Online installment loans have taken the subprime market by storm

Re:Online installment loans have taken the subprime market b... by logicchains on Tuesday October 29, 2019 @01:26PM (#21389717)

There was a studying showing that the trait behind this tendency towards saving, the ability to delay gratification, is present relatively early in childhood, and has strong predictive effect on success in life: https://en.wikipedia.org/wiki/Delayed_gratification#The_Stan... . Perhaps this implies that no matter how rich society gets, there'll always be people who just burn though whatever they earn. This would partially explain why people in poor countries like China and India are still able to save a greater percantage of their income than people in western countries who earn an order of magnitude more.

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Re:Online installment loans have taken the subprime market b... by sharkmerry on Tuesday October 29, 2019 @02:38PM (#21390592)

There was some challenge to this experiment. Once family and parental education were accounted for, the difference largely disappeared after age 15.

I read elsewhere theorizing, that kids from more secure backgrounds will delay more likely as the delay has been rewarded in the past. Whereas, if every dinner is fighting over scraps, they will probably take the initial marshmallow

https://www.theguardian.com/education/2018/jun/01/famed-impu...

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Re:Online installment loans have taken the subprime market b... by ThrustVectoring on Tuesday October 29, 2019 @01:50PM (#21390036)

The marshmallow experiment is less about whether children are able to delay gratification, and more about whether or not they trust adults to deliver on the promises they make.

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Re:Online installment loans have taken the subprime market b... by SkyBelow on Tuesday October 29, 2019 @03:45PM (#21391242)

While I wouldn't want to attribute either cause as being more or less, it is a n interesting confounding variable that I wonder who the original and subsequent research accounted for it. Especially since it also applies elsewhere in life. For example, investing money is delaying gratification, but it is also a question if you think you will actually make money which is not guaranteed.

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Re:Online installment loans have taken the subprime market b... by southphillyman on Tuesday October 29, 2019 @02:25PM (#21390465)

>this tendency towards saving, the ability to delay gratification, is present relatively early in childhood, and has strong predictive effect on success in life

This really resonated with me. As a child I use to eat my food "in order", saving the best part for last. Now I'm thinking about all the instances where I've delayed gratication in my life. I've always saved money at an above average rate but never really made this connection before.

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Re:Online installment loans have taken the subprime market b... by SilasX on Tuesday October 29, 2019 @01:48PM (#21389997)

>Perhaps this implies that no matter how rich society gets, there'll always be people who just burn though whatever they earn. This would partially explain why people in poor countries like China and India are still able to save a greater percantage of their income than people in western countries who earn an order of magnitude more.

What's the connection there you're implying [1]? I would think that the higher (capacity to) save is an artifact of peer pressure/ecosystem effects. If a frugal person is still expected to have a big house, or else be seen as weird, that imposes a constraint that forces a lower savings rate than they prefer.

It's a hard Gordian knot to cut, but once everyone expects normal people to pay a certain expense, you can get stuck in that kind of bad equilibrium.

[1] between "some people always burn through everything" and "people in some poor countries have higher savings rates than in rich countries"

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Re:Online installment loans have taken the subprime market b... by neffy on Tuesday October 29, 2019 @02:40PM (#21390618)

Unfortunately you can´t really do much with magnitudes of money - it´s all about the relative price level. Working in Silicon Valley with 6k/month income, and 4k/month housing expense makes you significantly worse off than the person with 4k income and 1k housing expense living in the midwest, say, who is consequently much more able to save. A similar comment applies with respect to comparing absolute prices between countries.

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