Author Topic: I Came of Age During the 2008 Financial Crisis. I知 Still Angry About It.  (Read 5428 times)

SlowAppreciation

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Re: I Came of Age During the 2008 Financial Crisis. I知 Still Angry About It.
« Reply #20 on: September 21, 2018, 09:11:36 AM »
Some of you are way too harsh. Plenty of highly educated 50 year olds don't understand loans and debt様et alone a 17 year old who has been told since day 1 to go to the best school they can get into. To someone who has never really worked before, and has been financially supported their entire life, the difference between a $10k and $100k future payment is just some abstract # with no real weight behind it.

For example, I would consider myself pretty financially savvy. I've (responsibly) had a credit card since I was 15, bought my first stock at 13, have had a 401k and Roth IRA since I was 17, etc. But I also took out ~$100k of student loans to go to school, because I simply had no idea how much money that was. Sure didn't seem like a lot when every school tells you that 80%+ of their graduates make $100k. In retrospect, yes, I overpaid for my education. But I also don't see how 17 year old me could have known otherwise.


DooDiligence

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Re: I Came of Age During the 2008 Financial Crisis. I知 Still Angry About It.
« Reply #21 on: September 21, 2018, 11:09:21 AM »
I can try to empathize with the author because he was young and perhaps made a series of poor decisions while young. 
We were all stupid of something when young.  And I think he realizes some of this mistakes.

To go into journalism and keep the major when newspapers were being gutted by the internet is not a wise decision, especially when English majors were in oversupply and prospects likely poor even in a good economy. 

Here are the bad decisions he made:

1.  Journalism - bad earning power and employment prospects.
2.  NYU -  ripoff, private school in ripoff city.
3.  Took on a ton of debt  (which he PROMISED TO PAY BACK, some with high interest rates loans).  It's like he LBO's himself.
4.  After graduation staying in a NYC in a likely low paying job.  Low pay, high costs and high taxes. 

These poor decisions just compound on themselves.  If his parents didn't warn their son of this they are also stupid.

In that context he has the uncontrollable factor of the great recession. 

That is a tough situation but you make your bed and then you lie in it. 
Being angry, resentful, bitter and other negative emotions don't help the situation.   Those are unproductive emotions and like a poison in one's body. 

I would tell him to try to negotiate his interest rates down, get a better paying job in a lower cost locale.  I don't hear engineers complaining of this in lower cost areas.

And you know what - the movie is not over yet.  He is still alive, has likely learned from many of his mistakes and gained wisdom that is hard to learn.  "Suffering reveals the way to greatness." 

I think people in the US are super lucky and should often quit their complaining.  A huge number of people in squalid 3rd world countries would happily trade places with him and wash dishes in the US vs starving in their country.

Another gigantic AGREE.

I've worked in many places such as those you speak of.
Two of the worst were Abidjan in Cote d'Ivoire and Takoradi in Ghana.

I would watch groups of literally a hundred or more guys, on a dock, hauling large sacks of cocoa off of trucks and then pouring them into a warehouse feeder trench in the 100+ degree sun.

I have no idea what they were being paid but I'm sure it wasn't much & they did this ALL DAY LONG.
Then they'd walk home to their dirt floor hovels with no windows or doors.

I'm particularly disturbed by people who act as if the world owes them a favor, especially when they live in one of the greatest economic zones in the world.

Luck plays an important part for all of us.

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KJP

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Re: I Came of Age During the 2008 Financial Crisis. I知 Still Angry About It.
« Reply #22 on: September 21, 2018, 12:03:10 PM »
Some of you are way too harsh. Plenty of highly educated 50 year olds don't understand loans and debt様et alone a 17 year old who has been told since day 1 to go to the best school they can get into. To someone who has never really worked before, and has been financially supported their entire life, the difference between a $10k and $100k future payment is just some abstract # with no real weight behind it.

For example, I would consider myself pretty financially savvy. I've (responsibly) had a credit card since I was 15, bought my first stock at 13, have had a 401k and Roth IRA since I was 17, etc. But I also took out ~$100k of student loans to go to school, because I simply had no idea how much money that was. Sure didn't seem like a lot when every school tells you that 80%+ of their graduates make $100k. In retrospect, yes, I overpaid for my education. But I also don't see how 17 year old me could have known otherwise.

There's a broader underlying point here about the financial illiteracy of even apparently intelligent people in this country, whether teenagers or adults.  As you note, this person made the initial decision to go to NYU and major in journalism when he was 17 or 18 years old.  He appears to be an intelligent person.   So, why did he (and many others like him) not make wiser decisions?  I understand the point about personal responsibility, but most people absorb the lessons they see around them.
« Last Edit: September 21, 2018, 12:04:58 PM by KJP »

rb

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Re: I Came of Age During the 2008 Financial Crisis. I知 Still Angry About It.
« Reply #23 on: September 21, 2018, 12:23:19 PM »
Some of you are way too harsh. Plenty of highly educated 50 year olds don't understand loans and debt様et alone a 17 year old who has been told since day 1 to go to the best school they can get into. To someone who has never really worked before, and has been financially supported their entire life, the difference between a $10k and $100k future payment is just some abstract # with no real weight behind it.

For example, I would consider myself pretty financially savvy. I've (responsibly) had a credit card since I was 15, bought my first stock at 13, have had a 401k and Roth IRA since I was 17, etc. But I also took out ~$100k of student loans to go to school, because I simply had no idea how much money that was. Sure didn't seem like a lot when every school tells you that 80%+ of their graduates make $100k. In retrospect, yes, I overpaid for my education. But I also don't see how 17 year old me could have known otherwise.

There's a broader underlying point here about the financial illiteracy of even apparently intelligent people in this country, whether teenagers or adults.  As you note, this person made the initial decision to go to NYU and major in journalism when he was 17 or 18 years old.  He appears to be an intelligent person.   So, why did he (and many others like him) not make wiser decisions?  I understand the point about personal responsibility, but most people absorb the lessons they see around them.
I've been asking myself this for a long time because I see people make stupid financial decisions all the time. And I don't think it's just about financial literacy because I saw lots of people that actually work in finance make tons of bad financial decisions for themselves.

The conclusion I've came to is that actually making good financial decisions for the most part is actually very hard. If you "get it" it may seem very simple. But it's a hard thing to do in general.

Cigarbutt

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Re: I Came of Age During the 2008 Financial Crisis. I知 Still Angry About It.
« Reply #24 on: September 21, 2018, 12:33:31 PM »
Some of you are way too harsh. Plenty of highly educated 50 year olds don't understand loans and debt様et alone a 17 year old who has been told since day 1 to go to the best school they can get into. To someone who has never really worked before, and has been financially supported their entire life, the difference between a $10k and $100k future payment is just some abstract # with no real weight behind it.

For example, I would consider myself pretty financially savvy. I've (responsibly) had a credit card since I was 15, bought my first stock at 13, have had a 401k and Roth IRA since I was 17, etc. But I also took out ~$100k of student loans to go to school, because I simply had no idea how much money that was. Sure didn't seem like a lot when every school tells you that 80%+ of their graduates make $100k. In retrospect, yes, I overpaid for my education. But I also don't see how 17 year old me could have known otherwise.
There's a broader underlying point here about the financial illiteracy of even apparently intelligent people in this country, whether teenagers or adults.  As you note, this person made the initial decision to go to NYU and major in journalism when he was 17 or 18 years old.  He appears to be an intelligent person.   So, why did he (and many others like him) not make wiser decisions? I understand the point about personal responsibility, but most people absorb the lessons they see around them.
Interesting question.
Looked for answers.
https://www.brookings.edu/wp-content/uploads/2016/06/Are-College-Students-Borrowing-Blindly_Dec-2014.pdf
https://static.newamerica.org/attachments/2358-why-student-loans-are-different/StudentLoansAreDifferent_March11_Updated.e7bf17f703ad4da299fad650f47ac343.pdf

So, this is an issue tied to individual responsibility.
But what if everybody around you (parents, friends, social circle, school, government and other institutions) say:
"Don't worry, just sign here."
Is it reasonable to expect that the average college applicant will behave responsibly?
Somehow, I would say that the "system" can be improved and not only through emphasis (and consequences) on personal responsibility.

This has a lot of parallels to the unfortunate mortgage episode that happened recently.

Doesn't history repeat itself sometimes?
Can we learn from mistakes?

KJP

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Re: I Came of Age During the 2008 Financial Crisis. I知 Still Angry About It.
« Reply #25 on: September 21, 2018, 02:04:29 PM »
Some of you are way too harsh. Plenty of highly educated 50 year olds don't understand loans and debt様et alone a 17 year old who has been told since day 1 to go to the best school they can get into. To someone who has never really worked before, and has been financially supported their entire life, the difference between a $10k and $100k future payment is just some abstract # with no real weight behind it.

For example, I would consider myself pretty financially savvy. I've (responsibly) had a credit card since I was 15, bought my first stock at 13, have had a 401k and Roth IRA since I was 17, etc. But I also took out ~$100k of student loans to go to school, because I simply had no idea how much money that was. Sure didn't seem like a lot when every school tells you that 80%+ of their graduates make $100k. In retrospect, yes, I overpaid for my education. But I also don't see how 17 year old me could have known otherwise.
There's a broader underlying point here about the financial illiteracy of even apparently intelligent people in this country, whether teenagers or adults.  As you note, this person made the initial decision to go to NYU and major in journalism when he was 17 or 18 years old.  He appears to be an intelligent person.   So, why did he (and many others like him) not make wiser decisions? I understand the point about personal responsibility, but most people absorb the lessons they see around them.
Interesting question.
Looked for answers.
https://www.brookings.edu/wp-content/uploads/2016/06/Are-College-Students-Borrowing-Blindly_Dec-2014.pdf
https://static.newamerica.org/attachments/2358-why-student-loans-are-different/StudentLoansAreDifferent_March11_Updated.e7bf17f703ad4da299fad650f47ac343.pdf

So, this is an issue tied to individual responsibility.
But what if everybody around you (parents, friends, social circle, school, government and other institutions) say:
"Don't worry, just sign here."
Is it reasonable to expect that the average college applicant will behave responsibly?
Somehow, I would say that the "system" can be improved and not only through emphasis (and consequences) on personal responsibility.

This has a lot of parallels to the unfortunate mortgage episode that happened recently.

Doesn't history repeat itself sometimes?
Can we learn from mistakes?

I read the papers you linked to.  Although the New America paper is based on only 59 focus group participants, I think it's more interesting and suggests many causes, including immaturity, financial illiteracy and low agency.  For example, look at all the quotes suggesting that borrowers had no idea what their monthly payments would be or didn't know that they'd have to payback the loans if they didn't get a degree.  Similarly, the apparent total befuddlement about IBR, even after it was explained, is both sad and frightening.

I have no evidence to support it, but I continue to believe that we could address some of the problem by having mandatory basic financial literacy education in high school.  For example, with an internet connection, a graduating high school student about to take out significant loans to attend college should be able to figure out (i) the expected monthly payments on student loans at graduation; (ii) expected rent in the city they want to live in; (iii) a rough estimate of additional living expenses (car, food, etc.) and taxes; and (iv) whether all of those expenses are greater than or less than a reasonable estimate of the starting salary in their hoped for profession.  I don't actually expect most 17 and 18 year olds to do that on their own.  But if they were forced to do it as part of a graded financial literacy class, it would hopefully open their eyes up to what they're getting themselves into.  Along the way, they'd learn many useful pieces of financial knowledge, e.g., the effects of compound interest, amortization tables, the actual impact of payroll and income taxes, the actual cost of renting an apartment, etc.
« Last Edit: September 21, 2018, 02:07:07 PM by KJP »

Cigarbutt

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Re: I Came of Age During the 2008 Financial Crisis. I知 Still Angry About It.
« Reply #26 on: September 21, 2018, 04:44:36 PM »
ponsibility, but most people absorb the lessons they I read the papers you linked to.  Although the New America paper is based on only 59 focus group participants, I think it's more interesting and suggests many causes, including immaturity, financial illiteracy and low agency.  For example, look at all the quotes suggesting that borrowers had no idea what their monthly payments would be or didn't know that they'd have to payback the loans if they didn't get a degree.  Similarly, the apparent total befuddlement about IBR, even after it was explained, is both sad and frightening.

I have no evidence to support it, but I continue to believe that we could address some of the problem by having mandatory basic financial literacy education in high school.  For example, with an internet connection, a graduating high school student about to take out significant loans to attend college should be able to figure out (i) the expected monthly payments on student loans at graduation; (ii) expected rent in the city they want to live in; (iii) a rough estimate of additional living expenses (car, food, etc.) and taxes; and (iv) whether all of those expenses are greater than or less than a reasonable estimate of the starting salary in their hoped for profession.  I don't actually expect most 17 and 18 year olds to do that on their own.  But if they were forced to do it as part of a graded financial literacy class, it would hopefully open their eyes up to what they're getting themselves into.  Along the way, they'd learn many useful pieces of financial knowledge, e.g., the effects of compound interest, amortization tables, the actual impact of payroll and income taxes, the actual cost of renting an apartment, etc.

Not sure if formal teaching with an elaborate curriculum is the way to go or if only some kind of online simplified program could do the trick. Perhaps an even more targeted approach (cost effective) may help.

Just for awareness of potential evidence, there seem to be green shoots.
https://www.inceptia.org/PDF/Inceptia_LoanSummary_Whitepaper.pdf
https://www.in.gov/che/files/150722_PressRelease_TruthInBorrowing.pdf
https://www.in.gov/che/files/Loan_Disclosure_Template_for_Mail_Merge.pdf

A simple annual "reminder" seems to "nudge" people in the right direction.
A bit sad that we may need "programs" to help people helping themselves but the principle of secondary prevention is to minimize the impact of a disease once you have it. Obviously primary prevention is better but democracies are not perfect.

james22

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Re: I Came of Age During the 2008 Financial Crisis. I知 Still Angry About It.
« Reply #27 on: September 21, 2018, 09:11:17 PM »
To go into journalism and keep the major when newspapers were being gutted by the internet is not a wise decision, especially when English majors were in oversupply and prospects likely poor even in a good economy. 

Here are the bad decisions he made:

1.  Journalism - bad earning power and employment prospects.
2.  NYU -  ripoff, private school in ripoff city.
3.  Took on a ton of debt  (which he PROMISED TO PAY BACK, some with high interest rates loans).  It's like he LBO's himself.
4.  After graduation staying in a NYC in a likely low paying job.  Low pay, high costs and high taxes.

I'm guessing he didn't make a *financial* decision.

If you want to change the world, journalism, NYU, and NYC are what you do to make more likely your voice is heard. Debt doesn't weigh much against that.

... it is no longer worth being a journalist? Worth, of course, is a loaded word. It can refer to money, viewing journalism as a lucrative way to make a living. Or it can have a vocational meaning, implying that journalism is intrinsically a public service.

https://www.theguardian.com/media/2015/feb/15/would-be-journalists-change-world-alex-thomson-felix-salmon

Cigarbutt

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Re: I Came of Age During the 2008 Financial Crisis. I知 Still Angry About It.
« Reply #28 on: September 22, 2018, 05:56:06 AM »
To go into journalism and keep the major when newspapers were being gutted by the internet is not a wise decision, especially when English majors were in oversupply and prospects likely poor even in a good economy. 
...

I'm guessing he didn't make a *financial* decision.

If you want to change the world, journalism, NYU, and NYC are what you do to make more likely your voice is heard. Debt doesn't weigh much against that.

... it is no longer worth being a journalist? Worth, of course, is a loaded word. It can refer to money, viewing journalism as a lucrative way to make a living. Or it can have a vocational meaning, implying that journalism is intrinsically a public service.

https://www.theguardian.com/media/2015/feb/15/would-be-journalists-change-world-alex-thomson-felix-salmon

Trust in media is reaching cyclical lows as the media used by media is undergoing transformation.
But "there are so many good stories that haven't been written yet".
https://www.youtube.com/watch?v=GtIIuwY-6s8
If one of my children would decide to become a journalist, I would say that the long term value has not changed.

wachtwoord

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Re: I Came of Age During the 2008 Financial Crisis. I知 Still Angry About It.
« Reply #29 on: September 22, 2018, 07:26:26 AM »
To go into journalism and keep the major when newspapers were being gutted by the internet is not a wise decision, especially when English majors were in oversupply and prospects likely poor even in a good economy. 

Here are the bad decisions he made:

1.  Journalism - bad earning power and employment prospects.
2.  NYU -  ripoff, private school in ripoff city.
3.  Took on a ton of debt  (which he PROMISED TO PAY BACK, some with high interest rates loans).  It's like he LBO's himself.
4.  After graduation staying in a NYC in a likely low paying job.  Low pay, high costs and high taxes.

I'm guessing he didn't make a *financial* decision.

If you want to change the world, journalism, NYU, and NYC are what you do to make more likely your voice is heard. Debt doesn't weigh much against that.

... it is no longer worth being a journalist? Worth, of course, is a loaded word. It can refer to money, viewing journalism as a lucrative way to make a living. Or it can have a vocational meaning, implying that journalism is intrinsically a public service.

https://www.theguardian.com/media/2015/feb/15/would-be-journalists-change-world-alex-thomson-felix-salmon

Change the world? LOL!

Being part of the mainstream media (and the vast majority of the journalists are) means being part of the governments propaganda machine (and thus doing evil, not good). Read what they write and know it's true. No mainstream media is reporting on the latest shananigans with Assange and any real independant media outlet would as it's their neck on the line next (yes Assange is a journalist).

There is just hardly any free media left as the last decades have shown a huge crackdown on free speech (both in Europe and the US, the rest of the world never really had it as far as I can tell). The only exceptions are wikileaks and alt right media and those aren't jobs anyone chooses that wants to make a decent living.

On topic: he made his bed now he must lay in it. As soon as he stops externalizing blame he might turn into anything else than a screw-up. I doubt he ever will.
« Last Edit: September 22, 2018, 07:29:31 AM by wachtwoord »
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