Why are some people poor?

[stocksontheblock]

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]

....
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!

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

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

 

[awg]

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

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

 

[Tysonboss1]

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]

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.

 

[Tysonboss1]

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]

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.

 

[Tysonboss1]

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.

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.

 

[awg]

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

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.

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)

 

[Chris45]

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?

 

[Tysonboss1]

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.

 

[Mr J]

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.

 

[Tysonboss1]

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.

 

[Dowdy]

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

 

[Wysiwyg]

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

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

 

[Tysonboss1]

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]

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?

 

[Wysiwyg]

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.

 

[Mr J]

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.

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.

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.

 

[Tysonboss1]

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?