dogzilla

Sometimes the blame does belong with the poor, specifically when they make poor choices about finances. While not true in all cases, if your poor, do you really need to buy that nice car, or the big screen TV, or other goodies that you put on your credit card? I learned a long time ago that credit should be used only when needed, and that if I really wanted something, that I'm better off to save for it than to pay 10% interest or more just to have something right now. I also learned a long time ago that I don't really need every single thing that the adman on the TV is trying to sell me.

The other thing I learned is that you live within your means and you save a little money each week. If it means going without some of the luxuries, then go without.

What should be done to fix this is mandatory education about basics of finance and budgeting, and teaching that credit is not the way to wealth.


Helping your family out is fine. If you're bailing your kid or other relative out of jail every weekend, maybe it's time to let junior sit in jail for a while and figure out what he's doing to land himself in jail so often.

---------- Post added at 05:43 PM ---------- Previous post was at 05:33 PM ----------

The Horatio Alger concept does work. As a kid, my family was lower working class with my father out of work about half the year thanks to drinking problems. The college I could afford was a two year tech school, and the year I graduated was a recession year so I took the job I could get. My net worth at that time was zero. I lived in a couple marginal neighborhoods for a few years, but busted my butt since since I thought I could do better than that. I worked for a few years and then took a chance on applying for a new job. Again I busted my butt and got a reputation as the guy who learned quick and got things done. That resulted in my employer rewarding me with good raises and promotions to the point where I live a decent lifestyle. Not wealthy, but comfortable.

I could have taken the attitude that the state owed me things. I'd probably still be living in those marginal neighborhoods.

That I credit to my father who despite his faults taught me that if you want things you have to work for them, and that you need to be careful how you manage what money you do have.

---------- Post added at 05:49 PM ---------- Previous post was at 05:43 PM ----------

This article and the pdf makes a few claims without references to back them up.

Assuming this to be accurate, one thing jumps out at me, specifically the claim about minorities paying higher interest rates for mortgages. What's the reason for that?

As a cautious lender, I'd look at the statistical history of any group that I was loaning money to. If any given group had a higher rate of defaults or late payments, you can bet your life that I'd charge them a higher rate of interest. That's part of the way interest works. You make a low risk investment, you charge less interest because you can count on getting your principal back. You make a high risk investment, you get more interest because you're less likely to get your principal back.