Negative Wheaton levels

[jacob]

They certainly exist (see viewtopic.php?f=13&t=10487 ) but what do they look like?

Here's the previous table of the positive levels.



One question is whether the columns should use the same header titles. For example, those I'm familiar with that I would associate with negative levels don't really have a retirement goal per se. Perhaps that column should be scrapped and replaced with one called "worries"? Then again, it also seems that negative levels are characterized by a lot of unconscious incompetence which excludes worries (ignorance is bliss). You don't worry about your credit score if you don't know why it's important. Savings rates can definitely be negative. One characteristic is to slowly grow depth until it's cancelled out by bankruptcy. Then do it again and again.

In any case, a starting point would be to differentiate level 1 since it compresses a whole lot of negative level behavior.

[CS]

Yes, level one does encompass so many levels - those who have slow growth (actually savings growth), those that never have savings, and several different levels of debt holders (the chronic bankruptcy folks versus those who can support their debt over decades).

The retirement column could be 'I'm going to work until I die', with various levels of enthusiasm to 'it's going to work out just fine' straight out denial.

Personally, I think the focus would be much more external - more living up to the Joneses/'I deserve what others have'. ERE is much more about staying in your own lane and taking care of one's personal backyard than the average consumer. So perhaps the negative Wheaton levels could be differentiated in terms of what external ruler they are using: HGTV versus Forbes comparisons, lol.

[unemployable]

I like the retirement goal column because it differentiates by philosophy, not just amount, and because it first goes up and then goes down as other characteristics of the levels change.

Broadly, negative levels should exhibit increasing amounts of net dependence rather than net independence. Say you take in $50k and spend $60k in a given year. To pay for the excess:

• relatives (biological or sacchariferous), the government, courts, theft, fraud: negative

• credit cards, loans: zero or +1

• sell off investment portfolio: mid-level positive

• wouldn't happen in the first place because you'd never spend that much in the first place, naturally adjust outflows to equal inflows and/or "pay" for the gap via nonmonetary productivity: high positive

[unemployable]

Is fraud a negative?

Only if you get caught

I'm just arguing for fun here. I read the book Goodfellas, which goes more into the business aspects of crime than the movie. Those guys are industrious!

I wouldn't call what the mob does fraud. They operate in the same market economy, subject to the same invisible rules, that the rest of us do.

[Mister Imperceptible]

Anyone who uses the phrase “post-scarcity.”

[jennypenny]

The Wheaton level chart above has a certain amount of privilege/presumption* in it and mostly applies to the middle class, so any corresponding negative chart would have to make the same presumptions. You'd have to start with people who'd gotten a decent start in life and then dug themselves a hole as adults (the depth of the hole = the level?).

I'm not criticizing the original chart, only pointing out the limitations of it. I have very rich and very poor friends who would see the chart as a middle class game.


*I know 'poor' people who wouldn't make level 1 on the chart above -- lower incomes, never been to disneyland -- who are more financially stable/secure than a lot of people who are at the first couple of levels of the chart. They value non-financial assets as much if not more than financial ones and therefore seek them as eagerly as FIRE types seek to build traditional wealth. I don't think that mindset is well-reflected in the chart.

[7Wannabe5]

@jennypenny:

I agree. Oddly, this is especially apparent if you compare the behavior of the crowd on this forum with the crowd on Paul Wheaton's Permies forum. I would say the bias or limitation was more like G-track urbanite.

[jacob]

The real territory is certainly multi-dimensional, but in order to make a table [with levels] I have to reduce the dimensionality to one and pick direction to project onto. The resulting usefulness of the table depends on the chosen direction. In the positive Wheaton level table, the direction was picked according to the path people usually take in the PF-world as they learn more and more.

Based on the above, the direction I would be inclined to pick is
a) Increasingly living above means (1%, 5%, 10%, 20%, ...)
b) Relying in increasingly greater backstops to compensate (credit cards, deferral, family bailout, bankruptcy, ...)

This would parallel the direction of the positive Wheaton table that shows increasing complexity/efficiency and value addition. The negative levels would show collapsing complexity with increasing levels of value subtraction. The overall vector would be one from broke to wealthy. The orthogonal axis would be poor to rich.

[jennypenny]

@jacob--I understand why everything can't be included in one chart. I was only pointing out that someone who wouldn't be included in the first (positive) chart shouldn't be included in the negative one. It's too easy to view everyone without measurable financial assets in a negative light when viewing through a PF lens.


Someone made a comment in another thread to the effect of 'women have other options'. I think it was meant disparagingly and I don't think it's true to the extent they believe anymore, but the comment was true in other respects. Because women have been shut out of most wealth-building activities until fairly recently, they were forced to identify and accumulate other types of assets. It might be that, in general, women are better at seeing the value in non-financial assets. That would in part explain why the PF field skews male and why people like me find some aspects of FIRE to be off-putting.

Anyway, sorry for the OT. Maybe I should have posted this part in the original Wheaton scale thread.

[Paula]

The negatives would have to involve those who are intentionally ignorant, who boast of their bad decisions, who are proud of their increasing debts, and who make every effort to force others to pay their way.

[Mister Imperceptible]

That would in part explain why the PF field skews male and why people like me find some aspects of FIRE to be off-putting.

Which do you find offputting? The overemphasis of the financial?

[7Wannabe5]

Someone made a comment in another thread to the effect of 'women have other options'. I think it was meant disparagingly and I don't think it's true to the extent they believe anymore, but the comment was true in other respects. Because women have been shut out of most wealth-building activities until fairly recently, they were forced to identify and accumulate other types of assets. It might be that, in general, women are better at seeing the value in non-financial assets. That would in part explain why the PF field skews male and why people like me find some aspects of FIRE to be off-putting.

I recently read a memoir written by a favorite female novelist, now in her 80s, which described community life in the fairly affluent, conservative Illinois town her family inhabited or farmed nearby for several generations. After each World War, when the men returned, the college educated married women gave up the jobs they had occupied in the meanwhile (the author's mother was a high school teacher), so that every man in the community who had a family to support could be employed.

Another note would be that in the U.S., it is much more likely that rural individuals with low incomes own their own homes without mortgage than affluent urban dwellers.

So, maybe that's why you, and I,find it off-putting that "going to the county fair" is supposedly indicative of lower systemic functioning than "solo back-packing around Europe."

Also, as Jordan Peterson very frequently notes, the most consistent tested differences between men and women are in the realms of agreeable vs. disagreeable and interest in people vs. things. So, the PF community is more likely to be composed of disagreeable people, because work involving things generates more income in a highly efficiency oriented end-game capitalist system, and people only tend towards becoming interested in saving and investing when they have enough extra money to save or invest (at least median income.) This became apparent to me when I observed that the behavior of my multi-millionaire friend in relationship to the stock market wasn't all that different than my beautiful young professional dancer niece's behavior in relationship to fashion. IOW, the most likely moment a person will become interested in investing is the first instance of significant savings which will usually be associated with some relative bump in income. This is why the chart has to start at household income/spending = $45,000 = median, and usually the "household" will consist of only 1 individual who consequently is also the income earner.

[Jean]

Someone made a comment in another thread to the effect of 'women have other options'. I think it was meant disparagingly and I don't think it's true to the extent they believe anymore, but the comment was true in other respects. Because women have been shut out of most wealth-building activities until fairly recently, they were forced to identify and accumulate other types of assets. It might be that, in general, women are better at seeing the value in non-financial assets. That would in part explain why the PF field skews male and why people like me find some aspects of FIRE to be off-putting.

That was me. I don't know if it's disparaging. I just meant that for a woman, finding a husband and staying at home, even without kid is a socially accepted plan. Traveling the world on luxury boat with an old rich man, is also an easily reachable option. They are not ERE, but they are competing with ERE, while the only option men have is a career.

[7Wannabe5]

Traveling the world on luxury boat with an old rich man, is also an easily reachable option.

I feel like a broken record, but once more I will note that this exact same option is readily available to any attractive young man who is willing to practice ballroom dance and exhibit a modicum of agreeable behavior.

I would also note that it is far more socially acceptable for a man to bail on any responsibility towards offspring except for providing child support funds, leaving single mothers with half the financial burden and all of the unpaid work and responsibility. I assure you that this was not an insignificant expense for me even though my children were in their late teens when my marriage ended. This work could be an overwhelmingly difficult barrier to entry for a young woman with young children.

[iopsi]

I feel like a broken record, but once more I will note that this exact same option is readily available to any attractive young man who is willing to practice ballroom dance and exhibit a modicum of agreeable behavior.

"Attractive enough" for a male to be able to do that, or be an escort in general, is like being model tier.
The attractiveness threshold for females is much smaller (any relatively young, chubby and facially average girl can make a living by becoming a prostitute) imo.

It's probably easier for a guy to become the old rich man instead of his ballroom dancer.

[Mister Imperceptible]

I'm resisting the urge to post a manifesto. One thing that I don't think has been mentioned ...

Don't forget to take into account that men have always been part of the workforce and they grow up with the presumption that they will always work. That makes FIRE, especially the RE part, a novelty. It might also be why men are eager to game the system and drop out of it.

Women OTOH haven't been in the professional workplace that long in large numbers. Many women still consider it a privilege to work in a field of their choosing. (Note: women are still breaking into many fields so there's a sense of achievement in landing certain jobs.) Also, for women who may have taken time off to raise children, going back to work might be viewed as a reprieve and a chance to exercise atrophied parts of their brain.

If you grow up thinking you _have_ to work, IMO the natural inclination is to feel some resentment. That's probably the default viewpoint of men. If you grow up thinking you're _lucky_ to be able to work (and you might have to fight to break into your chosen profession), the default viewpoint might be closer to determination than resentment. That might be why women aren't eager to escape a game they haven't been allowed to play for that long.

I was shamed for leaving the workforce to raise my kids. I did work from home, but many MANY women I knew (including my own mother) thought I was a huge disappointment for 'throwing away the opportunity' to be a career woman. That attitude isn't as prevalent in younger generations but the scent of it is still in the air.

tl;dr Many women might be framing the whole 'FIRE' issue differently ... not as a way to escape from the workplace but as a way to gain independence, start a business, have job flexibility, financially afford time off to raise children, etc. That could be why they don't end up on FIRE forums since most of the talk is about countdowns and achieving escape velocity.

I can respect that being a career woman and a mother at the same time is not easy. You’re showing that women can “make it” and at the same time being a mother. It is playing in “Hard” mode.

Aristotle wrote that men should not consider marriage before 35 and women should be married at 17. Not much help to a modern woman who is breaking barriers.

[Peanut]

That was me. I don't know if it's disparaging. I just meant that for a woman, finding a husband and staying at home, even without kid is a socially accepted plan. Traveling the world on luxury boat with an old rich man, is also an easily reachable option. They are not ERE, but they are competing with ERE, while the only option men have is a career.

Totally disagree in U.S. context. It’s sometimes looked down upon even if she does have children. Of course the same goes for career women with children. I would argue working (stiff) women with children are the only ones spared this particular critique, although if they are single mothers they will face many others.

Men can be stay at home parents now without much critique. Often they are even seen as heroic for going against the grain. Although in general I think career men who are also expected to be more involved fathers these days face a tougher challenge than in the past. Perhaps less than their working wives who also tend to take on the mental load and more of the housework, however.

As for being a sugar baby—do you really think this is any girl’s dream? Your daddy is never going to be Richard Gere at 40. Maybe RG today, not to pick on him too much. And as the saying goes, if you marry for money you earn every penny.

[jacob]

Since the positive Wheaton level table was not split into two tables according to gender-lenses, my first approach would be to avoid doing it for the negative levels, unless there's a convincing argument that whereas genders exhibit similar behavior when competently managing their resources, they become binary (bifurcation) when they mismanage.

I mean, I could see it in the sense that---to put it crudely---at the positive levels, both genders succeed in similar ways, but at the negative levels, genders fail differently. Men go in and out of prison-system. Women go in and out of the random pregnancy-system. That, however, is not really where I envisioned the negative Wheaton level table would be going.

[unemployable]

The math doesn't care what your sex is, and the financial markets sure as hell don't, just as they don't care what your upbringing or education is.

$45k is $45k earned, $20k spent is $20k spent, a 10% annualized return is a 10% annualized return and a 4% withdrawal rate is a 4% withdrawal rate. Now it may be easier to earn that 45K with an engineering degree than as a high-school dropout, and it may be easier to understand the power of saving, compounding, diversification and the like with math skills, and it may be easier to understand systems theory and develop money-saving life skills with a better education. Similarly, pregnancy/kids/divorce/whatever -- all of which are choices in the first place -- may complicate the path to ERE and may make it more difficult to climb up the Wheaton ladder.

But the same inputs yield the same outputs, and I don't see how the characteristics of Wheaton assume a certain sex. They certainly don't assume a certain age/race/career. In fact the beauty of the scale is it doesn't have these kinds of assumptions.

[Fish]

@jacob - I’m drawn to anything “Wheaton” on this forum but had been sitting this one out because I didn’t think there was anything to be learned by studying the negative side. Additionally, my perception is that discussion of hyperconsumerism is not very productive as it tends to be judgmental.

Anyway... a negative Wheaton scale could be constructed by assuming that the goal is to maximize consumption (rather than minimize spending), and that there is a type of skill which also increases in the negative direction. So at level 0, payday loans are preferred while level -X would instead leverage social capital to get interest-free unsecured loans from family and friends.

But even though I will agree on the existence of the negative axis, I’m having difficulty finding the motivation to map it out. Maybe there’s some overlap in skills, e.g. someone who is expert at maintaining a huge debt load while staying solvent, could be good at FIRE spreadsheeting and lifestyle optimization (Level +5). So maybe there could be a mapping from negative to positive levels (and possibly a shortcut for going from one to the other)?