We have a very materialistic and consumeristic culture and we shame the poor.
Homeless people are more financially rich than most of this country.
Do you see the problem yet
It’s actually curious to read this comment while several others state how they could manage to pay their debt, but they choose to be in debt because it’s somehow convenient for them. I believe them, it’s just curious because anyone could say the same.
How else are we supposed to know who’s better than who?
I thought you guys used race and gender for that?
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You said people and folk, but I think you meant men.
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God damn lazy modern bigots. Back in my day there was a word for people like you, but using it will get me banned on half the fediverse.
As President Lyndon B(ig dick) Johnson once said
“If you can convince the lowest white man he’s better than the best colored man, he won’t notice you’re picking his pocket. Hell, give him somebody to look down on, and he’ll empty his pockets for you.”
With a star on your belly.
I blame that predestination bullshit that’s in the country’s DNA. If you’re rich it must mean God loves you and if you’re poor that’s due to your sins.
Puritanism meets prosperity gospel. The original Jesus would get crucified all over again if he set foot in this hellhole.
Debt, used properly, makes you wealthy. Every billionaire you know has debt because of the advantages.
I grew up middle class. To afford my prestigeous university, I took out debt (before grant only financial aid). The value of my education allowed me to earn a higher salary to pay it off in two years. I kept earning that salary and more after the debt was paid. It had a high present value.
I bought my latest house four years ago. Mortgage rates were so low I decided to finance part of it at 2% even though I had the cash. I now earn 4.5% in money markets. After taxes, I earn 0.72% every year not to pay off my mortgage. With $350,000 remaining, this is an extra $2,500/year right now.
I shop with credit cards that give me 2-5% back on purchases. I pay off my balance every month and have never paid one penny in interest or penalties in over a decade. My credit cards therefore pay ~$1,500/year tax free.
Larry Ellison likes controlling Oracle and being a billionaire. Rather than selling stock of Oracle to fund his lifestyle, he instead borrows against the value of the stock. As Oracle appreciated, he got to keep the gains he doesn’t trigger capital gains taxes.
Most Americans do live paycheck to paycheck. They live at the ragged edge of their means and remain ignorant of finance. However, this is a global phenomenon. The difference is that much of the United States tax code is set up to benefit the wealthy. Adopt their habits and your wealth starts to snowball.
Larry Ellison likes controlling Oracle and being a billionaire. Rather than selling stock of Oracle to fund his lifestyle, he instead borrows against the value of the stock. As Oracle appreciated, he got to keep the gains he doesn’t trigger capital gains taxes.
I never really understood this. He still has to pay the loan, and he isn’t doing that with his symbolic $1/year salary. What part am I missing?
Debt interest below investment yield means infinite money.
You’re missing the taxes they aren’t paying on the yield of the investment. That’s only taxed when sold. So if you borrow against investments tied up in the market then it never triggers the tax.
Theoretically their estate would get taxed on the value resulting in a nice cascade of tax triggers but they’re doing away with that asap.
You need to pay that loan with cash, right? I get that your assets secure the loan, but without another source of cash, how you pay back the loan and not sell your assets?
Just keep borrowing and pay with that. Debt interest lower than yield.
Can you provide an example? I’m not sure I get how that works out in their favor. In my view, paying debt with more debt is a terrible mistake and will get you in financial trouble. But I get that they have far more assets than I do. I just don’t quite see where it doesn’t go wrong.
Do they not have to pay the principle?
I borrow $1000, assuring you I can pay you back because I have $5000 worth of stock.
A few years later, I borrow $5000, assuring you I can pay you back because I have $10000 worth of stock (it’s not more stock, it’s just worth more now). I use that $5000 to pay off the $1000 debt plus interest, and then have some left over.
Few years later, I borrow $10000, assuring you I can pay you back because I have $50,000 worth of stock. I use that $10000 to pay off the $5000 debt plus interest and then have some leftover.
Repeat as necessary. The bank does eventually get their money (when you die or are for some reason forced to sell, paying off the debt with cash rather than promises). To the bank this is an investment. To you, it’s a way to get cash without having to actually sell your stocks, avoiding taxes, and letting your value continue to skyrocket.
Okay. Thanks. That makes sense.
I guess the cycle continues if you will the stock to your children. So it could be decades until anyone pays taxes.
And if the stock tanks, then I guess you declare bankruptcy.
Other reply was good.
To answer your question, you can borrow against equity tied up in assets without down payment. For example, if you have a house you can borrow against the value less any mortgage up to some percent of the total value. In my situation i can borrow up to 60% of the value of a house.
Down payments are for purchasing assets where the purchased asset will act as collateral. The idea is that the bank walks away with something if you immediately fail to pay on debts.
Stocks can act as equity assets in a similar way as the house. Equity loans generally have relatively low interest.
As a side note, this is all bullshit, interest is evil, and the system should be burnt to the ground and billionaires rotisseried over the coals for dinner.
As I understand it, one way is to just borrow again against similar stock. He borrows against stock bundle A for a while, and when that loan comes due, repays with a fresh loan against stock bundle B. A and B can be the same amount of stock, but as long as the line goes up, the loan against B more than repays the loan against stock A.
There’s intricacies and details in the process, but that’s how I understand the basic process goes.
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And that you were never taught better was intentional.
crazy how people in brazil used to look up to American living standards, but it turns out americans have more inequality, violence, worse education, health system, worse food, and the list goes on
Honestly, not being a dick and caveat for me not knowing shit about you, but if you are curious enough about the topic to ask, you should take a quick finance course. Not like enroll in college or anything. I wanna say there are tons and tons of free to access resources for learning how debt and assets work that will undoubtedly improve how you manage your own money.
Just to save the search (I use Udemy the most but definitely have not checked out all of these platforms personally, so do yo own due diligence lol)
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Fuck it, lol, here is a link to a list of 30 free financial courses for all types of financing.
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who’s pretending they aren’t broke?
I don’t know anyone pretending they aren’t broke in America…I know a lot of good people struggling paycheck to paycheck and that’s it. I love how Lemmy has become this echo chamber of hate for Americans when y’all are just as fucked in Europe and other countries too with so many similar or different issues. Imagine a little compassion for all people rather than assuming “America bad because America”. Just so incredibly sad and stupid to see how dumb so many people are… that kind of thought process is exactly the same type of people that vote for trump that have this same attitude about “insert race or country here”. Y’all need a reality check, yesterday…
I’m American
In previous centuries with colonialism Europe was the cause of much disgrace in the world.
After WWII with neo colonialism it was either us or ussr imposing their way of life and values over the media, but overly exploiting resources and weakening both local economy and healthy politicians and putting dictators everywhere.
us bad fame still didn’t catch up with all the bad stuff they did and are still doing.
Speaking of “paycheck to paycheck”:
I certainly have compassion for people who live paycheck to paycheck because they’re struggling to make ends meet, but not those living “paycheck to paycheck” who have the ability to save, but choose not to. And, despite popular belief, the majority of people in the “living paycheck to paycheck” category are actually the latter. But it’s easy to assume the former meaning (it’s more intuitive, after all), so those two ‘subsets’ are almost always (basically everywhere other than within the depths of the methodology of the research that yields the figures) conflated, and so “living paycheck to paycheck” is often used to great effect in rhetoric as a result.
The fact is, on average, Americans have more of an overspending problem, than an underearning one. Did you know that 48% of consumers earning over $100,000 a year, and over a third earning over $200,000 are “living paycheck to paycheck”? Meanwhile, 25% of those earning less than $50k aren’t living paycheck to paycheck (a demo I was part of until I eclipsed $50k a few years ago)—maybe it’s time to more closely examine what those people are doing, and follow their example.
It’s absurd that anyone making less than $50k a year is saving more money than someone making $200k.
Propaganda of American exceptionalism.
The US is big on wealth inequality, like most third-world countries. Yeah, lots of people are broke, but lots of people are also making 200k/year. Overall we’re definitely struggling, but that doesn’t mean everyone is struggling.
Lemmy also leans both older and into the tech demographic, which tend to be higher paid.
The US is big on wealth inequality
You misspelled “built”.
Cries in near minimum wage UK tech work. The only upside is minimum wage is actually pretty good
What’s important is how much you can buy, not how much money you have.
Because we want to spend our end of days in comfort
Because being poor means you’re weak, and weakness makes you’re a piability to your friends, useless, and prey.
