5 ms·

And people wonder why they say Tech is out of touch. Reading the comments here is a great demonstration. Examples: > who uses savings accounts anymore? > Cas

And people wonder why they say Tech is out of touch. Reading the comments here is a great demonstration. Examples: > who uses savings accounts anymore? > Cash on hand or it's invested in stocks, bonds and my home. > The truth is you're losing more money by not having any of it generating higher potential yields. > the total net worth of my wife and me is many orders of magnitude greater than what our savings account reflects These kind of statements just show that the audience here is woefully out of touch with the average person. The average person in the US is unable to absorb a $1000 emergency. The average person in the US avoids going to the doctor because they can't afford it. The average person in the US doesn't have enough money to justify an investment account of any kind. But we in tech are privileged and goddamnit if we're not mostly (as a group) utterly blind to it... or worse - in denial that we are (and aggressively defensive about it). The median household income in the US is $51,939 the median individual income in the US is $28,567. Note: median, not mean. That is the financial reality of the average american. In tech we're used to making 6 figures and then bitching that other people aren't trying hard enough. We quibble over what "in savings" means. We try our hardest to minimize problems that we ourselves don't experience rather than work on the very real, very clear, issues at hand. This feels like we have a maturity and empathy problem as an industry to me...

throwawaymsft 11y ago
Thank you, the comments look like something from the Onion. "Oh, I don't have any savings either, it's all tied up in my money market account, stock portfolio, house, car, and business." When someone reads "less than $1000 in savings" and interprets it as "they must mean less than $1000 in a single investment vehicle" there's a huge empathy gap.
- abritinthebay 11y ago
  Seriously, the headlines write themselves: "Young Tech Entrepreneur Says People in Poverty Just Need To Have More Money."
luther07 11y ago
Thank you. This is the only interesting comment in this thread.
Artistry121 11y ago
This doesn't parse. You just said the median household income is $51,939. That's a ton of money. I and many spend far less than that. http://www.mrmoneymustache.com/2015/01/16/exposed-the-mmm-familys-2014-spending/ http://www.mrmoneymustache.com/2015/01/16/exposed-the-mmm-fa... Even throwing on a mortgage payment a couple can easily afford this - and this is a lot of luxury.
- OrwellianChild 11y ago
  Aggressive MMM savings strategies aside, $52k isn't a ton of money... Your profile says you are in Kansas City, so lets run some numbers really quick... $52k means take-home (after tax) is about $38.5k. This site [1] says monthly rent is about $1.4k plus $150 in utilities. One car payment on modest transportation will be about $200/month and insurance and gas might cost $200 more. We're up to about $2k/month in expenses for what is a relatively normal cost structure. That monthly take-home on $38.5k annually? $3.2k. We're down to $1.2k remaining cash each month and haven't considered heathcare, food, student loans, retirement, savings. And there aren't any kids in this equation yet, which causes another pile of problems if we assume the 1.8/family rate from the CIA Factbook. These are just ball-park, but then, so is that household income. It is very easy to eat up income without living an extravagant lifestyle full of smartphones, laptops, and luxury vehicles. [1] https://www.expatistan.com/cost-of-living/kansas-city https://www.expatistan.com/cost-of-living/kansas-city
  - lmm 11y ago
    $1.4k is way too much for somewhere that you're still driving to work from. I think a lot of people overestimate the value of a big house. You just end up filling it with junk. If you get a smaller house - say $1k/month - suddenly you can afford to live very comfortably, and save some as well. $52k is absolutely a lot of money; of course there's always more things to spend it on, and I won't pretend more money isn't very nice, but $52k really should be plenty. Putting it another way: if $52k isn't enough to make you happy, $100k probably won't be either.
    - OrwellianChild 11y ago
ghaff 11y ago
Without really disagreeing with a number of things you say, it's also fair to say that we have an entire article based around a question the answer to which is essentially meaningless (given how low interest rates on checking accounts are). I expect that, for a broader population, a better question would be around the size of their "emergency fund."
- abritinthebay 11y ago
  > I expect that, for a broader population, a better question would be around the size of their "emergency fund." Which other studies have revealed is "basically $0". This question is highly correlated with what you are referring to for the average American. You're just in a bubble so you don't see the relation because it's not related for you. That's ok, but what I'm pointing out is that it's not "essentially meaningless" and dismissing it as such is actually being out-of-touch.
  - ghaff 11y ago
    I think you're probably right that you could ask this question in a number of different ways and come up with at least highly correlated results. I'm not arguing with you. However, as someone involved in surveys among other things as part of my work, I do think precision matters. Otherwise, interpreting the results lead to exactly the sort of arguments you're seeing on this thread.
    - abritinthebay 11y ago
      That's fair in general but this kind of stuff ALWAYS comes up on this topic on HN. It's derailing behavior.
KirinDave 11y ago
Hi. I agree most people here are out of touch. While I am no longer in such a desperate situation, I was once in a few of them. I resolved to, and ultimate worked for and sold a financial product to help people with many of the problems they now face (sort of not making enough money or being in a debt spiral, but give me a few years to amass capital and I can try that too). I assure you, I have excellent data we use to help understand what features our customers need and which features customers do not need. I share your frustration, but would like to provide some alternative narrative around this story for the benefit of the audience here. Consumers avoid savings accounts across the board of income. They do this because financial advisors, both public on TV and private, tell them to. Many lack liquidity at the scale of 4 figures, but even those that have that avoid them. They do this for a lot of reasons, but it's incorrect to imply that the only reason they do so is because they don't have a cash buffer. In fact, our data suggests a surprising number of people keep a cash buffer when they'd be much better served paying down credit card debt with that money (and of course, better still served by converting a large revolving debt to a more attractive fixed loan). Again, many reasons (e.g., protection from credit-related cash seizure) exist to justify this approach at all income levels. Stories like this exist to belittle younger generations and further the narrative that our nations financial decline is somehow tied to the imprudence of its younger and more vulnerable citizens. This could not be further from the case; the real story is one of outrageous wealth extraction from the young to the old without a hint of remorse or self-reflection. That story spans many financial domains and also places like property tax law and policies around public health care. Stories like this also exist to push the burden of innovation off of banks, who say, "No one uses these savings products so we should focus on spending products." The point, "Your savings tools are terrible" is seldom offered. Stories like this are solicited carefully, by highly paid people, to help avoid painful discussions like, "Should the savings account rate be locked to at least the rate of inflation?" that many people (including people at the CFPB) have raised. Just sayin', this article is not only a pile of garbage, but it's a meticulously crafted pile of garbage designed to tell a toxic narrative.
- hiram112 11y ago
  ...the real story is one of outrageous wealth extraction from the young to the old without a hint of remorse or self-reflection. Bingo. More than half of your taxes are directly transferred to retirees. Those debt payments on your school loans are paid back to investors, many of whom are large pension funds and insurance / annuity accounts. The Fed has refused to allow a housing market correction, which is an implicit transfer from young to old. And the main point of Obamacare was to force young people to purchase insurance in order to subsidize the older generation. But if younger people would just stop going to Starbucks and buying IPhones, they wouldn't have any financial problems.
luther07 11y ago
> We try our hardest to minimize problems that we ourselves don't experience rather than work on the very real, very clear, issues at hand. >This feels like we have a maturity and empathy problem as an industry to me... Fully agree.

throwawaymsft 11y ago

Thank you, the comments look like something from the Onion. "Oh, I don't have any savings either, it's all tied up in my money market account, stock portfolio, house, car, and business." When someone reads "less than $1000 in savings" and interprets it as "they must mean less than $1000 in a single investment vehicle" there's a huge empathy gap.

abritinthebay 11y ago
Seriously, the headlines write themselves: "Young Tech Entrepreneur Says People in Poverty Just Need To Have More Money."

luther07 11y ago

Thank you. This is the only interesting comment in this thread.

Artistry121 11y ago

This doesn't parse. You just said the median household income is $51,939. That's a ton of money. I and many spend far less than that. http://www.mrmoneymustache.com/2015/01/16/exposed-the-mmm-familys-2014-spending/ http://www.mrmoneymustache.com/2015/01/16/exposed-the-mmm-fa... Even throwing on a mortgage payment a couple can easily afford this - and this is a lot of luxury.

OrwellianChild 11y ago
Aggressive MMM savings strategies aside, $52k isn't a ton of money... Your profile says you are in Kansas City, so lets run some numbers really quick... $52k means take-home (after tax) is about $38.5k. This site [1] says monthly rent is about $1.4k plus $150 in utilities. One car payment on modest transportation will be about $200/month and insurance and gas might cost $200 more. We're up to about $2k/month in expenses for what is a relatively normal cost structure. That monthly take-home on $38.5k annually? $3.2k. We're down to $1.2k remaining cash each month and haven't considered heathcare, food, student loans, retirement, savings. And there aren't any kids in this equation yet, which causes another pile of problems if we assume the 1.8/family rate from the CIA Factbook. These are just ball-park, but then, so is that household income. It is very easy to eat up income without living an extravagant lifestyle full of smartphones, laptops, and luxury vehicles. [1] https://www.expatistan.com/cost-of-living/kansas-city https://www.expatistan.com/cost-of-living/kansas-city
- lmm 11y ago
  $1.4k is way too much for somewhere that you're still driving to work from. I think a lot of people overestimate the value of a big house. You just end up filling it with junk. If you get a smaller house - say $1k/month - suddenly you can afford to live very comfortably, and save some as well. $52k is absolutely a lot of money; of course there's always more things to spend it on, and I won't pretend more money isn't very nice, but $52k really should be plenty. Putting it another way: if $52k isn't enough to make you happy, $100k probably won't be either.
  - OrwellianChild 11y ago

ghaff 11y ago

Without really disagreeing with a number of things you say, it's also fair to say that we have an entire article based around a question the answer to which is essentially meaningless (given how low interest rates on checking accounts are). I expect that, for a broader population, a better question would be around the size of their "emergency fund."

abritinthebay 11y ago
> I expect that, for a broader population, a better question would be around the size of their "emergency fund." Which other studies have revealed is "basically $0". This question is highly correlated with what you are referring to for the average American. You're just in a bubble so you don't see the relation because it's not related for you. That's ok, but what I'm pointing out is that it's not "essentially meaningless" and dismissing it as such is actually being out-of-touch.
- ghaff 11y ago
  I think you're probably right that you could ask this question in a number of different ways and come up with at least highly correlated results. I'm not arguing with you. However, as someone involved in surveys among other things as part of my work, I do think precision matters. Otherwise, interpreting the results lead to exactly the sort of arguments you're seeing on this thread.
  - abritinthebay 11y ago
    That's fair in general but this kind of stuff ALWAYS comes up on this topic on HN. It's derailing behavior.

KirinDave 11y ago

Hi. I agree most people here are out of touch. While I am no longer in such a desperate situation, I was once in a few of them. I resolved to, and ultimate worked for and sold a financial product to help people with many of the problems they now face (sort of not making enough money or being in a debt spiral, but give me a few years to amass capital and I can try that too). I assure you, I have excellent data we use to help understand what features our customers need and which features customers do not need. I share your frustration, but would like to provide some alternative narrative around this story for the benefit of the audience here. Consumers avoid savings accounts across the board of income. They do this because financial advisors, both public on TV and private, tell them to. Many lack liquidity at the scale of 4 figures, but even those that have that avoid them. They do this for a lot of reasons, but it's incorrect to imply that the only reason they do so is because they don't have a cash buffer. In fact, our data suggests a surprising number of people keep a cash buffer when they'd be much better served paying down credit card debt with that money (and of course, better still served by converting a large revolving debt to a more attractive fixed loan). Again, many reasons (e.g., protection from credit-related cash seizure) exist to justify this approach at all income levels. Stories like this exist to belittle younger generations and further the narrative that our nations financial decline is somehow tied to the imprudence of its younger and more vulnerable citizens. This could not be further from the case; the real story is one of outrageous wealth extraction from the young to the old without a hint of remorse or self-reflection. That story spans many financial domains and also places like property tax law and policies around public health care. Stories like this also exist to push the burden of innovation off of banks, who say, "No one uses these savings products so we should focus on spending products." The point, "Your savings tools are terrible" is seldom offered. Stories like this are solicited carefully, by highly paid people, to help avoid painful discussions like, "Should the savings account rate be locked to at least the rate of inflation?" that many people (including people at the CFPB) have raised. Just sayin', this article is not only a pile of garbage, but it's a meticulously crafted pile of garbage designed to tell a toxic narrative.

hiram112 11y ago
...the real story is one of outrageous wealth extraction from the young to the old without a hint of remorse or self-reflection. Bingo. More than half of your taxes are directly transferred to retirees. Those debt payments on your school loans are paid back to investors, many of whom are large pension funds and insurance / annuity accounts. The Fed has refused to allow a housing market correction, which is an implicit transfer from young to old. And the main point of Obamacare was to force young people to purchase insurance in order to subsidize the older generation. But if younger people would just stop going to Starbucks and buying IPhones, they wouldn't have any financial problems.

luther07 11y ago

> We try our hardest to minimize problems that we ourselves don't experience rather than work on the very real, very clear, issues at hand. >This feels like we have a maturity and empathy problem as an industry to me... Fully agree.