Why are some people poor?

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.

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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.

Mr J said:

Most people lack discipline.

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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.

properly

Looks OK to me.

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

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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.

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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.

tech/a said:

properly

Looks OK to me.

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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.

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.

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.

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.

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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

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.

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

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.

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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)

stocksontheblock said:

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

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I think you typed that with a NZ accent

Tysonboss1 said:

I think you typed that with a NZ accent

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

Note: never respond to posts while eating breakfast.

Tysonboss1 said:

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

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I think you're out of touch with reality.

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.

Wysiwyg said:

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

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

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.

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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Top notch

Mr J said:

I think you're out of touch with reality.

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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.

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.

Fishbulb said:

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

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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.

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.

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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.