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Rich people do have trouble understanding what it's like to be poor

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Re: Rich people do have trouble understanding what it's like to be poor

#131

Post by zepto »

bachmeier wrote: post #123

There are a couple things to understand about being poor. It's not about lack of money (though obviously having lots of money means you're not poor). It's about insecurity. I grew up in farm country in the 1980s. Nobody had money, but I didn't feel poor. When I moved to other parts of the country, that's when I encountered poor people. They had to worry about crime, schools for their kids, and being homeless. When yo…

> The other thing is that there's a saying along the lines of getting wealthy being mostly the same for everyone

What does this mean?

Re: Rich people do have trouble understanding what it's like to be poor

#132

Post by pedrosorio »

fnord77 wrote: post #20
aspaviento wrote: post #5

Earlier quoted context omitted.

I remember a politician complaining about having difficulties with a salary of 6000€/mo. Some people live in a bubble so far from the real world that almost seems fantasy.

a national politician needs two homes - one in the capital and one in the location they represent. That alone would eat up 6000€ especially if either place is expensive.

Often politicians in that situation get extra cost of living payments for travel and accommodation (at least in the EU)

Re: Rich people do have trouble understanding what it's like to be poor

#133

Post by ta988 »

dralley wrote: post #55
aspaviento wrote: post #5

Earlier quoted context omitted.

I remember a politician complaining about having difficulties with a salary of 6000€/mo. Some people live in a bubble so far from the real world that almost seems fantasy.

I remember when US Reps worth millions were mocking AOC for not being able to simultaneously afford an apartment in DC and NYC prior to receiving her congressional paycheck.

It shows you how competent these people are at taking care of the American people...

Re: Rich people do have trouble understanding what it's like to be poor

#134

Post by bradleyjg »

JKCalhoun wrote: post #115
throwaway6734 wrote: post #102

Earlier quoted context omitted.

The solution is to move to an area with cheaper housing. Moving to opportunity is the American way

Hmmm.... I've been looking at real estate in the midwest — Kansas City, Omaha — and surprised by how much it has skyrocketed there as well. At the same time (as seen on HN recently) they're "giving away" land in small-town Kansas and Nebraska. No jobs. You are responsibly for building the house. Lots of other caveats. I think a real-estate collapse or a sustained wave of affordable housing starts is more likely.

The government will not allow real estate to stay collapsed. Look what happened after 2008: https://fred.stlouisfed.org/graph/?g=EcTD

Re: Rich people do have trouble understanding what it's like to be poor

#135

Post by adolph »

chasebank wrote: post #101
fortran77 wrote: post #68

Earlier quoted context omitted.

Taxes even that out a bit. The person with an 800k house pays twice as much in property taxes. In many states, the amount that the state can raise taxes on someone whose house may have "increased" in value is limited.

Not in California. Prop 13 keeps property taxes at the value when you purchased your home. IMO this is a massive contributor to inflated property values, now leaking into other state economies.

What is your theorized mechanism for the freezing of property tax rates at the purchase price causing inflated property values?

I could see it making an upward or downward trend worse. In an upward trend buying before increase would be tax advantaged. In a downward trend buying after anticipated decreases would have the advantage. All in all, more people would be advantaged by just staying in place. Maybe that reduces total inventory, making the remaining properties on the market cost more?

Re: Rich people do have trouble understanding what it's like to be poor

#136

Post by allenrb »

A couple of weeks ago, I found myself on a ladder in a basement, doing a bit of plumbing. And I thought, “Isn’t this odd? Here I am, rather well-off, cleaning out the drain for an elderly black gentleman.” And it was more satisfying than most of what I’ve done at a keyboard.

To elaborate, for quite a few years I’ve owned rental property in poor-to-working class parts of town, first houses and then apartments. If you’re a hands-on landlord, you will learn more than you ever wanted to know about money in America. Sure, some tenants are total flakes who would be late on rent after a PowerBall win. Most of my tenants have worked hard, gotten by with little, and struggled to make ends meet. Many of them hesitate to tell me when something needs to be fixed in their home. Often they’re concerned that I am too busy. I tell them they have every right to expect stuff to work, that it’s a part of what they’re paying for. And it makes me wonder how bad things are with other landlords.

Going back to the plumbing story, I think every wealthy hedge-fund manager, etc, ought to get their hands dirty this way. It’ll either teach some humility, or let us see who the real jerks are. The latter can be first up against the wall…

Re: Rich people do have trouble understanding what it's like to be poor

#137

Post by ta988 »

TomSwirly wrote: post #86
aspaviento wrote: post #5

Earlier quoted context omitted.

I remember a politician complaining about having difficulties with a salary of 6000€/mo. Some people live in a bubble so far from the real world that almost seems fantasy.

> I remember a politician complaining about having difficulties with a salary of 6000€/mo. It depends on where you live. I lived in New York City for years. If you had a family, it would be hard to live there as on 6000€/mo, unless you had been living in the same apartment for decades. The median cost of a 2-bedroom apartment there is 3000€ a month, taxation is high (federal, city and state taxes), food is wildly exp…

There are people living with much less according to salaries distributions how do they do it?

Re: Rich people do have trouble understanding what it's like to be poor

#138

Post by JKCalhoun »

elliekelly wrote: post #12
FriedrichN wrote: post #3

A more distant but very wealthy family member once said that people wouldn't be so poor if they just saved up money. That perfectly illustrated the difficulty rich people have understanding poor people to me. I was really young, but that really stuck with me.

I thought this for the longest time. An embarrassingly long time. Then I volunteered with a program that helps people who qualify for EITC to prepare their taxes and budget how they’ll use their tax return to “get them out of their situation”. Person after person came in, we did their taxes, and then we went over their expenses and each case was a frustrating puzzle that was impossible to solve. There just wasn’t eno…

I found out when my mom kicked me out at 18 that there's a Catch-22 in the U.S. — a car costs money, you need a car to have a job.

Actually you don't, of course. I had a 10-speed bike (remember those?) and a minimum wage job at a restaurant. I rented a room for $100/mo. from a young woman (maybe I was helping cover her rent?). I was able to swing tuition at a local community college.

Man, I still remember riding the 10-speed in the midwest snow to the community college in the morning as cars threw up sleet speeding past.

It was a delicate balancing act to "bootstrap". And this was in the 80's. I don't think today's rent or college costs would make it repeatable today.

Re: Rich people do have trouble understanding what it's like to be poor

#139

Post by pjc50 »

throwaway6734 wrote: post #102
hn_throwaway_99 wrote: post #65

Earlier quoted context omitted.

I think this is an excellent comment. What makes me very sad is that during the past 14 months the divide between those who own assets and those who don't has reached gargantuan proportions. I mean, in my raging inferno of a housing market, over the past couple of years home prices have easily doubled. So a 400k house from 2018 now sells for 800k. Yes, if I want to move to another house in my area I'll pay similarly…

The solution is to move to an area with cheaper housing. Moving to opportunity is the American way

Cheaper housing => longer and more expensive commute.

Or worse job opportunities. Then people tell you to move where the jobs are. Which has really expensive housing.

The free market tends to flatten this stuff out

Re: Rich people do have trouble understanding what it's like to be poor

#140

Post by TacticalCoder »

I have both my father and my uncle who became dirt poor just by making terribly poor life choices so I've got a very different take on this. They had good jobs but couldn't help screwing it up by: gambling, buying sportcars, overall trying to bite more than they could swallow (houses too big, with monthly mortgage too expensive), etc.

In both cases it ended up with foreclosures / lawyers etc. My brother and I are now sending monthly money to our father because of his bad lifechoices.

And by poor I mean: living in a rusty, broken, RV hidden behind trees, illegally hooked up to electricity (not paying for it) and dumpster diving to find food for his dogs (because of course he was dirt poor but he had to have dogs and rabbits).

I've got friends who have serious issues meeting month's ends yet they buy 5x what I buy online. Every single time I arrive at their home they've got new pointless gadgets bought on Amazon.

There are people spending a fortune, compared to what they make, on packs of cigarettes and daily booze.

When you don't have enough money you don't have a ghetto dog, you don't buy cheap gadgets on Amazon, you don't drink your daily bottle of vodka/whiskey/packs of beer, you don't smoke a pack a day. You don't take a mortgage on a car from a category you can't afford just to keep up with the Joneses when a smaller car would do.

Well, you can... But there are choices and I refuse to accept that there are zero choices. You'll simply never convince me because I've seen it firsthand.

Now I don't tell those around me how they should handle their personal finances but I cannot but think about the many poor decisions I see being made.

And I'm not saying everybody has lots of room: but there are many poor people out there who are poor simply because of their dumb life choices (like my father).

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