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'Striking weaknesses' in adult financial skills

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Re: 'Striking weaknesses' in adult financial skills

#111

Post by tboyd47 »

hitekker wrote: post #102
tboyd47 wrote: post #93

Earlier quoted context omitted.

Anything involving the stock market is far from simple. And "don't spend money on stupid things" is more class signaling than financial advice. Who decides what is "stupid?" If it's important to you, why not estimate how much of an impact the purchase will have on your budget, and decide based on that? That requires math. I dunno, I do arithmetic in my head just about every day. I can't imagine engaging in any sort o…

> "don't spend money on stupid things" is more class signaling than financial advance. If it weren’t for the sneering tone of the GP, the advice could have been meant as “don’t buy transient things that are beyond your means”

That proves my point even further. The "beyond your means" part is where math starts being needed again.

Re: 'Striking weaknesses' in adult financial skills

#112

Post by ApolloFortyNine »

amichal wrote: post #62

At a local Starbucks the other day the person working the register insisted the quarter(25c) I gave him was nickle(5c). Later when giving me 16c in change he gave me a quarter and a penny. At McDonalds the next day I was refunded for a 4.67 order that took too long with 5.50 cents. My experience matches the article. On a more serious note: We design software for use by finance experts. After user testing we’ve had to…

I actually have had the same thing happen at McDonalds, sometimes they seem to just not have a receipt for you so they give you whatever they feel like. It's always been more than I paid, but it is kinda like "you had one job."

Supposedly if you pay with cash some cashiers pocket the cash and give you change from their own pocket, so maybe that's what happened here.

Re: 'Striking weaknesses' in adult financial skills

#113

Post by moduspol »

apo wrote: post #79

Some will look and this and say, "big deal, people can't do math in their heads." There may be more to it. Consider the recent "riddle" in which a man buys a horse, sells it, and buys it back again, then sells it. The question is, how much money did the man make or lose: http://www.independent.co.uk/news/science/math-riddle-quiz-q... It was so simple to me that it seemed like it must be a trick question. It's not. I…

It got me, TBH. When I read he bought the horse back at $80, it threw me off because (in my head) I was presuming he didn't have $80. He sold the horse for only $70. The "riddle" didn't say that's all he had, but it shifted the way I was thinking about it mid-question in a way that led me to thinking about it the wrong way.

Of course, that doesn't explain how people got wrong answers other than mine, but I do think the wording and framing is significant here, which is probably why this specific "riddle" is the one that is effective.

Re: 'Striking weaknesses' in adult financial skills

#114

Post by lawlessone »

scarface74 wrote: post #45
sokoloff wrote: post #28

Earlier quoted context omitted.

It's an exaggeration more than a myth, IMO. It's directionally correct, meaning no re good would be done by people considering it than ignoring it.

What instead of the "Latte Factor", they said... - buy a house that is well below your means or even move some place where your cost of living compared to your money earning potential is favorable. -Get a degree in something that can make money instead of a BS in Ancient Chinese Art History. -Don't go into debt getting a degree from a prestigious college to be a high school teacher. Go to a cheap state school. -Buy a…

>Get a degree in something that can make money instead of a BS in Ancient Chinese Art History.

I know plenty of places that are looking for intelligent people they can train up. The roles are often non technical but "BS" degree is often a good way for them to get their foot in the door.

Re: 'Striking weaknesses' in adult financial skills

#115

Post by scarface74 »

lawlessone wrote: post #114
scarface74 wrote: post #45

Earlier quoted context omitted.

What instead of the "Latte Factor", they said... - buy a house that is well below your means or even move some place where your cost of living compared to your money earning potential is favorable. -Get a degree in something that can make money instead of a BS in Ancient Chinese Art History. -Don't go into debt getting a degree from a prestigious college to be a high school teacher. Go to a cheap state school. -Buy a…

>Get a degree in something that can make money instead of a BS in Ancient Chinese Art History. I know plenty of places that are looking for intelligent people they can train up. The roles are often non technical but "BS" degree is often a good way for them to get their foot in the door.

I meant BS = Bachelor of Science.

Re: 'Striking weaknesses' in adult financial skills

#116

Post by pc86 »

amichal wrote: post #62

At a local Starbucks the other day the person working the register insisted the quarter(25c) I gave him was nickle(5c). Later when giving me 16c in change he gave me a quarter and a penny. At McDonalds the next day I was refunded for a 4.67 order that took too long with 5.50 cents. My experience matches the article. On a more serious note: We design software for use by finance experts. After user testing we’ve had to…

I have a hard time seeing how you can be a "finance expert" and not know what an error bar or histogram is.

Re: 'Striking weaknesses' in adult financial skills

#117

Post by pc86 »

AnIdiotOnTheNet wrote: post #108
poster123 wrote: post #76

Earlier quoted context omitted.

Billionaires are smarter, more hardworking, and ambitious on average, and there is likely some genetic competent to each of these qualities. Certainly there is for IQ. Is your guess for the average IQ of Bill Gates' children 100? I'd guess say 130.

Exactly the same reasoning can be used to justify monarchy.

Monarchy is fine as long as you elect the monarch every few years.

Re: 'Striking weaknesses' in adult financial skills

#118

Post by skybrian »

tboyd47 wrote: post #93
volgo wrote: post #3

Some of the skills tested in the study seem more like arithmetics rather than financial skills: - "About a quarter could not work out how much change they should receive from a shop..." - "About one in three adults struggled to work out the price they had to pay.. per litre or per kilo" - "About half could not read a simple financial line graph" - "Most struggled to calculate discounts involving more complex calculat…

Anything involving the stock market is far from simple. And "don't spend money on stupid things" is more class signaling than financial advice. Who decides what is "stupid?" If it's important to you, why not estimate how much of an impact the purchase will have on your budget, and decide based on that? That requires math. I dunno, I do arithmetic in my head just about every day. I can't imagine engaging in any sort o…

I think what we're seeing here is a class difference? For some people, if the grocery bill is higher than expected, you just shrug and try to do better next time.

Re: 'Striking weaknesses' in adult financial skills

#119

Post by toomuchtodo »

pge wrote: post #87
mbesto wrote: post #40

Earlier quoted context omitted.

> like monitoring your credit, your spending, creating a budget, pay off credit card in full, pay down high interest debt ASAP, avoid pay day loans, don't spend money on stupid things, invest in high quality index funds, etc. IMHO this all starts with the fact that many people I've encountered simply do not understand the difference between income and assets. In fact, I run into this all of the time on HN with people…

I think the Time Value of Money is one of the most important concepts any lay person should understand but most don't. I came out of college (an Ivy league school) as a physics major with zero understanding of finance. At my first job, one of the first things my boss asked me was, "What would you pay me today in exchange for me paying you $100 in one year?" That, of course, led to a lesson on the time value of money.…

There is a great set of Khan Academy videos on the subject.

https://www.khanacademy.org/economics-finance-domain/core-fi...

Re: 'Striking weaknesses' in adult financial skills

#120

Post by jdmichal »

gowld wrote: post #31
Kuiper wrote: post #8

Earlier quoted context omitted.

Especially when you consider that most supermarket labels will also include the "price per unit weight" or "price per unit volume" on the shelf with a smaller font, it becomes trivially easy to compare which bottle of soap is going to get you the most for your money. Or maybe you neglect to do this (simply opting for the container that looks the most appealing rather than optimizing for the amount of liquid per dolla…

You think someone who can't solve arithmetic problems is going to understand the consequences of compound interest and the TCO of revolving debt?

Back in my college prime and I was knee deep in the stuff, I was the guy that would do an integral in my head and then screw up the subtraction at the end. I've just always been bad at mental arithmetic, and don't put in the practice to get better because it just doesn't affect my life that much.

So yes, we exist.

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