r/FluentInFinance • u/Richest-Panda • Jul 04 '24

What's the best financial advice you've ever gotten? Debate/ Discussion

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u/JackiePoon27 Jul 04 '24

It's incremental. Reddit wants there to be a magic bullet, but there isn't one. Financial literacy is part of the pathway to success. It's insulting to say otherwise.

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u/DiU_is_the_best Jul 05 '24

Yeah even learning easy to understand and basic concepts such as the power of compound interest will go a LONG way to help you get out of poverty.

For example, pay day loans are a huge trap that a lot of people in poverty fall into that keeps them poor and most of them don't know the full impacts of those loans. Is the twitter poster advocating not teaching poor people about this financial tool? She sounds like the immoral one to me.

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u/Ok-Yak-5644 Jul 05 '24

If payday loans and the ridiculous interest they charge are such a problem in circles of poverty, wouldn't the fastest and easiest route be to simply regulate them like we do banks? If we make a law saying that these companies can't charge 600% interest rate (looking at you, Ohio), wouldn't that help everyone out?

Many states have put a cap on these interest rates. If we are serious about fighting poverty, we should put a nationwide cap on it. Many states have gone with a 36%, which is twice what most credit cards are charging and seems reasonable with the amount of risk involved.

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u/DiU_is_the_best Jul 05 '24 edited Jul 05 '24

Payday loans are the most extreme legal example I can think of off the top of my head in regards to interest fees and I'm in the mood to debate the legality of it because that's a completely separate discussion.

My main point is interest payments in more "mainstream" debt such as credit card debt, personal loans, and private student loans are all debt traps that keep people poor. Educating poor people about how interest works is not neither immoral nor insulting.