Price shocks in formative years scar consumption for life • Hacker News Board

Re: Price shocks in formative years scar consumption for life

#271

Post by Melatonic » Wed, Jun 15, 2022, 6:40 PM UTC

ciconia wrote: post #191

ChuckNorris89 wrote: post #2

Being poor in general, during your childhood, scars you for life. It makes you penny wise and pound foolish, adverse to taking risks in your career and investments, can destroy your confidence in yourself, while always having to look over your shoulder monetarily speaking. Habits that even after you remove poverty from your live, you still feel the the anxiety and triggers in your head.

> scars you for life. You could also say being poor in childhood teaches you how to be frugal. I regard this as a healthy habit and better discipline I wish I had with money (coming from a middle-class family). Another way to look at frugality is just an aversion to spending money on whatever it is that society or mass media tell you you have to buy, an important and healthy attitude one can have, IMO.

You can very easily teach yourself to be frugal now as well - it just requires taking the time out of your day to do so. Of course there are potential confounding factors but there are plenty of super rich people I know who are annoyingly frugal.

Re: Price shocks in formative years scar consumption for life

#272

Post by Melatonic » Wed, Jun 15, 2022, 6:42 PM UTC

collinvandyck76 wrote: post #235

mabbo wrote: post #206

Earlier quoted context omitted.

My wife grew up very close to the poverty line, with her parents always just about to lose the house. And she has this anxiety. (Edit: to be clear, she's a successful civil engineer, considered one of the best in her field locally and makes great money- she has nothing to worry about.) In order to help with it, we have a bank account that our bills come out of that has a little more than 6 months worth of all our bil…

with the market being as it is, actually very wise to have a lot of cash on hand :) we also operate this way. i could become unemployed today and we buffer enough so that it's not an emergency at all.

I prefer a layered approach - some investments take longer than others to cash out. And some are in between but still provide some return. A ton of cash on hand is probably a bad idea

Re: Price shocks in formative years scar consumption for life

#273

Post by wolverine876 » Wed, Jun 15, 2022, 6:43 PM UTC

ciconia wrote: post #191

ChuckNorris89 wrote: post #2

Being poor in general, during your childhood, scars you for life. It makes you penny wise and pound foolish, adverse to taking risks in your career and investments, can destroy your confidence in yourself, while always having to look over your shoulder monetarily speaking. Habits that even after you remove poverty from your live, you still feel the the anxiety and triggers in your head.

> scars you for life. You could also say being poor in childhood teaches you how to be frugal. I regard this as a healthy habit and better discipline I wish I had with money (coming from a middle-class family). Another way to look at frugality is just an aversion to spending money on whatever it is that society or mass media tell you you have to buy, an important and healthy attitude one can have, IMO.

> You could also say being poor in childhood teaches you how to be frugal.

You could say anything, but what's true is that it's not frugality. Where do you get that?

It's a traumatic experience with lifelong consequences. I know that from many people who have experienced it.

Re: Price shocks in formative years scar consumption for life

#274

Post by wolverine876 » Wed, Jun 15, 2022, 6:45 PM UTC

jlawson wrote: post #251

sangnoir wrote: post #215

Earlier quoted context omitted.

It goes way beyond frugality - it is usually accompanied by a touch of hoarding (bought a new phone? Let's keep the old one even if it has a cracked screen, just in case ... .) A term I've seen bandied about for the collective symptoms is having a Scarcity mindset and it's based on insecurity/fear of unexpectedly running out of money (which was a frequent event in childhood) John Scalzi's classic "Being Poor" blog po…

>(bought a new phone? Let's keep the old one even if it has a cracked screen, just in case... .) Never been poor; me and my whole family have always done this. I just forced them to get rid of their standalone DVD player. They have remote controls for devices going back to the 90's. The cellphone example is even better; you'd be a fool to immediately dump your old phone. It's small and easy to store, and if your new…

> Never been poor

So what basis do you have for commenting on the experience of it?

> me and my whole family have always done this.

I'm sure there are other things that both your family and poor families have done, but that doesn't have explanatory value.

Re: Price shocks in formative years scar consumption for life

#275

Post by ravenstine » Wed, Jun 15, 2022, 6:45 PM UTC

Nick87633 wrote: post #170

ravenstine wrote: post #111

Earlier quoted context omitted.

The generation of the Great Depression didn't have ubiquitous forms of usury. With credit cards, personal loans and student loans, I imagine the future stinginess of Millennials will be short lived.

They still had installment plans for buying appliances and repossessions. I'm pretty sure usurious loans have existed since money was invented.

Of course. Loans have existed since the beginning of money. That doesn't mean average people were using credit and loans to buy everything from Lambos to Cheetos to pornos like they can today. Not until very recently. Credit wasn't really something that was available to most people until around the 70s when it began to be digitized successfully. The psychology of debt today compared to that of a few generations ago is entirely different.

Re: Price shocks in formative years scar consumption for life

#276

Post by nradov » Wed, Jun 15, 2022, 6:46 PM UTC

twblalock wrote: post #268

ciconia wrote: post #191

Earlier quoted context omitted.

> scars you for life. You could also say being poor in childhood teaches you how to be frugal. I regard this as a healthy habit and better discipline I wish I had with money (coming from a middle-class family). Another way to look at frugality is just an aversion to spending money on whatever it is that society or mass media tell you you have to buy, an important and healthy attitude one can have, IMO.

One of the other aspects of being poor is the assumption that any windfall you get will be nickeled and dimed away from you pretty soon, so the only way you'll ever be able to enjoy it is to spend it all immediately. That turns out to be the opposite of frugality.

Poor people who manage to accumulate some savings also face intense social pressure to give or "loan" that money to family and friends who are in more desperate circumstances (or at least claim to be). It's nice to help people out, but being too generous makes it impossible to ever get ahead.

Re: Price shocks in formative years scar consumption for life

#277

Post by wolverine876 » Wed, Jun 15, 2022, 6:47 PM UTC

short_sells_poo wrote: post #196

ciconia wrote: post #191

Earlier quoted context omitted.

> scars you for life. You could also say being poor in childhood teaches you how to be frugal. I regard this as a healthy habit and better discipline I wish I had with money (coming from a middle-class family). Another way to look at frugality is just an aversion to spending money on whatever it is that society or mass media tell you you have to buy, an important and healthy attitude one can have, IMO.

I think you are both correct. It is true that people who grow up poor simply have much fewer chances to learn how to grow wealth. They may be frugal and manage the little they have with care, but that kind of mindset is not enough in general. They don't get any chance to learn how to invest money properly, because they don't have any to invest. If they do put something aside, they are encouraged (by the circumstances…

That overlooks the basic point, that poverty causes trauma. Budgeting is just one symptom. It causes negative life-long outcomes; there's plenty of research on this.

Re: Price shocks in formative years scar consumption for life

#278

Post by Mountain_Skies » Wed, Jun 15, 2022, 6:51 PM UTC

throw8383833jj wrote: post #138

giantg2 wrote: post #132

Earlier quoted context omitted.

"always carried penny pouches, because they remembered a time when one had to keep track of cents to survive." Sure. But you also have to realize that a loaf a bread cost a nickle and that cards didn't exist. People carried around change because you could actually buy meaningful stuff with it and there wasn't really an alternative to cash (sure someplaces give credit but much different than using a card today).

yup, it's pretty easy to forget that the dollar has already lost over 98% of it's value.

IIRC, when the US stopped minting the half penny, the whole penny was worth somewhere around $0.33 in 2022 currency. Lopping the last digit off of everything isn't practical for many reasons but I wish we could at least finally put the stupid "9/10" on gas prices into the grave.

Re: Price shocks in formative years scar consumption for life

#279

Post by tomjakubowski » Wed, Jun 15, 2022, 6:52 PM UTC

lotsofpulp wrote: post #125

CalRobert wrote: post #101

Earlier quoted context omitted.

We were surprised to discover after her death (in the late 80's) that my great grandmother kept $1,000 in a pouch in her bra. I can understand not trusting the banks and wanting to always have some sort of cash on your person.

I cannot understand not having at least a couple hundred cash on you, and much more at home. What are people’s plans if the power or payment networks go offline? Earthquake, hurricane, ice storm, volcano, etc.

I'm expecting to rely on pen and paper IOUs in this situation. That's really no different than cash, presuming you and local businesses have already established some trust.

Re: Price shocks in formative years scar consumption for life

#280

Post by tomcam » Wed, Jun 15, 2022, 6:52 PM UTC

Growing up not rich in the 60s and 70s was useful on the balance. I was willing to take risks in business because when you don’t have much to lose you are perhaps a little more free to try scary things. I read tons of how to succeed books and biographies and learned a lot about how failures are learning experiences. OTOH many of my peers wound up dead, on drugs, or incarcerated.

I do tend to be hoardy and my clever technique has been to just buy more houses, so not a great role model in that regard.