School me on investing...

Leasing or owning a new car ?
You do not SUFFER the depreciation on a lease (but you pay for it!)

 

Financial Responsibility: a state of mind that does NOT co-exist with the minds of kids today, as they have Door Dash deliver them a cup of Tall Java Chip Frappuccino, half sweet, no whip, lactose-free coffee, as they were too lazy to make it themselves.

 

Not remotely close to the question.

 

While I cringe a smidgen at paying 12 bucks for the pot roast I'ma cook for the guests we're going to have over tomorrow.

 

I hear this all the time from people I work with, and it’s just not true in the vast majority of cases- they can’t afford to do that. They can’t afford to do a lot of things we take for granted. If it was true, that’s our generation’s fault (I assume you are ~50ish like me).

 

Yes, they cannot afford it - but they do it anyway. I drove one night for Door Dash (to earn a hefty bonus) - and I saw examples of it everywhere.

Not my damn fault. No kids here (none I'm aware of, that is).

 

When should we arrive? I’ve got a Sara-Lee blueberry pie in the freezer I can bring for dessert.

 

I don't think either of those options are either "bad" or "good" intrinsically. Like everything else in life, it depends.

 

12 sharp!

 

And how do you know those kids were broke? Just because they order door dash doesn’t mean they are fiscally irresponsible. I say cut them some slack, after all they are shouldering the burden of the greatest ponzi scheme in history (Social Security) and they will never recoup any of that cost. They didn’t run the economy into the ground and they are constantly vilified.

 

I’ve taken thousands of loan applications over the years. Even now, the majority of the people I decline could afford a house. They just choose not to. It’s actually really common to see hundreds of dollars per month in food delivery alone. Then a few hundred more in Uber. ALL of the streaming platforms. The latest iPhone. Then car payments of between 600-1200 per month(per car). They are most certainly choosing to live paycheck to paycheck. And then are somehow the most negatively vocal about housing affordability. When they are blowing a house payment every month on things they could easily do without. That’s just my real world experience.

What is truly insane to me is the percentage of these people that contribute to 401k is minimal. Usually either none or the 2 percent that their employer automatically enrolls them in. Then another huge chunk of those people don’t even know they are enrolled in it and go cancel it immediately because “that’s my money” (they find out because I see the deductions on their paystub and ask for a 401k statement)

Now, I’ll readily admit. Truly “broke” people are not talking to me in the first place. Because they know they can’t afford a house. I have no clue what their personal finances may look like. The picture I’m painting above is typically your younger DINK’s with a combined household income of between 80-150k per year. Which isn’t all that hard to achieve in the metro areas my business is based in. Your local economy may differ substantially.

That being said, it’s been my opinion for a long time now that America has a massive consumer spending issue that is simply ignored. Schools don’t talk about it and parents seem to be failing their children on that front.

I’m aware, someone is going to post about how awesome their kids are and they would never raise them like this. That’s fine, they do exist and I know this because they are my customers. But if I was to take a number out of my ass, I suspect roughly 75 percent of my declines are the scenario painted above. 15 percent credit issues. And the other 10 outright can’t afford what they want.

That last group does have a bunch that could if they moved further out or something. But then it’s a location or lifestyle issue. And not always something they could make work. Long commute, bad schools etc. not their fault really.

Also note, my rough guesses for figures above are about the people who are declined. Not the ones that are approved. For younger people it’s the same DINK’s, they just have way less consumer debt. Really the only difference in the profile.

 

maybe I missed it. I don’t think anyone made a blanket statement that renting is better than owning at all. Just that some situations it’s not always the best call. But we are talking lifestyle choices versus investments I think. Which is what you are highlighting.
That said, an easy scenario would be if rent is significantly lower than the cost of ownership. Which is the case in many high price metro areas. In that circumstance, you would clear more simply taking the difference in the monthly payment and investing it.

Now getting people to do that on the other hand ……

 

This makes so much sense. My kids told me they were surprised how many of their friends had no clue how credit card interest starts the second they buy that Starbucks, etc. If they don’t pay off the balance and pay only the minimum, they will pay for 28 years.

 

I don't think thats true. Interest doesn't start unless you don't pay the balance off for that cycle, so I could carry that starbucks for like 30-days if I buy it at the beginning of my cycle. Pay it off, $0 accrued.

Otherwise you'd owe interest on every monthly payment regardless of paying off the balance or not....

 

I didn’t word it clearly, but I said if you don’t pay off the balance, in the very next sentence. But what you said clearly is what I was trying to say, because you are 100% correct if you pay the balance each month you are good.

My daughter is so paranoid about it she used to only use a debit card. I got her to quit doing that and using a credit card for the extra consumer protections. However she still generally pays it off every week , by looking online and paying it. I tell her to relax and wait for the statement, but it bugs her to do that. Lolol.

 

I see... I read it as two distinct statements due to the period and capitalization.

 

You are 100% correct I didn’t word it clearly. The period was for the etc. abbreviation and then I screwed it up. Lolol. But as I said you worded it way better than I did.

 

He lives in Mission Viejo. Give him a break whydontcha.

 

Are you a Gen Zer? ;--)

Let's just say that I agree with you in regard to SS, but for different reasons. They helped the economy being driven down, but we need to discuss this in person over some cold Pepsis.

 

I wasn’t aware that made me a lower class, dumber individual. Here when I moved from Huntington Beach to Mission Viejo, we looked at it as an upgrade for the schools district, lack of surfer bums, but not the weather