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 Mad Doc Grotsnik wrote:
And in a complete surprise to no-one at all, the FCA has now written to Banks, asking them all to explain how they each came to a suspiciously similar APR for overdrafts.

Cartels? no how dare you acuse me of this good sir? what supposedly i met the managers off all other bigshots in a restuarant? na never happened?

Orlanths golden rule to a happy financial life is.

T L : D R Dont go overdrawn.

If you need it and must have it. DO WITHOUT ANYWAY.
Sounds contrary, it isnt, most 'essential' spending is not.

If you are in debt don't' sell stuff to get out of it, that is just another % loss, only sell to get out of debt if you wanted to sell anyway. Take a short month, or a short season if necessary, however long ist actually takes. I suggest a harder shorter road than a 'small saving every week'. Banks approve spending plans because they know most customers cant keep to them. You are more like to last the course on a cash fast than by a longer slight underspend. Do everything you can to save money, work overtime if you can, don't go out or buy in, dont buy booze but get white labels food, don't buy gifts, don't buy rounds, don't live under peer pressure of whatever anyone else buys or does, don't buy anything but minimal travel fares and the necessities to keep you alive. Esdplain your hard times doctrine and your mates will understand if they are of worth. Get out of that fething debt by the shortest hardest (legal) route.
THEN spend on stuff and keep 0 as your real hard limit. Overdrafts are not for spending limits that are a cushion in case your pay comes in late or you are double billed. If you are approaching zero then you are approaching your real limit, dont be an idiot and convince yourself otherwise unless you are now earning a high enough income to pay it all off end of month guaranteed. Even then maintaining credit is better, high income high spend just raises the ante. Keep an overdraft facility but learn the hard lesson of the banking system now, overdrafts are for suckers.

Its a simple life lesson and it really works. If you are smart you only need to take one to three months on near zero spending to buy yourself a little float to keep yourself perpetually above zero, and if you ever want to make a happy purchase that takes you into the red. DONT. No matter how happy the happy purchase is.

Live by those simple easy rules and you will get on fine, even if you are in low income.

Tip 1: You can never be rich and happy unless you are able to be poor and happy.

Tip 2: Remember the powerful blessing Galadriel placed over Gimli.
"But if hope should not fail, then I say to you, Gimli son of Glóin, that your hands shall flow with gold, and yet over you gold shall have no dominion"

Be the master, not the servant, of your money. Stay in the black, and be content with less and you will end up with more.

To borrow the military adage, no fiscal strategy survives contact with poverty. The above is all well and good until you lose your job or have your hours cut or an earning family member gets ill or your rent goes up or your landlord sells etc

Treating people struggling to get out of debt like they're just imbecile who ours never occurred to to just stay in the black is extremely naive.

Meanwhile, 'you can't be rich and happy if you can't be poor and happy' is just a lie.

Thats easy to say when GW are about to drop a new Ghazzy!!

nfe wrote:
To borrow the military adage, no fiscal strategy survives contact with poverty.

Ok, lets shed some light on this.
If you cant handle credit temptation you wont handle real poverty. If you can you are armed for when things take a turn for the worse.
Stay in the black. If its an impulse spend and it takes you over the line, do without.

nfe wrote:

The above is all well and good until you lose your job or have your hours cut or an earning family member gets ill or your rent goes up or your landlord sells etc

You are in the same situation but you have either learned fiscal discipline or you haven't, if you haven't its much harder to adjust, let alone you might have an inferior start position with existing debt.
Stay in the black, then if things turn nasty you are on surer footing.

nfe wrote:

Treating people struggling to get out of debt like they're just imbecile who ours never occurred to to just stay in the black is extremely naive.

Nobody is doing that. It;'s just your trying to twist words to add malice that isn't there.
My point remains the quick hard cash fast is the best way out of moderate debt, heavy debt may need to be written off. Anyone can have more debt than they can possibly pay if they borrow enough.

As for staying in the black, there is more to this than meets the eye. The people who think you are imbeciles are those who run the payday loan companies. They prey on those who want easy cash for the impulse buy culture. Now they have been stomped on my increased legislation of late, but that was a long time coming and there were plenty of victims.
Stay in the black is the correct advice, if its not what you want to hear so be it, but it is what I am saying. The person who treats the collective you like imbeciles are those who want to offer you extra credit. Are you a sucker? Cant you wait? Haver you no self control? Then we have a loan just for you. A fiscal faustian pact.
What is the answer? Stay in the black. Simple really. Need a loan, do without. The exceptions to this are few and far between, house, car etc. And the house is a permanent asset and the car is an enabler for income.

Let me tell you what I actually hate. Those loan adverts who try to convince people to liquidate part of their pensions of value of their property. Its all dressed up so nicely, but it turns lasting assets, especially real estate into easy cash for easy spending.
Banksters make these ads because they hope you are stupid. i write what I write in the hope you are not.

nfe wrote:

Meanwhile, 'you can't be rich and happy if you can't be poor and happy' is just a lie.

Explain yourself. I did, so you could at least try the same. If you can.


Automatically Appended Next Post:

 queen_annes_revenge wrote:
Thats easy to say when GW are about to drop a new Ghazzy!!

Very easy. I stay in the black. So I could afford new sisters of Battle army when it came out, and my income is modest. I cant afford that and other luxuries, but I have a choice. If I want Ghazzy I will get him because I know how to budget and aren't paying off from not knowing how to budget.
I cant have everything I want, but I dont have to do without, and by having no debts to service in total I have more than my income without otherwise permit overall. Debt will allow me to have the choice of having some things faster at the cost of having far less overall. I do not consider that worthwhile.

 Orlanth wrote:

nfe wrote:
To borrow the military adage, no fiscal strategy survives contact with poverty.

Ok, lets shed some light on this.
If you cant handle credit temptation you wont handle real poverty. If you can you are armed for when things take a turn for the worse.
Stay in the black. If its an impulse spend and it takes you over the line, do without.

Plenty people are amazingly fiscally responsible (truly poor people tend to be expert budgeters and savers) and are still wrecked by simple events. Simply telling people to stay in the black when their outgoings are rapidly increased or their earnings rapidly decrease isn't meaningful advice when they're already on a shoestring living hand to mouth.

nfe wrote:

The above is all well and good until you lose your job or have your hours cut or an earning family member gets ill or your rent goes up or your landlord sells etc

You are in the same situation but you have either learned fiscal discipline or you haven't, if you haven't its much harder to adjust, let alone you might have an inferior start position with existing debt.
Stay in the black, then if things turn nasty you are on surer footing.

As above.

nfe wrote:

Treating people struggling to get out of debt like they're just imbecile who ours never occurred to to just stay in the black is extremely naive.

Nobody is doing that. It;'s just your trying to twist words to add malice that isn't there.

I'm not twisting anything. Though I don't think it's malicious, I do think your position is naive at best and derisive at worst. You are presenting it as an objective, logical approach, but it's based on a false assumption that it's possible, even easy, for everyone simply to never fall into debt.

nfe wrote:

Meanwhile, 'you can't be rich and happy if you can't be poor and happy' is just a lie.

Explain yourself. I did, so you could at least try the same. If you can.

It really doesn't need explanation. 'If you can't be happy when your kids are starving and you've no central heating in January then you wont be when you're comfortable either'? It's just nonsense.

nfe wrote:


Plenty people are amazingly fiscally responsible (truly poor people tend to be expert budgeters and savers) and are still wrecked by simple events. Simply telling people to stay in the black when their outgoings are rapidly increased or their earnings rapidly decrease isn't meaningful advice when they're already on a shoestring living hand to mouth.

Ok, how to explain this to you.
You can exercise daily, eat the right things, and be of excellent health then get cancer and die.
Does this mean that right living and health advice are all worthless because they don't eliminate all disease? You know it doesnt.

This is comperable. You cannot argue that fiscal responsibility advice is worthless because it doesn't prevent you from facing sudden insolvency due to third parties or random circumstance.
What you fail to realise is that if you are suddenly fethed over because your savings disappear in a financial meltdown or your job goes or anything else doesn't invalidate the core advice, in fact it reinforces it.
Sound financial planning is not a panacea against all social misfortune, nobody realistically claims that, certainly not I. But it places you in a better start position if you face misfortune and is sound advice for general life.

nfe wrote:

nfe wrote:

The above is all well and good until you lose your job or have your hours cut or an earning family member gets ill or your rent goes up or your landlord sells etc

You are in the same situation but you have either learned fiscal discipline or you haven't, if you haven't its much harder to adjust, let alone you might have an inferior start position with existing debt.
Stay in the black, then if things turn nasty you are on surer footing.

As above.

indeed as above.

nfe wrote:

I do think your position is naive at best and derisive at worst.

You are in a poor position to make that judgement.

nfe wrote:

You are presenting it as an objective, logical approach, but it's based on a false assumption that it's possible, even easy, for everyone simply to never fall into debt.

I am presenting an objective logical suggestion that financial discipline will go a long way towards avoiding unpleasant financial circumstances, and that this starts by avoiding debt whenever possible. Avoiding debt is discouraged by the financial establishment, and temptations for easy credit are commonplace but debt free life is easier than society is led to believe.
Banking culture wants the public to practice debt management, rather than debt avoidance. This is likely how the above truth was obfuscated from you.

nfe wrote:

nfe wrote:

Meanwhile, 'you can't be rich and happy if you can't be poor and happy' is just a lie.

Explain yourself. I did, so you could at least try the same. If you can.

It really doesn't need explanation. 'If you can't be happy when your kids are starving and you've no central heating in January then you wont be when you're comfortable either'? It's just nonsense.

Very obtuse. Take a while to think through what you wrote. You should not determine a general comment on huiman lifestyle is invalid unless it is applicable to all extreme circumstances. We are discussing techniques of fiscal responsibility, not discovering a law of physics. Assuming poverty automatically means extreme poverty is as illogical as assuming illness automatically means terminal illness.
Evidently someone whose kids are dying is not going to be very happy. This doesn't invalidate any value in the lifeskill of financial contentment and not being a slave to the desire for money.

Obviously seeking to remain in the black is a sensible basic approach and the way to go if you are capable. That's why it's entirely meaningless advice - it's only really actionable for people who're already reasonably secure.

It's like presenting 'don't drink dirty water' as useful advice. The people who have the choice aren't doing it and the people who don't can't avoid it. Sure there's a slim group of folk who know they're water is sketchy because they've got old pipes and can't be bothered to sort it but they're not really the folk that need helping.

I was joking with the ghazghkull comment. I'll probably be buying him, but then I don't have any money problems.

nfe wrote:
Obviously seeking to remain in the black is a sensible basic approach and the way to go if you are capable. That's why it's entirely meaningless advice - it's only really actionable for people who're already reasonably secure.

Thanks for saying that, as it helps me smack the misconception right on the noggin.
I am not a wealthy man, in fact I have been on disability for a while. I have spoken on Dakka about fiscal responsibility before, from a worms eye rather than a top down perspective. I made a detailed post on the 'prepper' thread including saying that people in the UK need to prep, not because of plagues or civic unrest, but for Brexit or Universal Credit rollout. I meant every word. Its the little innocuous things that get you. One of the key pieces of advice from those in know is that if moving from ESA or JSA onto UC you need some tins in the cupboard in case you have your benefit cut for five weeks during the transition. Universal Credit rollout harmed the unprepared, the process is now reformed but the advice was correct and frankly needed by many who never had it. . This is a different type of financial advice, not from a bank manager or a millionaire as you would expect financial advice to come from but from someone who know how things are at the bottom.
When I talk about staying in the black, I talk from the perspective of someone who has peers in the gig economy and supermarket wageslaves rather than players in the City of London.
Everything I have said has been applicable to people on lower income brackets, and is tried and tested.

Debt is only problematic when people come to rely on it.

Having access to credit can be very useful, particularly for those on low to medium incomes, who can’t necessarily deal with financial surprises that have to be addressed.

Consider. You drive for a living. Perhaps your a delivery driver in the gig economy. Maybe you’re a taxi driver. Or you live out in the sticks because it’s cheaper, and need your car to get to work.

One day, you twist the key, and something goes ‘clunk’. The clunk could prove expensive. And because you’re on a low to medium income, depending on your situation you may not be able to afford the repair bill.

Yet, one way or the other, not getting repaired is going to screw you even harder, by cutting off your income.

That is what overdrafts are meant to be for. A necessary dip into debt, to help you maintain business as usual.

And used in that way, they serve their purpose well, especially for those with unpredictable income, as there’s no compulsion to pay off capital.

But, when someone has one of those emergencies, and then doesn’t address the capital in due course? Not what they’re intended for. And banks should not be allowing them to run unaddressed over the long term.

I could go on a rant here, but I’ll refrain. Because the issue is a case of ‘six of one, half dozen of the other’.

But the concept that any and all debt is somehow inherently toxic just doesn’t sit well with me.

Not only that but an overdraft is easier to pay off than a loan. Loans are typically a fixed amount so if you get to car repair bills in a row suddenly you don't have to take out a second borrowing of money; you just dip into the overdraft again.

Plus if you can pay an overdraft off as fast or as slow as you want (within reason on the slow of course since it will depend on the amount you owe the bank). With a loan you've got to pay it off at specific moments - paying too little and (in many cases) too much can result in higher interest rates and problems. Plus even if you can negotiate a lower repayment plan its another layer of bother to set it all up like that and most won't want to be adjusting their loan repayment rates per month.

Indeed.

As a product, they do have a place in the wider financial landscape.

But, curiously in my professional experience, too few people just don’t see it as being debt. At all.

I can’t explain that, because whilst I see it day in, day out, I just don’t understand it. No form of borrowing is ‘phree munneh’. It all comes with a cost.

But the ‘six of one, half dozen of the other’ I mentioned is that here, it takes two to tango.

First, the borrower to request the borrowing. Second, the bank for agreeing to the initial lending.

Now, as I’ve seen Major High Street Banks erroneously rely on ‘they’re meant to be short term’ type arguments. Now on the face of it, that’s quite correct.

But, banks also have to be responsible lenders. And that’s where Overdrafts become a bit weird. See, if you’ve an overdraft of say, £200, and an income of, for arguments sake, £1,500?

Each and every payday that debt is ultimately repaid. Because of course it is. Your account exits overdraft, and the debt is extinguished.

But....and I’m not talking a big but. Or even a V Feltz but. I’m talking a V V Feltz but......that means the next time you dip into your pre-arranged overdraft? That’s new borrowing. Every time. But do banks due new credit checks etc?

Nope!

So there’s partial fault on the borrower for continuing to dip into it, and not taking it seriously. There’s also partial fault on the bank for not credit checking, or taking into account sustained borrowing.

And that’s the good side of things. As I mentioned earlier, there’s people I’ve encountered with five figure overdrafts. How in the name of Satan’s 6’ of throbbing red gristle is that short term? Because I’m talking Joe Spod here. Not nominally wealthy people. People with absolutely bugger all chance of digging their way out of that debt with simple belt tightening.

That is when I take exception to the somewhat smarmy ‘they’re meant to be short term borrowing’ excuse offered up by certain banks I shall not name.

It all too easily turns into a mutually parasitic relationship.

Its almost as if the financial sector is somehow doing their best to get as much of of our money whilst getting around as much regulation as possible..

I cannot possibly comment.

I just know I’m on the moral end of the seesaw.

I just did another one of the lean courses at work.. They were pointing at how banks got rid of *emm* I mean stream lined a lot of actual credit checking/due diligence to speed up lead times and saying how awesome it was for everyone.

Yeah.

To a point.

Bless ambiguous wording and pedantic superiors.

"these are "Guidelines" sir. We are doing x y and Z see? Just because we don't do A through to P does not mean we are not adhering to these guide lines"

And hence I have a career I’m not only really good at, but also really, really enjoy.

Working from home tomorrow, so no phone calls (yay!).

But on Monday? Someone is getting a rather stern talking to about adding their own bits to laws. Which is particularly important to me, because in my now 7 year career, I’ve had managers add BoLS additions to guidelines because reasons. And I will neither sit nor stand for that. Which means I’m probably hovering on a cloud of anger.

 Mad Doc Grotsnik wrote:
Debt is only problematic when people come to rely on it.

Having access to credit can be very useful, particularly for those on low to medium incomes, who can’t necessarily deal with financial surprises that have to be addressed.

Consider. You drive for a living. Perhaps your a delivery driver in the gig economy. Maybe you’re a taxi driver. Or you live out in the sticks because it’s cheaper, and need your car to get to work.

One day, you twist the key, and something goes ‘clunk’. The clunk could prove expensive. And because you’re on a low to medium income, depending on your situation you may not be able to afford the repair bill.

Yet, one way or the other, not getting repaired is going to screw you even harder, by cutting off your income.

That is what overdrafts are meant to be for. A necessary dip into debt, to help you maintain business as usual.

And used in that way, they serve their purpose well, especially for those with unpredictable income, as there’s no compulsion to pay off capital.

But, when someone has one of those emergencies, and then doesn’t address the capital in due course? Not what they’re intended for. And banks should not be allowing them to run unaddressed over the long term.

I could go on a rant here, but I’ll refrain. Because the issue is a case of ‘six of one, half dozen of the other’.

But the concept that any and all debt is somehow inherently toxic just doesn’t sit well with me.

A car is an enabler for income, so if something goes clunk you fix it, this may entail borrowing. I expressed a principle not a dogma.

 Orlanth wrote:

What is the answer? Stay in the black. Simple really. Need a loan, do without. The exceptions to this are few and far between, house, car etc. And the house is a permanent asset and the car is an enabler for income.

There you go. It doesn't help if people insist on seeing the black and white of my grey points.

https://www.bbc.co.uk/news/business-51323091

Nothing to see ere move along.. What collusion?? No insider training ere guvna, onest!

 Argive wrote:

https://www.bbc.co.uk/news/business-51323091

Nothing to see ere move along.. What collusion?? No insider training ere guvna, onest!

Edit: That does look suspicious due to the exact timing. However announcements from the Bank of England are themselves announced in advance. It is approaching Brexit day, if there is going to be an announcement at 1pm London time there will be a limited number of things this can be about. You can prep for that, eyes on the screen finger on the button. Notice the jump occurs swiftly afterwards, but it does occur afterwards, there was sudden movement based on the outcome. This looks to me like obvious contingencies being triggered rather than envelopes passed about.

Lets take an example a number of investors may have shorted the pound because on Brexit day the UK economy will crash and burn and there will be clouds and wailing and gnashing of teeth. Or so we have been told.
There was a £ jump the last Brexit day when Theresa May said we would come out the EU, though this was extended away. This was caused by shorting the pound prematurely or in error depending on your point of view.

If you mistime a short you can strengthen what you are shorting. Those who shorted the pound for referendum day made a lot of money, though the prevailing wisdom was that the UK would likely remain. You best make money on shorts when your wisdom goes against prevailing wisdom and you are proven right.
The above is a simplification of a quite complex economic process, and yes 'fan clubs' are frequent with well known trade circumstances. Brexit is not esoteric knowledge so large numbers of traders can come to similar conclusions without insider trading.

You have to have sterling to short it, and lots of people globally have a position on sterling right now because it appeared to be a forcastable outcome. This is both strengthening the pound and opening up opportunity for people who do not have a position. Bank of England is in competent hands, Mark Carney has done an excellent job and it not afraid to make big decisions. recent macro level decisions on the pound are easy to predict, even if the longer term future of the UK economy has been very widely forecast to multiple extremes.