Posted by bluedevil32 in experience, finance, questions, social, Uncategorized.
Tags: experiences, FathersDay, humanity, ideas, June, life, questions, training
Two years ago marked the start of the rest of my life where my father had been around for a minority of the time. My family was unlucky in that my father passed away unexpectedly of a major heart attack. I wanted to reflect on this today of all days because more and more often, I have to have an inner dialogue with myself hoping he’d respond. There are many things he could have taught me – constant reminders. I don’t mean for these to be strictly school-related, as I navigated that on my own fine. It is more about the massive learning curve one goes on an individual level when defining who they are, who you aspire to be, what defines success in your life. Some wait longer; some never even ask; others wonder at the end.
My aunt and uncle were in town last weekend and I had a long conversation with them. My uncle shared how much of an impact my father had on him in asking those same questions when they were younger, as our families were growing up. He had worked very hard providing for his family, often traveling for business and trying to spend all the time he had available thereafter with his family. It worked because he hadn’t particularly asked the question of what he wanted success to be and he was still doing what he thought was right to do. My father traveled minimally (bit more when I was very young), worked very hard, but a lot less hours. That provided him with the flexibility of being home for each dinner, play golf weekly and play basketball at least 3 times a week. All while providing for our family in a similar capacity. What drove him to that point, and how did he execute that transition? I listened intently to my uncle talk about the importance of his conversations with my father, as well as what he’s reiterated to my two cousins as reflections of the questions.
To avoid talking anyone’s ears off, I’ll try to connect this back to present. I believe the phrase is “single af” so I have merely thought of those primary questions in a goal-oriented manner – what to aspire toward. It seems that fewer people have goals in general and even less likely have long-term specific ones. More specific dreams allow for a reflection that can be adapted or changed, designed to figure a path out. Honestly, I think elementary or middle schools do better jobs of asking these questions than high school and college. They’re general but details get nailed down once more critical thinking skills are acquired. Again, I’d say that the invites for thinking through these important life questions slow as they become ever more important.
I’m an advocate for asking and discussing the hard questions. What makes you drive forward?
To all the new and well-seasoned fathers alike, continuing teaching lessons, and Happy Father’s Day!
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Posted by bluedevil32 in education, experience, questions, social, Uncategorized.
Tags: college, content, education, Gates, highschool, twitter
A quick preview: <blockquote class=”twitter-tweet” data-lang=”en”><p lang=”en” dir=”ltr”>American higher education: Pay us tens (sometimes hundreds) of thousands of dollars to recommend some books to you.</p>— Andy Bailey (@AndrewDBailey) <a href=”https://twitter.com/AndrewDBailey/status/865251606568345600″>May 18, 2017</a></blockquote>
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And this is what everyone and their moms (and dads) get bogged down with during at minimum freshman year of high school, while some do that even earlier. That is the mindset of a higher percentage of Americans in this day and age. Awareness is an excellent thing – parents should be more aware of how the process works, certainly. I think I could have been better prepared for the magnitude of it all, but it’s also possible I benefited from a mom who was proud with whatever came up for me. The pressure from school, parents, counselors, private ‘education counselors’, and now all friends as well at an earlier age scares me. It’s misguided and has created an atmosphere that approaches more of a lose-lose / lose-win than a win-win. A specific college shouldn’t be the ‘ultimate goal’ of students. Dreams/aspirations past that point, where college MAY act as a useful stepping stone, is more ideal, in my opinion.
Over the last 10 years, college costs have increased dramatically, needlessly. Yet that is what gets pushed in the middle and secondary environments – better grades, more AP’s, all the excellence for test scores and extracurricular activities if you can help it. Screw off with your joys and passions, unless they align with those above. All to throw your applications (and more importantly, their fees) into a lottery to provide you another stressful decision set (or worse, put you into a bout of depression over not being accepted into those loftily-held institutions). I’m nearly stressing myself thinking about it.
And I see it on an almost daily basis. ~3-4 times a week and more over the last 5.5 years with a rising, successful tutoring company. The expansion of centers to more states, the materials that have been pushed out are incredibly useful for achieving all of the above – but it does just that – pushes students to the brink for academic standards. When, in my experience, a majority of the ones that have been lucky enough to easily get into the top institutions were athletically gifted or born as kin of high places. Harvard, Duke, Stanford, Berkeley, NYU, Yale, UPenn, Princeton, etc… to name a few.
Work hard, do well and don’t have the athletics or parents to gift away – lottery-bound! Enjoy. And many do get into great schools, but it’s not certain. Even in the tri-valley / East Bay Area, where schools push academics so hard. Unfortunately, high school doesn’t allow the freedom to struggle or fail without hard consequences. Students avoid that at all costs – talk amongst themselves in group chats, memes, jokes and fun poked at those that did worse. Joy found in a group sorrow if a test is particularly hard – either perked up by a curve or succumb to the deterioration of the grades.
Then there is the homework – piled on with all of the classes, typically at home. Some students are fortunate – certain subjects require less effort to understand, but most have to work at it. That leaves minimal hours in the day, either clawing away at sleep or worse, depriving some of hobbies outside of class, which depresses me. Ask a student what they want to do if they could choose and they don’t have an answer. Just maybe what they’ll study in college. In a world where it’s easier to do almost anything in any particular field / industry, few students look past studies to what they want after. It’s a constant grind, of which I’m not envious.
I believe that students should have an opportunity to work or start a company or intern for some company or field that they wish – hopefully one that teaches them whether to pursue that industry in the future. Much of what I found in college was learning what I WASN’T passionate about, not so much of what I was passionate about. People change, but skills can be gained – focus on the companies/industries you wish to live around. Never before is that more true.
Bill Gates tweeted some advice recently – a few of which I’ll share my thoughts:
- “AI, Energy, and Biosciences are promising fields where you can make a huge impact. It’s what I would do if starting out today.”
Analytics drives all 3 of these. Energy is the one that may have the most impact, but efficiency is a challenger here – for instance, battery’s have made great strides, but solar has made linear strides that haven’t made any economic sense in the present. Biosciences will explode with the technology developed in recent years and the information we’ll be able to see with hardware/software connections.
- “Looking back on when I left college… intelligence takes many forms. It is not one-dimensional. And not as important as I used to think.”
I completely agree. Different levels and styles of intelligence – whether it’s focuses or broad knowledge. Experts in one field doesn’t make an expert in another. Be careful with ‘experts’ and what it takes to get that title. Do your due diligence and research but open-minded in conversations with others. Everybody – no matter their intelligence – can contribute to expanding/sharpening your mind.
- Then he had some world-impact tweets that described some of the “inequities” of the world. “You know more than I did when I was your age. You can start fighting inequity, whether down the street or around the world, sooner.”
- “Meanwhile, surround yourself with people who challenge you, teach you, and push you to be your best self.” Never truer words have been spoken. People mention having mentors, but we should really have mentors, people that we mentor and peers that challenge us. The combination to make each other better make the individuals better.
- He goes on about this being the most peaceful time in history. Progress can be made if you think the world is getting better, and you want to spread it.
If I had my way, I would love to start something for students that partnered some businesses that could use some admin-style / research analyst work but that were willing to take on a shadow for 4-8 weeks or something over summer. Give the students some money for working and helping out, but also provide them the opportunity to what positions above an intern role may entail in the industry. Is it exciting for them? Is it something that teaches them that that particular role isn’t a fit? I think those lessons, that early, would be invaluable.
If successful, a similar college program could be enacted for frosh / sophomores that were available during the year. Far too many do not get the work experience until after Junior or senior years. We can make that better!
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Posted by bluedevil32 in experience, finance, Politics, questions, social.
Tags: #business, Amazon, baseball, content, Cuban, experiences, Facebook, Google, Hirschhorn, humanity, ideas, NBA, Netflix, Politics, questions, research, sports, video
Listening to the Jason Hirschhorn interview with Mark Cuban from the end of February (just pre-$SNAP IPO) —
Many great resources in all the current tech-hubs: SF & Silicon Valley, Los Angeles, Austin, and expanding those. Cuban makes a good point that people and ideas are easily created now in almost every area. There are places in the country that have MORE resources — events, companies, VC’s, funds, but building can be done everywhere (Cuban mentioned when he visits IU, he can stay in contact with them).
With less and less companies going public (mentioned ~9000 publicly listed in 2008, but < 4000 now), people are either scared of going public, or are getting their payouts directly from bigger companies (Cisco, Facebook, Amazon, Microsoft, Google, etc…).
Digital ad revenue for FB and Google – 85%+ market share. NFLX and AMZN are 2 biggest shares – hasn’t sold yet. Content providers – Disney, Netflix, and Amazon…. not many others. CONTENT is very difficult (Cuban mentioned Enron doc and winning awards, along with Good Night and Good Luck — hasn’t done any successful since). Content is the most difficult to maintain – very difficult to get past that giant hurdle, and these companies have the money to get above it.
Eventually got into a political discussion – using news / reactions / tweets to respond. HOW do we respond? Communicate and be patient – tough to change minds or reason – noted 52% of eligible voters didn’t vote. Trolls and dealing with internet comments – control public/private responses on twitter? Twitter must be hard-coded otherwise. Cuban mentioned an app that he’s going with – soon, machine-learning or machines will deal with the curation of information and conversation in digital platforms.
Talking about video – 7 year old son wanting to play flag football / baseball and how different it is now. Esports / watching vs watching tv (sports). His son didn’t want to watch sports / baseball / football, but wanted to play. There’s no indoctrination or religion for it anymore as we grew up on (and Cuban’s era earlier). Gaming as a big advantage in expanding NBA reach – NBA 2k and professional aspect of them since players have a deeper involvement / knowledge of the league with gaming.
The overall theme for today (not just this interview) – how can we get more young people interested in building out great ideas? The future of technology is rapidly accelerating but ideas will still be needed from the smartest people. Education seems to nerf expansive ideas – boxes people in that may be more capable, restricting opportunities. In my opinion, this is a huge flaw in the system overall.
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Posted by bluedevil32 in finance, Uncategorized.
Tags: credit, experiences, finance, freedom, investing, Money, PVFV, taxes, Time
This article has brought praise: SingleMomPaysRentforYearUsingTaxReturn. However, a basic understanding of future/present value is skipped in this story. I believe she’s choosing to be “responsible” in paying rent vs spending it on vacation or unnecessary items for her kids, but it also illustrates a lack of understanding for fundamental financial details (that should be MUCH more important to learn early on). Opportunity cost of losing the money for the year, or going into details of how she received so much for her return in the first place (lent FAR TOO MUCH money over the previous year).
About 5 years ago, there was a larger push in the financial services industry to bring an analyst/advisor to every high school to have “qualified” (debatable, but at least licensed) experts (this word is becoming annoying, as well) teach fundamental financial information to the future masses. I cannot attest to generations before me, but as far as my high school career went, CHEE (child, health, and something) and economics were the extent of in-school teaching. I was lucky enough to have a family that provided me an environment of numbers, games, and finances, as well as schools that pushed early for branching out. That doesn’t mean I have been without my own transgressions in a monetary realm, but can say that the high school classes didn’t scratch the surface of what I learned previously.
From students I talk to and teach in school now, I don’t believe the basic individual finances are taught, still. It could be a flawed forum in economics (as opportunity costs are discussed), and business courses go over concepts, but neither focus at an individual level. It needs to get better, and I’m not sure when anyone is or will be required to take these courses. I have friends out of MBA’s/Law School and Med Schools that never took courses on it. Luckily, for the curious and responsible ones, there is a wealth of information available now online, and as more people see larger and larger parts of networks, you hopefully become more comfortable to discuss them. For those that don’t, hopefully trial and error occurs earlier than later.
And people wonder how the debt continues to rack up…. That topic I’ll leave for another day. SingleMomPaysRentforYear
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Posted by bluedevil32 in experience, social.
Tags: #business, Analysis, baseball, Data, finance, lacrosse, Luck, Paradox, Skill
On my drive home from work late this evening, I was listening to Wharton Moneyball Business XM. They had Michael Mauboussin on, author of The Success Equation: Untangling Skill and Luck in Business, Sports, and InvestingThe Success Equation: Untangling Skill and Luck in Business, Sports, and Investing. Fascinating stuff, discussing the difference between skill and luck, primarily how difficult it is for the human mind to differentiate the two. Humans tend to not just accept something that is, and something that may happen needs a cause or something that created it. There should be a reason for any given occurrence.
In trading or investing, we call some of these events “black swan events”. Companies and markets attempt to assess the risk of these events. Since they’re usually rare and unpredictable, it’s a tough thing to assess risk of something you may not know the cause / effect of at the time it occurs, let alone prior. So we assume that our skill and history will provide the outcome – likely incorrectly, or just by luck we may be correct.
Michael went on to discuss how in business there is a market for possibly being lucky. Using a trader who performed well as an example – recent studies show that it’s increasingly about chance/luck than skill in trading performance. However, if a trader outperforms, they could request a raise or use their performance as the expected amount to move to another company. Depending on the due diligence and statistical/skill assessment of the firms, this creates a market for production by luck.
In reading moneyball and the increasing sports analytics movement, they measure this against regression to the mean in a number of + stats. But in general, pros have a higher skill vs others, and the standard deviation, if you will, of said skills is much smaller. Minor nuances represent the differences in ‘higher’ skill than ‘lower’ at a professional level. A great year by an average pro could result in regression toward the career average. If this is not the case, then that player has probably found an efficiency level that could be affected by actions on their part to reduce the level of variance in that element.
I found the paradox of skill and luck explained very well. Typically, we see the two as a continuum – where on one end luck would play a part such as a roulette table or coins. On the other side, skill – maybe boxing, running. However, it seems to be more array/matrix-like, in that as you increase skill, you increase the dependence on luck. Separation at the most-skilled level involves all kinds of luck.
One author described it using Ted Williams’ .406 batting average in 1941. He had tremendous skill, ahead of most players in the professional leagues. However, that year, he also exhibited a tremendous amount of luck, again more than most players. That combination can attribute to some of the most heralded sporting feats. Our acknowledgement of those streaks come without luck – and that the players were just that skilled. Skilled yes, but also incredibly lucky.
Michael continued to go on about the statistics of lacrosse, and its rules are pulled from hockey and basketball. He noted that Canadian players in college lacrosse are extra efficient. Citing rules of box lacrosse (played usually on a hockey rink, much smaller in comparison to the field as is typical), they aim for smaller goals and have less space to work with. When they get on the field, the added space and larger goal sets them up to be monsters in shooting efficiency. Numbers-wise, 5% of D1 lax players are Canadian. Yet, they make up ~20% of the goals. Additionally, there was a 5% arbitrage between shooting accuracy – overall average was about 28%, non-Canadians shot 27.8% and Canadians? – nearly 33% of shots turned into goals. Astounding.
Statistical notes such as these create fascinating opportunities for further studies and team options, not just in sports but also in business. Taking note and then taking advantage will be easier with the increased abundance in acquiring data, but how much can we direct to noise, and how much is actually signal?
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Posted by bluedevil32 in experience, Politics, questions, social, Uncategorized.
Tags: #business, #plan, experiences, Money, Politics
There are hundreds of thousands of people that have good & great ideas. Many of them work for someone else and don’t take action on those ideas. Some of the ones who have good ideas take them and try to build something. Not all succeed. The ones that do often had plans or people they could reach out to help them with a plan. Then they attempted/carried it out. The ones that succeed often add value many times over.
Why is it different for elected office? Running for office should not simply be based on the platform of ideas you wish to change / better / create, but HOW candidates plan to put that in action.
Actual plans. Business plan. Who is needed to help enact them / what is done / how to put it plan in motion / stakeholders / pros / cons. Sure, this would take time up front, but I believe that it could reduce the time to impact once someone was elected.
Let’s take an example. “Infrastructure must be improved” is a general positive thought and I don’t believe any candidates are against that. However, the latest research I’ve read said that of the funds designated as infrastructure-related, only 5% actually are used for ACTION in that frame. The rest is spent on funding boosters / change orders / unions (not exclusively).
Now, do I believe that a majority of voters would read through these plans? No, but of anyone that does, they would be better well-informed. And, debates or interviews could bring up the questions from people that did read through them and see holes or improvements or issues, to hopefully allow for a publicized process into the plans presented.
Until I see a candidate for ANY office lay something out like this, I’ll refrain from giving any vote of confidence or otherwise. Oh, and for any Bernie supporters that believe his site lays this out – it’s a step in the right direction, but not to the detail that elicits true action.
What do you think? Or is all of this just lip service?
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Posted by bluedevil32 in experience, questions, social, Uncategorized.
Tags: #ReleaseTheBrake, #RTB, brake, credit, debt, education, finance, FinTech, personal finance, traffic
Been a while since I posted anything, but that’s not for lack of material. My mind has raced, and I’ve had a number of drafts that I saved and left to the side. They didn’t seem quite right.
A list of problems that cyclically affect everyone that could use (better) solutions – of which I am working on one.
- Traffic: especially in the Bay Area, where there appears to be more and more cars on the road each day.
- Hard fix: A friend of mine & I joke that Musk should simply work on infrastructure in the form of a “Tesla Road” that was built on top/above existing roadways. It would appear we are headed for autonomous cars as a larger percentage within the next 3-5 years. Infrastructure could create an environment that would entice a majority of people to switch to automated cars, eliminating the minor parts that cause the initial build-up of traffic.
- Simple fix: release the brake #RTB. It appears that too many people love using a pedal – if it’s not the gas, it has to be the brake. So wrong! Japanese researchers recreating shockwave traffic jam – simply by a brief brake or slowdown. It appears that few people have been taught (or put into action) that speeding up briefly and braking behind a slower car simply doesn’t save any time, and causes time in traffic for everyone else with an application of their brakes. Selfish. People do this when switching lanes (brake and go) or exiting off ramps. Release the break and your brake pads, people behind you, and your foot will thank you.
- Personal finance: Credit card debt, better investing, mortgages or even small business loans.
- I have done work with a fintech company that attempts to create an effortless process to personal lending. Granted, effortless is subjective. Growth in the industry as a whole seems to stagnant, despite a plethora of companies that have jumped in, due to a combination of minimal profit margins (investors are prioritized) along with a lack in the creative sense to alter the public’s general understanding of WHY these companies are helpful.
- The biggest example today of a failing company in the space is how hard Lending Club has been hit since its IPO, punctuated by the resignation/firing recently of their CEO and founder. Link to CEO resignation May 9
- From what I gather, the industry as a whole needs to focus on the education for why someone/anyone SHOULD look into how debt restructuring can be a positive thing, but it takes time and pointed goals. As it stands, unless someone does their due diligence or had a friend talk about one of these companies, many just hope for the best and don’t want to spend the time to educate themselves.
- With a potentially impending social security / pension shortage with the increases in health and aging, this education will be paramount in coming years. Additionally, when the US doesn’t seem to care about furthering the budget into the red, why should any of its citizens care? That scares me a bit more – the possibility of an event cratering the credit system due to rates/QE and a carelessness thought of ‘too big to fail’. Technology bubble in early 2000s was (mostly) limited to stock market and companies that were popping up. Housing crisis in 2008-2009 affected many more people, but ‘only’ threatened the system. A credit shock would threaten the global set-up.
- Education: the way that high schools and universities push forward does not appear to be as efficient a major system that educates the masses should be
- I was lucky and had a scholarship for tuition before I took a gap year my Junior year at UC Berkeley, so my family and I were spared that expense. Up until the start of 2016, I was paying the [small but not insignificant] loans off that I took out for housing / books / living expenses from my first 2 years at Cal, totaling a minuscule (comparatively) $12k. My senior year, I paid for my final 2 semesters and a summer of tuition and saw that they were between $4500 and $5000 each, right before the big hikes of the UC System. When there are more and more applicants each year applying to the awesome and improving UC’s, the regents still decided to increase tuition for undergrad nonresidents. For the whole story from last year’s Regents Last year’s undergrad resident tuition was a base of $11,220, plus whatever the total is now for student fees / taxes. That’s an increase of over 7% in the 4 years that I’ve been out, well surpassing that of inflation over the time frame. Eesh.
- I’m torn and haven’t seen / heard, but I believe that universities should be set up more like a vocational-type, where students enter needing work credits for graduation, either working for a company aligned with their major or through a mentor of some sort. Yes, many students do this anyway, but I feel like where universities should give advantages to others would be in the way that this could be set up. If students have active work experience from the onset of their freshman year over a semester or summer, more people would know if they wanted to continue down that path or switch.
- In a world that appears like we’re driving toward an automated approach for many things (if we can figure out how to do so), then many jobs will be expired at some point, maybe in this lifetime. Having the necessary work experience and knowledge of multiple fields may be beneficial in the long run.
Now, I was going to include another bullet about misinformation, but I can save that for another post. I plan on making this push in momentum to continue posting about how I may improve or reach out to figure out how to inform myself of progress in these areas. And I encourage everyone again, #ReleaseTheBrake
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Posted by bluedevil32 in finance, questions, social, Uncategorized.
Tags: adviser, Analysis, fiduciary, finance, questions, retirement, Time
Well, it’s a start. The US has passed a law that is set to go into effect by, *drum roll, please!*, early-2018 for fiduciary (client’s best interest) standards for some 300,000 financial advisers who deal with retirement plans (401k’s, IRAs, Roths, etc…). So, come 2018, your adviser may now only legally act in your best interest and give objective advice on your options – you know, what lawyers and bank trust officers have had to do for decades.
Don’t hold your breath just yet, however. It seems that this will be fought, as appeals are thought to be in the works. Why would advisers want to act in your best interest if that doesn’t make them the most money?? Currently, advisers are only limited to giving advice on products/plans that fall into ‘appropriate age and risk-tolerance’.
So basically this means you cannot get straight sleazy sales – any adviser would have to produce all of the options and give an objective opinion on what would be the best – cost and plan-wise. How that will be determined is anyone’s guess since it’s their job to know all of the options. I do not expect someone that works and is an expert in their own field to also know about finances and everything that goes into them – which is all the more reason to make sure you vet the experience and practice of any adviser that you wish to go with.
The Time article that mentioned this article Fiduciary Standard approximated that it could save $17 billion for retirement investors. In a country that holds a dumb amount of debt in the form of student loans / credit card debt, this seems small (Trillions of debt vs billions saved), but it’s certainly not insignificant.
Something around 3-5% of people currently retired have more than $60k a year. I would hope that this action helps that poor statistic, and that in the near-future, with the amount of knowledge and technology available, that costs come down and everyone can either automate or receive the pointed help that they deserve.
Note: Licensed Life, Disability, LTC Insurance
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Posted by bluedevil32 in experience, questions, social, Uncategorized.
Tags: Apple, businessman, Change, freedom, human, humanity, Jobs, progression, Steve Jobs
There was a fascinating Quora question posed about where you would rate Steve Jobs on a scale of 1-10 of the greatest humans ever. Steve Jobs – not greatest human ever – Quora for the read. There were some fascinating comments that usually comprised of two parts: a) Steve Jobs is nowhere near the list for greatest humans ever (probably much to the chagrin of millennials and those who only know Apple), and b) there is likely a “small encyclopedia” of people ahead of him on the list, depending on how you may rate a ‘great human’.
In no particular order, persons who were brought up that stood out for me from the comments in the article:
- Gandhi – who freed a nation by protesting peacefully, costing him his life
- Stanislav Petrov – for urging incoming missile signals were the result of a systems error and refusing to fire retaliatory Soviet nuclear strikes, at the cost of his career.
- Jonas Salk – creator of the polio vaccine who promptly gave it away instead of patenting and profiting (biotechs, do you read this?)
- Florence Nightingale – who pushed tirelessly for improved health standards and ushered the move toward modern nursing
Steve Jobs seems to have been an excellent entrepreneur in not taking no as an answer and pushing his vision forward. He built up the company by being an excellent salesmen while extracting the best from his top engineers. Likely a bit on the cutthroat side, and clearly was a master businessman. He had his negatives (I believe ‘caged safety’ vs ‘risky freedom’ was a description of the Chinese Apple conditions).
Each individual has their own unique skill set. One can only hope that we are able to figure out that passion and able to work through our strengths. To progress humanity, that strength may come at some cost to the individual. But therein lies the selflessness.
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Posted by bluedevil32 in Uncategorized.
As an analytic, inefficiencies send my brain into overdrive wondering how they continue or what could be done to remedy them. Now, inefficiencies certainly have created markets where otherwise they may not have existed.
Most people should have been taught in Economics in high school about opportunity cost. This is the underlying concept behind most inefficiencies. The problem isn’t that the work does not get done – it’s that often, it’s done in the least economical way possible.
With the start-up financial lender I have been working with, I see it everyday with borrowers. People just do not [want to] understand their own finances. The principal concept of financial fitness is an excellent one. When in some debt where you have reached the point that you pay and pay and pay without making a dent due to high interest rates and the compounding, there should be the trigger that goes off that initiates a new, better-structured debt that will rid you of the one that has you in quicksand. Structured payments that won’t change over a 3 or 5-year term – and done, often or hopefully at a similar or better amount and throw in less interest. Borrowers seem to only understand that the investments/savings they put away is more important earning 6-8% than to rid themselves of the compounding 15, 20, even 30% interest slogging them down. Alas, money is money and the interest lost to credit cards will cancel that return you so craved for the year.
This is why we see borrowers receiving $15,000 / yr in disability at an advanced age or the middle-aged earner pulling in $200k, or the graduate of a university seeking to remove the debt placed on them from the inefficiencies of universities advancing tuition at a rate 200 times that of inflation over the last 30-40 years (we won’t go in to why they feel they can do this). Some ask the right questions, others do not. They see the numbers for the terms in front of them and blindly exclaim that it doesn’t work – why can rates be high if they earn x dollars and have xxx fico. Then when we look, they have savings or investments that could easily take care of the interest/debt extra but people do not understand that it’s usable – and likely a better option.
It’s no wonder why the average household holds $15k in credit card debt or total any type of debt of $130k (as taken by Q3 ’15 in NerdWallet data) where income as been outpaced by inflation and the average household pays $2500/yr in credit card interest alone. All of the little things add up, and people do not realize that. $6.85 a day sounds reasonable until you look at the $2500 for the year. What’s not having a coffee or as big a lunch as you planned? Well, over the year, that would equate to a substantial sum.
Information is available, but it needs to be read and talked about and understood. More importantly, it needs to be acted upon properly.
Eliminate bad debt that costs you and budget for the rest. You will realize there is a substantial amount that remains – and better, you’ll have the authority to control where you put it!
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