JayleneSlide comments on Klarna for rent

[–] JayleneSlide@lemmy.world 8 points 8 months ago (8 children)

This is a financially naive and reductionist take, approaching financial illiteracy. Applied correctly, financing allows you to preserve liquidity while still leaving funds in accounts with higher returns. Financing also provides a hedge against inflation, e.g. real estate.

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[–] sp3ctr4l@lemmy.dbzer0.com 4 points 8 months ago* (last edited 8 months ago) (5 children)

Financing also literally causes or just is monetary inflation, in a debt-based fiat currency system.

Those with access to credit leverage it and prosper roughly proportional to their level of credit access, those without access to it pay the inflation tax and suffer.

This is why capitalism has bubble/pop cycles, inherently, systemically, unavoidably.

When your home is functionally your own personal bank, you want home values to keep going up... which necessarily causes less people to be able to afford homes, and in a society based on access to credit being necessary to 'buy' a home, this creates and exacerbates a class divide.

(You really haven't 'bought' your home untill you've fully paid off the mortgage, untill then you're more or less doing a complex rent-to-own from the bank.)

Its also why you get 'too big to fail' banks and other entities... they have a bunch of bad debt, and if they are forced to actually account for it, well that would mean so many write offs that it would massively decrease the money supply, which is a recession/depression.

The same dynamic is at play with college costs.

More financialized, more loans? Prices go up. Less people can afford college, or in our lovely system where student loans are not dischargeable in bankruptcy, more people become literal debt slaves.

Same dynamic is also at play with vehicles, cars.

... real estate is only a hedge against inflation in a society that is stratifying, becoming more inequitable.

If that's your inflation hedge strategy, you must understand that mass broad usage of this strategy actively causes the impoverishment of those who can't afford super-inflating home prices.

Super-inflating home values is the Boomers climbing a ladder, and then once they're on top of it, constantly pulling that ladder higher, further and further away from the ground, from all their kids.

EDIT:

Median age of a new home buyer, as of latest data, is now 40 years old.

It was ~28 through most of the 80s.

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[–] baggachipz@sh.itjust.works 4 points 8 months ago (2 children)

If that's your inflation hedge strategy, you must understand that mass broad usage of this strategy actively causes the impoverishment of those who can't afford super-inflating home prices.

And yet an individual has to “play the game” to avoid falling into poverty. I’m not sure what else could be done here. Anyway, privilege begets privilege beyond all else, and at the end it’s mostly luck of the draw.

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[–] sp3ctr4l@lemmy.dbzer0.com 2 points 8 months ago* (1 child)

I’m not sure what else could be done here.

Reform or overthrow the system instead of participating in it to the detriment of others.

Start or join a housing co-op.

Do something to alleviate the harm, or provide an alternative system.

If you have enough assets/credit to consider getting a home mortgage, you have enough assets/credit to make a meaningful difference.

No more excuses.

In a broken system, doing good, being moral, has costs, is difficult.

Instead of leveraging your privelege to increase or sustain your privilege, leverage it toward effective change.

"I don't know what else you're supposed to do" is why the machine keeps grinding everyone to death, is why more and more people become homeless, is ultimately why the planet's climate is now fucked beyond repair and we can now only attempt to cope with the now unstoppable changes that are coming.

You understand what you are doing by participating in the system, therfore, you either condone it, or you're a hypocrite.

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[–] baggachipz@sh.itjust.works 2 points 8 months ago

I wish I had the capital and time to try to fix the system. I’m not rich, I have to work to pay the bills and mortgage. I do understand my relative privilege and so try to do good where I can. I’m involved in 3 charitable organizations locally. We help feed and house lots of people. We bring clean drinking water to desperate populations elsewhere. I raise more money doing this than I could by taking my salary and directly spending it to fix an entire system. So, am I still a hypocrite? Boolean, absolutist thinking actually hinders progress.

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[–] JayleneSlide@lemmy.world 2 points 8 months ago (1 child)

I completely agree with everything you said, both in this response and your response to Scrubbles. I also appreciate your long-form responses in both.

This is, however, the system in which we live. There is no ethical consumption under capitalism. Choosing to pay cash for big ticket items, real estate, and durable goods when other accounts/portfolios earn more interest than the financing... that's just throwing money away. If your laddered certificates accounts earn >3.5% and you can get 0% or 1% automobile financing (and you need a vehicle where you live), I don't think anyone would choose to burn that much liquidity.

You really haven’t ‘bought’ your home untill you’ve fully paid off the mortgage, untill then you’re more or less doing a complex rent-to-own from the bank.

Agreed. My options where I live are primarily rent or mortgage; there are intentional communities with equitable arrangements, but the waitlist is 5 to 10 years. And with rents here going up at about 8% to 12% per year, I chose the 3.7% mortgage. FWIW, most home sales in my area are industrial investors or second homes, which absolutely underscore your points regarding livability, financial violence, and all this shit in which we live.

real estate is only a hedge against inflation in a society that is stratifying, becoming more inequitable

Again, fully agreed. Inflation is here. None of us are going to wish away inflation or predatory lending, because primate brain and "they" have our number. If one has interest rate arbitrage available, using it prudently leaves more disposable income, and therefore more time to strive for more equitable systems. For example, I am the treasurer for my regional timebank, and among my offered services are financial literacy, budgeting, and household bookkeeping. This won't surprise you at all: it's my most used offer (>100 hours used) and the number of people lacking these skills... it's almost like this system is designed for a certain scope and scale of financial ignorance.

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[–] sp3ctr4l@lemmy.dbzer0.com 3 points 8 months ago*

For example, I am the treasurer for my regional timebank, and among my offered services are financial literacy, budgeting, and household bookkeeping. This won't surprise you at all: it's my most used offer (>100 hours used) and the number of people lacking these skills... it's almost like this system is designed for a certain scope and scale of financial ignorance.

Well hey, you're actually doing some effective harm mitigation and working to provide a framework of alternatives!

That is actually commendable, I tip my proverbial hat to that.

I used to work at a nonprofit serving the homeless and at risk of becoming homeless... after enough years inside a few Fortune 500 companies showed me the true extent of the horror.

Sadly I got badly maimed and am almost a year into full time at home physical therapy... progress is real, but slow.

Had to move to the middle of nowhere to find somewhere I could afford to rent off of just SSDI.

But anyway, yes, it is very much obviously intentional that we have a lack of financial literacy and at this point just general literacy:

The Republicans have been doing everything they can for my entire lifetime thus far to destroy public education, and it is working.

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[+] Riverside@reddthat.com 2 points 8 months ago (1 child)

[deleted]

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[–] JayleneSlide@lemmy.world 1 point 8 months ago* (last edited 8 months ago)

I deeply empathize and sympathize with the challenge. I also failed to choose "congenitally rich" at birth, and I hope to remedy this error on my next iteration.

But seriously, I grew up very poor and left my abusive home at 16. I was homeless twice. Once in my late teens and again in my mid-20s. Not "crashing on my friends' couches" homeless, but rather "living in the woods and dumpster diving for food" homeless.

I bring this up as empathy by way of anecdote, and also as acknowledgement of my immense luck and privilege. I know that reaching a place of relative comfort is fucking hard in our modern environment. What's an even bigger pisser is that cost of living is stupid, the systems required for modern life are expensive, and the attacks on our attention, focus, health, and well-being are legion.

So it comes down to: is your position yet painful enough for you to want to do something about it?

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