Tag Archives: compound interest

Reflections on Finance and the Incentive to Budget, Part 1

Appar­ent­ly my excur­sion from the oth­er day left me laid up a while after­wards, so I’ve been using the time to rest, catch up on cur­rent events, and read up about one of my oth­er peren­ni­al loves: finance.

I can’t men­tion it enough: a great many peo­ple I’ve encoun­tered over the course of my life have great dif­fi­cul­ty doing some­thing as sim­ple as bal­anc­ing a cheque­book. They take on too many bad debts at unre­al­is­tic inter­est rates, they take on finan­cial instru­ments that built with only the short term in mind, they lose track of where the mon­ey goes each pay­day, or they neglect the pur­pose of cre­at­ing and pro­tect­ing a sav­ings. All of these are patho­log­i­cal and may not at first seem to have that much of an impact, but they cause seri­ous dam­age and a great deal of strife in the end.

Worse still are those who cre­ate an arti­fi­cial cri­sis: they cat­a­stro­phize the state of their being to exclude them­selves from scruti­ny, or choose to stay anchored to cir­cum­stances they could extract them­selves from — for exam­ple, mak­ing proac­tive ren­o­va­tions or repairs to a home that’s bleed­ing out mon­ey through exces­sive ener­gy bills each month, instead of putting up with the sta­tus quo.

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