Most Money Advice Is Worthless When You’re Poor
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> The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money.
> Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles.
> But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that'd still be keeping his feet dry in ten years' time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet.
> This was the Captain Samuel Vimes 'Boots' theory of socioeconomic unfairness.
Terry Pratchett, Men at Arms
What they do is get $500 to $2000 cars. And those do break down frequently. They may or may not have resources, skill and or time to repair them.
On a more basic level, we set expectations for standard of living, and business actually depends on, expects those behaviors, while half the nation does not have income to meet those expectations, often despite full time or more labor.
This idea of shitty jobs being worthless completely ignores the cost of the laborers. And those costs fall on all of us.
Why subsidize business in this way?
Or, if we want to do that, why so much angst over assistance?
Those drivers then have to attend court to pay the fines - missing work and losing wages because of it, and sometimes losing their jobs.
If they don't attend court to pay their fines they have arrest warrants issued against them.
https://www.bbc.co.uk/news/world-us-canada-31849421
https://www.theguardian.com/money/2014/mar/02/poor-for-profi...
Cheap is getting better and better. And the rich just buy new because they like to go with the trend spending hundreds of dollars on boots.
Most people I know (Netherlands) who are not wealthy have mental issues or don't know how to manage money.
Edit: I don't want to sound like I think the author belongs to those 2 groups. There are many more reasons why someone is poor.
And I really feel sorry for the author. But my comment was more about the boots story.
i can't tell from the price whether something is of good quality or not.
If after non-negotiable expenses you have barely any money to budget, then budgeting advice is useless as your budgeting choices don't matter much. Career advice, on the other hand, may be useful in that case.
If you're unable to work because of a disability or other factors, then career advice is useless as your career choices don't matter much, but financial tips on how to get the medicine you need in the most affordable way may be useful.
Same goes for saving money by cooking at home. It works, but it takes skill and time. If you’re working 60-80hrs a week then it’s very hard to justify that time expenditure, and triply hard to justify the up front cost of tools and ingredients. $20 for a mediocre kitchen knife is 6-10 McDonald’s meals ($1,$2,$3 menu), putting someone who is already broke deep into the red before seeing any returns.
If you're earning nothing and have no savings, you need crisis mode budgeting.
Think the financial equivalent of malnourishment - you don't want the regular food pyramid, you need an IV drip.
This doesn't actually change ever. The 'best course of action' changes at every level.
Poor people money advice is worthless to rich people too. Lower middle class advice on 'how to save for a home deposit' is completely useless to the wealthy.
Usain Bolt doesn't take advice from the guy running in the park either.
> Much of the financial advice online and on reddit is aimed at people who have varying degrees of disposable income, ability to invest, lots of free time, available transportation, no kids, a partner, access to credit, and beyond. This is a place for people who do not have a lot, nor ideal circumstances, to help each other get by and hopefully move up in the world.
Edit: Anyone want to tell my why I'm apparently so wrong?
She's not just a sandwich-shop worker, apparently.
So yeah, poor people follow a very different decision process, which might not seem rational to people who have only ever been poor in the low-bank-balance sense (if that). Don't tell someone who's already deprived to deprive themselves further. Those small indulgences might be the only thing keeping people from giving up entirely. To the extent that the truly poor need advice from the less poor at all, it's advice on how to secure the most basic of needs in the short to medium term. Only then, only when the most severe psychological effects of being poor have been dealt with, is it rational to expect that people will start looking further up Maslow's pyramid to things like longer-term financial security.
I might be sympathetic to that point of view... but then what about the 'indulgence' of keeping a rainy-day fund? You know, the one indulgence that OP fails to acknowledge in any way and even disparages, despite the fact that indulging in this gets rid of a major source of stress in a poor person's life? This is why you should save, even at strenuous cost. Because when you save, you do feel better.
Personally I lived like that for many years, with 350$ rent on 1000$ income and thus saved 500$ a month, after a few years you will have saved a couple of ten thousand dollars. That was enough for me to take time off to learn programming properly without worrying about money, I am now working as a software engineer and make lots of money (not sure how people can find enough important things to spend this much on...) but I hated blogs like this even when I was poor.
Towards the end of that people on 6th street stopped asking for change and instead would say things like, do you know if check day is Friday or Monday this month. That question was when I realized I needed a new jacket.
Millions of Immigrants come to the USA/Canada with nothing but the cloths on their backs and somehow they manage to support themselves and their families. Others are 4th, 5th Generation Americans and can't seem to get off Welfare or dig themselves out of a hole.
I don't understand.....
You have what’s called “survivor bias”, and you need to get past it to understand systemic issues.
My BS-meter is showing a strong reading after seeing these:
"i’m pretty blindly aggressive against all the manifestations of capitalism so naturally my takeaway is Eliminate The Stock Market: It Is Stupid And Harmful And Archaic And, Perhaps Worst Of All, Boring."
"moisturizing in my 20s like i’m in my 40s with the (pointless) hope i won’t look like i’m in my 50s by the time i hit my 30s"
Here she's offering to help buy some guy a mattress: https://mobile.twitter.com/itsa_talia/status/107409983684723...
Here's she's gone to LA (from New York) for work:
"lemme try this in LA-speak: hey, LA buds! although i’m in town working on a tv project, i’d love to hang out tonight! let me know if you’re interested!"
In my thinking, this author does not seem to be living the life of a poor person trying to save.
If you downvote, please share your point of view. I'd really like to understand.
I come from a poor neighborhood. I get it. Most of childhood friends are in jail or are dead. But I have a hard time believing someone with a bachelor's has to scratch it with the rest of them with multiple part time jobs, not in this economy for sure.
What a terrible way to look at it, making it seem like it’s entirely out of your control and you need outside help just to survive. There’s many examples of people who have climbed out of poverty to middle class, even upper class. I highly doubt they’d spread the advice that being poor is a hopeless disease.
Is this not the case? It seems rather apparent that we all depend on our environment (including one another) for survival.
There are also many examples of people who have survived cancer.
The commonality is it was out of their control, they absolutely needed outside help just to survive, and that their odds were terrible. The existence of rare exceptions only highlights the fatality rate.
Unlike cancer, however, there's a known, 100% effective cure for poverty: money. GDP per employed person in the US is over $120000 while the average wage is just over $50k. The solution is obvious.
Equal productivity would just mean the average and median wages would be the same.
Government spending, funded by taxes, contributes to the GDP like any other spending.
That's exactly the problem. You're thinking of Gross Value Added (GVA), which strictly talks about value added through normal economic activity. Once you start "removing" productivity through taxation and "adding" productivity back through spending/subsidies you have a new variable- the presence of that variable is the difference between GVA and GDP. That variable doesn't necessarily net out to 0 either, or even close, if the government runs a surplus or deficit as the United States does.
Regardless, GDP can be calculated by summing all income across all sources. It represents a nationwide increase of wealth. The gap between wage per worker and GDP per worker indicates that, despite labor being the only source of wealth generation, labor only receives a fraction of its productive efforts back as wages. I like it because illustrates the gap between capital and labor, as an alternative to the more traditional income inequality between workers.
Its market cap divided evenly among its half million full and part time workers would make all of them millionaires.
The problem isn't just that common advice isn't helpful; it's well-meaning outsiders just missing this over and over and endlessly giving the same unhelpful, irrelevant advice.
No, you try, fail, try again, fail, try some more - to save up, and start making more. All that advice glosses over just how hard it actually is (not that it can even convey it properly), and it takes time, but you can't give up unless you're ready to kick the bucket at any time.
Look for a better paying job and scrape together every dime you can until then. Don't indulge in the burger or chips, spend that on making a massive pot of cheap hearty soup, stew, or gumbo that'll last you through the week. Bunker down and take free indulgences. (a free game or movie from a maybe less than official source on the internet if you have to)
And when I say look for another job, I know that sounds like horrible advice but it is valid. Look for the physically demanding job with long hours. Mine was in a mushroom packaging plant. It was hard work for 60+ hours a week and most people gave up in less than 2 weeks but it was good consistent money. Places like that exist all around. On paper they look like low income with poor work conditions but overtime is extremely helpful when you work 60+ hours a week.
Life is not by any means pleasant when you are poor but if you are as frugal as possible and know where to look you can almost always find a job that will leave you not always worrying about being able to pay the bills. Then you can start saving.
There is a wealth of ways that healthy people with nothing but free time (to both work 60+ hours, AND to find that work; how did you pay for yourself while you were finding that work? Can everyone else use that same source of funding?) and access to basic facilities can help themselves. But once people fall so far that your advice is no longer applicable, and they find themselves living somewhere like the US, they're fucked permanently. A permanent underclass.
Which is the worst thing one can say. It's just a short term relief. If you plan on living, you need to NOT waste money AND always look for better opportunities.
At the core, there's really three options: Advance (save more, learn more, to ultimately earn more), survive hoping there's no major personal disasters, or die. If you plan on living, it's best not to give into the easy choice.
Also typical HN, discuss poverty and pat yourselves on the back for thinking about the poor (unlike those other cunts), while downvoting people with actual experience because it makes you feel bad. Waah, waah. Just fucking ban this account already, I don't even know why I'm here. Upvotes for everyone.
Whether that's a valid approach is up for debate but that money is there.
The reality is people in that scenario have a backlog of unmet needs as well as unsatisfied obligations, and the occasional, but consistent enough set of unexpected costs to render saving almost moot.
Skip the fries Skip the debt collector Skip that new light bulb Skip proper heating
Etc...
Manage to save a couple hundred, car breaks down, kid gets sick.
That's how it goes.
At some point, risk reward will make crime / going on the hustle very attractive. Then that happens.
I know that I'm supposed to address the strongest interpretation of a comment, not the weakest one - but I genuinely cannot tell what your point might be here? That having 200 bucks saved up when that emergency hits has no value? That it's better to have a broken car you can't afford to repair, and maybe lose your job as a result? It literally makes no sense to me.
Really, this exercise has high value when we seek understanding.
You did that by getting after the question in your mind, rather than some form or protocol. That's where the good stuff is, most frequently. Not always, but good conversation hits home far more than appropriate, or proper conversation does.
Well played, I often do the same.
I will add more context next time. Good feedback on a difficult topic.
Her choice is tiny bit of happiness now and lots of misery, or just lots of misery. She's already fucked. Middle class advice on making small savings to build up a pot of cash is not relevant.
I know you read the article, but you just can't stop with the very same irrelevant advice the article is pointing out is irrelevant.
Okay, then maybe she should consider declaring personal bankruptcy and getting a clean start? There are some debts that cannot be discharged using bankruptcy, but they're not the sort of debt that f---s you over and that you have no chance in hell of paying off. Solutions are out there, she should use them.