dedicate to research and learning new open source tools that help me create really usable documents at way lower costs.
Oh yes, you'd better get used to skimping on sleep on occasion. You can always catch up after your deadline!
To Jack from eyeflare,
I can see where Matt's coming from in terms of paper investments. If you buy a stock that's already in circulation (as opposed to at the IPO), the company doesn't actually get any of that money. The only way the company can benefit from higher share prices is by issuing new shares at the new price. They don't get any money off of the trading of their stock in the public market.
To further Matt's point (horribly oversimplified, mind you):
- A poor person gets a tax cut and hires a roofing company to fix his leaky roof. The company gets revenue.
- A rich person gets a tax cut and invests funds in the roofing company's stock, which is already listed on a public exchange. The company gets no revenue.
Whether buying paper assets indirectly stimulates production, I can't say, but it doesn't stimulate production the same way buying the company's product or service does.
Oh, and a definition check: what's BNP? Did you mean GNP (gross national product)?
a 401k debit card has to be the most unethical thing I've heard in a LONG while! I recently posted too how to stay away from those payday loans. It really irks me that they are outside every military installation ad nauseum.
I'm with you all the way. In scoping out our living room I realize that three objects were trash picked, five gotten at second hand places, two given, one from a yard sale and three purchsed with money (on sale). Plus personal knick knacks arranged nicely. Old English furniture polish, paint, rewiring and in one case recovering made them functional and bring the pieces together. I think if you're true to your own likes and dislikes your stuff works together.