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Old 01-06-2010, 08:12 AM   #41
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(As mentioned several times above.)

I believe it was Malcolm Forbes who attributed his success and wealth solely to "a wise choice of parents." I believe the number one reason (if not the only one) for a person being poor (whatever that means) is because of this choice. Making plans and convincing yourself that the world is doing or will do things your way is very heart-warming but the true value of that is encapsulated in "What the gods do when you tell them of your plans."

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Old 01-06-2010, 10:59 AM   #42
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I think a lot of it is a mix of luck (stable upbringing) and the personality type of being able to plan ahead vs. "do it now". One SIL reminds me so much of my ex - everything is on credit, three new cars in the past four years, a sense of entitlement ("Well, we need to take a trip to the beach") and lots of restaurant meals - "I'm too tired to cook". And they continue to lurch from one financial crisis to the next. Retirement for them is not going to be much fun and they don't even see it coming. All he has coming for certain is a few hundred/month from National Guard and SS.

Another relative is in the same boat. For a while there he was doing great selling condos in Ocean City, MD. Sold $3 million in six months, bought the Lincoln Navigator, etc. Now he's bagging groceries.

Me? I think I just got lucky in picking a career and an agency that had a good DB pension plan with COLA's, which they don't offer any longer. Further, I escaped serious injury although sometimes I wonder how. I certainly came close enough to buying the farm many times. About 20-25% go out on permanent disability and in 29 years I went to eight funerals for coworkers killed at work. But I also had a relatively stable home (luxurious by the standards of some I've read here - we had indoor plumbing) and parents who gave me the opportunity and means to go to a community college, the degree from which allowed me to get that job.

But others from similar circumstances left that job early, some are doing well in other occupations, many are barely scraping by.

I suppose that often it comes down to "You pays your money and takes your chances".
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Old 01-06-2010, 11:40 AM   #43
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Very few are rational? You don't show much charity, do you?

How do you rate us members here in this forum?
The average person on this board is clearly two orders of magnitude more rational than normal.
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Old 01-06-2010, 11:55 AM   #44
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By rational, I am generally referring to the ability to list the long and short term pros and cons of a specific decision, and making a choice that will reasonably balance long and short term interest. People generally fail this test when buying cars, buying houses, choosing spouses, make career decisions, making educational decisions, family planning, etc.
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Old 01-06-2010, 11:59 AM   #45
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J. Paul Getty said something about if one wants money they have to make it the total pursuit of their life. And he meant totally and lived it. I doubt if many folks would happily make that sacrifice.
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Old 01-06-2010, 01:27 PM   #46
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I grew up in an impoverished broken home. My neighborhood wasn't rough, but it wasn't ideal. Having enough to eat was a major concern. I'd often go out at night to get food from garbage dumpsters. Lots of other interesting stories.

I have two brothers. One makes about $10K/yr (poor) and the other about $35K/yr (blue collar middle class). I make a little under $200K/yr. We came from the same stock. Went to the same schools. Had many of the same teachers. The opportunity was there. It was just a matter of accepting it.
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Curious - are you the eldest? I am, and financially do better than my sibs.

And lest we all get carried away, and to beat REWahoo to the punch:



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Old 01-06-2010, 01:33 PM   #47
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While drinking my first cup of coffee and reading this article, I noticed that OP mis-titled the original title of the article that was copied and pasted. It was not "Why People Are Poor", but, rather "10 Reasons Why Most People Do Not Achieve Financial Success".

The article was more in the nature of discussing the dumb things people do with their money rather than how they wind up being poor or rich. If you took a random group of middle income folks and judged them on how well they followed the author's advice, there would be a marked difference in the financial outcomes. Those that chose poorly would not be in the ER crowd while the others would be (if they chose to). Most would be somewhere in between.

In a forum so devoted to the concept of LBYM I don't think I have to say anything about how being financially successful has more to do with how you handle your money as opposed to it just being all about how much money you have. Everyone's choices and preferences differ and we all have our own version of "the number".

In spite of all that, this thread has been devoted to the title OP gave, why are people poor? A couple of cups of coffee later, I reflected on where I came from and where I am today - and the hows and whys of it all.

I'm not going to replay my internal Four Yorkshiremen or Horatio Alger bit, other than to say "you guys got to live indoors? Wow, you had it made!"

Did I win what Warren Buffet calls “The Great Ovarian Lottery”? The answer depends on how wide you want to spread the possible outcomes. If it means I was born in a democratic republic with a (mostly) capitalist economy with opportunities as opposed to Mogadishu, then yes I hit it big. If you narrow it to mean I was blessed by parents with the economic and social means to provide access to opportunities most others don't, well, all I got was the "Please Play Again" card.

But, if you defined it as I do, that I got some good genes that made me intellectually and physically capable of being successful, and an upbringing that taught me that my success was more a matter of my effort rather than what life handed me, then I hit the lotto and even got the power ball right as well.

Luck? Again, it depends on how far you want to stretch the meaning of that concept. If you're talking about random fate dictating the dice to not make you a loser, yes I have been lucky. There have been many times that my body should have been getting cold out there on the streets and yet I live on while others didn't.

But luck comes in both flavors, good and bad, and there are many times that the outcome has a lot to do with what you do in response to a situation than it does just accepting what fate dealt you. There's a lot of times that luck tried to play for the other team, I was better or faster and I'm the one who gets to keep walking around.

There are people out there that never got a break, but they are rare and form a tiny minority. As there are their opposite number who got all the breaks. But in the Western world the greatest majority of people are handed a mixed bag of good and bad that they have to deal with. None of us can credit all of our success, nor blame all of our failures, on fate, luck, or who are parents were.

And of course we can't all claim sole credit for success in life.
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Old 01-06-2010, 01:41 PM   #48
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I think there is an epidemic of obsessive comsumption in the USA..........
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Old 01-06-2010, 01:59 PM   #49
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I think there is an epidemic of obsessive comsumption in the USA..........
Caused by what? Relentless advertising perhaps? There sure has to be some explanation for the rampant consumerism around here.

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Old 01-06-2010, 02:11 PM   #50
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Shawn do your bothers make it ok on what they make? Do your bothers save any money? My father always said it was an advantage to grow up poor.

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I grew up in an impoverished broken home. My neighborhood wasn't rough, but it wasn't ideal. Having enough to eat was a major concern. I'd often go out at night to get food from garbage dumpsters. Lots of other interesting stories.

I have two brothers. One makes about $10K/yr (poor) and the other about $35K/yr (blue collar middle class). I make a little under $200K/yr. We came from the same stock. Went to the same schools. Had many of the same teachers. The opportunity was there. It was just a matter of accepting it.

I believe that 90% of poor adults are poor due to their own choices. In the United States, pretty much everyone has the opportunity to obtain at least a middle class income and lifestyle. Yes, it's certainly true that the children of poor parents are more likely to become poor adults, just like the children of middle class parents are more likely to become middle class adults. I believe the biggest disadvantage the poor have is their inability to realize that they do not need to remain poor. This can manifest itself in many ways.

One of my high school friends, whose father was a doctor, once told me that it wasn't until 8th or 9th grade before he realized that not everyone went to college. He just assumed college was a natural extension of high school. I was the opposite. It wasn't until 8th or 9th grade before I realized that it wasn't just the very rich who went to college (without an athletic scholarship).

It's not a lack of opportunity, at least in the United States. It's about perception and personal choice.
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Old 01-06-2010, 02:31 PM   #51
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Caused by what? Relentless advertising perhaps? There sure has to be some explanation for the rampant consumerism around here.
I think we've been conditioned to believe that "we deserve it" and forgot how to delay gratification until we could easily afford it.

I also think that we made mistakes in the economic post-WW2 boom years by creating entitlements and benefits that were clearly not sustainable, and even after it was becoming obvious that the global economy had shifted to the point where we clearly couldn't afford them any more, instead of reforming them, watering them down or eliminating them we just kept borrowing. That is true of federal, state and local budgets just as it was true for a lot of household finances.
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Old 01-06-2010, 02:40 PM   #52
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The key to breaking the cycle of poverty is the kind of message that these kids (those who did not win the "birth lottery") receive each and every day from their teachers. Teachers are, often times, the only humans that have daily contact with these kids that can deliver the message that they are valued and that someone really believes in their potential to be productive and successful members of society. I know that teaching is a hard enough profession these days, but they are probably the best hope that these kids have of ever breaking the cycle. Until we have teachers who have the talent and desire to do this, the cycle of poverty will continue. I know there are many really great teachers out there who can do this; unfortunately, I don't think there are enough of them to go around.
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Old 01-06-2010, 02:41 PM   #53
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Caused by what? Relentless advertising perhaps? There sure has to be some explanation for the rampant consumerism around here.

Audrey
Ahem. Oh owner of the big diesel pusher and buyer of house made for same - can you explain? Sez the guy who bought a cashmere jacket for himself last month 'cause he wanted it, not because he had any need for it. Did go to Mens Wearhouse based on comments made to TheFed here - so maybe it IS the relentless advertising on this board. Have to see if Martha and Rich buy next door to you....
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Old 01-06-2010, 04:00 PM   #54
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I think we've been conditioned to believe that "we deserve it" and forgot how to delay gratification until we could easily afford it.

I also think that we made mistakes in the economic post-WW2 boom years by creating entitlements and benefits that were clearly not sustainable, and even after it was becoming obvious that the global economy had shifted to the point where we clearly couldn't afford them any more, instead of reforming them, watering them down or eliminating them we just kept borrowing. That is true of federal, state and local budgets just as it was true for a lot of household finances.
Again - who is pushing the "you deserve it NOW" message the hardest? Sure comes across loud and clear in the endless consumer advertising. I kind of suspect "free" TV broadcasting paid for by ads - a model which now is used in most cable programming as well, even though we pay for cable by subscription.

How much does that rampant consumerism correlate with the growth in the hours of TV watched per week? I wonder.

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Old 01-06-2010, 04:03 PM   #55
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Ahem. Oh owner of the big diesel pusher and buyer of house made for same - can you explain? Sez the guy who bought a cashmere jacket for himself last month 'cause he wanted it, not because he had any need for it. Did go to Mens Wearhouse based on comments made to TheFed here - so maybe it IS the relentless advertising on this board. Have to see if Martha and Rich buy next door to you....
Hey - If I were out buying stuff all the time, running up credit card debt or a HELOC, with closets stuff full of clothes and shoes and a house overflowing with "stuff", and a huge 5000 square foot house, multiple autos, other toys, etc., I might consider myself a victim of rampant consumerism.

But I saves my $$$ and then I buy it on the big stuff I REALLY want, which IMO is the whole point of $$$. You DO eventually want to spend it! Just be sure to spend it on what matters the most.

I know you know that already!

Audrey

P.S. And I eschew most advertising and I didn't grow up with it either as I lived without TV most of my childhood.
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Old 01-06-2010, 04:38 PM   #56
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Get born American or least find a way to get here.

1957 - An Aunt -aka 'The Swedish maid' died in New York City. She left my Father about 21k in mutual funds. Which he promptly sold because 'he knew' from the Great Depression' that stocks were evil and besides he was a FDR Democrat(don't ask there isn't a rational explanation). He probably made at least twice her highest pay as a log train mechanic.

I in the 7th grade went to the library and checked out the only book they had on mutual funds - Handbook of Mutual Funds or some such title.

heh heh heh - You can draw your own conclusions. Me being a 'poor' ER will lighten up and stop shopping the Salvation Army Family Store sales when my portfolio gets past 3 mil - inflation don't you know.
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Old 01-06-2010, 07:12 PM   #57
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By rational, I am generally referring to the ability to list the long and short term pros and cons of a specific decision, and making a choice that will reasonably balance long and short term interest. People generally fail this test when buying cars, buying houses, choosing spouses, make career decisions, making educational decisions, family planning, etc.
I think there is little in life scarier than the prospect of everybody and everything being too "rational." Corporations behave "rationally" when they hide behind the corporate veneer and hire lawyers to stonewall people rather than behaving ethically.

Let's say I am dirt-poor, and can't afford to feed myself. There is a person walking in front of me with $1,000,000 on his person (yes, HE'S not rational). If I kill him, and there's a 5% chance of my being caught, is that rational? Especially considering that if I DO get caught, I'll probably be locked up and fed three squares per day for a long time?

I'm not sure that it's so easy to define what 'rational' really is, but I'm fairly certain that everybody behaving according to somebody's definition of what it is will not make the world's problems go away.
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Old 01-06-2010, 07:18 PM   #58
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While drinking my first cup of coffee and reading this article, I noticed that OP mis-titled the original title of the article that was copied and pasted. It was not "Why People Are Poor", but, rather "10 Reasons Why Most People Do Not Achieve Financial Success".
Ah! Just a hint to future posters - if you want to keep Harley from spouting off, post the correct title. This one makes much more sense.
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Old 01-06-2010, 07:25 PM   #59
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Borrowing for things that loose value, so that with interest payments you pay much more the article than it cost initially.

For a cut and paste job he could have at least run it through spell check or proof read before posting.
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Old 01-06-2010, 08:11 PM   #60
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For the benefit of our newer members -- we discourage a wholesale cut and paste of articles from other sources. It is far better to summarize the main argument, perhaps throw in a few comments of your own and then link to the article so that those who want to read the whole thing may do so.

Thanks.

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