True Financial Literacy Requires Understanding Systems

Via Naked Capitalism, I’ve discovered several articles about the uselessness of ‘consumer financial education’. I’ve been to various classes on ‘personal finance’, and I agree much of it is pretty useless.

At the same time, I think that being financially literate can make a big difference in one’s financial wealth.

After thinking about this for a while, I figured it out – the kind of ‘financial literacy’ which makes a difference is the kind which includes an understanding of how systems (the financial system, the political-economic system, etc.) work.

One of my tax instructors said that he knew of cases of families putting 80% of their income towards mortgage payments (this was during the peak of the housing bubble), and that they qualified for a mortgage because they had taken a class on making a budget. He said that, no matter what class you take, if you’re paying 80% of your income towards mortgage payments, you’re financially screwed.

I took college course on housing policy. An entire class was dedicated to explaining how primary and secondary mortgage markets work. And there was no explanation of the sophistamacated mortgage markets of the housing bubble – it took just that much time to describe the vanilla mortgage markets of the 1950s. During the class, I thought ‘everybody who takes out a mortgage should understand how these markets work’. Then I thought ‘this is news to most students in this class, and most students in this university, let alone most U.S. citizens, will never understand how even a vanilla secondary market works’. That was a scary thought.

During the housing bubble, my family sold off as much of its property in South Florida as it could, and would have sold it all off if certain people (not in my family, but still involved) hadn’t acted in bad faith AND believed the property ‘boom’ in Florida would go on forever. This choice, to sell high during the bubble, made a huge difference in the collective financial wealth of my family. It was a painful choice, since some family members have deep emotional ties to South Florida, but the consequences of having that property after the housing crash would have been much more painful.

Why did my family do it? My family has been in South Florida for over a hundred years, they know about Florida’s history of ‘sleazy’ property deals, and jokes about ‘beachfront property’ are almost like nursery rhymes. Though they didn’t know what was causing the housing bubble, they could feel that something was wrong with the property market, and that scared them into getting out. In other words, my family has some understanding of how systems work in South Florida.

Financial education which focuses on guidelines and to-do lists with almost no context is not terribly helpful. But financial education which explains systems is truly valuable. It’s not just valuable financially, it’s also valuable for psychologically.

Of course, if citizens understood the system better, they might try to change it.

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In Praise of Casual Relationships

I would consider ‘someone who I wouldn’t confide in or show great vulnerability to but would talk about mutual interests and/or would enjoy hanging out with’ to be a casual friend.

My ideal set of relationship patterns includes a wide variety of casual relationships. What do I think causal relationships offer that I am (at least less likely) to get from closer relationships?

1) Mutual interests not shared with other relationships. I have never met anybody who shares every single one of my interests, and I doubt I ever will. When people in close relationships don’t share a particular interest of mine, my casual friends are there when I really want to explore it in good company.

2) Relaxation. Casual relationships and close relationships get me to relax in different ways. In close relationships, I relax in the sense that I am secure that I will be valued unconditionally. However, close relationships carry a higher level of responsibility than casual relationships. The lack of responsibility in casual relationships can be a relief.

3) Learning. Generally, we form close relationships with people who share similar ideas and views of the world, and who have a similar set of knowledge. There are some exceptions, but generally if I want to be exposed to new ideas or get access to a wider set of knowledge, casual relationships do this way better than close relationships.

Here is a prime example of the value of casual relationships: my relationship with the participants of the ace-spectrum community. I have never been in a close relationship with anybody openly on the ace-spectrum. However, when I really want to get into conversations about the ace-spectrum which goes beyond asex/aro 101, ace-spectrum spaces are there to host them. I have also LEARNED A TON from other people on the ace-spectrum.

And I think casual relationships improve the quality of close relationships. For example, my dad is very interested in Perry Mason. However, he is not in a close relationship with anybody who wants to listen to what he has to say about Perry Mason. This means a) we either have to listen to him talk about Perry Mason, in spite of our lack of interest b) my dad has to keep silent about something he really wants to express or c) he can go to an online Perry Mason discussion group. Clearly (c) is the best course of action.

And I the extreme-nuclear-family model (marriage+children above all, which even excludes even the parents of the married couple) is unstable not only because it discourages forming other kinds of close relationships, it even discourages investing in more casual relationships. Yes, casual relationships require less investment per relationship, but the required investment is still greater than zero.

Of course, close relationships get priority over casual relationships. That’s one of the things which distinguishes them. However, having a diverse set of relationships, both casual and close, is best. The way I look at it, close relationships offer depth, and casual relationships offer breadth.

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A Society Deprived of Holistic Physicality

I define ‘physicality’ as bodily engagement (listening to the body, expressing oneself physically, etc.)

For most of human history, people were bodily engaged by default. People relied on physical labor to meet their basic needs. Take transportation for example. Before the fossil-fuel age, most people’s transport options were walking, or if there was a convenient waterway, a boat. Walking obviously entails using many parts of the body (legs for force, arms for balance, eyes for navigation, etc.) even on well-maintained paved surfaces. However, people often had to rely on rougher paths, which, among other things, meant people had to listen closer to their feet. For example, as a hiker, ‘the ground doesn’t feel right’ is often the earliest sign that I am going the wrong way (and many of the trails I hike were originally established before the widespread use of cars/buses/trains so that ordinary people could get around to take care of their business).

However, cheap energy has replaced so much of physical labor that many people now hardly ever walk, have sit-down jobs, sit down for most of their social encounters and entertainment, and get food delivered to them instead of, say, maintaining their own garden without power tools.

Hey, am I sitting down at my computer writing a blog entry, or am I talking loudly at the town square to whoever will listen to me?

I, personally, cannot be happy with a sedentary life. I need my regular dose of stress hormones, and my muscles need to be able to burn them off and get the exercise-endorphins flowing. If I am just sitting or lying down most of the time, then I’m not living to the fullest. This is why I hope I will never have an 8-4 or 9-5 sit-down job.

I also think the sedentary lifestyle might contribute to the over-emphasis society puts on sex. In many people’s lives, it’s one of the few kinds, if not the only kind, of deep bodily engagement which has not be substituted by cheap energy (i.e. fossil fuels). With so, so, so many people I’ve met, when bodily engagement comes up, their minds immediately turn to sex. I bet in the minds of farmers who don’t use electricity or fossil fuels, ‘bodily engagement’ and ‘sex’ are not so closely coupled.

Ace-spectrum people often highlight the value of sensuality. I love sensuality too, but I think it goes way beyond that. We should, as a culture, stop privileging sex over other forms of bodily engagement, but I am not sure that’s possible without restoring a more holistic physicality to daily life.

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The Way I Approach Personal Finance Makes Me Weird

Society forges life templates for people. This is not necessarily a bad thing – it can help people collectively make good decisions – but sometimes the template is badly flawed. For example, the lifestyle template for pretty much the entire developed world (and parts of the developing world) is cumulatively ecologically destructive. Either this will change, or it will kill off most of the human race (which in itself would be a huge change).

In other cases, the harm is personal. For example, adherence to the relationship escalator causes a great deal of preventable drama.

Wait, I’m supposed to talk about personal finance.

Okay. The middle class template in many places, including the United States, is to get a college degree (which needs to be financed), buy a car, buy a house, and get enough assets to retire. This is the main point of middle-class asset accumulation.

What about me? I already have enough college education. I hope I never need to buy a car. I think have a less than 50% chance of ever buying a house, and I am most likely to buy a house if I can somehow buy with cash. I cannot see myself taking out a mortgage. And I’d rather work less hard and have plenty of free time than save for retirement (if people don’t stop killing the environment, the environment might not be capable of supporting billions of people by the time I could ‘retire’ anyway).

So why do I like to build savings? Simple – emergencies, small investments, and luxuries (such as travel). By ‘investment’, I don’t mean buying stocks, I mean being able to purchase stuff which will save me money or increase my income in the long run (such as a menstrual cup).

I am basing my personal finance goals based on my own assessment of my life, not car!house!retirement! This is not unlike forming one’s own relationship patterns instead of going on the relationship escalator. In fact, the default personal finance plan and the relationship escalator are closely intertwined – people are supposed to buy houses as (married) couples, not as single women (which is what my mom did), or with their brother (which is what my dad did), and they are supposed to plan retirement as a couple (instead of firewalling their finances, as my parents are doing).

Heh, it’s obvious who taught me how to approach personal finance.

I am debt free. I’d love to take ‘credit’ for this, but this is mainly because a) I attended public university in California and b) I was born to a family which could pay California public university tuition out of pocket.

The housing, student loan, and overall economic crises are making people rethink the template. While the endemic fraud which caused the crises is utterly repugnant, getting society to rethink the so-called ‘American Dream’ is a good thing. I wish it didn’t come with inflicting intense suffering on the 99%.

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I Don’t Want to Be in a Couple

Recently, I’ve read a bit about ‘couple privilege’, specifically in the context of polyamory, but it definitely exists in society at large too.

This has set off a lightbulb in my head.

I don’t want to be in a couple.

I don’t completely reject the relationship escalator, but I want to be able to hop on an off at will, skip the steps I am not interested in, and be able to stay at a step as long as I want, or even go backwards.

I always known that I wasn’t interested in marriage, but my interest in joining any kind of couple has always been, at the very most, mild. And right now, I would strongly prefer never to be in a couple.

That isn’t to say I don’t want close, intimate relationships – I definitely do! – but I don’t to have one primary partner. While I’ll always prioritize some relationships over others, I want some fluidity in how those priorities evolve, and I feel entering the ‘couple’ mold would interfere with that.

But I think what rankles me most about being in a ‘couple’ is that I want to be perceived as a complete person on my own, not seen as completing/being completed by ‘my other half’. I am okay with being perceived as a part of a group, such as a club, or my family, etc.

This is why, in my ideal family structure, I would have two intimate partners, not just one. Maybe I’m lucky to be on the ace spectrum – I think I am more likely to form satisfying non-coupled close intimate relationships in the ace community than in society at large.

The big snag I see ahead is parenting. I am interested in, eventually, having a biological child, and I want to have a personal relationship with my biological co-parent. Yet having a biological child together is one of the most couple-ish things people can do, at least according to society at large. My parents are perceived as a couple primarily because they raised a child together (if they were not co-parents, they would seem much less like a couple). I don’t want to be in a ‘couple’ with my co-parent. Yet it seems that between having a child with a stranger (via sperm donation, for example), and forming a ‘couple’ with the co-parent, society does not offer much intermediate space. This is why sometimes I think it might be best to co-parent with a queer man in a primary relationship with someone who cannot get pregnant (most likely another queer man) – since he would already be in a couple, he wouldn’t want to get in a couple with me, and since a) they would be queer and b) his partner is not capable of being pregnant, I think it would be much easier to engineer a set of relationships which would be satisfying to all parties.

*sigh* This is complicated.

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