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Lowlow

Thoughts for Young People

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I talk about all this very often with my daughter (nearly 14) and remind her how lucky she is to have the thing's that she has got where as myself I had my first mobile phone at 18 my first computer at 21 and tell her that everything I've got I've worked bloody hard for and telling her to do the same 

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12 hours ago, Lowlow said:

Few thoughts for young people ...

This financial world you live in is NOT the stable long lasting place you may imagine it to be, so be cautious.

When I was young, nobody even had credit cards.  They paid with checks, cash, etc.  Credit card debt that you and your friends take for granted is a very new phenomenon.  People used to save up for things they wanted, or buy with some limited store credit, but they did not have the huge amounts of credit card debt that many of you take for granted.

It was only 53 years ago that the money in your pocket (in the United States) stopped being made of silver.  It was only in 1971 that the currency completely severed the link to gold and became a pure fiat currency.  Before that, people literally walked around paying for things with silver coins that were in their pocket.

30 year mortgages have only existed for working people in the U.S. since 1934, approximately 84 years ago.

It was only during the 1920's in the U.S. that average people started trading stocks, and even then it was a very small minority of people.

The Internet as you know it is only about 25 years old (meaning the web, browsers, etc), and the adoption of computers by average people is only slightly longer.

ATM machines were not widely used until approximately 30 years ago.

So .. what's my point ?  My point is that all of this stuff seems so solid, like it has been around forever, but in the grand scheme of things, it's all very new.  The expectations that you have about money, about entitlement, about what you are owed, about what you should be able to afford, about your safety and security, your retirement, etc ... all of these things are built upon a foundation of expectations and beliefs that are VERY new and have been created and molded during a time of plenty, and most of them have never weathered a serious financial downturn.

The point is ... be careful, and thankful for what you have.  Try to understand what the world was like just as little as a few decades ago, so that you can be prepared in case something goes wrong with all of this.

Agreed poiniant reading for a 23 year old 

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Some very wise words and views in this thread, I too remember the days of +15% rate on my endowment mortgage and the promises of a healthy return at the 25 year term ... Oh how empty those promises turned out to be!

It's such a different world now, in some ways marvellous and in other ways, not so, but that's our roller coaster journey of life, sometimes it's a white knuckle ride but still a blast haha

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Credit card debts.. That really is an American thing I suppose. In Europe it is not quite common to use a credit card for almost everything. Really only thing I use my credit card for, IS when I'm in the USA, and that happens twice a year for holidays... Without a credit card, it's pretty hard to rent a car, rent a hotel room or such..

Thank god we don't have that widespread use of creditcards...In my surroundings it's quite normal to only spend money you have(apart from mortgage, and a rare loan used for a car, which almost never happens)..

Quite a good story though, totally understand what you're saying there..

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I understand what you're saying, with the addition of @FFkook to that. My parents taught me to save money. Only debt I have is a mortgage and I had a small student loan back then (paid off within my first couple of working months). 

I think of myself being lucky growing up in the time I did. I'm a bit older than the internet. So my youth was in the analog age and I had the benefit of the digital age at the right moment. It took a while before I had my first mobile phone, so not being spoiled with apps etc back then. 

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On 02/10/2018 at 15:24, FFkook said:

Credit card debts.. That really is an American thing I suppose. In Europe it is not quite common to use a credit card for almost everything. Really only thing I use my credit card for, IS when I'm in the USA, and that happens twice a year for holidays... Without a credit card, it's pretty hard to rent a car, rent a hotel room or such..

Thank god we don't have that widespread use of creditcards...In my surroundings it's quite normal to only spend money you have(apart from mortgage, and a rare loan used for a car, which almost never happens)..

Quite a good story though, totally understand what you're saying there..

You really should start using a credit card. 

They give protection on purchasing, some offer cashback or rewards and with a bit of clever money management they will make you money. 

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59 minutes ago, Kenty said:

You really should start using a credit card. 

They give protection on purchasing, some offer cashback or rewards and with a bit of clever money management they will make you money. 

As I wrote, I have a credit card and yes, I use that whenever possible. Not for groceries or gasoline, there's just no point to do that. Regarding PM's, there are not many shops that allow payment through credit card, they almost all require bank wiring...

The cashback and rewards is also not very common here.

There is a difference in culture here. Credit card payments are restored to 0 every end of the month by automatically paying the debt through your regular bank account. That way, you don't get to build up a big CC debt, which is the real danger..

Can't see why I really would want to build up a debt the way they do in -for example- the USA. It's just a different way of life, just like getting a loan to buy a car. No way we do that here. I buy the car when I can pay it myself. Don't get me wrong though, I'm not attacking the way of life in -for example- the USA. As a matter of fact, I love the USA and I visit the country at least twice a year. Don't know why I was chosen to be born in Europe...

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26 minutes ago, FFkook said:

As I wrote, I have a credit card and yes, I use that whenever possible. Not for groceries or gasoline, there's just no point to do that. Regarding PM's, there are not many shops that allow payment through credit card, they almost all require bank wiring...

The cashback and rewards is also not very common here.

There is a difference in culture here. Credit card payments are restored to 0 every end of the month by automatically paying the debt through your regular bank account. That way, you don't get to build up a big CC debt, which is the real danger..

Can't see why I really would want to build up a debt the way they do in -for example- the USA. It's just a different way of life, just like getting a loan to buy a car. No way we do that here. I buy the car when I can pay it myself. Don't get me wrong though, I'm not attacking the way of life in -for example- the USA. As a matter of fact, I love the USA and I visit the country at least twice a year. Don't know why I was chosen to be born in Europe...

I use my credit card pretty much exclusively for buying diesel. Just to build my credit score up (with direct debit set up to pay the thing in full each month). Good tip for young people as it'll make it easier to be accepted for a mortgage in future. 

Agree with you about the cars though. If you can't pay for it in full (or at least 0% finance), you don't deserve it imo. There's plenty of £2000 cars that'll do people,  but no, they want the £30000 audi on finance to look the part. 

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The most important lesson my parents taught me was hard work.  They worked hard, and set an example.  

I got a good education because they worked hard but at 15 they insisted I work in Tesco for summer holidays. This taught me humility, and that hard work pays.

I will be doing the same for my children to keep them grounded, and give them work ethic

My experience is that hard work and just a bit of tenacity have presented all sorts of opportunities....other people say I have been “lucky”.  I disagree, I just work hard and life then presents opportunities (along with challenges).  You can tell your kids this but the rest they have to figure out themselves. 

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22 minutes ago, dicker said:

The most important lesson my parents taught me was hard work.  They worked hard, and set an example.  

I got a good education because they worked hard but at 15 they insisted I work in Tesco for summer holidays. This taught me humility, and that hard work pays.

I will be doing the same for my children to keep them grounded, and give them work ethic

My experience is that hard work and just a bit of tenacity have presented all sorts of opportunities....other people say I have been “lucky”.  I disagree, I just work hard and life then presents opportunities (along with challenges).  You can tell your kids this but the rest they have to figure out themselves. 

Working hard is all well and good ..but it won't make you financially secure in most cases.. working smart is more important. Trust me there are far more  hardworking poor people out there than hardworking wealthy ones.

As for luck well.. some have it and some don't...if you have some don't knock it...

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34 minutes ago, Groundup said:

Working hard is all well and good ..but it won't make you financially secure in most cases.. working smart is more important. Trust me there are far more  hardworking poor people out there than hardworking wealthy ones.

As for luck well.. some have it and some don't...if you have some don't knock it...

I can't speak for dicker, but I think what he means is hard work in all its forms, not just back breaking hard manual labor, though that's certain a part of it when you're starting out and trying to get your feet on the ground.

For example ... it's hard physical labor to be a waitress, you're on your feet all day, putting up with people's nonsense, etc ... but that is also easy in the sense that you don't have to study in school, you can p*ss around with your friends when you're not working, you can get a waitress job anywhere, you can mouth off at your boss and quit if you get mad, etc ... it's a job that requires basically no risk taking on your part, no strategy, no study, no investment beyond showing up to work everyday and working, barely any skill or experience, pretty much anybody can show up and learn to be a waitress (albeit maybe not a good one lol).

I'm not knocking being a waitress, it's an honorable job, your work helps to feed people, it's a living for a lot of people, and it is hard physical work.  That said, there's something to be said for the challenges people face when they take risks, try to get an education, learn new skills, push themselves forward towards new challenges, take chances that might not work out, and generally work to make their lives better too.

There are plenty of people out there who love to sit around and b*tch and moan about their lives but never take any chances, avoid conflict, write it all off as being a consequence of luck, or fate, feel it's out of their control to do anything about it, blame the "system", or "rich people", or one political party or another, blame their childhood, their lack or resources, and generally just make a lot of excuses for why they never took a chance and worked for what they wanted.  It is not easy to want something and work to make that something a reality, ask anyone who has done it, it's a struggle and not for the faint of heart - it is hard.  Many times you are the only person who believes, and it can be very lonely, especially when you are young.

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In the UK over the past few decades there has been some fundamental changes in industries and working habit's. I've personally worked hard..grafted..long hours.. backbreaking work ect ect just to be made redundant.. chucked on the scrap heap... Start again.. grafted..  long hours ect ect. This time company cutbacks were  closing your department... Start again.. this time I'm working smarter and I'm already benefiting and using my fiat to create wealth... using my knowledge and understanding to add to that wealth. No hard work, hours imputed are shorter. Chuck in a bit of luck and bingo.

Hard work in any form will only get you so far in life.. smart working and luck will propell you further... Just saying.

 

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3 hours ago, Blockhead said:

 

My ex wife's brain tumour and the financial pressures that caused must have been because she wasn't clever or hard working enough, then. 

 

[deleted in favor of @Nick1368 's much more understanding / empathetic response]

Edited by Lowlow

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8 hours ago, Blockhead said:

 

My ex wife's brain tumour and the financial pressures that caused must have been because she wasn't clever or hard working enough, then. 

I'm so sorry to hear that.

that's not quite what I meant, unfortunately bad luck exists and we can't do nothing about that, I was more referring to good luck.

 The reality is that life is not fair nor  is the world  that we are living in, someone is for example David Beckham's son and he doesn't need to be worried about money as long as he is alive and then there is someone who is born with disabilities, diagnosed with serious illnesses , or he is born in countries like Syria in the middle of war and poverty and all of that.

at the end of the day all we can do is to make the best out of the situation that we are put in, and there is absolutely no benefit in comparing our lives to other people's lives, if you compare yourself to someone who is doing better than you then you get depressed, if you compare yourself to someone who is not doing as well as you then you lose motivation and take your foot off the gas.

but in my personal experience a normal person with a normal life can't rely only on intelligence and good luck to become successful , there are loads of people out there who come up with great business ideas everyday but to go out and execute it to perfection and have the consistency and patience to stick to it and make it happen is what separates successful people from others.

 

Edited by Nick1368

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Landscape is the most important thing of all. Play the hand you are dealt within the landscape. You can have the best idea in the world and the best business plan, infinite patience, Nikola Tesla level IQ and still fail, if the market is not right for your idea, perhaps people don't want it at that time, perhaps your idea is early, perhaps it is late and obsolete. Perhaps you will be lucky and time it right, but you are 1 in 1000 and it is luck that determines that not your attributes. Landscape is determined by luck first and foremost, it is the key to whether your efforts result in success or failure. The rest, your attributes, work ethic, they are details and the details only determine the extent of success. Be humble, as success or failure is simply by the grace of opportunity. 

Further more, you can have the best work ethic in the world, sacrifice your time with family, move away from home, work hard, rise through merit and sacrifice, and despite all of it, your neighbour can do none of that, live on benefits for years, and win the lottery. :D Its not fair but it is what it is. Life is not fair. Society is not just. 

Know these things when you start and you can no be disappointed. Be thankful for what you have.

Remember that the government is taking most of your taxes to give as charity to others who care nothing for you. When the time comes in the future, those people taking your hard earned today, need to come asking for your charity instead, remember to say 'no'.  

Landscape (the economic situation, society, government) and opportunity (or lack of) determine success far more than any personal attribute. Its all luck of the draw chaps. 

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