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Texas ranks as No. 1 state with the most people in financial distress

dallas.culturemap.com

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Re: Texas ranks as No. 1 state with the most people in financial distress

#11

Post by toomuchtodo »

elevation wrote: post #8
carefulfungi wrote: post #4

Earlier quoted context omitted.

The methodology is arbitrary and is mostly a measurement of average credit score. Methodology: https://wallethub.com/edu/states-with-the-most-people-in-fin... This Equifax article lists CA has having a better average credit score than Texas. I did't bother to sort the Equifax to list to see how closely to correlates to the article, though. https://www.equifax.com/personal/education/credit/score/arti...

Credit score is not a useful measure of financial health. A minimum wage worker living paycheck to paycheck but making minimums on a large credit card balance will have a better score than a retiree who's long since paid off his house and car and pays cash for entertainment and playthings.

The minimum wage worker will not be making the minimum payment successfully on their credit card balance (bottom sixty percent of Americans cannot afford a basic quality of life [1] [2]). They likely can't produce $500 for an emergency, and use credit products with interest rates as high as ~30-35% with credit lines no larger than a few hundred or thousand dollars. The retiree you mention in your example will have an 800+ FICO credit score due to longevity of their trade lines (decades) and likely no inquiries (because they don't need to seek credit) or missed payments.

Cash flow underwriting would paint this picture better [3], but is still not widely performed outside of an org containing the deposit account (internal underwriting for credit products that don't have to conform for asset backed security sales). So, credit score is a reasonable proxy at this time for household financial health (imho) [4] [5] based on research performed by the CFPB.

[1] https://www.cbsnews.com/news/cost-of-living-income-quality-o...

[2] https://lisep.org/mql

[3] https://fintechtakes.com/articles/2024-05-22/cash-flow-under...

[4] https://www.consumerfinance.gov/about-us/blog/new-report-exp...

[5] https://files.consumerfinance.gov/f/documents/cfpb_credit-ka...

(day job is in finance/consumer credit)

Re: Texas ranks as No. 1 state with the most people in financial distress

#12

Post by WorldWideWebb »

crnvbikwblcps wrote: post #3

[flagged]

Just making sure you’re aware of the size of California and New York. Yes - has a small chunk of very affluent residents, but also huge populations, loads of people living well below the poverty line, high percentage of undocumented workers (also likely living below the poverty line), and a huge mix of both urban and rural populations. Those rankings don’t strike me at all as odd.

Re: Texas ranks as No. 1 state with the most people in financial distress

#13

Post by RandomBacon »

fragmede wrote: post #5
crnvbikwblcps wrote: post #3

[flagged]

Do you have any numbers as to why those rankings should be suspicious, or is it down to preconceived notions about people from those particular states you've met and you're projecting?

Having lived in Honolulu for several years, I'm quite surprised that Hawaii is last on the list for "financial distress".

Although maybe they're just better at leaving within their means, which is very hard when salaries are low and things are very expensive. The way of life there is generally healthier, so perhaps people don't need to do as much "retail therapy" or other terrible financial ideas.

I wonder how that list correlates to a happiness ranking. I think Hawaii was at the top of the list last time I heard a year or two ago.

Re: Texas ranks as No. 1 state with the most people in financial distress

#14

Post by upoixzoicuopiq »

WorldWideWebb wrote: post #12
crnvbikwblcps wrote: post #3

[flagged]

Just making sure you’re aware of the size of California and New York. Yes - has a small chunk of very affluent residents, but also huge populations, loads of people living well below the poverty line, high percentage of undocumented workers (also likely living below the poverty line), and a huge mix of both urban and rural populations. Those rankings don’t strike me at all as odd.

[flagged]

Re: Texas ranks as No. 1 state with the most people in financial distress

#15

Post by WalterGR »

upoixzoicuopiq wrote: post #14
WorldWideWebb wrote: post #12

Earlier quoted context omitted.

Just making sure you’re aware of the size of California and New York. Yes - has a small chunk of very affluent residents, but also huge populations, loads of people living well below the poverty line, high percentage of undocumented workers (also likely living below the poverty line), and a huge mix of both urban and rural populations. Those rankings don’t strike me at all as odd.

[flagged]

Do you have data to support that?

Re: Texas ranks as No. 1 state with the most people in financial distress

#16

Post by NietzscheanNull »

upoixzoicuopiq wrote: post #14
WorldWideWebb wrote: post #12

Earlier quoted context omitted.

Just making sure you’re aware of the size of California and New York. Yes - has a small chunk of very affluent residents, but also huge populations, loads of people living well below the poverty line, high percentage of undocumented workers (also likely living below the poverty line), and a huge mix of both urban and rural populations. Those rankings don’t strike me at all as odd.

[flagged]

Are these bot/LLM accounts? The user of the post I'm replying to and the thread parent user (@crnvbikwblcps) seem to be randomly generated sequences, both very recently created.

Re: Texas ranks as No. 1 state with the most people in financial distress

#17

Post by bsaynqmnzioioai »

NietzscheanNull wrote: post #16
upoixzoicuopiq wrote: post #14

Earlier quoted context omitted.

[flagged]

Are these bot/LLM accounts? The user of the post I'm replying to and the thread parent user (@crnvbikwblcps) seem to be randomly generated sequences, both very recently created.

[flagged]

Re: Texas ranks as No. 1 state with the most people in financial distress

#18

Post by RandomBacon »

RandomBacon wrote: post #13
fragmede wrote: post #5

Earlier quoted context omitted.

Do you have any numbers as to why those rankings should be suspicious, or is it down to preconceived notions about people from those particular states you've met and you're projecting?

Having lived in Honolulu for several years, I'm quite surprised that Hawaii is last on the list for "financial distress". Although maybe they're just better at leaving within their means, which is very hard when salaries are low and things are very expensive. The way of life there is generally healthier, so perhaps people don't need to do as much "retail therapy" or other terrible financial ideas. I wonder how that l…

Typo: I meant "living", not "leaving"

Re: Texas ranks as No. 1 state with the most people in financial distress

#19

Post by RandomBacon »

Texas: generally the cost of living is low. However, if you live in one of the four largest cities, like 2/3rds of the state's population:

- You need a car to do things (lots of financial distress there no matter the state).

- Housing is expensive.

- There is a lot of cheap labor keeping wages lower.

I can see why they might be at the top of that list.

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