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Poor People Should Probably Gamble More

ewjordan.blogspot.com

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Re: Poor People Should Probably Gamble More

#11

Post by jfager »

patio11 wrote: post #10
jfager wrote: post #7

Or: go to the courthouse to get on a payment plan or ask the judge to waive the ticket or let you perform community service. It's not like you're the only person ever who hasn't been able to pay a ticket, that scenario gets handled all the time with zero drama.

The notion that "this is probably negotiable" is one of the things that persistently separates rich people from poor people in my experience. (That is partially a knowledge thing, partially a culture thing, and at least partially a "people tolerate rich people having a cavalier disregard for The Rules a lot more than they tolerate poor people in the same situation" thing.)

In my experience, the notion that "I should go to the casino to try to get out of this" is one of those things, as well. They're both reflections of the same underlying issue, the division between "I'm helpless" vs. "I can do something". It's a little mind-bending to read a post that tries to frame gambling as something someone in the latter category would do.

Re: Poor People Should Probably Gamble More

#12

Post by larrykubin »

mattmaroon wrote: post #4

I sure hope nobody reads this and is fooled by it. It's terrible, terrible advice for three reasons. 1. Money has a declining marginal utility. Winning that $130 isn't nearly as positive as losing it would have been negative. The author neglects to mention what happens the other 53% of the time when someone with mounting bills loses the last money they had. Debt spiral is usually the result. Even if the odds were 50/…

Note: when you make a don't pass bet, not only are the odds still slightly against you, at least 10 other people at the table will hate you too :)

Re: Poor People Should Probably Gamble More

#13

Post by JimboOmega »

mattmaroon wrote: post #4

I sure hope nobody reads this and is fooled by it. It's terrible, terrible advice for three reasons. 1. Money has a declining marginal utility. Winning that $130 isn't nearly as positive as losing it would have been negative. The author neglects to mention what happens the other 53% of the time when someone with mounting bills loses the last money they had. Debt spiral is usually the result. Even if the odds were 50/…

As for 1, the whole article is arguing a case where that is not true. They are illustrating a case where Mary's $130 is not worth much of anything: it doesn't pay half of her $250 liability and get her out of half of the downside. It's useless. But doubled, it has some utility.

Granted it's an oversimplification, because that $130 could be used for something, and yes, #2 and #3 are probably better. (Though with fees and multiple rollovers, the payday loan could be ouchy).

Still - declining marginal utility is not always the case. There are plenty of situations like this one, (especially for a corporation) where having half of the money necessary gets you nothing.

Of course, there are also almost always better ways of securing that financing, unless you're the only person that perceives the odds that way.

Here's an interesting example in my life - if I get a windfall, the marginal value starts off low (I don't change my lifestyle), rises somewhat (it becomes enough for me to take a breather from my job and spend more time working on my startup), and eventually declines as I no longer need more to work.

Or in other words, I can't retire because I got $10k. Not useful. But if I can make that $50k, I can survive for a year+ and try to launch a company - that's useful. The value of that $50k is more than 5 times as much as the $10k. (Though the $10k does get me that much closer to having enough...)

Re: Poor People Should Probably Gamble More

#14

Post by ewjordan »

mattmaroon wrote: post #4

I sure hope nobody reads this and is fooled by it. It's terrible, terrible advice for three reasons. 1. Money has a declining marginal utility. Winning that $130 isn't nearly as positive as losing it would have been negative. The author neglects to mention what happens the other 53% of the time when someone with mounting bills loses the last money they had. Debt spiral is usually the result. Even if the odds were 50/…

1. Money has a declining marginal utility. Winning that $130 isn't nearly as positive as losing it would have been negative.

I question this because you're already in the red: do nothing, and you'll be left with $130 in the bank but $250+$100=$350 in liabilities that eventually have to be paid, so you're at -$220 by default (even if you've still got $130 in your pocket, that's not really your money; as I commented elsewhere, I probably should have set up the example so that Mary had already purchased food for the week, to avoid questions of starvation).

When you're starting in negative territory the usual rules about marginal utility of money don't necessarily apply, I'd actually argue that there might be more utility gained when you go from -$50 to +$50 than there is going from -$150 to -$50 because of the debt spiral effects that you mention.

As for your other points, I agree, there are issues with the false dichotomy that I've set up, ones that I expected to be called out on. Perhaps I should have worked out a better example where there were fewer options available, c'est la vie.

Re: Poor People Should Probably Gamble More

#15

Post by coryl »

mattmaroon wrote: post #4

I sure hope nobody reads this and is fooled by it. It's terrible, terrible advice for three reasons. 1. Money has a declining marginal utility. Winning that $130 isn't nearly as positive as losing it would have been negative. The author neglects to mention what happens the other 53% of the time when someone with mounting bills loses the last money they had. Debt spiral is usually the result. Even if the odds were 50/…

#3.5) or decent Texas Holdem player. I won a couple hundred bucks in a 10 man tourney in Vegas. Final showdown hand: Ad, 7d. His hand, As, Qc. I pushed all in, he called.

Diamond flush for the win! It's better to be lucky than skilled :D

Re: Poor People Should Probably Gamble More

#16

Post by krschultz »

illamint wrote: post #5

And for God's sake, man, pay your tickets before they're overdue, a few hundred bucks is nothing compared to the pain of trying to get just about anything done at the Connecticut Department of Motor Vehicles! It's true: I just moved to CT and had to deal with transferring a car title, registration and license from out of state and it was a nightmare . Definitely would've rather spent the 8 hours and ~$350 at a casino…

+1 because I just did the same thing. CT DMV has to be the worst in the country.

Re: Poor People Should Probably Gamble More

#17

Post by ewjordan »

patio11 wrote: post #10
jfager wrote: post #7

Or: go to the courthouse to get on a payment plan or ask the judge to waive the ticket or let you perform community service. It's not like you're the only person ever who hasn't been able to pay a ticket, that scenario gets handled all the time with zero drama.

The notion that "this is probably negotiable" is one of the things that persistently separates rich people from poor people in my experience. (That is partially a knowledge thing, partially a culture thing, and at least partially a "people tolerate rich people having a cavalier disregard for The Rules a lot more than they tolerate poor people in the same situation" thing.)

The notion that "this is probably negotiable" is one of the things that persistently separates rich people from poor people in my experience.

When I landed myself in this situation, that was exactly the problem: I felt like the Big Bad Court System would never cut a stupid kid like me any slack, and it just never occurred to me that I should talk to them and see what could be done about it. After trying unsuccessfully to deal reasonably with the DMV on the issue, I sort of assumed every aspect of the government was always out to screw me over in any way possible.

Live and learn, I suppose.

Re: Poor People Should Probably Gamble More

#18

Post by sliverstorm »

> In the end, though, I did nothing, my license was revoked, and I had to live without one until I was able to come up with the extra cash that it took get it back

Maybe that was the best solution? Having to live without a privilege such as your licence seems like one of the best ways to teach you not to let your registration expire next time. Stay on top of things, and don't let the first late fees happen in the first place. If you STILL don't have enough money, you're living beyond your means, plain and simple.

Re: Poor People Should Probably Gamble More

#19

Post by seles »

"Let's assume for the moment that Mary has no safety net; there are no friends she can ask to float her a loan, no family members that she can reach out to, etc."

But this is almost always a false assumption. It would be better to borrow money to pay the fee in time. Can anyone think of a case where it actually would be better to gamble (at expected loss) than borrow money?

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