Credit vs cash.

[Jan SobieskiParticipant 28791]

I study economics for fun. I enjoy behavioral econ.

There is evidence that shows our brains treat cash different than plastic.

That is, test subjects make different decisions based upon how you pay.

Putting a new , $1000 TV on a credit card lights up different areas of the brain vs dropping 10 one hundred dollar bills.

That is why so many live beyond their means.

Consider this when you buy s~~~ you don’t need.

Love is just alimony waiting to happen. Visit mgtow.com.

[Won'tGetFooledAgainParticipant 3293]

Jan Sobieski wrote:

I study economics for fun. I enjoy behavioral econ.

There is evidence that shows our brains treat cash different than plastic.

That is, test subjects make different decisions based upon how you pay.

Putting a new , $1000 TV on a credit card lights up different areas of the brain vs dropping 10 one hundred dollar bills.

That is why so many live beyond their means.

Consider this when you buy s~~~ you don’t need.

Totally agree, I used to live on credit I was quite happy to have a brand new car and the latest mobile phone as I only saw it as a monthly cost.

I had an epiphany 12 years ago as I realised I hated paying interest, sold the car, cleared the loans and paid off all the credit cards. Since my divorce I have been hording money and have six figures in my give a f~~~ fund. Would I buy a brand new car now and hand over the cash, no freaking way!

I work with people who clearly have no money saved at all but have just bought a £40k BMW and always have the latest iPhone. They see all this crap as showing other people how well they are doing without realising the people that actually have money invest it and don’t waste it trying to impress people who don’t care.

The warm fuzzy feeling I get knowing I have that money way exceeds the temporary feeling of excitement in owning the latest shiny thing. I just see owning nice things as hassle and liability, I am very happy with my four year old phone and 12 year old car that I don’t give a crap about.

For women, everything eventually boils down to Alpha Fucks, Beta Bucks.

[LeoYourKingParticipant 225]

Cash is King!!

[MasterAnglerParticipant 42]

I use to be cash only best I ever did money wise.I had a bank account kept money in it for auto pay bills and online purchases. I had upwards of $3000 in cash as an emergency fund. Spending cash only makes a big difference when your at the store and you look at the bills in your wallet and you say I don’t really need this. I am going back to this!

[BeerParticipant 11832]

Won'tGetFooledAgain wrote:

Totally agree, I used to live on credit I was quite happy to have a brand new car and the latest mobile phone as I only saw it as a monthly cost.

I had an epiphany 12 years ago as I realised I hated paying interest, sold the car, cleared the loans and paid off all the credit cards. Since my divorce I have been hording money and have six figures in my give a f~~~ fund. Would I buy a brand new car now and hand over the cash, no freaking way!

I work with people who clearly have no money saved at all but have just bought a £40k BMW and always have the latest iPhone. They see all this crap as showing other people how well they are doing without realising the people that actually have money invest it and don’t waste it trying to impress people who don’t care.

The warm fuzzy feeling I get knowing I have that money way exceeds the temporary feeling of excitement in owning the latest shiny thing. I just see owning nice things as hassle and liability, I am very happy with my four year old phone and 12 year old car that I don’t give a crap about.

That is my exact experience as well. One guy I know for example…always complains about how the system is stacked the average worker bee…yet he’s got the latest smart phone at all times, has several expensive hobbies that he has dumped probably 5-10k on this year, traded in a perfectly good car he still owed money on for a more expensive one, has taken a few week long vacations, and at least a half dozen long weekends out of state with the gf, and I’m sure he’s paid all travel expenses for both of them on all trips.

He doesn’t have jack s~~~ in the bank…yet he thinks he’s doing awesome in life just because he has s~~~ to show off that in reality nobody cares about. Its funny he told me once “Life is about balance, you have to live when you are young.” WTF? If life was about balance, wouldn’t that mean you save a little spend a little, not spend more than you make even though you make a good salary and continue to run up the debt? In his eyes though its just all about making the monthly payment. Its like once people get stuck in this mindset they think getting ahead is paying a car loan or whatever off…but its not, that is just breaking even. Getting ahead is when you start stacking money and investing.

I’m with you though. I love stacking money in my FU fund. Why would I ever want to pay interest on s~~~ I really don’t want anyhow? If you lose interest in something before you can save up and pay cash for it…was it something you really wanted or needed anyhow? Its also nice having your money grow instead of paying interest as well. Just the guy I was talking about above as an example…he probably shelled out 10-15k in interest on his debts this year. I’m up about 20k with investments. That effectively gives me 30-35k a year more in disposable income then him…yet he thinks I’m doing it wrong. 30-35k a year in extra disposable income for life can buy me a whole hell of a lot more worth of cars, traveling, and hobby s~~~ that whatever he bought running himself into debt over the last 10 years.

I think this is where people run into problems with credit vs cash. I don’t think its so much the physical nature of the card or the cash, I think its just some people view life as monthly payments. That guy running himself 1000 into debt just for a new tv would be doing the same s~~~ even if credit cards didn’t exist…he’d just have to find a new way to finance his lifestyle. Credit cards are just a convenient and easy way to get it done. Once you get away from the debt trap and become focused on building net worth and passive income instead of making monthly payments, you are probably responsible with your cards and realize its the same as throwing out paper money.

[coolthingy450Participant 1223]

Beer wrote:

Won’tGetFooledAgain wrote:

Totally agree, I used to live on credit I was quite happy to have a brand new car and the latest mobile phone as I only saw it as a monthly cost.

I had an epiphany 12 years ago as I realised I hated paying interest, sold the car, cleared the loans and paid off all the credit cards. Since my divorce I have been hording money and have six figures in my give a f~~~ fund. Would I buy a brand new car now and hand over the cash, no freaking way!

I work with people who clearly have no money saved at all but have just bought a £40k BMW and always have the latest iPhone. They see all this crap as showing other people how well they are doing without realising the people that actually have money invest it and don’t waste it trying to impress people who don’t care.

The warm fuzzy feeling I get knowing I have that money way exceeds the temporary feeling of excitement in owning the latest shiny thing. I just see owning nice things as hassle and liability, I am very happy with my four year old phone and 12 year old car that I don’t give a crap about.

That is my exact experience as well. One guy I know for example…always complains about how the system is stacked the average worker bee…yet he’s got the latest smart phone at all times, has several expensive hobbies that he has dumped probably 5-10k on this year, traded in a perfectly good car he still owed money on for a more expensive one, has taken a few week long vacations, and at least a half dozen long weekends out of state with the gf, and I’m sure he’s paid all travel expenses for both of them on all trips.

He doesn’t have jack s~~~ in the bank…yet he thinks he’s doing awesome in life just because he has s~~~ to show off that in reality nobody cares about. Its funny he told me once “Life is about balance, you have to live when you are young.” WTF? If life was about balance, wouldn’t that mean you save a little spend a little, not spend more than you make even though you make a good salary and continue to run up the debt? In his eyes though its just all about making the monthly payment. Its like once people get stuck in this mindset they think getting ahead is paying a car loan or whatever off…but its not, that is just breaking even. Getting ahead is when you start stacking money and investing.

I’m with you though. I love stacking money in my FU fund. Why would I ever want to pay interest on s~~~ I really don’t want anyhow? If you lose interest in something before you can save up and pay cash for it…was it something you really wanted or needed anyhow? Its also nice having your money grow instead of paying interest as well. Just the guy I was talking about above as an example…he probably shelled out 10-15k in interest on his debts this year. I’m up about 20k with investments. That effectively gives me 30-35k a year more in disposable income then him…yet he thinks I’m doing it wrong. 30-35k a year in extra disposable income for life can buy me a whole hell of a lot more worth of cars, traveling, and hobby s~~~ that whatever he bought running himself into debt over the last 10 years.

I think this is where people run into problems with credit vs cash. I don’t think its so much the physical nature of the card or the cash, I think its just some people view life as monthly payments. That guy running himself 1000 into debt just for a new tv would be doing the same s~~~ even if credit cards didn’t exist…he’d just have to find a new way to finance his lifestyle. Credit cards are just a convenient and easy way to get it done. Once you get away from the debt trap and become focused on building net worth and passive income instead of making monthly payments, you are probably responsible with your cards and realize its the same as throwing out paper money.

I see this problem so many times with people in their mid 20s or so. They have to have their drugs, or their best mobile phone with a bad contract plan instead with a prepay plan which funny enough is a lot more flexable then a contract.

Besides from bills, rant from the folks and what not. I get to keep a large chunk of my earning. Though right now I won’t be ordering anything on Amazon at this time until after christmas.

Most of the guys and women with no brains that I know that left the small town had to come back to this town after they couldn’t pay the rent. And can you guess how that happen. Hint, it was because they were living beyond their means. For the women, I believe from what I’ve heard on someone else facebook account the women are now in debt because of that women studies that they tried to get in Selkirk. Now they are working at a minimal wage job making less then I am. I think it’s around $11.25 or slight less around here. Granted I may earn about $14.00 an hour, but it helps when you don’t have to do dumb stuff with women, or pay for the latest phone. I can take at least 20% of my savings, and buy tools with it for edc carry. Which does pay for itself far more then the crap people buy these days. I also have 5k in cash as a emergency fund should something goes wrong, and I need to leave fast.

The guys with brains, have a similar set up. Aside from the bad idea of having a girlfriend.

After making plans, and I leave. I’m planning to take a portion of my saving, and start invest in stock only after I do my research.

Actions have consequences and consequences have prices. Cause and effect at work.

[Chris1234Participant 353]

That’s exactly why casinos issue chips to play rather than using cash, it tricks your brain into thinking its not cash. Putting a $20 chip on a number feels different to putting a $20 note. I’m sure its the same feeling with a credit card.

[BeerParticipant 11832]

coolthingy450 wrote:

I see this problem so many times with people in their mid 20s or so.

It doesn’t end with age or with higher wages. I know people in their 60s who have made good money for many years of their lives who very easily could have retired a millionaire, but instead they are still in debt just planning on working til they can’t anymore. The same people who have to have the latest/greatest cell phones, a brand new car, and who put vacations on credit cards at 25 seem to end up the same ones who want all that s~~~ plus a giant house and a boat at 35.

Its really quite dumb how so many people operate. All they have to do is be a cheap miser for a year, maybe pick up a second job during that time and just go all out on getting rid of debt and they could save themselves a few hundred bucks a month in interest payments. Instead they’ll carry perpetual debt through life. In the long run, they could have so much more money to spend on toys, hobbies, and travel if they don’t pay a premium for everything because they finance it all and pay interest…but they just can’t give up having stuff right now. Maybe I’m just nuts but if someone told me I could have a dollar this week or two dollars next week, I’d say see ya next week.

[Author]

Posts