Easy money
A crazy idea at:
http://www.startribune.com/148/story/1132162.html Kara McGuire: The financial facts of life
It talks about a parent GIVING an 11-year old $200/month to help them learn how to budget money. It implies from one example that turned out well, that giving responsibility lead to a responsible young adult, one capable of saving and avoiding excess spending, falling for credit card debt, and all that.
I just don't know, at least in general. First, even going back to my own childhood in the 1970s and 80s, $200 seems like a rather large amount of money. I can think to me and my brother, as opposites. He seemed always overanxious to enter the adult world and money for him was a sign of power, and he seemed to need a lot more money than me. On my side, I had no real interest in the adult world, and the only thing I really knew about money in elementary school is I had a savings account where my birthday money went.
Later, when I was 13, I got a paper route (from my brother) and I kept it for over 6 years, earning enough money to buy things I wanted, big stuff - bicycle, computer, telescope, books. I'm not sure if I really dealt with my finances honestly. I mean if my mom always took money from my account when I bought stuff. I don't remember dealing with money much at all, certainly not carrying much around.
I remember a few months before I got my paper route, being awake at 5am to try to rediscover the planet Uranus, seeing my brother get up for his paper route and I thought I'd never do that. But something dawned on me, that money was useful, so when he didn't want it any more, I took it over. It was easy, especially after everyone went prepaid. I wasn't a morning person too much, but I could go back to sleep for an hour before getting ready for school.
I wonder if getting $200/month, if I would have just saved 3/4 of it, perhaps even not getting a paper route which wasn't really much money. I mean the article talks about it being used to buy clothes and such, but the reality of my childhood is I NEVER wanted to go shopping at all, so giving me money to buy clothes would be meaningless since I had no interest in clothes except those I already had, thread-bare or whatever.
And with my brother, I'll never guess how much money he squirmed out of my mom, but must have been a lot more than I ever needed. I wonder how the GIVE MONEY plan works with siblings of different ages and different needs.
Overall it seems very hard, to set a reasonable balance. If you give a kid too much, there's no lesson, and he learns nothing of self-restraint. If you give him too little, he perhaps can learn from it, how to budget, but ONLY if you're a STONECOLD parent willing to see your child suffer when there's plenty of money.
The article also talks about charging interest if the child need more money and borrows it. Certainly the whole world of debt is a very abstract one, one not easily understood by children or adults. Myself, I bought my first car when I was 24, used Toyota Tercel for $3900 cash. The first debt I ever really knew was a home mortgage in my 30s, and a short term debt for a new energy efficient furnace and A/C.
I tried to lecture my sister on debt interest, when she bought some ring or something crazy for $500 on payments at 18% interest. I tried to tell her it was bad, and she just looked and saw a comfortable payment, and was unfazed by my fears. Interest is a slippery slope of acceptance. A purely emotional rejection (like mine) exaggerates danger, but once you get used to debt, there's no clear boundary between viable and unviable debt - payments are always so small they can be made long after the debt is unpayable, so it takes a nasty financial crisis to face the problems.
As I've gotten older I've realized I have some sort of categorical personality which always chooses familiarity and safe bets over newness and gambling. I suppose playing $5 poker was illuminating, when I found I was conserving my dime chips, and others thought nothing of throwing away their whole chips on a hand. My style was slowly losing over time as my good hands never won enough to get back my slow and steady losses, while others lost everything or won big.
I remember in my 20s after graduating from college, I didn't want to be "corrupted" by money (or cars). I successfully did contract work for 6 years, working for periods and living off from savings between. I shared my car with my sister, and depended on my bike for transportation the most.
When I was running low on savings, I took a job at Rainbow Foods doing night stock work for $5.15/hour. It was a worthy experiment, to see what some people live on. It was a union job, and had health insurance, although I didn't stay long enough to get it. I picked the grocery store, thinking I ought to work someplace that I spend money, sort of closing my income/expense loop.
Really I don't know how the economy works, not that that is a surprise. I mean I seriously doubted it made any sense for the long term, finally deciding it was "cheap energy" that drives our wealth, and more convinced now than ever that bad things can happen as easy energy gets depleted. AND our current collective debt (government and personal) would seem to confirm my fears.
We can all believe the Federal Reserve System is much smarter now than in the 1920's. It won't make the same mistakes as they did after the stock market crash. When overly leveraged debt collapses again like a house of cards, the Federal Reserve will compensate by flooding the market with credit to keep things humming, inflating away debt, transfering wealth from those with savings to those with debt.
I suppose things like that are what's most disturbing. As I make extra payments to my mortgage to pay it down, I realize someday I might have real cash to invest besides my home, and holding onto cash is perhaps the riskiest thing - I mean in ANY fixed interest accounts.
WELL, all in all, it's like those poker games. I'm just playing to "lose the least", so hard to have much passion there. Really probably similar for me. I'm resigned to the fact I have no control, so I just try to stay out of the big pots and hope my savings lasts until my next win. Actually I feel much more successful in income than poker, better guarantees on a salary job for income.
I do try to remember that my current success isn't a guarantee of the future. My only defense is to invest in ways that reduce my future cost of living, so eliminating debt is an easy one, and simpler lifestyle (no car for 2+ years), and sharing expenses as I can.
It's a funny cloud I'm under. I do what everyone does - have intution looking at one view, and look for evidence to support it, and neglect evidence that appears to counter it. Well, its easier to believe things are well, especially on a quickly greening spring day, but there's plenty of signs to fear.
I almost believe I'm immune to corruption by money, although I'm sure I'm not. If you gave me a million dollars, I still couldn't imagine changing my lifestyle. I'd have to pay off my mortgage. Perhaps I'd pay down many mortgages of families and friends, give them some breathing room, and slow the drain of interest to the banks.
It is a funny thing, to imagine a million dollars appearing out of no where. In the REAL world a million dollars usually appears because someone borrowed it, so it's not real money either.
I'm most curious about the claims that most of money in the world is fake (fiat currency), existing as a multiplication within the fractional reserve system.
What would the U.S. do if we suddenly went under a spell, stopped senseless spending, and started saving? Saving in the sense of paying down debt. It seems like a fun "revolution" to see what happens.
In reality we do need debt, at least if directed to good long term investments, those that move us away from dependency upon ever more energy and material inputs.
If there was ONE thing I'd do as KING of the U.S., perhaps it would be to end tax deductions for home mortgages. This to me is one of the worst "easy money" schemes. I'd have to be King since a majority of Americans benefit from this. My egalitarian argument (as King still) is that mortgage deductions are unfair to those who don't own their own homes. My secondary argument is that it is abused by the credit system - allowing people to accumulate large credit card debts, and then transfer them against their hard earned home equity, using mortgage interest deductions as icing on the cake for the scam.
I suppose this demonstrates my biggest hatred to our system. In my mind there's "Moral uses of money", and then there's dealing with the real world, where "easy money" schemes exists which appear to help us, although in reality just encourage us to be a part of a pyramid scheme, taking money from the bottom, and transfering to the top, each step getting a little cut.
I don't easily like to use the word "morality", but don't know any other. The immorality of money is that it can help separates us from each other, pretending what we have is somehow "earned" while those with less haven't worked as hard.
I can look at things from lots of views, and I don't deny individual responsibility must be involved. I really can look at problems of others, those without the security and comfort I know and imagine I'm responsible. And I can equally say they haven't acted responsibly and don't deserve help from me. I knew however much money I gave my brother, it would never be enough to help him. He could do great things with money I'm sure, but as much it would just sieve through his finders like sand, and he'd be left with empty hands out looking for more.
I know it is too easy to blame, to look at capitalism as unfairly benefiting the few on top. I rather despise the antitax diatribe of republicans against the wealthy paying a higher tax rate, even up to 60% in some European countries. It would be nice to believe those most wealthy are most capable of making the best investments for the future of society, and I can believe this sometimes, but mostly I'm convinced the modern money system is designed for an "end game" where a few end up owning everything, and that the government's purpose is to keep the field flattened, whether through taxes, tax incentives, or outright limitations on the influence of money.
If things keep rolling a few more years it'll be interesting to see what the affluent babyboomers do in their last years. I knew one preboomer, lamenting the electoral influences of the retirees, sucking up unsustainable benefits in their later years while support for schools and children are cut short. Voting for your self interest is an easy approach, and I admit I except the "entitlements explosion" argument of groups like the Concord Coalition. Most of all I can accept the arguments because every program is based on delaying costs, and magically expecting the future can pick up the difference. I can't respect such decisions.
Lots of thoughts. I feel blessed whatever else is true. I wish all could know security, even as I realize not everyone is like me.
http://www.startribune.com/148/story/1132162.html Kara McGuire: The financial facts of life
It talks about a parent GIVING an 11-year old $200/month to help them learn how to budget money. It implies from one example that turned out well, that giving responsibility lead to a responsible young adult, one capable of saving and avoiding excess spending, falling for credit card debt, and all that.
I just don't know, at least in general. First, even going back to my own childhood in the 1970s and 80s, $200 seems like a rather large amount of money. I can think to me and my brother, as opposites. He seemed always overanxious to enter the adult world and money for him was a sign of power, and he seemed to need a lot more money than me. On my side, I had no real interest in the adult world, and the only thing I really knew about money in elementary school is I had a savings account where my birthday money went.
Later, when I was 13, I got a paper route (from my brother) and I kept it for over 6 years, earning enough money to buy things I wanted, big stuff - bicycle, computer, telescope, books. I'm not sure if I really dealt with my finances honestly. I mean if my mom always took money from my account when I bought stuff. I don't remember dealing with money much at all, certainly not carrying much around.
I remember a few months before I got my paper route, being awake at 5am to try to rediscover the planet Uranus, seeing my brother get up for his paper route and I thought I'd never do that. But something dawned on me, that money was useful, so when he didn't want it any more, I took it over. It was easy, especially after everyone went prepaid. I wasn't a morning person too much, but I could go back to sleep for an hour before getting ready for school.
I wonder if getting $200/month, if I would have just saved 3/4 of it, perhaps even not getting a paper route which wasn't really much money. I mean the article talks about it being used to buy clothes and such, but the reality of my childhood is I NEVER wanted to go shopping at all, so giving me money to buy clothes would be meaningless since I had no interest in clothes except those I already had, thread-bare or whatever.
And with my brother, I'll never guess how much money he squirmed out of my mom, but must have been a lot more than I ever needed. I wonder how the GIVE MONEY plan works with siblings of different ages and different needs.
Overall it seems very hard, to set a reasonable balance. If you give a kid too much, there's no lesson, and he learns nothing of self-restraint. If you give him too little, he perhaps can learn from it, how to budget, but ONLY if you're a STONECOLD parent willing to see your child suffer when there's plenty of money.
The article also talks about charging interest if the child need more money and borrows it. Certainly the whole world of debt is a very abstract one, one not easily understood by children or adults. Myself, I bought my first car when I was 24, used Toyota Tercel for $3900 cash. The first debt I ever really knew was a home mortgage in my 30s, and a short term debt for a new energy efficient furnace and A/C.
I tried to lecture my sister on debt interest, when she bought some ring or something crazy for $500 on payments at 18% interest. I tried to tell her it was bad, and she just looked and saw a comfortable payment, and was unfazed by my fears. Interest is a slippery slope of acceptance. A purely emotional rejection (like mine) exaggerates danger, but once you get used to debt, there's no clear boundary between viable and unviable debt - payments are always so small they can be made long after the debt is unpayable, so it takes a nasty financial crisis to face the problems.
As I've gotten older I've realized I have some sort of categorical personality which always chooses familiarity and safe bets over newness and gambling. I suppose playing $5 poker was illuminating, when I found I was conserving my dime chips, and others thought nothing of throwing away their whole chips on a hand. My style was slowly losing over time as my good hands never won enough to get back my slow and steady losses, while others lost everything or won big.
I remember in my 20s after graduating from college, I didn't want to be "corrupted" by money (or cars). I successfully did contract work for 6 years, working for periods and living off from savings between. I shared my car with my sister, and depended on my bike for transportation the most.
When I was running low on savings, I took a job at Rainbow Foods doing night stock work for $5.15/hour. It was a worthy experiment, to see what some people live on. It was a union job, and had health insurance, although I didn't stay long enough to get it. I picked the grocery store, thinking I ought to work someplace that I spend money, sort of closing my income/expense loop.
Really I don't know how the economy works, not that that is a surprise. I mean I seriously doubted it made any sense for the long term, finally deciding it was "cheap energy" that drives our wealth, and more convinced now than ever that bad things can happen as easy energy gets depleted. AND our current collective debt (government and personal) would seem to confirm my fears.
We can all believe the Federal Reserve System is much smarter now than in the 1920's. It won't make the same mistakes as they did after the stock market crash. When overly leveraged debt collapses again like a house of cards, the Federal Reserve will compensate by flooding the market with credit to keep things humming, inflating away debt, transfering wealth from those with savings to those with debt.
I suppose things like that are what's most disturbing. As I make extra payments to my mortgage to pay it down, I realize someday I might have real cash to invest besides my home, and holding onto cash is perhaps the riskiest thing - I mean in ANY fixed interest accounts.
WELL, all in all, it's like those poker games. I'm just playing to "lose the least", so hard to have much passion there. Really probably similar for me. I'm resigned to the fact I have no control, so I just try to stay out of the big pots and hope my savings lasts until my next win. Actually I feel much more successful in income than poker, better guarantees on a salary job for income.
I do try to remember that my current success isn't a guarantee of the future. My only defense is to invest in ways that reduce my future cost of living, so eliminating debt is an easy one, and simpler lifestyle (no car for 2+ years), and sharing expenses as I can.
It's a funny cloud I'm under. I do what everyone does - have intution looking at one view, and look for evidence to support it, and neglect evidence that appears to counter it. Well, its easier to believe things are well, especially on a quickly greening spring day, but there's plenty of signs to fear.
I almost believe I'm immune to corruption by money, although I'm sure I'm not. If you gave me a million dollars, I still couldn't imagine changing my lifestyle. I'd have to pay off my mortgage. Perhaps I'd pay down many mortgages of families and friends, give them some breathing room, and slow the drain of interest to the banks.
It is a funny thing, to imagine a million dollars appearing out of no where. In the REAL world a million dollars usually appears because someone borrowed it, so it's not real money either.
I'm most curious about the claims that most of money in the world is fake (fiat currency), existing as a multiplication within the fractional reserve system.
What would the U.S. do if we suddenly went under a spell, stopped senseless spending, and started saving? Saving in the sense of paying down debt. It seems like a fun "revolution" to see what happens.
In reality we do need debt, at least if directed to good long term investments, those that move us away from dependency upon ever more energy and material inputs.
If there was ONE thing I'd do as KING of the U.S., perhaps it would be to end tax deductions for home mortgages. This to me is one of the worst "easy money" schemes. I'd have to be King since a majority of Americans benefit from this. My egalitarian argument (as King still) is that mortgage deductions are unfair to those who don't own their own homes. My secondary argument is that it is abused by the credit system - allowing people to accumulate large credit card debts, and then transfer them against their hard earned home equity, using mortgage interest deductions as icing on the cake for the scam.
I suppose this demonstrates my biggest hatred to our system. In my mind there's "Moral uses of money", and then there's dealing with the real world, where "easy money" schemes exists which appear to help us, although in reality just encourage us to be a part of a pyramid scheme, taking money from the bottom, and transfering to the top, each step getting a little cut.
I don't easily like to use the word "morality", but don't know any other. The immorality of money is that it can help separates us from each other, pretending what we have is somehow "earned" while those with less haven't worked as hard.
I can look at things from lots of views, and I don't deny individual responsibility must be involved. I really can look at problems of others, those without the security and comfort I know and imagine I'm responsible. And I can equally say they haven't acted responsibly and don't deserve help from me. I knew however much money I gave my brother, it would never be enough to help him. He could do great things with money I'm sure, but as much it would just sieve through his finders like sand, and he'd be left with empty hands out looking for more.
I know it is too easy to blame, to look at capitalism as unfairly benefiting the few on top. I rather despise the antitax diatribe of republicans against the wealthy paying a higher tax rate, even up to 60% in some European countries. It would be nice to believe those most wealthy are most capable of making the best investments for the future of society, and I can believe this sometimes, but mostly I'm convinced the modern money system is designed for an "end game" where a few end up owning everything, and that the government's purpose is to keep the field flattened, whether through taxes, tax incentives, or outright limitations on the influence of money.
If things keep rolling a few more years it'll be interesting to see what the affluent babyboomers do in their last years. I knew one preboomer, lamenting the electoral influences of the retirees, sucking up unsustainable benefits in their later years while support for schools and children are cut short. Voting for your self interest is an easy approach, and I admit I except the "entitlements explosion" argument of groups like the Concord Coalition. Most of all I can accept the arguments because every program is based on delaying costs, and magically expecting the future can pick up the difference. I can't respect such decisions.
Lots of thoughts. I feel blessed whatever else is true. I wish all could know security, even as I realize not everyone is like me.
posted by Ares Olympus at 11:13 AM
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