Why are people poor???

[Enuff2Eat]

"Money can't buy you happiness. But it helps you to be miserable in comfort."
Reason One: Lack of knowledge: or more specifically, a lack of a desire to gain knowledge. Make the effort to read to read about financial matters and you will learn. Many people don't know where to go for unbiased advise so they do nothing.
Reason Two: Failure to set plans. Did you know that only 5% of the population sets goals and only 2% have any form of written goals? Their actions have a sense of purpose - they are results oriented, they are motivated, they are positive - they are life's winners. Without a plan it is easy to drift aimlessly, and live from day to day. If you have set goals you will know what you want to achieve.
Reason Three: Inefficient use of time and poor work habits. Time is like money - you can spend it or invest it in building a better you by self-development. When you waste you are wasting yourself. Plan your day - what do you really want to achieve today?
Reason Four: Lack of foresight. Achievers have an ability to look beyond the immediate and into the future. Although some may see your visions as dreams do not forget that you have to have a dream to make a dream come true. Unless you are fortunate enough to be left a legacy, the only money you will ever have working for you is that what you save from current income and invest. People with vision can multiply their income by investing in growth investments. Work for your money then make your money work for you.
Reason Five: The need to conform. Dare to be different which is why the majority of people are not successful. Don't be afraid take calculated risks. Remember the people who make big money are the ones who do the opposite of what everyone else does - sell when everyone else buys and vice versa.
Reason Six: Poor debt management through excessive borrowing. Lack of discipline through poor spending habits and having no budget. Borrowing for things that loose value, so that with interest payments you pay much more the article than it cost initially. (Especially new cars, furniture etc.)
Reason Seven: Lack of desire as a result of a poor attitude to acquiring wealth. Bad mental attitude has caused more personal problems than any thing else. What we expect to happen usually does. Successful people are optimists while unsuccessful people have a pessimistic attitude . Block out negative thoughts and stereotypes and mix with successful, positive people.
Reason Eight: Inadequate protection against unforeseen events. It may be the loss of a home due to natural disaster or the death or disablement of the bread winner. Adequate protection (insurance) against these events is vital to financial success. Not being properly covered has financially wiped out many potentially successful people.
Reason Nine: Lack of discipline. Most people find it difficult to save. It is easier to say yes than no. Those who lack discipline to say "no" will find financial success an impossible achievement. The "must have it now" mentality - buy now what you can't afford by charging it in the hope that you can pay for it later. Most people are easily led by advertising and the easy availability of credit.
Reason Ten: Procrastination. Many people put off a savings programme until it is too late. Young people have a wonderful opportunity and advantage because they have time on their side. The reasons people give for not starting a savings programme are varied. Many are genuine. In their twenties they are just getting started in life with a first job and want to enjoy themselves by spending on cars, stereos etc. In their thirties they have a young family and a mortgage to support and no money. In their forties they say things are tough with kids to put through university and unexpected medical expenses. And in their fifties it is already too late with no time left to accumulate capital through the magic of compound interest. A convenient time never comes.
Craig Lock is the author of the Mad Money Book. He has been involved in the personal finance field for many years.

 

[kumquat]

I suspect that in some cases there are fundamental problems which are beyond a person's control.

 

[Lazarus]

All true. Although having marriage, divorce, kids, job loss or change, health, all have an impact on whether you can retire at all, much less early. Luck is an issue but most successful people do not attribute it to their success.

Oh yes, having the right parents.

 

[Martha]

Maybe these are a few factors which play into why some people don't get ahead with saving, but they don't apply much to the really poor people that I know. I also get a bit irritated when people claim that others are not successful because they have a bad attitude or lack of discipline when there are so many internal and external factors in play. Luck of the draw is huge.

 

[ziggy29]

Many of these are often true -- especially when they happen to people born of reasonable means, those who weren't big losers in what Warren Buffett called the "birth lottery." They follow this blueprint, they will very likely succeed.

I guess the one thing that kind of bugs me (not that it invalidates the premises) is that these statements are often made by people who were born on third base and act like they hit a triple. (Not saying that's you.) But to me these words are fairly hollow when they come from someone who grew up with all the advantages and can't relate to what it's like to grow up impoverished in a broken home and rough neighborhood, where surviving and putting food on the table today are the primary concerns, not saving for junior's college fund.

 

[Gumby]

I also get a bit irritated when people claim that others are not successful because they have a bad attitude or lack of discipline when there are so many internal and external factors in play. Luck of the draw is huge.

To wit: my mother's family was poor because the Nazis bombed them out of house and home three times during the London Blitz and killed my grandfather. My grandmother then raised her three young children alone by working as a charwoman. I don't think a bad attitude or lack of discipline had anything to do with it.

 

[Spanky]

it's nothing wrong being poor in external wealth.

 

[jimnjana]

To wit: my mother's family was poor because the Nazis bombed them out of house and home three times during the London Blitz and killed my grandfather. My grandmother then raised her three young children alone by working as a charwoman. I don't think a bad attitude or lack of discipline had anything to do with it.

I think this has more to do with why the war on poverty is futile, not so much with particular life events leading to poverty, but more with the cycle of poverty.

 

[Gumby]

I think this has more to do with why the war on poverty is futile, not so much with particular life events leading to poverty, but more with the cycle of poverty.

They weren't poor due to any "cycle of poverty". They were poor due to the ravages of war. Being left homeless, destitute and fatherless would try even the hardiest of souls. The fact that my grandmother was able to go out and work (which was not common for married women in that time and place) and keep her family together in those circumstances is testament to her determination and fortitude. I know these people. They were all hardworking, disciplined and, despite all that happened to them, had generally positive attitudes. They were precisely the people who could well have flourished if given a little support, instead of just barely being able to eke out a life.

 

[tryan]

poverty and hardship build character; wealth and security destroy it

 

[NW-Bound]

My parents were poor when they got married; my mother was only 18. My father was orphaned in his late teens and had to fend for himself; his parents were poor farmers, and he did not finish high school. By the time I reached elementary school, we were solidly middle-class.

Yes, I wholeheartedly agree that many of the poor people have difficult circumstances, and perhaps do not get chances to get ahead like my parents. Perhaps they are not equipped to fight to survive for several reasons.

I think the OP was trying to say that often people would and should be able to help themselves, but failed because of the reasons that were listed. Obviously my parents were able to figure these things out for themselves. One should look at the list to see if any applies in a particular case.

‘It is better to light a candle than to curse the darkness.’​

 

[Enuff2Eat]

it's mostly LUCK.

I can speak about my own siblings and parents. It's 70% luck, 20-30% hard work and a right spouse. I personally know several people that are very smart, work very hard worker but without luck and the right spouse, they struggle day to day.

Sometime, being at the right time and the right place can make a big different in your life. Just ask Sarah Palin.


Enuff

 

[tuixiu]

Some people have a way of consistently getting lucky, makes one wonder how much of what is called luck is actually wisdom that might not always manifest itself in a measurable or even easily noticeable way.

 

[NW-Bound]

Agree 100% on the "right spouse" criteria.

And yes, one always needs some luck.

However, as I like to say, luck or the right circumstance is a necessary but not sufficient condition. Hard work and the right attitude are also needed.

But then, these aren't the things any of us doesn't already know.

 

[Culture]

I have always wondered about this issue. We all know someone who climbed out of the worst of circumstances, while others do not make it. The birth lottery clearly helps, but is clearly not required either.

I am firmly convinced that almost anyone who approaches life rationally can climb to at least middle class from even the worst of circumstances. The problem is that very few people are rational, and there is very little social support or encouragement to act rationally. I think this is mostly because rational behavior is primarily innate, not learned, and few people have the "rational" gene.

Of course I could be wrong.

 

[NW-Bound]

Very few are rational? You don't show much charity, do you?

How do you rate us members here in this forum?

 

[Enuff2Eat]

I have always wondered about this issue. We all know someone who climbed out of the worst of circumstances, while others do not make it. The birth lottery clearly helps, but is clearly not required either.

I am firmly convinced that almost anyone who approaches life rationally can climb to at least middle class from even the worst of circumstances. The problem is that very few people are rational, and there is very little social support or encouragement to act rationally. I think this is mostly because rational behavior is primarily innate, not learned, and few people have the "rational" gene.

Of course I could be wrong.

No, you're not wrong. Someone once told me "The guy with the most intelligent got the best job, the guy with the most common sense make the most money". As I get older it starts to make more sense since most of the big cheese in my office are NOT the most intelligent people but they always make the big bucks.

enuff

 

[NW-Bound]

...most of the big cheese in my office are NOT the most intelligent people but they always make the big bucks.

There are different measures of intelligence. These people may have the "street smarts" that the "booksmarts" disdain, like I used to. I don't anymore.

 

[tuixiu]

For many things raw intelligence isn't always the most important attribute for success, including a lot of roles in the workplace.

 

[easysurfer]

Why are people poor? Some are from circumstances beyond their own control and some are because of the choices they make. In the case of the latter, if you give $10,000 to three siblings (all from the same nest) when they are teens, when they are older, will their financial state all be the same? I think a good chance not. One sibling might see the 10K as a windfall and spend it as fun money. One sibling might invest it in himself to learn and learn and let it grow. The other might give it away to someone else do with it as they think best.

 

[Bikerdude]

"One of the strangest things about life is that the poor, who need money the most, are the very ones that never have it."

Mr. Dooley

"As a general rule, nobody has money who ought to have it."

Benjamin Disraeli

 

[harley]

I think these are valid reasons why people aren't rich, or "well off". I don't think they even touch on why people are poor. Poverty is overwhelming, and if you are born into it just trying to keep your nostrils above water takes an immense amount of work. That work negates almost all of the 10 items listed in the OP. There are a few people, who through luck or extreme desire, are able to overcome the handicap of being born into poverty, but not many. In cases like Gumby's grandmother, people can usually work themselves back out of poverty in a generation or so because they have the basic knowledge of how not to be poor. But those who are born into poverty and who's entire history is impoverished don't have those skills, and are very lucky if they can break the cycle.

 

[NW-Bound]

About what Harley wrote, yes, it is difficult to rise out of it if one is born into abject poverty. We still see a lot of that in 3rd world countries.

I may have a very sheltered life, so do not know if there still are Dickensian poverty cases in the US. It seems to me we have made great progress in welfare and aid programs to the poor. Am I wrong?

 

[bbbamI]

I grew up poor and so have most of my relatives. Unfortunately, most are still poor. It seems at some point they decided life wasn't going to get any better, so why should they bother trying to get ahead. Once their minds were made up, they stopped looking to the future. I suppose for them, it was easier to do nothing than to face the possibility of failure. In my opinion, it was all about fear.

 

[harley]

I may have a very sheltered life, so do not know if there still are Dickensian poverty cases in the US. It seems to me we have made great progress in welfare and aid programs to the poor. Am I wrong?

JMO, of course, but I don't think welfare raises people out of poverty. It can give them a better version of it, but unless they learn how to work, show up for a job, accept responsibility, etc, they aren't going to move forward. There are families who have been welfare recipients for 3-4 generations, and whose members don't have a clue how to do these things, as there is no one to teach them. So I'm not sure how much it has helped.

As far as the Dickensian poverty, I went to college in SW VA, and many of the Appalachian people I saw down there would feel right at home with Fagin and Oliver. Sad.

And that's just in this country. Overseas is immeasurably worse. Of course, I don't have a solution. I wish I did. The poor will be with us always, as it says in the good book. All you can do is try to help where you can. I just got a little annoyed at the glibness of the OP. It listed a number of secondary reasons, but ignored the most important (the birth lottery).