Income Inequality

[Guy Chamberlin]

On 8/26/2018 at 5:22 AM, B.B. Hemingway said:

One thing that I haven't seen mentioned in this thread to this point, is just how bad people are at managing/allocating their money. My wife has worked in the the banking/financial world as long as we've been married, and she has always said how staggering it is. And it's not just poor people of course, but they are the one's more immediately impacted by those poor financial decisions. You can be both poor, and personally responsible for your financial situation. Wealth redistribution, and tax reform aren't going to correct those habits.

 

 

The 2008 financial debacle had plenty of blame to go around, but not much was laid at the feet of the people who bought homes they couldn't afford.

 

We are the worst nation at saving money in the world, and I'm amazed how many people with middle-class salaries go deep in debt and live paycheck to paycheck. 

 

We bought a house in 1999, and our mortgage broker informed us we could have afforded much more house. I told him no, no we couldn't. The house we were buying was actually a stretch and anything more was out of our comfort zone. He explained that we had more than four months of mortgage payments in the bank, and that alone qualified us to buy a more expensive house. I explained that a four month "cushion" could evaporate in.....well, four months. The house he told us we could afford would also have left us with very skimpy discretional income. He also encouraged us to take out the much less expensive 5 or 7 year ARM, saying that people think they're going to stay in their house for a long time, but usually sell before 7 years, so it would be crazy not to get the 7 year ARM and refinance later. 

 

We went with the house we could afford and the 30 year fixed mortgage. It was a hard sell to spend more and I wondered if I was being too cautious and midwestern. At the time I said to my wife:  "what happens if all these people are buying houses they can't afford, and all the 7 year ARMS run out at the same time?"

 

 

[deedsker]

1 hour ago, BigRedBuster said:

So, whatever parents are bad at, we are going to force the schools to teach to kids?

 

Careful, that list can go on forever.  I guess we don't need to teach STEM anymore and prepare kids for college or to be employed.

The list is long, but that is why we have 12/13 years to teach everyone what we find important as a society. If we aren't at least trying to meet goals with education, what are we doing at all?

[teachercd]

48 minutes ago, deedsker said:

The list is long, but that is why we have 12/13 years to teach everyone what we find important as a society. If we aren't at least trying to meet goals with education, what are we doing at all?

I get what you are saying but what/how you do with your money is really up to you.  In personal finance classes you learn ABOUT savings and stuff but telling a kid (or anyone) what to do with their money is a tough sell.

[BigRedBuster]

1 hour ago, deedsker said:

If we aren't at least trying to meet goals with education, what are we doing at all?

I didn't realize we weren't trying to meet goals.  

 

Just because people disagree with what the role of schools should be, doesn't mean they aren't trying to meet certain goals.

 

My last kid graduated from HS last year.  I'm sitting here thinking about what classes they should not have taken and instead sit in a class learning about personal finance.  I guess I wouldn't have a problem with them not doing Freshman PE.  That's pretty stupid when all my kids were three sport athletes at the time.  

 

How much of the class day are you willing to take up with teaching kids stuff they should learn at home instead?

[TheSker]

Taxpayers pay for public education.....then get to pay for welfare programs.

 

Financial literacy is an issue, but certainly not the only issue leading to income inequality.

[methodical]

On 8/26/2018 at 1:16 PM, funhusker said:

The same reason they don't require training on residential and automotive maintenance, healthy cooking and childcare: not enough funding to hire the teachers.  Instead they are made electives so only about 10-20% of the student body gets educated in these areas if they choose to take the class.

 

On the bright side, the internet has made it easier than ever before to learn about that stuff on whenever you may need it.  I can't think of a home/appliance repair I haven't at least looked up on youtube to learn by watching pros before either deciding to do it myself or hire it done.  Usually it comes down to "do I have the tools to do this safely? would it cost less to get them and do it myself? do I actually have the time? would it involve being up high? :p"  So really, if the will to learn is there, the information is out there and available to anyone.

 

4 hours ago, BigRedBuster said:

I didn't realize we weren't trying to meet goals.  

 

Just because people disagree with what the role of schools should be, doesn't mean they aren't trying to meet certain goals.

 

My last kid graduated from HS last year.  I'm sitting here thinking about what classes they should not have taken and instead sit in a class learning about personal finance.  I guess I wouldn't have a problem with them not doing Freshman PE.  That's pretty stupid when all my kids were three sport athletes at the time.  

 

How much of the class day are you willing to take up with teaching kids stuff they should learn at home instead?

 

We had a "personal finance" style class in my high-school.  It was where the kids who couldn't hack anymore advanced math ended up in their final year and was basically a bookkeeping/accounting class.  It seemed like my friends taking it thought it was a pretty big waste of time basically going back into arithmetic at the end of high-school.  It's not that people don't have the education or ability to understand basic finances would be my guess.  Although I doubt many understand the compounding interest stuff in practice.  Although to answer your question, I'd say none of the day should be taken up by that stuff.  High school should be focusing on preparing students for higher education and broadening their exposure to different subjects, because frankly high-school isn't enough anymore and hasn't been for nearly 30 years.

 

[B.B. Hemingway]

20 hours ago, Landlord said:

 

 

You're right that not every poor person is a victim of the system. But middle and upper class people also make bad decisions, and their wealth generally insulates them from those really costing anything. 

 

And....

 

In a lot of cases (not all of course) that's a credit to the financial position that they've put themselves in. I'm a lot more okay with people being financially irresponsible with their own money, than I am with those being financially irresponsible and ending up on government assistance.

 

13 hours ago, teachercd said:

There are finance and personal finance classes in high school but think back to high school and how much attention you paid to s#!t like that.  Just like we all took PE and learned about living a healthy life but most of us stop working out and running once we aren't forced.

 

And let's face it, no 16 year old is getting his paycheck and saying "Well, Mr. Schmeckie said I should say 33% of the each check so I am going to do that"

 

Also, how we do things with our money is different for everyone.  

 

 

Haha! I was one of those weirdos putting back every penny I earned in High School!

 

Being financially responsible isn't the easiest thing in the world to accomplish. It takes a lot of discipline that  a lot of people (poor and rich) don't have. Poor or rich, I don't like seeing people being bailed out of their irresponsibility.

 

 

8 hours ago, Guy Chamberlin said:

 

The 2008 financial debacle had plenty of blame to go around, but not much was laid at the feet of the people who bought homes they couldn't afford.

 

We are the worst nation at saving money in the world, and I'm amazed how many people with middle-class salaries go deep in debt and live paycheck to paycheck. 

 

We bought a house in 1999, and our mortgage broker informed us we could have afforded much more house. I told him no, no we couldn't. The house we were buying was actually a stretch and anything more was out of our comfort zone. He explained that we had more than four months of mortgage payments in the bank, and that alone qualified us to buy a more expensive house. I explained that a four month "cushion" could evaporate in.....well, four months. The house he told us we could afford would also have left us with very skimpy discretional income. He also encouraged us to take out the much less expensive 5 or 7 year ARM, saying that people think they're going to stay in their house for a long time, but usually sell before 7 years, so it would be crazy not to get the 7 year ARM and refinance later. 

 

We went with the house we could afford and the 30 year fixed mortgage. It was a hard sell to spend more and I wondered if I was being too cautious and midwestern. At the time I said to my wife:  "what happens if all these people are buying houses they can't afford, and all the 7 year ARMS run out at the same time?"

 

 

 

 

Kudos to you for knowing your financial situation, and showing that elusive financial discipline. 

 

As to the bolded, it really is astonishing sometimes. I own and a landscaping company, and we see it all the time. One guy in particular, has multiple pricey vehicles, a boat, all kinds of toys, and of course a beautiful home. Multiple times a year he asks if he can put off payment until his next check. The guy is a VP at one of the larger companies in the area, and probably makes $200,000+.... To his credit (i guess) he does always pay, and if he wasn't worth 'thousands' a year to my business I'd say to hell with him

 

 

 

[Landlord]

11 hours ago, BigRedBuster said:

My last kid graduated from HS last year.  I'm sitting here thinking about what classes they should not have taken and instead sit in a class learning about personal finance.  I guess I wouldn't have a problem with them not doing Freshman PE.  That's pretty stupid when all my kids were three sport athletes at the time.  

 

How much of the class day are you willing to take up with teaching kids stuff they should learn at home instead?

 

 

Here's a wild theory - any subject/class that is nothing more than just regurgitating memorized info that, even if you don't know, you could figure out within a minute of google searching, would probably be better served teaching something more practical about how to live life as an adult.

 

Knowing how to file taxes would be infinitely better than knowing when the Magna Carta was signed.

[teachercd]

5 hours ago, Landlord said:

 

 

Here's a wild theory - any subject/class that is nothing more than just regurgitating memorized info that, even if you don't know, you could figure out within a minute of google searching, would probably be better served teaching something more practical about how to live life as an adult.

 

Knowing how to file taxes would be infinitely better than knowing when the Magna Carta was signed.

knowing how to file takes 20 years ago would be important.  Now it takes about 3 minutes.  

 

Life skills class is a good idea, it really is, but so many parents bitch about what is taught and I think you are forgetting something, you are thinking like an adult that wants to learn this stuff...you are not thinking like a teen who is texting/snapping away in class waiting to get to lunch.

 

 

[B.B. Hemingway]

6 hours ago, Landlord said:

 

 

Here's a wild theory - any subject/class that is nothing more than just regurgitating memorized info that, even if you don't know, you could figure out within a minute of google searching, would probably be better served teaching something more practical about how to live life as an adult.

 

Knowing how to file taxes would be infinitely better than knowing when the Magna Carta was signed.

 

Couldn't agree more. 

[BigRedBuster]

7 hours ago, Landlord said:

 

 

Here's a wild theory - any subject/class that is nothing more than just regurgitating memorized info that, even if you don't know, you could figure out within a minute of google searching, would probably be better served teaching something more practical about how to live life as an adult.

 

Knowing how to file taxes would be infinitely better than knowing when the Magna Carta was signed.

 

So, let me get this straight.  It's not important for kids to learn history of major historical points in history like the Magna Carta, or the Holocaust, or American civil rights so that we have an educated populace on those issues.....  But, it's more important for teachers to spend time teaching kids how to file their taxes?  Because they can google all those other issues???

I googled "how to file my taxes" and came up with 65,000,000 results in .62 seconds.  The first 5 are from the US government giving official information on....actually filing your taxes.

 

But...hey....we don't need to know about different times in history where tyrannical or horrible forms of governments took power and what the results were....or how we came to have the freedoms we have now.

[teachercd]

1 hour ago, B.B. Hemingway said:

 

Couldn't agree more. 

I have long said that high schools should work with their community more.  There are many many many students that do not plan on attending college and that is fine but I think that for those students, if they want, they should have the chance to get started in a trade/apprentice program.  Welding, Electric, Plumbing, Concrete, whatever.

 

So the school works with those unions and those unions work with the school (or non-union too) and the student starts his/her apprentice program while they are in the second semester of their junior year, they finish up core classes and then leave to learn that trade, they get paid for their work (that is the key) with a % of that payment being kicked back to the union/company for training them.  The union/company would agree to hire the student on, full time, at the end of the 1.5 training period IF they meet the requirements, whatever those would be.

 

Clearly there is a ton more involved with this but that is where I would try and start.

[teachercd]

7 minutes ago, BigRedBuster said:

 

So, let me get this straight.  It's not important for kids to learn history of major historical points in history like the Magna Carta, or the Holocaust, or American civil rights so that we have an educated populace on those issues.....  But, it's more important for teachers to spend time teaching kids how to file their taxes?  Because they can google all those other issues???

I googled "how to file my taxes" and came up with 65,000,000 results in .62 seconds.  The first 5 are from the US government giving official information on....actually filing your taxes.

 

But...hey....we don't need to know about different times in history where tyrannical or horrible forms of governments took power and what the results were....or how we came to have the freedoms we have now.

I can only imagine where I would be in life...right now...had I learned more about a W-2 form from my finance teacher in high school.  I WOULD BE DOMINATING THE WORLD!

[TheSker]

9 minutes ago, BigRedBuster said:

So, let me get this straight.  It's not important for kids to learn history of major historical points in history like the Magna Carta, or the Holocaust, or American civil rights so that we have an educated populace on those issues.....  But, it's more important for teachers to spend time teaching kids how to file their taxes?  Because they can google all those other issues???

Maybe the question should be asked if the American educational system adequately teaches either?

 

The Magna Carta knowledge might help answer a Jeopardy question, but lack of life skills is costing taxpayers millions.

 

Sometimes the answer can be both/and......

[Guy Chamberlin]

Well they already had the best of both worlds for years. It was called Home Economics and it was part of every high school curriculum. 

 

Understanding food, meals, & shopping. What raising children actually entails. The cost of living and how to budget. 

 

But for some reason, Home Economics was only for girls.