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PT6A posted:Oh Jesus christ, this times 1000. isn't that really just the same thing.
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# ? Jan 1, 2015 00:28 |
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# ? May 10, 2024 07:40 |
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Blade_of_tyshalle posted:Sure, and I agree with this. I did make the choice to blow money with no regard to how I'd afford it later. At the time, I was a complete imbicile about money. I spent and spent and eventually maxed the card out with interest and such. I'm still paying it off, ten years later, because I just didn't know enough about how credit works to have been given that kind of access to it; I've been in lovely finances since and only been concentrating on paying it down the past year or so. I'll get there eventually. $2000 is a very reasonable limit for a first credit card, and of all of the people to blame here (yourself, your parents, the educational system, etc), I think the banks are pretty low on the list.
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# ? Jan 1, 2015 00:57 |
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PT6A posted:Oh Jesus christ, this times 1000. That's pretty much what brackets are, though you might argue more levels would be useful since it's not computationally problematic to have more now. Also, lol at "simple to understand" - you already lost everyone at "function of"
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# ? Jan 1, 2015 01:00 |
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Lexicon posted:That's pretty much what brackets are, though you might argue more levels would be useful since it's not computationally problematic to have more now. Everyone knows enough math to read a simple graph, though, right? We could easily create a smooth graph of net vs. gross income, expressed as a single function, that would easily express to people that they can't lose money by having more income. This is high school level math or below, right? How much simpler can we make it? EDIT: Mind you, tax brackets should be easy to understand too, so I just don't know what the gently caress. PT6A fucked around with this message at 01:10 on Jan 1, 2015 |
# ? Jan 1, 2015 01:08 |
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My favourite is the hmrc. Two loving tax brackets. And they implemented a third one after the GFC.
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# ? Jan 1, 2015 01:09 |
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PT6A posted:Everyone knows enough math to read a simple graph, though, right? We could easily create a smooth graph of net vs. gross income, expressed as a single function, that would easily express to people that they can't lose money by having more income. This is high school level math or below, right? How much simpler can we make it? But it already is simple, and it's not widely understood.
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# ? Jan 1, 2015 01:18 |
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Cultural Imperial posted:My favourite is the hmrc. Two loving tax brackets. And they implemented a third one after the GFC. It's actually 5, or 8 if you include student loan repayments collected via the tax system LemonDrizzle fucked around with this message at 01:29 on Jan 1, 2015 |
# ? Jan 1, 2015 01:21 |
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LemonDrizzle posted:It's actually 5, or 8 if you include student loan repayments collected via the tax system That's what you get for being a striver. Know your place. Shut your face.
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# ? Jan 1, 2015 01:40 |
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Lexicon posted:But it already is simple, and it's not widely understood. I agree, but it's phrased in a way that's very open to misunderstanding. It would probably be better if people's eyes just glazed over because they didn't understand any of it, rather than completely misunderstanding what they perceive to be something that they understand perfectly.
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# ? Jan 1, 2015 02:05 |
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LemonDrizzle posted:Debt should be a human right. Not having access to credit is a scary place to be in. Instead of borrowing money to fund my purchases I have to rely on savings, which is not fun at all. It’s like my finances are being suffocated. Imagine how constrained a start up business would feel if it can’t get a bank loan. Without using debt I feel like my options are severely limited. I can’t wait for the new year when I can go on shopping sprees again. At first I thought you were jokingly paraphrasing him, not directly quoting him.
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# ? Jan 1, 2015 02:05 |
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tagesschau posted:At first I thought you were jokingly paraphrasing him, not directly quoting him. I dream every night of getting brutally ravished by the banks.
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# ? Jan 1, 2015 02:09 |
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What really pisses me off is I know a lot of people who earn a fuckton more than I do, and have tons more debt (well, I have none, so that's not difficult), who then complain about me being a tightwad. No, I'm not going to put a vacation on my VISA until I have the money to pay it off, because I'm not a moron with no sense of what delayed gratification is.
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# ? Jan 1, 2015 02:17 |
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Blade_of_tyshalle posted:I wish it was a little harder to get credit, honestly. Then maybe I wouldn't have been given a $2000 Visa when I was 19 and making $7/hr. The people at RBC who set me up with that card should really be ashamed; what made them think it was appropriate to give someone with no credit history that much limit? That seems to me like a little bit like blaming the people who sold you the bottle of liquor you got wasted on that night when you got too drunk and crashed your car or something.
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# ? Jan 1, 2015 06:14 |
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Lumius posted:isn't that really just the same thing. It's an infinite number of infinitely small tax brackets, so yes.
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# ? Jan 1, 2015 06:29 |
Jesus Christ, even making a large purchase one month on my credit card and paying it off over the next two to three months feels risky to me. I'll never understand people who just run up the bill like the minimum payment will never go up with no plans about what to do when the debt needs to be paid off.
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# ? Jan 1, 2015 06:35 |
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ChairMaster posted:That seems to me like a little bit like blaming the people who sold you the bottle of liquor you got wasted on that night when you got too drunk and crashed your car or something. The bank certainly carries responsibility in the situation as a party to the contract, and furthermore carries greater responsibility as the party with the greater resources and capacity to understand the financial situation in the deal. This is why bankruptcy courts routinely tell unsecured creditors like CC companies to go pound sand. The bank also has a responsibility to the financial health of their customers, and while they do not bear responsibility for individual purchases, giving a person credit that far outweighs their income is both predatory and unnecessarily increases the chance of a bankruptcy. This is directly analogous to banks handing out mortgages to people who cannot handle them, or will in all likelihood be unable to handle them sometime in the future. You can surely blame the consumer for accepting the money, but it was the bank who knew first, and knew best that these people were at risk.
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# ? Jan 1, 2015 07:20 |
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The general gist of it is that banks shouldn't be awarded for handing out loans that they themselves don't expect to get paid. That's the business model of a loan shark.
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# ? Jan 1, 2015 09:17 |
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Apologies for another Australian centric post, but this is too good not to share. OC = owners corporation which manages common property. quote:
http://www.flat-chat.com.au/forum/and-the-rest/honest-property-developers-is-that-an-oxymoron/
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# ? Jan 1, 2015 10:04 |
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AVeryLargeRadish posted:Jesus Christ, even making a large purchase one month on my credit card and paying it off over the next two to three months feels risky to me. I'll never understand people who just run up the bill like the minimum payment will never go up with no plans about what to do when the debt needs to be paid off. melon cat fucked around with this message at 05:41 on Mar 16, 2019 |
# ? Jan 1, 2015 15:51 |
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I know someone who recently consolidated all his cc debt into a car loan for a kia soul.
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# ? Jan 1, 2015 16:42 |
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melon cat posted:If you think that's bad, you should see the people who not only run their cards up to their limit, but they continuously transfer it between different credit card companies under 6-month long 1.99%/2.99% balance transfer promotions. It's like a screwed up shell game of high-interest consumer debt that's several grades worse than living "paycheque to paycheque". I don't know how they sleep at night. I got my first offer for a balance transfer recently - 1% of the balance in exchange for 6 months interest free. That's, uh, lower than inflation, so I think this is a far better deal than any almost any other kind of debt. I mean, if you save enough to be able to afford to pay off the balance once the balance transfer offers stop (if they ever do), and if the offers are at a lower interest rate than most government bonds, let alone typical index fund returns... why not? Precambrian Video Games fucked around with this message at 17:31 on Jan 1, 2015 |
# ? Jan 1, 2015 17:29 |
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eXXon posted:I got my first offer for a balance transfer recently - 1% of the balance in exchange for 6 months interest free. That's, uh, lower than inflation, so I think this is a far better deal than any almost any other kind of debt. Cultural Imperial posted:I know someone who recently consolidated all his cc debt into a car loan for a kia soul.
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# ? Jan 1, 2015 17:48 |
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eXXon posted:I mean, if you save enough to be able to afford to pay off the balance once the balance transfer offers stop (if they ever do), and if the offers are at a lower interest rate than most government bonds, let alone typical index fund returns... why not? What would you do with the money that could make it worth it, unless you're already deep in the hole and trying to save on interest? Using it as leverage to invest is bad with money, that 1% bond will net you a whole 50 bucks on that borrowed 5k, and the second anything goes wrong you're on the hook for 6 months of retroactive 25% interest? Not worth it IMO. E. Now that I think about it I read an article on some FI type website where, through creative use of churning and balance transfers, a couple was able to effectively get a $16000 loan at -5% interest after factoring in rewards. Can't find it on mobile but I might have it bookmarked at home. Guest2553 fucked around with this message at 18:01 on Jan 1, 2015 |
# ? Jan 1, 2015 17:57 |
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The USA is now threatening to export 1M bpd of ultra-light crude.
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# ? Jan 1, 2015 18:01 |
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eXXon posted:I got my first offer for a balance transfer recently - 1% of the balance in exchange for 6 months interest free. That's, uh, lower than inflation, so I think this is a far better deal than any almost any other kind of debt. Just... don't. Investing with leverage is a risky enough proposition, and this is not the way to go about it. The path to the bankruptcy courts is well trodden by people who think (a) they're smarter than credit card issuers, or (b) use leverage to invest. This counts as both!
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# ? Jan 1, 2015 18:04 |
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I had a TD rep call me to ask me to come in and discuss how to invest my big rear end pile of cash. No offer of an LOC though. Are they even allowed to go around looking at your balance and then cold calling like that?
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# ? Jan 1, 2015 18:06 |
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Cultural Imperial posted:Are they even allowed to go around looking at your balance and then cold calling like that? Yes they are. You're doing business with them. It is categorically a part of what they do to know everything about your accounts and to look inside them whenever they want. And if you do actually have a big rear end pile of cash why not invest it yourself. You post in the Canadian Finance thread.
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# ? Jan 1, 2015 18:19 |
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ductonius posted:Yes they are. You're doing business with them. It is categorically a part of what they do to know everything about your accounts and to look inside them whenever they want. I didn't know that. It was the first time TD ever contacted me for anything. Yeah I already actively manage my money. gently caress TD.
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# ? Jan 1, 2015 18:23 |
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Anyone know of any good counterarguments against Mian and Sufi' house of debt?
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# ? Jan 1, 2015 18:28 |
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ductonius posted:The bank certainly carries responsibility in the situation as a party to the contract, and furthermore carries greater responsibility as the party with the greater resources and capacity to understand the financial situation in the deal. How could the bank possibly understand the borrower's financial situation as well as they do? For a major loan the bank knows what your income is, your credit rating, your major assets and liabilities, and that's about it. For a $2000 credit card I'm sure they don't even know that much. They arrive at some actuarially-determined interest rate which will make the loan profitable given some % default rate. The bank can't guess which borrowers will default and which won't, they just know some of them will. The borrower has vastly more information about their financial situation. Especially for a piddling entry-level credit card. The borrower should have a much better idea what their overall assets-to-liabilities situation is. The bank might know what it is on paper, but the borrower knows whether their rich Aunt Mabel is going to kick it next month, or whethecr the kids are going to need braces soon. What you do with your credit card will depend on what you expect your future cash flows to be and you have a *far* better idea of that than the bank does. quote:This is why bankruptcy courts routinely tell unsecured creditors like CC companies to go pound sand. No, that's because unsecured is a financial term meaning "if the borrower goes bankrupt, the court could tell you to go pound sand." Hence the high interest rates. It's not a punishment, it's just the rules of the game. Lexicon posted:Just... don't. Investing with leverage is a risky enough proposition, and this is not the way to go about it. Guest2553 posted:What would you do with the money that could make it worth it, unless you're already deep in the hole and trying to save on interest? Using it as leverage to invest is bad with money I know you guys are talking about credit cards, and in general this is super good advice. But I'm a tremendous pedant about financial stuff so I gotta point out that a university education is an investment made with leverage, and one which still has excellent returns.
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# ? Jan 1, 2015 18:31 |
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^ I get the argument, but I don't think it's helpful to lump in borrowing for tuition or even a housing purchase alongside borrowing to buy AAPL. The latter is a fundamentally different financial behaviour from the former, which are really a case of consumption smoothing.
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# ? Jan 1, 2015 18:42 |
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Cultural Imperial posted:I had a TD rep call me to ask me to come in and discuss how to invest my big rear end pile of cash. No offer of an LOC though.
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# ? Jan 1, 2015 19:05 |
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cowofwar posted:Buy gasoline and ammo. Oh and lots of non-perishable goods. And maybe a bunker in your backyard. Or a school bus http://channel.nationalgeographic.com/channel/doomsday-preppers/videos/the-bug-out/
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# ? Jan 1, 2015 19:18 |
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Cultural Imperial posted:I didn't know that. It was the first time TD ever contacted me for anything. I got so fed up with TD's incessant upselling that I had them put triplicate non-solicitation notices on my accounts, but I still have to chew the tellers out for ignoring them every time I go to deposit something. It's to the point that I avoid doing so as much as possible.
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# ? Jan 1, 2015 19:23 |
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Xoidanor posted:The general gist of it is that banks shouldn't be awarded for handing out loans that they themselves don't expect to get paid. That's the business model of a loan shark. Yeah a good amount of the real estate crash is just the banks being greedy and throw underwriting common sense to the wind. Also in a increasingly lovely economy like Canada i'm sure it becomes safe to find safe loans, so the banks start taking bigger risks by relaxing loan requirements.
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# ? Jan 1, 2015 19:29 |
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It's the consumer that goes to the bank/CC company asking for credit. The bank is the party that has the greatest control over whether they actually get it and they have the capacity to *find out* any piece of information they want before they give the consumer any loan. The fact that they hand out credit cards willy-nilly with fruit-loops maximums does nothing to diminish the fact that they could, at a moment's notice, decide to simply stop doing so. The borrower does have vastly more information about themselves, but it's the bank's entire job to know what information and/or situations make a person a credit risk and what is just statistical noise. This is part of what they do all day long and what their organs and machinations are set up to accomplish. To somehow think that they can decide to just not do this and their negligence somehow shuffles off responsibility onto the other party is absolutely horse-poo poo.
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# ? Jan 1, 2015 19:55 |
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Also, the bank is far better placed than the average borrower to make a dispassionate and emotion-free judgement about how much credit should be extended.
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# ? Jan 1, 2015 20:04 |
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Xoidanor posted:The general gist of it is that banks shouldn't be awarded for handing out loans that they themselves don't expect to get paid. That's the business model of a loan shark. etalian posted:Yeah a good amount of the real estate crash is just the banks being greedy and throw underwriting common sense to the wind. I think you guys have some pretty big misconceptions about banks and bank policy. I know those are pretty boring, technical fields, but if you want to criticize the banking system and be taken seriously you gotta be precise with your criticisms. Like, banks can't tell whether any given loan will be paid back. On an individual level the borrower has a much better idea than they do. Banks expect that some proportion of loans will go into default. They've got all sorts of complicated financial models, but those mostly say "For a client has income of A and net assets of B, we can charge X% interest rates and expect the loan's future cash flows to be Y, with a Z% chance of default." If a bank actually knew which loans wouldn't be repaid, they wouldn't make those loans in the first place. So, how could you stop banks from making "predatory" loans without also screwing over the people who legitimately want, need, and can afford a loan? Keep in mind that predatory borrowing is a thing too. Since the bank only gets a snapshot of my personal finances, I can trick them into giving me a loan I actually can't afford, then declare bankruptcy and avoid having to repay it. This is a scam that's as old as finance itself and still goes on today. Point being, if banks can't even reliably filter out the scammers, then how could they possibly be expected to filter out people who are financially illiterate? Everyone has a good credit score until they ruin it... There was a ton of predatory lending that happened in the run-up to the real estate crash. But it wasn't caused by "banks being greedy." Banks were greedy in 1997 and they'll still be greedy in 2017. Like I said above, the NINJA loans and sub-prime mortage bubble can be explained by the incentives facing banks, and the policies and institutions that shape those incentives. So the takeaway is that, if you're actually interested in preventing a future financial crisis, then subjecting insurance companies to greater regulatory scrutiny is one good place to start. And this is actually being done in Canada and the US. You can't outlaw people from being greedy, you just manage it. PS: Banks carry less overall risk when the economy is weak, not more. When times are good you can justify giant leverage ratios to your creditors and regulators by pointing to your profit margins. When times are bad, not so much.
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# ? Jan 1, 2015 20:12 |
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guys guys, what about the shareholder? The bank's ultimate responsibility is to the shareholder and thus can't be made responsible for underwriting losers who can't pay back their loans. Maybe we ought to be a little more charitable to those who are generous enough to extend their consideration to buying precious bank stocks which in turn make it possible for borrowers to enrich themselves with the providence of debt???????
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# ? Jan 1, 2015 20:12 |
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# ? May 10, 2024 07:40 |
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Not to mention things like small business or personal loans tend to be riskier. So the banks how the option to go for something risky like a business loan or they can go for mortgage loan which is backed by the CMHC. It's no wonder that mortgage payments have been creeping up rapidly over the last few years in terms of revenue share for Canadian banks.
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# ? Jan 1, 2015 20:25 |