I don't really think penny pinching works during inflation. Your money will be worth less in the future
Price shocks in formative years scar consumption for life
321–330 of 478 posts
Re: Price shocks in formative years scar consumption for life
#322Earlier quoted context omitted.
Having a solid emergency fund is actually pretty wise. Maybe split some of that into something low risk like I-bonds. My wife has similar anxiety, and it took years of financial education to get her comfortable with the idea that we only need a month of backup, and can float the rest on CC until we liquidate other assets.
> we only need a month of backup As someone who went through two recessions, survived multiple layoffs, and had a few medical things, this seems like crazy talk. The general rule of thumb is 6 months of savings. I've known many that didn't follow this rule, and ended up in very bad debt.
Do you need it all sitting in a savings account, though? Inflation ate almost 9% of its value this past year. Granted stocks are down 20% this year, but assuming you don't have to touch it for a while, they should more than recover in a few years (well, assuming no massive global disaster, which seem more and more common lately).
We have a decent amount sitting in our savings account, but not six months worth. But I can liquidate assets to get us the rest of that six months if necessary, and it would take about a week to get that into our bank account.
Re: Price shocks in formative years scar consumption for life
#323Earlier quoted context omitted.
Unless you're claiming violent seizure, then the Benz had a good probability of being earned by someone, thus meriting some social clout by those who value those contributions. I have a pickup over a decade old and with a noisy muffler, and write comments on forums like this instead of, apparently, providing value sufficient to afford more. It's not meritorious, and I receive and deserve some derision. Well at least…
In almost all situations, a high school student being dropped off by parents in a fancy car did nothing to help the parents earn the fancy car. In fact, generally kids at that stage are a net negative on parents finances.
The key is that the wealth used to buy the car was earned (unless evidence to the contrary is convincing). The parents elected to buy an expensive car, and maybe they bought their kid more expensive clothing. But can't you see, that having one's child lack want is (one) motivation for making the efforts to earn wealth? Suppose those parents were otherwise identical (in terms of their privileges), but, like you, decided that such differential wealth displays were to be shunned. Not needing those displays caused them in part to lose motivation to obtain wealth, and thus lose motivation to perform the efforts that would lead to that. So they produce less. Great, now the people who can produce the most are encouraged to produce less. Try selling that to the people who will now be more poor as a consequence.
Instead of clipping the knees of the productive, realize that envy can encourage the unproductive to imitate the habits of the productive to themselves become productive. We all benefit indirectly thereby.
Re: Price shocks in formative years scar consumption for life
#324Earlier quoted context omitted.
Stocks are liquid enough that you can sell enough to pay your credit card off before getting hit with interest. There's no reason to have 6 months worth of expenses in cash just sitting around unless you strongly suspect a crash.
The S&P 500 is down 21% since the beginning of the year.
Muni bond and treasury ETFs are not down 21%, and neither is my emergency fund investment account.
Re: Price shocks in formative years scar consumption for life
#325Earlier quoted context omitted.
If you're able to live without the credit aspects of the credit card, why not take the 1-2% discount on nearly everything consumable that you buy? If you pay it off every month, credit cards have a negative cost (to you) and a fair amount of convenience (for renting cars, hotels, booking flights, etc).
That 1-2% is what they pay you for all your data. Credit cards are a key component of data brokers.
It's a refund on the interchange fee from not doing chargebacks and paying your bills on time. Your data is not interesting or valuable, that's your ego talking.
Re: Price shocks in formative years scar consumption for life
#326Earlier quoted context omitted.
I remember sitting in the car with my mom outside an Amtrak train station in the late `70's asking her why she was cutting the tops off of several cereal boxes that we had just bought from the grocery store. Apparently they were for a discount on train tickets.
Some coupons are just worth it. A guy in the 90s figured out he could get millions of frequent flyer miles from a few thousand dollars of pudding.
Or a military jet? https://en.wikipedia.org/wiki/Leonard_v._Pepsico,_Inc.
Re: Price shocks in formative years scar consumption for life
#327Re: Price shocks in formative years scar consumption for life
#328Earlier quoted context omitted.
Doctors say they are the only profession that saves lives. Well they're the only profession allowed to save lives. And the only profession making money saving lives. Charging for saving lives. Price discriminating to save lives. What happens when they make a mistake in what someone is able to pay? EDIT (I tried replying but can't yet): The basic solution to make medicine cheaper is supply more medics. In Chile anybod…
I'm from Chile (and still live here). I don't know where you got the idea that anybody whot wants to be a doctor can go to a medical school without much effort. Medicine is by far the most exclusive career that you can apply to, they're always the highest scores in our version of the SAT (you can check the scores that are needed for one of our universities here https://www.uchile.cl/admision-y-matriculas/admision-reg…
Yeah but compared to American medical schools? Whole different ball game.
10x cheaper, and longer life expectancy.
Re: Price shocks in formative years scar consumption for life
#329Earlier quoted context omitted.
There’s a fine line between frugality and being stuck in a local optima. Sometimes, expensive things are better in the long run, because they serve their purpose better and last longer.
My approach is to always buy the first "stuff" cheap and then try to use it the best possible way. If it breaks or I see the limits with the "stuff", then I go for the good and expensive one. This way I know I need it but I can also better assess the quality. This of course after having spent too much on high quality "stuff" with little use.
The only problem with this approach is the amount of time before your interest in a new thing starts to fade is often just about the same amount of time it takes to recognize the limits of the cheap stuff and decide to upgrade.
It's definitely happened to me multiple times. And I don't think it's just a coincidence, with any new hobby or skill you will start out improving very quickly and then eventually hit a plateau. The first thing you think when you hit the plateau is "I would be a little bit better/have a little bit more fun with this if I had better gear", and it's usually true and you do get a slight boost. But then a little while after that you hit a sustained plateau anyway and that's the point where you'll often lose interest.
Re: Price shocks in formative years scar consumption for life
#330Earlier quoted context omitted.
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.
Yeah, seriously. It was there to visually fool customer into thinking the price is cheaper than it really is. But because today it is insignificant difference as well everyone else is doing it, it is just nonsense and no longer serves its purpose.
Another thing (and that actually matters much more) is that tax is not included in the prices there are excuses about it that tax is different in different areas, but it's just yet another way to lie to a customer.