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Joined: Jul 2012
Posts: 423
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You assume that smart finance is all about math, in reality it's largely about habit. If you get into the habit of debt, it becomes more and more a part of your life and more and more acceptable, that's human nature.
Simply because one "understands more comlex financial strategies" doesn't mean they're disciplined enough to execute them wisely without falling into the debt habit that the financial companies are selling you......you didn't think they were willing to give you a loan to help you out did you? They're giving you a loan to make money off of you.
If paying off debt was simply mathmatical, one wouldn't be in debt so far they have to figure out strategies for paying it off.....it's about habit...but being in a Gifted Forum, I'm certain you already knew that discipline, habit, focus, and persistence always play a much bigger role in sustained success than ability to understand a complex concept.
Last edited by Old Dad; 06/24/15 11:17 AM.
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Joined: Apr 2013
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Simply because one "understands more comlex financial strategies" doesn't mean they're disciplined enough to execute them wisely without falling into the debt habit Agreed. On the forums we frequently read of children who can answer correctly but not demonstrate a specific form of knowledge in context. Executive function (EF) issues may be common, and remediation, re-training, and learning to compensate may be vital life skills. Helping children become familiar with a wide variety of personal finance information may be key.
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Joined: Oct 2011
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Please read your own reference, because it basically makes my point for me. The first thing they talk about in getting approved is the need for an established credit history, with bolding added by me for emphasis: Here is what you need to do if you have no credit score but wish to purchase a home:
Make sure you have 4 alternative credit tradelines, with one of them being a rent or lease payment. Contact the creditors and get a letter from each of them on their letterhead showing your name and account number, and stating your account has been "paid as agreed for the last 12 months." This is a good start, but further documentation could be required from the creditor. Their summary says it all, really: In summary, no credit score loans are harder to document, harder to find lenders that will underwrite them, take longer to underwrite, may require a significant down payment, and require you to take precautions in the event the program is no longer available. Their example is a very cheap $125k home, with 20% down. It takes most people a long time to save $25k, and those savings are losing value every day. If you're buying something closer to the national median house, you're saving even longer, and have even longer to depreciate. One thing that is going up, on the other hand, is your rent, because you have to live somewhere while you're saving all this money. So a path to wealth building, this isn't. This is a perfect example of how wealthy and not-wealthy parents teach their children different values around money which help sort their children into wealthy and not-wealthy adults in the future. This sort of financial illiteracy more often leads to downwards mobility than the other way.
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Joined: Oct 2011
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You assume that smart finance is all about math, in reality it's largely about habit. If you get into the habit of debt, it becomes more and more a part of your life and more and more acceptable, that's human nature. Straw man. I assume nothing of the sort. Please don't say absurd things and attribute them to me. Sensible debt management is a habit, too.
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Joined: Mar 2006
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This is strike 2. Everyone please stay on-topic and civil with each other, or I will lock this thread.
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Joined: Apr 2013
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You assume that smart finance is all about math, in reality it's largely about habit. If you get into the habit of debt, it becomes more and more a part of your life and more and more acceptable, that's human nature. Straw man. I assume nothing of the sort. Please don't say absurd things and attribute them to me. Sensible debt management is a habit, too. It appears that OldDad may have been addressing another poster, one who spoke of " complex financial strategies", as he used that same verbiage in his reply.
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Joined: Mar 2014
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Warren Buffett's shareholder letters are available online. They are pretty funny and educational.
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Joined: Apr 2013
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In summary, no credit score loans are harder to document, harder to find lenders that will underwrite them, take longer to underwrite, may require a significant down payment, and require you to take precautions in the event the program is no longer available. This summary of no-credit-score loans is nearly analogous to gifted kids... square pegs, round holes. We persist nonetheless. It takes most people a long time to save $25k, and those savings are losing value every day. Some may say the inflation rate (which causes savings to lose purchasing power) may still be less than interest paid if one borrowed the $25K. If it is difficult to set aside $25K, how much more difficult some may find it to repay principle of $25K plus interest. For some, the dilemma has become a matter of being able to choose only one: paying for college, home ownership, starting a family. If you're buying something closer to the national median house Current national median home price, according to Zillow, is $179,200, and has not recovered since the dip in 2008. The graph showing the dip deep in home prices underscores that many who purchased their homes at higher 2006-2007-2008 prices may now be underwater on their mortgage loans (owing more money than what their home could most likely be sold for, given the current supply and demand in the residential real estate market). This is a perfect example of how wealthy and not-wealthy parents teach their children different values around money which help sort their children into wealthy and not-wealthy adults in the future. Yes, many are taught by varied and diverse life experiences, yet all may be following what they perceive as "The American Dream". When it comes to kids & money, parents may wish to explain how an individual's decisions may impact and be impacted by the decisions of others. Here is a link to a website of information by Ray Dalio, economic principles. Here is a link to a post on another thread.
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Joined: Jul 2012
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I'm going to be done with this thread as most viewpoints have been presented numerous times with their reasoning. Thank you for taking the time to share you opinions and best of luck to you and your children in their financial futures!
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