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Frugal is an imposed vice.

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  • Chet Ruminski
    2017-01-20 08:57:41 AM
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    Scmidt said:

    "It requires considerable self discipline to live frugally much of your life so that you can enjoy a retirement without financial worries."

    Do you realize that a progressive prospering economy would obviate frugality. If Quadrillions of dollars weren't stagnated in non productive speculative trading (gambling) frugal and poverty and saving would be meaningless. When some people have so much money they have to hire people to give it away then something is wrong. Human rights demand spending money.

  • Schmidt
    2017-01-20 09:41:59 AM
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    Total retirement assets near $25 trillion mark

    I am not alone. Quite a few people have amassed retirement savings in IRAs, 401Ks, mutual funds, pensions, etc.

    Is that bad? Should we have spent it all during our working lives so we can now blame the government for not providing for our retirement?

  • Schmidt
    2017-01-20 11:36:55 AM
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    Regarding that "quadrillions of dollars stagnated in non productive speculative trading (gambling)" I should point out that the number is more like a little over a quadrillion according to various sources I have researched. It is also a global number and not a number specific to the USA. And finally and most importantly it is a notional value and not the market value.

    For example, a farmer looking at current prices of his crops may decide to lock in that price now in case it loses value by harvest time. So he sells his crops on a futures contract at $100,000 -- that is the notional value of the transaction. He is guaranteed $100,000 for his crop at harvest time. If the price of the crop rises 10 percent in the meantime, he still gets paid $100,000 but the contract now has a futures market value of $10,000. If the price of the crop goes down 10 percent, he still gets his $100,000 but the market value of the futures contract is a negative $10,000.

    The notional value is $100,000. The market value could be $10,000 or maybe -$10,000 or something in between -- zero if the price remains unchanged. Now let's suppose that those "gamblers" owning the futures contract get a bit worried that the crops might not rise in value. So they do a swap and sell the contract to someone else (another gambler) willing to take the risk...but at a lower price. Now that farmer's crop has been traded twice, and the notional value of all futures contracts for that period is no longer $100,000 but $200,000. And if that gambler trades the contract again there is another notional value booking entered again for another $100,000. Hence the cumulative notional values of the contracts trading the farmer's crop during the period before harvest has risen to $300,000, but the market value of all those combined futures transactions might be less than $10,000 or maybe even negative.

    Now apply the same principle to all derivatives traded again and again on the global market and you can easily see why the notional values of all contracts rises to over a quadrillion dollars. This applies to currency trading, farmers crops, cattle, chickens, pork bellies, stocks, oil and gas supplies, insurance contracts, and just about anything that can be traded. The derivative values of any gains are reported as income to the IRS. They are taxed. Notional values do not count for anything.

    The market values of all the derivatives traded in the world market is thus vastly smaller than the notional values....probably more like a few trillion and not quadrillions. How much is derived from and subject to US taxation? Considerably less.

    Derivatives serve a valued purpose for ordinary folk like farmers, but I will concede that there are people who trade futures contracts on a daily basis such things as currency, pork bellies, stocks, etc. not to protect their investments such as an entire crop, but rather to speculate and gamble on future changes in the market. I do not know how much is legitimate hedging versus gambling, but it would be hard to legislate and restrict one without hurting the other...the farmer for example. I do know that when people cite "quadrillions" that the number is meant to deceive...way out of the ballpark.

    The topic is frugality but you got off topic pretty quickly, and I just wanted to clarify any misconceptions.
  • jaredsxtn
    2017-01-20 03:13:02 PM
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    Chet Ruminski Wrote: Do you realize that a progressive prospering economy would obviate frugality. If Quadrillions of dollars weren't stagnated in non productive speculative trading (gambling) frugal and poverty and saving would be meaningless. When some people have so much money they have to hire people to give it away then something is wrong. Human rights demand spending money.

    I'm with Schmidt on this one.

    How is someone saving as much money as they can a bad thing? I kick myself in the ass every day for not saving for most of my 20's and now I'm playing catch up. I commend him for being smart and living frugally and wish I listened to my dad who advised me not to take some trips on my credit card. Thankfully I finally smartened up and began to save a large chunk of each paycheck, but I'd be in a much better position if I began saving immediately after college.
  • Chet Ruminski
    2017-01-20 04:59:34 PM
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    You guys as always and continuously miss the point. Saving is great, fantastic, wonderful if you want to do it. But why should somebody have to save and live frugally while other people amass so much money they have to hire people to give it away. Why is Schmidt apologizing to and for the people that forced him to live a frugal life so he could have a worry free retirement. Do you guys not understand that wall street is stagnating trillions of dollars so they can create incomes that have no socially redeeming value. How can the Democratic Party make Schmidt think they are great while at the same forcing him to live an uncomfortable life so he can have a comfortable retirement. People should not be forced to live uncomfortably in a world of plenty.
  • Chet Ruminski
    2017-01-20 05:19:54 PM
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    "I commend him for being smart and living frugally and wish I listened to my dad who advised me not to take some trips on my credit card."

    Total crap. An indictment of propaganda that people admire suffering as an accepted way of life. That is wrong. Money should be treated as a resource and laws passed so money could be regulated into movement, super speed high velocity movement. The only thing preventing prosperity and security is fear. The fear of demanding fair level playing field treatment and respect. Involuntary servitude is facing millions of low income high school students dreaming of a college education.
  • jaredsxtn
    2017-01-20 05:42:50 PM
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    Chet Ruminski Wrote:

    "I commend him for being smart and living frugally and wish I listened to my dad who advised me not to take some trips on my credit card."

    Total crap. An indictment of propaganda that people admire suffering as an accepted way of life. That is wrong. Money should be treated as a resource and laws passed so money could be regulated into movement, super speed high velocity movement. The only thing preventing prosperity and security is fear. The fear of demanding fair level playing field treatment and respect. Involuntary servitude is facing millions of low income high school students dreaming of a college education.

    Is commending someone for being smart with their money propaganda and total crap?

    I was stupid with my money (or lack thereof) during my 20's. I spent money like I had it, but my problem is that I didn't actually have any money and wanted to believe that I did. Now I am paying down my debts and saving for my eventual retirement at the same time. That's because I realized that going on vacations on my credit card wasn't the best idea.

    I'm not trying to be an ass, but you just seem like a very jealous person. I am as liberal as they come when it comes to making sure that every person in this country has a roof over their head and food on the table, but some people are just going to have a bigger roof and nicer food.
  • Chet Ruminski
    2017-01-20 06:54:37 PM
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    Schmidt Wrote:

    Regarding that "quadrillions of dollars stagnated in non productive speculative trading (gambling)" I should point out that the number is more like a little over a quadrillion according to various sources I have researched. It is also a global number and not a number specific to the USA. And finally and most importantly it is a notional value and not the market value.

    For example, a farmer looking at current prices of his crops may decide to lock in that price now in case it loses value by harvest time. So he sells his crops on a futures contract at $100,000 -- that is the notional value of the transaction. He is guaranteed $100,000 for his crop at harvest time. If the price of the crop rises 10 percent in the meantime, he still gets paid $100,000 but the contract now has a futures market value of $10,000. If the price of the crop goes down 10 percent, he still gets his $100,000 but the market value of the futures contract is a negative $10,000.

    The notional value is $100,000. The market value could be $10,000 or maybe -$10,000 or something in between -- zero if the price remains unchanged. Now let's suppose that those "gamblers" owning the futures contract get a bit worried that the crops might not rise in value. So they do a swap and sell the contract to someone else (another gambler) willing to take the risk...but at a lower price. Now that farmer's crop has been traded twice, and the notional value of all futures contracts for that period is no longer $100,000 but $200,000. And if that gambler trades the contract again there is another notional value booking entered again for another $100,000. Hence the cumulative notional values of the contracts trading the farmer's crop during the period before harvest has risen to $300,000, but the market value of all those combined futures transactions might be less than $10,000 or maybe even negative.

    Now apply the same principle to all derivatives traded again and again on the global market and you can easily see why the notional values of all contracts rises to over a quadrillion dollars. This applies to currency trading, farmers crops, cattle, chickens, pork bellies, stocks, oil and gas supplies, insurance contracts, and just about anything that can be traded. The derivative values of any gains are reported as income to the IRS. They are taxed. Notional values do not count for anything.

    The market values of all the derivatives traded in the world market is thus vastly smaller than the notional values....probably more like a few trillion and not quadrillions. How much is derived from and subject to US taxation? Considerably less.

    Derivatives serve a valued purpose for ordinary folk like farmers, but I will concede that there are people who trade futures contracts on a daily basis such things as currency, pork bellies, stocks, etc. not to protect their investments such as an entire crop, but rather to speculate and gamble on future changes in the market. I do not know how much is legitimate hedging versus gambling, but it would be hard to legislate and restrict one without hurting the other...the farmer for example. I do know that when people cite "quadrillions" that the number is meant to deceive...way out of the ballpark.

    The topic is frugality but you got off topic pretty quickly, and I just wanted to clarify any misconceptions.

    There are some instances of justification of derivatives for a small limited number of markets. But is it fair or does it make sense to allow massive amounts derivatives to stagnate money out of the entrepreneurial jobs producing market into a non regulated speculative market that does toning for the underlying entity. Would it be fair or make sense for large companies to take out life insurance policies on millions of unknowing never benefiting individuals. It would divert money from the economy and force people to live frugal lives to survive retirement. If it doesn't earn it should illegal.
  • Chet Ruminski
    2017-01-21 12:59:01 PM
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    jaredsxtn Wrote:
    Chet Ruminski Wrote:

    "I commend him for being smart and living frugally and wish I listened to my dad who advised me not to take some trips on my credit card."

    Total crap. An indictment of propaganda that people admire suffering as an accepted way of life. That is wrong. Money should be treated as a resource and laws passed so money could be regulated into movement, super speed high velocity movement. The only thing preventing prosperity and security is fear. The fear of demanding fair level playing field treatment and respect. Involuntary servitude is facing millions of low income high school students dreaming of a college education.

    Is commending someone for being smart with their money propaganda and total crap?

    I was stupid with my money (or lack thereof) during my 20's. I spent money like I had it, but my problem is that I didn't actually have any money and wanted to believe that I did. Now I am paying down my debts and saving for my eventual retirement at the same time. That's because I realized that going on vacations on my credit card wasn't the best idea.

    I'm not trying to be an ass, but you just seem like a very jealous person. I am as liberal as they come when it comes to making sure that every person in this country has a roof over their head and food on the table, but some people are just going to have a bigger roof and nicer food.

    jaredsxtn, I don't know your motives. You might be fabricating answers and posts out of meaness, humor or whatever, but I address everything as valid and sincere and answer accordingly because I welcome anything that requires thinking. You totally and it seems purposely miss the point. I do not criticize Schmidt for living frugally to have adequate money for retirement years. I criticize the system that he lived in that required him to deny himself certain things. A system that deprived him the security of a safe healthy life in returement. I cannot conceive of anything that I could criticize him of, or you or most of the other contributing members of this forum. But it appears that you do not or cannot respond to my posts without twisting them into something negative and then addressing that. And you know the term for it. I am criticising that he was forced to live frugally in order to have peace of mind in his retirement. That a system that he says is operating fine economically forced him to skimp and save to make up for its shortfall in his retirement. Once again, I am not criticising Schmidt for saving for his retirement. I am criticising the economics that the both of you say is fine for forcing him to makeup for the shortfalls.
  • Chet Ruminski
    2017-01-21 01:06:53 PM
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    Schmidt, I applaud and compliment you for ensuring a worry free retirement. I criticize adamantly the system because of it's unfairness that causes people to worry about financial short falls in their retirement. There is no justification for clouding thoughts about financial security in working people's retirement.
  • Chet Ruminski
    2017-01-21 01:27:14 PM
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    "I'm not trying to be an ""ass"", but you just seem like a very jealous person."

    Well you are an "" "" because you can't respond to any of my posts without demonizing them and then replying to the distortion.

    But I don't care that you do that because I appreciate anybody's time for writing something I can analyze and respond to. But if you had the rational objective mind to have ever appreciated my posts this would be a world famous forum. Ever since I have been writing here you have ridiculed, distorted, threatened banning and whatever negative applies to your actions against my writing for your satisfaction. Just like this thread. You totally distort my written verbage criticisng the system that forced Schmidt to deprive himself his entire working life to ensure retirement peace of mind. You dishonestly, without reason, no justification, blatantly said I criticized Schmidt. Shame to you.
  • Chet Ruminski
    2017-01-21 01:32:25 PM
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    jaredsxtn, I opened this thread with:

    "Do you realize that a progressive prospering economy would obviate frugality."

    Then you distorted that into a criticism of Schmidt.
  • Schmidt
    2017-01-21 03:17:49 PM
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    Just let me clarify any misconceptions. Being frugal does not mean that you are denying yourself pleasure or happiness. Growing up in Butte with little money, I had one of the happiest childhoods that you could imagine. We didn't have all the modern electronic goods or other stuff that our consumer society seems so compelled to buy now. I played outside everyday with the other neighborhood kids in the mine dumps and other mining relics. Our idea of a family vacation was to pitch a tent at a lake and camp out. We also did that on weekends and holidays. We had freedom to run and explore and make mistakes...and respect and tolerate each other.

    Later in life with my own family we carried on with many of the same traditions even as the electronic age was catching up with us and consumerism was running rampant. Frugality is more about wise choices as opposed succumbing to the latest consumer crazes. Economic status in life does not equate with happiness. I know some wonderful happy low income people who enjoy life to its fullest. I also know some wealthy people that are having difficulty finding happiness...perhaps because they measure happiness in terms of dollars.

    I have had a happy life because I don't look for happiness in places that I cannot afford. Now I can afford many of the things we passed over while younger. I enjoy traveling and meeting people, but I could do the same at home without traveling. Happiness is a state of mind not measured by wealth.
  • Dutch
    2017-01-21 04:35:55 PM
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    Schmidt Wrote:

    Just let me clarify any misconceptions. Being frugal does not mean that you are denying yourself pleasure or happiness. Growing up in Butte with little money, I had one of the happiest childhoods that you could imagine. We didn't have all the modern electronic goods or other stuff that our consumer society seems so compelled to buy now. I played outside everyday with the other neighborhood kids in the mine dumps and other mining relics. Our idea of a family vacation was to pitch a tent at a lake and camp out. We also did that on weekends and holidays. We had freedom to run and explore and make mistakes...and respect and tolerate each other.

    Later in life with my own family we carried on with many of the same traditions even as the electronic age was catching up with us and consumerism was running rampant. Frugality is more about wise choices as opposed succumbing to the latest consumer crazes. Economic status in life does not equate with happiness. I know some wonderful happy low income people who enjoy life to its fullest. I also know some wealthy people that are having difficulty finding happiness...perhaps because they measure happiness in terms of dollars.

    I have had a happy life because I don't look for happiness in places that I cannot afford. Now I can afford many of the things we passed over while younger. I enjoy traveling and meeting people, but I could do the same at home without traveling. Happiness is a state of mind not measured by wealth.

    Schmidt, you needed only to reply with your last line: Happiness is a state of mind not measured by wealth. Amen

    What we get now from Washington is surely not "happiness" as well "tolerance" or making this "country great again".

    It likely will read by Trump " making the rich richer again" and the "poorer dumber again" without any happiness.
  • Chet Ruminski
    2017-01-22 09:19:27 AM
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    jaredsxtn, This could have been a good thread on how the economy overlooks working people but you strawmanned it into an attack on Schmidt. The economy is and has been unfair to working people. Schmidt proves that statement by having to be frugal to have money for his retirement. A fair system would not have people threatened into saving for retirement.
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