
Will moving people to daily wages solve financial stress? - FahadUddin92
I came across an idea that said if people in offices are paid daily using a mobile app and they can withdraw their till date earnings, financial stress will reduce and they wouldn&#x27;t need pay day loans. Whats everyone&#x27;s opinion?
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richardknop
No, this wouldn't solve the underlying problem which is these people don't
make enough money. They either need to make more money or spend less. By
paying them daily you don't solve the actual problem.

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skofgar
I agree.

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skofgar
Wow... in Switzerland people get paid monthly and I think most of them are not
in financial stress. But then having loans and credit cards aren’t as popular
either...

is there a correlation between the salary payout frequency and financial
stress?

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skofgar
I wonder if the cause of financial stress is the credit/loan system.

I think there is a cultural difference, which - in the US - encourages people
to get loans and buy things they cannot necessarily afford. While elsewhere
you’d save up and then buy the thing of desire.

*this is a little too general and doesn’t apply to everything (e.g. houses etc)

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FahadUddin92
Please check my above comment.

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Rainymood
Financial stress is caused by people/the system preying on people who can not
adequately defend themselves against these predators. It might seem like I
have a tinfoil hat on but I honestly believe that people should be protected
and safe-guarded for their own good. I once read that more than 50% of
Americans start too late with their retirement savings which means that they
will have financial stress later on. In contrast, here in The Netherlands you
automatically save for your pension if you are employed. I have studied some
actuarial science and my god it's quite complicated and you can not expect a
simple lay-person to understand the subleties and the complexities of each
system. I think it's just a messed up system all round ... people should be
protected more.

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nicholas73
I think most people who work in offices aren't stressed about making it to
payday, but just that they'd be in serious trouble if they didn't have their
job.

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owebmaster
> Will moving people to daily wages solve financial stress?

A month with daily pay would still have 28-31 days so not by much. I think it
might worsen the problem because when you you don't make it productive in a
day you'd be in the worse situation, with a job and without money.

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whb07
You mean like Uber does?

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crispytx
I think one of the biggest problems is inflation. We have an inflationary
monetary system, so workers wages can fall way behind what it actually costs
to live.

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Gustomaximus
I've never understood why deflation is such a bad thing. Sure in larger levels
the old arguments deferred consumption kicks in but as lower 1-2% levels this
could be a good thing is we have some years of small increases with others
offset by smaller decreases.

I think govt chases low inflation so hard as it 1) business looks its growing
more than it is and 2) helps them manage budgets better. Whereas for the
majority a stable situation would be better.

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mattbgates
"The money problem" is a human problem, and unfortunately, one that has been
with us since our beginning.

We always think that if someone just gave us enough to pay our bills, our
mortgages, and a little extra, we'd be happier. Even if we won the lottery and
earned that $30 million after taxes, we'd be happy, but really, it does bring
about more problems. We always want more and are never satisfied. We want and
want and want!

When we have more money, we are likely to spend more money. When we don't have
a lot, we make due with what we have, yet we still spend it, usually paying
our bills and our rent, and just trying to figure out how to come up with a
little bit more.

The true fact is: elementary school, middle school, and high school teach
people nothing about finances, and unfortunately, the majority of people get
into debt and make their mistakes and figure it out, and some never actually
do figure it out, and remain there for life.

I'm from the generation where I made $5.05 an hour at my first job. Can you
imagine telling someone they are going to make that an hour? That is crazy.
Unfortunately since then, greed has skyrockets, with very little change in
minimum wage. I know it is now $7 in most places and $8-$9 in many more..
$8-$9 was a lot of money when I was 18! Luckily now I'm a developer.. making
no where what I want to be making, but I'm making more than I'd thought I'd
ever be making in my life.

There is no way to solve the money problem until people are actually educated.
The fact is... housing prices are insane. Why is that a house in 1975 was $35k
yet in 2017 it is $200k. Inflation? Sure, lets call it that... who controls
that? The more money printed, the less value it has? Who makes up these rules?
Economists? Because as far as I can see.. economists would have solved the
issue by now.. but there is far more to it than that.

The problem of the world is two factors: Greed and instant gratification.

Credit Card company and banks: "Hey you want this now? We'll lend you money.
You want to go to school but can't afford it because the price is too much?
You want that house? We got you! Here's money you don't have! We'll give you
all the money you want as long as you pay it back with interest!"

Most people (Americans): Hell yeah, lets do this!

I'm in my 30s... I can't help but realize: After I turned 18 and decided to go
to college, I've owed some company somewhere money. After I paid off my
student loans... I was lucky enough to understand credit card debt and never
had any... but then I took on a mortgage.. now I'll be paying that back for
who knows how long.. the 30 years they give me in which they make over $100k
in interest if I don't make more than just the minimum payments?

If you think about it... the majority of our lives... is just spent paying
someone back. Why is life designed like this? Because someone somewhere
continues to make money and is happy about it.. "someone" is usually not just
one person, but a great many people.

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miguelrochefort
> We always want more and are never satisfied.

That's called the hedonic threadmill.

People really should have more self control, live frugally, and become
financially independent early.

Most developers in the US could retire after just 10 years. Why don't more of
them do that is a mystery.

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BOOSTERHIDROGEN
How did you arrive the calculation? Care to explain

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miguelrochefort
Assumptions:

\- You're financially independent once you saved 25 times your yearly cost of
living

\- You earn $150,000/year

\- You can live on $25,000/year

Calculations:

\- Earn $150,000/year

\- Pay 40% income tax ($95,000 left)

\- Spend $25,000 ($70,000 left)

\- Save $70,000

\- Repeat for 10 years (save $700,000)

\- $700,000 > 25 years * $25,000 = $625,000

These numbers are very conservative, and assume no raise in salary, no
interest on savings, no tax deduction or 401k matching, and a is achievable in
just 9 years.

The key is to live frugally, and the US makes that super easy.

To give you some perspective, I earn about $25,000 USD (after income taxes) as
a full-time software developer in Canada.

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icebraining
That doesn't seem conservative at all. I very much doubt the average US
developer is making $150k/year for the first ten years of their career. Maybe
in some places, but those are also the same where the rent will eat more than
half of those $25k.

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miguelrochefort
It also works if you earn $100,000 and spend $20,000.

\- $100,000

\- $60,000 (40% tax)

\- $40,000 ($20,000 spending)

\- $500,000 (10 years of savings at 4% interest rate)

