Why do people act like you can save your way out of poverty? (rent, income)

[mathjak107]

Originally Posted by freemkt

HowTF would a poor person think rich? Working harder or longer at a menial dead-end job won't make them rich.

THE ANSWER IS AT THE TIP OF YOUR NOSE !

if you have to ask , then you will never know . it is like learning to throw a ball . no one can explain it to you , it is a feeling you acquire on your own .

you feel how hard to throw , how high to arc to reach the goal .

the mere fact you are asking means there is nothing anyone can explain to you nor is it something you can or will learn on you own ..

you are just one of those who committed financial suicide .

[GeoffD]

Originally Posted by freemkt

HowTF would a poor person think rich? Working harder or longer at a menial dead-end job won't make them rich.

You do realize that, in the practical definition, rich means you have amassed enough capital where your passive income is large enough that you no longer have to work? "Thinking rich" means you are saving and investing to achieve that goal. Most people only get there in retirement and have some help from Social Security and pensions.

So "thinking rich" means you are thinking strategically to amass the wealth where you don't have to work. It involves a helluva lot of deferred gratification. You're studying at a "hard" major while your buddies are out socializing. You defer consumer spending so you can save and invest. You use birth control to make sure you have an education, stable career, and a spouse with the same before you think about reproducing. The poorest people have a 1-day event horizon. All thoughts are for today. A somewhat less poor person lives week to week. The people who become rich have 20 or 30 year plans and their decision making revolves around making baby steps towards executing that plan.

So what's your strategy to not be poor? All I ever see is posts where you claim to be powerless. Anyone without a plan is indeed making themselves powerless.

[keraT]

immigrants (low education once) have been living and thriving on below minimal wage because:


They share housing with other family/friends. This cuts down not only rent but utility bill & internet & even food..etc Yes they give up their privacy & living room might be used as kids bedroom but if you are poor & have families that are poor, it might be worth living thru the hardship until you make it.

[Murk]

Once upon a time (about 15 years ago), I made $18,000 salary a year. I saved money even then, although a very small amount each month. Combined with being frugal, I ended up having money in the bank for emergencies etc. That buffer is what prevents true poverty, I think.

It's a mindset more than anything. I educated myself and now work for myself making quite a bit more than that $18k a year, although my income is nowhere near "rich." I'm still frugal and still save as much as possible.

You can save your way out of poverty, but it has to be in conjunction with some method that will raise your income as well. When you're poor, a flat tire with no money in the bank to fix it and a flat tire you can pay cash to fix is a huge difference.

[Marlow]

While there is much to be said for the importance of frugality and hard work in lifting someone out of poverty, I think that our current economy has made it much, much more difficult to raise oneself out of poverty than it used to be. The OP said he didn't want this to turn into a discussion of minimum wage, but the fact remains that working class wages have not in any way kept up with expenses.

I was able to pay for my college tuition and books in the 80's by delivering pizzas for Dominoe's and later earning minimum wage working part time at a university library. My parents paid my room and board without taking out loans while working middle class jobs. That simply is not possible these days, no matter how diligent a person is or how hard they work.

There is a lot to be said for "thinking rich," working hard, and reaching for the stars, but for most people those things will not overcome the disparity between wages and the cost of living.

[oregonwoodsmoke]

Originally Posted by BradPiff

.........News flash, you are never saving anything of significance on 9 dollars an hour, I don't care how "conservative" you are with money......... .

No one at any salary level is becoming rich by saving from their salary. You don't save to become rich, you save to accumulate working capital and you use that working capital to climb up the income ladder. Savings are a stepping stone, not the ultimate goal.

People who are working for $9 an hour and are bitter becasue they aren't rich are going to improve their lives a lot more by figuring out how to increase their salary than they are going to improve their lives through whining about how the world is picking on them.

No one has to remain at $9 an hour unless they are mentally ill or very low IQ. Even low IQ people can earn a better salary than that. I know handicapped people, even a paraplegic, who earn much more than that. There are very few valid excuses for lingering at $9 an hour for the rest of your life.

[Nor'Eastah]

Originally Posted by usayit

One thing I've noticed about my friends that I left behind is that they don't see opportunity everywhere.. they only see obstacles.

Originally Posted by mathjak107

...being creative and motivated to increase earnings has no limits .

^ These!

I was young once, too...had a bride and two kids under age 4. Had an old pickup I'd bought used. Had an idea. Over some years (happy ones! ) I was able to grow a tiny business into a supporting one, and from that into a profitable one. None of us starved. But we DID save.

Even now in retirement, I still see opportunity everywhere, and have started another business. And I still save, too - even in retirement. I have lived frugally all my life; though I don't need to now, I still do.

[jm1982]

One of the biggest myths in our society is that the reason poor people are poor is because they spend their money on drugs, Clothes, technology. That if they just pocketed that 120 dollars on an Xbox they wouldn't be living in trailer parks/project lol.

News flash, you are never saving anything of significance on 9 dollars an hour, I don't care how "conservative" you are with money. For the record when I say significant I mean that will change your economic reality in a big way long term.

For the record, I don't want to turn this into a MW raising debate because it's not about that.

I'm not sure that most people believe that the reason poor people remain poor is because they spend money foolishly.
Sure $120 won't get you out of poverty, but chunks of $120 over time ..can grow to a significant amount of money.

Since I was younger, I always enjoyed reading biographies or stories of how people that started poor or with little got rich.
They pretty much all started with small businesses and then leveraged them into bigger businesses making big money.

People mentioned the importance of seeing opportunity. That is key really. Where some see problems , others see opportunity to make money.

$120 could buy you $120 electronic device or some new trendy sneakers...but $120 could also buy some products at a wholesale price that you could sell for more.
Today the internet has opened up a lot of opportunities for people.
I've heard stories of people started quite small , even using a credit card to buy products and now selling millions.
Of course it's easier said than done.
There are more free online tutorials and courses now than ever before.
People really have no excuse not to learn new skills with free libraries,etc .

People don't realize that time is their most valuable asset. We all have 24 hours in a day....millionaires or billionaires have the same amount of time in the day as the poor. The question is what is done with that time.

Trading time for money , especially at a low wage and then having all that money go to expenses keeps people poor.

Welfare is not a good long term solution either. The whole give a man a fish vs teach a man to fish.

Of course there are some that have an interest in keeping people poor. Huge numbers of people would probably lose their jobs if there weren't poor people. Payday lenders are just one example of many.

I'm for helping people that need help or are hungry...but we really need to do something to teach people how to fish.

A huge issue I think is that kids are basically trained to be employees from the time they are young.
"Do good in school, so you can go to college and then get that good job" .
Unfortunately the average American ,even with a good job seems "Just Over Broke"...although again the middle class also can fall victim to consumerism just like the poor and trading time for money.

It's just much much easier to spend money rather than save/invest it.

I recently listened to an interview with Jim Cramer on a podcast . He said that he tries to cut his expenses every month. Which sounds crazy because he likely makes millions a year.

He also is still involved in different businesses , even though he must make a lot of money with his dayjob.

One thing that really struck me was that he mentioned there was a period where he was actually living in his car.
I have to believe that mindset and seeing opportunity , combined with taking action played a huge role in getting him out of living in his car to where he is today.

This is the interview for anyone interested.
Jim Cramer - So Money with Farnoosh Torabi

I wasn't really a big Cramer fan, but I thought it was a good interview.

Most of the poor in the U.S have computers and smartphones and can listen to these things too or if they dont they can listen at a library...but I wonder how many are.

[raggedjim]

Because it has been proven time and time again. It is common knowledge to spend less than you make. Nobody improves their lot in life by fighting against common knowledge.

Good luck, Rg

[Vaedrem]

No, you can't save your way out of poverty. Our economic system/economy is designed right now so that most people will live in poverty while a few at the top will be rich. People are LUCKY to be born to the right people, to wind up in the right circumstances and thus not live in poverty, but they become smug enough to imagine that it's all due to their personal effort, when it's not. You can't save your way out of poverty because even if you manage to squeeze some money out to save aside every month, it will soon get eaten by unexpected car repairs, dental bills, unforseen illness, rising rents... That's why social policy favoring rent control, subsidized housing, living wages, inexpensive public transportation, single payer healthcare, free college education, etc. is what alleviates poverty, not shame and myths about 'hard work,' and blaming the poor for not having the right 'mindset.'