'Deep' & 'Meaningful' - why are some people good with money?

Conrad · 10 November 2007 at 1:34PM

Ok, firstly this is'nt some kind of lecture, but I notice most of the chat on here is very much on the surface, it fails to really address the mechanics that lead to bad outcomes.

If we dont understand underlying causes, all we will ever achieve is a sticking plaster excercise.

As a mortgage and loan broker I have seen it all.
The really interesting element I find again and again is that those who end up in trouble tend to 'externalise' thier problems as plain old bad luck.

Why is one person good with money and thier sibling not so good?

On balance we all have pretty much the same chance of bad luck, but (YOU WONT LIKE THIS BIT) some people 'create' more than thier share of bad luck, and often also consider thier luck is tougher than others.

They would'nt think they create it, they would say thier luck is just bad.

Luck is like a snowball, it starts very small, but if you keep adding, it just grows. It depends how well you plan and cope for the first bit of bad luck that then determines whether the snowball grows into a bad or a good luck snowball.

IT IS THE PERSONS REACTION TO THIS EARLY BAD LUCK THAT SETS THEM ON ONE PATH OR ANOTHER.
One person with the same initial bad luck event will handle it in a better way than the other which means less FURTHER bad lick will flow from the first event.

PLANNING;
Before we get to the bad luck people either plan well or plan badly.

People who end up with good financial outcomes in my experience are more cautious.
So for example when they first set up as a bricklayer they ALWAYS put 20% by just in case of INEVITABLE bad luck events such as the Van breaking down.

People with bad outcomes seem not to have a developed sense of risk.

I meet clients who earn £14000 pa but have paid off a mortgage and have no debts.
I meet people who earn £250,000 pa but have £1m in debt and are right on the edge.

DISCUSS

rog2 · 10 November 2007 at 1:46PM

I am afraid that I don't really understand your implied definition of being 'Good with Money'.

The fact that somebody with a salary of £14k can manage a mortgage, whereas somebody on £250k may be teetering on the edge, has, often, little or nothing to do with 'how good they are with money'
I would suggest that most people try to 'plan' their financial future, and, whilst some are, indeed, fortunate enough to be able to stick to their plans, this is not the same for the majority of people.
The Financial Industry depends on everything being 'finite' and allows little, often no, flexibility for the unforeseen.
Perhaps the point for discussion should be 'Why is MONEY Good with some people and Bad with others?'

ZTD · 10 November 2007 at 1:47PM

Conrad wrote: »

People who end up with good financial outcomes in my experience are more cautious.

But how long is your experience? On what does it encompass?

Every action, can either work fantastically well, or devastatingly badly - and the difference is circumstances.

You can reduce your risk in any situation - but only with hindsight. You seem to claim that savings reduce risk. Possibly, but who ran the most risk of losing £100,000? The person with £150,000 in Northern Rock, or the person with no savings at all?

In_Search_Of_Me · 10 November 2007 at 1:48PM

Sorry how was that not some kind of lecture? I personal have no problem with a discussion (but dont like to be TOLD "discuss!" - this isnt school) but feel the post comes accross as both judgemental & patronising!
I suspect OP that you have only skimmed the surface of posts if you feel that we just skim the surface! People on here get genuine support in dealing with the impact that debt has on our lives, which is devastating. Clearly your "seen it all" comment makes you think you know it all when it is clear from the tone of your post & sig that what is missing is any kind of understanding and compassion.
Neither do I think that the vast majority ignore why they got into debt or blame luck, but I accept the point there are a few. I dont think I am one of them as happily tell anyone and everyone that the reason I got into such massive debt was a mixture of stress & pure stupidity with money. Thankfully I have made a few people think before they go down the path I did.
While I still have crippling debts I am dealing with them proudly and with the love and support of the people on here, family collegues & friends. Thankfully most are lovely and only a couple so far have been sanctimonious about how stupid I was. I think most realise that I was deeply ashamed about how stupid I had been, recognised my mistake and have changed my behaviour - to the point that I am unrecognisable as the person I was before and 100% happier for it!
So yes interesting point on which I agree to a degree. Some people do refuse to accept responsibility for their actions but I think you will find that some people genuinely are unlucky and some, like me, were just plain stupid! So there you go.

millionaire_in_training · 10 November 2007 at 1:52PM

oo Controversial subject !!
I know why I am in debt and am working on getting out of it. I tried to make up to my kids the fact their dad had left us by buying them constantly. I dressed them in GAP etc when I can only afford GEORGE. I am better now but still find myself getting sucked in. An example is that ex said to DD he would buy her a pink phone then he didnt so I felt that I had to get her it, I could have left her without one but I hated seeing her disappointment. Not sure I will ever stop doing this but at least I am trying to do it within my spending range now.x

msmicawber · 10 November 2007 at 2:49PM

I don't think the posts are generally 'on the surface' on this board. On the whole, posts are specific and constructive in offering advice about how to get out of debt. Most people on here already know what has caused them to get into debt or find out in the process of dealing with it. Martin's more general advice about budgeting etc. deals with the business of planning and being savvy, whereas this board deals more with how to get out of the poop once you're in it, and then stay out of it.

I found the 'you won't like this bit' rather patronising. In my experience of these boards, they are regularly posted on by realists and pragmatists who don't shy away from the truth and encourage others not to either.

115K · 10 November 2007 at 2:53PM

I remember when I was a kid, if I bought a bag of sweets I would eat them all in one go and my friend would keep hers and ration them out so she could keep them for a week.

I think this translates to the way I have spent money in the past. I am not too fond of delayed gratification.:rotfl:

lieutenant_dan · 11 November 2007 at 12:46AM

Re the original post, I'd recommend a book called "The Luck Factor" by Richard Wiseman, which is a good read and very thought provoking, and it tackles issues such as why some people are luckier than others in certain areas, including money.

But turning the argument on its head, yes those who are too frivolous who will get into trouble, but what about those at the other end of the spectrum, the tightwads?

I've yet to meet a tight fisted person who could be said to have a generosity about them in other areas, tight with money = mean spirited in general.

I've found people with money problems to be far more generous in turn, and far more likely to help you out/loan you money they don't really have than those who have to dust the cobwebs off their wallets. Their generosity tends to be part of their downfall too, but I get far more sickened by people who hoard money than those who squander it, if we're going a bit deeper, because it says a lot about the underlying personality.

1_step_closer · 11 November 2007 at 1:49AM

Conrad I actually find your post offensive. If you had actually READ a wide variety of posts you would see that most people don't blame luck - a great deal is circumstances. Yes many of us would agree that we have been completely stupid (I hold my hand up here) and for some of us the issues surrounding our debt are not because we were materialistic. I am finally learning why I spent the way I did and am making inroads to reduce that debt. It won't be easy and I'm sure I'll fall off the wagon now and then - as will others.

I have bared my soul here and there are things these lovely people know about and have given me support on that my closest friends have no idea about.

I think you should be very careful when you next post.

1 step

Triker · 11 November 2007 at 2:00AM

Sometimes its not so much luck as support especially initially when you start out. The £14,000 earner may have the family who will have supported them and their offspring through thick and thin, helping with education, childcare, housing and bits and pieces along the way.

The £250,000 earner may have had to go it alone, pay for education, childcare, housing etc, it soon mounts up and in order to get on a bit in life you have to bite a few bullets financially, along the way.
You'll notice neither Margaret Thatcher, Tony Blair or Gordon Brown have student loans to still pay off!

Triker · 11 November 2007 at 2:04AM

Conrad wrote: »

Ok, firstly this is'nt some kind of lecture, but I notice most of the chat on here is very much on the surface, it fails to really address the mechanics that lead to bad outcomes.

If we dont understand underlying causes, all we will ever achieve is a sticking plaster excercise.

As a mortgage and loan broker I have seen it all.
The really interesting element I find again and again is that those who end up in trouble tend to 'externalise' thier problems as plain old bad luck.

Why is one person good with money and thier sibling not so good?

On balance we all have pretty much the same chance of bad luck, but (YOU WONT LIKE THIS BIT) some people 'create' more than thier share of bad luck, and often also consider thier luck is tougher than others.

They would'nt think they create it, they would say thier luck is just bad.

Luck is like a snowball, it starts very small, but if you keep adding, it just grows. It depends how well you plan and cope for the first bit of bad luck that then determines whether the snowball grows into a bad or a good luck snowball.

IT IS THE PERSONS REACTION TO THIS EARLY BAD LUCK THAT SETS THEM ON ONE PATH OR ANOTHER.
One person with the same initial bad luck event will handle it in a better way than the other which means less FURTHER bad lick will flow from the first event.

PLANNING;
Before we get to the bad luck people either plan well or plan badly.

People who end up with good financial outcomes in my experience are more cautious.
So for example when they first set up as a bricklayer they ALWAYS put 20% by just in case of INEVITABLE bad luck events such as the Van breaking down.

People with bad outcomes seem not to have a developed sense of risk.

I meet clients who earn £14000 pa but have paid off a mortgage and have no debts.
I meet people who earn £250,000 pa but have £1m in debt and are right on the edge.

DISCUSS

Can I just also say its really easy for some people to be smug about other people's financial problems but hey, it's like everything.....one minute you can be secure with your future and the next, bang, a set of circumstances means that you are in debt. Happens to us all, unless you are really, really lucky.

'Deep' & 'Meaningful' - why are some people good with money?

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