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canyoneer posted:"I have so much money, that the risk of losing double digits on my emergency savings when I need it most by keeping it in an index fund doesn't outweigh the opportunity cost of keeping it in cash. In other words, I have such a favorable spread between earnings and expenses that I probably would never need to withdraw it anyway. I don't understand why this is a bad idea for the other 95% of the population who earn less than I do and/or have homes or families to support" No one said this. Keisari posted:The hell? That's illegal in the US? You're technically not allowed to use student loan money on anything other than school expenses. Dropping down to below eligible credits for student loans just means you have to pay them back which sounds like he did? Albeit on a payment plan.
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Mar 2, 2015 19:10
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Rurutia posted:You're technically not allowed to use student loan money on anything other than school expenses. Hahahah wow. I just read about the Finnish equivalent, this one info page says something along the lines of this. "A student loan is a loan taken by a student from a bank, which is meant to be used for studying expenses. However, this has not been / is not practically limited or controlled." Basically USA is bad with students. It just blows my mind that while this guy was a total moron, that he would be thrown into jail for it. The justice system threw some big "Does this guy get recruited by some organized criminal entity?" -dice.
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Mar 2, 2015 19:54
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Are student loans the same as they are in the USA? They're federally guaranteed, so you're defrauding the government by obtaining them under false pretenses ("they're for school"). I'm sure a real lawyer could explain it better, but student loans aren't "just" some money the bank has gladly made available to you around the time you go to school.
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Mar 2, 2015 20:02
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It should not be shocking that a lender wants to know what you plan to do with their money and that lying about it in order to obtain money via false pretenses is a crime.
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Mar 2, 2015 20:06
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Guinness posted:Man, I get that you have to 'punish' people for illegal gently caress ups, but our criminal justice system really does gently caress all to rehabilitate or get people back in a position to be able to support themselves. They're doomed to become an expensive drag on society. This is where the US is bad with money. Basic slave labour in prison for 2 years is preferred over someone being economically productive at a much higher level of productivity. The guy made a huge mistake in not concentrating on his degree. Nothing wrong with a part time business on the side while you are a student. Although he shouldn't have risked most of his loan money either.
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Mar 2, 2015 20:35
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xie posted:Are student loans the same as they are in the USA? They're federally guaranteed, so you're defrauding the government by obtaining them under false pretenses ("they're for school"). Gabriel Pope posted:It should not be shocking that a lender wants to know what you plan to do with their money and that lying about it in order to obtain money via false pretenses is a crime. Yeah well I dunno, here you can do whatever you want with it and is very common for someone who doesn't need it to take it anyway and then invest it. The financial magazines post about it and I remember reading one blog where this dude didn't need the student loans but took them anyway to invest with them. He told about it straight to the banker and the banker got really loving excited because it meant they could try to sell their investment products and do a loan. And yes the government insures it here too. If I recall correctly he also told some government officials responsible for backing the loan that he's just going to buy stocks with it, they frowned and told him it's supposed to be for school expenses but otherwise didn't do anything. I know the link is in Finnish but it's just as proof so you know I'm not just talking out of my rear end. I guess it boils down to a cultural difference. Here in Finland, student loans are just some money the bank gladly makes available to you when you go to university.  EDIT: The good news is that I now know to never advise an American to put his/her excess student loans into any sort of investment vehicle ever. Keisari fucked around with this message at 21:00 on Mar 2, 2015 |
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Mar 2, 2015 20:56
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canyoneer posted:"I have so much money, that the risk of losing double digits on my emergency savings when I need it most by keeping it in an index fund doesn't outweigh the opportunity cost of keeping it in cash. In other words, I have such a favorable spread between earnings and expenses that I probably would never need to withdraw it anyway. I don't understand why this is a bad idea for the other 95% of the population who earn less than I do and/or have homes or families to support" He actually got convicted and sent to prison for this? There has to be more to the story than that.
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Mar 2, 2015 21:10
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BEHOLD: MY CAPE posted:He actually got convicted and sent to prison for this? There has to be more to the story than that. I'm hearing this all third hand, but my understanding of it was that it was some combination of not actually being enrolled at the level he said he would, and thus not actually using the funds for their stated purpose.  Shouldn't ever take a bet you can't afford to lose
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Mar 2, 2015 21:15
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canyoneer posted:I'm hearing this all third hand, but my understanding of it was that it was some combination of not actually being enrolled at the level he said he would, and thus not actually using the funds for their stated purpose. Wait does enrolling mean applying for some level? Did he basically say "Yea I'm gon apply to this level" and then not apply, or did he apply but then just fail his classes or what? Because if he didn't even apply/loving try anything then I can understand why he could be charged with fraud, if he wasn't supposed to even get the loans in the first place.
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Mar 2, 2015 21:18
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Keisari posted:Wait does enrolling mean applying for some level? Did he basically say "Yea I'm gon apply to this level" and then not apply, or did he apply but then just fail his classes or what? Because if he didn't even apply/loving try anything then I can understand why he could be charged with fraud, if he wasn't supposed to even get the loans in the first place. quote:He also didn't maintain minimum enrollment in school, and had to pay back all the student loan money. You can see where this becomes a problem
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Mar 2, 2015 21:40
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That's what it sounds like to me. It's not so much that he used the excess of his student loans to start a business, it's that he took out student loans and then didn't enroll in enough credit hours, then started a business with the money that was supposed to be for his tuition.
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Mar 2, 2015 21:42
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zamin posted:That's what it sounds like to me. It's not so much that he used the excess of his student loans to start a business, it's that he took out student loans and then didn't enroll in enough credit hours, then started a business with the money that was supposed to be for his tuition. That's probably what happened. You don't get tossed in jail for failing classes, but you do get the attention of the law when you are taking out loans to pay for classes you have no intention of actually taking and using the loan money to do other stuff with.
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Mar 2, 2015 21:46
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Haifisch posted:Minimum enrollment means maintaining so many credit hours worth of classes per semester. The number needed varies by school and what type of aid you're getting. Either he didn't enroll in enough classes to maintain his aid or else he dropped classes, fell below the limit, and thought nobody would notice. Right so it was the combination of all that made it fraud.
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Mar 2, 2015 21:54
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I have so much money, that the risk of losing double digits on my emergency savings when I need it most by keeping it in an index fund doesn't outweigh the opportunity cost of keeping it in cash. In other words, I have such a favorable spread between earnings and expenses that I probably would never need to withdraw it anyway. I don't understand why this is a bad idea for the other 95% of the population who earn less than I do and/or have homes or families to support.
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Mar 2, 2015 22:06
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Boy, all this e-fund talk sure brings out the insufferable douchebags. Where's Slow Mo when you need him?
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Mar 2, 2015 22:12
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If you have no debt, are fully funding tax-advantaged retirement savings, and have enough money left over that you're putting meaningful amounts into taxable brokerage accounts, it doesn't matter much what you do after that point. It's taking a personal finance victory lap.
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Mar 2, 2015 22:29
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Grouco posted:Boy, all this e-fund talk sure brings out the insufferable douchebags. canyoneer posted:If you have no debt, are fully funding tax-advantaged retirement savings, and have enough money left over that you're putting meaningful amounts into taxable brokerage accounts, it doesn't matter much what you do after that point. I wasn't posting to boast if that's the implication. I honestly think this is where the more interesting discussion about personal finance starts - when you can't use the one size fits all obvious stuff. For example, there was the discussion about using the HSA as another retirement account vs. actually using it for medical expenses - where there are valid arguments on both sides. Or, one of my married friends are currently funding 529's even though they aren't planning to have kids for another 3 years, and my husband thinks this is stupid for us in case I turn up infertile  .
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Mar 2, 2015 22:42
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I really don't get throwing the student loan fraud dude in jail for two goddamn years and ruining his life. Make him responsible for repaying all the debt with interest/penalties, garnish the hell out of his wages, and make sure he can never get a federal loan again. Seems like enough of a punishment to me?
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Mar 2, 2015 22:42
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onemillionzombies posted:I really don't get throwing the student loan fraud dude in jail for two goddamn years and ruining his life. Make him responsible for repaying all the debt with interest/penalties, garnish the hell out of his wages, and make sure he can never get a federal loan again. Seems like enough of a punishment to me? The federal government is not known for their measured approach to situations.
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Mar 2, 2015 22:47
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I'm sure it was an overzealous prosecutor, which as far as I know is basically every prosecutor. His only saving grace was a sympathetic judge/jury annnnnd no. The U.S. has such a retarded hard-on for punishment.
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Mar 2, 2015 22:53
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Yeah, sounds to me like he took the money, went to school but used loan money to start a business, then when it started going bad, he focused on the business and semi-dropped out of school. Then when he got caught and it all hit the fan, he either had a lovely lawyer or none at all and got reamed.
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Mar 2, 2015 23:00
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I think the gov opinion is make an example of the guy for us to chat online about and it might prevent the next guy vs letting more offenders off easy. Not saying it is not stupid, just trying to see the other side.
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Mar 2, 2015 23:24
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Mercury Ballistic posted:I think the gov opinion is make an example of the guy for us to chat online about and it might prevent the next guy vs letting more offenders off easy. Not saying it is not stupid, just trying to see the other side. Then they probably should have skinned him alive and got the skin a twitter account to post "AAAAAHHH AAH AH AAAAAAAH IT HURTS MOMMY IT HURTS" all day long. That would learn everyone around the world we'll loving kill you if you don't give that money to a diploma mill proper so you can balance the books for a couple of Hardees', bitch.
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Mar 2, 2015 23:32
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AgrippaNothing posted:Then they probably should have skinned him alive and got the skin a twitter account to post "AAAAAHHH AAH AH AAAAAAAH IT HURTS MOMMY IT HURTS" all day long. That would learn everyone around the world we'll loving kill you if you don't give that money to a diploma mill proper so you can balance the books for a couple of Hardees', bitch. Please stop kinkshaming me.
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Mar 2, 2015 23:49
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I'm so confused by the student loan thing there just has to be a ton of info missing. I'm a grad student and poo poo, the vast majority of people take out more loans than they need and do dumb poo poo with the extra like travel or whatever [in other words, not spending it on school related expenses]. It must either be that there is a specific law against using student loan money to invest/start a business or he was doing seriously sketchy stuff. People flunk out all the time so I don't see how the fact that he dropped below enrollment matters. In that scenario his bill just comes due sooner than if he had stayed in school. In every school I have attended you get transferred any excess loan money after the school has already taken their cut anyway.
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Mar 3, 2015 04:00
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Scenty posted:I'm so confused by the student loan thing there just has to be a ton of info missing. I'm a grad student and poo poo, the vast majority of people take out more loans than they need and do dumb poo poo with the extra like travel or whatever [in other words, not spending it on school related expenses]. It must either be that there is a specific law against using student loan money to invest/start a business or he was doing seriously sketchy stuff. People flunk out all the time so I don't see how the fact that he dropped below enrollment matters. In that scenario his bill just comes due sooner than if he had stayed in school. In every school I have attended you get transferred any excess loan money after the school has already taken their cut anyway. It's not just for tuition costs, it's for other school-related expenses and purchases, too. But yes, the system is still flawed.
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Mar 3, 2015 04:44
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Scenty posted:I'm so confused by the student loan thing there just has to be a ton of info missing. I'm a grad student and poo poo, the vast majority of people take out more loans than they need and do dumb poo poo with the extra like travel or whatever [in other words, not spending it on school related expenses]. It must either be that there is a specific law against using student loan money to invest/start a business or he was doing seriously sketchy stuff. People flunk out all the time so I don't see how the fact that he dropped below enrollment matters. In that scenario his bill just comes due sooner than if he had stayed in school. In every school I have attended you get transferred any excess loan money after the school has already taken their cut anyway. The student loan documents specifically require immediate repayment of any money not used for educational expenses. It's just only enforced in blatant cases.
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Mar 3, 2015 06:42
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Grouco posted:Boy, all this e-fund talk sure brings out the insufferable douchebags. )Series DD Funding posted:The student loan documents specifically require immediate repayment of any money not used for educational expenses. It's just only enforced in blatant cases.
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Mar 3, 2015 07:20
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Newlywed Couple Looks So Deeply In Debt This is a funny Onion article.
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Mar 3, 2015 07:21
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Haifisch posted:
quote:... (going to ITT was one of the worst decisions of my life), ... Everyone who goes to ITT says the same thing.
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Mar 3, 2015 15:43
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Haifisch posted:Now Reddit is where you go to watch a train wreck in slow motion. (Not quoting the story here because it's really just sad and unfortunate, not bad with money, but the title was relevant. God it is sad, because if he had any entry-level quality corporate job he could handle the bills (but obviously not the surprise medical concerns).
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Mar 3, 2015 15:47
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Somebody should tell Betterment and their advice to keep your emergency fund + 30% in a conservatively invested index fund that they're bad with money.
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Mar 3, 2015 19:58
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One of my girlfriend's friends is pretty bad with money, despite having loads of it. She's in her mid 20's, and has an engineering degree that was almost entirely paid for with scholarships and help from her dad, so good on her for avoiding the massive amount of student loan debt so many millennials are in. She has spent all of her college years and most of her years after graduating working for her dad, almost entirely under the table. She gets a token paycheck to make the IRS happy (from her dad's business's point of view, that is) but then he'll just give her most of her salary in cash later. So she is likely going to be in very hot water with the IRS soon. She has also never had a credit card until about six months ago, and never had a car loan, thanks to buying in cash (first couple cars were used purchased from family, but last year she bought a new $30k car in cash.) So that's the other part...she has TONS of money saved up, thanks to a massive under the table, tax-free salary from her dad. And other than that new car, she has lived well below her means. Even after that car purchase, she has over $50k in savings for emergencies and a soon-to-be house down-payment. But as mentioned, she has almost no credit history. The recent credit card was gotten at the suggestion of someone from her bank to at least get some sort of credit history before she applies for a mortgage. She also chooses not to get any health or life insurance (doesn't "believe" in it, so...yeah,) does not put any of her ample extra income towards a retirement plan, etc... She certainly has the means and capability to get on the right track right away, but just chooses not to. I've had a few conversations with her, and it's a combination of being fairly hard-core libertarian (so she is against giving the IRS more money by declaring all her income, or going back to work for a company that will do things by the books,) combined with a common young person's idea of "that's so far away, why worry about it now?" (for things like retirement, and health issues...because EVENTUALLY she will encounter some sort of health issue that could easily wipe out her savings that wouldn't have had she had insurance.)
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Mar 3, 2015 20:30
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People with legitimately wealthy parents (and not just "200k salary/210k expenses") don't really think about retirement and I can't really blame them. One of my best friends is on perfectly good terms with his parents. They're quietly wealthy, not flashy, own property and are pretty well diversified, own a book of business that's easily worth 6 figures when they retire, he has 1/4 of a house in his name that he gets when his grandmother dies, etc. As rational people who aren't wealthy we can sit back and say "well what if something happens to them/the money/your relationship/medically," etc but in the same way you can't teach a teenager not to be an idiot when it comes to dating you can't teach someone who has no context about money. PS her parents will probably just co-sign for whatever she needs because they're wealthy.
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Mar 3, 2015 20:41
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There's a debate raging in an internal investment mailing list at my company about what a new hire should put into their 401k. Well, it's not so much a debate about that as an argument wether or not someone making less than $100k can possibly max out their 401k. There are a whole lot of people who think it's utterly impossible and laughable to even suggest (mostly from the SF Bay Area) and a few people who think those people are insane for thinking that (mostly from Texas, Colorado, and North Carolina.)
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Mar 3, 2015 21:16
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xie posted:People with legitimately wealthy parents (and not just "200k salary/210k expenses") don't really think about retirement and I can't really blame them. I can. Counting on an inheritance is bad with money. If my parents had relied on the multi-million dollar inheritance they should have gotten and hadn't saved for retirement, they would have nothing today. My in-laws are quite wealthy but there's no way we're going to count on getting a large part of it, even though that's how the will reads as of now. I've seen old people make really stupid financial moves, or just decide that they don't care about leaving an inheritance anymore and make it their mission to spend it all. Even if something is seriously affecting their mental state (in my grandmother's case, 20 years of alcoholism and depression), unless the person can be declared legally incompetent there's nothing any of the heirs can do to protect the money. And by protect it, I mean for the owner's continued necessary expenses, not for a future inheritance.
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Mar 3, 2015 21:19
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Inverse Icarus posted:There's a debate raging in an internal investment mailing list at my company about what a new hire should put into their 401k. In all fairness, it's pretty unreasonable to ask a 45 year old living in the Bay Area to get a 3rd or 4th room mate. They should however cut their expenditures on artisanal toasts, but that's only going to help so much.
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Mar 3, 2015 21:22
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xie posted:People with legitimately wealthy parents (and not just "200k salary/210k expenses") don't really think about retirement and I can't really blame them. On the other hand, my parents have far, far more than that wealth-wise (think eight, not six figures), and have given me absolutely no idea whether they're going to leave me an inheritance or not. So, of course I'm planning on not receiving one, but wealthy parents don't automatically mean financial spoiled idiots.
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Mar 3, 2015 21:52
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Radbot posted:think eight, not six figures What would they be doing with their tens of millions of dollars? Giving it away to charity? Even for someone used to the finer things, it would be challenging to spend all of that down in your later years. Ask them to save you a cool million as a favor.
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Mar 3, 2015 22:03
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I don't think my good friend is an idiot, and he's certainly not spoiled. The only times they've ever given him money are when he had an awful, awful pile of medical bills, and they loaned him the "start up" money to move to the city (First/Last/Deposit). He spends less than he earns, doesn't even have a credit card (bad with money in the opposite direction, but still), etc. It's just that when you start talking about IRAs and saving 10-15% minimum it doesn't compute. His parents absolutely have 7 figures in cash/property/etc. and are slowly winding down their business. The business is located on their 40+ acre property as well, so when they retire to FL I'm sure it'll all get sold. Yes, parents don't owe you anything at all, but if you can sit these people down and explain all of it then there's probably a career in financial counseling in your future. note: I said I can't blame them, not that they're correct or that it isn't stupid. It's very difficult to get someone to learn a lesson on paper that they haven't had to learn IRL.
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Mar 3, 2015 22:05
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