# Why are some people poor?



## Julia (11 September 2006)

Looking around our society we see all levels of income and asset bases.

Why do you think some people never have any money while others on an apparently quite small income manage to achieve some assets?

Is it to do with our genes, the role modelling we receive while growing up,
our peer relationships, where we live, how much education we have had etc?

Or is it more a matter of attitude and ambition?

What other factors do you think come into our level of affluence?

Julia


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## Happy (11 September 2006)

I would say, that some people seem to better manage the same amount of money.

If amount is inadequate to provide for all needs, then it is inevitable to make sacrifices and inability or limited ability to do that, makes such a difference.

Having said that I think that % based income increases are laughable, when recently pollies gave themselves 7.5% of 150,000 (11,250) when pensioners got 4.5% of 15,000 (675) per annum.

We do this a number of times and we will talk different incomes for sure.
No wander increased number of people drop below poverty line.

  How about we make increase $ based like $1000 per recipient, after all we’ve got the same digestive systems.


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## happytrader (11 September 2006)

Hi Julia

I reckon its 'according to kind' and its anchored for the most part unconsciously by all that stuff you mention in your post.

Of course if most of us weren't so distracted and became conscious and realised the truth in Shakespeare's, 'All the worlds a stage and everyone is a player' you could change the script, the scenery and the characters.

Cheers
Happytrader


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## Dr Stock (11 September 2006)

Some people never get a fair chance in the first place. 

Stuff like getting sick at a young age, having parents that are disfunctional, all sorts of circumstances.


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## the_godfather4 (11 September 2006)

Not sure if anyone else has heard the theory that says that if all the world's wealth was split evenly amongst all the earth's inhabitants, that in less than 2 years, the same people would eventually end up with it all again.......

Money management would be the key at the end of the day.....and a bit of business acumen.


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## dr00 (11 September 2006)

i think there many things that have an impact. education and personality type are the two biggest though IMO, education being parenting and schooling. when i was at school (i graduated high school in 2000 so not long ago) i wasnt taught a single thing about money, the closest was economics which was an elective that most students didnt do. parents pass on either their bad habits with money (if they are poor) or a lack of understand or respect for money (if they have a lot). but some people are just naturally conservative and careful with everything, including their money.

how can we justify not providing education on probably the biggest factor we will need to manage from mid teens right through to the day we die. money is responsible for the breakdown of a lot of relationships and may not buy happiness but lack of it creates a difficult environment for happiness.


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## carmo (11 September 2006)

I work with a bloke who buys his lunch every day, I take cut sandwiches and he calls me "carefull Carmo". My bank account is expanding, with him it's his waist.


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## Happy (11 September 2006)

101 Ways to save money:

https://www.aussiestockforums.com/forums/showthread.php?t=4146&highlight=101

Gives good start to spend less.


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## laurie (11 September 2006)

It's this way because we have a system that rewards those that want to milk the system,those that work hard will be punished when retirement comes those that pissed their money on poker machines and drugs,grog,ect will be reward with a pension I have no problems with those that have a geniune need   

cheers laurie


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## Rafa (11 September 2006)

Happy said:
			
		

> How about we make increase $ based like $1000 per recipient, after all we’ve got the same digestive systems.




Brilliant, i like that...


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## hector (11 September 2006)

Wish I had your maturity at same age, congratulations Dr00.


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## wayneL (11 September 2006)

One shouldn't underestimate the enourmous influense of luck in the aquiring of wealth.

There are alll the good things that people can do to set themselves up for wealth, then there is luck... or lack of.

I know a girl who though previously was not wealthy, who is now a cash millionaire, because someone with boxxes of cash sitting around the house in the US wanted her horse.

Shere luck.


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## hector (11 September 2006)

Anyone want to swap a box for a cat?


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## wayneL (11 September 2006)

How's this for a story... bad timing, bad business, or bad luck?

I used to be in the furniture manufacturing game. One of my contemporaries was a Polish immigrant who came to OZ in the 60's and started a business making budget kitchen chairs in his father in law's garden shed.

The business grew over the years and in the mid eighties he was running a 50,000 sqft manufacturing plant in QLD... a big "small" business. He was doing very well, had the big house, latest high end merc etc etc. 

The late 80's heralded in the previous housing boom which resulted in a big increase in demand for his product; he couldn't keep up with orders. So he decided to build on another 15,000 sqft of factory space, invest in more machinery, hire more people.

Well we all know what the late 80's early 90's heralded in too don't we? Those big interest rates and "the recession we had to have".

So just as he substantially increased his standing overhead, his sales dropped to below "pre" boom levels... catch 22.

He went BK, his wife left him etc.

He now lives in a humble home on the outskirts of Brisbane.. a broken man, and essentially "poor".

Bad timing, bad business, or bad luck?


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## WaySolid (11 September 2006)

Well a large chunk of the worlds population have lost Buffet's 'Ovarian lottery' simply by being born in the wrong country.

In Australia there is so much opportunity to accumulate large chunks of money it's amazing, and it seems to be getting better not worse in my opinion.

Why people don't... well thats just us humans being human I guess.

You don't need to wander past this very bulletin board to see plenty of examples of young people with oceans of opportunity, yet they have so many excuses as to why things are bad..


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## cogidubnus (11 September 2006)

I once owned a Milk Bar after my retirement, but kids used to pinch the lollies and break the milk bottles. After that I got fed up.


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## cogidubnus (11 September 2006)

My wife died last month and I  am sad. You people are good to talk with Thank you


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## nioka (11 September 2006)

wayneL said:
			
		

> One shouldn't underestimate the enourmous influense of luck in the aquiring of wealth.
> 
> There are alll the good things that people can do to set themselves up for wealth, then there is luck... or lack of.
> 
> ...



You can make your own luck. Work hard helps. It's not what you earn that makes the difference but what you waste.


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## petee (11 September 2006)

hi all..having spent a lot of time in countries like The Philippines and Indonesia,its easy to see what we lack here..with the "lucky country" tag comes a very limited sense of family and a dog eat dog mentality of people never minding who lives even next door..like the instance of the sydney man who was dead six months before anyone new what had happened..people in 3rd world countries are poor financially but make up for it in hospitality and just good cheer..we could learn a lot from these cultures..Mark10:23..Jesus looked around and said to His disciples,"how hard it is for those who have riches to enter the kingdom of God".


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## wayneL (11 September 2006)

nioka said:
			
		

> You can make your own luck. Work hard helps. It's not what you earn that makes the difference but what you waste.




So, what if my friend bought a different horse, what if that horse was injured early in its career, what if she had a career ending injury and sold that horse to somebody else before anyone knew how brilliant it was?

What if those yanks went to UK looking for horses instead of Oz?

Hard work is indipensible, and yes you can create situations where luck may find you....but it is still luck.

Never underestimate it.


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## wayneL (11 September 2006)

cogidubnus said:
			
		

> My wife died last month and I  am sad. You people are good to talk with Thank you




Very sorry to hear that cog'


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## nioka (11 September 2006)

wayneL said:
			
		

> So, what if my friend bought a different horse, what if that horse was injured early in its career, what if she had a career ending injury and sold that horse to somebody else before anyone knew how brilliant it was?
> 
> What if those yanks went to UK looking for horses instead of Oz?
> 
> ...



OR ..........work hard at finding another good horse and work on finding another buyer. That is called making your own luck.


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## CanOz (11 September 2006)

cogidubnus said:
			
		

> My wife died last month and I  am sad. You people are good to talk with Thank you




I too am very sorry to hear that Cog. I hope that somehow you manage through this rough time.

All the best.


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## smoothsatin (11 September 2006)

wayneL said:
			
		

> How's this for a story... bad timing, bad business, or bad luck?
> 
> I used to be in the furniture manufacturing game. One of my contemporaries was a Polish immigrant who came to OZ in the 60's and started a business making budget kitchen chairs in his father in law's garden shed.
> 
> ...




Well it was good luck/business/timing to manufacture behind heavy tariffs, good timing to be part of the a speculative frenzy fuelled by deregulation that prompted the RBA to try and prick the bubble (yes it was an inevitable recession given how blunt and clumcy monetary policy is). Bad business/understanding of how an economy works and what is sustainable and what isn't. I guess this largely supports the luck theory!


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## nioka (11 September 2006)

smoothsatin said:
			
		

> Well it was good luck/business/timing to manufacture behind heavy tariffs, good timing to be part of the a speculative frenzy fuelled by deregulation that prompted the RBA to try and prick the bubble (yes it was an inevitable recession given how blunt and clumcy monetary policy is). Bad business/understanding of how an economy works and what is sustainable and what isn't. I guess this largely supports the luck theory!



Don't blame luck. That is what business is all about. In the 80's I went to a seminar held by acertain Terry M (a supposed genius at finance) and was convinced to borrow in swiss francs. The $350,000 I borrowed ended up being $990,000. I don't blame luck. I had bad advice and made a bad decision. I just had to find another "horse".( or 2 or3)


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## wayneL (11 September 2006)

nioka said:
			
		

> OR ..........work hard at finding another good horse and work on finding another buyer. That is called making your own luck.




You can do that. It doesn't mean you'll find another million dollar horse though.

There are hundreds of riders who work their nuts off... and do very well as a result. But there are very few million dollar horses and you can't pick them in the raw.


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## Julia (11 September 2006)

Thanks to all for thoughtful and interesting responses.

I have to agree that luck does play some part.  Here's an example of two couples who are friends of mine:

Couple A:  self funded retirees in their 50's.   They married at around age 20, had three perfect children.  She was a schoolteacher and he worked in the Public Service.  They both had lifetime contributions to Super.  They have both been really healthy all their lives and their children caused no problems, either physical or psychological.  There are now grandchildren and all is happy and content.  They have a beautiful home, travel overseas at least twice a year and within Australia another three or four times a year.

Couple B:  Second marriage.  Neither had much of an education and consequently didn't have high earning careers or Super.  Any assets accrued during the respective first marriages disappeared in the break-up.  The stress involved with both marital splits encouraged somewhat excessive use of alcohol and tobacco in both partners.  They manage to get enough cash together for deposit on an old house.  Large mortgage.  They both get sick.
Jobs have to go.  Both are on Disability Pensions.  Difficulty in making the mortgage payments.  More alcohol and more cigarettes.  The house, being old, develops lots of problems.  They can't afford to fix these.  More despair.
She gets cancer.  Local health system is overloaded so the cancer has spread through her body by the time she is evaluated.  She dies six months later.


When all this happens with Couple B, Couple A (who know couple B), are critical and say that it's all their own fault because they haven't planned properly.

What do you think?

Julia


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## Milk Man (11 September 2006)

Julia, I would hazard a guess that no-one inspired or encouraged couple B to do better for themselves. Also, if couple A were faced with the same situation, they probably wouldnt have done any different. What do you think?


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## professor_frink (12 September 2006)

nioka said:
			
		

> OR ..........work hard at finding another good horse and work on finding another buyer. That is called making your own luck.




Here's a story that is nothing but luck  

A couple that I know- generally hard working blue collar type people. Lovely people- they just never had any spare money left over at the end of every week- had fallen into the renting trap- couldn't put enough money aside for a house deposit. Husband had medical problems(nothing life threatening) and they were struggling to find the money to pay for his treatment.

The wife went out and bought a lotto ticket. Won 1.3 million.

They recently moved into their new home, and have enough money for their retirement.

Now that's luck!


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## swingstar (12 September 2006)

_Why are some people poor? _

Most people are poor because they don't seize opportunities, are close-minded and are afraid of leaving their comfort zone. 

Luck has very little to do with it in most cases. Just IMO.


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## nelly (12 September 2006)

Hi y'all....my whole hearted sympathy cog'.....



Now wealth vs poverty.....I think it has to do with a combination of education, upbringing and guts, just plain hard work might not get you there, you have to have the 'smarts' as well....... "you gotta know when to hold 'em and when to fold 'em."....apart from the chances of winnin' Lotto, I think you have to create your own luck...luck is seeing an opportunity and being prepared to take advantage of it.

cheerful


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## Blitzed (12 September 2006)

Speaking of luck (or lack of education etc) and lotto, what about those people who win it only to find themselves in the same financial mess or with nothing a year or two later.

I remember years ago in the USA they had a show on people who won the big lotto twice.....one man won and then turn the pattern of the numbers upside down and won again.  

Then there was the incident I was told of when I was about 12 (it was in the local paper), of the man in our country town who decided to kill himself...he bought a sausage roll (or something similar) from a little shop, sprinkled it with the poison but changed his mind and left it on the table outside. Along came (what they thought) a poor old woman who ate it and died.....they found out later that she had heaps of money but hated to spend or waste anything.  She Seized one to many opportunities.


And then the guy who died after he bought a sports car with some of his lotto winnings and crashed it.....hmmmm luck and bad luck.

Isn't life strange sometimes?


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## petee (12 September 2006)

Julia said:
			
		

> Thanks to all for thoughtful and interesting responses.
> 
> I have to agree that luck does play some part.  Here's an example of two couples who are friends of mine:
> 
> ...



hi all..firstly im not a great believer in luck,rather we reap what we sow..and secondly when people start on the idea that life is great and just dandy id say be very careful coz u dont know what disaster lurks just around the corner..we arent called to be critical but rather walk in love and compassion for one another


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## tech/a (12 September 2006)

My view is lack of *education in Life Experience*.

You can be as intelligent as Einstien and live like a pauper.

Quickest way to gain that experience is to seek out *MENTORS*.

Business,Trading,Property,Happiness,Health,Relationships,Kids,DIY.

*Go and befriend an expert.*

Life is as hard or as easy as we make it.


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## nioka (12 September 2006)

professor_frink said:
			
		

> Here's a story that is nothing but luck
> 
> 
> 
> ...



A 1.3 million to 1 chance. Not very good odds.

I had friends (who also borrowed swiss franks) try that . There was a drought at the time and their dams were half empty so they sold their stock. My dams were half full so I bought a lot of stock allowing for the fact that it always rains at the end of a dry spell. I paid off my loan, They didn't win lotto. They went to the wall, I'm still having fun. Now that's NOT luck.


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## professor_frink (12 September 2006)

nioka said:
			
		

> A 1.3 million to 1 chance. Not very good odds.
> 
> I had friends (who also borrowed swiss franks) try that . There was a drought at the time and their dams were half empty so they sold their stock. My dams were half full so I bought a lot of stock allowing for the fact that it always rains at the end of a dry spell. I paid off my loan, They didn't win lotto. They went to the wall, I'm still having fun. Now that's NOT luck.




Sorry I should have phrased it better- she bought a lotto ticket nearly every week. Not because they were in a tight spot and needed to win.

Odds of winning lotto aside, how does luck NOT play a part in something like that happening?

Sure most of the time people make their own luck to a certain extent, but not everything in life can be planned for, a positive spin can't be put on every single situation in life. Sometimes people can have all the good intentions, plan accordingly, do everything in life that SHOULD get them ahead, and still end up living the life of a pauper. Or die before all the good planning and positive thinking pay off.


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## nioka (12 September 2006)

wayneL said:
			
		

> So, what if my friend bought a different horse, what if that horse was injured early in its career, what if she had a career ending injury and sold that horse to somebody else before anyone knew how brilliant it was?
> 
> What if those yanks went to UK looking for horses instead of Oz?
> 
> ...



You make a point but the thread was "why are some people poor" Some people are luckilly rich but many are poor waiting for luck.


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## tech/a (12 September 2006)

In 1996 I started buying houses in the south of Adelaide because the Plans for the Southern expressway came across my desk.

Housing had boomed when the crafers Freeway went in and Glenelg boomed when holdfast shores developement went ahead.--So logically off I went.

The Housing boom un related to the southern expressway hit in 1997-2001.
I had many I/P's. Did very well.

So was it luck or Good management???


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## TimmyC (12 September 2006)

a few errors in judgement practiced every day


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## Sultan of Swing (12 September 2006)

From a newbie....

Some of it comes down to 'delayed gratification' and lack of planning.

Some people have high incomes and spend it all thinking the income will last forever and others may have a far lower income but put a portion away for later 'just in case'. 

Who's going to be better off in the long term.

Others just want and 'need' everything NOW! They think there's plenty of time later to 'save' for retirement or think the government will look after us cos 'We've always paid taxes and now they 'owe' us a pension'. (They never do the sums and work out that the little tax they've often paid would equate to just a few years of pension payments.)

Just my 2 cents


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## Julia (12 September 2006)

Sultan of Swing said:
			
		

> From a newbie....
> 
> Some of it comes down to 'delayed gratification' and lack of planning.
> 
> ...




I agree, Sultan.  Friends of mine are highly qualified professionals with a combined income of around $250,000 pa.  They are in their 50's.  They own their home but have no savings or super.  This is because of just the point you make that they have always had lots of money coming in, no children to spend it on, so have just "spent it".  Even the fact that they own their own home is no real credit to them - they inherited it when her parents died!

To me, it's absolutely incredible that people with such a capacity to be in the best financial position will probably end up being on a government age pension.

I guess if I had to narrow it down to a couple of factors, I'd go for role modelling and education.  As a very small child, I was never allowed to spend all my pocket money.  Half had to be saved and I had to have a defiinite goal towards which I was saving - perhaps buying a book.  If your parents are good money managers, and as Tech points out, you are prepared to look for opportunities and take them, it's my bet you'll do OK financially.

Just to go back to my Couple A and Couple B discussed earlier.  They had entirely different attitudes.  Couple A made stuff happen.  Couple B just sat back and let stuff happen.  Comes down to taking responsibility for your own life and outcomes.

Unexpected sickness, though, can put a dent in anyone's plans.

Julia


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## The Mint Man (12 September 2006)

Julia said:
			
		

> Looking around our society we see all levels of income and asset bases.
> 
> Why do you think some people never have any money while others on an apparently quite small income manage to achieve some assets?
> 
> ...




I think that stupid decisions play a huge part for some peple that are poor.
For instance: 
Having a baby to get $4000 = Stupid
There are so many more I could come up with but Im sure you get my drift.
Of course role modeling/how we are brang up, education to some extent and yes peer relationships plays a huge part in this.
I also find it amazing that so many people cant do something as simple as budgeting. I mean how hard is it? even someone that dosnt have a great education can see that, For example, Foxtel may be un-affordable if your income is $500pw but bills are $400 and shopping $100. simple math. But for some reason people insist on having/buying things they cant afford.

Hopefully some of these people will visit that website on 'understanding money' that the government set up.


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## Bloveld (12 September 2006)

The Mint Man said:
			
		

> I think that stupid decisions play a huge part for some peple that are poor.
> For instance:
> Having a baby to get $4000 = Stupid
> There are so many more I could come up with but Im sure you get my drift.
> ...





Brang up?
Jesus wept. 
Pray tell us about your education and upbranging.


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## noirua (20 September 2009)

Julia said:


> Looking around our society we see all levels of income and asset bases.
> 
> Why do you think some people never have any money while others on an apparently quite small income manage to achieve some assets?
> 
> ...




For those amongst us, my self included, who will never be an entrepreneur and have never been left money or assets worth much; the willingness to take "RISKs", and on losing, somehow, get going again and take more and more risks. Not succeeding is due to not taking enough risks.


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## noirua (20 September 2009)

Julia said:


> Looking around our society we see all levels of income and asset bases.
> 
> Why do you think some people never have any money while others on an apparently quite small income manage to achieve some assets?
> 
> ...




For those amongst us, my self included, who will never be an entrepreneur and have never been left money or assets worth much; the willingness to take "RISKs", and on losing, somehow, get going again and take more and more risks - not succeeding is due to not taking enough risks. 

*** Reply to post 3 years old.


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## dbcok (20 September 2009)

I dare say that if you were born aboriginal the chances of you being poor,by white persons' standards,are extremely high.


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## aaronphetamine (20 September 2009)

This is an absolutely excellent question to pose Julia, it's somewhat of a behavioural economists and demographers dream question to pose.

I'm under the presumption that life, is somewhat of a statistics play. Money, and obtaining vast swathes of money is arguably a zero sum game. So for someone to have lots of money, others can't have it. Now this is true to an extent becuase if everyone in the country had a million dollars none of us would be rich or well off. So straight away we know that in a given population in a perfectly capitalised market only a certain number of people will be able to become rich.

Other factors that I see alot from working in lending in a bank is that people, regardless of their income spend ALL of their money by next pay cheque. They live at their capacity and have little of no savings to cover them for unexpected events. They dont have the ability to accumulate savings and they beleive its their right to spend all their working money earnt so that they can recieve the aged pension when they retire.

I'm not under this train of thought though. I want to be self sufficient, and that involves saving and investing - compounding.

Basically some people are poor becuase they have absolutely atrocious money management, and an extra $10 in their account means that they have an extra $10 to spend by next pay day.


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## nioka (20 September 2009)

Reading posts on this subject I believe that a lot of people dont realise that you dont need money to be rich and having a lot of money doesnt necessarily make you rich.

Life is what you make of it. Sometimes money helps sometimes it is a hinderance,

Think about it   !!!!!!!!!!!!


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## MrBurns (20 September 2009)

cogidubnus said:


> My wife died last month and I  am sad. You people are good to talk with Thank you




So sorry to hear that, life deals out some cruel lessons sometimes.
I wish you all the best.


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## MrBurns (20 September 2009)

Some people don't operate on the "money is important" level of thought , they have a different focus and are just not built to recognise opportunities and chase the dollar.


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## nioka (20 September 2009)

MrBurns said:


> just not built to recognise opportunities and chase the dollar.




And some of us have been there ,done that and have found that recognising opportunities may mean "dont worry about chasing the dollar, there are better opportunities around that don't require you to run yourself raggad chasing the dollar. 

If all one thinks about is getting money you may have run out of time on this earth by the time you think you have enough. Personally I have never met many people that "have enough" money.


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## jono1887 (20 September 2009)

laurie said:


> It's this way because we have a system that rewards those that want to milk the system,those that work hard will be punished when retirement comes those that pissed their money on poker machines and drugs,grog,ect will be reward with a pension I have no problems with those that have a geniune need
> 
> cheers laurie




I think within the next decade, there will probably be no pension system. Or a very highly regulated one if it was to exist. Sure they will be awarded with a pension for wasting their money earlier on in life. But just talk to anyone who is trying to live on it. Its a miserable living that is barely considered survival. howver those people who have been prudent with their money are able to live far more comfortably even without a government pension with the income coming from their assets...



wayneL said:


> One shouldn't underestimate the enourmous influense of luck in the aquiring of wealth.




I doubt that these things happen very often. The majority of people who acquire wealth generally do it from hard work, good ideas or inheritance... 



wayneL said:


> How's this for a story... bad timing, bad business, or bad luck?
> 
> I used to be in the furniture manufacturing game. One of my contemporaries was a Polish immigrant who came to OZ in the 60's and started a business making budget kitchen chairs in his father in law's garden shed.
> 
> ...




Well he was naive to drown himself in debt during such a period. But then again, hindsight is wisdom : ... however, I do have an uncle that was a property developer in Brisbane during the 80s and 90s and ended up bankrupt when the boom crashed to a halt and he couldnt move any of his properties. 

10 years later and he's far richer than he was before and is in the clothing manufacturing business exporting cheap clothing from china to Africa...
You can say it was bad timing or business... but resilience will get you back on your feet...



cogidubnus said:


> I once owned a Milk Bar after my retirement, but kids used to pinch the lollies and break the milk bottles. After that I got fed up.



A shotgun filled with bean bags or rock salt should scare them off quite well....


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## Mofra (21 September 2009)

nioka said:


> Reading posts on this subject I believe that a lot of people dont realise that you dont need money to be rich and having a lot of money doesnt necessarily make you rich.
> 
> Life is what you make of it. Sometimes money helps sometimes it is a hinderance,
> 
> Think about it   !!!!!!!!!!!!



There was a news report on a study of the happiest countries in the world a few weeks ago. Despite being down on the GDP stakes, Puerto Rico came in at no 1. It has made the list of my holiday destinations over the next few years for that very reason.


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## alwaysLearning (21 September 2009)

Dr Stock said:


> Some people never get a fair chance in the first place.
> 
> Stuff like getting sick at a young age, having parents that are disfunctional, all sorts of circumstances.




Totally agree with you. It's all about 'conditioning' and what you are exposed to.


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## 888 (21 September 2009)

Julia said:


> Looking around our society we see all levels of income and asset bases.
> 
> Why do you think some people never have any money while others on an apparently quite small income manage to achieve some assets?
> 
> ...




I reckon everyone should read the book of Ecclesiastes at least once a year to put things to perspective.  I first read it when I was 18 and think it's the best autobiography book ever.


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## RamonR (22 September 2009)

As mentioned earlier being able to delay gratification is a huge factor.

There was some study with children about getting two lollies if they could avoid touching the one in front of them.

The kids which were able to avoid gratification when followed up later in life where all much better of.


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## Stormin_Norman (22 September 2009)

RamonR said:


> As mentioned earlier being able to delay gratification is a huge factor.
> 
> There was some study with children about getting two lollies if they could avoid touching the one in front of them.
> 
> The kids which were able to avoid gratification when followed up later in life where all much better of.




future focused people are more successful.

http://www.youtube.com/watch?v=bo4HiVetBd0


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## alwaysLearning (22 September 2009)

I think life sux. That's a sad story Julia 

I think luck does play a part for sure. Or karma at least anyway (karma is not luck).



Julia said:


> Thanks to all for thoughtful and interesting responses.
> 
> I have to agree that luck does play some part.  Here's an example of two couples who are friends of mine:
> 
> ...


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## alwaysLearning (22 September 2009)

Stormin_Norman said:


> future focused people are more successful.
> 
> http://www.youtube.com/watch?v=bo4HiVetBd0




Thanks for posting that. I forgot about those TED talks. They are usually awesome.


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## Glen48 (22 September 2009)

Passing grade 1 maths is a big help and knowing if some thing cost $10 and you only have $8 or $1  you don't have enough money.. Luck for some reason as well, my divorce cost us both about $1M each.. yet a mate who plays around is still married after 30 yrs. I saw a show were a Lotto winner gave his mate 20K to pay off his B/card and 5 mths later his card  was back up to 20K again he came back for a second try and the winner told him no and lost a friend.


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## Glen48 (22 September 2009)

Those who take investment property advice from Robots are a good example of how to stay poor.


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## Stormin_Norman (22 September 2009)

Glen48 said:


> Those who take investment property advice from Robots are a good example of how to stay poor.




oh no. all my investment advice comes from robots.


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## Julia (22 September 2009)

RamonR said:


> As mentioned earlier being able to delay gratification is a huge factor.
> 
> There was some study with children about getting two lollies if they could avoid touching the one in front of them.
> 
> The kids which were able to avoid gratification when followed up later in life where all much better of.



Ah yes, the famous marshmallow study where children were given the choice of immediately eating the single marshmallow in front of them, or waiting until some time later when they would receive two marshmallows.

I agree the capacity for long term goals versus instant rewards is a necessary prerequisite to earning wealth.

A woman I know is very fond of the dreaded pokies and has lost countless thousands.   They are months behind in mortgage payments, and two years behind in council rates, paying an excessive interest rate on the latter overdue monthly payments.   Yet when she 'does the budget' from the disability pension both she and her husband receive each fortnight, she still takes out what she terms 'our allowance' of $60 each, i.e. $120 p/f, for the pokies.  The suggestion that this could go towards either the rates or the mortgage was rejected on the basis that they needed to have something to look forward to.


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## chode84 (22 September 2009)

I find this thread quite interesting and reminds me of a converstaion I had with a colleague the other week.

Im not sure how we got onto the topic but we were talking about buying a first property as my partner and I purchased ours last year at the age of 24. My work colleague who is in his early to mid thirties remarked that he wasn't ready to buy a property yet which is fair enough I thought, each to their own. 
But he then went on to tell me how he was going to buy a 4wd and a new speedboat all with the help of a personal loan (about $70,000 worth). This blew me away because I just couldn't understand why you would put yourself into so much debt over highly depreciating objects.

Just an example of how some people only want to live in the moment and worry about the future when it arrives.


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## awg (22 September 2009)

A topic I have some interest in, and experience, from working with the "poor" for many years.

* I am amazed how many people dont save a % of their earnings, dont rate this as the number one rule of wealth accumulation.

* try not to use interest bearing debt for depreciating items

* do without, including big house, new car, excessive holidays..in order to build asset base ( then u can spend)

* make sure you are born into a family with some wealth, and values wealth accumulation

* dont have poor health, accident, bad luck, uncontrolled risk

* dont get divorced

* dont have too many kids

* dont drink, smoke, gamble, *****, gluttonise ( excessively)..edit..the blotted out bit refers to using prostitutes

* learn, study and practice investment principles

* invest in yourself by attaining qualifications that allow you to continue earning

* if u cant get rich quick, get rich slow, live a long time 

* I used to visit unemployed etc, in their homes, they invariably had bigger TVs, stereos, and cars than me, also drank, smoke gamble etc.

(My tenants all had LCD widescreens before me)

* you can show love, kindness and compassion without spending big $

* you can be very disciplined about personal spending, without becoming a compulsive miser, if you are careful..check all religious, spiritual  and philosophical learning, to guide you


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## Wysiwyg (22 September 2009)

I know some people are "labelled" not deserving and they find it a terrible struggle to break free from the shackles society clasps on them.


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## Julia (22 September 2009)

Wysiwyg, could you give some examples of what you mean in the above?

I rather have the contrary impression, i.e. that there is a lot of assistance available for people who are genuinely trying to improve themselves.


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## So_Cynical (22 September 2009)

Julia said:


> Wysiwyg, could you give some examples of what you mean in the above?
> 
> I rather have the contrary impression, i.e. that there is a lot of assistance available for people who are genuinely trying to improve themselves.




Whats this "assistance" u speak of Julia?

This Thread could well of been called why am i poor....besides the obvious not winning lotto etc i can offer up all sorts of reasons...poor choices (drugs) bad decisions (wife) bad timing (expulsion from school)...funny how 1 negative seems to snow ball into many, like getting asked to leave school leads to limited employment choices witch leads to lower pay witch leads to less choice etc etc.

The worlds a funny/strange place...my step father *a millionaire* had a few months off work a couple of years ago...and gets offered to do a forklift course for free through centerlink...and at about the same time...poor old me *no where near a millionaire* had to pay 300 bucks, he has never driven a forklift since, i drive one every day.

Ive had my hours cut at work...so im about to revisit poverty.


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## Julia (22 September 2009)

So_Cynical said:


> Whats this "assistance" u speak of Julia?



There are multiple quasi government or government funded job assistance organisations in my area.  Also multiple community agencies which will share the cost of the forklift ticket you talk about and suchlike expenses, e.g. workboots, transport to out of town worksites for interviews etc.


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## Julia (22 September 2009)

So_Cynical said:


> This Thread could well of been called why am i poor....besides the obvious not winning lotto etc i can offer up all sorts of reasons...poor choices (drugs) bad decisions (wife) bad timing (expulsion from school)...funny how 1 negative seems to snow ball into many, like getting asked to leave school leads to limited employment choices witch leads to lower pay witch leads to less choice etc etc.
> 
> Ive had my hours cut at work...so im about to revisit poverty.



And yes, you're right.   Poor choices do affect future choices.

I'm sorry to hear about your hours being cut.  Hope it's only temporary.
Good luck.


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## Wysiwyg (22 September 2009)

Julia said:


> Wysiwyg, could you give some examples of what you mean in the above?
> 
> I rather have the contrary impression, i.e. that there is a lot of assistance available for people who are genuinely trying to improve themselves.




Sure Julia. 

Example one involves the kid who has a rather nasty father that is not well liked in the community. The kid gets bullied at school and is rejected with work applications. He or she is "one of the nasty mans kids".

Example two involves the kid who committed a crime and was punished duly for such. The community sees the kid as untrustworthy and "oh he`s the kid that did that crime".

So to sum up, they may be a better person than they were but people don`t forget and like to administer what they see as deserved punishment by denying the individual fair passage through life.


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## Bill M (22 September 2009)

I read the opening post and the last few up to date posts so please excuse me for not reading all.

Some people will always be poor due to poor choices, poor partner choices and just plain old bad luck.

My best mate and I both entered apprenticeships in the 1970's. Today my friend is working very hard to pay maintenance for a child from a previous marriage plus working hard for his new wife and 3 kids. He pays rent and can not see himself ever buying a property. 

I myself finished my apprenticeship and travelled Australia and the world. Then I got married and my good wife and I worked hard and paid off our house on the Northern Beaches. We had no kids and no divorces from the past so we just concentrated on a few things only, retirement, travel and a setting up ourselves for a peaceful life. We have this now and are very thankful for it.

However, lets say the unfortunate thing happens and one of us gets chronically ill, then nothing but life matters anymore. By that I mean if I had sell everything to save my wife's life then I would. Moving down the track, lets say things didn't work out and my medical bills cost me my life savings then I would be dependant on government benefits. So what I'm trying say is that the so called wealth can be blown on saving some ones life and then to make a comeback may not be possible. Under those devastating situations people should be entitled to some form of Government help.

Poorness can result from severe medical situations than can never be recouped, please keep that in mind folks. Cheers.


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## So_Cynical (22 September 2009)

Julia said:


> There are multiple quasi government or government funded job assistance organisations in my area.  Also multiple community agencies which will share the cost of the forklift ticket you talk about and suchlike expenses, e.g. workboots, transport to out of town worksites for interviews etc.




Yes on the surface they seem to be offering "help" however in reality these organizations are there to employ people with degrees in social service etc and so the politicians can point in there direction and say...look were doing something, blame them if i doesn't work....IMO



Bill M said:


> Poorness can result from severe medical situations than can never be recouped, please keep that in mind folks. Cheers.




Hey Bill...i met a Kiwi guy many years ago that had a stroke when he was 20 something...he was a chippy and had no insurance of any kind and lost more than half the movement on one side, the whole side leg arm everything.

Just incredible bad luck, poor bastard was coping ok years later, but was poor as and had nothing but poverty and unemployment to look forward to...he was a nice guy too.


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## Wysiwyg (22 September 2009)

Bill M said:


> Poorness can result from severe medical situations than can never be recouped, please keep that in mind folks. Cheers.




Thankyou for that story Bill M. 

I think for some people, no matter how hard they try, things don`t work out the way they had wanted. 

In reality we see many people delicatetly and ever so subtly stomped on in order for others to gain higher ground.


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## Whiskers (23 September 2009)

Julia said:


> Is it to do with our genes, the role modelling we receive while growing up,
> our peer relationships, where we live, how much education we have had etc?
> 
> Or is it more a matter of attitude and ambition?




I expect attitude and ambition has a lot to do with 'financial' wealth, but...



nioka said:


> Reading posts on this subject I believe that a lot of people dont realise that you dont need money to be rich and having a lot of money doesnt necessarily make you rich.
> 
> Life is what you make of it. Sometimes money helps sometimes it is a hinderance,
> 
> Think about it   !!!!!!!!!!!!




... what if there is much more to the notion of 'wealth' than financial measures.



professor_frink said:


> Sure most of the time people make their own luck to a certain extent, but not everything in life can be planned for, a positive spin can't be put on every single situation in life. Sometimes people can have all the good intentions, plan accordingly, do everything in life that SHOULD get them ahead, and still end up living the life of a pauper. Or die before all the good planning and positive thinking pay off.




And what if, there is no such thing as coincidence and luck... they are just loose concepts that people tag on non-understood circumstances.

Another concept I notice mentioned is intuition... what a powerful gift that can be when one starts to understand it and can distinguish it from impulse.

By 'coincidence' I've come across certain people at fortunate/oppertune times and 'luckily' I'm learning to dismiss impulses and 'intuit' better what the best/right course of action is. 

What if we are not meant to be preoccupied with the persuit of wealth as in financial assets, but that wealth or the lack of, is not the end, but the course.

I believe they call it faith... no not like in religion and nothing to do with what many so called 'faiths' subscribe to as in 'God'.

It's sorta like the old saying 'you can lead a horse to water, but you can't make it drink'. It's something that comes from within and that you have to let yourself become attuned to and want... like the will to live.

Getting back to the question "Why are some people poor?"... I guess for me the short answer is it's just a circumstance, a test that we must pass in the evolution of life.


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## tech/a (23 September 2009)

If you have a serious look around at *MOST* of the poor you will see *ONE COMMON* thread,which leads to poverty.

*Having children too young.*

This leads to 20 yrs of life for those who are poor of.
(1) Single mum little opportunity to raise above the poverty line.Always struggling.
(2) Single dad,with child support/rent/work little chance of anything else.

Single mum has a pool of single dads to find a partner who doesnt need the burden of the increased cost of your kids on top of his.

While not *ALL* are doomed those who are caught in the continual grind and fail for all the reasons why wealth doesnt come their way as mentioned above I'm sure you'll ultimately find come from single parent backgrounds.


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## moXJO (23 September 2009)

Taking the easy option and bad judgment IMO is why most people are poor. A lot of people are happy without large amounts of money though. Would be pretty crappy if you simply ran after the dollar for years wasting a lot of valuable time and then failed


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## trainspotter (23 September 2009)

Because they do not recognise opportuntity when it knocks. Some people are purely and simply not "go getters". They are conditioned to accept their lot in life and are happy to do so.


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## gooner (23 September 2009)

trainspotter said:


> Because they do not recognise opportuntity when it knocks. Some people are purely and simply not "go getters". They are conditioned to accept their lot in life and are happy to do so.




True. But if everyone was a go-getter, there would be a lot of more miserable people around because not everyone can "get". There's not enough to go around. 

Go getters are only successful because there are lots of non-go getters around


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## Tink (23 September 2009)

Great post Chode and Awg

Money management and people living for the moment.. 

I have met a few like that Chode and if you do say something, their reply is, you gotta live.....


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## tech/a (23 September 2009)

> Because they do not recognise opportuntity when it knocks. Some people are purely and simply not "go getters". They are conditioned to accept their lot in life and are happy to do so.





gooner said:


> True. But if everyone was a go-getter, there would be a lot of more miserable people around because not everyone can "get". There's not enough to go around.
> 
> Go getters are only successful because there are lots of non-go getters around




Most can recognise opportunity
Few know what to do with it.
Even fewer actually do something.

Ive met many fast talking highly motivated people who have the comfort zone/know how of a Tibetan Monk in a brothel.


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## weatherbill (23 September 2009)

soem people are poor because of bad decisions. SOme have a spirit of poverty over them. some because of mental problems.
some because of bad decisions..... some because of a lack of discipline.....some have had a gambling problem and other addictions, such as lacoholism or drug abuse....lots of reasons


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## Wysiwyg (23 September 2009)

weatherbill said:


> SOme have a spirit of poverty over them.




That would encompass "the lord giveth and the lord taketh away" events.


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## Happy (23 September 2009)

Wysiwyg said:


> That would encompass "the lord giveth and the lord taketh away" events.




God loveth everybody 


On the positive note, no matter who you are (rich or poor), no matter what you do (go get or not) you end up dead anyway. 

Somebody might say: why bother?


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## Chris45 (23 September 2009)

weatherbill said:


> some people are poor because of bad decisions.



This is very true and I know this is not quite what you meant but I’m reminded of the story of a friend of mine who is a very decent person and was a gifted soccer player in his teens. He trained hard and his ability was such that he scored a scholarship to an elite private school and his future as a professional sportsman looked very promising.

One night, in his early twenties, he went to the assistance of a girl who was being harassed by a thug outside a nightclub. The thug decked him and proceeded to kick his head in. My friend suffered serious brain damage and is now permanently incapacitated, has a very limited concentration span, has lost coordination and is unable to even drive a car.

The girl fled from the scene and the thug escaped and was never brought to justice. Being in the wrong place at the wrong time and attempting to be chivalrous has condemned my friend to a life of relative poverty on a disability pension.


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## Sean K (23 September 2009)

Has 'by choice', been considered?

Some people just don't want money to define their lives.


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## Kash Kosmo (23 September 2009)

Some people also spend more money on there pets than on themselves ? 

On another note it is expensive for Vet Medical bills for pets 
From personal experience just the other day I had to take my dog for a scan
Cost $440.00 

KK


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## disarray (23 September 2009)

many people remain poor because that's the way the system is designed. the primary means for this is the tax / welfare system.

around 50% of the federal budget goes on welfare - regardless of whether it is supporting worthy causes or scumbags, the simple fact remains it is the working man and woman who pays AT LEAST 35% of their wage IN DIRECT TAX, as well as myriad indirect taxes like stamp duties, GST, fees, levies, rates blah blah the list is endless. more than half of this money which has been extracted from productive workers goes to support those who cannot support themselves. 

people often complain about middle class welfare, well it would be untirely unnecessary if the middle class weren't continually milked like some infinitely fertile cow to support the unproductive.

so to protect the weak, vulnerable, unfortunate and terminally lazy the fit and strong are perpetually hounded by various authorities for the fruits of their labours, holding them back and preventing them from being able to produce large families of fit and strong children. the end result of this is to bleed the productive classes so we can foster and support a burgeoning, useless underclass.

welfare is society's money sink wrapped in moralism (which makes it difficult to criticise), designed to keep productive workers from getting ahead so they cannot retire early, and so must remain as indentured cogs in the machine. if productive people were allowed to keep most of the money they earn they could retire early and then wouldn't be paying tax any more which the system finds intolerable.

now this is not to say welfare is bad, or should be stopped, and hundreds of enormous, emotional threads couldn't even begin to properly examine the whole financial, social and moral aspects of welfare such as who deserves it etc. however, regardless of intentions, this is the way the system has played out and i believe it is ultimately unsustainable.

to begin to address this issue, at the very least, EVERYONE MUST WORK. expand work for the dole, put old people and pensioners to work, we need child carers, phone answerers, tree planters, basket weavers, volunteers etc. and there is no excuse whatsoever for any person in our society to be sitting on their ass doing nothing while others are paying to support them.

the working poor need to be cut a break, preferably in tax. the non working poor need a kick up the ass and made to contribute to society. what to do with the aged (both active and infirm) is partly a moral question and needs discussion, but there are already plenty of them out there that wish to contribute but few, if any, programs exist to facilitate this.

many in this thread have been critical of those who spend lavishly, but it seems odd to criticise those who spend the money they earn on what they want, yet continue to support a welfare system that pours billions upon billions of unproductive dollars (obtained from someone else) down a black hole with little return to society. if people spend all their money on stupid crap then more power too them, as long as they realise its not for the rest of us to bail them out.


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## awg (23 September 2009)

disarray said:


> to begin to address this issue, at the very least, EVERYONE MUST WORK. expand work for the dole, put old people and pensioners to work, we need child carers, phone answerers, tree planters, basket weavers, volunteers etc. and there is no excuse whatsoever for any person in our society to be sitting on their ass doing nothing while others are paying to support them.




I very much agree with this point. ( although not EVERYONE)

Having worked in the welfare system, you all would go bananas if you knew how many lazy bastards sit back with 4 or 5 kids and pull near the average wage. 

( Every criminal and drug dealer is on welfare also, so they have visible means of support)

It was always my assertion that the amount of welfare you receive should be at least be partially linked to your contribution to society.

If you want to kick back and not contribute, get very little.

If you are genuine, put in the hours.

"Work for the dole" was very poorly thought thru, implemented, and understood.

I could identify a welfare cheat in literally a few minutes, but was never really allowed to target them, it was always "Mcdonalds" welfare..the same treatment for everyone...my ar$e 

But dont target those who shouldnt be targeted, it is a waste of time, money, and  emotion


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## Happy (23 September 2009)

awg said:


> ...
> 
> I *could identify a welfare cheat *in literally a few minutes, but was never really allowed to target them, it was always "Mcdonalds" welfare..the same treatment for everyone...my ar$e
> 
> ...





Isn't it possible to report them anonymously?


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## stocksontheblock (23 September 2009)

It amazes me how this thread seems to have boiled down to luck, or (missed) opportunities, or in broad terms ‘their own fault’.

Poor is a subjective term. So what is poor? Sure living off welfare might be a good indicator, yet I don’t know what most of you are basing your assumptions on.

There are people who have natural ability and talents, and then there are those who don’t. Those who have been given every opportunity and those who haven’t. Those who made their own luck and those who didn’t. Those who had it handed to them, and those who didn’t, the list goes on. There are those who can try to put their ‘lack’ of skills and abilities to good use, some fail and some don’t.

However, it’s amazing how people impose their own definitions of waste on others and hence label them as being poor because it’s their own fault.

I have noticed Foxtel as been deemed a waste. So what? If you do earn $500 a week and are responsible with all your money, and budget – as many of you seem to claim they mustn’t be – then Foxtel is maybe just the one little ‘luxury’ they can afford themselves. Assume $600 a yr for this little ‘luxury’ and it’s at the expense of what? Very little! It might add up to $6000 in 10 yrs, yet what will this have achieved? Nothing in real terms.

Where does the naivety of trying to get out of the cycle of poverty stop? Don’t buy that single cup of coffee each week? Don’t go to the movies once a month? Buy all clothes from the ‘op’ shop’? Everything that is purchased must be a home/no name brand? 

Being poor is not a matter of being wasteful. Being poor is simply a state that some live in through no fault of their own, through no lack of not trying, and more to the point, generally they are not poor because they want to be.

This doesn’t detract from that there are most certainly those who are poor because they are lazy, bludgers, or just can’t be bothered, yet you can’t tar all with the same brush.


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## Julia (23 September 2009)

awg said:


> I very much agree with this point. ( although not EVERYONE)
> 
> Having worked in the welfare system, you all would go bananas if you knew how many lazy bastards sit back with 4 or 5 kids and pull near the average wage.
> 
> ...




Good post, awg.  Have seen all the same stuff and completely agree.

Chris 45, that's a very tragic story, and yes, people like that deserve our absolute support and compassion which, sadly, they seldom receive.

I fully support a decent welfare system but would like to see it more finely targeted.  Probably to do this wouldn't be cost effective, so we go on supporting the bludgers and cheats along with those who really should be receiving much more than they do.


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## Riddick (23 September 2009)

as a migrant, whose family lived in one room when we first arrived in australia, had no money for pretty much anything other than basic food this is a subject I have given a huge amount of thought to over the past 25 years.

1. people do indeed make bad choices. this can take many forms: buying a new car when really they don't need one, leveraging up their eyeballs for a house that is wayyyyy too big, having children they cannot hope to afford, general consumption on non essentials. I look at my family here and can say we drove 100 cars, had no tv for a decade, one school uniform etc just so we could manage our money. and we never ate junk food. 
in effect, the majority of the urban poor blur the line between need and want: a tv is not a need, a new car is not a need, new clothes are not needs, junk foods are not needs. and lots of folk inbibe in habits that unsustainable eg drinking and smoking. if you can't afford it, don't buy it.

2. people fail to plan ahead. - they make one plan and expect that plan to work out. as we all know, a plan that cannot be changed is a bad plan.

3. luck has nothing to do with it. if you believe in luck as a mysical force you are kidding yourself. there is probability, there is opportunity, there is choice. I'm sorry to burst anyone's bubble but there is no 'luck'. luck is simply accounting for probability and strategising accordingly.

as you can see I am not very sypathetic, partly as a result of seeing lots of people waste opportunity, or not take full advantage of their circumstances, when given a boost by family, friends or existing social standing. having had nothing other than a single suitcase and far surpassing the yearly earnings of the vast bulk of the population, I can share from experience that choice is the key element in success: the choice to get educated, the choice not to get into lifestyle afflictions that are detrimental to success, the choice not to breed in adverse situations, and the choice to walk away from environments that do not line up with my future ambitions, the choice to create ever evolving financial plans suitable to current climates. the list is endless.  

sorry for the lack of sympathy, I just can't feel sorry for people who sabotage their own success when there is literally thousands of avenues available to help people deal with issues in modern society. 

choose your own path and don't complain when it becomes a dead end. just turn around and try a different path....


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## tech/a (23 September 2009)

> 3. luck has nothing to do with it. if you believe in luck as a mysical force you are kidding yourself. there is probability, there is opportunity, there is choice. I'm sorry to burst anyone's bubble but there is no 'luck'. luck is simply accounting for probability and strategising accordingly.




Hmm dont know about that.
But do know that the more often I place myself in front of the freight train of opportunity the "luckier" I get.

After buying some houses in 1995 on the sound judgement that a freeway was going to open up one area---along came the strongest housing boom in history---luck?


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## awg (23 September 2009)

Julia said:


> I fully support a decent welfare system but would like to see it more finely targeted.  Probably to do this wouldn't be cost effective, so we go on supporting the bludgers and cheats along with those who really should be receiving much more than they do.




You would be amazed how much could be saved.

I spent years as a specific welfare cheat investigator.

Example of complete waste..call in everyone for a review every 3 months, huge waste of staff time ( ie taxpayer $)..not to mention the poor buggers money and inconvenience..what you would find is the honest ones turned up, the ones that were working would not..instead of investigating those ones properly, the charade continued.

Now they have implemented an absurdly harsh arbitrary scheme that discriminates against the poor &  disposessed etc.

I did countless thousand home visits, you could tell almost straight away when things were amiss.

Came across some really unsavoury criminal big nobs...living in luxury on the dole..and I can tell you they wernt too happy having me as a visitor at their home

Couldnt do anything about them either, they didnt keep their money in the bank!


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## stocksontheblock (23 September 2009)

Riddick said:


> as a migrant, whose family lived in one room when we first arrived in australia, had no money for pretty much anything other than basic food this is a subject I have given a huge amount of thought to over the past 25 years.
> 
> 1. people do indeed make bad choices. this can take many forms: buying a new car when really they don't need one, leveraging up their eyeballs for a house that is wayyyyy too big, having children they cannot hope to afford, general consumption on non essentials. I look at my family here and can say we drove 100 cars, had no tv for a decade, one school uniform etc just so we could manage our money. and we never ate junk food.
> in effect, the majority of the urban poor blur the line between need and want: a tv is not a need, a new car is not a need, new clothes are not needs, junk foods are not needs. and lots of folk inbibe in habits that unsustainable eg drinking and smoking. if you can't afford it, don't buy it.
> ...




Wow ... its just all so easy isn't it? Really, its not all that simple, or black and white.


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## Tink (23 September 2009)

Good one Riddick and well done : )

I also agree with awg and disarrays post regarding welfare..


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## awg (23 September 2009)

Happy said:


> Isn't it possible to report them anonymously?




Yes..see my subsequent post...most dob-ins are spiteful non-matters, but lots of good ones, usually spurned ex's 



stocksontheblock said:


> I have noticed Foxtel as been deemed a waste. So what? If you do earn $500 a week and are responsible with all your money, and budget – as many of you seem to claim they mustn’t be – then Foxtel is maybe just the one little ‘luxury’ they can afford themselves. Assume $600 a yr for this little ‘luxury’ and it’s at the expense of what? Very little! It might add up to $6000 in 10 yrs, yet what will this have achieved? Nothing in real terms.
> 
> Where does the naivety of trying to get out of the cycle of poverty stop? Don’t buy that single cup of coffee each week? Don’t go to the movies once a month? Buy all clothes from the ‘op’ shop’? Everything that is purchased must be a home/no name brand?




LOL the Foxtel and Cappacino's..I rag a mate of mine all the time about this, tell cafe-boy to cut that crap and buy equities instead.

watch the ABC, SBS and drink Nescafe 43, eat Bi-Lo choc wheats:

many years ago, earnt some extra money, decided to spend half on toys and invest the other half in equities, including floats of CBA and WOW..guess the rest


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## Fishbulb (23 September 2009)

Given that all things are equal, I think people who are poor as a way of life, as opposed to someone "down on their luck" has everything to do with mindset. 

Some have a negative cast to their thinking

Some are self defeating

Some have fear of success, while others have fear of failure, and when they do fail, it causes problems that may take years to overcome. 

I think it's a complicated area.


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## stocksontheblock (23 September 2009)

awg said:


> I very much agree with this point. ( although not EVERYONE)
> 
> Having worked in the welfare system, you all would go bananas if you knew how many lazy bastards sit back with 4 or 5 kids and pull near the average wage.
> 
> ...






awg said:


> You would be amazed how much could be saved.
> 
> I spent years as a specific welfare cheat investigator.
> 
> ...




Its like watching ACA or TT. The myth as fact stories, and myth as 'they are all doing it' is simply amazing.

This is not directly aimed at you awg, yet some reality needs to be injected into all of this. I to have a lot of experience in this area, and sure it might be a mess, yet its not that bad that those who are bleeding the system are not caught. Maybe where you are, or where you were, yet its not really the norm.


----------



## stocksontheblock (23 September 2009)

awg said:


> many years ago, earnt some extra money, decided to spend half on toys and invest the other half in equities, including floats of CBA and WOW..guess the rest




This is taking an opportunity and running with it, so well done. However, there has to be the opportunity to take.

Saving the $5 a week in coffee or $10 in shopping by buying no brand won’t add up to much in real terms. So avoiding being poor is not a matter of living a life, if you want to call it living, of saving every cent for the sake of it, it should be about making the best of what you have, and taking a few chances, or grasping opportunities if you have them.

Risk and chance when you are poor are not 2 words you want to hear, or do. If you have money, or if the risk fails and you are potentially no worse off than where you were when you started then risk is not so much of an issue, yet being poor and taking a risk which fails will put you worse off than where you were, which is not what you want.


----------



## Happy (23 September 2009)

awg said:


> ....
> Came across some really unsavoury criminal big nobs...living in luxury on the dole..and I can tell you they wernt too happy having me as a visitor at their home
> 
> Couldnt do anything about them either, they d*idnt keep their money in the bank*!




South Australia passed law or wants to pass law to investigate 'unexplained wealth'. 

This, by the way, could be used in all States.


----------



## awg (23 September 2009)

stocksontheblock said:


> This is taking an opportunity and running with it, so well done. However, there has to be the opportunity to take.
> 
> Saving the $5 a week in coffee or $10 in shopping by buying no brand won’t add up to much in real terms. So avoiding being poor is not a matter of living a life, if you want to call it living, of saving every cent for the sake of it, it should be about making the best of what you have, and taking a few chances, or grasping opportunities if you have them.
> 
> Risk and chance when you are poor are not 2 words you want to hear, or do. If you have money, or if the risk fails and you are potentially no worse off than where you were when you started then risk is not so much of an issue, yet being poor and taking a risk which fails will put you worse off than where you were, which is not what you want.





Dont want to seem too disageeable, but I recently took up my SPP allotment in CFU at 5c per share, not much over $600..hit 30c today, still plenty left in this baby, a real long-term green energy stock..still no Foxtel, my youngest son nags me, I said sure, will buy it for xmas or yr birthday if you want, so long as you want keep paying it.

cappucino + cake @ $7 x 365 =$2555pa

me mate Warren still gets his shoes re-soled and drives a Camry




Happy said:


> South Australia passed law or wants to pass law to investigate 'unexplained wealth'.
> 
> This, by the way, could be used in all States.




I noticed the crims live high on the hog, this means they dont tend to build readily accessible assets. They also regard welfare fraud as bread-and butter crime, of very little consequence.

The good ones dont get caught, or come to attention either.

There is 2 in particular I remember, both had spouses that normally worked, when the woman stopped working, they claimed UB, utterly chilling, I didnt bother asking too many unwelcome questions

The Federal/State police had the task of investigating associated criminal activity, not me, no sir.

lots of examples of people born in some degree of hardship making wealthy
Malcolm Turnbull, Alex Vella, whatsisname McGurk


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## Tysonboss1 (24 September 2009)

Julia said:


> Why do you think some people never have any money while others on an apparently quite small income manage to achieve some assets?




Because they are hyper consumers,

High income does not = wealth,

Regardless of how much or little you earn if you spend less than you earn you will generate wealth, if you spend more than you earn you generate debt.


----------



## stocksontheblock (24 September 2009)

Tysonboss1 said:


> Regardless of how much or little you earn if you spend less than you earn you will generate wealth, if you spend more than you earn you generate debt.




I have to disagree with this; there is a difference between saving some cash – e.g. savings; and acquiring wealth.


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## Tysonboss1 (24 September 2009)

Dr Stock said:


> Some people never get a fair chance in the first place.
> 
> Stuff like getting sick at a young age, having parents that are disfunctional, all sorts of circumstances.






Yeah, I guess if you were a jew living in nazi germany and had you father and brothers taken to concentration camps and had to live hiding till you escaped to israel where you fought in the israel war, till you left and ended up in Australia hardly speaking english, struggling to find employment in a city and culture completely foreign to.

I guess if the above was a description of your life till age 22, you would have a good excuse on why you never achieved anything.

Or you could build a multi billion $ company called westfields, Frank lowy one of Australias richest is the jewish boy who I was describing.

I hate people who make excuses.


----------



## Riddick (24 September 2009)

tech/a said:


> Hmm dont know about that.
> But do know that the more often I place myself in front of the freight train of opportunity the "luckier" I get.
> 
> After buying some houses in 1995 on the sound judgement that a freeway was going to open up one area---along came the strongest housing boom in history---luck?




Absolutely not luck. assigning things to luck is tantamount to thinking that magic somehow holds sway over the affairs of the world. Making a prudent business decision, like yours, is simply a matter of sound judgement and good financial management.

believeing in the force of "luck" is like believing in the tooth fairy,  leprechauns or santa. Some kind of inexplicable, though somehow sentient force that chooses moments to shine good fortune on deserving individuals. as much as want to believe in something like luck, this act alone is not sufficient to make luck real in any sense of the word.

so back to the original point. People do not become poor or wealthy by "accident". a whole bunch of things have to go wrong or right and a whole host of decisions have to be made. 

I still maintain monetary wealth, if this is the definition of what "rich" is attainable through good education and prudent money management. there is heaps of anecdotal evidence - "self made" success stories - that back up this assertion.

as a result, it follows that the bulk of people who fit into the "poor" category are dificient in the areas of prudent money management and the ability to make correct judgements. The most classic example i can think of here is folk chosing to have families when clearly they cannot afford it, then crying out for help when one of their ill concieved decisions brings their plans to a grinding halt.


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## Tysonboss1 (24 September 2009)

Tysonboss1 said:


> Because they are hyper consumers,
> 
> High income does not = wealth,
> 
> Regardless of how much or little you earn if you spend less than you earn you will generate wealth, if you spend more than you earn you generate debt.






stocksontheblock said:


> I have to disagree with this; there is a difference between saving some cash – e.g. savings; and acquiring wealth.




Yes, But my point is that if you can not generate savings by spending less than you earn, how can you ever generate real wealth, If you spend everything you  earn, you will be poor, you may be a high income poor person, but still poor

If every time you earn money you spend it, you will never generate real wealth.

When I talk about spending less than you earn, I am not recommending stock piling cash in a bank account, offcourse as you generate savings you have to start allocating the capital into assets that produce income or growth or both.

The original question asked why are some people "poor" and some people "rich"

Both "POOR" and "RICH" are mindsets. you can give a poor person $1M and they will still be poor.

Broke is temperary, Poor is eternal.


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## awg (24 September 2009)

stocksontheblock said:


> I have to disagree with this; there is a difference between saving some cash – e.g. savings; and acquiring wealth.




Unless yr wealth is entirely inherited, you HAVE to do the first part before you can achieve the the second



Tysonboss1 said:


> Yeah, I guess if you were a jew living in nazi germany and had you father and brothers taken to concentration camps and had to live hiding till you escaped to israel where you fought in the israel war, till you left and ended up in Australia hardly speaking english, struggling to find employment in a city and culture completely foreign to.
> 
> I guess if the above was a description of your life till age 22, you would have a good excuse on why you never achieved anything.
> 
> ...




Could be genetic qualities come to the fore in this case, as well as many of the reverse, but I tend to agree, some people born into poverty have a burning urge to better their financial position, unlike some spoilt rich kid.

Bing Lee story was on TV, came hear with nothing, no family (bought a laptop of them yesterday, after standing in a competitor for 10 mins, no salesman to assist me)


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## Chris45 (24 September 2009)

Tysonboss1 said:


> Frank Lowy one of Australia's richest is the Jewish boy who I was describing. I hate people who make excuses.



You don't think natural gifts like intelligence etc might have had something to do with his success do you?


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## Tysonboss1 (24 September 2009)

kennas said:


> Some people just don't want money to define their lives.




Yeah thats what alot of "have not's" say so as to avoid having to take action, and maintain their current laziness.

However, How many of these people would refuse a $1M payment if they won the lotto. not many I would say.


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## Mr J (24 September 2009)

Tysonboss1 said:


> Yeah thats what alot of "have not's" say so as to avoid having to take action, and maintain their current laziness.




Some of them mean it.


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## Tysonboss1 (24 September 2009)

Chris45 said:


> You don't think natural gifts like intelligence etc might have had something to do with his success do you?




Intelligence alone won't bring wealth, there are plenty of Doctors, lawyers, Professors, etc living pay cheaque to pay cheaque.

And there are plenty of people who would not really be classed as having above average intelligence sitting on large amounts of wealth.

But all I am saying is that if Frank lowy can go from such a bad early life to the very top, There is no reason that the average person can't achieve atleast a moderate level of wealth.

To become wealthy you must apply continuous effort to areas that increase wealth.

Hard work does not guarantee wealth if you just spend the extra money that hard work brings.


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## Dowdy (24 September 2009)

stocksontheblock said:


> I have to disagree with this; there is a difference between saving some cash – e.g. savings; and acquiring wealth.




And thus, is the reason why we're in this credit crisis


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## Wysiwyg (24 September 2009)

So what is the one common thread between the worlds poor people?

Intelligence. The lack of knowledge in acquiring and managing wealth.


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## Tysonboss1 (24 September 2009)

Wysiwyg said:


> So what is the one common thread between the worlds poor people?
> 
> Intelligence. The lack of knowledge in acquiring and managing wealth.




Don't confuse knowledge with intelligence.

Do you need to have above average intelligence to be wealthy,... NO.

Do you need to have knowledge on the basics of investing to maintain wealth,... yes.


----------



## awg (24 September 2009)

Wysiwyg said:


> So what is the one common thread between the worlds poor people?
> 
> Intelligence. The lack of knowledge in acquiring and managing wealth.




Do you think so?

I agree that intelligence is very useful

But opportunity in general and learning opportunity is equally, or more, so surely?

Pretend you are born into low caste poverty in rural India, for eg, but intelligent

would that not be a worse stroke of fate for wealth accumulation than being born in Australia?


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## Wysiwyg (24 September 2009)

Tysonboss1 said:


> Don't confuse knowledge with intelligence.
> 
> Do you need to have above average intelligence to be wealthy,... NO.
> 
> Do you need to have knowledge on the basics of investing to maintain wealth,... yes.




Knowledge is a trait of intelligence so perhaps you don`t confuse definition.


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## Mr J (24 September 2009)

Tysonboss1 said:


> But all I am saying is that if Frank lowy can go from such a bad early life to the very top, There is no reason that the average person can't achieve atleast a moderate level of wealth.




The average person already achieves a moderate level of wealth. What they do not and cannot achieve is better than moderate wealth. Only the minority can 'get ahead'. Also, one example is not proof.



Wysiwyg said:


> So what is the one common thread between the worlds poor people?
> 
> Intelligence. The lack of knowledge in acquiring and managing wealth.




I strongly disagree. Knowledge =/= intelligence, and most of the world's poor have no hope of aquiring wealth. Anyone who thinks otherwise cannot have any idea of the conditions in which these people live.



Wysiwyg said:


> Knowledge is a trait of intelligence so perhaps you don`t confuse definition.




Lack of knowledge does not mean one is unintelligent. It simply means that one lacks education or experience in that area. This would certainly be the case regarding the poor and managing wealth.


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## Tysonboss1 (24 September 2009)

When surveyed most people with net worths over $10M answer "YES" to the following three questions.

Were your parents frugal?

Are you frugal?

Is your partner more frugal than you?


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## kam75 (24 September 2009)

At a subconscious level they want to be poor.


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## Wysiwyg (24 September 2009)

awg said:


> Do you think so?
> 
> Pretend you are born into low caste poverty in rural India, for eg, but intelligent
> 
> would that not be a worse stoke of fate for wealth accumulation than being born in Australia?




Sure the path could have more obstacles but the intelligent being will have the better chance. The duration from poor to wealth for your example may be longer and simply comparative to an Australian resident.


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## Wysiwyg (24 September 2009)

Mr J said:


> Lack of knowledge does not mean one is unintelligent. It simply means that one lacks education or experience in that area. This would certainly be the case regarding the poor and managing wealth.




Twist it as you will.


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## nunthewiser (24 September 2009)

kam75 said:


> At a subconscious level they want to be poor.





LOL

yes the ppl in the favelas in brazil and the ppl in the shanty towns in south africa all dream of remaining in there born into predicaments


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## Tysonboss1 (24 September 2009)

Wysiwyg said:


> Knowledge is a trait of intelligence so perhaps you don`t confuse definition.




What I mean is that Having high intelligence by itself is nothing unless you apply your self to devolep knowledge in a certain area.

For instance, The mechanic that works on my car has far superior Knowledge of engines than I do, But that does not mean he has higher intelligence.

Unless a person takes the time to develop knowledge in a certain area, intelligence will not help.

The worlds richest people are probally not the worlds most intelligent, Warren Buffet actually admitted he went to bed hungry one night because he couldn't turn on the stove in his own kitchen.

Now I am not saying Buffet is not intelligent, I am just saying he had no knowledge of kitchen appliances.

Now just as Buffet went to bed hungry because of lack of knowleadge on a certain topic, many people hit retirement age with out any assets to draw income due to their lack of knowledge on another topic.


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## Wysiwyg (24 September 2009)

Additionally, there are the poor people who struggle for year upon year to the point of giving up in their goal of attaining wealth. 

They are rejected for various reasons including ... religious belief, supposed or realised intelligence, skin colour, family "status" and physical appearance.

They come to a realisation the "society" they live in generally rejects their presence.


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## Tysonboss1 (24 September 2009)

Mr J said:


> The average person already achieves a moderate level of wealth. What they do not and cannot achieve is better than moderate wealth. Only the minority can 'get ahead'. Also, one example is not proof.




I wouldn't say the average person has moderate wealth.

I would say moderate wealth would be a capital base large enough to support a passive income of about $50,000.

The average Australian has no such capital base and lives pay to pay.


----------



## Wysiwyg (24 September 2009)

Tysonboss1 said:


> The worlds richest people are probally not the worlds most intelligent, Warren Buffet actually admitted he went to bed hungry one night because he couldn't turn on the stove in his own kitchen.




LOL   Such an example of monetary wealth as W.B. reminds me that wealth isn`t created alone. You need friends and acqaintances with wealth to accept you. Being "allowed" to become wealthy is another kettle of fish.

Anyone who thinks they made it on their own is asleep.


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## Tysonboss1 (24 September 2009)

Wysiwyg said:


> They are rejected for various reasons including ... religious belief, supposed or realised intelligence, skin colour, family "status" and physical appearance.




An Interesting fact,

When looking at the backgrounds of both Australias and Americas first generation wealthy people, Immigrants make up a very large percentage.


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## Tysonboss1 (24 September 2009)

Wysiwyg said:


> LOL   Such an example of monetary wealth as W.B. reminds me that wealth isn`t created alone. You need friends and acqaintances with wealth to accept you. Being "allowed" to become wealthy is another kettle of fish.
> 
> Anyone who thinks they made it on their own is asleep.




Thats a nice comfortable way to look at things,

Thats like looking at a sports star and saying it's all natural ability, After all it couldn't have anything to due with the 6 days / week they have been putting into training for 10years before the general public heard about them.

If you want to be poor do the following things,

Victimise yourself and believe that others are rich because they are born like that.

Try and keep up with the jones's

Spend all of you pay each week,

get into debt for consumer goods, holidays  and cars.

cling to entitlements, benefits and pay rises. 

Spend extra money that comes your way such as tax refunds etc. after all you weren't expecting the money so you way as well spend.

Convince your self that rich people are greedy evil people.

Convince your self that money is hard to get.

Avoid risking your money, after all it's better to spend they money than put it in somthing risky like investments.


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## stocksontheblock (24 September 2009)

kam75 said:


> At a subconscious level they want to be poor.




I really do hope your just taking the pi*s with a statement like this?


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## stocksontheblock (24 September 2009)

Tysonboss1 said:


> Thats a nice comfortable way to look at things,
> 
> Thats like looking at a sports star and saying it's all natural ability, After all it couldn't have anything to due with the 6 days / week they have been putting into training for 10years before the general public heard about them.
> 
> ...




Intelligence has nothing to do with wealth. Opportunities and those you make play an enormous part.

I also fundamentally disagree with your above statements.

Everything you have said has to be based on you having disposable income of such an amount that you can accumulate more wealth from it, rather than, as I have said in response to other comments by you, having some excess cash from last months pay.

Creating wealth is not a simple matter of giving up the coffee or buying cheap imported products or home brand goods etc., you would have to be kidding yourself if you were to seriously believe this 'saving' v's income will create any wealth that could move you from 'poor' to 'wealthy'.

This is not directed at you, yet I posed a question a few posts back as to what people are considering to be poor and I haven’t seen a single answer.

People who are poor are those starving, homeless, oppressed, and subjugated people of many African countries. That’s poor! Some guy (or girl) who can’t afford Foxtel or a new car every 3 yrs is far from poor.

Any standard of wealth or poverty is based on what you consider you would like to have if you had the money; however that doesn’t make you poor, it just makes you wishful, unless of course you are wondering where you next meal is coming from.

I have to admit to finding the idea that people are poor because they want to be as absolutely abhorrent – which seems to be the suggestions of a couple.


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## Wysiwyg (24 September 2009)

> Creating wealth is not a simple matter of giving up the coffee or buying cheap imported products or home brand goods etc., you would have to be kidding yourself if you were to seriously believe this 'saving' v's income will create any wealth that could move you from 'poor' to 'wealthy'.




Yes it depends on income really doesn`t it. If one can live fruagally on income of 100 k per year then wealth is a certainty.


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## ROE (24 September 2009)

I think it's more of a case of it's not how much you earn but 
how much you save.

Spend less than you earn always goes down well.
and spend less than you earn and invest the saving goes even further

I know people on absolute minimum wages and own their own home outright and still accumulating more than they can spend.

These arent the smartest people I know and they are the one that doesnt care if Mr Jones own a BMW or what the latest fashion in Investing by gearing or margin loan, slow and steady and compounding seems to work


----------



## Tysonboss1 (24 September 2009)

stocksontheblock said:


> Creating wealth is not a simple matter of giving up the coffee or buying cheap imported products or home brand goods etc., you would have to be kidding yourself if you were to seriously believe this 'saving' v's income will create any wealth that could move you from 'poor' to 'wealthy'.




Offcourse creating wealth takes more than just buying cheaper goods, especially if the money you save in one area gets spent in another.

When I speak of spending less than you earn I mean actually reducing your total spending so each week you have money left over which you can then use to invest, 

If you set aside a certain portion of your pay each week and invest it wisely, eventually it will compound to the point where it produces more cashflow than your work does, you can then choose to work or not this is true wealth.

If you spend every last cent you earn, and then use credit cards and other loans to spend even more, you will never be able to choose not to work, you will be stuck in the rat race on the debt tredmill, this is being poor, 

The africans you talk about are living in poverty, I class hopless poverty in a very different class than what I call being Poor.


----------



## Julia (24 September 2009)

Wysiwyg said:


> Additionally, there are the poor people who struggle for year upon year to the point of giving up in their goal of attaining wealth.
> 
> They are rejected for various reasons including ... religious belief, supposed or realised intelligence, skin colour, family "status" and physical appearance.
> 
> They come to a realisation the "society" they live in generally rejects their presence.



You seem to have a particular axe to grind here, rather than just arguing objectively.

I agree overall with Tyson's views.   
Poor people often lack self discipline.

NB.  I am absolutely excluding from this anyone with serious illness or disability.  That would have to be the fastest passport to being poor.


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## GumbyLearner (24 September 2009)

Hey Julia 

It's all in their mind just like this crap

http://www.creditcontraction.com/im...redit-Contraction-Liquidity-Pyramid-Large.jpg


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## Mr J (24 September 2009)

Tysonboss1 said:


> I wouldn't say the average person has moderate wealth.
> 
> I would say moderate wealth would be a capital base large enough to support a passive income of about $50,000.
> 
> The average Australian has no such capital base and lives pay to pay.




That's far greater than moderate wealth, unless you only consider the wealthier portion of society to be 'wealthy'. Only a minority can aspire towards earning a passive income of ~$50k.



ROE said:


> I think it's more of a case of it's not how much you earn but
> how much you save.




It's what you do with the savings that matters. Savings depreciate or break-even over time. Investing is an improvement, but most people invest poorly and spin their wheels.



			
				Julia said:
			
		

> Poor people often lack self discipline.




Most people lack discipline.


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## GumbyLearner (25 September 2009)

Mr J said:


> Most people lack discipline.




Until they are academically ready to dish it out! 

Return Serve

Fore


----------



## Wysiwyg (25 September 2009)

Julia said:


> You seem to have a particular axe to grind here, rather than just arguing objectively.
> I agree overall with Tyson's views. *Poor people often lack self discipline*.




Yes, many find reason for `poor` in the individuals psychological makeup, just as you have done. It is obvious to me that a large proportion of this planets poor people are the direct result of oppressive leaders and the laws they create. Some other reasons are extreme climate, poor soil, little or no water supply, lack of knowledge, wars and disease.   

Thank your lucky stars that this country has an abundance of life sustaining natural resources along with the intelligence of predecessor and present to create a civilised country resulting in a quality of life for the inhabitants. 

Poor defines rich, rich defines poor. Everyone can`t be wealthy because they would all have the same and no poor people to compare too. As I`ve said many times before, everything is via comparison and agreement. Whenever we quantify something it is via comparison.    

So to cut a long story short with my now sharp axe, the majority of the worlds poor people are so because of circumstances mentioned in the first paragraph. Not through their own cause.


----------



## Tysonboss1 (25 September 2009)

Mr J said:


> That's far greater than moderate wealth, unless you only consider the wealthier portion of society to be 'wealthy'. Only a minority can aspire towards earning a passive income of ~$50k.




In my veiw, If you rely on a pay cheque you are not wealthy.

But it is also subjective, If you Have a life style that requires only $50,000 per year and you can fund it from passive income then you are wealthy. If you have a life style that requires $200,000 a year, and you only have passive income of $50,000 a year then you are not wealthy, because you are still a slave to the the system.

I don't think a passive income of $50,000 is unachievable for 99% of people, especially if they start young.

I am 27 and started investing my paper round money when I was 14 and I now have passive income of over $50,000. If I can do it by 27, then it shouldn't be hard to do by 50 given an extra 23 years of compounding.

But offcourse if the majority of people focus on lifestyle rather than investing and get on the debt treadmil then it is impossible for them, But that is their choice.


----------



## Tysonboss1 (25 September 2009)

Mr J said:


> Most people lack discipline.




Thats why most people struggle finacially,



On a side note, I think I am proof it doesn't take high intelligence to build up a bit of wealth, I can't even spell properly most of the time.


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## tech/a (25 September 2009)

*properly*

Looks OK to me.


----------



## Mr J (25 September 2009)

> I don't think a passive income of $50,000 is unachievable for 99% of people, especially if they start young.




I do. Most people are destined to be ordinary, and will always lack the discipline, motivation and skills to get ahead. Individuals can get ahead, but the majority can't (the majority can't ahead of itself!). Also, think of the economic consequences if people did become more responsible (we live in a consumer economy).

A lot of people think "If I can do it, so can anyone else", but I think you're underestimating how hard it is for most.



> If I can do it by 27, then it shouldn't be hard to do by 50 given an extra 23 years of compounding.




It's not only about financial responsibility, it is also about investment skill. Even if someone becomes financial responsible, their investments will usually be marginal at best. Most investments perform significantly worse than most people think, largely because they underestimate inflation, and perhaps expect unreasonable gains and consistency.


----------



## Tysonboss1 (25 September 2009)

tech/a said:


> *properly*
> 
> Looks OK to me.




 HA HA HA,

I always have trouble with financel or is it financal,... I don't know, people will just have live with it. Another one is cheque or is it cheaque or check I don't know that one either.

It took me 6 months to get infrastucture right,... now I am not even sure I got it right just then.


----------



## Fishbulb (25 September 2009)

I think the so called "poor" are oftentimes the happier. I'm not talking about those that live in squalour or the homeless, but those that choose a low level of living. 

I've travelled extensively, and met lots of people - especially throughout Australia, and the happiest, the friendliest and least assuming are the so called poor. The biggest pricks on the other hand? You guessed it. 

Sometimes there's a richness of spirit that those with material gain simply do not have.


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## stocksontheblock (25 September 2009)

*finacially*

is though 

Seriously though, the comment I would add is that to make an investment grow, or to gain a degree of wealth you need to be in a position to do so. If your only means of doing this is through your income, then your income needs to be sufficient enough for you to make sacrifices that don’t impact your living standards - make of that comment what you like. Living standards don’t just mean going without the 60inch plasma TV.

Wealth is a construct of society. If you earn $40k and can manage/pay your debts and have generally what you want then you are wealthy. The fact you can’t buy a $200k car is irrelevant. If you earn the same amount again and want to have all the little gadgets and god knows what other toys to make up for your incredibly small ... ego, then yes you will be poor as you owe significantly more than you earn.

However, this is not poor. This is just stupid. Many people, if you use the same example are poor. They have a mortgage, have an income and I’m sure the income is not the same as the debt on the house, for if it were then there would be no debt.

Poor are people who cannot afford the, lets call it - basics of life. I'm not going to get into a discussion as to what this is, as we all have a different definition of what basic's are.

So, the person on the pension - who deserves it (OAP, disability, etc), will think the guy on $25k is rich as he 'earns' twice as much. The guy on $50k will think the guy on $200k is rich and so it goes.

Poor, rich, or just stupid, it isn’t the level of debt you create that makes you poor, its the ability to maximise your income to create additional money that will hopefully lead to additional wealth. Yet, IMO this has to come from a sound income to start with. The pensioner might be able to put $10 a fortnight way, yet to deprive him/herself of this is plain silly. This $240 a yr saving will grow into nothing (it would take 2yrs 1mth to save enough to buy a min. parcel of shares on some trading platforms).

So the benefit of the 'spend now' mentality is fully justifiable. The same could be said for someone earning $25k a yr. The gain by depriving yourself some pleasures in life in the end will not lead to any great degree of wealth.

The one thing is: assuming people want to be 'wealthy', and that they aren’t just happy with what they have.


----------



## stocksontheblock (25 September 2009)

Tysonboss1 said:


> HA HA HA,
> 
> I always have trouble with financel or is it financal,... I don't know, people will just have live with it. Another one is cheque or is it cheaque or check I don't know that one either.
> 
> It took me 6 months to get infrastucture right,... now I am not even sure I got it right just then.




Here's some help 

Financial

Financially

Finance

Cheque – this is what you write to someone for payment

Cheek – this is what you do on a form, or if you were to cheek-in at the airport


----------



## Wysiwyg (25 September 2009)

Fishbulb said:


> I think the so called "poor" are oftentimes the happier. I'm not talking about those that live in squalour or the homeless, but those that choose a low level of living.
> 
> I've travelled extensively, and met lots of people - especially throughout Australia, and the happiest, the friendliest and least assuming are the so called poor. The biggest pricks on the other hand? You guessed it.
> 
> Sometimes there's a richness of spirit that those with material gain simply do not have.




THANKYOU so much for that. All part of staying close to what is real.


----------



## Tysonboss1 (25 September 2009)

stocksontheblock said:


> So the benefit of the 'spend now' mentality is fully justifiable. The same could be said for someone earning $25k a yr. The gain by depriving yourself some pleasures in life in the end will not lead to any great degree of wealth.




I agree income does have a big part to play, So a person needs to focus on increasing their income without increasing their expenditure, so as to have excess income that can fund investments.

Really if some one is only earning $25,000 per year they are not really trying, or they have made some really bad decisions early on. (offcourse I am not talking about people who have genuine disabilities)


----------



## Tysonboss1 (25 September 2009)

stocksontheblock said:


> Cheek – this is what you do on a form, or if you were to cheek-in at the airport




I think you typed that with a NZ accent


----------



## stocksontheblock (25 September 2009)

Tysonboss1 said:


> I think you typed that with a NZ accent




Yes, what a balls-up that was. It should have been Check.

Note: never respond to posts while eating breakfast.


----------



## Mr J (25 September 2009)

Tysonboss1 said:


> Really if some one is only earning $25,000 per year they are not really trying




I think you're out of touch with reality.


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## wayneL (25 September 2009)

Lucius Annaeus Seneca was a Roman philosopher who thought a great deal about wealth. Here is a selection of his quotations:

A great fortune is a great slavery.

For many men, the acquisition of wealth does not end their troubles, it only changes them. 

It is not the man who has too little, but the man who craves more, that is poor.

Success is not greedy, as people think, but insignificant. That is why it satisfies nobody.

What difference does it make how much you have? What you do not have amounts to much more.


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## Fishbulb (25 September 2009)

Wysiwyg said:


> THANKYOU so much for that. All part of staying close to what is real.




No worries. People often make the mistake of thinking that the poor are somehow inferior. Far from the truth.


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## Fishbulb (25 September 2009)

wayneL said:


> Lucius Annaeus Seneca was a Roman philosopher who thought a great deal about wealth. Here is a selection of his quotations:
> 
> A great fortune is a great slavery.
> 
> ...




Top notch


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## Tysonboss1 (25 September 2009)

Mr J said:


> I think you're out of touch with reality.




I don't think so,

$25,000pa is only $480 per week,

It's hard for me to believe someone could be limited to earning such a small amount if they are honestly putting in 100% effort into increasing their earnings.

I do believe there is people who believe they are limited to this amount, But I don't believe they are. My girlfirend earns more than that only working as a shop assistant 25hours a week.


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## Mr J (25 September 2009)

So you're suggesting that all minimum wage earners are lazy? I can only assume that you have never been poor, don't truly know anyone who is poor, or at least have no idea of what they go through. If someone is barely making enough for the necessities, how are they meant to get ahead? Hard work alone is not enough.


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## Tysonboss1 (25 September 2009)

Fishbulb said:


> People often make the mistake of thinking that the poor are somehow inferior.




do you mean all the people who were saying that the poor weren't wealthy because they didn't have the intelligence or special gifts like the rich had.


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## Tysonboss1 (25 September 2009)

Mr J said:


> So you're suggesting that all minimum wage earners are lazy? I can only assume that you have never been poor, don't truly know anyone who is poor, or at least have no idea of what they go through. If someone is barely making enough for the necessities, how are they meant to get ahead? Hard work alone is not enough.




In my business you only get minimum wage if you put in minimum effort,

If I had a great staff member that was working really hard and making me lots of money, Do you think I would have them on minimum wage.

If your an above average employee and your on minimum wage I would start looking for other places to work.


----------



## Julia (25 September 2009)

Mr J said:


> Most people lack discipline.



That's a very broad statement.  Are you sure you're being fair, and not being rather patronising?



Wysiwyg said:


> Yes, many find reason for `poor` in the individuals psychological makeup, just as you have done. It is obvious to me that a large proportion of this planets poor people are the direct result of oppressive leaders and the laws they create. Some other reasons are extreme climate, poor soil, little or no water supply, lack of knowledge, wars and disease.
> 
> Thank your lucky stars that this country has an abundance of life sustaining natural resources along with the intelligence of predecessor and present to create a civilised country resulting in a quality of life for the inhabitants.



Perfectly obviously the above is true.   Perhaps I should have been more clear that when I asked the original question which began the thread, I wasn't including such obvious stuff as this.

Rather, my interest was in why if you take two people living in the same country, with roughly the same level of basic IQ, and give them both $1000, say, one will quickly work out how to make it grow, and the other will simply spend it.


----------



## Riddick (25 September 2009)

Mr J said:


> So you're suggesting that all minimum wage earners are lazy? I can only assume that you have never been poor, don't truly know anyone who is poor, or at least have no idea of what they go through. If someone is barely making enough for the necessities, how are they meant to get ahead? Hard work alone is not enough.





I can only assume you have never been poor! As a migrant who came with my family to australia as a child and who has no extended family your comment sounds like you have never really struggled. define barely making enough for "necessities". If you can only earn enough in the short term for a few vegies and some bread, then this is what you eat for a month. if you can;t afford a car, then you don't have one. If you can't afford a phone then you dont have one (we didn't have a pone all through school and university). If you can't afford to go on holiday or have a TV don't buy one, don't use credit. the list is endless.

at the end of all that the lesson is that when you are financialy poor you really have to swallow pride (like we did) and live well within your means until such times as you are in control of your finances. 

I refuse to believe that people cannot make enough for necessities. If you count necessities as basic food and a basic house then even 20k a year will suffice. No extra clothes, no socialising. just living within your means. sounds harsh but as a person who for many years lived in this manner - as a child then into studenthood - I will testify that what fits into needs is not really very much.

As a result of this experience my family has amassed considerable wealth in a short period of time (assets and cash over $3 mil) due to hard work, not making excuses and making some big sacrifices.

just my thoughts thats all.


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## Tysonboss1 (25 September 2009)

Mr J said:


> If someone is barely making enough for the necessities, how are they meant to get ahead?




Earn more, you are not born with a limit to your earning potential.

The amount you earn is a direct result of your education, effort, efficiancy, willingness to learn etc.etc

If someone is not earning enough they can choose to change that.


----------



## Tysonboss1 (25 September 2009)

Riddick said:


> I refuse to believe that people cannot make enough for necessities. If you count necessities as basic food and a basic house then even 20k a year will suffice. No extra clothes, no socialising. just living within your means. sounds harsh but as a person who for many years lived in this manner - as a child then into studenthood - I will testify that what fits into needs is not really very much.
> 
> As a result of this experience my family has amassed considerable wealth in a short period of time (assets and cash over $3 mil) due to hard work, not making excuses and making some big sacrifices.
> 
> just my thoughts thats all.





Well said,


----------



## Chris45 (25 September 2009)

Tysonboss1 said:


> On a side note, I think I am proof it doesn't take high intelligence to build up a bit of wealth, I can't even spell properly most of the time.



Being very intelligent doesn't necessarily mean you're going to be wealthy. I don't think Einstein was a billionaire. Inability to spell words correctly doesn't necessarily indicate low general intelligence. But, highly intelligent people do tend to be wealthier than those with low intelligences.

What's your IQ? I'd be surprised if it was less than 90.

Apparently, the IQ gives a good indication of the occupational group that a person will end up in, though not of course the specific occupation. In their book, "Know Your Child’s IQ", Glen Wilson and Diana Grylls outline occupations typical of various IQ levels:
140	Top Civil Servants; Professors and Research Scientists.
130	Physicians and Surgeons; Lawyers; Engineers (Civil and Mechanical)
120	School Teachers; Pharmacists; Accountants; Nurses; Stenographers; Managers.
110	Foremen; Clerks; Telephone Operators; Salesmen; Policemen; Electricians.
100+	Machine Operators; Shopkeepers; Butchers; Welders; Sheet Metal Workers.
100-	Warehousemen; Carpenters; Cooks and Bakers; Small Farmers; Truck and Van Drivers.
90	Laborers; Gardeners; Upholsterers; Farmhands; Miners; Factory Packers and Sorters.


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## Tysonboss1 (25 September 2009)

Chris45 said:


> What's your IQ? I'd be surprised if it was less than 90.




I question the accuracy of IQ tests in general but I did one about 5 years ago and I think I scored 124.


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## Fishbulb (25 September 2009)

Tysonboss1 said:


> do you mean all the people who were saying that the poor weren't wealthy because they didn't have the intelligence or special gifts like the rich had.





I haven't read through the entire thread so I'll pass

I guess what I meant by that, was that some folks look down their nose at the poor for their lack of fiduciary power, whether it's from the reasons you mentioned or otherwise.


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## Tysonboss1 (25 September 2009)

Fishbulb said:


> I guess what I meant by that, was that some folks look down their nose at the poor for their lack of fiduciary power, whether it's from the reasons you mentioned or otherwise.




Yeah it happens and It's wrong.

This happens in all walks of life, their will always be an element that will look down down their noses at people for all sorts of reasons, whether it be they think they are Richer, More educated, have better fashion sense, have a faster car, are a better footballer, listen to better music, have parents that let them stay out longer, they weighless than you, they weigh more than you, they can run faster than you, they feel you shouldn't be hitting your kids, they feel you should be hitting your kids,

It is not something that is limited to "rich vs Poor",


----------



## awg (25 September 2009)

Tysonboss1 said:


> I question the accuracy of IQ tests in general but I did one about 5 years ago and I think I scored 124.




I was thinking about this matter while reading this thread and got curious, 

followed on from a thread that Trembling Hand had about what it takes to make a trader.

So I wonder what the IQ of participants on ASF/this thread, might be, and whether higher intelligence does correlate to higher wealth?

I have also had the privilege to know several self made entrepreneurs...these guys were much older than me and did not have Uni degrees or high education, so it was difficult to gauge from the way they talked etc, how intelligent they were, but they all had enormous reserves of something, I cant place my finger on it, but even though my IQ was probably higher, I would have swapped my mental capacity for theirs.

btw, the average IQ is actually 100

When I was in school, I covertly perused my file in both primary and high school,( while I was waiting to get disciplined in the principals room) and they had my IQ as respectively 130+ and 140, later when I did the adult Uni entrance exam, my mark was in the top 2%..although I should say plenty of people would probably reckon they were all mistakes
I have had a person tell me that could definitely not be right 

I do think that in my case, this has helped me accumulate wealth, but the concepts and maths of investing or trading are elementary.

anyone want to own up to being below average intelligence, and accumulated wealth?..dont worry...you are anonymous 

If no one does, that means we are all above average


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## Mr J (25 September 2009)

I'd swap 30 IQ points for some concentration points.


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## trainspotter (25 September 2009)

awg said:


> I was thinking about this matter while reading this thread and got curious, So I wonder what the IQ of participants on ASF/this thread, might be, and whether higher intelligence does correlate to higher wealth?
> 
> btw, the average IQ is actually 100
> 
> ...




That would be me. I am a dullard and obtuse in the extreme measure.


----------



## Chris45 (25 September 2009)

Tysonboss1 said:


> I question the accuracy of IQ tests in general but I did one about 5 years ago and I think I scored 124.



Tyson, I agree with most of what you have said, except your assertion that *99%* of people could achieve an investment income of $50,000 pa by age 50, even with compounding. No way!

About 25% of our population have IQs of more than 110.
About 50% of our population have IQs of between 90 and 110.
About 25% of our population have IQs of less than 90.

If your IQ is 124 (+/- a few points) then you are in the top 25% and probably even in the top 10% and I think you're a good example of what an intelligent person can achieve if he uses his gifts wisely.

However, I think there would be only a few people in the bottom 75% who could achieve that simply because they just don't have the intellectual capacity to make the necessary correct investment decisions. $50k pa is a very handsome investment income!

I agree with Mr J that "Only a *minority* can aspire towards earning a passive income of ~$50k."

Einstein's IQ was apparently 160. I wish I was that smart!


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## Chris45 (25 September 2009)

awg said:


> I do think that in my case, this has helped me accumulate wealth, but the concepts and maths of investing or trading are elementary.



Elementary for a person with an IQ of 130+, certainly!


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## Mr J (25 September 2009)

Remember that IQ can be misleading. It really just measures who is better at that specific test. Change the questions and time and the results could be quite different.


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## greggy (25 September 2009)

Mr J said:


> Remember that IQ can be misleading. It really just measures who is better at that specific test. Change the questions and time and the results could be quite different.



True indeed. different tests can provide different results. When I joined my organisation over a decade ago I had to be in the top 1% to get in in terms of aptitude. Lucky I fluked it. My best friend, a Menza member didn't even get close to my score.


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## wayneL (25 September 2009)

greggy said:


> True indeed. different tests can provide different results. When I joined my organisation over a decade ago I had to be in the top 1% to get in in terms of aptitude. Lucky I fluked it. My best friend, a Menza member didn't even get close to my score.




I've scored everything from 95 to 140 in IQ tests. Neither are anywhere close to how smart I "think" I am (but would believe 95 more than 140 )


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## Julia (25 September 2009)

Chris45 said:


> Being very intelligent doesn't necessarily mean you're going to be wealthy. I don't think Einstein was a billionaire. Inability to spell words correctly doesn't necessarily indicate low general intelligence. But, highly intelligent people do tend to be wealthier than those with low intelligences.
> 
> What's your IQ? I'd be surprised if it was less than 90.



(This was referring to Tyson.)



> Apparently, the IQ gives a good indication of the occupational group that a person will end up in, though not of course the specific occupation. In their book, "Know Your Child’s IQ", Glen Wilson and Diana Grylls outline occupations typical of various IQ levels:
> 140	Top Civil Servants; Professors and Research Scientists.
> 130	Physicians and Surgeons; Lawyers; Engineers (Civil and Mechanical)
> 120	School Teachers; Pharmacists; Accountants; Nurses; Stenographers; Managers.
> ...



That's a pretty insulting suggestion to make to Tyson, Chris45!
Given that 100 is considered the average IQ, to suggest you would be surprised if Tyson's was less than 90 is at the very least patronising.
So you are lumping him in with the bottom order of workers in the table you quote.

I'd suggest his posts and general obvious common sense put him at decidedly above average IQ, something he has later attested to himself.

Someone whose opinion I respect once said that IQ tests are a measurement of nothing more than one's ability to do IQ tests.  I think that's often right.

I once bought a book of IQ tests.  I was a helluva lot smarter at the end than when I did the first one.


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## Chris45 (26 September 2009)

Julia said:


> That's a pretty insulting suggestion to make to Tyson, Chris45!
> Given that 100 is considered the average IQ, to suggest you would be surprised if Tyson's was less than 90 is at the very least patronising.
> So you are lumping him in with the bottom order of workers in the table you quote.




Julia, that is a ridiculous suggestion! 



> Someone whose opinion I respect once said that IQ tests are a measurement of nothing more than one's ability to do IQ tests.  I think that's often right.




I've heard that cynical comment before and I think the majority of psychologists would disagree with it if the tests are properly administered.



> I once bought a book of IQ tests.  I was a helluva lot smarter at the end than when I did the first one.




Obviously practice will improve your score on a particular type of test which is probably why psychologists these days use a variety of tests and keep them confidential.


----------



## Mr J (26 September 2009)

Julia said:


> That's a very broad statement.  Are you sure you're being fair, and not being rather patronising?




I agree that it was too strong (for some reason I've had a harsh mindset lately). Perhaps not a lack of discipline, but an inconsistency in how it is applied. I'm certainly no exception!



Tysonboss1 said:


> Earn more, you are not born with a limit to your earning potential.
> 
> The amount you earn is a direct result of your education, effort, efficiancy, willingness to learn etc.etc
> 
> If someone is not earning enough they can choose to change that.




I don't think you appreciate the circumstances with which many live. It's not as simple as 'work harder' or 'get an education'. I would identify your words to come from someone who has never experienced poverty. Have you? If not, why do you think you can make an informed argument regarding why they are poor?


----------



## Julia (26 September 2009)

Chris45 said:


> What's your IQ? I'd be surprised if it was less than 90.






> Apparently, the IQ gives a good indication of the occupational group that a person will end up in, though not of course the specific occupation. In their book, "Know Your Child’s IQ", Glen Wilson and Diana Grylls outline occupations typical of various IQ levels:
> 
> 90	Laborers; Gardeners; Upholsterers; Farmhands; Miners; Factory Packers and Sorters.






Chris45 said:


> Julia, that is a ridiculous suggestion!




I agree entirely.  It was, however, you who made the ridiculous suggestion as shown above.


----------



## Gordon Gekko (26 September 2009)

Didn't no were to post this but it so funny!!!!

Enjoy.

Best
G


http://globaleconomicanalysis.blogspot.com/2009/09/elephant-in-room.html?ref=patrick.net


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## Tysonboss1 (26 September 2009)

Mr J said:


> I would identify your words to come from someone who has never experienced poverty. Have you?




No I have never experianced "poverty". I don't think many Australians have.

Are you saying that there are people in Australia who's fulltime occupation does not provide the basics of life.

Can you give me an example of an occupation like this. ( and I don't mean illeagal sweat shops ). I mean someone working fulltime earning an award wage.

And also if you can provide an example of how the person working this occupation could not have changed their situation by making better choices earlier in life.


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## awg (26 September 2009)

Mr J said:


> Remember that IQ can be misleading. It really just measures who is better at that specific test. Change the questions and time and the results could be quite different.




A contentious point. I agree that results can be misleading, in several ways.
If you are not educated, or never done such things before, certainly.
Much debate about ethnicity as well, as negroid people consistently show lower average IQ.

An example is the Selective High School tests, which are IQ tests.

There are 2 Primary schools nearby that coach the kids in these tests and they consistently get a higher entrance rate than all the other schools.

I sent my third son for a few lessons with a private coach, cause I wanted to make sure he got in like his 2 older brothers ( they never got coached, and made it off the reserve list)..he got the highest mark, straight in.
(he would have been ragged as a dumbass otherwise)

Another thing I feel, is that even though I have a tested high IQ, something is missing, that others have, not sure what, but IQ alone is definitely not enough, makes me a bit lazy. 

Determination and hard work overule IQ in my observation 




awg said:


> the concepts and maths of investing or trading are elementary.






Chris45 said:


> Elementary for a person with an IQ of 130+, certainly!




Seriously what heavy maths do you need for trading or investing?

addition, subtraction, divide, multiply, percentages, probability, a bit of statistics

no trigonometry or calculus.

Computer skills seem to becoming ever more important,(for investing) I dont know if good IQ is correlated to good computer skills, but I suspect it is.


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## greggy (26 September 2009)

There's many factors that may help to explain why some people are poor.
I can think of some:

1. Lack of opportunity
2. Lack of education 
3. Disability (mental or physical)
4. Family history (e.g. upbringing)
5. Welfare mentality
6. Refugees
7. Bad investments
8. Lack of housing
9. Lack of general skills

Besides being employed full-time, a part-time share trader and a hands on father of one, I also do voluntary work within the community in order to help out the less fortunate.

Those who might want to find out why some people are poor might want to consider doing a bit of voluntary work in order to meet such people. It is eye opening.

I live by the motto: I only look down on people in order to give them a hand up.


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## Mr J (26 September 2009)

awg said:


> Seriously what heavy maths do you need for trading or investing?




None, but I have to assume that the advertised trading jobs don't do the same sort of work as I do. I think what is important is to think of the world in terms of numbers (specifically, to see everything in reward, risk and probability), so maybe that's why they prefer mathematically-minded people.



> Determination and hard work overule IQ in my observation




I imagine people with high IQs tend to be drawn to doing something, and they usually do it very well.



> Computer skills seem to becoming ever more important,(for investing)




We only need basic computer skills for trading/investing.


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## xherd (26 September 2009)

There must be poor people in order for there to be rich people. I want to be wealthier than I currently am. In order for that to occur a lot of other people are, by necessity, going to be poorer.

If you examine any society at any level at any time past to present through a financial lens, you'll see it's pyramidal in shape, the poor supporting wealthier individuals or groups.

Individuals react differently to the political economy they find themselves in. Their lives reflect the mindset and values they live by. There's nothing inherently bad/evil about this and there's no right or wrong way to live financially.

This doesn't mean being callous or indifferent to the suffering of others but being realistic enough to know you can't change the world or the people you share it with.

So when I say I want to be wealthier I really mean I want you, the reader, to fund that wealth and be poorer.

Sorry no offense meant, that's just life.


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## Tysonboss1 (26 September 2009)

You don't need to be fantastic at math to invest.

If a person made a choice that from the moment they started working at 18 they set aside a portion of their pay each week. and over their working life they split this amount into a managed fund, extra super payments and buying a home. By the time they were 55 they would have a decent super balance, a decent managed fund and own their own home.

If they did this right up till 55 they would find them selves living in their home rent free cause they own it with a monthly payment from their super probally larger than their old wage, and a decent chunk in their managed fund that they can use for extras like holidays.


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## Wysiwyg (26 September 2009)

xherd said:


> If you examine any society at any level at any time past to present through a financial lens, you'll see it's pyramidal in shape, the poor supporting wealthier individuals or groups.
> 
> So when I say I want to be wealthier I really mean I want you, the reader, to fund that wealth and be poorer.
> 
> Sorry no offense meant, that's just life.




Pyramid type companies work in a way where everyone supports each other. The process is to keep people joining so the ones who enrolled before benefit. Obviously the last to join has the lowest income until they in turn have someone join under them. The last to join is obliged to encourage others join after them, or have no income. The people you enlist are your best friends because they are the ones who enroll your next source of income.

So in this practice everyone is a winner.


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## Tysonboss1 (26 September 2009)

xherd said:


> There must be poor people in order for there to be rich people. I want to be wealthier than I currently am. In order for that to occur a lot of other people are, by necessity, going to be poorer.
> 
> If you examine any society at any level at any time past to present through a financial lens, you'll see it's pyramidal in shape, the poor supporting wealthier individuals or groups.




when I think of the pyramid you describe I see young people entering the workforce at the bottom of the pyramid, and as time goes by and they invest, buy a home and contribute to super they would be moving up the pyramid. 

As people at the top of the pyramid age and retire, they would slowly sell off assets to fund life style which assists the people at the bottom continue to move up.

Offcourse if a person fails to invest, the only thing which will move them up the pyramid is their super contributions, So the process would be very slow.


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## Chris45 (26 September 2009)

awg said:


> Seriously what heavy maths do you need for trading or investing? addition, subtraction, divide, multiply, percentages, probability, a bit of statistics no trigonometry or calculus.






> the concepts and maths of investing or trading are elementary.




Awg, I think that was a rather broad statement and I may have interpreted it differently from how you intended.

I agree that the maths of basic investing is fairly simple and the Compound Interest formula is probably about as complicated as it gets for most people. The basic concepts of investing, eg Dollar Cost Averaging, etc into an index fund or industry leader share are also simple and I agree with Tyson that if everyone had the discipline to do it from an early age then they should be able to accumulate a reasonable amount of wealth over time which is what compulsory superannuation is all about. However, I think generating extraordinary wealth in a short time, such as Tyson did and I understand you have done, is much more difficult. Many people have tried to emulate Warren Buffet’s investment success but few have succeeded - why is that?

With the exception of options (Black & Scholes formula etc) the maths of trading may also be simple. Sure, the individual components of addition, subtraction, division, multiplication, percentages, probability and a bit of statistics are all fairly elementary but I think the difficulty is in putting them all together to create a winning system. The basic concepts of trading, “buy low sell high”, “cut your losses but let your profits run” sound so easy, so why do 95% of traders end up losing wealth rather than accumulating it? Surely intellectual ability has to be a factor. Could you train a monkey to be a successful trader?

I’m very impressed with Tyson’s achievement and wish he would expand on his post #141 and give more details of how he did it.


----------



## awg (26 September 2009)

Chris45 said:


> However, I think generating extraordinary wealth in a short time, such as Tyson did and I understand you have done, is much more difficult. Many people have tried to emulate Warren Buffet’s investment success but few have succeeded - why is that?




I want to make it clear that by no means do I claim to be a gun trader, far from it.

As per my first post in the thread, I subscribe to a variety of wealth accumulation strategies, in my case each one of them played a a part.

I was only able to reach a stage where my passive income exceeded my expenditure when I received an inheritance,(alluded to in my post) although I had built up an asset base equal to that, over many years.

My opinion is that there will always be a percentage of rich and poor, with the bulk in between, that is the human condition.

I nearly puke when I read stuff that says everyone can succeed..by definition this is impossible, as someone must come second, third, last etc, in order there be a winner. "Loser" psychology is of interest to me, as it is just as important to avoid mistakes, as it is to make the right moves.

Mistakes are inevitable, the more things you do, the more you make, although hopefully the percentage of errors falls. 

This thread has morphed a bit from " Why are people poor" to "how not to be".

I wonder if the actions and results are the opposite?
(I think they are)


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## Julia (26 September 2009)

Sometimes I consider that the capacity to be a good investor/trader/wealth accumulator is at least partly a genetic trait, similar to whether we have skills in sport, art etc.

The basic principles are very simple, yet I know many otherwise highly intelligent people, well qualified in their own fields, who simply don't have any affinity with the world of money and investments.  Try to discuss it with them and you just see their eyes glaze over.

Early conditioning must make a difference.  I grew up with my father talking stock markets and property investment.


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## MrBurns (26 September 2009)

Julia said:


> Sometimes I consider that the capacity to be a good investor/trader/wealth accumulator is at least partly a genetic trait, similar to whether we have skills in sport, art etc.
> 
> The basic principles are very simple, yet I know many otherwise highly intelligent people, well qualified in their own fields, who simply don't have any affinity with the world of money and investments.  Try to discuss it with them and you just see their eyes glaze over.
> 
> Early conditioning must make a difference.  I grew up with my father talking stock markets and property investment.




To make real money in any market you have to put it all on the line at some stage and hope luck is with you.

I sold to investor/developers who rubbed lucky beads before signing contracts. 

Bizzare.

Most of the people I dealt with wren't nessessarily intelligent just risk takers who had the market on their side at the time.


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## awg (27 September 2009)

Julia said:


> Sometimes I consider that the capacity to be a good investor/trader/wealth accumulator is at least partly a genetic trait, similar to whether we have skills in sport, art etc.
> 
> The basic principles are very simple, yet I know many otherwise highly intelligent people, well qualified in their own fields, who simply don't have any affinity with the world of money and investments.  Try to discuss it with them and you just see their eyes glaze over.
> 
> Early conditioning must make a difference.  I grew up with my father talking stock markets and property investment.




I agree, know many intelligent people, that follow almost NONE of the principles I use.

My father was a share and property investor

TH's thread was interesting, he has an interest in high performance, and the 10,000 hour principle (that being the average time to master skills).
I agree with that as well 



MrBurns said:


> To make real money in any market you have to put it all on the line at some stage and hope luck is with you.
> 
> Most of the people I dealt with wren't nessessarily intelligent just risk takers who had the market on their side at the time.




I got my biggest profit by risking all and leveraging as much as I could, on a private property syndicate development in Sydney, early this century.
If the market hadnt been on a long rise, I could have gone broke.

The wealthy entrepreuers I knew had all been bankrupt at least once


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## Chris45 (27 September 2009)

Tysonboss1 said:


> You don't need to be fantastic at math to invest.
> 
> If a person made a choice that from the moment they started working at 18 they set aside a portion of their pay each week. and over their working life they split this amount into a managed fund, extra super payments and buying a home. By the time they were 55 they would have a decent super balance, a decent managed fund and own their own home.
> 
> If they did this right up till 55 they would find them selves living in their home rent free cause they own it with a monthly payment from their super probably larger than their old wage, and a decent chunk in their managed fund that they can use for extras like holidays.



Absolutely agree and I did a little calculation to see what a young person could reasonably expect to accumulate over just a 10 year period along those lines if he lived frugally and dollar cost averaged into an index fund while purchasing a 1-bedroom unit.

I don't know how realistic I'm being in today's world but my assumptions were:
Single male of average IQ in a public service job earning initially $35,000pa and increasing to $62,000 after 10yrs (net income $31,275 -> $48,690)
Frugal living costs (nutritious low GST diet, 2nd-hand reliable small car, minimum entertainment expenses) = $10,000pa
Mortgage repayments on $250,000 1-bedroom unit = $17,500pa
Savings = $3,800pa increasing annually by $1,900 to $21,000pa in yr 10 and dollar cost averaged into a low fee index fund compounding @ 12%pa.

I calculate that he should have about $186,000 saved after 10 yrs. Not a bad start for a 28yo and easily achieved with a bit of discipline, but I bet very few average 28yos have anywhere near that much saved.


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## So_Cynical (27 September 2009)

Chris45 said:


> I did a little calculation to see what a young person could reasonably expect to accumulate over just a 10 year period
> 
> I don't know how realistic I'm being in today's world but
> 
> I calculate that he should have about $186,000 saved after 10 yrs




Now for a little reality, $150 on booze, women, taxis, social drugs every Friday night x 52 weeks 
over 10 years = $78,000 leaving this conservative, average young person with $108,000  still 
not to bad, and he/she has had a little fun.


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## Chris45 (27 September 2009)

So_Cynical said:


> Now for a little reality, $150 on booze, women, taxis, social drugs every Friday night x 52 weeks over 10 years = $78,000 leaving this conservative, average young person with $108,000  still not to bad, and he/she has had a little fun.



$150 x 52 = $7,800. Bang goes the mortgage and/or investment plan! And I think you've just explained why some people are poor.

For better and healthier entertainment, join a sports club or surf club. (Too unrealistic?)

I could also add that, for some *real* fun, my frugal young person could use the money he saved from his after school job to finance a 2-3yr working holiday in England & Europe immediately after finishing high school.

If, from age 30, he had a partner who also worked and the money was used to supplement living expenses, he could easily continue to invest $1,750/mth into the index fund, and by age 50, he would have $3.76 million *plus* his 1-bedroom unit. He and his partner could then both retire early and live very comfortably for ever after.


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## white_crane (27 September 2009)

What about kids, inflation and recession?

He could do all those things to save...and wind up a highly strung, boring old fart with no life experience too


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## Wysiwyg (27 September 2009)

white_crane said:


> What about kids, inflation and recession?
> 
> He could do all those things to save...and wind up a highly strung, boring old fart with no life experience too




But most importantly ... he will die financially wealthy.


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## Tysonboss1 (28 September 2009)

So_Cynical said:


> Now for a little reality, $150 on booze, women, taxis, social drugs every Friday night x 52 weeks
> over 10 years = $78,000 leaving this conservative, average young person with $108,000  still
> not to bad, and he/she has had a little fun.




Just remember Pay your self first, The booze and fast women are ok (in moderation) if they are funded from whats left after you have allocated your planned amount into investments.


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## Chris45 (28 September 2009)

white_crane said:


> What about kids, inflation and recession?
> 
> He could do all those things to save...and wind up a highly strung, boring old fart with no life experience too






Wysiwyg said:


> But most importantly ... he will die financially wealthy.



Yeah you're right. Much better to live for the moment and spend everything you earn on booze, sex and drugs and die young in the gutter.


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## Tysonboss1 (28 September 2009)

Chris45 said:


> I’m very impressed with Tyson’s achievement and wish he would expand on his post #141 and give more details of how he did it.




As I said I started from a very young age, I got a paper run when I was around 12 or 14, and when I earned my first pay $14 My father asked what I was going to do, I told him i was going to buy fish and chips, gobstoppers and coke. My father then said "If you do that your money will be gone, and all that work was for nothing. If you save it you could earn interest for the rest of your life" that stuck with me and I never spent a single cent I earned from any of my high school jobs.

As a teenager I hated working, I especially hated my paper round. But I had the idea stuck in my head that if I kept working and saving eventually I would be earning more money from interest than I was from delivering the papers, so I kept going. As I have gotten older I have just kept developing this simple idea. I will write a brief description of what I have done in another post.


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## Tysonboss1 (28 September 2009)

Chris45 said:


> I’m very impressed with Tyson’s achievement and wish he would expand on his post #141 and give more details of how he did it.




*High school years* - 

Worked a paper round and picked fruit eventually earning about $50 a week. At first I saved the money in term deposits, But my mum worked for the CBA and when they did a public offering my mum explained what shares were, I was excited to find out I could become part owner of the bank so invested all my savings ($2000) into CBA shares.

I was then bitten by the investment bug, I would read the financial review every day because mum would bring her free copy home from work.

By the time I left High school at 17 I was a disciplined investor, and had built a portfolio a bit over $12,000.

*First full time job* -

After high school I got job at a service station, earned a bit more and was able to contribute a large amount each week into my share portfolio.

*The Army* -

When I joined the Army at age 19, Things really kicked into gear for me. Not only did I really enjoy the job, But I suddenly found myself earning a bit over $40,000. But I was living on base where I only had to pay $150 / fortnight which include accommodation and three meals a day. So I was able to contribute more than $500 each fortnight to investments.

At this stage as well as buying shares I bought my first investment property ( with dumb luck it was before the property boom). 

The stars lined up even further in my favor when My Army unit became classed as a special operations unit, which gave me a $12,000 pa pay rise, combined with pay rises for higher qualifications as I became more experienced and also extra pay when going away for training it boosted my income to over $70,000 pa.

Though I was earning all this extra money, I never increased my spending. I  diverted all the extra pay to my shares and buying more properties. I never bought property near my army base though, this allowed me to rent near work and collect rental assistance from the army at the same time I owned investment properties.

*First Business* -

I left the Army after five years and bought my first business, and thankfully the business has done really well since I have taken over and it generates alot of excess cash that I use to reduce debt and make further investments,

I have also managed to keep my expenses low by living in a one bedroom flat attached to my business and for the last year have been pumping as much cash as I can into the share market investing in undervalued companies paying good dividends.

So at the moment I have a property portfolio that is positively geared so it generates a cash flow, A share portfolio which pays a decent dividend yield and generating good capital growth recovering from the GFC. and my business is also generating good excess cash ( however I don't include my business earnings in the passive income I stated because it requires me to be there so I count it as earned income)

And thats my life in a nut shell.


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## RamonR (28 September 2009)

Great example Tysonboss.

I am happy with my current situation but would have been much happier getting there at 27


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## MrBurns (28 September 2009)

RamonR said:


> Great example Tysonboss.
> 
> I am happy with my current situation but would have been much happier getting there at 27




I'd be happy just to be 27........gee it goes fast.


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## awg (28 September 2009)

So_Cynical said:


> Now for a little reality, $150 on booze, women, taxis, social drugs every Friday night x 52 weeks
> over 10 years = $78,000 leaving this conservative, average young person with $108,000  still
> not to bad, and he/she has had a little fun.




seek girlfriends who are great in bed & dont like boozing, grow yr own weed:


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## Chris45 (28 September 2009)

Tysonboss1 said:


> And that's my life in a nut shell.



That's a fantastic story!!! Thanks for telling it. Full credit to you. 
Maybe a few here with brains will have learnt something.



awg said:


> seek girlfriends who are great in bed & don't like boozing, grow yr own weed:



Excellent advice! How to have your cake AND eat it.


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## Julia (28 September 2009)

Tyson, as has always been so evident in your posts, you've spoken from genuine experience.

How I wish more people had your determination and attitude.  You've done a great job.  

Hope you don't neglect to take some pleasure from your efforts as well.

Imo you got the best possible start with good parental advice.


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## Tysonboss1 (28 September 2009)

Julia said:


> Hope you don't neglect to take some pleasure from your efforts as well.




I am starting to go a bit easier on my self now, At the beginning of next year I will be moving out of my one bedroom flat into a House away fom the business, which should make for a better home life.

I'll also be putting on an extra staff member to cover some of my work load, to make my work day a bit less stress ful, and allow me to work "on" my business rather than "in" it.

While I don't intend on becoming a hyper consumer, I am going to be putting less of my personal exertion income into my investments, which will free up some cashflow for some of the finer things I have deprived my self off such as holidays, my own home and possibly a wedding  

I will still be investing however the bulk of the growth now will be going from reinvested earnings rather than from my personal sacrifices and savings,

And some time between now and when I turn 30, I hope to sell the business and have a year or two off to focus managing my investments and maybe some part time work or a hobby I think I will take up bee keeping.  :alcohol:


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## burglar (24 December 2010)

Wise old Polish saying:
"Jesteśmy biedni bo jesteśmy głupi!
Jesteśmy głupi bo jesteśmy biedni!!"

Translates roughly to:

We are poor because we are stupid!
We are stupid because we are poor!!


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## kgee (24 December 2010)

what you ever have is all you know
and what you don't you'll never know
Buddha B##sh#t


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## tigerboi (24 December 2010)

yeah well done...but how many good sorts have you thrown your legover???while sitting around every friday night counting your cash?



Tysonboss1 said:


> *High school years* -
> 
> Worked a paper round and picked fruit eventually earning about $50 a week. At first I saved the money in term deposits, But my mum worked for the CBA and when they did a public offering my mum explained what shares were, I was excited to find out I could become part owner of the bank so invested all my savings ($2000) into CBA shares.
> 
> ...


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## KurwaJegoMac (24 December 2010)

tigerboi said:


> yeah well done...but how many good sorts have you thrown your legover???while sitting around every friday night counting your cash?




So I take it you've never purchased any clothes, produce, gadgets or gizmos that havr been imported from overseas where exploited workers get paid a handful of dollars a day and live in extreme poverty? It's a bit hypocrytical don't you think?

Also he's worked in the military, protecting our wonderful country, provided homes for people to rent, and run a business which has provided staff with a job. Of course he's also paid taxes to our government for the good of thr country and will not be reliant on welfare payments upon retirement.

So I fail to see how he's giving anyone a 'legover', except for the bit about claiming rental assistance while having an investment property - but he's returned that in spades.


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## Junior (24 December 2010)

KurwaJegoMac said:


> So I take it you've never purchased any clothes, produce, gadgets or gizmos that havr been imported from overseas where exploited workers get paid a handful of dollars a day and live in extreme poverty? It's a bit hypocrytical don't you think?
> 
> Also he's worked in the military, *protecting our wonderful country, provided homes for people to rent, and run a business which has provided staff with a job. Of course he's also paid taxes to our government for the good of thr country *and will not be reliant on welfare payments upon retirement.
> 
> So I fail to see how he's giving anyone a 'legover', except for the bit about claiming rental assistance while having an investment property - but he's returned that in spades.




I applaud tysonboss for his disciplined spending and hard work, but the above is a bit much.  It's hardly charity work, he's received substantial financial compensensation for his efforts.  And I hope he's done anything he can to minimise his tax bill, I know what those defence force accountants are capable of!


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## KurwaJegoMac (24 December 2010)

Junior said:


> I applaud tysonboss for his disciplined spending and hard work, but the above is a bit much.  It's hardly charity work, he's received substantial financial compensensation for his efforts.  And I hope he's done anything he can to minimise his tax bill, I know what those defence force accountants are capable of!




Everyone minimises their tax bill. That's hardly cause to accuse someone of giving a 'legover'. Better that you pay minimal tax than be a dole-bludging loser on welfare.

Also you're right about the compensation, he did receive compensation for his efforts just as we all do. However he could have been compensated for his efforts in other fields, yet he chose to serve in the military.

So by your reasoning, we shouldn't be praising firefighters who risk their lives to run into your house when it's burning down and save your nanna? After all, they get compensated too (Metropolitan brigades only). Whether you get compensated or not is irrelevant. You're still doing a good service. Of course had he been doing it as charity that would have been even better but I don't know too many people that would willingly get shot at for free :


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## gav (24 December 2010)

KurwaJegoMac said:


> Everyone minimises their tax bill. That's hardly cause to accuse someone of giving a 'legover'.




I read the "leg over" comment as meaning something entirely different...


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## againsthegrain (24 December 2010)

> Wise old Polish saying:
> "Jesteśmy biedni bo jesteśmy głupi!
> Jesteśmy głupi bo jesteśmy biedni!!"
> 
> ...




Seems that its as wise as the people who say it, and no I don't mean the Polish people


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## burglar (24 December 2010)

againsthegrain said:


> Seems that its as wise as the people who say it, and no I don't mean the Polish people




Seems to me that the people who say it, can see that it is a loop and need to find a way out.

A lottery ticket might be one way out! 

IMO, education would be a surefire way!!


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## KurwaJegoMac (24 December 2010)

gav said:


> I read the "leg over" comment as meaning something entirely different...




Could very well be, my interpretation is that he's accusing him of screwing over 'the good guy' for the sake of earning $.

If i missinterpreted then I apologise :S


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## BradK (24 December 2010)

KurwaJegoMac said:


> Could very well be, my interpretation is that he's accusing him of screwing over 'the good guy' for the sake of earning $.
> 
> If i missinterpreted then I apologise :S




'Legover' means sexual relations :

Does that clear things up? 

Brad


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## tothemax6 (24 December 2010)

To contribute my  (mostly to the macroeconomics of poverty).
The current model I have for 'why are people poor' is structured as follows:

High time preferences
Government interference
Genetics
(in that order).
1) High time preferences (the desire for present consumption over increased future consumption) is the biggie. If Somalia, for instance, was repopulated overnight with very-low-time-preference individuals (like Tysonboss), the resulting change in economic growth would be enormous. 
People with low time preferences invest - they set up farms, they conduct research, they save up for education for their children, they work harder etc.
People with high time preferences spend away their money as soon as they get it - on drugs, booze, prostitutes. They engage in high-risk ventures with high returns (drug dealing and trafficking, theft, robbery, hijacking, kidnapping for ransom). They form gangs and conduct raids etc.
2) Government interference. That is to say "deviations from a free market". Despite the collapse of 'applied socialism', there is still no lack of support for the left, in spite of them not changing their tune one bit. When a government interferes with private trade, when it expropriates property by force and then re-appropriates it and calls this 'fair', when it disincentives earning and production with punishment for being rich, when it subsidizes laziness and high-time preferences and low earnings with welfare and benefits, when it takes control of the nations money and spends it and prints it and says 'this is for the common good', - it does what the left wants - "simultaneously claim progress whilst enforcing regression at the highest rate possible".
3) To claim that genetic spreads between populations have no effect on the nature of those populations, despite sustained empirical evidence to the contrary, may be very well be completely indefensible and disconnected from reality. It is however the prevailing 'allowed' opinion. But nevertheless, it does contribute to distributions in quality of life, albeit not any where near to the extent that the first two issues contribute.


Hence, according to my model, the cure to poverty is as follows:
The populace elects a government which restricts and focuses its role to "fighting crime, enforcing contracts, and defending the nation from external threats, ONLY and NOTHING ELSE".
This results in several things happening - criminals (who have the lowest time preferences of all) are steadily removed from society. Investment becomes safer, because increased law and order increases certainty in the safety of property rights and the strength of contracts, and hence investment rates increase. This results in increased farming, research and development increases (hence an increase in average tech level), saved funds allows for more medicine when it is needed, water extraction projects commence, roads start being built to profit from increasing trade etc etc etc.
Pipe dream.


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## explod (24 December 2010)

Just spotted this topic  and my answer has probably been covered but here goes:-

Rich and Poor are devided first by:

1.     wealth of parents and family

2.     education and through that the ability to make their own decisions

3.     or very hard work and a spirit to overcome all odds and rise to the top from
        Boganville.

4.     and some are lucky 

The poor are the labor resources of the rich and are kept there via vehicles such as religion and many forms of mass entertainment.

just my 

merry Christmas to you all,

And that is another great fairy tale to make the rich richer and the poor poorer


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## Julia (24 December 2010)

burglar said:


> Wise old Polish saying:
> "Jesteśmy biedni bo jesteśmy głupi!
> Jesteśmy głupi bo jesteśmy biedni!!"
> 
> ...



To say this is to ignore that the most intelligent people can be overcome by life events such as serious illness, precluding the capacity to work.
Another group which is frequently on the poverty line are the women fleeing domestic violence, or for that matter even retired people whose only asset if they separate is the low value family home, which when sold does not realise enough for either of them to buy another house.

I just think we need to take into account some of the social problems which have to do with people finding themselves in poverty.  One of the greatest of these is mental illness which sees so many homeless.


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## So_Cynical (25 December 2010)

tothemax6 said:


> To contribute my  (mostly to the macroeconomics of poverty).
> The current model I have for 'why are people poor' is structured as follows:
> 
> High time preferences
> ...




I've had some experience in Africa (not Somalia) with Africans and i can tell you that your "High time preferences" theory is not really applicable there...in general Africans don't save/work hard/plan for the future etc because.

There governments and institutions are unstable and unreliable thus the population in general doesn't trust them so wont invest, they don't work hard because in general there's no reward for that, no overtime rates etc...they don't plan for the future because they live a hand to mouth existence, they eat everything in the cupboard today because some one mite take it from them tomorrow.


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## Tyler Durden (25 December 2010)

I'm surprised no one has mentioned the book Rich Dad, Poor Dad by Robert Kiyosaki. Putting aside his marketing and used car salesman-like persuasiveness, I agree with him that the main reason why a lot of people aren't wealthy is because of the lack of financial education.

Someone made this point near the beginning of this thread - why do schools not teach kids about money? What good is algebra ten years down the track? Wouldn't teaching a subject on money be MUCH more useful given that it's relevant to EVERYTHING?

Kiyosaki argues that because of this lack of financial education, people get stuck in the rat race, working harder and harder to earn the next paycheck, oblivious to their wealth being de-valued by taxes, inflation and debt, which just traps them deeper into the rat race.

On the other hand, people who are financially educated understand the concept of passive income, and are thus in a much better position to get out of the rat race.

If you're going to read just one book next year (or find a present for someone), I'd recommend this book. I don't recommend his subsequent books because they are fairly repetitive of this one and they try too hard to sell you his products.

And no, I don't have an interest in anything related to him nor do I benefit from sales of his books/products.


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## Vicki (26 December 2010)

Hi Tyler,
I've read it...over 
ten years ago.

He had economic predictions for around 2007-08..
Appears he was pretty accurate.

Vicki


It was because of him that I invested wisely in real estate......Before I made the ultimate f!@@k-up...
PLANET WEALTH!!! yes you deserve it, you Gr##k C***t


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## doctorj (26 December 2010)

tothemax6 said:


> To contribute my  (mostly to the macroeconomics of poverty).
> The current model I have for 'why are people poor' is structured as follows:
> 
> High time preferences
> ...





Interesting theory.  I'm not sure there's a single answer and there's definately no silver bullet.  I spend most my year in the former soviet bloc and from what I've seen there the issues I've noticed are:

1. Lack of trust in government - From one government to the next, nobody really knows what will or won't change.  Also, as you said, people and companies suffer a lot from governments interfering with the normal order of commerce.  So no one, other than the government and the well connected few invest.  No investment, no international know-how and no stability means no jobs, no infrastructure and no hope of a better life

2. Lack of financial intermediation - people tend to barter, trade or store money under the mattress.  If they happen to know about banks, they certainly don't trust them (because in the past they keep failing or the money gets taken by the govt).  So no saving, no borrowing (so they keep working on the farm manually, rather than using machines or buying fertilizer etc) and no concept of long term planning.  For example, in Russia, when the financial crisis hit there it had a pretty heavy impact and a lot of people lost their jobs.  The Joeski Averageski didn't cut back on the finer things in life or put something aside for tougher times incase they also lost their job - in fact, sales of new cars, luxury goods etc actually sky rocketed.  The philosophy was that you might as well spend it while you have it, because tomorrow the government might take it off you or something...  Lack of financial intermediation also has other impacts - shallow or non-existant local capital markets, no pensions, no insurance (farm burns down, people starve or rely on family to bail them out...), low money velocity etc etc etc

3. Outlook in life - For generations, people have known only one way.  It's almost fatalistic, in the sense that when things are good, they know they will go very bad soon, because they always have.  Things are the way they are and will forever be so....


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## noirua (26 December 2010)

People are poor because they are locked into poverty by birth or in a job that they blindly go to or there is, or appears to be, no way out. This can often happen if a person lives in an outback town. This was me once though I took advice, not directly, but by over hearing others conversations and one I remember "don't hang around, just go", it was the look in the eyes of the stranger that had a kind of urgency being relayed to all who listened.
I listened many years later to a person I worked with. He just left his family and left a note at the Post Office and sent some money every month returning several years later. This seems a harsh thing to do, but I understood that this just had to be done; he had to go.


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## tothemax6 (29 December 2010)

So_Cynical said:


> I've had some experience in Africa (not Somalia) with Africans and i can tell you that your "High time preferences" theory is not really applicable there...in general Africans don't save/work hard/plan for the future etc because.
> 
> There governments and institutions are unstable and unreliable thus the population in general doesn't trust them so wont invest, they don't work hard because in general there's no reward for that, no overtime rates etc...they don't plan for the future because they live a hand to mouth existence, they eat everything in the cupboard today because some one mite take it from them tomorrow.



Well I addressed that in my solution, since the first two factors are strongly connected. 


doctorj said:


> [/LIST]
> Interesting theory.  I'm not sure there's a single answer and there's definately no silver bullet.  I spend most my year in the former soviet bloc and from what I've seen there the issues I've noticed are:
> 
> 1. Lack of trust in government - From one government to the next, nobody really knows what will or won't change.  Also, as you said, people and companies suffer a lot from governments interfering with the normal order of commerce.  So no one, other than the government and the well connected few invest.  No investment, no international know-how and no stability means no jobs, no infrastructure and no hope of a better life
> ...



Again, as I addressed in my solution, the first two factors I mentioned are strongly connected. Indeed, socialist systems are renowned for supporting high-time-preferences and punishing low-time-preferences. All low-time-preference individuals who lived in communist countries had only one goal - get out.


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## gav (31 December 2010)

Here's an article I read today made me think of this thread.  It claims that *property rights* are the reason the poor stay poor.

http://reason.com/archives/2010/12/09/why-do-the-poor-stay-poor


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## Vicki (31 December 2010)

GULLABILITY?

A lot of r/e wealth has been created in just the last 10-15 yrs. or so.

I think a lot of 'scamsters' have tried their best at getting people to part with it, with one scheme or another....Stock market & derivatives appear to be their 'snake-oil' of choice...A mixture of part truths & out right dangerous assumptions or hidden truths.

Planet wealth, Onedaywealth, 21st C.A., Henry Kaye & just a few days ago, Fermosa systems etc.


Buyer beware.

Vicki
p.s. What puzzles me is that these people who willingly mislead others [to their own peril], don't seem to realise we live on an Island, with a small population?


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## Good Vibes (1 January 2011)

Julia said:


> I just think we need to take into account some of the social problems which have to do with people finding themselves in poverty.  One of the greatest of these is mental illness which sees so many homeless.




Julia you show much compassion towards those who are economically powerless.  

We must also consider "The Working Poor" in seeking answers to why people are poor.


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## motorway (1 January 2011)

gav said:


> Here's an article I read today made me think of this thread.  It claims that *property rights* are the reason the poor stay poor.
> 
> http://reason.com/archives/2010/12/09/why-do-the-poor-stay-poor




The Birth of Plenty, an inquiry into the origins of modern prosperity

You might enjoy this book ..


http://www.efficientfrontier.com/ef/404/CH1.HTM

Motorway


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## Good Vibes (1 January 2011)

gav said:


> Here's an article I read today made me think of this thread.  It claims that *property rights* are the reason the poor stay poor.
> 
> http://reason.com/archives/2010/12/09/why-do-the-poor-stay-poor




But in western society so many problems center on inability to keep up with mortgage repayments. The poor Peruvians would be faced with same problems...eventually.


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## gooner (2 January 2011)

Hmmm, my $20 investment in the $20m Lotto draw failed to produce a result, yet again. Maybe these high risk/high return ventures are not for me.......

But the wife and me did get to talking about what we would do with a spare $5m or so were our numbers to come up. And apart from the usual giving to family/giving to charity, the question was whether we would move to the next (much wealthier) suburb. We love where we live and have great neighbours. But the next suburb is full of old sandstone 19th century mansions on the water and I love old houses.  The outcome was that we would probably stay where we are because if we moved, we would probably have some d'head CEO as a neighbour who would complain about our children playing, who would sue you rather than say hello and who would not be what I would call "a neighbour".

What has this to do with people being poor?  I think many people including myself realise that money is not a goal in itself and that once you get  a certain amount, any extra does not bring any extra happiness. Therefore, why bother working 12 hours a day where you never see your wife or kids?  For what? A bigger house and a Mercedes?  Neither give you a hug when you come in the door every night. And the reality is that most people who get rich, don't given their kids a hug every night, because they are "too busy making money for their children".  Obviously I am not talking about poverty but many people are quite comfortable with what they have - I know lots of people where I work that don't want promotions because they do not want the stress and extra hours that come with it .

At the end of the day, wealth is about your relationships and happiness first.  Money corrupts absolutely............


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## Julia (3 January 2011)

gooner said:


> .  The outcome was that we would probably stay where we are because if we moved, we would probably have some d'head CEO as a neighbour who would complain about our children playing, who would sue you rather than say hello and who would not be what I would call "a neighbour".



Quite a generalisation there, gooner.  If you've not actually lived amongst such people, what's your basis for assuming they'd be any less friendly than your current neighbours?



> What has this to do with people being poor?  I think many people including myself realise that money is not a goal in itself and that once you get  a certain amount, any extra does not bring any extra happiness.



Yes, agree absolutely.  For some people making more and more money becomes an obsession.  For others, it's the drive to keep achieving, with the money being a side issue.




> And the reality is that most people who get rich, don't given their kids a hug every night, because they are "too busy making money for their children".



Again, what's your basis for this assumption?   You could assume quite to the contrary, i.e. that people who are wealthy are able to pay others to do basic household maintenance etc, so that they in fact have more time to spend with their family.




> Obviously I am not talking about poverty but many people are quite comfortable with what they have - I know lots of people where I work that don't want promotions because they do not want the stress and extra hours that come with it .



Sure, and that's absolutely their right to make such a choice.

Just don't think an automatic assumption that wealthy people are uncaring about their families or don't make the time to show them affection is very logical.


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## gooner (3 January 2011)

Julia said:


> Quite a generalisation there, gooner.  If you've not actually lived amongst such people, what's your basis for assuming they'd be any less friendly than your current neighbours?
> 
> 
> Yes, agree absolutely.  For some people making more and more money becomes an obsession.  For others, it's the drive to keep achieving, with the money being a side issue.
> ...




Julia

We know a few people who live there who say that their neighbours are a complete pain which is enough evidence for me.

As to the long hours, I have seen it in many of the jobs that I have done - there is really a culture of work being priority and not worrying about the family.


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## J&M (3 January 2011)

No one needs to be poor they just don't have the balls or inclinations to do the hard
work 

I left the UK in 74 went to NZ with a pregnant wife and about 200 pounds in my pocket 
I did have a job to go to. I have always liked to travel but this was a big move 
I never knew how big a move was till I started work on wages. I would have been about 24. The company started cutting asbestos sheets with no masks ext 
This had just been banned in the UK. So I called the union and they called the health dept. I was nominated as shop steward and we want out on strike for a few days 
It came back to the health dept asking that masks & plastic clothing be supplied and that the sheets be cut off site. This was later in the award that we got paid extra for the wearing on the masks and clothing 

I was not making enough money so moved to Aust. I worked as a carpenter 
and eventually got work as a sub contractor. work was hard and the hours long 
Set my then wife up in a hairdressing salon which went well. So we leased a shop in a med size shopping centre. This I supported with my earnings as a subbie. The shop was not going so well and almost went broke. We entered into a deed of arrangement with our creditors. We cut back on staff and I did some promotion work. The shop did pick up after about 6 months we finally paid our bills and the shop was doing ok. Then my wife left me for a jeweller  at the centre we had just brought a house. She got the shop I got the house and paying maintenance   for our daughter 

I was single for about 4 years almost lost the house as the rates went up I could not find work. I had to refinance the house at a highest rate but they gave me the equity money in the house to make the payments. I did find work and was able to refinance the house again with a bank at a lower rate.  Work was very good and paying of the house 

I then met my second wife I was still working as subbie. On one job the Builders took me on as his Forman and offered me a partnership at no cost to me. The money was average 
So I got my own Builders Licence.  I was making very good money and my accountant put me into this scheme which he called the “round robin” cost to set up $12000 sent money to Hong Kong and the New Zealand and came back as superannuation   I paid very limited tax 
And built a house on an island in Moreton Bay with the tax money I did not pay 

Then my second wife left me. This I lost half of everything. Then the tax dept came looking for tax returns as this scheme was not approved by them. There were some big high profile people in the scheme including lawyers who were looking to take on the tax dept 
I could see this a no win for me my bill was 250k as well as the money I had lost in the round robin scheme after lots ot talking I agreed to pay the amount by monthly instalments  over a few years

My building work turned into Underpinning houses I saw an opportunity and took it 
Taught myself with help from Engineers. Brought houses that needed underpinning and the owners could not afford it. Also brought  a property “farmhouse” at Stanthorpe “wine country” which is rented out to tourists,  This is now paid off and doing ok 
The house are now underpinned and rented out.  I am now married again 

Last year I got into shares read the Eureka report and followed some of David H buys 
Some have gone down same are ok. I found this site by looking for a forum 

I guess a came up from the school of had knocks but never doubted that I would be ok money wise. Luck: you make your own luck and life is all about choices and weather you take them or not.  Just my 2C


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## againsthegrain (3 January 2011)

> had just brought a house




where did he bring it from?


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## IB12 (3 January 2011)

People are poor because they are born in Bangladesh and Nigeria. 
The majority of people in Bangladesh and Nigeria will always be poor.


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## IB12 (3 January 2011)

gooner said:


> Julia
> 
> As to the long hours, I have seen it in many of the jobs that I have done - there is really a culture of work being priority and not worrying about the family.




Who says family should be a priority? 
Not everyone gets married and has kids.


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## gooner (3 January 2011)

IB12 said:


> Who says family should be a priority?
> Not everyone gets married and has kids.




Fair comment for single people. But not if you have kids - if you can't be bothered, don't have them. "You need a licence to own a dog but any a'hole can have kids" (from a movie, I don't remember which one)


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## qe2infinity (5 January 2011)

karma.


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## Julia (5 January 2011)

qe2infinity said:


> karma.



 Perhaps you might like to explain what you mean.


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## So_Cynical (5 January 2011)

Julia said:


> Perhaps you might like to explain what you mean.




Karma...like your very successful and drive a flashy car etc in this life, because in your last life you were a one legged, dirt poor, subsistence rice farmer in the Dutch East Indies in your last life.


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## Julia (5 January 2011)

So_Cynical said:


> Karma...like your very successful and drive a flashy car etc in this life, because in your last life you were a one legged, dirt poor, subsistence rice farmer in the Dutch East Indies in your last life.




So Cynical:  I'm quite cognisant of the idea of karma.  I was hoping qe2 would explain how he/she saw the relevance in this thread.

My understanding of it is that we will eventually experience the consequences of our actions, i.e. if we've dealt with others unfairly during our present lives, then we will experience the results of this in another following life.

So just the fact that you were successful and drove a 'flashy car' in this life, doesn't mean you're destined to be poor in the next life.  If, however, you acquired the success and the 'flashy car' by cheating and doing wrongly by other people, then karma would suggest you would be penalised in the next life.

I don't necessarily subscribe to any of this stuff, but am interested in why qe2 would suggest some people are poor because of karma.  It seems a simplistic and even irrational explanation to say the least.

People can be poor despite their very best and most diligent, honest efforts, e.g. someone becoming too ill to work.


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## So_Cynical (5 January 2011)

Julia said:


> So Cynical:  I'm quite cognisant of the idea of karma.  I was hoping qe2 would explain how he/she saw the relevance in this thread.
> 
> My understanding of it is that we will eventually experience the consequences of our actions, i.e. if we've dealt with others unfairly during our present lives, then we will experience the results of this in another following life.
> 
> ...




Well there you go Julia...i always thought it (Karma) was more a yin and yang type thing, like unlucky in this life = lucky in the next, not just a good v bad type of thing.

Karma is something i have little time for.


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## akkopower (6 January 2011)

Julia said:


> So Cynical:  I'm quite cognisant of the idea of karma.  I was hoping qe2 would explain how he/she saw the relevance in this thread.
> 
> My understanding of it is that we will eventually experience the consequences of our actions, i.e. if we've dealt with others unfairly during our present lives, then we will experience the results of this in another following life.
> 
> ...




Julia, Julia, Julia...
What is wrong with you!
your reply here and to the bank vault thread seemed quite negative. Are you a nasty person, are you having a bad day or is your humour just going str8 over my head. 

To me the posts you quoted weren't meant to be taken seriously just an attempt to entertain the masses. You seemed to try to make the posters look like fools. Why are you doing this??


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## nioka (6 January 2011)

So_Cynical said:


> Well there you go Julia...i always thought it (Karma) was more a yin and yang type thing, like unlucky in this life = lucky in the next, not just a good v bad type of thing.
> 
> Karma is something i have little time for.




Karma, in my view, is not tied to luck but more to actions. Bad deeds, lying,cheating etc deserve to be caught up with actions or happenings that cause punishing "happenings" later on in this life. Just as "one good deed deserves another" so does "one bad deed deserves another bad bad happening".

For believers it may happen in the next life but for non believers there is still the Karma payback probability.

Just as in the investing field, you make your own luck in life to a great extent.

AND There is nothing wrong with being poor if you are happy. I've seen a lot of happy poor people.


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## sails (6 January 2011)

akkopower said:


> Julia, Julia, Julia...
> What is wrong with you!
> your reply here and to the bank vault thread seemed quite negative. Are you a nasty person, are you having a bad day or is your humour just going str8 over my head.
> 
> To me the posts you quoted weren't meant to be taken seriously just an attempt to entertain the masses. You seemed to try to make the posters look like fools. Why are you doing this??





My interpretation of Julia's post is that she has simply expressed her opinion based on qe2's one word post of "karma" with no further explanation and was not personally attacking anyone.   I didn't see anything at all "nasty" in her post.

Then you come along and take a nasty personal swipe at Julia.  Now, who is the nasty one?

I don't know for sure, but I am assuming that Julia started this thread due to her untiring work in helping those less fortunate and is genuinely interested in the responses to this thread. 

While she speaks her mind and calls a spade a spade, to assume she is a nasty person is absolutely unfounded IMO...


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## Mofra (6 January 2011)

sails said:


> While she speaks her mind and calls a spade a spade, to assume she is a nasty person is absolutely unfounded IMO...



Bingo - anyone who has read Julia's posts on this and other threads knows she is anything but nasty.


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## Julia (6 January 2011)

akkopower said:


> Julia, Julia, Julia...
> What is wrong with you!
> your reply here and to the bank vault thread seemed quite negative. Are you a nasty person, are you having a bad day or is your humour just going str8 over my head.
> 
> To me the posts you quoted weren't meant to be taken seriously just an attempt to entertain the masses. You seemed to try to make the posters look like fools. Why are you doing this??




And Happy New Year to you too, akkopower.

Am I a nasty person?  Well, if you want to think so, that's OK with me.

I have no interest in trying to make anyone look foolish.  But if someone posts something which doesn't make much sense to me, then if I'm interested in the topic,  I'll seek clarification.

As Sails has pointed out, I have many years of voluntary assistance to poor people and it's a subject I think about a lot.  So when someone just says "karma" in answer to the question posed in the thread, I probably find it a bit offensive, given I'm so familiar with much of the background tragedy that many people who are now poor have experienced.

To say it's karma (even if you believe in the concept) is to effectively say they have brought their poverty and misery on themselves.   Sometimes that's quite true.
But I've seen hundreds of cases where, despite someone's most earnest efforts, their life circumstances and background are simply more than they are able to overcome.

So, if what I thought was simply an enquiry about why the poster deduced poor people 'had it coming' is to you my being nasty, then so be it.  I can quite well live with your opinion.

And my thanks to Sails and Mofra.


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## Tysonboss1 (7 February 2011)

tigerboi said:


> yeah well done...but how many good sorts have you thrown your legover???while sitting around every friday night counting your cash?




I always had an active social life that allowed for many such opportunities, But thanks for your concern any way. 

One big fallacy that I have seen in my life is that, Spending less than you earn = Enjoying life less. This is simply untrue.

I mean the best things in life are free, (or at least very cheap).

 You can have a great night with friends drinking in moderation on $3 beers, waking the next morning and crusing out to the beach for some spear fishing or scuba diving, then head back to a mates for a BBQ and a beer, then waking sunday morning and taking your dog for a run, etc.etc the whole week end can cost less than $100. and you'll have a great time.

But some people think they will enjoy life better if they spend big on flashy clothes go to a night club and drink 20 $8 vodka and red bulls shout some random girls $12 drinks catch a $50 cab home at 5 in the morning (without the girls) sleep all day with a hang over and then go and do the same thing saturday night and be broke monday.

Me and my mates took option 1 after we got sick of the night club seen, and to be honest option one gave us more oppotunity to meet good girls,


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## Wysiwyg (7 February 2011)

Tysonboss1 said:


> One big fallacy that I have seen in my life is that, Spending less than you earn = Enjoying life less. This is simply untrue.
> 
> I mean the best things in life are free, (or at least very cheap).



You definitely have the right attitude and practices for creating wealth. Enjoy your input on this forum.

However, the economy keeps ticking over because people SPEND. Without the majority of people spending their money (consumerism), businesses would not prosper. Imagine if everyone lived their lives as you do. Society, status and the whole system would collapse.

 So let us not forget that without the spendthrifts, the misers would be broke.


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## Tysonboss1 (7 February 2011)

Wysiwyg said:


> However, the economy keeps ticking over because people SPEND. Without the majority of people spending their money (consumerism), businesses would not prosper. Imagine if everyone lived their lives as you do. Society, status and the whole system would collapse.
> 
> So let us not forget that without the spendthrifts, the misers would be broke.




I think we have seen in the american example that an over consumption mentality and a failure to save can weaken even the strongest nation.

Trust me I spend and consume, I just don't over do it. their is a firm middle ground that the average guy should aspire to where he spends less than he earns, and saves for a comfortable future.


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## Tysonboss1 (7 February 2011)

Wysiwyg said:


> However, the economy keeps ticking over because people SPEND. Without the majority of people spending their money (consumerism), businesses would not prosper. Imagine if everyone lived their lives as you do. Society, status and the whole system would collapse.
> 
> So let us not forget that without the spendthrifts, the misers would be broke.


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## Wysiwyg (7 February 2011)

Tysonboss1 said:


> I think we have seen in the american example that an over consumption mentality and a failure to save can weaken even the strongest nation.
> 
> *Trust me I spend and consume, I just don't over do it.* their is a firm middle ground that the average guy should aspire to where he spends less than he earns, and saves for a comfortable future.



 Fair play to you. Be interesting to see in the years ahead if the richer countries mindsets do adjust or whether it's back to Plumperville in better economic times. The amount of waste is phenomenal and accepted.


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## Smurf1976 (8 February 2011)

Tysonboss1 said:


> But some people think they will enjoy life better if they spend big on flashy clothes go to a night club and drink 20 $8 vodka and red bulls shout some random girls $12 drinks catch a $50 cab home at 5 in the morning (without the girls) sleep all day with a hang over and then go and do the same thing saturday night and be broke monday.
> 
> Me and my mates took option 1 after we got sick of the night club seen, and to be honest option one gave us more oppotunity to meet good girls,



You'd be amazed at just how much money some of these places take in on a Saturday night especially. Truly amazing when you look at the $ taken in and then look at how many people are actually there. It's not cheap that's for sure.

As for people getting sick of the scene, for most there's a point where they realise that the hype doesn't match reality. Let's face it. Of all the people you know who are in long term relationships or who are married, how many of them met their partner in a night club? Not many... 

A pub maybe, or a retro night at a club (which won't likely be dominated by the 18 - 20 crowd), or any other type of dancing situation you could well meet someone. But a packed dancefloor, smoke machines and stobe lights, music you'd never listen to anywhere else played at 110 dB and with the staff wearing ear plugs? Not a likely place to meet a long term partner really. Hence the dominance of the 18 - 20 crowd in those places for whom a short, not long, term "relationship" is the objective.

Not unusual to find 50% plus of a young person's total income being spent at night clubs...


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## prawn_86 (8 February 2011)

Smurf1976 said:


> Of all the people you know who are in long term relationships or who are married, how many of them met their partner in a night club? Not many...
> 
> But a packed dancefloor, smoke machines and stobe lights, music you'd never listen to anywhere else played at 110 dB and with the staff wearing ear plugs? Not a likely place to meet a long term partner really.




My fiance and I are obviously the exception to the rule 

We still do enjoy going out clubbing but certainly not every week


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## Mofra (9 February 2011)

Smurf1976 said:


> Not unusual to find 50% plus of a young person's total income being spent at night clubs...



I'm not a fan of many Gen Y traits by any stretch of the imagination, but preliminary studies have shown they are generally far more frugal with their finances than given credit for. They're probably as varied as every other generation in Australian history though.


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## inq (9 February 2011)

I'm always amused by the Gen Y bashing. Especially when people who are still 'poor' due to their own lack of financial abilities rag on their 'bad traits' specific to Gen Y.

In my workplace I'm one of the youngest colleagues, with average age being circa 40 yrs +, I'm 20. I would be one of the few (less than 20) who actually owns a house, has an education and an investment portfolio. This is a well paying job which makes most things in life easily affordable, but all those Gen X's and baby boomers still go on the booze, buy cars constantly and just generally piss it all up the wall.

If every Gen before Gen Y was so financially better than them, why are there so many financially inept people from these age groups?

Anywho enough about Gen rants. I believe the core of it has already been discussed, short term and long term rewards. People who aren't as financially secure seem to have poor abilities in self restraint, effectively reducing the ability to reap long term rewards which in finance terms can be very lucrative.


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## Julia (9 February 2011)

Mofra said:


> . They're probably as varied as every other generation in Australian history though.






inq said:


> I'm always amused by the Gen Y bashing. Especially when people who are still 'poor' due to their own lack of financial abilities rag on their 'bad traits' specific to Gen Y.




Agree.  Criticism of any whole generation just doesn't make sense.  The demographer, Bernard Salt, is particularly guilty of this.

Well done, inq, on your achievements at your age.


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## Tysonboss1 (9 February 2011)

Hey, Just a question to Jools and anyone else that cares to give an opinion. 

What do you consider poor and what do you consider rich?


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## Mofra (9 February 2011)

Tysonboss1 said:


> Hey, Just a question to Jools and anyone else that cares to give an opinion.
> 
> What do you consider poor and what do you consider rich?



I think that is a personal question for everyone to come to themselves Tyson.

Some would consider monetary wealth to be the sole definition of rich.
Other would conclude that you have the means to live a lifestyle you so choose - that to me would include money, time and resources/locale/other to indulge your passions.

Personally I believe it is simply a measure of happiness. I know high net worth individuals who aren't very happy, although they tend to be very serious people by nature. I do know people in lower paying jobs who are always happy, indulging a pasison for which they are happy to forego a higher salary.
Others may find that raising a family in a better circumstance in which they themselves were raised is their source of wealth.

Others might devote themselves to a spiritual pursuit and find their interpretation of themselves and the world around them is their overriding measure of self-worth.

Others just like turtles:


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## burglar (9 February 2011)

Tysonboss1 said:


> Hey, Just a question to Jools and anyone else that cares to give an opinion.
> 
> What do you consider poor and what do you consider rich?




With a question like that you could start a whole new thread!

If, at age 20, I had a car that was "fully sick", I would consider that rich.

If later, I had a wife, 3-7 kids, a mortgage, and a once "fully sick" old car, I would consider that poor!


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## Julia (9 February 2011)

Tysonboss1 said:


> Hey, Just a question to Jools and anyone else that cares to give an opinion.
> 
> What do you consider poor and what do you consider rich?



 When I started the thread I was thinking about being poor in terms of one's financial circumstances.

Mofra's quite right though.  "Wealth" is surely the total measure of everything that contributes to our sense of being content.

What I was wanting to look at - and this has been really well responded to on the thread "What formed your attitude toward money" - was why some people just seem to have a natural ability to manage money well, and others will always be in debt no matter how many opportunities they have.

Obviously limiting factors are such difficulties as illness, retrenchment, marital breakup, and accepting bad financial advice.

What's your own view, tyson?


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## Tysonboss1 (9 February 2011)

Julia said:


> What's your own view, tyson?




I was posing my question more on economic grounds, rather than richness or poorness of life in general, And I was mainly after what people considered poor.

So In economic terms, What would people here consider "Poor"?


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## Julia (9 February 2011)

Tysonboss1 said:


> I was posing my question more on economic grounds, rather than richness or poorness of life in general, And I was mainly after what people considered poor.
> 
> So In economic terms, What would people here consider "Poor"?



As others have observed, it's a very individual assessment.

After leaving a destructive marriage with no home, no job and no money, I felt very poor, and I was.   Borrowed deposit and initial rent on accommodation.  Soon got a job and put every possible dollar into saving for a home.  I did that, then bought the first IP.  By then I was earning a decent salary, and had company car etc.
But still wanted to pay off the debt. and acquire more investments.

  Had about a decade of buying only second hand clothes, buying only cheap food, not having people in for dinner etc., living on potatoes and cabbage until the money was there to pay the private health insurance, and feeling unable to buy a birthday present for someone who meant a lot to me.

To me that was being poor.  It was horrible.  But it was a means to an end.

Now I'd say being poor means not being able to share in a similar life to that of your friends and colleagues, not being able to buy what you want when you go food shopping, and above all, not having that sense of security that allows you to feel that whatever you need you can afford.

Good question, Tyson.
I'd be interested in what 'being poor' means to others.


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## Tysonboss1 (10 February 2011)

Julia said:


> I'd be interested in what 'being poor' means to others.




I guess I would consider someone poor when they struggle to supply the basics of life for themselves, (shelter, food, clothing) and their finiancel situation is causing them stress and making them depressed longterm. I do think there is a difference between broke and poor, which alot of it is mindset and timeframe.

I guess if you are a low income earner, but still managing to put food on the table and generally happy with you life style and you household is stable, I would not consider you poor. But if you are constantly stressing about bills, you have starve nights etc then you are poor.

I do think that no one in Australia has to be poor, I reserve the right to be Broke. But Poor is a longterm thing in my view and that is really a choice, unless you have some sort of disability or other long term circumstances playing against you.


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## inq (10 February 2011)

My personal evaluation of financial competence and being classified as poor is the inability to reach a self funded retirement. Reliance upon welfare puts you in that basket, IMHO.

If you can go about your life and spend it all up the wall, yet manage to put yourself in a position in which you can retire on a passive income, I don't find that poor.


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## trainspotter (10 February 2011)

Islamic thinking on the subject ........... "there are some people for whom nothing but poverty is good, and if Allah made such a person rich it would be harmful for him; and there are others for whom nothing but richness is appropriate, and if they became poor that would be harmful to them."


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## Mofra (10 February 2011)

trainspotter said:


> Islamic thinking on the subject ........... "there are some people for whom nothing but poverty is good, and if Allah made such a person rich it would be harmful for him; and there are others for whom nothing but richness is appropriate, and if they became poor that would be harmful to them."



Sounds like it has some similarities to the Indian Caste system - remembering Islam's roots were in the most culturally mixed region in the world in the 6th century, it's not unreasonable to conclude that may have influenced thought at the time.
Most religions borrow heavily from others (ie Jesus' time in Kashmir studying Buddhism influencing his preaching as an adult).


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## Tysonboss1 (10 February 2011)

I love Dave Ramsey, I think if poor people follow his Baby steps they won't be poor long.


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## awg (10 February 2011)

definition of poor is same as dickens quote

as for rich, $1M is spit nowadays really, especially for family

I really take some convincing to utilise debt for other than investment purposes or live beyond cashflow and investment guidelines, and this has led to some substantial negotiation on spending.

I consider freeganism to be a good thing.

Adjoining my business premises was a packaged food distributor. They would dispose of all unused stock before the use-by-date. I gave stuff to my kids...they freaked when I told them the source.

Finally, I find that many people just dont seem to think about it much, or consider talk of investing crass or the idea of being a professional investor or trader somehow immoral

My overall investment timeframe is 30yrs


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## tothemax6 (10 February 2011)

awg said:


> My overall investment timeframe is 30yrs



That's all very well, but no man can guarantee himself another 30 years.


----------



## Tysonboss1 (10 February 2011)

tothemax6 said:


> That's all very well, but no man can guarantee himself another 30 years.




offcourse nothing in life is guaranteed, but you have to live by the law of probability, most of us will live to 75 (or older),


----------



## Julia (10 February 2011)

awg said:


> I consider freeganism to be a good thing.



What is freeganism?   (Obviously I'm missing something obvious here.)



> My overall investment timeframe is 30yrs



That will obviously change as you age, as will your risk profile.


----------



## burglar (10 February 2011)

"We forge the chains we wear in life." 
- Charles Dickens

Chains of habit are too light to be felt until they are too heavy to be broken. 
Warren Buffett

I'm all for freeganism, but it's hard to remain dignified whilst dumpster diving.


----------



## GumbyLearner (11 February 2011)

I think it's the same reason why most people are poor


----------



## Tysonboss1 (11 February 2011)

Julia said:


> What is freeganism?   (Obviously I'm missing something obvious here.)
> 
> 
> That will obviously change as you age, as will your risk profile.




It is a play on word the word Vegan.

Basically people who are "freegan's", distain waste on enviromental and economics grounds. A Freegans goal is to live mainly off the discards of others. For example they may do the rounds of restruants, bakeries and cafes asking to collect the dailey discards which may include day old breads, salads, fruit and veg that is in it's final days etc.etc

Some Hard core freegans dumpter dive looking for their meals,


----------



## awg (11 February 2011)

tothemax6 said:


> That's all very well, but no man can guarantee himself another 30 years.






Julia said:


> What is freeganism?   (Obviously I'm missing something obvious here.)
> 
> 
> That will obviously change as you age, as will your risk profile.






burglar said:


> "We forge the chains we wear in life."
> - Charles Dickens
> 
> Chains of habit are too light to be felt until they are too heavy to be broken.
> ...





Was it Dickens?.... about expenses and income being one penny different etc etc?

No.. dont think my 30yrs change cause wanna croak with larger capital base than have now...its called estate planning (also easy to run out if live too long)

If I had no children, grandchildren, would be different

I feel dignified when practising freeganism,  abhor waste and the throwaway mentality..each of my properties has its own magnesium-base lawnmower, picked up from roadside chuck-outs, takes only a few minutes for me to fix them, last forever.
New steel ones rust out in a short time, cannot be repaired.


----------



## Tysonboss1 (11 February 2011)

awg said:


> No.. dont think my 30yrs change cause wanna croak with larger capital base than have now...its called estate planning (also easy to run out if live too long)
> 
> If I had no children, grandchildren, would be different




I plan to give away my capital base when I die to charities that will change to world for all mankind, hopefully I can give the bulk away before I die. When it comes to money I will give my children nothing but advice.

Hopefully I can raise my kids well enough that they don't need welfare assistance from me.


----------



## Julia (11 February 2011)

Tysonboss1 said:


> , hopefully I can give the bulk away before I die.




The difficulty is in knowing when you're going to die.  I'd like to do as you suggest, too, but would then be a bit put out if I lived a lot longer and went back to being poor in the last years.


----------



## prawn_86 (11 February 2011)

Tysonboss1 said:


> Hopefully I can raise my kids well enough that they don't need welfare assistance from me.




I think it is nice to give your kids something.

I got a small inheritance from both sides of grandparents and will have some coming when my old man pegs it. I got a small amount throughout uni, but it was only enough that i appreciated it and didnt expect it


----------



## Tysonboss1 (11 February 2011)

prawn_86 said:


> I think it is nice to give your kids something.
> 
> I got a small inheritance from both sides of grandparents and will have some coming when my old man pegs it. I got a small amount throughout uni, but it was only enough that i appreciated it and didnt expect it




They will probably get a bit from what is remaining in my personal accounts, but as for the company and investment trusts, they will get none of it. 

To be honest I want nothing from Mum and Dad when they pass, I would much rather see them enjoy the cash in their twilight years making their life a bit easier and enjoying the finer things.

I want their house, But I plan on offering them some sort of deal where they live in it rent free and I purchase it over say 20 years like a reverse morgatege. I am far more likly to hand money up than pass it down.


----------



## Tysonboss1 (11 February 2011)

Julia said:


> The difficulty is in knowing when you're going to die.  I'd like to do as you suggest, too, but would then be a bit put out if I lived a lot longer and went back to being poor in the last years.




yeah thats the hard bit isn't, 

You could have your cash invested in income producing assets and live on the distributions and then when you die have them liquidated and the capital sent to a few charities of your choice.


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## burglar (11 February 2011)

Julia said:


> The difficulty is in knowing when you're going to die.  I'd like to do as you suggest, too, but would then be a bit put out if I lived a lot longer and went back to being poor in the last years.




When you get really old you can't travel overseas, you can't drive!
Oh, you get the drift.

The things you can do dwindles towards nothingness, ...

I would risk being poor in the last years.


----------



## Julia (11 February 2011)

burglar said:


> When you get really old you can't travel overseas, you can't drive!
> Oh, you get the drift.
> 
> The things you can do dwindles towards nothingness, ...
> ...



Would you?  Well perhaps you're not taking into account that evolving government policy is that we will all have to make a substantial contribution to our own aged care.

The costs of providing full taxpayer funded aged care, given the blow out in the aging population, are simply not sustainable, so there is going to have to be a new model introduced where we pay for the level of care we want.

Certainly distasteful if this is going to mean that we get better care if we are able to pay for it, but essentially necessary.

So far the family home has been quarantined from assessment in aged care payments.
The new suggestion is that it won't be in future.  Seems fair enough to me.
Why should succeeding generations of taxpayers have to fund our retirement because we want to hold on to the family home to pass on to our children?

No reason I can think of.


----------



## Tysonboss1 (11 February 2011)

Julia said:


> Would you?  Well perhaps you're not taking into account that evolving government policy is that we will all have to make a substantial contribution to our own aged care.
> 
> The costs of providing full taxpayer funded aged care, given the blow out in the aging population, are simply not sustainable, so there is going to have to be a new model introduced where we pay for the level of care we want.
> 
> ...




Use the family home to fund your aged care, reverse morgatage style. Or setup an annuity funded by the sale of your home to see you through the final years, and give the rest away, you family can have the remainder of the annuity on your death as a little bonus.


----------



## burglar (12 February 2011)

Julia said:


> ... we will all have to make a substantial contribution to our own aged care.




As much as it pains me to say ... I think you got me there!


----------



## brianwh (15 February 2011)

Having browsed through several pages of the posts on this thread, I have come to the (not surprising?) conclusion that they are written by people who are not poor. For the most part I am not detecting much empathy with or sympathy for people who find themselves in depressed financial circumstances. And it made me think of someone I know very well and perhaps his circumstances may provide another perspective.

He is part of a small pool of aged pensioners, all in their late sixties, early seventies who are on call, seven days a week,  to ferry drive vehicles for a rental car agency. The drive is often 200 plus kilometres each way and includes some city driving. For this they get paid $6 per hour!!!! This begs the obvious questions: why would they work for such a pittance and/or why don't they demand award rates. Their answer is that given their age, the prospect of getting any other work to supplement their pension is nil; and when they have made representations to their employer, they have been told that he is treating them as contractors and he can pay what he likes. I don't think any of them have high levels of education and would have little idea of what recourses they have they have open to them. And of course there is no union involvement at the place.

You might be able to make a case that this story is extreme and not likely to be in any way representative. But I suspect that there are many similar stories in this age group particularly. These men worked all their lives, raised families, in most cases, on one income and now find themselves unable to improve their lot in even a small way. And meantime they are vulnerable to expoitation.


----------



## inq (15 February 2011)

What does sympathy have to do with it?

In the end, you have the choice between trying to set yourself up financially for retirement (A good period of 45 years between 20 and 65) and if you don't so be it.

I cannot wait for old age pensions to be grandfathered out of welfare, it will result in much greater accountability of individuals.


----------



## Julia (15 February 2011)

brianwh said:


> You might be able to make a case that this story is extreme and not likely to be in any way representative. But I suspect that there are many similar stories in this age group particularly. These men worked all their lives, raised families, in most cases, on one income and now find themselves unable to improve their lot in even a small way. And meantime they are vulnerable to expoitation.



That's a sad story, Brian.


----------



## Julia (15 February 2011)

inq said:


> What does sympathy have to do with it?
> 
> In the end, you have the choice between trying to set yourself up financially for retirement (A good period of 45 years between 20 and 65) and if you don't so be it.
> 
> I cannot wait for old age pensions to be grandfathered out of welfare, it will result in much greater accountability of individuals.



inq, it has to do with the culture of the time.  A couple of generations ago, there was a genuine belief that if one paid all tax due, the ultimate benefit would include a pension in retirement that was sufficient to live on.

Such a belief certainly seems naive now.   

And yes, perhaps more accountability should be happening.  I think it's gradually happening as more people appreciate that anything offered by governments will simply not be enough.

But we will always have a proportion of the population who will need support.
We're simply not all born equal, in terms of intrinsic capability or opportunities.

You might feel invincible, but anyone can have a sudden catastrophic event, illness or accident which will render them unable to look after their own needs, physical and financial.


----------



## burglar (15 February 2011)

Julia said:


> ... there was a genuine belief that if one paid all tax due, the ultimate benefit would include a pension in retirement that was sufficient to live on. ...





http://www.centrelink.gov.au/internet/internet.nsf/payments/age_eligible.htm

" Age pension age
From 1 July 2017, the qualifying age for Age Pension will increase from 65 to 65.5 years. The qualifying age for Age Pension will then rise by 6 months every 2 years, reaching 67 by 1 July 2023."

And that is just the age requirement!!

I am glad I looked that up because it is not as severe as I thought. 
(I turn 65 before it comes in)


----------



## inq (15 February 2011)

Oh I agree Julia,

There indeed will always be those in need, however I believe they should be captured under disabled, permanently injured payments etc. not an old age pension.

Thankfully the government seems to be moving in this direction in by winding back the old age pension, now if they can just move towards fixing the dole.


----------



## brianwh (16 February 2011)

inq said:


> What does sympathy have to do with it?
> 
> In the end, you have the choice between trying to set yourself up financially for retirement (A good period of 45 years between 20 and 65) and if you don't so be it.




Inq I suggest a lot of people don't have the choice to set themselves up. The reasons for this are many, but clearly not everyone has the same opportunities to to provide a comfortable retirement for themselves. I was making the point that my friend (and probably his work mates) was a case in point. And mitigating against them improving their lot is a business person who will probably provide for his or her own comfortable retirement at their expense.


----------



## Tysonboss1 (16 February 2011)

brianwh said:


> Having browsed through several pages of the posts on this thread, I have come to the (not surprising?) conclusion that they are written by people who are not poor. For the most part I am not detecting much empathy with or sympathy for people who find themselves in depressed financial circumstances. And it made me think of someone I know very well and perhaps his circumstances may provide another perspective.
> 
> He is part of a small pool of aged pensioners, all in their late sixties, early seventies who are on call, seven days a week,  to ferry drive vehicles for a rental car agency. The drive is often 200 plus kilometres each way and includes some city driving. For this they get paid $6 per hour!!!! This begs the obvious questions: why would they work for such a pittance and/or why don't they demand award rates. Their answer is that given their age, the prospect of getting any other work to supplement their pension is nil; and when they have made representations to their employer, they have been told that he is treating them as contractors and he can pay what he likes. I don't think any of them have high levels of education and would have little idea of what recourses they have they have open to them. And of course there is no union involvement at the place.
> 
> You might be able to make a case that this story is extreme and not likely to be in any way representative. But I suspect that there are many similar stories in this age group particularly. These men worked all their lives, raised families, in most cases, on one income and now find themselves unable to improve their lot in even a small way. And meantime they are vulnerable to expoitation.




So they are on the pension, and have hobby with a very small income attached, I can hardly see how this person can be called poor. 

How ever their life could have been improved if they had a better saving/spending habits during their working life.


----------



## Tysonboss1 (16 February 2011)

Julia said:


> inq, it has to do with the culture of the time.  A couple of generations ago, there was a genuine belief that if one paid all tax due, the ultimate benefit would include a pension in retirement that was sufficient to live on.
> 
> .




And it is true, My Nanny has a decent standard of living on the pension. I must admit though it is easier for a pensioner who owns their own home. Which Is one of the reasons I recommend home ownership as one of the cornerstones of financel stratergy.


----------



## Julia (16 February 2011)

Tysonboss1 said:


> So they are on the pension, and have hobby with a very small income attached, I can hardly see how this person can be called poor.



Depends on whether they are on a single pension or are part of a married couple getting almost twice as much to meet all the same expenses.  i.e. the single pensioner even with his own home still has to meet most of the same expenses such as rates, water, electricity, insurance.   That can be very tight on a single pension.



> How ever their life could have been improved if they had a better saving/spending habits during their working life.



Perhaps, but we don't know what difficulties they may have encountered before reaching age pension age.  If e.g. there has been a relationship breakdown with the assets split that couple are then individually going to be in a disadvantaged financial situation.  Or people can be retrenched, ill, etc during what would usually be working years.

And I don't want to interpret for Brian, but I think he was also pointing out the pretty disgusting fact that the employers of these elderly folk are exploiting them and that's despicable imo.


----------



## Tysonboss1 (16 February 2011)

brianwh said:


> Inq I suggest a lot of people don't have the choice to set themselves up. The reasons for this are many, but clearly not everyone has the same opportunities to to provide a comfortable retirement for themselves. I was making the point that my friend (and probably his work mates) was a case in point. And mitigating against them improving their lot is a business person who will probably provide for his or her own comfortable retirement at their expense.




It's true not every one can set them self up if they have waited to long to start thinking about it, Late 60's early 70's would be an example of being to late. (saying that though colonel sanders was 66 when KFC took off, and nearly was bankrupt 2 years before)

But your friend could have set him self up if he started at 20 or 30 or even 40.

But what is so bad about your friends position if he is on the aged pension and collecting some (probally illeagal) cash on the side.


----------



## Tysonboss1 (16 February 2011)

Tysonboss1 said:


> (saying that though colonel sanders was 66 when KFC took off, and nearly was bankrupt 2 years before)


----------



## brianwh (16 February 2011)

Tysonboss1 said:


> It's true not every one can set them self up if they have waited to long to start thinking about it, Late 60's early 70's would be an example of being to late. (saying that though colonel sanders was 66 when KFC took off, and nearly was bankrupt 2 years before)
> 
> But your friend could have set him self up if he started at 20 or 30 or even 40.
> 
> But what is so bad about your friends position if he is on the aged pension and collecting some (probally illeagal) cash on the side.




Obviously I don't know what age group you are in Tyson but if you are familiar with the circumstances of people, now in their 70's, when they started their working life, you would know that, for many, there was little opportunity to accumulate wealth. Typically, once they married, they would support a wife and family on one income. Professional people could earn high incomes but the rest were "battlers".

I know my comments are focussing on the circumstances of a particular age group. And I know that the current pension system is not sustainable as life expectancies increase. But I am uncomfortable with the generalisation that people who are poor are poor because of choices they have made. No doubt some are, but I am sure many are not.

And your final comment that suggests my friend is not declaring this income  is interesting. Why focus the focus on him? Why not the illegality of what this employer is doing. 

PS: For the record, my friend has told me that he takes a printout of his earnings to Centrelink fotnightly.


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## Tysonboss1 (16 February 2011)

brianwh said:


> 1, Obviously I don't know what age group you are in Tyson
> 
> 2, but if you are familiar with the circumstances of people, now in their 70's, when they started their working life, you would know that, for many, there was little opportunity to accumulate wealth.
> 
> ...




1, I am 28.

2, thats complete B/S, They could have bought a home and paid it off over the years this would have a big impact on their position in retirement, they could have purchased an investment property after they had paid of their home, or invested in the stockmarket.

Some one who is 70 was in their

20's during the 1960's
30's during the 1970's
40's during the 1980's
50's during the 1990's
60's during the 2000's,

So their was ample opportunities to spend less than they earned and build wealth, during their entire life their was an active share market and ability to invest in property.

3, Well there are battlers still today and they make a go of it, but some of them sit and make the opposite excuse of "things were easier for the baby boomers we have it harder, they had it easy growing up in a land of milk and honey". 

4, They are not bad people and they are not stupid people, But they are 100% where they are because of the decisions they have made. ( the only people I exclude here are the special cases with permanent disabilities )

My grandparents and my partners grandparents are on the pension, and they live full lives, they go on social outings with the seniors club and come to out family get togthers etc. Offcourse they have to watch there pennys but they are not poor, So I don't actually think pensioners have it as bad as what the media make out.


----------



## burglar (13 May 2011)

I came across mention of Pareto Income Distribution.
So I thought to brush up on the theory.

Googled a few things and came up with link:
http://www.newscientist.com/article/dn7107-why-it-is-hard-to-share-the-wealth.html
Physicists are joining in with Economists.


An interesting piece you might say!!


But I took the greatest exception to this:


> "The model seems to me not like an economic exchange process, but more like a burglar process. People randomly meet and one just beats up the other and takes their money."


----------



## joea (13 May 2011)

Tysonboss1 said:


> 1, I am 28.
> 
> 2, thats complete B/S, They could have bought a home and paid it off over the years this would have a big impact on their position in retirement, they could have purchased an investment property after they had paid of their home, or invested in the stockmarket.
> 
> ...




Tyson you have missed one very important point.
In the 60's and 70's a famliy generally only have one provider. In those years is was about having a family and a life.
To purchase a home, you were bound to interest rates basically for 25 years.
If you have a squizz, at one time they were up to 15 - 16% I think.

So do not judge the people of the past on the economics of today.

Another point, in the past people trusted the banks to invest their money in funds. Those funds then got smashed through the years.

Finally, many of the Australian youth now go overseas to work to save money, to invest in Australia.
Then along came Rudd and wanted the difference betwween the overseas tax and the highest rate in Australia. .
The next step they are taking is to be non - resident.
Labor is driving our youth overseas, and that is adding to the skilled shortage.

Labor are attempting to control our lives. Why? Watch the poker machine and betting online caper. it will spread to "two up" on Anzac Day.

I  have some knowledge of this, as I am from that era, and my two sons work overseas.
However they have formed a company with a builder to still invest in Australia.

Cheers


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## nioka (13 May 2011)

Tysonboss,

A lot of people my age are poor because of broken promises that were not seen because they were busy working hard bringing up your generation on one wage with their head down and busy while thinking about, and looking forward to, the promised pension providing for a comfortable retirement. 

They paid their dues. Many took years out of their life being active in defending this country through active service. They deserve everything that is provided for them and more.

I've posted this before: "The year I started work 1947. there was a new deduction made from our wages. It was a pension provision taken from our wages that was going into a special fund that would give EVERYONE a pension on retirement. No more poverty for the aged. A few years down the track another government looked at the fund, grabbed it with the promise that pensions would still be paid but out of consolidated revenue. A few more years on and another government decided the some people didn't really need a pension so they brought in the means test. This meant that those of us that had paid the most tax and saved got less."

They worked all their life in most cases believing that there was at least a pension at the end.

So now we have your generation with super deductions, paid by their employer in most cases setting aside money for pensions. In a lot of cases those funds are being siphoned off by fund managers to a point where they will not be sufficient to fund retirement. Some are losing most of the money. So how safe IS you superannuation. 

So before you think about whether or not a pension payment should be made or why some people are poor just remember it could happen to you. Illness, war, floods, family breakdowns, accident, business failure, theft, etc are all around you and could come to you. My father died when I was 3 leaving my mother with 3 children under the age of 6. No widows pension in those days, only family support. I know what it was like to be poor. I know why SOME people ARE poor.


----------



## medicowallet (13 May 2011)

joea said:


> Tyson you have missed one very important point.
> In the 60's and 70's a famliy generally only have one provider. In those years is was about having a family and a life.
> To purchase a home, you were bound to interest rates basically for 25 years.
> If you have a squizz, at one time they were up to 15 - 16% I think.
> ...




Yes and I was around in those years too. I think Tyson has a balanced and reasonable view on this.

Housing was much cheaper, and people had great opportunity to purchase their own home.

It is difficult to purchase a home now, and someone in their 70s who worked their whole life had ample opportunity to purchase their own home.

(eg a 20 year old may find it difficult to purchase now, but in 2060, they would no doubt have been in a position where they could have)


----------



## joea (13 May 2011)

medicowallet said:


> Yes and I was around in those years too. I think Tyson has a balanced and reasonable view on this.
> 
> Housing was much cheaper, and people had great opportunity to purchase their own home.
> 
> ...




Medicowallet.
I do not deny he understands.
I was attempting to point out one income provider limits the family somewhat.
Many people purchased houses, which actually set their lifestyle.

Life is not easy, and people attempt to get financial advice, however that advice was generally a rip off. Thats what people find hard.

To explain that a little better. I have a friend that makes money the minute he wakes up.
Originally he got tax advice from Mossman, then Cairns, then Brisbane and now he flys to Sydney twice a year.
Most people do not have that advantage.

I apologise, if you think I came on a bit strong.

In hindsight everybody could be the current middle class.

Joea


----------



## nioka (13 May 2011)

medicowallet said:


> Yes and I was around in those years too. I think Tyson has a balanced and reasonable view on this.
> 
> Housing was much cheaper, and people had great opportunity to purchase their own home.
> 
> ...




I disagree. It is easier now for my grandkids to buy a home than it was in my day or in their parents day. Sure houses were cheap but so were wages. Rent took the same percentage of a wage then as it does now, there were no banks offering home loans on low deposits, there were no first home buyers subsidies, subsidised child care etc. Working hours were longer (I worked five and a half days per week of 44 hours).


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## Glen48 (13 May 2011)

The legal system is one of the causes of peoples demise, I read about a woman who got some meat and a then decided she wanted to buy a dress so she claimed the meat was  contaminated and sued the butcher the word got out his meat was bad so he went out of business..If we had a legal system what worked on commonsense and had to act like peopel in the real world life would be much easier.


----------



## skyQuake (13 May 2011)

Glen48 said:


> The legal system is one of the causes of peoples demise, I read about a woman who got some meat and a then decided she wanted to buy a dress so she claimed the meat was  contaminated and sued the butcher the word got out his meat was bad so he went out of business..If we had a legal system what worked on commonsense and had to act like peopel in the real world life would be much easier.




You cant be serious? Sure the legal system stuffs up sometimes but thats what appeals are for...


----------



## Glen48 (13 May 2011)

The legal system is good for those who have money and know more about the law than lawyers.
 The feds have introduced so many new acts no one know which way is best.
The trade practice act stipulates you pay the money in full and get a receipt and then collect the goods, how many pay a deposit and work proceeds, why can experts use the appeals court for years to fight a case. 
Why can people like Skase live over seas and be immune to laws?  
In the 40 - 70 your hand shake was as good as any legal doc.


----------



## tech/a (13 May 2011)

Glen48 said:


> The legal system is good for those who have money and know more about the law than lawyers.
> The feds have introduced so many new acts no one know which way is best.
> The trade practice act stipulates you pay the money in full and get a receipt and then collect the goods, how many pay a deposit and work proceeds, why can experts use the appeals court for years to fight a case.
> Why can people like Skase live over seas and be immune to laws?
> In the 40 - 70 your hand shake was as good as any legal doc.




Nieve.


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## Julia (13 May 2011)

nioka said:


> Tysonboss,
> 
> A lot of people my age are poor because of broken promises that were not seen because they were busy working hard bringing up your generation on one wage with their head down and busy while thinking about, and looking forward to, the promised pension providing for a comfortable retirement.
> 
> ...



Great post, Nioka.   So easy to be judgemental about people whose individual circumstances we cannot know.


----------



## Calliope (13 May 2011)

I suppose it's because they want to claim the Kingdom of God. And also the odds are stacked against the rich getting there.



> Blessed be ye poor: for yours is the kingdom of God.






> It is easier for a camel to go through the eye of a needle, than for a rich man to enter the kingdom of heaven





While we are on conundrums - Why are poor people fat?


----------



## trainspotter (13 May 2011)

Calliope said:


> While we are on conundrums - Why are poor people fat?




ROFL 

The primary reason that lower socio economic people are fat is because the unhealthiest and most fattening foods are the cheapest. If you were broke and had just three dollars to spend on food today, would you buy a head of broccoli or a Super Value McMeal with French fries, a cheeseburger and a Coke?

Choosy cheese choosers always choose the cheese in a cheeseburger at McDonalds. 

Also might have something to do with never being taught limitations on diet or nutrition?


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## youngone (13 May 2011)

trainspotter said:


> ROFL
> 
> The primary reason that lower socio economic people are fat is because the unhealthiest and most fattening foods are the cheapest. If you were broke and had just three dollars to spend on food today, would you buy a head of broccoli or a Super Value McMeal with French fries, a cheeseburger and a Coke?
> 
> ...




Nonsense, $3 burgers cannot be the reason why people are fat. Fat people are morely to order take outs then to cook healthy food. I have been trying to get fat for years (65kg). If i can get fat on $3 burger and not be hungry for the rest of the day then i must be doing something wrong. 

On the topic of Fat people. Who is more likely to be depressed? The Fat people or normal people. One would assume, majority of Fat people are lazy and depressive. Or is it possible that they are just fat because they love life and live to eat and eat to live. LOL.


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## trainspotter (13 May 2011)

youngone said:


> Nonsense, $3 burgers cannot be the reason why people are fat. Fat people are morely to order take outs then to cook healthy food. I have been trying to get fat for years (65kg). If i can get fat on $3 burger and not be hungry for the rest of the day then i must be doing something wrong.
> 
> On the topic of Fat people. Who is more likely to be depressed? The Fat people or normal people. One would assume, majority of Fat people are lazy and depressive. Or is it possible that they are just fat because they love life and live to eat and eat to live. LOL.




Your endeavour to get fat has obviously impaired your comprehension capabilities.

Cheeseburger 900 calories + French Fries 450 calories + Coke 175 calories = 1525 calories = $3.00

Broccoli, cooked, boiled, drained, without salt = 100 calories = $3.00

As the average person requires approximately 2000 calories per day then it is pretty obvious which is the more healthier. 

Calliope wrote this _"While we are on conundrums - Why are poor people fat?"_

You wrote this _"Fat people are morely to order take outs then to cook healthy food. I have been trying to get fat for years (65kg). "_

I wrote this _"If you were broke and had just three dollars to spend on food today, would you buy a head of broccoli or a Super Value McMeal with French fries, a cheeseburger and a Coke?"_

Is a McValue Super Meal for $3.00 not "takeouts" ?????


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## Mister Mark (13 May 2011)

nioka said:


> Tysonboss,
> 
> A lot of people my age are poor because of broken promises that were not seen because they were busy working hard bringing up your generation on one wage with their head down and busy while thinking about, and looking forward to, the promised pension providing for a comfortable retirement.
> 
> ...




Great post, i relate to this people can not relate now unfortunately


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## burglar (13 May 2011)

trainspotter said:


> ... Broccoli, cooked, boiled, drained, without salt = 100 calories = $3.00 ...




20 Heads of Broccoli, cooked, boiled, drained, without salt = 2000 calories = $60.00

Mmmm. I'm starting to like MuckDonalds! 

I'm off to get Pizza and Milkshake. lol


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## Glen48 (14 May 2011)

Why are they poor because the purchased a house thinking they would double every 7 years and took the first home owners Bribe.
From SMH:

  More mortgage defaults than at GFC peak  
Queensland suffered biggest acceleration  
Points to new wave of repayment stress  
MORTGAGE customers are defaulting on their loans at a faster pace than at the height of the global financial crisis as soaring living costs stretch household budgets to breaking point. 
Westpac, the nation's second-biggest home lender, revealed yesterday that mortgage delinquency rates had climbed above the peaks they reached late in 2008 as the crisis swept around the globe.

And chief Gail Kelly, unveiling the bank's record first-half profit yesterday, said they were likely to climb further - albeit off a low base - as households struggled with rising utility bills and other costs.

Customers accounting for about 1.5 per cent of Westpac's $275 billion home loan book were more than 30 days behind on their repayment schedule at the end of March, according to the data released yesterday.

And the proportion of home loan clients more than 90 days late has jumped to 0.6 per cent - almost double the rate of a year ago and significantly above the high watermark hit during the financial crisis.

Start of sidebar. Skip to end of sidebar.
.End of sidebar. Return to start of sidebar.
Although Queensland has suffered the biggest acceleration in delinquencies - compounded by the natural disasters that beset the state over summer - defaults are gaining pace in every state.

Analysts said the surge in defaults, which comes despite the robust state of the nation's employment market, pointed to a new wave of repayment stress in Australia's mortgage belt.

UBS analyst Jonathan Mott questioned whether the rise was driven by first home buyers who used grants to enter the market.

The abrupt surge in the proportion of customers who were at least 30 days behind on payments was likely to "flow through over time" to the proportion at least three months late, Mr Mott said.

Mrs Kelly said the lift in delinquencies was "entirely within our expectations".

"It is picking up and we think it will pick up actually a little more, because we're in that stage of the cycle," she said.

While more customers were likely to require support to manage their loan repayments, "we don't actually see it translating into loss".

The revelation came as Westpac posted a cash profit for the six months to March of $3.17 billion, up 7 per cent on the same period a year ago in a result aided by a sharp fall in the charge for bad and doubtful debts.

Net profit soared to $3.96 billion - a 38 per cent increase largely fuelled by a favorable taxation ruling, previously announced by the group, relating to its 2008 acquisition of St George.

Nomura analyst Victor German said there were "no obvious problems" with Westpac's result, despite the 2.5 per cent fall yesterday in the value of the group's share price on a downbeat day across the market.

Some investors were concerned that the increase in profit, which beat analysts' forecasts, was largely fuelled by the sharp drop in the charge for bad and doubtful debts, Mr German said.


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## Wysiwyg (14 May 2011)

Glen48 said:


> Why are they poor because the purchased a house thinking they would double every 7 years and took the first home owners Bribe.



Consider the average price of a house in good condition is 400k.
 Consider you save $50,000 as deposit and negotiate a home loan of $350,000 over 25 years at an average of 8.8%.







> (The average bank variable interest home loan interest rate rate over the past 59 years in Australia is 8.87 percent. (source Reserve Bank of Australia standard variable interest rate home loans, Jan 1959 to Feb 2008)



Weekly repayments would be $666.27. You would have to be earning well in excess of $1000 per week to live a simple life after mortgage payments. Guess what? Unless you are skilled and your skills are in demand, you won't be pulling in well over $1000 per week and mortgage repayments will squeeze your lifestyle down to poverty level.

I think you will find the great Australian dream is errr out of reach for the unskilled low income and tough for mid income earners. But wait!!!! The government can bail them out .... right???


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## Glen48 (14 May 2011)

No the Government will bail out the banks, the taxpayer will bail out the Feds while the feds  keep spending then we all fall down


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## Knobby22 (15 May 2011)

I agree with the housing issue.

I am gen x and bought my house for $330K, it is now worth $950K (ridicilous)and I have almost paid it off.  I would like to go the next step but the prices are stupid, I would need to borrow 400K so we are staying put. 

It is terrible for the next generation. I know plenty of very wealthy Baby boomers with tens of houses who are rolling in it. The tax system needs to be changed so that they can only gain negative gearing on the house - not their wage. The government would be able to lower our taxes with the money saved and the young would be able to buy houses and I could upgrade. ...but house prices are sacrocent - we are a weird mob in Australia.


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## Glen48 (15 May 2011)

Your house might be worth $950K but you can't sell it and get that amount in your hand
 it you could get out NOW before its to late.
 Buy it back again in 10 yrs time for 95,000


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## sptrawler (15 May 2011)

Well Knobby 22 if you feel the baby boomers had it easy "picked up tens of houses" get on with it. 
It was just the same when they had to take risk on an unknown future. Don't worry about it's easy you just jump in take on debt and make a lot of money. Then gen y can tell you how easy it was for you. 
Mate I'm 55 started work on $17.32 a week a $1000 loan frightened the S###t out of me. LOL
You bought your first house for 330k now your scared of borrowing 400k when you have made 620k on the first one. Doesn't sound like you have much confidence in what Wayne Swan is crapping on about.
The thing in everyones favour is the capitalist sytem relies on prices and wages going up. So no matter what happens if you can carry the load and have big enough you know whats and you wait long enough you will make money.
It just depends if you want the stress and cost to your lifestyle.


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## tothemax6 (15 May 2011)

sptrawler said:


> The thing in everyones favour is the capitalist sytem relies on prices and wages going up. So no matter what happens if you can carry the load and have big enough you know whats and you wait long enough you will make money.



Not really, in pure capitalism money is gold or some other high-value-density physical item. During the days of the gold-standard, mild deflation was the norm. The steady uptrend in overall prices (including wages) is caused by expansion of the monetary base by the central bank (inflation).
Of course, this doesn't actually 'make anyone money', because since all prices go up (the money just looses value). Indeed, because you only get you wage up-adjusted about once per year, but prices of the things you buy steadily creep up over the whole year - you loose out.


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## sptrawler (15 May 2011)

Actually toothmax6, I was taking the pizzzz if just borrowing and buying was the answer, we would all be zillionaires.


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## Garpal Gumnut (15 May 2011)

I find this thread a bit distasteful.

Poverty has little to do with talent or effort.

It is often a consequence of birth, latitude, or circumstances.

gg


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## Wysiwyg (15 May 2011)

Garpal Gumnut said:


> I find this thread a bit distasteful.gg



I recommend not licking the screen.


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## Garpal Gumnut (15 May 2011)

Wysiwyg said:


> I recommend not licking the screen.




Fair comment.

gg


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## Muschu (15 May 2011)

Garpal Gumnut said:


> I find this thread a bit distasteful.
> 
> Poverty has little to do with talent or effort.
> 
> ...




Highly agree


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## sptrawler (15 May 2011)

Should be end of thread THANKFULLY


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## burglar (16 May 2011)

I've been cold but I've never been hungry!


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## nioka (16 May 2011)

One more thought before you go out and try and get rich. I was actually richer when I was "poor" than I am now and can say that I am worth millions. Think about it. Life is so short.


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## NewOrder (16 May 2011)

> Or is it more a matter of attitude and ambition?



my simple anecdotal experience is that the above is true. My parents are the perfect example. The separated when I was a kid, at that stage they had an equal share of nothing and one parent took on a massive debt/business so was on the back foot from that day. 

Fast forward 35 years and the parent that took on the debt/business has a *nett *wealth in the $10,000's mil my other parent is about to die a pauper.

The wealthy one has the best attitude of anyone I know as well as being a very hard working person. They have a great attitude to life, love, work and has a good grasp on the reality of it all.
The poor one has always had a bitter and bad attitude to life. Life owes them, everyone else is to blame, "I am owed". There has always been a head in the sand attitude and not a good grasp on the reality of life.

At times I think I need counselling to reconcile the massive difference in my parents circumstance, it has had a big impact on my life. I do not tell people that I have a multi millionaire parent and a poor pensioner parent.


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## prawn_86 (16 May 2011)

NewOrder said:


> Fast forward 35 years and the parent that took on the debt/business has a *nett *wealth in the* $10,000's mil *my other parent is about to die a pauper.




Not sure if this is a typo, but very few people in the world worth $10 billion. Andrew Forrest if your father?


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## NewOrder (16 May 2011)

prawn_86 said:


> Not sure if this is a typo, but very few people in the world worth $10 billion. Andrew Forrest if your father?




 Sorry I cannot edit my posts. His nett wealth is well over $20mil (no debt). Those extra zero's make all the difference.


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## Julia (16 May 2011)

sptrawler said:


> Should be end of thread THANKFULLY




sp, I don't think there's anything wrong with the idea of the thread.  There have been some thoughtful and intelligent responses.
What have you found so distasteful?


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## Glen48 (16 May 2011)

It all goes back to what switch's in when people go through puberty and is handed down from some parent or grand parent maybe a few generations back.

 Look back at some one in the family tree you will find one with the same attitude.
 Sadly it shows how hard it is to form a relationship and why there is a lot more to be explored in to the way the mind works once that is mapped out we can start to live in peace.


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## Wysiwyg (17 May 2011)

Glen48 said:


> Look back at some one in the family tree you will find one with the same attitude.
> Sadly it shows how hard it is to form a relationship and why there is a lot more to be explored in to the way the mind works once that is mapped out we can start to live in peace.



Look at the simplicity of life for an animal and it is purely survival focussed. In harmony with nature, no weight loss (unless their habitat has been destroyed by plague human), no sexual hangups, no mind games, plenty of sleep/rest, no exercise required, no deadlines to meet and no big deal about anything.


Hey that's me. lol.


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## cynic (17 May 2011)

Wysiwyg said:


> Look at the simplicity of life for an animal and it is purely survival focussed. In harmony with nature, no weight loss (unless their habitat has been destroyed by plague human), no sexual hangups, no mind games, plenty of sleep/rest, no exercise required, no deadlines to meet and no big deal about anything.
> 
> 
> Hey that's me. lol.




Very interesting comparison, but surely squirrels do store nuts in preparation for the Winter (seasonal deadline). Migratory birds are also compelled to respond in a timely fashion to the change of seasons. Insects also create their respective hives/nest and toil for the benefit of their Queen(regent or government) and the perpetuation of their society. Many animals mark (and defend) their territory (acquisition of real estate!).

I've always held the opinion that mankind (whilst somewhat more evolved and possibly more intelligent) is simply another animal species with a drive to survive and adapt to the various challenges presented by one's environment (habitat). 
Poverty, disease, war and geological/meteorological phenoma could be considered to be the natural predators to which mankind often succumbs.
Activities in our business world and respective economies often appear to be subject to the age old concept of "survival of the fittest".

I believe that parallels between our social/political structure and survival behaviours can always be found by anyone willing to humbly recognise themselves as always being subject to Nature (and her forces) rather than presuming to be Nature's conqueror.

Having said all this, I do applaud the efforts of mankind to consciously combat/alleviate our various "natural" predators (poverty, war, disease etc.) in the hope of creating a safer, more peaceful and prosperous world for ourselves and the enjoyment of our future descendants.


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## burglar (18 May 2011)

cynic said:


> ... squirrels do store nuts in preparation for the Winter ...




Even if a squirrel is left in a room it will scratch at the floorboards in an attempt to bury the nuts. Interesting, but well off topic


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## burglar (20 May 2011)

I believe it is the time value of money 
Prof. Julius Sumner Millar was once asked to fix a chimney/flue. He drilled one hole. And he walked away with a cheque for $10,000. In them days it was a lotta loot!
He justified it thusly:
I knew it needed a hole and I knew where to put it. 
They were happy to pay!
I have some very expensive toys.

If they offered $17 per hour I doubt he would have left home.
He knew the time value of money. 
Most people work for an hourly rate and thereby reduce their opportunity to accumulate.

About chimneys and Prof. Julius Sumner Millar!
http://www.youtube.com/watch?v=KCcZyW-6-5o
http://www.youtube.com/watch?v=wwuffpiYxQU&NR=1


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## Sdajii (20 May 2011)

Wysiwyg said:


> Look at the simplicity of life for an animal and it is purely survival focussed. In harmony with nature, no weight loss (unless their habitat has been destroyed by plague human), no sexual hangups, no mind games, plenty of sleep/rest, no exercise required, no deadlines to meet and no big deal about anything.
> 
> 
> Hey that's me. lol.






You haven't studied zoology or had much to do with wild animals, have you?


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## Wysiwyg (20 May 2011)

Sdajii said:


> You haven't studied zoology or had much to do with wild animals, have you?



No but I don't mind the occasional seared rat kebab with a chilled glass of cat juice while watching a David Attenborough documentary.


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## cynic (20 May 2011)

Wysiwyg said:


> No but I don't mind the occasional seared rat kebab with a chilled glass of cat juice while watching a David Attenborough documentary.




Personally I prefer platypus pate with a Koala Bear smoothie, whilst watching a rerun of 'Milo and Otis'. But each to his own.

Oh and Burglar, just how many squirrels have you been locking indoors lately?

I confess I may have taken this a bit off the original topic. 

Being a lover of many animal species (although I sometimes find the human beast a little bit difficult to stomach) I would be interested to hear if any one has any further interesting insights into animal poverty.


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## burglar (30 December 2012)

cynic said:


> Personally I prefer platypus pate with a Koala Bear smoothie, whilst watching a rerun of 'Milo and Otis'. But each to his own.
> 
> Oh and Burglar, just how many squirrels have you been locking indoors lately?
> 
> ...




1. I don't have squirrels.
2. If I do have squirrels, I don't lock them indoors. 


.... just kidding ... now back to topic.

The more humans I meet, the more I like squirrels!



> First human ancestor looked like a squirrel. Fossilized bones reveal tiny, agile
> animal that spent a lot of time eating fruit ...



Read more:
http://www.msnbc.msn.com/id/4948322...ience/t/first-human-ancestor-looked-squirrel/


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## cynic (30 December 2012)

burglar said:


> 1. I don't have squirrels.
> 2. If I do have squirrels, I don't lock them indoors.
> 
> 
> ...




Thanks for that Burglar. 

For a while there I thought I might've had to wait another 5 years or so only to receive a reply from GG!

It's good to see that Bellenuit and I aren't the only one's up at this hour.


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## burglar (30 December 2012)

cynic said:


> Thanks for that Burglar. ...




I have no idea how to get this thread back on topic!



> Poor people are poor because they lack valuable labour, land, capital, human capital, or social capital, or because they have disabilities that overwhelm their advantages, or because they squander their advantages, or because they are denied the opportunity to put their advantages to lucrative use (often because of lack of public infrastructure, because of defective legal and economic institutions, or because they are oppressed), or because they are exploited by monopsonists in the markets for their factors of production, or because they are oppressed, or because they are robbed, or because war destroys their assets and the markets for their assets



Read more:
http://wiki.answers.com/Q/Why_are_some_people_rich_and_why_some_are_poor


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