4 ms·

Grew up poor, made it a little in life - could maybe retire now. The things I and the people I grew up with don't know how to do at all can be shocking. People

by bane 1y ago

Grew up poor, made it a little in life - could maybe retire now. The things I and the people I grew up with don't know how to do at all can be shocking. People who grew up similarly and ended up in middle class seem to be similar unless they put real time into it: - how to buy stocks, what ETFs are, what a 401(k) is, etc. - hiring people to clean your house, do yard work, etc. - traveling out of the country, or in many cases, how to take a plane to a part of the country that's too far to drive - how financing works, ranges from personal credit cards to mortgages, and thus what TCO means. The number of people I grew up with who were fine with 12% on a car loan and what that meant to the final cost of the car is flabbergasting - how to buy high-quality (expensive) stuff vs brand recognition (expensive) stuff some anecdotes: - a friend of mine recently did retire after 30 years in the government, wanted to buy stocks, had no idea what a brokerage was - another guy I know, an airline pilot who grew up in a broken home and ended up with a business degree, figured out how to buy stocks, but didn't know what index funds were or that they exist outside of his 401(k) - perfectly middle class people who will spend all weekend cleaning their house and doing yard work, and hate it, who thought hiring a cleaning person and lawn mowing guy would be too expensive ($35k-50k/yr) - a lot of people I know are afraid to travel to non-English speaking countries even if they've been outside of the U.S., they can't fathom that you can get by in most places with English, a translate app, and pointing and smiling. Even tourist friendly places with plenty of English signage and English speaking help like France or Japan are unfathomably exotic

jjice 1y ago
I find this super interesting and something I've thought about a bit in the past. All of these things combined are relatively simple. You could give a decent breakdown of each bullet point within an hour each, with room to dive in deeper if needed. Now with the internet and all the great resources out there, the access is there for most people (in a place like the US) to learn about these. I think the main problem now is that these are "unknown unknowns". People don't even know to know what a 401k or similar is and thus don't know that there's something to dive deeper into there. That missing piece is very hard to solve. I've had it myself where I run into something in my career, for example, where I'm introduced to a concept I wasn't aware of that I now use to underpin serious decision making about something like application architecture. Had I never had the opportunity to initially find out about a problem/solution, it would've made it notably harder to get better. All the things you lists are things I personally associate with familial education. Most of those things were taught to my by my family, having grown up in a middle class home. If my parents hadn't had the opportunity to learn about those, neither would I. It's a familial/potentially class (depending on the situation) based learning opportunity, purely based on the education your family was able to receive (whether formal or not). School is also a place to inject these concepts (personal finance specifically), and I did have a great experience with the personal finance elective at my high school when I was in 9th grade. Tangentially, I don't think that's a perfect solution (but still important) because teenagers will absolutely ignore/tune in the info out. When people say they wish that had learned how to do their taxes in high school, I agree in principle and I do think it should be taught, but I also believe most teenagers (at least around me growing up) wouldn't have payed any attention. It doesn't mean we shouldn't teach it, but educating a teen is hard.
- bane 1y ago
  yup, it's very hard to bootstrap without knowing where the next step even is in a dark room. > All the things you lists are things I personally associate with familial education. I absolutely agree. Or some good mentor. If your entire family runs paycheck to mouth, the likelihood of somebody able to guide you towards a low fee brokerage that provides you with the financial advice to differentiate between different investment instruments is vanishingly small. Even people who make it into white-collar jobs with 401ks are likely to only vaguely understand that it's something more than a weird savings account they can't touch. Investment takes a certain kind of stomach and can be a very expensive training exercise. Lots of people don't do it well, even highly sophisticated and educated investors. I remember we spent a couple weeks on stocks and bonds in a class in middle school, but basically zero time on personal finance, how loans work, how to read legal paperwork, run a ledger, etc. Those have almost always been a "learn on the job" thing since I've been alive.
flerchin 1y ago
I think a cleaning person and lawn guy should be more like $3500-$5k per year.
- e40 1y ago
  The given range was the assumed incorrect price, which made them not contract for the service.
  - ty6853 1y ago
    2 people x the entire weekend = 32 hours labor, which was the quoted time for how much upkeep the household required. Including business overhead, licensing, insurance, etc you're at 35-50k for a year of 32 hours of labor a week with the upper end a w2 employee and the lower end an illegal. Original value looks correct.
    - marcuskane2 1y ago
      32 hours per week is about 10-20x what the average American household uses for cleaning/lawncare. Most people have a cleaner or lawncare crew come like once every couple weeks for a couple hours, they're not hiring a full-time employee for their 3 bedroom house on 0.1 acre lot.
ty6853 1y ago
The real cost of hiring people to do stuff for your house is it's actually hella expensive to get licensed and bonded legal employees with references that attest they aren't thieves, and if you don't eventually they steal your shit or they get hurt and sue you for a billion dollars. I could easily hire people to do it, but I sweat bullets everytime I am guilt tripped into letting a neighbor kid mow the lawn because I know if he gets hurt I'll lose everything (renter's/ homeowners insurance usually doesn't cover unlicensed contractors).
- anon291 1y ago
  Umbrella insurance is very cheap, and if you have any money at all, you should have it.
  - ty6853 1y ago
    " Umbrella insurance does not cover workers' compensation claims," -- some random top google result for umbrella insurance
- rcbdev 1y ago
  The quintessentially American perpetual fear of lawsuits is sickening to the unwitting bystander.
  - ty6853 1y ago
    Don't worry, we made qualified immunity so the government employees, also of whom are the people that enforce the lawsuits they are immune from, don't have to eat their own dogfood. There is some seriously crazy stuff in America. Like guys who go around asking mom & pop shops to use a normally private bathroom "for an emergency", then sue the shit out of them because it's not considered handicap accessible and now that they let the public use it it is now a public bathroom. The effect is a lot of places would rather you shit yourself than open themselves up to lawsuit.
marcuskane2 1y ago
> how to buy stocks, what ETFs are, what a 401(k) is, etc. I've seen this before, and I remain incredulous. We learned about stocks in 4th grade and did a mock exercise picking stocks and tracking their performance over a few weeks. We did calculations on mortgage interest and investment returns in middle school math class. Every news source has a finance section and talks about stocks regularly. There are advertisements for brokerages on every TV commercial break and everywhere else ads are found. Every company I've ever worked for had a mandatory training about the 401k as part of employee onboarding and usually ongoing mentions at least once a year. There are a zillion personal finance websites, podcasts, blogs and youtube channels. It seems like if an alien landed in the US or a time traveler arrived here, they'd learn about ETFs and 401ks within the first 24 hours whether they wanted to or not. People have to be actively, intentionally avoiding learning these things or actively tuning it out or forgetting, because they're dead simple and information about them is incredibly easy to find.
- bane 1y ago
  When I did the equivalent "lets learn about stocks" at school, we opened the newspaper, found a stock, "invested" fake money in a ledger the teacher kept, and then cashed out at the end of three weeks after doing some rough calculations. The equivalent for a real world person would have been to 1) know what a brokerage was 2) find one 3) drive there and fill out some paperwork to make the account 4) deposit a paper check or cash at the location 5) get a phone # with a specific broker at the brokerage 6) subscribe to a local paper with the stock section 7) watch one of several thousand stocks, and write down by hand the movement of the stocks to see if you could set a strategy 8) maybe buy subscriptions for some investment magazines, a few hundred dollars per year 9) decide the time is right, call your broker, leave a message with his secretary to get back to you 10) wait for that to happen, then place your order. your broker would then charge you a percentage (up to 3% of your trade!) as their fee 11) Angry men in a pit in NYC would yell at each other for hours to make the trade. The trade would be communicated on scraps of paper with hastily written numbers, then shouted over a phone on the trading floor 12) wait for your broker to send you physical mail with your certificates or a record of ownership showing that the trade closed several days after you placed it with him 13) go through a similar process to sell your stock certificates, but then have to self track capital gains for your taxes Can you name a single reason why you think a poor person living paycheck-to-meal would even know about or wish to participate in this? Things got better with the internet, which didn't exist for most people until I was an adult (I know because I helped start an ISP), it still cost $30 trade electronically and settlement still didn't happen for days. So somebody making hundreds of dollars a month would have to lose $30, just to make a bet of whatever they were able to scrimp together over months, in the hope it would turn into more than $30 so they could sell it and make money above the trading fee. Again, why would a poor person, who may not even have a bank account, be a participant in this? So, to help with your incredulity, why would somebody, who is from a poor family, with not a single person around them trading stocks, most without full-time employment, take a brief class when they were 10, retain those precious handful of classroom hours, until they get lucky enough to have disposable income decades later and suddenly decide "I'm going to trade ETFs" <insert rich yacht buying cat meme picture> Most people don't work in companies with a 401k, or even with any benefits at all. Why would they be familiar with managing one? Next time you eat out, trade some tips with your waiter on how they diversify their retirement investments. Ask them which ETFs they like, and if any have especially low fees, or do they pursue a market segment strategy. What's their opinion on I-bonds? Maybe they have a prediction if Cathie Wood is a cook or not?

by bane 1y ago

jjice 1y ago

I find this super interesting and something I've thought about a bit in the past. All of these things combined are relatively simple. You could give a decent breakdown of each bullet point within an hour each, with room to dive in deeper if needed. Now with the internet and all the great resources out there, the access is there for most people (in a place like the US) to learn about these. I think the main problem now is that these are "unknown unknowns". People don't even know to know what a 401k or similar is and thus don't know that there's something to dive deeper into there. That missing piece is very hard to solve. I've had it myself where I run into something in my career, for example, where I'm introduced to a concept I wasn't aware of that I now use to underpin serious decision making about something like application architecture. Had I never had the opportunity to initially find out about a problem/solution, it would've made it notably harder to get better. All the things you lists are things I personally associate with familial education. Most of those things were taught to my by my family, having grown up in a middle class home. If my parents hadn't had the opportunity to learn about those, neither would I. It's a familial/potentially class (depending on the situation) based learning opportunity, purely based on the education your family was able to receive (whether formal or not). School is also a place to inject these concepts (personal finance specifically), and I did have a great experience with the personal finance elective at my high school when I was in 9th grade. Tangentially, I don't think that's a perfect solution (but still important) because teenagers will absolutely ignore/tune in the info out. When people say they wish that had learned how to do their taxes in high school, I agree in principle and I do think it should be taught, but I also believe most teenagers (at least around me growing up) wouldn't have payed any attention. It doesn't mean we shouldn't teach it, but educating a teen is hard.

bane 1y ago
yup, it's very hard to bootstrap without knowing where the next step even is in a dark room. > All the things you lists are things I personally associate with familial education. I absolutely agree. Or some good mentor. If your entire family runs paycheck to mouth, the likelihood of somebody able to guide you towards a low fee brokerage that provides you with the financial advice to differentiate between different investment instruments is vanishingly small. Even people who make it into white-collar jobs with 401ks are likely to only vaguely understand that it's something more than a weird savings account they can't touch. Investment takes a certain kind of stomach and can be a very expensive training exercise. Lots of people don't do it well, even highly sophisticated and educated investors. I remember we spent a couple weeks on stocks and bonds in a class in middle school, but basically zero time on personal finance, how loans work, how to read legal paperwork, run a ledger, etc. Those have almost always been a "learn on the job" thing since I've been alive.

flerchin 1y ago

I think a cleaning person and lawn guy should be more like $3500-$5k per year.

e40 1y ago
The given range was the assumed incorrect price, which made them not contract for the service.
- ty6853 1y ago
  2 people x the entire weekend = 32 hours labor, which was the quoted time for how much upkeep the household required. Including business overhead, licensing, insurance, etc you're at 35-50k for a year of 32 hours of labor a week with the upper end a w2 employee and the lower end an illegal. Original value looks correct.
  - marcuskane2 1y ago
    32 hours per week is about 10-20x what the average American household uses for cleaning/lawncare. Most people have a cleaner or lawncare crew come like once every couple weeks for a couple hours, they're not hiring a full-time employee for their 3 bedroom house on 0.1 acre lot.

ty6853 1y ago

The real cost of hiring people to do stuff for your house is it's actually hella expensive to get licensed and bonded legal employees with references that attest they aren't thieves, and if you don't eventually they steal your shit or they get hurt and sue you for a billion dollars. I could easily hire people to do it, but I sweat bullets everytime I am guilt tripped into letting a neighbor kid mow the lawn because I know if he gets hurt I'll lose everything (renter's/ homeowners insurance usually doesn't cover unlicensed contractors).

anon291 1y ago
Umbrella insurance is very cheap, and if you have any money at all, you should have it.
- ty6853 1y ago
  " Umbrella insurance does not cover workers' compensation claims," -- some random top google result for umbrella insurance
rcbdev 1y ago
The quintessentially American perpetual fear of lawsuits is sickening to the unwitting bystander.
- ty6853 1y ago
  Don't worry, we made qualified immunity so the government employees, also of whom are the people that enforce the lawsuits they are immune from, don't have to eat their own dogfood. There is some seriously crazy stuff in America. Like guys who go around asking mom & pop shops to use a normally private bathroom "for an emergency", then sue the shit out of them because it's not considered handicap accessible and now that they let the public use it it is now a public bathroom. The effect is a lot of places would rather you shit yourself than open themselves up to lawsuit.

marcuskane2 1y ago

> how to buy stocks, what ETFs are, what a 401(k) is, etc. I've seen this before, and I remain incredulous. We learned about stocks in 4th grade and did a mock exercise picking stocks and tracking their performance over a few weeks. We did calculations on mortgage interest and investment returns in middle school math class. Every news source has a finance section and talks about stocks regularly. There are advertisements for brokerages on every TV commercial break and everywhere else ads are found. Every company I've ever worked for had a mandatory training about the 401k as part of employee onboarding and usually ongoing mentions at least once a year. There are a zillion personal finance websites, podcasts, blogs and youtube channels. It seems like if an alien landed in the US or a time traveler arrived here, they'd learn about ETFs and 401ks within the first 24 hours whether they wanted to or not. People have to be actively, intentionally avoiding learning these things or actively tuning it out or forgetting, because they're dead simple and information about them is incredibly easy to find.

bane 1y ago
When I did the equivalent "lets learn about stocks" at school, we opened the newspaper, found a stock, "invested" fake money in a ledger the teacher kept, and then cashed out at the end of three weeks after doing some rough calculations. The equivalent for a real world person would have been to 1) know what a brokerage was 2) find one 3) drive there and fill out some paperwork to make the account 4) deposit a paper check or cash at the location 5) get a phone # with a specific broker at the brokerage 6) subscribe to a local paper with the stock section 7) watch one of several thousand stocks, and write down by hand the movement of the stocks to see if you could set a strategy 8) maybe buy subscriptions for some investment magazines, a few hundred dollars per year 9) decide the time is right, call your broker, leave a message with his secretary to get back to you 10) wait for that to happen, then place your order. your broker would then charge you a percentage (up to 3% of your trade!) as their fee 11) Angry men in a pit in NYC would yell at each other for hours to make the trade. The trade would be communicated on scraps of paper with hastily written numbers, then shouted over a phone on the trading floor 12) wait for your broker to send you physical mail with your certificates or a record of ownership showing that the trade closed several days after you placed it with him 13) go through a similar process to sell your stock certificates, but then have to self track capital gains for your taxes Can you name a single reason why you think a poor person living paycheck-to-meal would even know about or wish to participate in this? Things got better with the internet, which didn't exist for most people until I was an adult (I know because I helped start an ISP), it still cost $30 trade electronically and settlement still didn't happen for days. So somebody making hundreds of dollars a month would have to lose $30, just to make a bet of whatever they were able to scrimp together over months, in the hope it would turn into more than $30 so they could sell it and make money above the trading fee. Again, why would a poor person, who may not even have a bank account, be a participant in this? So, to help with your incredulity, why would somebody, who is from a poor family, with not a single person around them trading stocks, most without full-time employment, take a brief class when they were 10, retain those precious handful of classroom hours, until they get lucky enough to have disposable income decades later and suddenly decide "I'm going to trade ETFs" <insert rich yacht buying cat meme picture> Most people don't work in companies with a 401k, or even with any benefits at all. Why would they be familiar with managing one? Next time you eat out, trade some tips with your waiter on how they diversify their retirement investments. Ask them which ETFs they like, and if any have especially low fees, or do they pursue a market segment strategy. What's their opinion on I-bonds? Maybe they have a prediction if Cathie Wood is a cook or not?