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Can We Survive the Next Financial Crisis?

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Re: Can We Survive the Next Financial Crisis?

#111

Post by y-c-o-m-b »

crazynick4 wrote: post #104
y-c-o-m-b wrote: post #21

The definition of "we" and "survive" needs to be established clearly first and I don't think all those fancy graphs and market trends will define them. There's a lot of people that ended up bankrupt, in a bottomless depression, turned to drug abuse or committed suicide because of the last crisis. Wages are still relatively low while prices continue to climb. Many people are working 2-3 jobs and having trouble affordi…

If you have an extreme health care incident, why pay the bill? Sure it would hurt your credit score not to, but if it's between that and tens/hundreds of thousands, I think it is worth it to take the hit for 7 years. I know health care workers who give this 'unofficial' advice to their patients and I've had friends and family members do the same thing - people who had no health insurance but still got health care and…

Having wages garnished doesn't sound like fun, but that's just me. Healthcare incident doesn't necessarily mean 100k hospital bill or something ridiculous. It can be as little as 10k (or much less) and still do a lot of financial damage to a person. Sounds like a bad idea.

Re: Can We Survive the Next Financial Crisis?

#112

Post by waterphone »

nostrademons wrote: post #75
waterphone wrote: post #28

Earlier quoted context omitted.

Investing in total market index funds is literally investing in the economy as a whole. (Or as much of a whole as the index represents.) So while yes, they will crash with future market crashes, of which there will be many in each of our lifetimes, historically in the U.S. so far the market has always recovered.

"historically in the U.S. so far the market has always recovered." This is sorta enshrining survivorship bias in your premises - take the largest economy around today and point out that every time it's crashed, it's recovered. Well, if it hadn't, there wouldn't be anything to point at. There are actually plenty of examples - even among European settlers of the Americas - where the economy did not recover. The Contine…

Yes, it's an imperfect predictor of the future. No one else does a very good job predicting economic futures either, however.

Re: Can We Survive the Next Financial Crisis?

#113

Post by atomical »

y-c-o-m-b wrote: post #111
crazynick4 wrote: post #104

Earlier quoted context omitted.

If you have an extreme health care incident, why pay the bill? Sure it would hurt your credit score not to, but if it's between that and tens/hundreds of thousands, I think it is worth it to take the hit for 7 years. I know health care workers who give this 'unofficial' advice to their patients and I've had friends and family members do the same thing - people who had no health insurance but still got health care and…

Having wages garnished doesn't sound like fun, but that's just me. Healthcare incident doesn't necessarily mean 100k hospital bill or something ridiculous. It can be as little as 10k (or much less) and still do a lot of financial damage to a person. Sounds like a bad idea.

I think most of the time you can work with the hospital and possibly get the charge cut in half. Then pay monthly payments with zero interest. Has anyone done this?

Re: Can We Survive the Next Financial Crisis?

#114

Post by icedchai »

y-c-o-m-b wrote: post #105
travisoneill1 wrote: post #49

Earlier quoted context omitted.

The data doesn't support your conclusion. Almost nobody keeps all their assets in a savings account. What you should be looking at is net worth. https://dqydj.com/net-worth-by-age-calculator-united-states/

I disagree. Net worth is an unstable data point and I always view it as a status symbol more than a realistic means of acquiring cash. For example in a market where nobody is willing (or able) to buy your home, your net worth can be ... well, worthless. In a financial crisis it's even worse. Your "on-demand" cash is what's in your checking or savings account. There's no guarantee you'll be able to tap into your home,…

This is why you invest outside of retirement accounts. Your on-demand cash isn't getting much, if any, return. Your home equity and retirement funds are expensive to access.

Re: Can We Survive the Next Financial Crisis?

#115

Post by jandrese »

crazynick4 wrote: post #104
y-c-o-m-b wrote: post #21

The definition of "we" and "survive" needs to be established clearly first and I don't think all those fancy graphs and market trends will define them. There's a lot of people that ended up bankrupt, in a bottomless depression, turned to drug abuse or committed suicide because of the last crisis. Wages are still relatively low while prices continue to climb. Many people are working 2-3 jobs and having trouble affordi…

If you have an extreme health care incident, why pay the bill? Sure it would hurt your credit score not to, but if it's between that and tens/hundreds of thousands, I think it is worth it to take the hit for 7 years. I know health care workers who give this 'unofficial' advice to their patients and I've had friends and family members do the same thing - people who had no health insurance but still got health care and…

It's not just the 7 years on your credit score, it's having collection agencies hound you incessantly. It's having people constantly trying to scam your bank to drain your account. It is legal threats against you, your family, your friends, your employer, etc...

You're basically dropping you bloody name to a pool of sharks who have little respect for what is legal or ethical.

Re: Can We Survive the Next Financial Crisis?

#116

Post by [deleted] »

icedchai wrote: post #87
izacus wrote: post #81

Earlier quoted context omitted.

What exactly are they keeping their assets in? A house that they can't sell and make that worth liquid? A retirement account they cannot withdraw without huge costs and compromising old age? Where else?

Uh, you ever hear of taxable investment accounts? Online brokerages, mutual funds, etc?

[deleted]

Re: Can We Survive the Next Financial Crisis?

#117

Post by jandrese »

atomical wrote: post #113
y-c-o-m-b wrote: post #111

Earlier quoted context omitted.

Having wages garnished doesn't sound like fun, but that's just me. Healthcare incident doesn't necessarily mean 100k hospital bill or something ridiculous. It can be as little as 10k (or much less) and still do a lot of financial damage to a person. Sounds like a bad idea.

I think most of the time you can work with the hospital and possibly get the charge cut in half. Then pay monthly payments with zero interest. Has anyone done this?

Getting a $250k bill cut in half doesn't help so much when you used to make $40k/year before you lost your job because of the medical emergency.

Re: Can We Survive the Next Financial Crisis?

#118

Post by mrep »

nabla9 wrote: post #84
wallacoloo wrote: post #79

Earlier quoted context omitted.

Many readers at HN find posts with interesting titles, skim the comments, and then read the article. Discussion of the title is useful for them, because if a commenter reveals that the title is misleading, the reader might choose to read something else, or approach the article with a different frame of mind. Point being: there is some value in discussing the title. Certainly different readers value that discussion mo…

> because if a commenter reveals that the title is misleading This is rarely the case. Usually (as is the case here). The commenter uses the title title as a statement and criticizes it directly, not it's relation to the article. It seems to me that people read the title, and come here to comment the title before reading the article.

I've got 27 points on the first comment of this article [0] talking somewhat about the title and 8 points on my follow up about how the title is misleading so some people including myself definitely think the title is important.

[0]: https://news.ycombinator.com/item?id=17941804

Re: Can We Survive the Next Financial Crisis?

#119

Post by izacus »

icedchai wrote: post #87
izacus wrote: post #81

Earlier quoted context omitted.

What exactly are they keeping their assets in? A house that they can't sell and make that worth liquid? A retirement account they cannot withdraw without huge costs and compromising old age? Where else?

Uh, you ever hear of taxable investment accounts? Online brokerages, mutual funds, etc?

People with < 6000$ on their savings account? Most of the population? Very very unlikely.

Re: Can We Survive the Next Financial Crisis?

#120

Post by oihoaihsfoiahsf »

kolbe wrote: post #107
oihoaihsfoiahsf wrote: post #68

Earlier quoted context omitted.

According to this article [1], public firms account for about 80% of the pre-tax profit in the private sector. That's probably enough, given that public and private company returns are probably at least somewhat correlated. [1]: https://www.forbes.com/sites/sageworks/2012/09/21/private-co...

The P in GDP does not stand for Profit. An economy consists of a lot more than private sector profits.

Right. But I'd wager that index fund investors are more interested in profits than GDP, at least as it relates to their investments and the proposition at the top of this thread that index funds will be "ripped" (presumably disproportionately) in the next downturn.
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