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Being frugal is for the rich

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Re: Being frugal is for the rich

#91

I would also make the economic argument that a rich person that is still frugal is actively exacerbating income inequality. If Warren Buffett is indeed still paying only $3 for breakfast every day, that's giving a big middle finger to the economy. Money is half of the circulatory system of the economy. When it pools too long in one spot, it clots, and then a thrombosed clot can cause damage somewhere else. He really…

I think you're discounting the utility of an extremely wealthy person's capital as a vehicle for greater change.

That is, Warren Buffet probably can't move the needle much through consumption of goods. Even if he replaced his $3 breakfast with a $300 breakfast it's just not going to have a huge net effect.

Instead if he manages his finances carefully and leaves himself capital for investments then he's able to influence entire markets at once. This is a lot more effective use of his leverage than simple consumption because it drives innovation, fosters competition, etc.

There's certainly something to be said on your points of wealthier consumers pioneering technologies and solutions for the rest of the world. I believe it's more realistic to look at the upper-middle-class for that sort of thing than the ultra-wealthy though, as people like Warren Buffet are the 0.1% of the 0.1% of the 0.1%.

Re: Being frugal is for the rich

#92
post #7

Earlier quoted context omitted.

I guess this is the real motive behind the article: But here’s the thing. Regardless of intent, these Millennials are telling an older generation of elite Americans — the very people whose policies and financial decisions kneecapped the economy — what they want to hear: that everything is more or less okay, and young people just need to be more thoughtful about their money. And that’s a shitty idea to perpetuate. Bec…

> continuing to build a world where they are more and more necessary My grandmother can still, to this day, recount living in an apartment with no furniture except a mattress, with my grandfather who was employed as an engineer in New York. It took, by her estimate, about two years to have enough furniture before she was willing to invite over any sorts of company. Today you can furnish an apartment reasonably with a…

Ok, I earned approximately $18k when I was a research assistant, 20 years ago, and my possessions when I graduated were : 2 pairs levis, 4 t-shirts, 2 sweaters, 1 coat, 2 pairs shoes (trainers, boots), 1 formal shirt, bag of socks and underwear (I can't remember). I had a watch also.

My dad gave it to me - I guess I had privilege.

Ok, ok - I also had a car! Sort of - a citroen BX (look it up and marvel).

I had gone on holiday once in 4 years, also I had my thesis bound and I had many nights at the pub. Also I used not to heat my attic flat (I was tough), my mother came and helped me move out when I got my first job before graduation. She cried.

My point isn't boo hoo, I had a blast, but my point is that I struggled like hell on more than minimum wage 20 years ago. I had no commitments, I was going to earn money in the future (even pre dot.com compsci was a valuable bsc, and even 20 years ago a Ph.D in ML was even more valuable). I had no children, I wasn't french. I had my health (dear god I was a living marvel) I was pretty, I was loved and supported.

It isn't personal sin by people making six figures, it's utter shit poured down on people who are both clueless and helpless, and frankly people (like you, like me) qualify to judge by living it.

I don't qualify, but I can tell you something factual, without all the advantage that my middle class parents gave me (most of which was growing up with the expectation that I would go to University and study science and if I didn't I was a shameful idiot who could go and work as vegetable picker - fear is a motivator) all the financial skills in the world, all the cheap hobbies and all the diy would not have helped.

And by the way if you spend 45 hours a week digging holes how do you think you would contemplate home building projects?

Yes, some people work their way out of it, some people are extraordinary, and some people can have great luck and get the cards to fall for them. But most people are just... most people - everyday people. And most times, you get average breaks. Well, you can do the maths and work out the joint distributions - bad things can happen to good people, normal people don't need much to go wrong, and people who will struggle don't need anything to go wrong.

A wise man wrote :

She came from Greece,

She had a thirst for knowledge.

She studied sculpture at Saint Martin's College.

That's where I caught her eye.

She told me that her Dad was loaded.

I said, in that case I'll have a rum and coca-cola.

She said fine, and in thirty seconds time she said,

I want to live like common people.

I want to do whatever common people do.

I want to sleep with common people.

I want to sleep with common people, like you.

Well, what else could I do?

I said, I'll see what I can do.

I took her to a supermarket.

I don't know why, but I had to

Start it somewhere, so it started there.

I said, pretend you've got no money.

She just laughed, and said

Oh you're so funny. I said, yeah?

Well, I can't see anyone else smiling in here.

Are you sure you want to live like common people?

You want to see whatever common people see?

You want to sleep with common people?

You want to sleep with common people, like me?

But, she didn't understand,

She just smiled and held my hand.

Rent a flat above a shop.

Cut your hair and get a job.

Smoke some fags and play some pool.

Pretend you never went to school.

But still, you'll never get it right.

When you're lying in bed at night

Watching roaches climb the wall,

If you called your Dad he could stop it all.

Yeah.

You'll never live like common people

You'll never do whatever common people do.

You'll never fail like common people.

You'll never watch your life slide out of view,

And dance and drink and screw

Because there's nothing else to do.

Sing along with the common people.

Sing along, and it might just get you thru.'

Laugh along with the common people.

Laugh along, even though they're laughing at you

And the stupid things that you do

'Cause you think that poor is cool.

Like a dog lying in a corner,

They'll bite you and never warn you.

Look out.

They'll tear your insides out

'Cause everybody hates a tourist.

'Cause Everybody hates a tourist,

Especially one who thinks

It's all such a laugh.

Yeah, and the chip stains' grease

Will come out in the bath.

You will never understand

How it feels to live your life

With no meaning or control

And with nowhere left to go.

You're amazed that they exist

And they burn so bright,

While you can only wonder why.

Rent a flat above a shop.

Cut your hair and get a job.

Smoke some fags and play some pool.

Pretend you never went to school.

But still, you'll never get it right.

'Cause When you're lying in bed at night

Watching roaches climb the wall,

If you called your Dad he could stop it all.

Yeah.

You'll never live like common people

You'll never do what common people do.

You'll never fail like common people.

You'll never watch your life slide out of view

And dance and drink and screw

Because there's nothing else to do.

I want to sing with common people, like you.

I want to sing with common people, like you.

I want to sing with common people, like you.

Re: Being frugal is for the rich

#93

The word missing from this discussion is "structural" - there are deep structural changes to how the job market and economy now works that limit the economic prospects of millennials (as a group) in ways that can't readily be overcome with thriftiness and hard work. Here's an excerpt of the article that really clarified this for me: "Thirty years ago, she says, you could walk into any hotel in America and everyone in…

Except they also had less. This is the ... I'm not sure of the right word, paradox? duality? ... anyway, the problem/benefit of globalisation, that it leads to cheaper stuff. We all have more today, even on less money. Thought experiment: ask yourself when it was better to be poor: 1950, or 2018. In 1950 you could... go to the library? In 2018, even the very poor likely have a mobile phone, the internet, a games console, and an near endless world of entertainment.

The problem is not with income as much as costs. The NIMBYism of a lot of places inflates the cost of the main expenses like rent - where most people's money goes - and the cost of getting around, as people are forced to live further away from jobs. That was the big finding from the minimum wage hike in Seattle, that poor people where forced to travel further for work, and it cost them more. Ironically, I think that is pretty much how all cities work since crime went away. The days of the poor occupying prime real estate near a city is pretty much over.

Even sans better employment opportunities, fixing the zoning laws in most cities would lead to better lives for many people. Sadly, this NIMBYism is really hard to fight against, and often the people it hurts fight hardest for it.

Re: Being frugal is for the rich

#94

Earlier quoted context omitted.

Most young people do need to be more thoughtful about their money, though. And the economy as a whole is, by multiple different metrics, the best it’s ever been. It’s just that this greatness needs to be spread a bit wider. In the capitalist system with a labor market as tight as we’ve ever seen it this is addressed by getting another job for more money. Now is a good time to do it. You are responsible for your own s…

"The economy is doing great, all you need to do to flourish is work a second job in addition to your first one!"

I didn’t say a “second” job. I suggested to merely change the one people have right now. In my experience this is by far the surest way to increase one’s compensation. Do this once every 2 years, it adds up.

Re: Being frugal is for the rich

#95
post #83

Earlier quoted context omitted.

We don't have adequate public transportation (so car + car insurance + car maintenance). And our cities were never really designed to be walk-able or bike-able. While we have compulsory health insurance not dissimilar to the German system, most areas only have one or two providers (vs. 130 of Germany) whose prices have been going up like 30% every year. We still pay out of pocket for most medicine, dentistry, emergen…

You forgot the housing/rental situation too. In my area, renting is 33% - 50% of _take home pay_ (after withholding taxes), without utilities or property tax.

That is the same everywhere - worse in places like London.

Re: Being frugal is for the rich

#96
post #85

The word missing from this discussion is "structural" - there are deep structural changes to how the job market and economy now works that limit the economic prospects of millennials (as a group) in ways that can't readily be overcome with thriftiness and hard work. Here's an excerpt of the article that really clarified this for me: "Thirty years ago, she says, you could walk into any hotel in America and everyone in…

What can the average person do about this system? It seems like it's only becoming more widespread.

Open a company. Try to avoid it. Understand why others do it. Then look for solutions.

Re: Being frugal is for the rich

#97
post #73

Earlier quoted context omitted.

The specific example you bring up seems to be a result of increased liability on the employer for employees. Hotels etc would rather contractors carry those liabilities, especially I imagine when it comes to possibly illegal immigrants.

Sure, but that's not some kind of neutral, organic development. It's something the rich choose to do, in collusion with politicians, to increase their own wealth and power. Shifting all the "liability" onto workers, creating an economy where everyone but the wealthiest are fungible serfs, is a specific set of values and decisions advanced by these people because it benefits them.

It is _partly_ organic, or rather, technological. General Motors did everything in house (partly) for the same reason the hotel did: the computers needed to keep track of today's supply chain / subcontracting payments & management didn't exist. The efficient thing was to have one centralised payroll department cutting checks.

But politics played a big role too. It deserves to be noted here that almost all the employees at this (1960s NYC, say) hotel were born Americans. While today a large proportion would not be, a factor which tips the balance of power towards their managers.

Re: Being frugal is for the rich

#98

Earlier quoted context omitted.

Wages are rising at the highest rate since 2009: https://www.npr.org/sections/thetwo-way/2018/02/02/582641530... . And black unemployment is at historic lows a well.

Rates do not matter unless they are over big time scales. You have conveniently picked a year just past the banking crisis... Does the absolute inflation and purchasing power adjusted value even match 90s?

Sounds to me like you’ve already made up your mind if “rates do not matter”. Because objectively they do.

Re: Being frugal is for the rich

#99

Earlier quoted context omitted.

You're missing the point. The 'frugal culture' is selling the idea that this is the road to economic self-sufficiency while omitting or glossing over other significant information, like having a very healthy income stream to begin with. If you're poor, being frugal is very unlikely to lift you out of poverty. That doesn't mean frugality is bad, but that marketing is as the key to financial stability is deceptive.

> If you're poor, being frugal is very unlikely to lift you out of poverty. It's infinitely more likely to do so than being financially irresponsible.

They can't choose to "be frugal" when their choices are which kid eats, who gets shoes, gas for work means working overtime while the kids grow up without you, and other typical situations faced by the poor.

Re: Being frugal is for the rich

#100

I would also make the economic argument that a rich person that is still frugal is actively exacerbating income inequality. If Warren Buffett is indeed still paying only $3 for breakfast every day, that's giving a big middle finger to the economy. Money is half of the circulatory system of the economy. When it pools too long in one spot, it clots, and then a thrombosed clot can cause damage somewhere else. He really…

I fundamentally and vehemently disagree with you.

Why?

He is fundamentally correct. If you are rich and decide to stop hiring people from your community to build extensions to your already large house, then the money is just going to be pooling in your over-sized bank account: potentially just being deployed by a bank to create profit for other rich people.

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