Why are some people poor?

[inq]

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.

 

[Julia]

. They're probably as varied as every other generation in Australian history though.

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.

 

[Tysonboss1]

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?

 

[Mofra]

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:

 

[burglar]

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!

 

[Julia]

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?

 

[Tysonboss1]

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"?

 

[Julia]

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.

 

[Tysonboss1]

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.

 

[inq]

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.

 

[trainspotter]

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."

 

[Mofra]

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).

 

[Tysonboss1]

I love Dave Ramsey, I think if poor people follow his Baby steps they won't be poor long.

 

[awg]

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

 

[tothemax6]

My overall investment timeframe is 30yrs

That's all very well, but no man can guarantee himself another 30 years.

 

[Tysonboss1]

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]

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]

"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]

I think it's the same reason why most people are poor

 

[Tysonboss1]

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,