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  • FIRST POST
    • longleggedhair
    • By longleggedhair 11th Sep 17, 12:26 PM
    • 268Posts
    • 339Thanks
    longleggedhair
    What's wrong with people.
    • #1
    • 11th Sep 17, 12:26 PM
    What's wrong with people. 11th Sep 17 at 12:26 PM
    Despite earning big money, why are some people in big debt and have no savings.

    I think it's definitely a psychological thing. I had parents who were professionals & earned very good money, but never had any money, because while they are both intelligent people they are financially illiterate. Money was just wasted on needless things and quite often financial problems would crop up.

    The experience as a child changed my whole mindset and as an adult I've saved & invested with every pay rise. Just added up my latest total and im around £200,000 after 12 years....and it really was very easy! I don't earn big money (just above minimum wage) I did have a small inheritance and have done well with my investments.

    The key is not to chase the posh cars/clothes/phones. I absolutely love my life, I live it to the full but that money gives me so much security and happiness you wouldn't believe. I know that if I want I can walk out of work tomorrow I can, it gives you choices. And that security is worth far more than material things.

    As others have said it's important to live life and enjoy it, we only come this way once, but what I don't understand is why most people haven't "seen the light" (time is precious, we don't have much so why spend most of our life at work to buy things that make us feel better about going to work, which then results in us having to be at work almost forever) I work with people who hate work, are desperate to leave but have no prospect of ever being able to become they are driving the posh car, the designer clothes etc

    It seems so simple to me...but why have so few seen the light?
Page 2
    • Seabee42
    • By Seabee42 11th Sep 17, 2:56 PM
    • 347 Posts
    • 210 Thanks
    Seabee42
    We have a social welfare system that discourages saving. If you do not have much you might as well spend it all. What are they going to do take the crap you bought back?


    Debt is someone else making money out of you and if you cannot afford it today having less tomorrow does not make sense to me. Each person has a choice in life and if that's how they choose to do it good luck to them.
    • Anonymous101
    • By Anonymous101 11th Sep 17, 3:08 PM
    • 1,010 Posts
    • 370 Thanks
    Anonymous101
    It's my opinion, controversial no doubt, people who are struggling simply choose to make bad financial decisions and don't seem to have the capacity to recognise as much or more importantly the desire to seek help and/or mend their ways. Everything that's wrong is someone else's fault.

    Being frugal is not cool.

    One thing that stuck with me after watching one of those nasty poverty porn TV programs years ago which paradoxically I object to and typically avoid...

    This glamorous young thing, caked in makeup, nice hair do, thousands in debt, living with parents and struggling to make ends meet day to day speaks into the camera,

    'Just because I'm on low pay why shouldn't I have nice things.'
    Originally posted by JohnRo
    I agree there is a certain sense of entitlement now with a large proportion of society. Its been fostered by the media through advertisements and to an extent the government wanting to perpetuate the consumer society. Individuals living beyond their means for any length of time isn't any good for any of us.

    Take cars for example. It wasn't that long ago that people drove older cars without any real hesitation. Now new drivers are wanting brand new cars. The average of the cars on the road must have reduced significantly in the last 10-15 years.
    • Anonymous101
    • By Anonymous101 11th Sep 17, 3:10 PM
    • 1,010 Posts
    • 370 Thanks
    Anonymous101
    We have a social welfare system that discourages saving. If you do not have much you might as well spend it all. What are they going to do take the crap you bought back?

    .
    Originally posted by Seabee42
    That's exactly the problem. My Dad has just retired having saved reasonably hard on an average salary most of his life. Some of his peers haven't saved a bean yet with their top ups and credits they are only marginally worse off than he is. Its easy to see how someone would think "why bother?"
    Last edited by Anonymous101; 11-09-2017 at 3:16 PM.
    • Anonymous101
    • By Anonymous101 11th Sep 17, 3:15 PM
    • 1,010 Posts
    • 370 Thanks
    Anonymous101
    So, it's a nice story (and there are plenty of blogs which are very evangelistic about financial independence / retire early etc - Mr Money Mustache is quite fun). But, "why doesn't everyone do it like me it was eeeeaaasssy" seems a bit like bragging, tbh.
    Originally posted by bowlhead99
    It is bragging in a way. I've been doing a lot of reading and listening to blogs recently... most of the people who shout loudest about FI fall into a similar category. They're certainly all intelligent and are able to earn good money in a short space of time. None of these people are earning minimum wage and struggling to feed the kids.
    • coyrls
    • By coyrls 11th Sep 17, 3:16 PM
    • 919 Posts
    • 961 Thanks
    coyrls
    That's exactly the problem. My Dad has just retired having saved reasonably hard on an average salary most of his life. Some of his peers haven't saved a bean yet with their top ups and credits they are only marginally worse off than he is. Its east to see how someone would think "why bother?"
    Originally posted by Anonymous101
    because they will be marginally better off? Margins can make a difference.
    • A_T
    • By A_T 11th Sep 17, 3:17 PM
    • 222 Posts
    • 111 Thanks
    A_T
    The economy needs people to spend money on things they don't really need. We'd all be in a mess if they didn't.
    • Anonymous101
    • By Anonymous101 11th Sep 17, 3:22 PM
    • 1,010 Posts
    • 370 Thanks
    Anonymous101
    because they will be marginally better off? Margins can make a difference.
    Originally posted by coyrls
    Marginally better off in retirement by sacrificing throughout their whole working lives though.

    Its sent me the other way and made me endeavour to save even harder for my retirement. If I were unable to though it would certainly have me thinking if it was worth it.
    • jack_pott
    • By jack_pott 11th Sep 17, 3:22 PM
    • 4,259 Posts
    • 5,471 Thanks
    jack_pott
    Originally posted by eskbanker
    I just wanna be different, like everybody else.
    • Barny1979
    • By Barny1979 11th Sep 17, 3:32 PM
    • 3,814 Posts
    • 43,601 Thanks
    Barny1979
    The OP does seem to be Willy Waving
    • jack_pott
    • By jack_pott 11th Sep 17, 3:43 PM
    • 4,259 Posts
    • 5,471 Thanks
    jack_pott
    Despite earning big money, why are some people in big debt and have no savings.

    I think it's definitely a psychological thing. I had parents who were professionals & earned very good money, but never had any money, because while they are both intelligent people they are financially illiterate. Money was just wasted on needless things and quite often financial problems would crop up.

    The experience as a child changed my whole mindset and as an adult I've saved & invested with every pay rise. Just added up my latest total and im around £200,000 after 12 years....and it really was very easy! I don't earn big money (just above minimum wage) I did have a small inheritance and have done well with my investments.

    The key is not to chase the posh cars/clothes/phones. I absolutely love my life, I live it to the full but that money gives me so much security and happiness you wouldn't believe. I know that if I want I can walk out of work tomorrow I can, it gives you choices. And that security is worth far more than material things.

    As others have said it's important to live life and enjoy it, we only come this way once, but what I don't understand is why most people haven't "seen the light" (time is precious, we don't have much so why spend most of our life at work to buy things that make us feel better about going to work, which then results in us having to be at work almost forever) I work with people who hate work, are desperate to leave but have no prospect of ever being able to become they are driving the posh car, the designer clothes etc

    It seems so simple to me...but why have so few seen the light?
    Originally posted by longleggedhair
    The answer lies in understanding the psychology of status competition, because a consumer society is just a society in which consumption is the primary means of competing for status.

    Maximising status is about recognising the difference between commodities whose value is relative and those whose value is absolute. The former is a conspicuous consumable, the latter an inconspicuous consumable. For example, the value of a car is measured by whether it's bigger/newer than the neighbours, but the value of say a central heating boiler is in how well it heats the house. Nobody sits in the pub bragging about boiler power the way the would about the power of their car engine.

    Pensions and spare time are both inconspicuous consumables: the guy with a Ferrari and no pension has higher status than the guy with a pension and no Ferrari. Similarly, the chief executive with money and no spare time has more status than a dosser with lots of time but no money.

    For more reading on the subject see here:

    Robert Frank, Luxury Fever
    Geoffrey Miller, Spent
    Thorstein Veblen, Conspicuous Consumption
    • jack_pott
    • By jack_pott 11th Sep 17, 3:45 PM
    • 4,259 Posts
    • 5,471 Thanks
    jack_pott
    The economy needs people to spend money on things they don't really need. We'd all be in a mess if they didn't.
    Originally posted by A_T
    No we wouldn't, we'd have more money to spend on the things we do need.
    • Malthusian
    • By Malthusian 11th Sep 17, 3:50 PM
    • 3,294 Posts
    • 5,004 Thanks
    Malthusian
    The idea that the economy depends on people spending and not saving is nonsense. All savings get spent eventually.

    In the meantime the money you save either gets lent out to somebody else (which they spend, and meanwhile the bank spends the interest, and the bank's staff spend their salaries) or invested in businesses (which they spend, etc etc).

    The money keeps circulating around the economy either way. But if people save and sensibly invest it does more good. And if people are secure in retirement, there's less need for the government to seize people's money to redistribute it to the elderly, meaning less dead weight loss, meaning more money to go around.


    I absolutely love my life
    Originally posted by longleggedhair
    Apparently not, or you wouldn't worry so much about how other people live theirs.

    You need some more things to care about that you can actually make a difference to.
    • cashbackproblems
    • By cashbackproblems 11th Sep 17, 3:50 PM
    • 1,705 Posts
    • 662 Thanks
    cashbackproblems
    No we wouldn't, we'd have more money to spend on the things we do need.
    Originally posted by jack_pott

    Yes we would its excess spending and debt which is keeping the country going.
    • Hattie625
    • By Hattie625 11th Sep 17, 4:01 PM
    • 617 Posts
    • 480 Thanks
    Hattie625
    Despite earning big money, why are some people in big debt and have no savings.

    I think it's definitely a psychological thing. I had parents who were professionals & earned very good money, but never had any money, because while they are both intelligent people they are financially illiterate. Money was just wasted on needless things and quite often financial problems would crop up.

    The experience as a child changed my whole mindset and as an adult I've saved & invested with every pay rise. Just added up my latest total and im around £200,000 after 12 years....and it really was very easy! I don't earn big money (just above minimum wage) I did have a small inheritance and have done well with my investments.

    The key is not to chase the posh cars/clothes/phones. I absolutely love my life, I live it to the full but that money gives me so much security and happiness you wouldn't believe. I know that if I want I can walk out of work tomorrow I can, it gives you choices. And that security is worth far more than material things.

    As others have said it's important to live life and enjoy it, we only come this way once, but what I don't understand is why most people haven't "seen the light" (time is precious, we don't have much so why spend most of our life at work to buy things that make us feel better about going to work, which then results in us having to be at work almost forever) I work with people who hate work, are desperate to leave but have no prospect of ever being able to become they are driving the posh car, the designer clothes etc

    It seems so simple to me...but why have so few seen the light?
    Originally posted by longleggedhair
    Brilliant post. I just wish everyone would read this and see the light.

    It's not often that I feel exactly in tune with someone else's thinking. This is a rare experience. Thank you.
    • jack_pott
    • By jack_pott 11th Sep 17, 4:05 PM
    • 4,259 Posts
    • 5,471 Thanks
    jack_pott
    Yes we would its excess spending and debt which is keeping the country going.
    Originally posted by cashbackproblems
    No it isn't. The global economy is like a giant conveyor belt digging resources out of mines at one end, and dumping them in landfill at the other, and the object of economic growth is just to make it go 2% faster each year.

    Throwing a TV away after 3 years instead of 6 isn't increasing wealth, it's just wasting labour and materials that could be used to make real improvements in wealth.

    In Luxury Fever, economics professor Robert Frank explains how changing from taxing income to taxing expenditure would free up huge quantities of capital for investment whilst still allowing for status competition.
    • longleggedhair
    • By longleggedhair 11th Sep 17, 4:06 PM
    • 268 Posts
    • 339 Thanks
    longleggedhair
    Thank you for the interesting replies.

    To those who think I am somehow "bragging" I can only apologise. That certainly wasn't my intention, and comparatively to some posters on here what I have is small change, however it's interesting to see how others view things. I just feel sorry when I see people debt laden and in a financial mess & the reality is its not that difficult, with time and perseverance to become secure. Granted many will never achieve FI but when you read that big percentages of people don't even have enough saved to last a month if they lost their jobs....can't be good for society or the economy.
    • JohnRo
    • By JohnRo 11th Sep 17, 4:26 PM
    • 2,458 Posts
    • 2,213 Thanks
    JohnRo
    The answer lies in understanding the psychology of status competition, because a consumer society is just a society in which consumption is the primary means of competing for status...
    Originally posted by jack_pott
    I think the superficial image has become an increasingly conspicuous consumable and far more important now than it has ever been in the past, I'm probably talking nonsense but I think in my experience 'looking good' is now becoming paramount. The younger generation are suffering the pressures of that in a way I don't recall ever feeling or really seeing, so I do have some sympathy for the younger generation feeling the need to have those nice things and to look that good.

    Being frugal is a tough ask in a world where commercialisation bombards images of vacuous successful people with no discernible talent beyond a superficially attractive image and an artificial micro celebrity 'brand', willing to subject themselves to the baying mob, being able to exploit things like the social media phenomenon, make a good sponsored living from it and live apparent perfect lives.

    Me, I know my place.
    'We don't need to be smarter than the rest; we need to be more disciplined than the rest.' - WB
    • Glen Clark
    • By Glen Clark 11th Sep 17, 4:27 PM
    • 3,892 Posts
    • 2,894 Thanks
    Glen Clark
    In Luxury Fever, economics professor Robert Frank explains how changing from taxing income to taxing expenditure would free up huge quantities of capital for investment whilst still allowing for status competition.
    Originally posted by jack_pott
    Thats what they have been doing for 30 years. I think it was Sir Geoffrey Howe who really developed the wheeze of reducing income tax and replacing it with stealth taxes (20% VAT... Insurance Premium Tax... Tax on building sand we dredge from the sea bed etc etc) Succesive governments have carried it on.
    Its a sneaky way of increasing inequality whilst presenting it as something else. Every time they increase the income tax threshold by £1,000 they say its to reduce tax for the low paid. But of course the lowest paid weren't paying income tax anyway, but will be hammered by the stealth taxes the Government slips in to replace income tax. Even the guy sleeping in a cardboard box pays stealth taxes. Those earning a bit more will save £1,000 x the basic rate. But those who save the most are the highest paid saving £1,000 x ther highest rate. Yet the Government aided by the right wing press presents it as help for the low paid. Brilliant.
    “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair
    • Glen Clark
    • By Glen Clark 11th Sep 17, 4:34 PM
    • 3,892 Posts
    • 2,894 Thanks
    Glen Clark
    ..and massively inflated house prices due to the credit bubble that all these debt junkies were encouraged into by the banks....
    Originally posted by Crashy Time
    Inflated housing costs are more to do with restricting production of new homes with (allegedly) the worlds most onerous planning system. QE, easy credit and low interest rates didn't inflate the price of consumer goods because production of those wasn't restricted by UK Government intervention in the market.
    Most countries have their own idiocy of choice, and ours is that high housing costs are a good thing. Successfull economies like Germany can't understand the British obsession with house prices.
    “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair
    • Anonymous101
    • By Anonymous101 11th Sep 17, 4:52 PM
    • 1,010 Posts
    • 370 Thanks
    Anonymous101
    I think the superficial image has become an increasingly conspicuous consumable and far more important now than it has ever been in the past, I'm probably talking nonsense but I think in my experience 'looking good' is now becoming paramount. The younger generation are suffering the pressures of that in a way I don't recall ever feeling or really seeing, so I do have some sympathy for the younger generation feeling the need to have those nice things and to look that good.

    Being frugal is a tough ask in a world where commercialisation bombards images of vacuous successful people with no discernible talent beyond a superficially attractive image and an artificial micro celebrity 'brand', willing to subject themselves to the baying mob, being able to exploit things like the social media phenomenon, make a good sponsored living from it and live apparent perfect lives.

    Me, I know my place.
    Originally posted by JohnRo
    I agree, its much more extreme now than ever before. It's incredibly easy to get swept up into the consumerist way of thinking. However once you have your eyes opened to it you can see it for what it is... a total waste and completely pointless.
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