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Most Money Advice Is Worthless When You’re Poor

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

#41

Post by bluedevil2k »

paulpauper wrote: post #27
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.

That’s probably a far too simplistic way of putting it - I would actually think people with a hard work ethic (ie gumption, ie stick-to-it-iveness) would be more likely to climb their way out of poverty.

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

#42

Post by zozbot123 »

ddingus wrote: post #20
ThrowawayR2 wrote: post #17

Earlier quoted context omitted.

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.

Or not. The reality is people in that scenario have a backlog of unmet needs as well as unsatisfied obligations, and the occasional, but consistent enough set of unexpected costs to render saving almost moot. Skip the fries Skip the debt collector Skip that new light bulb Skip proper heating Etc... Manage to save a couple hundred, car breaks down, kid gets sick. That's how it goes. At some point, risk reward will mak…

> Manage to save a couple hundred, car breaks down, kid gets sick.

I know that I'm supposed to address the strongest interpretation of a comment, not the weakest one - but I genuinely cannot tell what your point might be here? That having 200 bucks saved up when that emergency hits has no value? That it's better to have a broken car you can't afford to repair, and maybe lose your job as a result? It literally makes no sense to me.

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

#43

Post by bluedevil2k »

ddingus wrote: post #19
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.

While there are many examples, their number is small. One could say there are orders more examples of people not escaping poverty.

No kidding...that’s pretty obvious.

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

#44

Post by brianpgordon »

bluedevil2k wrote: post #40
Decathect wrote: post #26

Earlier quoted context omitted.

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…

GDP has no relation to average wage, so not sure you can make an argument for ... giving people more money? If if I make a candy bar and sell it for $1, GDP would be $1, but my personal profit may only be 10 cents. Further, if I sold it to a convenience store who sells it for $2, then GDP is $3, and total profitability may only be 20 cents.

That's not how GDP is calculated. It's roughly the total value added along each step of the production/sales chain. If every person were equally productive and were paid exactly the value they added, and there were no taxes or government spending, then GDP per capita would indeed be the same as the national wage, though of course this situation is idealized to a ridiculous degree.

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

#45

Post by tomcam »

rue wrote: post #32
hourislate wrote: post #24

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 Immig…

You know, all immigrants can’t do that either. And other “others” do just fine. You have what’s called “survivor bias”, and you need to get past it to understand systemic issues.

Did the parent say all immigrants? Read the post a couple of times and couldn’t find that wording

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

#46

Post by brianpgordon »

EliRivers wrote: post #37
zozbot123 wrote: post #34

Earlier quoted context omitted.

> Already in debt and dodging bailiffs and debt collectors and intimidating loan-sharks, none of whom she has any chance of paying off. Okay, then maybe she should consider declaring personal bankruptcy and getting a clean start? There are some debts that cannot be discharged using bankruptcy, but they're not the sort of debt that f---s you over and that you have no chance in hell of paying off. Solutions are out the…

Yet they don't. Why not? Why is your advice here not being taken?

I think he has a point that you're assuming debt is the problem. It seems to me that she's just not being paid a living wage. If she's really struggling that much to make rent I would be surprised if anyone would give her credit at all, other than maybe short-term payday loans. And declaring bankruptcy every month doesn't help you avoid eviction.

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

#47

Post by ddingus »

zozbot123 wrote: post #42
ddingus wrote: post #20

Earlier quoted context omitted.

Or not. The reality is people in that scenario have a backlog of unmet needs as well as unsatisfied obligations, and the occasional, but consistent enough set of unexpected costs to render saving almost moot. Skip the fries Skip the debt collector Skip that new light bulb Skip proper heating Etc... Manage to save a couple hundred, car breaks down, kid gets sick. That's how it goes. At some point, risk reward will mak…

> Manage to save a couple hundred, car breaks down, kid gets sick. I know that I'm supposed to address the strongest interpretation of a comment, not the weakest one - but I genuinely cannot tell what your point might be here? That having 200 bucks saved up when that emergency hits has no value? That it's better to have a broken car you can't afford to repair, and maybe lose your job as a result? It literally makes n…

It totally has value! But, that value isn't escaping poverty, just coping.

I will add more context next time. Good feedback on a difficult topic.

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

#48

Post by ddingus »

zozbot123 wrote: post #42
ddingus wrote: post #20

Earlier quoted context omitted.

Or not. The reality is people in that scenario have a backlog of unmet needs as well as unsatisfied obligations, and the occasional, but consistent enough set of unexpected costs to render saving almost moot. Skip the fries Skip the debt collector Skip that new light bulb Skip proper heating Etc... Manage to save a couple hundred, car breaks down, kid gets sick. That's how it goes. At some point, risk reward will mak…

> Manage to save a couple hundred, car breaks down, kid gets sick. I know that I'm supposed to address the strongest interpretation of a comment, not the weakest one - but I genuinely cannot tell what your point might be here? That having 200 bucks saved up when that emergency hits has no value? That it's better to have a broken car you can't afford to repair, and maybe lose your job as a result? It literally makes n…

Secondly, and this is my preference, but there is no need to address the strongest component.

Really, this exercise has high value when we seek understanding.

You did that by getting after the question in your mind, rather than some form or protocol. That's where the good stuff is, most frequently. Not always, but good conversation hits home far more than appropriate, or proper conversation does.

Well played, I often do the same.

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

#49

Post by [deleted] »

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.

[deleted]

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

#50

Post by Decathect »

bluedevil2k wrote: post #40
Decathect wrote: post #26

Earlier quoted context omitted.

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…

GDP has no relation to average wage, so not sure you can make an argument for ... giving people more money? If if I make a candy bar and sell it for $1, GDP would be $1, but my personal profit may only be 10 cents. Further, if I sold it to a convenience store who sells it for $2, then GDP is $3, and total profitability may only be 20 cents.

Intermediate goods are explicitly excluded from GDP calculations and resale of finished products only increases GDP by the value added amount. In your scenario GDP would be $2.

Regardless, GDP can be calculated by summing all income across all sources. It represents a nationwide increase of wealth. The gap between wage per worker and GDP per worker indicates that, despite labor being the only source of wealth generation, labor only receives a fraction of its productive efforts back as wages. I like it because illustrates the gap between capital and labor, as an alternative to the more traditional income inequality between workers.

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