Would you please stop posting flamebait and/or unsubstantive comments to HN? You've unfortunately been doing it repeatedly. We have to ban that sort of account, in the hope of preventing this site from destroying itself.
This is borderline antagonistic. Do you think that the majority of lower-income people who do not have large savings are in this situation due to disproportionately high discretionary spending?
We live in a consumer society. The messages pulling us to buy things are pervasive and highly effective. Our self-worth has been successful tied to those cars and iPhones by the companies who sell them. It's a real phenomenon that when a low income person gets a windfall they might buy a TV. But there are a number of totally legitimate reasons for that. Besides the marketing, money has a totally different meaning when you are low income. It's not some safety blanket you can store up for later. It's more like evaporating pools of water on a hot day. It's going to go somewhere, and soon. It's pretty rational to have it go towards something you know you or your family will enjoy instead of the next bill collector. The bill collectors will never be satisfied anyway.
The post you replied to was a little snarky, but there is some debate here, a lot of which boils down to financial options and “financial literacy.” For example:
> Poor people do have surplus money to save, find Massachusetts Institute of Technology (MIT) economists Abhijit Banerjee and Esther Duflo. Even people living on less than $1 per day spend money on many nonessential items such as alcohol, tobacco, and televisions.2 And when poor people increase their earnings, they spend only two-thirds of their windfall on food. These findings suggest that poor people are not just living hand to mouth; they do have funds to save.
So the question is, what financial products could help the poor lay away some of those funds for the future?
You know buying a use second hand iPhone can be a better monetary investment then a new android phone when you get convinced by all the Apple marketing about superior build quality. (Because Apples definition of that tend to not include physical robustness).
Also if buying a car allows you to save hours every day you can then use to work more and earn it back pretty fast (or take care of you kids or whatever) then this might be quite reasonable.
If marketing works in convincing people to buy more stuff than they need, then it's directly responsible for poor people making unwise financial decisions.
If it doesn't convince people to buy more than they would done have anyway, then it doesn't actually work. This means the marketing, advertising, PR and communications industries can be completely eliminated.
1) A cell phone is an absolute necessity nowadays. Sorry. Remember the Dot Com bust? People were becoming homeless but absolutely maintained their cell phone because it was the single thing that they had to have to get back out of being homeless. And that was 2001! Cell phones have just gotten more important since then.
This is in top of the fact that a cell phone nowadays may be the only computer someone has access to.
2) I know of very few poor people who buy new cars. However, most of them would be better off if they did. Quite often, the amount of money they have to pour into an old car to keep it running exceeds the amount of money to actually purchase a new car. However, no one will give them the loan required to do so.
dang|5 years ago
https://news.ycombinator.com/newsguidelines.html
yayadarsh|5 years ago
dougmwne|5 years ago
We live in a consumer society. The messages pulling us to buy things are pervasive and highly effective. Our self-worth has been successful tied to those cars and iPhones by the companies who sell them. It's a real phenomenon that when a low income person gets a windfall they might buy a TV. But there are a number of totally legitimate reasons for that. Besides the marketing, money has a totally different meaning when you are low income. It's not some safety blanket you can store up for later. It's more like evaporating pools of water on a hot day. It's going to go somewhere, and soon. It's pretty rational to have it go towards something you know you or your family will enjoy instead of the next bill collector. The bill collectors will never be satisfied anyway.
burlesona|5 years ago
> Poor people do have surplus money to save, find Massachusetts Institute of Technology (MIT) economists Abhijit Banerjee and Esther Duflo. Even people living on less than $1 per day spend money on many nonessential items such as alcohol, tobacco, and televisions.2 And when poor people increase their earnings, they spend only two-thirds of their windfall on food. These findings suggest that poor people are not just living hand to mouth; they do have funds to save. So the question is, what financial products could help the poor lay away some of those funds for the future?
Source: http://www.pensiondevelopment.org/documenten/Helping%20the%2...
dathinab|5 years ago
Also if buying a car allows you to save hours every day you can then use to work more and earn it back pretty fast (or take care of you kids or whatever) then this might be quite reasonable.
triceratops|5 years ago
If it doesn't convince people to buy more than they would done have anyway, then it doesn't actually work. This means the marketing, advertising, PR and communications industries can be completely eliminated.
Right? So which is it?
(FWIW, I think it's the first).
bsder|5 years ago
This is in top of the fact that a cell phone nowadays may be the only computer someone has access to.
2) I know of very few poor people who buy new cars. However, most of them would be better off if they did. Quite often, the amount of money they have to pour into an old car to keep it running exceeds the amount of money to actually purchase a new car. However, no one will give them the loan required to do so.