[1] http://www.nbc.com/saturday-night-live/video/dont-buy-stuff/...
For companies, debt is even more interesting, because in corporate finance you'll find that debt is subsidised through tax rates. It sounds a bit weird but it's true, and so there is an incentive to take on debt. In some countries due to the tax systems, this applies to individuals too, e.g. for mortgages, the cost of debt reduces effective income and thereby reduces tax liabilities further than if you saved up first and then bought the house without debt, such that in some countries people did not pay off their mortgages because deductible interest payments were attractive.
Debt sucks, I know, I hate the debt culture as much as anyone and as a European the American creditcard industry is something I pity, but the discussion on debt today is extremely one-sided.
"I do not speak of merchants buying and selling on credit, or of those who buy on credit in order to turn the purchase to a profit. The old Quaker said to his farmer son, "John, never get trusted; but if thee gets trusted for anything, let it be for `manure,' because that will help thee pay it back again.""
First, there is a fundamental law, from which no one—neither the great nor the small—is exempt. In substance it is: "Every 'Standard Oil' man must wear the 'Standard Oil' collar."
This collar is riveted on to each one as he is taken into "the band," and can only be removed with the head of the wearer.
Here is the code. The penalty for infringing the following rules is instant "removal."
1. Keep your mouth closed, as silence is gold, and gold is what we exist for.
2. Collect our debts to-day. Pay the other fellow's debts to-morrow. To-day is always here, to-morrow may never come.
3. Conduct all our business so that the buyer and the seller must come to us. Keep the seller waiting; the longer he waits the less he'll take. Hurry the buyer, as his money brings us interest.
4. Make all profitable bargains in the name of "Standard Oil," chancy ones in the names of dummies. "Standard Oil" never goes back on a bargain.[9]
5. Never put "Standard Oil" trades in writing, as your memory and the other fellow's forgetfulness will always be re-enforced with our organization. Never forget our Legal Department is paid by the year, and our land is full of courts and judges.
6. As competition is the life of trade—our trade, and monopoly the death of trade—our competitor's trade, employ both judiciously.
7. Never enter into a "butting" contest with the Government. Our Government is by the people and for the people, and we are the people, and those people who are not us can be hired by us.
8. Always do "right." Right makes might, might makes dollars, dollars make right, and we have the dollars.
This is good advice?
Mind you - I have worked with very senior people who would avoid putting things in writing and then a few months later always have a notably different account of conversations than I did. At first I thought I was actually forgetting things until I realised it's a trick used by overly political types.
I'd like to think that the old robber-barons could still teach the current generation a thing or two about how to run a ruthless business.
They just have smarter PR and image protection from their big media brethren.
But I think it's mostly survivorship bias. The very few things from long ago that we still read, are still relevant today. That's why we know about them! Take a random book from from most periods of history, and it will be uninteresting, if not outright unintelligible, to a modern audience.
I don't think so. Have you seen who wrote this piece? I'd say it is a classic case of the Barnum effect.
I'd be very interested in doing in doing just that. How would I go about it? Weighted by popularity in that era would be fine, but not weighted according to current popularity.
While "teachable moments" in most contexts aren't fatal, the overall point that it's better to learn from other people's mistakes remains the same.
"In this eye-opening account, Cal Newport debunks the long-held belief that "follow your passion" is good advice. Not only is the cliché flawed-preexisting passions are rare and have little to do with how most people end up loving their work-but it can also be dangerous, leading to anxiety and chronic job hopping."
Paraphrasing, it means "do what you you're naturally good at"
"Unless a man enters upon the vocation intended for him by nature, and best suited to his peculiar genius, he cannot succeed".
Probably the best strategy is to select something within the venn diagram of things you like and things that are lucrative.
> The inordinate love of money, no doubt, may be and is "the root of all evil," but money itself, when properly used, is not only a "handy thing to have in the house," but affords the gratification of blessing our race by enabling its possessor to enlarge the scope of human happiness and human influence. The desire for wealth is nearly universal, and none can say it is not laudable, provided the possessor of it accepts its responsibilities, and uses it as a friend to humanity.
> So in regard to wealth. Go on in confidence, study the rules, and above all things, study human nature; for "the proper study of mankind is man," and you will find that while expanding the intellect and the muscles, your enlarged experience will enable you every day to accumulate more and more principal, which will increase itself by interest and otherwise, until you arrive at a state of independence.
> When a man's undivided attention is centered on one object, his mind will constantly be suggesting improvements of value, which would escape him if his brain was occupied by a dozen different subjects at once. Many a fortune has slipped through a man's fingers because he was engaged in too many occupations at a time.
The poor spendthrift vagabond says to a rich man:
"I have discovered there is enough money in the world for all of us, if it was equally divided; this must be done, and we shall all be happy together."
"But," was the response, "if everybody was like you, it would be spent in two months, and what would you do then?"
"Oh! divide again; keep dividing, of course!"
When you spend money, it doesn't disappear. It's just moved.
"Money" was backed by commodities of finite quantity.
Least of all, if one believes in the ability of capital to be reinvested to create more capital, it is obvious that the second case need hardly injure an economy while still helping the people who are broke.
The former case, of continual wealth division, of course may fail--luckily, that's not how UBI works.
Read about it here: https://en.wikipedia.org/wiki/Socialism
"The tax burden (measured by the Institute for Fiscal Studies in the form of total government receipts as a share of national income) started at just above 40 per cent in 1979, peaked at 45.4 per cent in 1982, then fell below 40 per cent in 1990."
http://www.independent.co.uk/news/uk/politics/10-things-you-...
What she did do was reduce the silly taxes on higher level of income - but those taxes were just imposed on poorer people.
She managed alone to prove that women can be as hateful and live destroyers as any men.
I know a lot of people from my circles, especially older people in the late 50's and 60's who have spent their lives in the socialist era endlessly expect elder brothers/relatives to provide for them. Any refusal to do so is taken to amount to some extremely bad kind of selfishness and greed. Keep alone the fact that they've barely done any work all their lives, or are any way serious even now with their spending habits. The basic idea is that they are entitled to be provided no questions asked and someone is supposed to make up for them. Refusing to comply is evil.
[1] http://efinance.org.cn/cn/fm/The%20Equity%20Premium%20Stock%...
This is all true, but it was not all obvious until I'd experienced four or five decades of life lessons. If you think this advice is at all dubious, ask and we'll see if we can explain...
Epic.
Although I never had problems with paying the money back, I was paying a lot more money back to the bank, so when I finished paying the credit off, the car was worth half of the price I bought it, almost having paid double the price because of the credit interests.
But the worst part was that it didn't feel right.
So now my policy is to never buy anything with money that I don't have (yet). It makes you feel so much better, you feel a truly free person. I don't own my apartment, true, and the money I spend each month on rent could bring me closer to owning one, but I just don't see the point of it. But buying stuff for money you actually have makes your decisions so much better and closer to what you can really afford.
Also, there is another component to buying stuff with money you actually have. Recently, I decided to buy a scooter. Not a big "deal", but I didn't want to just spend any savings on it that I have so far, so I put aside money from some freelancing outside my daily job, sold some unused furniture and electronics, and only had to pay around 25% of the price of the scooter from my account. It felt so good, it felt like I deserved it, because I planned for it in advance and didn't have to "compromise" my savings. On the other hand, when I took the loan for the car, I felt bad, I almost felt miserable, as if I was doing something wrong. I can't imagine buying a house for someone else's money. You must feel like a slave.
For example, imagine you had taken a loan to buy the scooter, then used the money put aside to pay the installments instead. You might have paid somewhat more for the scooter, but on the other hand, you could actually own the scooter earlier, which might even save you money in the end (for example, if you drove a car instead and therefore spent more in gas and such).
Buying a house is similar; the "point" is that you end up saving money, since you stop paying for it, but never stop paying rent. Also, there are incentives (such as tax breaks) that make it cheaper still.
Does it mean that you have an extra obligation "tying" you? Sure. But that doesn't mean it's always a bad choice.
Comfort. Immense comfort.
I spend a lot of time in my car. I enjoy the car that I have now (a 2012 Honda Accord EX-L), but the only reason why I didn't take out a lease on something more expensive (like a 535i or an E-class) is because we're planning to move very soon and driving a luxury car in NYC makes no damn sense unless you are flush with money and can afford the inevitable body work.
When I went to Austin a few months ago, I decided to rent a BMW Z4. It was amazing. An absolute pleasure to drive. It wasn't the speed that did it in for me, though. It was the sheer comfort of everything.
Volume knobs? They're RIGHT THERE. You don't even need to move your forearm.
The seats? Plushy and comfortable (unlike my Accord; everything is great, but those seats are terrible).
Cruise control that actually works on downhills and actually slows down? Not a problem.
Me paying a few hundred dollars per month to not drive something much cheaper (and, likely, not as nice/comfortable) doesn't bother me at all. It's a debt, and debt sucks, but driving a low-grade econobox for a few years while I save up for something that will be worth 30% less than what I bought it for the minute I drive it out is much worse (for me).
(Same goes for my future house or apartment.)
That being said, building up my emergency spend and clearing up some debt that I've amassed is next on my priority list after moving.
If you don't understand it, then yes, you should avoid it. But if you do understand it, you can use it to help yourself.
https://en.wikipedia.org/wiki/There%27s_a_sucker_born_every_...
Required reading for those considering a startup or a career.
The first rule for making money: never do it for the money.
A free download is available: http://www.tinaja.com/ebooks/ismm.pdf
> Some men have a foolish habit of telling their business secrets. If they make money they like to tell their neighbors how it was done. Nothing is gained by this, and ofttimes much is lost.
Nicely done, Mr. Barnum. I am honored to share a birthday with you.
I was recently reading in a London paper an account of a like philosophic pauper who was kicked out of a cheap boarding-house because he could not pay his bill, but he had a roll of papers sticking out of his coat pocket, which, upon examination, proved to be his plan for paying off the national debt of England without the aid of a penny.
However there's a hidden idea which equals wealth to happiness which I dislike heavily. That said we can rest assured that while wealth is not connected to happiness (too many things into play to achieve that state), debt sure as hell leads to miserable.
Probably neither.
Also worth mentioning is "The Millionaire Fastlane" - the title is sleazy, but it had big impact on my mindset when I've read it.
BTW, the parts of the Patanjali Yoga Sutra, which gives practical advice about the practice - about necessity of an appropriate isolated place, diet, habits with emphasis on sleep cycle, proper state of mind, concentration and persistence - is the best universal advice to achieve anything in life that I am aware of. The word Yoga could be translated as "discipline", and has little to do with asanas, mats, and yoga pants.
I loathe books like How to Win Friends and Influence People that have some meandering and boring story before it gets to the point.
This is the 'how to start a startup' for business of the regular type, i.e. no ambition to get loads of capital and become the next Google. Read this once the tech bubble has burst!
