3 ms·

I don't know if the numbers in the comment you're referring to are correct, but let's assume they're close enough and do the math. If I pay $5 every other day

I don't know if the numbers in the comment you're referring to are correct, but let's assume they're close enough and do the math. If I pay $5 every other day for 10 diapers, then I'm paying ~$75/month for 150 diapers. $0.50/diaper, $2.50/day. If I take a pay day loan of $30 for a 200 pack of diapers, then I've just brought a 40 day supply of diapers. $0.15/diaper, $0.75/day. After 16 days I've recouped my original investment of a $30 loan + $10 fee. By the time day 40 rolls around and I run out of diapers, I've saved $60. I can now afford to buy bulk diapers in perpetuity. For every subsequent month, I'll be spending $52.5 less on diapers.

FuckOffNeemo 9y ago
Good luck finding a legal loan shark that only charges $10. I can only speak from the fees here in Australia but here, for a small loan. You're looking at a minimum fee of 200-300% and that's assuming you pay on time. This is why legal loan sharks exist, and if this method actually did work as you intended it, why do legal loan sharks still exist? Couldn't you apply your macroeconomics to everything? Food? Nappies? Water? Bulk buy all of your items on legal loan sharks just once and you're ahead. 1) Get a small loan 2) Buy all the small disposable/consumables you require in bulk and reap the savings 3) Pay off the loan with 200-300% in fees on top, assuming you pay it off in time 4) ... 5) Profit!
- lulmerchant 9y ago
  At 200% you still come out ahead after your first packet of diapers. As somebody who grew up in abject poverty, and who lived in poverty for the first portion of their adult life, better planning will absolutely make situations like this instantaneouly better. When I was poor as hell I put a huge amount of effort into buying in bulk and doing various other things to avoid all of the blindingly obvious poverty traps that exist. It took some hardship to get everything established properly, but my whole life was hardship, so big deal... Most people in the west could get away with living a sustainable (although shitty) lifestyle in poverty. It’s only proper planning and effort that will pull them out of it.
  - FuckOffNeemo 9y ago
    @lulmerchant I'm from a poor working background too. You can look through my comment history, topics of poverty, drug abuse and macroeconomics are some of the many topics that typically interest me enough to contribute to the conversation here on Hacker News. Your logic is absolutely sound, but in the event or period where you've taken the loan and have to pay it off in 1-2 weeks. What happens when said parents child gets sick and requires more nappies that day? Perhaps they need medication. Maybe they lost some cash walking to the grocery store. They lost a days work. There's no room for error and when or if that occurs. The entire benefit goes backwards and you end up losing so much more than you hoped to gain. There's a whole myriad of reasons that could contribute to this loan going backwards when you have 0 disposable income. But if you're borrowing $30 for nappies, it would not take much to then push you outside of that fortnightly budget so you are not able to meet your legal loan sharks contractual payments and that, by definition, is a financial slippery slope. The financial industry relies on people like this, I would assume for every credit card owner that has 55 interest days free or a 0% balance transfer. There's another 9 who don't pay off in time and will incur interest charges and fees and make the entire business venture profitable. Legal Loan sharks are profit driven, they are not providers of care, and they are not their to help you get ahead so you do not need to use their services again. Their business model is the exact opposite. They assume you will need to go back, and go back repeatedly. You'd do well to watch Episode 2 of Dirty Money on Netflix - Payday. The entire episode is essentially a business case for why Loan Sharks should be avoided at all costs. But the thing is, your maths is _correct_. So instead why can't we loan this person who lives in poverty from non-profits and similar who want to _help_ if it's so logically sound that allowing those in poverty to buy in bulk, will allow them to get ahead?
    - lulmerchant 9y ago
      I don’t disagree with most of that. The loan shark maths is just one (rather contrived) example of how a person can break out of a particular poverty trap. It’s harder to break out of a poverty trap than it is to live with one, but it’s much easier to stay out of one than it is to live with it. My point is that with the correct effort, people can generally break free of most of the poverty traps they find themselves in. To speak to your last point, there generally are non-profits around who help with these sort of things, and I used some of them myself in the past. The thing that non-profits can provide so simply is the motivation and discipline required to maintain a well planned budget. Each small thing that you improve, like buying diapers in bulk, is a step towards escaping poverty, and everybody has the capacity to do those things.
- deleted 9y ago
  [deleted]
briandear 9y ago
If you had the intelligence to do that calculation, you would have the intelligence to not be in such a desperate situation in the first place.
- FuckOffNeemo 9y ago
  That's not intelligence, it's privilege and having sufficient disposable income to invest in cost saving. Items like chest freezers that cost more electricity to run, but allow me to buy more food and freeze it. At the cost of larger electricity bills. It's having enough money for fuel so I can drive 80km to Costco. It's having /time/ so I can just do the baths of all the above because I'm not working 60 hour weeks to feed the family.
- lulmerchant 9y ago
  That’s grade school arithmetic. We’re not talking about people who aren’t intelligent enough to do arithmetic, we’re talking about people who don’t have the correct mindset and motivation to make small, incremental investments in their future.
ggg9990 9y ago
This may be accurate math but it’s also the thought process of a non-indigent person sitting at a computer, not the thinking of someone who works all day for $8.25 and hour and is taking care of a newborn and trying to make ends meet.

FuckOffNeemo 9y ago

Good luck finding a legal loan shark that only charges $10. I can only speak from the fees here in Australia but here, for a small loan. You're looking at a minimum fee of 200-300% and that's assuming you pay on time. This is why legal loan sharks exist, and if this method actually did work as you intended it, why do legal loan sharks still exist? Couldn't you apply your macroeconomics to everything? Food? Nappies? Water? Bulk buy all of your items on legal loan sharks just once and you're ahead. 1) Get a small loan 2) Buy all the small disposable/consumables you require in bulk and reap the savings 3) Pay off the loan with 200-300% in fees on top, assuming you pay it off in time 4) ... 5) Profit!

lulmerchant 9y ago
At 200% you still come out ahead after your first packet of diapers. As somebody who grew up in abject poverty, and who lived in poverty for the first portion of their adult life, better planning will absolutely make situations like this instantaneouly better. When I was poor as hell I put a huge amount of effort into buying in bulk and doing various other things to avoid all of the blindingly obvious poverty traps that exist. It took some hardship to get everything established properly, but my whole life was hardship, so big deal... Most people in the west could get away with living a sustainable (although shitty) lifestyle in poverty. It’s only proper planning and effort that will pull them out of it.
- FuckOffNeemo 9y ago
  @lulmerchant I'm from a poor working background too. You can look through my comment history, topics of poverty, drug abuse and macroeconomics are some of the many topics that typically interest me enough to contribute to the conversation here on Hacker News. Your logic is absolutely sound, but in the event or period where you've taken the loan and have to pay it off in 1-2 weeks. What happens when said parents child gets sick and requires more nappies that day? Perhaps they need medication. Maybe they lost some cash walking to the grocery store. They lost a days work. There's no room for error and when or if that occurs. The entire benefit goes backwards and you end up losing so much more than you hoped to gain. There's a whole myriad of reasons that could contribute to this loan going backwards when you have 0 disposable income. But if you're borrowing $30 for nappies, it would not take much to then push you outside of that fortnightly budget so you are not able to meet your legal loan sharks contractual payments and that, by definition, is a financial slippery slope. The financial industry relies on people like this, I would assume for every credit card owner that has 55 interest days free or a 0% balance transfer. There's another 9 who don't pay off in time and will incur interest charges and fees and make the entire business venture profitable. Legal Loan sharks are profit driven, they are not providers of care, and they are not their to help you get ahead so you do not need to use their services again. Their business model is the exact opposite. They assume you will need to go back, and go back repeatedly. You'd do well to watch Episode 2 of Dirty Money on Netflix - Payday. The entire episode is essentially a business case for why Loan Sharks should be avoided at all costs. But the thing is, your maths is _correct_. So instead why can't we loan this person who lives in poverty from non-profits and similar who want to _help_ if it's so logically sound that allowing those in poverty to buy in bulk, will allow them to get ahead?
  - lulmerchant 9y ago
    I don’t disagree with most of that. The loan shark maths is just one (rather contrived) example of how a person can break out of a particular poverty trap. It’s harder to break out of a poverty trap than it is to live with one, but it’s much easier to stay out of one than it is to live with it. My point is that with the correct effort, people can generally break free of most of the poverty traps they find themselves in. To speak to your last point, there generally are non-profits around who help with these sort of things, and I used some of them myself in the past. The thing that non-profits can provide so simply is the motivation and discipline required to maintain a well planned budget. Each small thing that you improve, like buying diapers in bulk, is a step towards escaping poverty, and everybody has the capacity to do those things.
deleted 9y ago
[deleted]

briandear 9y ago

If you had the intelligence to do that calculation, you would have the intelligence to not be in such a desperate situation in the first place.

FuckOffNeemo 9y ago
That's not intelligence, it's privilege and having sufficient disposable income to invest in cost saving. Items like chest freezers that cost more electricity to run, but allow me to buy more food and freeze it. At the cost of larger electricity bills. It's having enough money for fuel so I can drive 80km to Costco. It's having /time/ so I can just do the baths of all the above because I'm not working 60 hour weeks to feed the family.
lulmerchant 9y ago
That’s grade school arithmetic. We’re not talking about people who aren’t intelligent enough to do arithmetic, we’re talking about people who don’t have the correct mindset and motivation to make small, incremental investments in their future.

ggg9990 9y ago

This may be accurate math but it’s also the thought process of a non-indigent person sitting at a computer, not the thinking of someone who works all day for $8.25 and hour and is taking care of a newborn and trying to make ends meet.