Financial knowledgeis a very good skill to have. Whether we want it or not, most aspects of our lives are about money. Data from theWorld Economic Forumshows that about half of Americans are financially literate.In the EU, 65% of citizens understand inflation, and 45% can explain compound interest.
Understanding economics can be hard, but the WEF explains that “it’s important to develop a basic understanding of the influential role money plays in our work, social life, health, education and everything in between.”
Some commenters misreading the question and giving answers aboutfinanceis pretty ironic, we have to admit. But, at the same time, it’s a good reminder of how important educating yourself about money, personal finance, and economics is, right?
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Believing in trickle-down economics.
Millionaires lecturing poor people how it’s all about your attitude and mindset, as if the landlord will accept attitude as rent payment.
Anyone promoting the idea that tax cuts for billionaires will feed the hungry, heal the sick, house the homeless, or in any way improve the lot of Joe Schmoe.
Blaming a sitting president for gas prices.
Refusing a raise because “it’ll bump you up to the next tax bracket.”.
Professing that the current President is responsible for the economy, when in actuality, the President has very little to effect on it. Especially the global economy of which we are very much tied to.
“Investing” in crypto and NFTs.
Not understanding marginal taxes.No, there is no scenario where you get a raise and your take-home pay goes down because of reaching a new tax bracket.
Complaining about endless credit card debt while getting every meal delivered. :|.
Confusing personal finance with economics.
Expecting prices to reduce when inflation goes down.
A lot of people actively refuse to live at/below their means. You’ll meet people making >$100,000 a year still living paycheck to paycheck because they just spend all the money they make.Keep this in mind when people talk about the economy, since a lot of people complaining absolutely could be living comfortably if they downsized a bit. People who are actually struggling often sound basically the exact same as well-off people who have been slightly inconvenienced, which leads to a lot of distortion in how people perceive the economy.
Oh man, there’s so many of these:- Thinking that a tax write-off is equal to a tax refund- Conflating one’s own financial struggles with rhetoric state of the national economy- Thinking that rising interest rates are a cause of inflation, not a remedy of it- Thinking saving cold hard cash outside of a bank is a sound investment strategy- Defending tax cuts for the hyperwealthy while you personally don’t have two pennies to rub together.
Big new truck parked in front of a house that looks like it is about to fall down.
Tesla Cybertruck in an apartment complex parking lot.
Routinely taking out payday loans.
Asking why can’t we just print more money to solve a recession.
Belief in trickle down economics. Citing the commons problem.
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Buying a new car when you are upside down on your current car loan, and you roll the balance into the new loan.
Paying the minimum on your credit card.
Confusing net worth with liquidity. Jeff bezos may have a net worth of billions but he doesn’t have that money sitting in a bank. It’s in his house, Amazon stock etc.
Not investing in my pyramid scheme. You, yes, you who are not like this dumba*s, you who know how to invest how to win in life contact me for this extremely great opportunity for me to take your money. people that fall for this kind of things.
Not knowing the interest rate of your credit card while carrying a balance. Especially on a large balance.
Sunk cost fallacy.
Thinking that tax write-offs actually make some things free. I had an old boss that would constantly say since it was a write-off, what he was getting was free, even though he just spent $500 on it.
The relationship between supply, demand and price is fundamental economic knowledge, if they can’t grasp that they would be considered “illiterate”.
Every single tik tok / Social media guru headline repeated but no actions ever taken“ 401k ‘s are a scam and will be worthless ““ need to have multiple air bnbs to retire ““ it’s all about section 8 “Etc .
Being upset over a smaller tax refund.
“If we build more housing my rent will go up.”.
Proposing taxes on unrealized gains.
Anyone with a single home who’s pleased about soaring property prices"Thank god I invested in the housing market when I did!“You didn’t invest dumbass. That’s a roof over your head. It’s a basic necessity. Now you will never, ever be able to afford anything better.
I ran the finance department at a ~250 car/month Toyota dealership for the better part of a decade. 1-2 times a year, Toyota Financial (the corporate financial arm of Toyota, not the dealership) would run promotions on certain vehicles for a truly, sincerely no strings attached 0% financing PLUS a $1000 rebate on select models. The rebate did not apply to cash transactions, was applied at time of sale, and the financing carried no prepayment penalty, origination fee, or termination fee.In short, if you setup financing and paid the car off in the very first statement, you would pay exactly $1000 less and get your new car’s title when you go to register it exactly the same as you would if you were to pay cash.The number of damn-near arguments I had with customers over this who insisted on paying cash anyways was simply astounding. I was literally able to give each of probably two hundred people over the years a legitimately free $1000 and they’d say no. More money than brains.
Thinking your Social Security tax is saved for you to later use in retirement. Na, goes to pay boomers now and you are hoping one day young kids will get taxed for you.
Thinking installment payments are significantly cheaper then paying all at once.
“I did that” stickers.
Cashing your paycheck at the same place that sells gas.
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