Like they got cash on hand about 20k but they don’t seem to want to pay 2k of credit card debt. Even when I explain they are paying a 20 percent interest, it doesn’t seem to click. My parents were like this until I fixed everything. It’s crazy that there are educated people out there that are just financially retarded.
poor people typically don’t have 20k in cash, at least none of the ones I’ve met.
I read a study last year that said that the average american cannot come up with an extra 1000 bucks within 30 days. If that’s true, no wonder so many have massive credit card debt.
I don’t think you get to quietly sit there and champion MMT but tell me I can’t carry 3k on an Amex every month.
the sepcific article https://www.cnbc.com/2020/01/21/41-percent-of-americans-would-be-able-to-cover-1000-dollar-emergency-with-savings.html
and now 20% are unemployed. majority of which in the poorer rungs. real estate is not making any sense in the us especially in the lower tier areas in hcol cities.
Low supply and low rates
It’s not just poor people, I think it’s many people, just seems like it’s just poor people. I chalk it up mostly to lack of financial education.
Unless I’m missing something, in high schools today, do they even teach the kids about general finance? I think educators believe that’s the parents job but don’t think a lot of parents know either.
I work in residential mortgage and I’m pretty much constantly amazed at how little most people know about what it takes to get a home loan and how they even work.
You aren’t guaranteed a line of credit. You are sure of the purchasing power of cash. I can see situations where the rational option is to borrow first
I currently work in the Subprime world. None of them have savings though
i dont mean subprime people with no savings. when i mean poor, i mean they have a decent income to have savings, but they dont use their savings to optimally create wealth.
i mean i get why its poor people msotly. if you dont have money. ur really gonna rack up debt. cuz u cant afford to live.
im saying people who retain 20% credit card debt or dont contribute to a 401k/ira. when they have 50k in cash in the bank earning 0%. it should be no brainer. of course its good to have some liquidity. maybe 10k to 20k. but to just save 50k in cash or have clsoe to 100% of net worth in cash to me is a sin.
coincidentally a 30 yo with 50k is in the 50 percentile. but imo i still consider it poor.
Ok, I see what you mean. Yeah, I don’t get those people. But if I had to guess, again I would chalk it up to lack of financial education/savvy. Also partly to risk aversion as well.
I think it’s no different than the people back in the day that would hide their money in their mattresses than take it to the bank or buy some savings bonds with it.