I see lots of people blaming "the system" and whatnot for not teaching you to be rich..... and getting you into debt. And to be sure, the financial industry has been given too much rope to hand out credit without enough risk.
But I seem to recall seeing many other forums about university, mortgages, etc, where people who's parents paid for their education, helped with a house, etc, are ridiculed - and I don't mean super rich dynastic trust fund babies....
It only takes a generation and some common thinking for a family to stick together and get ahead, and ensure their children never need to borrow money from a bank to get an education, or buy a house. You don't have to be rich... but why can't we live, you know, a generation ahead?
I know a guy who told me his parents paid for all his stuff, his house, etc, and therefore all his work and all that (good tech guy) was just being saved up for HIS kids, ad-infinitum. They aren't trying to be rich - they just stay a generation ahead.
How many people, 10 years into their working life, have a year's minimum expenses in liquid cash, a cushion, just in case? How about 6 months? Most don't even have 2 weeks.... most live hours away from disaster if they don't get paid on time, and they blame everyone else. Get a couple months ahead and you no longer think about when payday is.... it's not relevant.
Want to be an entrepreneur? great. Do it.
People don't understand what money is for, or how to really use it to their advantage. They learn abou their "credit rating" - that's it.
My rules:
- There's nothing wrong with cash in the bank (really secure, liquid assetts). People tell you you are losing out because of inflation..... most of those people got smashed when the stock market crashed. I'm not knocking investment, I'm just saying, cash is okay. I've weathered the ups and downs of the financial world without worry or concern while everyone else was freaking out.
A good credit rating is good - but it should be a side effect of good financial practices, not a goal in and of itself.
My credit rating probably isn't great - it's not bad because I've done nothing wrong, but I haven't borrowed large sums and paid them back, that kind of thing.
Credit cards should work for you, they are not a privilege. They should protect you from risk of theft, and help you balance out and manage cache flow. They should never be used for money you don't have. There are other ways to go about that (and in a circle of friends with similar practices, you borrow from friends - imagine a society based on the same)
Avoid debt. Debt is okay - but don't get over your head... stay far, far away from that kind of debt. Debt carries a psychological burden as well.... for me it feels great knowing that when I get paid, my money is mine. If I borrow some money, pay some interest so I can keep some liquidity rather than spend cash on something big the interest payments are worth keeping my security cushion adequate - but if push comes to shove, I can just pay it off - that's what I mean.
You want a simple credit card without fees or nasty interest rates. You want protection and no nonsense.
You want cash in the bank, always growing - I don't mean retirement savings, I mean a cushion - it should grow all the time. After 20 years of working you should be in a position where you could have no job for a year or more without screwing up your life. (not saying you SHOULD do that, you probably shouldn't - but you should be able to - that makes negotating salaries and dealing with employers much, much easier).
It's really simple.
Avoid debt.
Build and keep adding to a cash cushion. Dip in once in a while, no problem, but keep it growing. It'll hurt at first, but before long you'll LOVE it. Be as aggressive as you can.
Liquidity = opportunity.
(Imagine having a rented home and lots of cash in the bank rather than an underwater mortgage when the housing market crashed. Most people tragically sufferred - you would be in a position to take advantage of the situation immediately.
>It only takes a generation and some common thinking for a family to stick together and get ahead, and ensure their children never need to borrow money from a bank to get an education, or buy a house. You don't have to be rich... but why can't we live, you know, a generation ahead? I know a guy who told me his parents paid for all his stuff, his house, etc, and therefore all his work and all that (good tech guy) was just being saved up for HIS kids, ad-infinitum. They aren't trying to be rich - they just stay a generation ahead.
You are talking about unbelievable sums of wealth that are completely unavailable to the working poor. This is great advice for people who are already unbelievably privileged (probably most of us at HN) but it does jack shit for people who are living pay cheque to pay cheque because their pay cheque is barely enough to sustain any standard of living.
I can see your point, given the audience here - but I'm in no way unbelievably rich. I'm not working poor, but I'm still freaked out at how I'm going to retire and pay for my kids education, etc.
BUT
People who live cheque to cheque, if given double the salary, would very shortly still end up living cheque to cheque. Triple it, same thing.
I'm not dismissing problems with the system - but I've seen people who make in a month what I make in a day (more because of where I live, only a little becuase I make a good wage - it's not something that would impress anyone on this forum, let me assure you) who still manage to save money slowly, raise kids, buy a house eventually, etc....).
It's about your attitude towards money, not the amount.
It's very likely that you are, in fact, unbelievably rich. If you look at the condition that most of the people in the world live in, and even large groups of Westerners, I would bet that you are doing very, very well.
There's nothing wrong with wanting more, or discussing how to better manage your finances, I just don't think that we're really talking about poverty anymore at that point.
I know a ton of people who were "working poor" either just post-WWII or as immigrants, who nonetheless have managed to acquire some pretty good sums of wealth. Most of them don't go as far as being "a generation ahead", but their hard work and sacrifices put their kids and grandkids in position to be successful without going through the sorts of financial dire straits that others treat as normal.
Interesting point on the "avoid debt," because that's what naive young adults here are told not to worry about. Get a student loan, no problem - bank overdraft, fine. They are roped into the system when they're young and naive, and they spend half of their adult working life trying to climb their way out of it before they can really start saving whilst still paying off their mortgages.
I agree with your sentiments about being conservative with your finances, and there's no doubt a huge portion of poor people are terrible with money. You see people struggling to pay rent, but queuing up for the new iPhone - such way of living is ludicrous, and they are bound to stay poor that way. The reality is they don't need it - you don't need gadgets, fashion accessories, takeaways, beer, drugs and other money drains - but at the same time, if you're not buying the latest and greatest, someone else isn't making enough money - which is considered bad for the economy. They encourage you to spend.
Call it whatever makes you happy I guess - but personally, as much as I might want to, I htink it's abad idea to burn bridges. "go fuck yourself boss" is the wrong mentality - if the place isn't for you, you just go, move on, and leave it in the past.
But I seem to recall seeing many other forums about university, mortgages, etc, where people who's parents paid for their education, helped with a house, etc, are ridiculed - and I don't mean super rich dynastic trust fund babies....
It only takes a generation and some common thinking for a family to stick together and get ahead, and ensure their children never need to borrow money from a bank to get an education, or buy a house. You don't have to be rich... but why can't we live, you know, a generation ahead? I know a guy who told me his parents paid for all his stuff, his house, etc, and therefore all his work and all that (good tech guy) was just being saved up for HIS kids, ad-infinitum. They aren't trying to be rich - they just stay a generation ahead.
How many people, 10 years into their working life, have a year's minimum expenses in liquid cash, a cushion, just in case? How about 6 months? Most don't even have 2 weeks.... most live hours away from disaster if they don't get paid on time, and they blame everyone else. Get a couple months ahead and you no longer think about when payday is.... it's not relevant. Want to be an entrepreneur? great. Do it. People don't understand what money is for, or how to really use it to their advantage. They learn abou their "credit rating" - that's it.
My rules: - There's nothing wrong with cash in the bank (really secure, liquid assetts). People tell you you are losing out because of inflation..... most of those people got smashed when the stock market crashed. I'm not knocking investment, I'm just saying, cash is okay. I've weathered the ups and downs of the financial world without worry or concern while everyone else was freaking out. A good credit rating is good - but it should be a side effect of good financial practices, not a goal in and of itself. My credit rating probably isn't great - it's not bad because I've done nothing wrong, but I haven't borrowed large sums and paid them back, that kind of thing.
Credit cards should work for you, they are not a privilege. They should protect you from risk of theft, and help you balance out and manage cache flow. They should never be used for money you don't have. There are other ways to go about that (and in a circle of friends with similar practices, you borrow from friends - imagine a society based on the same)
Avoid debt. Debt is okay - but don't get over your head... stay far, far away from that kind of debt. Debt carries a psychological burden as well.... for me it feels great knowing that when I get paid, my money is mine. If I borrow some money, pay some interest so I can keep some liquidity rather than spend cash on something big the interest payments are worth keeping my security cushion adequate - but if push comes to shove, I can just pay it off - that's what I mean.
You want a simple credit card without fees or nasty interest rates. You want protection and no nonsense. You want cash in the bank, always growing - I don't mean retirement savings, I mean a cushion - it should grow all the time. After 20 years of working you should be in a position where you could have no job for a year or more without screwing up your life. (not saying you SHOULD do that, you probably shouldn't - but you should be able to - that makes negotating salaries and dealing with employers much, much easier).
It's really simple. Avoid debt. Build and keep adding to a cash cushion. Dip in once in a while, no problem, but keep it growing. It'll hurt at first, but before long you'll LOVE it. Be as aggressive as you can. Liquidity = opportunity. (Imagine having a rented home and lots of cash in the bank rather than an underwater mortgage when the housing market crashed. Most people tragically sufferred - you would be in a position to take advantage of the situation immediately.