Most Money Advice Is Worthless When You’re Poor • Hacker News Board

Re: Most Money Advice Is Worthless When You’re Poor

#21

Post by PeterisP » Sun, Dec 16, 2018, 6:59 PM UTC

This kind of has a very simple point - advice is useful iff your problem is caused by bad choices, and advising to make better choices can help. If your problem is caused by external forces that your choices can't change much, then it's better to devote all your energy to doing stuff instead of looking for advice on how to do stuff better, because there's no silver bullet, you can't do significantly better, and you don't need to waste effort on looking for it.

If after non-negotiable expenses you have barely any money to budget, then budgeting advice is useless as your budgeting choices don't matter much. Career advice, on the other hand, may be useful in that case.

If you're unable to work because of a disability or other factors, then career advice is useless as your career choices don't matter much, but financial tips on how to get the medicine you need in the most affordable way may be useful.

Re: Most Money Advice Is Worthless When You’re Poor

#22

Post by EliRivers » Sun, Dec 16, 2018, 6:59 PM UTC

ThrowawayR2 wrote: post #17

EliRivers wrote: post #6

Earlier quoted context omitted.

This advice seems pretty irrelevant. She just said that these people do not have any spare money to save up, but this advice is "save up".

Re-read the last section entitled " Go ahead, buy that bag of fries ". The lady chooses to buy small luxuries to help her cope with her life. Whether that's a valid approach is up for debate but that money is there.

She knows she's already fucked. Not going to make rent. Already in debt and dodging bailiffs and debt collectors and intimidating loan-sharks, none of whom she has any chance of paying off. Hoping she doesn't get sick because she'll lose her job and end up on the streets. If her wreck of a car suffers a minor fault, she's going to lose her job. She knows she's already fucked. Not buying the bag of fries will not help her. She's already fucked.

Her choice is tiny bit of happiness now and lots of misery, or just lots of misery. She's already fucked. Middle class advice on making small savings to build up a pot of cash is not relevant.

I know you read the article, but you just can't stop with the very same irrelevant advice the article is pointing out is irrelevant.

Re: Most Money Advice Is Worthless When You’re Poor

#23

Post by tarboreus » Sun, Dec 16, 2018, 6:59 PM UTC

pasta wrote: post #16

aw3c2 wrote: post #2

https://en.wikipedia.org/wiki/Sam_Vimes#Boots_theory_of_soci... > The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money. > Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the card…

I don't think this applies anymore. Cheap is getting better and better. And the rich just buy new because they like to go with the trend spending hundreds of dollars on boots. Most people I know (Netherlands) who are not wealthy have mental issues or don't know how to manage money. Edit: I don't want to sound like I think the author belongs to those 2 groups. There are many more reasons why someone is poor.

I think it's fair to say that this is less true in America, where we have essentially no social safety net.

Re: Most Money Advice Is Worthless When You’re Poor

#24

Post by hourislate » Sun, Dec 16, 2018, 7:01 PM UTC

Being a first generation American and coming from an environment of poverty, my parents sacrificed their health and lives to give us kids a better one. My father did the hardest, dirtiest work that was unfit for a beast and mother cleaned houses. They had nothing but made sure the kids had everything they needed (cloths, education, food) and through their sacrifice the chains of poverty were broken.

Millions of Immigrants come to the USA/Canada with nothing but the cloths on their backs and somehow they manage to support themselves and their families. Others are 4th, 5th Generation Americans and can't seem to get off Welfare or dig themselves out of a hole.

I don't understand.....

Re: Most Money Advice Is Worthless When You’re Poor

#25

Post by your-nanny » Sun, Dec 16, 2018, 7:01 PM UTC

if the author has a degree as claimed, then the author is eligible for a number of better jobs, even part time ones, and doesn't have to work to flip burgers. Substitute teaching pays better, usually, and is easier to do; also gives you professional contacts. Getting a credential on top of your bachelor's is within reach for most people; some districts so desperate for teachers they'll hire you anyway, provisionally. With a bachelor's you can also teach SAT prep and tutor, all of which pay better than fast food. And the guy can write obviously.

I come from a poor neighborhood. I get it. Most of childhood friends are in jail or are dead. But I have a hard time believing someone with a bachelor's has to scratch it with the rest of them with multiple part time jobs, not in this economy for sure.

Re: Most Money Advice Is Worthless When You’re Poor

#26

Post by Decathect » Sun, Dec 16, 2018, 7:02 PM UTC

bluedevil2k wrote: post #8

> The way I see it, being poor is like having cancer What a terrible way to look at it, making it seem like it’s entirely out of your control and you need outside help just to survive. There’s many examples of people who have climbed out of poverty to middle class, even upper class. I highly doubt they’d spread the advice that being poor is a hopeless disease.

There's many examples of people who have survived cancer and lived another decade, even five decades. I highly doubt they’d spread the advice that having cancer is a hopeless disease.

The commonality is it was out of their control, they absolutely needed outside help just to survive, and that their odds were terrible. The existence of rare exceptions only highlights the fatality rate.

Unlike cancer, however, there's a known, 100% effective cure for poverty: money. GDP per employed person in the US is over $120000 while the average wage is just over $50k. The solution is obvious.

Re: Most Money Advice Is Worthless When You’re Poor

#27

Post by paulpauper » Sun, Dec 16, 2018, 7:05 PM UTC

bluedevil2k wrote: post #8

> The way I see it, being poor is like having cancer What a terrible way to look at it, making it seem like it’s entirely out of your control and you need outside help just to survive. There’s many examples of people who have climbed out of poverty to middle class, even upper class. I highly doubt they’d spread the advice that being poor is a hopeless disease.

I think IQ, which is biological and intrinsic to the individual, plays an important role in upward mobility. All else being equal, someone with an IQ of 80-100 is going to have a harder time climbing out of poverty than someone with an IQ higher than 115.

Re: Most Money Advice Is Worthless When You’re Poor

#28

Post by zozbot123 » Sun, Dec 16, 2018, 7:06 PM UTC

bloaf wrote: post #15

The one universal piece of money advice is "Spend less than you earn, and put the difference somewhere that earns interest." Most articles, recognizing this universal truth, go on to propose ways of spending less and saving more efficiently. The author of this piece, having reduced his spending as low as reasonably possible, actually just needs advice on how to earn more.

The actual universal advice is "use that difference to pay down your existing debt, highest interest rate first. Then, after that stops being worthwhile, put your money at work." Special cases may apply - you always want a rainy-day fund, no matter what (even just the lack of stress around finances that comes with not living hand-to-mouth makes it a no-brainer) and some debt should perhaps not be paid off immediately - but I'm pretty confident that the gist is correct.

Re: Most Money Advice Is Worthless When You’re Poor

#29

Post by CuriousCosmic » Sun, Dec 16, 2018, 7:07 PM UTC

EliRivers wrote: post #6

jotm wrote: post #3

What a terrible article. Sure, yeah, you're poor, own it, give up. Go buy that fast food shit, get fat and damage your health. Buy all that alcohol that helps you get through life, that will definitely help . FFS. No, you try, fail, try again, fail, try some more - to save up, and start making more. All that advice glosses over just how hard it actually is (not that it can even convey it properly), and it takes time,…

This advice seems pretty irrelevant. She just said that these people do not have any spare money to save up, but this advice is "save up".

I'm not the OP but I have a somewhat similar mindset. My advice isn't just "save up", it's the following.

Look for a better paying job and scrape together every dime you can until then. Don't indulge in the burger or chips, spend that on making a massive pot of cheap hearty soup, stew, or gumbo that'll last you through the week. Bunker down and take free indulgences. (a free game or movie from a maybe less than official source on the internet if you have to)

And when I say look for another job, I know that sounds like horrible advice but it is valid. Look for the physically demanding job with long hours. Mine was in a mushroom packaging plant. It was hard work for 60+ hours a week and most people gave up in less than 2 weeks but it was good consistent money. Places like that exist all around. On paper they look like low income with poor work conditions but overtime is extremely helpful when you work 60+ hours a week.

Life is not by any means pleasant when you are poor but if you are as frugal as possible and know where to look you can almost always find a job that will leave you not always worrying about being able to pay the bills. Then you can start saving.

Re: Most Money Advice Is Worthless When You’re Poor

#30

Post by seibelj » Sun, Dec 16, 2018, 7:11 PM UTC

ddingus wrote: post #18

chrisco255 wrote: post #13

Earlier quoted context omitted.

You think that always holds up or is that an unreasonable extrapolation? There are plenty of high dollar products that don't last. And spending $100K on a car isn't going to give you a more affordable or longer lasting vehicle than a $20K Honda Civic. It's far more likely that you can buy a $20K Civic and it will last longer than the luxury vehicle with lower maintenance costs.

The poor people do not buy $20k Civics. For about half the nations labor force, that purchase could be half a year worth of income. Given housing and other costs, financing that purchase is difficult. What they do is get $500 to $2000 cars. And those do break down frequently. They may or may not have resources, skill and or time to repair them.

A long time ago I worked at a pizza shop as a delivery boy and cook. Multiple coworkers had luxury cars, including one Cadillac sporty sedan. They just seemed to put every possible spare dollar they had towards the most expensive car possible. Made no sense, but buying too much car is a common phenomenon in America.