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Jeffrey posted:Why? Doesn't the rule apply like anything else, if it's low enough aren't you better off investing your money and paying the minimum? Are there special rules for underwater car loans? You're forgetting to price in the additional risk you are taking on by using borrowed money to invest. Edit: Say the investment goes to crap. You're out the investment and still are on the hook to repay the loan. blugu64 fucked around with this message at 22:11 on Jul 30, 2014 |
# ? Jul 30, 2014 22:08 |
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# ? May 15, 2024 03:12 |
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blugu64 posted:You're forgetting to price in the additional risk you are taking on by using borrowed money to invest. Well sure, I'm assuming a reasonable index fund and a cash reserve. (If SPY goes to 0 you probably won't have to pay back your car loan either in the wartorn hellhole this place would become.) I just mean that, if the borrowed money for the car is small relative to your assets, it seems win win to borrow money at a low enough interest rate. I often hear advice to people paying down a mortgage to pay the minimum if their rate is low enough, I presume you'd disagree with that advice in the case that the home is underwater? (Obviously a car's value over time is much more predictable than a house's.)
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# ? Jul 30, 2014 22:17 |
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I admit I'm a bit more financially conservative then most, but I'd hesitate to specifically borrow money to invest. Housing is somewhat different due to the scale of the costs involved, and it not necessarily being a depreciating asset, but paying down that loan is going to be pretty high up on my list. Edit: I won't belabor it, but that's my general thought process. Obviously different people have different risk tolerance. blugu64 fucked around with this message at 23:07 on Jul 30, 2014 |
# ? Jul 30, 2014 22:57 |
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Jeffrey posted:Why? Doesn't the rule apply like anything else, if it's low enough aren't you better off investing your money and paying the minimum? Are there special rules for underwater car loans? (I'm assuming you have enough money to cover the difference should you have to pay it - obviously buying more car than you can afford is a mistake.) If I can buy a $5000 car at 1% with $1000 down I'm going to do it even if I could pay in cash. (My numbers are clearly made up here.) People keep talking about doing that but the number of people who actually do it is probably miniscule. The number of people who realize a worthwhile profit even less. Nobody mentions the risk you assume either. Min/maxing a pile of unnecessary debt like some Level 80 Elvish Actuary in Wow sounds neat but it will leave you vulnerable. Edit: good drat I type slow on my phone.
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# ? Jul 31, 2014 01:13 |
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Every time I think it would be fun to own an expensive car, I think back to the fact that scheduled maintenance for my father's Mercedes costs several times what I pay for my Mazda 3. They try to fool you by giving you free maintenance for a few years, but I know better than to fall for that. A luxury car doesn't stop being expensive just because you've paid off the loan.
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# ? Jul 31, 2014 01:48 |
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This is the article everyone has been talking about : http://www.washingtonpost.com/posteverything/wp/2014/07/08/this-is-what-happened-when-i-drove-my-mercedes-to-pick-up-food-stamps/quote:Sara Bareilles played softly through the surround-sound speakers of my husband’s 2003 Mercedes Kompressor as I sat idling at a light. I’d never been to this church before, but I could see it from where I was, across from an old park, abandoned in the chilly September air. The clouds hung low as I pulled the sleek, pewter machine into the lot. But I wasn’t going to pray or attend services. I was picking up food stamps.
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# ? Jul 31, 2014 03:14 |
MrKatharsis posted:People keep talking about doing that but the number of people who actually do it is probably miniscule. The number of people who realize a worthwhile profit even less. Nobody mentions the risk you assume either. Min/maxing a pile of unnecessary debt like some Level 80 Elvish Actuary in Wow sounds neat but it will leave you vulnerable. Min/maxing finances is like one of the few times it's probably worthwhile.
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# ? Jul 31, 2014 03:51 |
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Jeffrey posted:Why? Doesn't the rule apply like anything else, if it's low enough aren't you better off investing your money and paying the minimum? Are there special rules for underwater car loans? (I'm assuming you have enough money to cover the difference should you have to pay it - obviously buying more car than you can afford is a mistake.) If I can buy a $5000 car at 1% with $1000 down I'm going to do it even if I could pay in cash. (My numbers are clearly made up here.)
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# ? Jul 31, 2014 04:23 |
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blugu64 posted:I admit I'm a bit more financially conservative then most, but I'd hesitate to specifically borrow money to invest. Housing is somewhat different due to the scale of the costs involved, and it not necessarily being a depreciating asset, but paying down that loan is going to be pretty high up on my list. But you're not specifically borrowing money to invest - you're just putting a minimal downpayment (and taking the rest of the debt at low interest) and using the money you would otherwise have put down to invest. This assumes you have your financial house in order and a healthy reserve in case something unknown happens (get gap insurance, it's like $30) but I'd prefer to either invest or stay more liquid rather than paying down a really low interest debt (assuming you're creditworthy enough to get a low interest loan). Nobody is ever putting more money at their mortgage than they really need to and that's (typically) at a higher interest rate. MrKatharsis posted:People keep talking about doing that but the number of people who actually do it is probably miniscule. The number of people who realize a worthwhile profit even less. Nobody mentions the risk you assume either. Min/maxing a pile of unnecessary debt like some Level 80 Elvish Actuary in Wow sounds neat but it will leave you vulnerable. I'm sure the number of people that do it are minuscule but that doesn't mean it's somehow rocket surgery to generally maximize what your money does for you.
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# ? Jul 31, 2014 04:56 |
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Barry posted:But you're not specifically borrowing money to invest - you're just putting a minimal downpayment (and taking the rest of the debt at low interest) and using the money you would otherwise have put down to invest. e: fixed quotes
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# ? Jul 31, 2014 05:29 |
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Money is fungible but cars aren't so much.
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# ? Jul 31, 2014 05:45 |
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SiGmA_X posted:I wouldn't. Having debt sucks. You aren't calculating in risk of debt. I don't understand? What's the risk of debt? Yeah, I'm assuming that in the average case, the market goes up by more than 1%, but the worst case just means my cash reserves go down a little lower. I'm not talking about spending every penny or putting every cent I own into risky investments, so I don't see how a debt that's much smaller than your cash reserves sucks at all. What sort of financial planning can you do if you don't believe the market will, on average, go up. If I'm willing to invest at all then it seems like a no brainer to do it. You aren't invited to my 401k raiding group.
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# ? Jul 31, 2014 06:50 |
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The trouble is a lot of people don't have enough money to not finance things. In the US, a car is needed to get to work (and groceries and errands and...) more often than not. You might get lucky and have a friend/relative/carpool, but then you might not. Sometimes you know a decision sucks financially, but the alternative is far worse.
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# ? Jul 31, 2014 13:33 |
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I feel like I'm losing track of the conversation here.Barry posted:But you're not specifically borrowing money to invest - you're just putting a minimal downpayment (and taking the rest of the debt at low interest) and using the money you would otherwise have put down to invest. This assumes you have your financial house in order and a healthy reserve in case something unknown happens (get gap insurance, it's like $30) but I'd prefer to either invest or stay more liquid rather than paying down a really low interest debt (assuming you're creditworthy enough to get a low interest loan). Nobody is ever putting more money at their mortgage than they really need to and that's (typically) at a higher interest rate. The reason you don't finance a car in the US, is because you'll be required to carry collision and comprehensive insurance. The premiums on those policies cost more than the profits you'd make on investing the same money in nearly every situation. If you have the cash assets to replace the car, and you buy a cheap car, you're probably better off self-insuring against those particular risks. Aerofallosov posted:The trouble is a lot of people don't have enough money to not finance things. In the US, a car is needed to get to work (and groceries and errands and...) more often than not. You might get lucky and have a friend/relative/carpool, but then you might not. Is this in general? Or about the article? Because if it's about the article, then anybody who can pay off a 4 year old Mercedes should have an emergency fund big enough to buy a $10k-ish car. If this is just a general sentiment, then baring some terribly bad luck, you should only finance 1 car - your first one. After you pay it off, start making the payments to a self-insurance/next car account. Once you have enough in that account to buy a cheap replacement car, drop the extra insurance and start putting that money in the account too.
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# ? Jul 31, 2014 14:09 |
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You could also stop trying to act like you have more money than you really do and buy a car that costs nowhere near your yearly salary.
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# ? Jul 31, 2014 14:36 |
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Folly posted:I feel like I'm losing track of the conversation here. I think I got lost, too. Sorry. And in general. My plan is to do the 'finance a first car once I get a job that actually pays me and gives me hours' then squirrel up as I can. The only thing that makes my life (besides mom dumping over 10k debt onto me - thanks, mom!) tougher is waiting for a new SSN petition to go through and all that jazz. And the complications that go with a new SSN.
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# ? Jul 31, 2014 15:19 |
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Aerofallosov posted:I think I got lost, too. Sorry. Oh man, that sucks. That situation seems unfortunately common here on SA. Good job going through the steps to undo it and recover.
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# ? Jul 31, 2014 16:53 |
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Aerofallosov posted:I think I got lost, too. Sorry. Holy shiitake mushrooms. My mom frustrates me enough when she spends beyond her (meagre) means. That blows man.
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# ? Jul 31, 2014 18:03 |
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Since we're talking about moms I'm going to vent a little bit about my mom. She grew up with extremely wealthy parents and when they passed away she got 1/3rd of their total net worth, something in the area of 1.3 million dollars. before they passed she married a guy with drug problems and a propensity for prostitutes and when they eventually got divorced she wanted to be "fair" and basically let him walk away with half the money. As far as I know the guy has pissed all the money away on pointless purchases, drugs, and prostitutes, last I heard he was in the hospital for kidney problems. She purchased a large rental property with a mortgage (not really sure why she got a mortgage instead of buying it outright) and is currently in the process of paying it off, she also purchased another building that she supposedly got a great deal on that she operates a store out of but from what I've heard the store doesn't make much money at all. Despite all this kinda iffy behavior I still assumed she was doing ok financially since she hasn't made any noteworthy purchases and lives extremely frugally aside from her property ownership. However, in March my brother's birthday came up and his old, ailing computer finally gave up on him so I convinced my mom to split the cost of building a computer for him, her half of which came to about 350 bucks. This was apparently too much money for her or something and so I agreed to let her pay it off in 3 monthly installments of 120ish dollars each, of which I've seen 2 payments in 4 months. I really don't care about the money for the computer but drat how could she go from inheriting over a million dollars to having to pay off 350 bucks in monthly installments?! She should have been set for life! It makes me worry about her future but I don't want to seem pushy about trying to look into her finances.
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# ? Jul 31, 2014 18:49 |
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Paiz posted:I really don't care about the money for the computer but drat how could she go from inheriting over a million dollars to having to pay off 350 bucks in monthly installments?! She should have been set for life! It makes me worry about her future but I don't want to seem pushy about trying to look into her finances. The likely answer is that she's probably not as well off as she appears to be, even at this point. It might be worth offering to help her, but don't be surprised if you get rebuked for it.
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# ? Jul 31, 2014 18:55 |
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Paiz posted:I really don't care about the money for the computer but drat how could she go from inheriting over a million dollars to having to pay off 350 bucks in monthly installments?! She should have been set for life! It makes me worry about her future but I don't want to seem pushy about trying to look into her finances. She's either a tightwad or lying to you about something. Find out the truth now or else you'll be supporting her when she's heavy in debt.
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# ? Jul 31, 2014 19:02 |
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My mother has been mired in actual, real poverty for years and it's really depressing. It's gutted who she is as a person, strained and stretched our relationship, and is a burden I did not ask for that I'll keep having to deal with for the rest of her life. It really sucks, and over time even the best of people become bitter about it. If you can talk to your mom and help her come up with a plan you may be able to avoid some of it.
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# ? Jul 31, 2014 19:12 |
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From a couple pages back, but for those of you curious about the peculiarities of the Japanese housing market, here's a link to a paper about it: http://www.nri.com/global/opinion/papers/2008/pdf/np2008137.pdf. It's quite interesting, been a while since I read it, but IIRC the authors are arguing that having the single biggest purchase a household makes almost always be hemorrhaging value over time creates a significant net drain/drag on the Japanese economy.
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# ? Aug 1, 2014 00:55 |
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Let's lift the mood a little! My mom developed a drug addiction in her 30s. She lost a house in a lucrative part of the bay area to foreclosure, she took out debt in my name, we lived without running water or electricity for a year. My grandfather, horrible piece of poo poo that he is, took money from all of our family and put her into scientology rehab to the tune of $20k. For the last two years my brother and I have been paying her rent and helping her get by as she struggled as an older woman to find employment - she was a paralegal and librarian before, something that 50 year old women with enormous employment gaps are apparently not in demand for. As of four months ago, she is working full time, living in the same town as my brother, paying her own rent, and beginning to come out of long stretches of serious and dark depression. She's been clean for three years Sometimes helping your bad-with-money mom out isn't bad forever. My mom and I are very close despite all the hurdles.
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# ? Aug 1, 2014 04:41 |
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Rick Rickshaw posted:Holy shiitake mushrooms. My mom frustrates me enough when she spends beyond her (meagre) means. That blows man. I know the feeling. My mom is horrible about impulse purchases. She bought a bird on payments. A literal bird. MC Hawking fucked around with this message at 05:14 on Aug 1, 2014 |
# ? Aug 1, 2014 05:05 |
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Pompous Rhombus posted:From a couple pages back, but for those of you curious about the peculiarities of the Japanese housing market, here's a link to a paper about it: http://www.nri.com/global/opinion/papers/2008/pdf/np2008137.pdf. It's quite interesting, been a while since I read it, but IIRC the authors are arguing that having the single biggest purchase a household makes almost always be hemorrhaging value over time creates a significant net drain/drag on the Japanese economy. As the fellow kiwi goon above said the one who is bad with money is our respective Governments. Insane regulation is the problem in Japan. While it keeps a lot of people employed in the construction industry it's completely artificial, and the mortgage will destroy any wealth with the rapid decline in value of the house. In terms of people bad with money half of my family is a disaster. I have an auntie who bought a small townhouse and had a mortgage when she hit retirement. Living from government pension payment to the next. It's difficult to know what she or my cousins are doing given we severed contact completely. The only contact was via my grandmother who my auntie constantly asked for money thinking half of my grandmother's money was hers. My auntie just hung around like a vulture and didn't care for my grandmother at all. Then I have a number of friends who are just turning 30. Some finally have jobs that they can start improving their financial situations. In response some have increased debts with little to show for the loans and others don't accumulate debt but spend all their money on drinking. It's bad to think that someone drinking all their money is better than those working to go backwards financially.
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# ? Aug 1, 2014 09:55 |
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Three kids, three mothers
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# ? Aug 1, 2014 13:01 |
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This is incredible. $15,000 due for unpaid child support. Warrant out for his arrest. His child support payments are $1300 per month. Rent is $1125. He makes less than just those two numbers combined. They should seriously get a divorce. In my state at least that would make a lot of sense. Then she'd be a single mom on paper and get EVERYTHING paid for. Housing, child care, heating assistance, food stamps, and child help (WIC).
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# ? Aug 1, 2014 13:39 |
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If anyone could've convinced me before that bad financials aren't a big deal when considering a significant other, this just obliterated that chance
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# ? Aug 1, 2014 13:47 |
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She's not so hot herself, making $500 a month at a part time job that requires her to spend $75 on a smart phone, still going to school (so big student loans coming), very unrealistic picture of her future job prospects, and won't put the pressure on her ex to pay the child support he should be paying.
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# ? Aug 1, 2014 13:52 |
Nail Rat posted:She's not so hot herself, making $500 a month at a part time job that requires her to spend $75 on a smart phone, still going to school (so big student loans coming), very unrealistic picture of her future job prospects, and won't put the pressure on her ex to pay the child support he should be paying. How are you even under the impression he can pay it?
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# ? Aug 1, 2014 13:55 |
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Harry posted:How are you even under the impression he can pay it? If he literally can't pay a dollar, he should start by getting a job. I don't have any idea what you're asking here. He has a legal obligation to pay and he's not even trying (read the thread), so she needs to get the courts involved and make him motivated to do so. It's not that her ex isn't paying all of the child support owed, it's that he's not even trying to pay at all and she doesn't really care. Nail Rat fucked around with this message at 14:00 on Aug 1, 2014 |
# ? Aug 1, 2014 13:58 |
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What kind of union journeyman job requires a smartphone? Same with part-time jobs, really. I guess they do need email, especially since they're cutting the internet, but... $150 a month, goddamn. And in all this, she's worried about damaging her credit.
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# ? Aug 1, 2014 14:01 |
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Why do people have so many god drat kids?
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# ? Aug 1, 2014 14:02 |
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KYOON GRIFFEY JR posted:Why do people have so many god drat kids? Because
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# ? Aug 1, 2014 14:04 |
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Nail Rat posted:He has a legal obligation to pay and he's not even trying (read the thread), Dumb question, but how do you read reddit threads? Is there a way to sort by "things the OP has replied to and also keep the OPs replies intact" or do I have to sift through all the poo poo? Reddit doesn't really make a good format for discussions...
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# ? Aug 1, 2014 14:05 |
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KYOON GRIFFEY JR posted:Why do people have so many god drat kids? Sex ed. in most of the US is really really REALLY bad. Like, straight up lying to the kids levels of bad.
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# ? Aug 1, 2014 14:11 |
Devian666 posted:As the fellow kiwi goon above said the one who is bad with money is our respective Governments. Insane regulation is the problem in Japan. While it keeps a lot of people employed in the construction industry it's completely artificial, and the mortgage will destroy any wealth with the rapid decline in value of the house. Just yesterday it got better - South Australian Senator Nick Xenophon proposed allowing first home buyers to use their superannuation to help them gather that first deposit! It's a bad idea because a.) his proposal was based around a similar Canadian scheme where people have to pay the money back within 15 years (and if the average first home buyer is scraping for that deposit already, are they really going to be able to pay it back?) and b.) it does nothing to improve the supply of housing in Australia, so all it will do is inflate costs as more money chases after the same amount of housing stock.
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# ? Aug 1, 2014 14:12 |
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froglet posted:It's a bad idea because a.) his proposal was based around a similar Canadian scheme where people have to pay the money back within 15 years (and if the average first home buyer is scraping for that deposit already, are they really going to be able to pay it back?) and b.) it does nothing to improve the supply of housing in Australia, so all it will do is inflate costs as more money chases after the same amount of housing stock. It is a good idea because of the things you just said.
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# ? Aug 1, 2014 14:37 |
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# ? May 15, 2024 03:12 |
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Nocheez posted:You could also stop trying to act like you have more money than you really do and buy a car that costs nowhere near your yearly salary. KYOON GRIFFEY JR posted:Why do people have so many god drat kids? I believe that the majority of people that rail against welfare and state support systems think of people like that and start by blaming the women because "they should know better." While it appears most of the girls this guy knocked up are as dumb as a box of rocks, you'd think by now that even dumb girls wouldn't randomly gently caress a stranger without a condom and be totally chill with finishing right in there, no pull-out. The just world fallacy is pretty strong with all of these armchair social theorists though just by putting primary blame on a person somewhere along the way toward libertarian ideals. But the US attitude of sex-shaming anywhere outside a 30 mile radius from a major metropolitan area is not delivering good results (no pun intended).
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# ? Aug 1, 2014 15:21 |