Hacker News Reader

Comment by kazinator | Hacker News Reader

That's a good question. Historic human societies without algebra somehow had working bean counting.

Using a credit card isn't very abstract.

You only have to use the concrete specific values in your situation, and not solve some generality.

Moreover, I don't think I had to ever square anything, let alone, cube, when reckoning over credit card transactions. Or find the roots of a polynomial, or do anything with polynomials.

I'm not saying that the intuitions gained from algebra are not relevant, mind you.

View on HN

> Using a credit card isn't very abstract.

To use a credit card responsibly you need to understand the concept of exponential growth, or you might accidentally turn a manageable $500 debt into a burdensome $5000 debt. Same goes for understanding good debt (mortgages) vs bad debt.

It might not be solving a polynomial per se, but I don't see how you get to understanding exponential equations without at least understanding algebra.

There is understanding the concept of exponential growth, and there is being able to manage it. They are two skills. Where management is helped more by having resources than it is by understanding it.

>Where management is helped more by having resources than it is by understanding it.

There are many examples of lottery winners, athletes, and celebrities who came across considerable resources yet still went broke because they didn't understand how to manage it or the concept of exponential growth.

A fool and his money are easily parted, as the saying goes. People who don't have financial literacy will lose their money over and over again regardless of how much you give them.

There are, but there are also plenty of examples of lottery winners, athletes, and celebrities that came across considerable resources and then lived quite well on said resources. Probably more of those, but the stories are far less dramatic.

You are also picking a category of people that come across enough resources that make them a target to plenty of others. Such that it is almost an adversarial game, at that point.

>Probably more of those, but the stories are far less dramatic.

Evidence shows that having an excess of resources actually leads to more financial irresponsibly, not less. Or as the Illustrious Notorious B.I.G. eloquently put it: "mo money, mo problems":

"The CFP Board of Standards says nearly one-third of lottery winners eventually declare bankruptcy, and lottery winners are more likely to declare bankruptcy within three to five years than the average American."

https://www.ngpf.org/blog/question-of-the-day/question-of-th....

The vast majority of lottery winners are not of the instant robber baron generational wealth level. "1/3 of lottery winners" has to be qualified with what the minimum payout was that we're talking about here because obviously a lot of lottery winners are exactly the sort of people who are going to be living paycheck to paycheck, or even in such dire circumstances that they are likely close to bankruptcy anyway. A 50000 or 100000 or even 500,000 dollar/euro lotto windfall is likely to exacerbate their fundamental problems rather than solve them.

I love that that evidence actually supports both of us. My claim was that more people that win the lottery do fine than otherwise. Your own evidence is that 2/3rds of them do so. You are focusing on that fact that 1/3rd of them declare bankruptcy, which is higher than the general populace.

That is to say, yes, you have to rack up some bad debts in order to declare bankruptcy. The kind of debts that just aren't possible for most people.

And this is ignoring the selection bias that almost certainly exists here. Buying a lottery ticket is, basically by definition, not a savvy financial move. That it basically works out for 2/3rds of the people that do it speaks to the power of additional resources. :D

Not entirely true. I have multiple credit cards and use them for everything, yet I've never ran into exponential growth.

I don't spend money I don't have.

It's really simple math this way.

I'd argue that you're not really using the credit on your credit card as a credit card. You're using it as a charge card.

Exponential growth is a fundamental concept of financial literacy. If you want to invest in the stock market or plan your 401k it helps to understand exponential growth. The reason why it's impossible to get rich off a wage is because of the difference between exponential vs linear growth.

>I don't spend money I don't have.

You've never taken out a mortgage or opened a margin account? Plenty of responsible people make money by spending money they don't have every day.

Sorry, yes. I do spend money I don't have, just not in the context of credit cards, as they have terrible interest rates. I go to the banker to get a loan.

Reply on news.ycombinator.com