That's the best lesson I've learned about income and wealth in my whole life, thank you for pointing that out, sir. And you taught me in a patient and classy way(or you explained the common sense very well). The way of becoming prosperous applies to any other country, though. It's not just an American phenomenon. I guess I was trying to talk in a macro-economy sense. People need to think out of their own box. The mass are brainwashed and enslaved mentally not to believe exploitation by the banks. They don't even think that way. But this is a complex issue to be reckoned and elaborated with more time in future.
Another we-are-the-best-in-the-world feel good kid. How about some Europeans considering many USers obese, lack of education and barbaric in general? A peasant is always a peasant and money can not change that. US infrastructure is deteriorating, fast. Many parts of the country look horrifying, even worse than a "third-world" country. It's living on inheritance now.
average joe on the street doesn't pay much in income tax. if he lives in a backwards regressive state like texas he unfortunately pays disproportionately in terms of sales tax. if he lives in a nice state he gets a lot of social services because of it. for the bottom half the total tax rate in the US is probably not much more than 25%. unfortunately that doesn't provide the level of services as it should. but the tax rate itself isn't the problem. its that we don't tax the rich more in order to provide social services to the average joe. but the average joe is probably busy whining about taxes instead of whining about lack of services his government provides him.
Thats the dave ramsey's plan to a T. If you have no debt except a mortage and basic stuff like lights,food,clothing and transportation, you can become wealthy. I've been debt free for a few yrs now and once you get there, you can truly understand how this mess this country is in is because of people not understanding money. There is no such thing as good debt, no matterwhat people say.
There definitely needs to be personal finance education both in the High School and College level. Considering a big reason for the recession was people living beyond their means, the idea of that kind of education is not getting enough attention.
My only problem with the large banks is that they take deposits from anyone but are selective with who to provide loans to.. They may not care that you can't make the payments if you have already been factored in as a default (they make provisions for losses). So basically, you have to cover your own ass. But as a regulator of the financial sector I can tell you that the financial institutions are so much more sophisticated than the average individual that it inevitably becomes unfair. It's essentially like a casino. Overall, the house will always win. 99% of the time, if you win, it's luck more than smarts.
That kid was just thinking US is the place with the best quality of life and should be free of criticism. I just waked him up bluntly with all good intentions. Arrogance and ignorance will drag this country down. We should not encourage that kind of attitude.
Not saying things are perfect in the U.S. but Europe is breaking down just as fast if not more. I was just confused how you complain about Banks collecting interests (which I still don't see an explanation of why its' big deal, people wants return on investments) to complaining about taxes. I do think that people in this country are in for a rude awakening and we'll see a massive change in consumer behavior. The idea that everyone should be house owners, have HDTVs (sorry Tinman), and be able to eat out everyday is just dumb. But we still have an amazing higher educational system. For as much flack U.S. gets for schools failing, the top universities and colleges in the U.S. is still competitive and attract the best minds in the world. Despite it's recent melt down, the U.S. financial structure (not the products which blew up, but the structure like technology, data, and etc.) are still first class. We just need to harness it better and make it more productive. And as far as taxes go, I don't think it's anything overly burdensome. P.S. I was born in China with almost of all of my non-immediate family still living there. My parents have a vacation home there which I use time to time (I try to visit China atleast once every two years, keeps my Chinese sharp ). When my family first came here, we were very poor and worked our way into upper middle class. I lived the life of a poor college student living on very little student loans through college before graduating and getting a decent gig. So I actually had a lot of diverse perspective. If you've looked at my other posts in D&D, you'll see that I'd criticize parts of the U.S. government/society when I think it's warranted, but I just don't understand what your exact rant is against. Is it the rich, the banks, the taxes, or just anybody that's not in your social economical situation.
I think the regulator are also responsible for some of the stuff too. It's unfair when the top Ivy League graduates are the ones creating these new and exciting financial products within the rules of the game (though pushing it hard) and have it being difficult enough that most regulators aren't able to understand it fully. I remember reading "When Genius Fails" and was just struck and how most people weren't able to "check" Long Term because the math they were using were just X times more difficult than most people that were suppose to regulated can comprehend. I believe the regulators can pay better or higher more people to even the talent levels a little.
If I'm speaking about regulators in general.. A regulator will never be able to hold on to talent. The pay is much better when being regulated than being regulator. Also, the knowledge is better because there are teams which are constantly thinking about how to innovate new products. Additionally, even if you are the best regulator in the world, things will go wrong. Regulators arent the final solution - they are what their name suggests. They regulate. They stabilise. In essence, they are stabilizing the market and prolonging economic cycles as much as possible. I agree that regulators in Europe and the U.S. could have done more, but considering the qualifications of their employees AND that for a lot of those regulators, the regulated entities are providing them with income, it becomes very difficult. Paying your employees more to get more skilled people means charging the big guys more, which makes them unhappy which means they start creating trouble. Too big to fail is a real thing. The only solution I see is to not allow firms to get too big, but that doesn't fit in with capitalism. I'm afraid we can all do the best we can and in the end and try to filter it to the poitn where human decency is the only factor contributing positively or negatively.
completely disagree. 1. if you incur debt to get an education and are able to make more money than otherwise....and in the US, you can deduct the interest you pay on student loans. 2. as long as you can beat the interest rate you're paying, you're better financing then plunking cash down for those items. dave ramsey is about as simplistic as it gets. he's helped a lot of people come out of massive debt, and that's a very good thing. he's helped a lot of people understand finances better and that's a very good thing. but the one-size-fits-all approach to finances is funny to me....and completely missing the concept that you're making money if your debt is at 5% and you're earning a return of 7% on the money you would have plunked down otherwise. as for the OP's comments about banks....i don't find them menacing, i find them moronic. i think they make the same poor decisions in cycles, seemingly never learning from their mistakes. i think they are way too impatient in working out issues with customers and sell off assets at values WAY below what is reasonable. and i think if you know how to take advantage of that, you can do pretty well making money off their mistakes.
You're definitely right, but the cause is more systematic than moronic bankers. New bankers learning new mistakes as a result of long economic cycles. Loan officers naturally incentivized to look out for their best interests (a lot of high paying loans made in good economies with small risks of default = large bonuses, promotions) as opposed to the interest of the shareholder. Regulators actually pushing for growth (I know of more than one case in recent years where regulators came in and basically said, make more risky loans, you're earnings ratios are too low). Etc., etc.
This is not remotely true. Two examples: 1. Subsidized student loan debt. I know many people who have 1-2% interest on their student loans. They'd be idiots to pay that back. Invest that money and you'll get a much higher return. 2. 0% interest consumer financing - whether it be a car loan or Best Buy or what not. Even ignoring the possibility of investing your money, you make money through sheer inflation by paying less for the item. Now, if you don't know how to manage your finances, this is all bad debt to have. But if you know how to manage money, then you absolutely want to take on this type of debt if you're spending that money anyway. Any debt that provides a greater return on your money than it cost to take out the debt is good debt.
Only if you don't know how to invest. There are plenty of risk-free investments that outperformed subsidized student loan debt.
My formal roommate bought some 300,000$ nasdaq stocks by cash a few years ago. All the money is basically gone now, plus he has to put more money into the accounts to keep it afloat. He suspects the value will ever come back again. He never bought a new car, didn't want to buy a house(too much work for him), always bought cheap stuff for himself but expensive ones for his parents and nephews......
I don't see the relevance of this. It just means you had a not-very-smart roommate. If he had to put more money in the account, it means he was investing on margin. If he borrowed money and put it all in high risk investments, then that's just stupid on his part. That says nothing about the system.
What does this have to do with anything? Seems like your friend made dumb investment decisions and on margin as well. That's his fault.
