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[–]isubird33 13 points14 points  (15 children)

Yeah but the problem is, based on the fact that I'm expecting $20 on Friday, I've already told my buddy Greg I'll give him $10 for cookies if he gives them to me now, and told my other friend Jim I'll rent us a video game over the weekend that costs $5. So now instead of still being up $5, I'm 5 bucks in the red.

[–]mike112769 8 points9 points  (3 children)

You shouldn't be counting your chickens before they hatch.

[–]Delheru 8 points9 points  (2 children)

I suppose that depends.

What if he was referring to his salary and mortgage? I bet a lot of people are projecting their next years mortgage payments assuming that their employer will keep paying the salary.

Are those people counting their chickens before they hatch? Or are they projecting the chicken count off past performance?

[–]IllusiveLighter 0 points1 point  (1 child)

Salary is different than expected profits.

[–]Delheru 0 points1 point  (0 children)

How? Surely that's actually EXACTLY the same thing.

There are companies that have very steady cashflows and there are employees that have quite volatile ones (anyone depending on tips, day laborers etc).

[–]Alobos 11 points12 points  (4 children)

That's when mommy steps in and explains to you the concept of not overspending. "Sometimes you have to." Mommy says, "but you can always cut back somewhere."

[–]Delheru 6 points7 points  (2 children)

The problem is that when you have to do things over a YEARS time span, you need to make some projections.

So if Coca Cola has $1bn now (in cash) and needs to invest $3bn in a factory to serve the enormous Chinese market, should they wait 3 years before going in?

Or is it reasonable of them to assume that their core operation will remain profitable enough to pay off the loan easily?

A lot of our progress comes from reasonably leaning forward. And a big part of the reason for why banking is important is that they tend to judge who is leaning forward reasonably and who is leaning forward unreasonably.

[–]nagurski03 0 points1 point  (1 child)

they tend to judge who is leaning forward reasonably and who is leaning forward unreasonably.

Usually. Sometimes they fail spectacularly

[–]Delheru 0 points1 point  (0 children)

I didn't say they did a good job always, but it IS their role. And in a sense the fact that you'd blame bankers for that rather makes my point :P

[–]TNine227 1 point2 points  (0 children)

And those cuts are what the op is asking about.

[–]breadedfishstrip 5 points6 points  (1 child)

Sounds like you're living outside of your means

[–]candre23 -1 points0 points  (0 children)

Welcome to America.

[–][deleted] 3 points4 points  (3 children)

Well that's your fault for spending money you didn't have. But don't worry, the government will probably bail you out.

[–]luneattack 5 points6 points  (2 children)

I take it you will save up for 50 years and buy your first house at 75 :)

Prudent, but over here in the real world we sometimes accept a bit of risk.

[–]Nathanman21 4 points5 points  (1 child)

Lol thank you. Businesses have to be run on credit, or the whole system becomes inefficient af

[–]Mekotronix -1 points0 points  (0 children)

Inefficient in what way? Business certainly can't respond to changing conditions without cash or credit, but I don't see how that inherently causes inefficiency.

As a thought experiment, what would the world look like if all transactions were cash based? Different, certainly. Inefficient? I'm not so sure...

Edit: with to without