Those 'Poor' People earning $200k

[Augie]

10 minutes ago, Alaska Darin said:

 

He didn't "misspeak" - he let an unwritten corporate policy out into the customer ether.  Banks like people who pay big interest, that's why they are able to put up big buildings in every city on the world.  Smart people who pay their balances every month and use the rewards programs are a liability to the bottom line.

 

How many decades did you spend working in banking?  It costs them nothing to make the plastic. You can pay it off every month, and they still made the Merchants Fee on every single transaction. That’s income. Banks like income - from every source.  Merchant Services is it’s own department in a bank, unless they outsource it. There is probably an annual fee which more than pays for an processing costs. They are happy to have that card out there just in case you might need it one day. It’s not like they set your credit limit aside making it unavailable to lend to others. That’s just not how it works.  It may not be AS profitable as some other frequent users, but it’s still profitable. 

 

If smart people paying their lines off were a liability to the bank, THE BANK WOULD NOT DO IT. It’s quite simple. 

 

We have a large home equity line, just in case it’s handy one day. Haven’t used it in forever, but they LOVE us! 

[Bill from NYC]

2 hours ago, Hapless Bills Fan said:

 

Nice try.  The problems recruiting high-level and especially tech-savvy people to the midwest goes beyond St Louis and predates 2014 by decades.

And somehow riots in LA and NYC (not to mention lack of affordability) don't seem to dampen their desirability as career destinations.

People are running out of NYC. Rents are sinking rapidly for the first time in decades. Maybe I am misinformed. That is always possible, but; I am under the impression that St. Louis ranks in the top 5 in murders in the nation. Couple that with Ferguson and it sounds bleak, wouldn’t you say? Maybe that is why the networks declared the state for President Trump 7 minutes after polls closed.  Lesson learned.....there is good and bad in everything. ???

[Greybeard]

1 hour ago, WhoTom said:

 

I pay market rate - the same rate as before the ACA. What's supposed to make it affordable is the subsidy for those who otherwise couldn't afford it. My income is just over the threshold, so I don't qualify. Technically, it is affordable, as I'm able to pay the bills without going homeless or hungry. Rather than complaining about not getting a subsidy that others are getting, I'm grateful that I don't need the subsidy.

 

The ACA leaves a lot to be desired, but as someone else pointed out, it's helped more than 20 million people obtain coverage. I'd like to see it improved, not repealed or gutted. And for the record, the politicians who passed it ARE forced to use it.

https://www.cnbc.com/2017/07/25/heres-how-much-members-of-congress-pay-for-their-health-insurance.html

 

          Thanks for the link.  I did think they were still covered by their old plan.

[Bill from NYC]

19 hours ago, Hapless Bills Fan said:

 

I feel confident you will not let it get in the way of your snark, but the point of the article was the accountant's claim that the family hardly had any money left over for savings.

401(k) is a form of tax-advantaged savings, and their budget called for them to save a substantial amount in this manner.

 

It's not reasonable to budget including good chunk of savings (specially tax advantaged savings at that), and then complain that you don't have much money left over to save.  Oh, the humanity! indeed.

 

 

Most pensions are things of the past HBF. You know this. A 401K is now a total necessity. There is plenty of blame to go around for this too I might add.

[Alaska Darin]

24 minutes ago, Augie said:

 

How many decades did you spend working in banking?  It costs them nothing to make the plastic. You can pay it off every month, and they still made the Merchants Fee on every single transaction. That’s income. Banks like income - from every source.  Merchant Services is it’s own department in a bank, unless they outsource it. There is probably an annual fee which more than pays for an processing costs. They are happy to have that card out there just in case you might need it one day. It’s not like they set your credit limit aside making it unavailable to lend to others. That’s just not how it works.  It may not be AS profitable as some other frequent users, but it’s still profitable. 

 

If smart people paying their lines off were a liability to the bank, THE BANK WOULD NOT DO IT. It’s quite simple. 

 

We have a large home equity line, just in case it’s handy one day. Haven’t used it in forever, but they LOVE us! 

I very much appreciate the snark.  I don't work in banking and I never have.  I probably shouldn't have used the term "liability" but there is a reason credit card companies and banks refer to people who pay their CC balances in full every month as "deadbeats."  It takes a number of deadbeats to make the profit of a single "normal" CC user who doesn't pay their balance.

It's literally as simple as investment.  Would you rather invest in something with a 3% guaranteed return or 15% (or more)?  Banks LOVE people who carry credit card balances.  They get the same guaranteed profit that deadbeats earn them, plus HUGE interest each month.  The average American household pays north of $1k in CC interest each year.   You gotta charge and payoff over $30k a year as a deadbeat to match just that.

 

And of course your bank loves your HELOC.  It's SECURE.

[Mike in Horseheads]

4 hours ago, Alaska Darin said:

Can't come up with any real examples of your own take?   Every President and politician with a brain should be trying to overturn it.  It's a terrible law.

 

Yes 20m people being on health insurance is terrible.

[Augie]

2 hours ago, Limeaid said:

 

 Well the way he put it, it was insulting to my wife rather than understanding that we just do not borrow money unnecessarily.  I did not put all of the conversation in post.  He suggested that my wife open another type of card backed by line of credit (basically a debt card) and that the money be borrowed from the bank to support it.  We could not use the CDs we had (which I later closed) to secure it. She was to borrow money so she could have their card but she already had credit cards.

 

Frankly I am glad bank took stand as well.  I did not want to go back.

 

Well, now THAT sounds spot on. Sometimes it’s not what you do as much as how you do it, and good help is hard to find in most industries. I’m NOT saying the guy isn’t a buffoon!  I’d want to see him trained a little better before having him fired, but I get that it can become emotional. 

 

Every consumer credit application that is declined is required to give a written explanation as to WHY it’s declined. That is what you need to look at if you want to know why it was declined, not some clown spouting off about things he knows little of. It’s usually in the form of boxes checked such as bad credit, insufficient credit, high debt/income ratio, length of employment, etc. Consumer credit became very formulaic generally using credit score decades ago. This makes regulators happy and avoids accusations of discrimination and lawsuits. It’s good in some ways, but difficult in other ways if there is no room to actually “think”. 

 

When our son graduated from college we gave him a couple thousand to get a secured credit card. He had to build credit even if he was happy just using a debit card. When it was time for a new car, my wife co-signed so he could avoid the astronomical interest rate a first time car buyer would get. 

 

I get that it can be frustrating at times, and I may be touchy about all the “Big Bad Bank” attitudes, but public perception is often waaay off. It’s like the folks who resent high incomes and net worths, it helps to thoroughly understand it before making judgment. My sister gets furious over how much some top executives earn. I get that the gap is enormous, sometimes ridiculously so, but she chose to be a teacher. A very noble job (and far more appreciated than ever now!), but she could have tried to get into an Ivy League law school and devote her entire life to her work, networking, sacrificing family time, etc. Instead, she got her summers off. 

 

If you make $200k+, good for you. If you throw it away on fancy cars and $20k in vacation expense annually, don’t expect any sympathy from me. 

 

 

.

 

 

1 hour ago, Alaska Darin said:

I very much appreciate the snark.  I don't work in banking and I never have.  I probably shouldn't have used the term "liability" but there is a reason credit card companies and banks refer to people who pay their CC balances in full every month as "deadbeats."  It takes a number of deadbeats to make the profit of a single "normal" CC user who doesn't pay their balance.

It's literally as simple as investment.  Would you rather invest in something with a 3% guaranteed return or 15% (or more)?  Banks LOVE people who carry credit card balances.  They get the same guaranteed profit that deadbeats earn them, plus HUGE interest each month.  The average American household pays north of $1k in CC interest each year.   You gotta charge and payoff over $30k a year as a deadbeat to match just that.

 

And of course your bank loves your HELOC.  It's SECURE.

 

Not every customer can be your most profitable customer. Yes, they prefer the more profitable customers. I never argued against that. 

 

Chase still loved us, and we hadn’t used that card (other than Visa is required at Costco) for a couple years. The Delta AmEx is no longer the best deal (who flies anymore?), so we are back to our unsecured Chase card. Nobody had mentioned security prior to that. You went from profitability to risk. 

Edited July 26, 2020 by Augie

[Alaska Darin]

37 minutes ago, Mike in Horseheads said:

Yes 20m people being on health insurance is terrible.

It never gets tiring listening to people parrot politicians.  That "small picture" thinking is exactly what politicians count on to keep power.

 

Health care costs are rising just as fast as they did before.   The "Affordable Care Act" is anything but. 

[Alaska Darin]

16 minutes ago, Augie said:

 

Well, now THAT sounds spot on. Sometimes it’s not what you do as much as how you do it, and good help is hard to find in most industries. I’m NOT saying the guy isn’t a buffoon!  I’d want to see him trained a little better before having him fired, but I get that it can become emotional. 

 

Every consumer credit application that is declined is required to give a written explanation as to WHY it’s declined. That is what you need to look at if you want to know why it was declined, not some clown spouting off about things he knows little of. It’s usually in the form of boxes checked such as bad credit, insufficient credit, high debt/income ratio, length of employment, etc. Consumer credit became very formulaic generally using credit score decades ago. This makes regulators happy and avoids accusations of discrimination and lawsuits. It’s good in some ways, but difficult in other ways if there is no room to actually “think”. 

 

When our son graduated from college we gave him a couple thousand to get a secured credit card. He had to build credit even if he was happy just using a debit card. When it was time for a new car, my wife co-signed so he could avoid the astronomical interest rate a first time car buyer would get. 

 

I get that it can be frustrating at times, and I may be touchy about all the “Big Bad Bank” attitudes, but public perception is often waaay off. It’s like the folks who resent high incomes and net worths, it helps to thoroughly understand it before making judgment. My sister gets furious over how much some top executives earn. I get that the gap is enormous, sometimes ridiculously so, but she chose to be a teacher. A very noble job (and far more appreciated than ever now!), but she could have tried to get into an Ivy League law school and devote her entire life to her work, networking, sacrificing family time, etc. Instead, she got her summers off. 

 

If you make $200k+, good for you. If you throw it away on fancy cars and $20k in vacation expense annually, don’t expect any sympathy from me. 

 

 

.

 

 

 

Not every customer can be your most profitable customer. Yes, they prefer the more profitable customers. I never argued against that. 

 

Chase still loved us, and we hadn’t used that card (other than Visa is required at Costco) for a couple years. The Delta AmEx is no longer the best deal (who flies anymore?), so we are back to our unsecured Chase card. Nobody had mentioned security prior to that. You went from profitability to risk. 

I like the "pick and choose." I led with "banks call full balance payers deadbeats" for a reason.  My entire initial point that you didn't agree with is proven by that simple statement. 

 

The rest of it is informational and not necessary but some people may benefit from it, so I put it in.

[Augie]

1 minute ago, Alaska Darin said:

I like the "pick and choose." I led with "banks call full balance payers deadbeats" for a reason.  My entire initial point that you didn't agree with is proven by that simple statement. 

 

The rest of it is informational and not necessary but some people may benefit from it, so I put it in.

 

I don’t understand what you mean by “pick and choose”. I have never heard the term “deadbeat” in any manner other than to describe people who do NOT pay their bills. Banks certainly profit from people who pay in full very month. Would they rather you carry a balance? Sure, we can agree on that. 

[Mike in Horseheads]

1 hour ago, Alaska Darin said:

It never gets tiring listening to people parrot politicians.  That "small picture" thinking is exactly what politicians count on to keep power.

 

Health care costs are rising just as fast as they did before.   The "Affordable Care Act" is anything but. 

Whatever, it got 20m people on insurance that weren't and too bad you think thats "small picture'. Move on.

[Hapless Bills Fan]

5 hours ago, Bill from NYC said:

Most pensions are things of the past HBF. You know this. A 401K is now a total necessity. There is plenty of blame to go around for this too I might add.

 

Absolutely, I agree a 401K or an IRA is a total necessity.  The point is, it's a form of savings, right?  Don't you think it's a bit hinkey to list it as an expense, then conclude the client's income vs expenses did not allow them to have significant savings?

[T&C]

23 minutes ago, Hapless Bills Fan said:

 

Absolutely, I agree a 401K or an IRA is a total necessity.  The point is, it's a form of savings, right?  Don't you think it's a bit hinkey to list it as an expense, then conclude the client's income vs expenses did not allow them to have significant savings?

Agreed here as well about the 401k or IRA. I just hit the age of no penalty so I took 6k out to get the tree's trimmed. Didn't want to but Had to... hurricane season is upon us. What is amazing is that even doing that my balance is basically what it was on Jan.1.

 

I've seen credit cards mentioned. I am the only person I know or anyone I know knows that has never had one. Never had that bill or interest. My credit is excellent regardless. 

We live decently, nothing outrageous going on as far as the usual bills and doing a refi saved $340 a month or so. Dropped directv and got sling... love it, that was $100 a month off for the same damn thing. 

 

There are ways to cut costs as opposed to spending money that isn't actually yours... the credit card hell. A buddy of mine took out a ***** ton of money from his 401k last month, with penalty included, to pay off $20k in credit cards. That is ***** crazy.

[Bill from NYC]

On 7/26/2020 at 6:27 PM, Hapless Bills Fan said:

 

Absolutely, I agree a 401K or an IRA is a total necessity.  The point is, it's a form of savings, right?  Don't you think it's a bit hinkey to list it as an expense, then conclude the client's income vs expenses did not allow them to have significant savings?

Not really. People used to be given pensions that were mostly paid for by their employers. Now, folks must lay out their own money to plan for old age so why isn't it an expense? Tax deductible yes, but; an expense nonetheless. 

I can't say that I completely understand what it is that troubles you about this issue. is it just the complaints, or do you think that a family that makes 200 K, pays 15,000 in property tax, and has kids in college deserves a rebate/incentive, or whatever one wishes to call it less than an illegal alien?

I for one do not but that is simply jmo.

[Taro T]

4 hours ago, Bill from NYC said:

Not really. People used to be given pensions that were mostly paid for by their employers. Now, folks must lay out their own money to plan for old age so why isn't it an expense? Tax deductible yes, but; an expense nonetheless. 

I can't say that I completely understand what it is that troubles you about this issue. is it just the complaints, or do you think that a family that makes 200 K, pays 15,000 in property tax, and has kids in college deserves a rebate/incentive, or whatever one wishes to call it less than an illegal alien?

I for one do not but that is simply jmo.

 

Pensions used to be a good thing where both the employee and employer had skin in the game.  The employee took a lesser salary to have income post retirement and the company funded the plans adequately.

 

Nowadays, most of the few pension plans that remain are essentially stealing from future owners of the company as the pension funds are oftentimes not fully/ adequately funded to provide for the defined benefits that are promised the employee.

 

Defined contribution plans don't have that issue.  The employee and employer each contribute what they've agreed to do and future owners/shareholders & employees aren't on the hook for covering for what didn't get done. 

 

And, by maxing out contributions to the plan, employees can take control of their own retirement and not be at the mercy of a company declaring bankruptcy.  (Fully realize that people can be in situations where they can't contribute much to the 401k, but they can also often change those circumstances.  Not much they can do if the company pulls the rug out from under them.)

[Augie]

8 minutes ago, Taro T said:

 

Pensions used to be a good thing where both the employee and employer had skin in the game.  The employee took a lesser salary to have income post retirement and the company funded the plans adequately.

 

Nowadays, most of the few pension plans that remain are essentially stealing from future owners of the company as the pension funds are oftentimes not fully/ adequately funded to provide for the defined benefits that are promised the employee.

 

Defined contribution plans don't have that issue.  The employee and employer each contribute what they've agreed to do and future owners/shareholders & employees aren't on the hook for covering for what didn't get done. 

 

And, by maxing out contributions to the plan, employees can take control of their own retirement and not be at the mercy of a company declaring bankruptcy.  (Fully realize that people can be in situations where they can't contribute much to the 401k, but they can also often change those circumstances.  Not much they can do if the company pulls the rug out from under them.)

 

We always maxed out on the 401k and taught our kids to do the same. At the very least, you have to get the max match from the employer possible. It may seem difficult, but as the old saying goes “pay yourself first”. If you have money leftover, you will find a way to spend it, probably not knowing where it went. If you put it away for your retirement, you’ll probably get by just fine and benefit exponentially after a full career.