Why poor people make poor decisions

[1] https://gizmodo.com/im-buying-an-iphone-because-im-ashamed-o...

edit: Ok this obviously isn't black and white, but I'm saying this should be considered among other things.

A father, perhaps?

I think one of the biggest impacts we could make is to teach financial literacy in school, to everyone. Form and reinforce good habits early on. Demonstrate the danger of credit card interest. Demonstrate the power of compounding all throughout 1st to 12th grade. Taken seriously, it could have a huge effect on outcomes. It'd also make something like the Freedom Dividend (UBI) more effective when/if it happens.

I don't know your neighbours situation, but in general you can learn to be a good parent without having had one yourself.

The following may seem coldhearted, evil, or misguided, but it's the truth. After high school I wasn't making a ton of money, so moved back to near where I grew up, which was a very cheap place to live. After 2 years, I'd had it. I told my wife "I...I just hate poor people, I can't take it anymore." Maybe hate is too strong a word, but it was a feeling of constant frustration. People constantly fighting, littering, driving drunk into mailboxes, etc. When I first moved in, I felt sorry for a few of the folks, including my neighbors. But for the squalor they lived in, they made sure to sit outside blasting shitty music off their new model iphones. By the time I moved out, I had a very different view of the world, and a 'you reap what you sow' attitude.

There are many ways of tackling poverty. Education and mentorship are certainly very valid ways. And so too is expanding the social safety net. I don't know about you, but I would love to live in a society where everyone is smarter, less violent, and less prone to acting out.

As I understand, this is pretty much exactly the goal of such programs, to surround poor families stuck in the cycle with middle class knowledge/experience/wisdom.

Privilege is invisible, or so they say. This is an extremely short-sighted approach to trying to find an explanation to poverty. It is also a lazy excuse to avoid thinking more, because it leads to a conclusion like "... hence why they're poor. That's it."

I hope one day you have the (mis?)fortune of living under precarious conditions, then you could judge by yourself if your preconceived notions are actually in agreement with what you will experience. And then we will see how long it takes you to "stop being poor", it shouldn't be long right?, as you, presumably, already know how to avoid making the kind of "poor decisions" that makes people stay in that situation.

Edit: Check out this comic and see if it opens up your mind a bit. https://www.rnz.co.nz/news/the-wireless/373065/the-pencilswo...

> No. Poverty is a lack of education and, more importantly, mentorship.

No, poverty is a lack of material wealth.

A lack of education (of which mentorship is a component) may contribute to the durability of poverty, but it is far from the only factor which does so; active class discrimination in distribution of opportunity by the non-poor, both personally and through institutional, including public, policy, is also a factor.

Mentorship is absolutely true. Kids need someone to invest and grow them.

In the specific example you gave: on average kids that grow up in two parent households excel in every metric: graduation rates from high school / college, employment, total lifetime earnings, and incarceration rates.

For kids that grow up in single parent homes, their success on the same metric comes down to mentorship; having involvement from a successful person in their life and repeating their steps to success.

Whatever happens with your neighbor, keep at it as long as you're invited, and keep asking the tough questions. You will undoubtedly are a turning point in his life even if you don't see immediate results.

Attacking the character of suboptimal decision makers isn’t fair. They have lives and they have every right to decide how they live it. At the same time, they’re beholden to the economic forces that govern everyday life.

Thinking back at my childhood, my parents gave me a computer, a $300 baseball glove, an N64...etc despite not being able to afford it and I’m grateful for that. It allowed me to not be seen as the poor kid, ostracized by my peers, and provided me with countless hours of entertainment. When my friends went to summer camps, I played counter strike and Mario Kart at my house with the other kids who couldn’t afford camps while my parents worked. Sure, summer camp and a nanny could’ve provided me with a more meaningful experience, but let’s be real.

Without friends, and families of friends, I wouldn’t be where I am today. They’ve fed me countless dinners, driven me to school, and even took me on vacations. The parents most definitely knew my economic situation, but my peers didn’t. Don’t judge the kid. Don’t even try to understand. Just be there if you want. If not, then that’s fine too, just don’t be so patronizing about how his mom should optimize her life.

I’m thankful for it all.

I also want to say, having an iPad or two, a PS4 and cable TV, that's not really a good indicator of wealth. People's top expenses are generally housing, transportation, utilities and food, possibly healthcare if you need it. In your example, rent is subsidized, that means the top expense is minimized and a lot of savings comes from that. That said, I don't think its logical to say that the savings from holding off from buying two iPhones, an iPad and a PS4 can match that. Rent average price for a 2-bedroom is 1200$. That means in 2 or 3 months of rent, you've already purchased 2 iPhones, an iPad and a PS4. So no one can pay their rent by simply not buying these things. So I'm challenging your quote saying: "My neighbors have money". Do they really?

iPhones and video games are very cheap compared to good schools and safe and mentally stimulating childcare.

A poor person's children having an iPhone and PlayStation is no more an indication of their having money than my kids not having those things is an indication that I'm poor.

If anything the correlation is slightly on the opposite direction: I can afford better (expensive) activities for my kids (i.e. horseback riding camp, after school enrichment classes), which cost me tens of thousands per year.

Poor people routinely occupy their children with an iPhone with Candy Crush, which is cheap by comparison. Those things create the temporary illusion of prosperity, both for those in poverty, and for observers like you.

> Just recently he boasted that his mom is going to buy him a brand new $1500 gaming rig. I remarked that seemed quite expensive and wondered where the money would come from. "tax return" he replied non-chalantly. He also said once they got their tax return they would be going to Disneyland.

You shouldn't necessarily believe everything that a child in need says about what their family is purchasing. People (children and adults) do a lot of wishful thinking out loud. Some of it is to assuage themselves, and to feel normalized among their more privileged peers.

> These kids need mentors more than they need cash.

Families need cash to reduce financial stress levels. Being a single mother on govt benefits isn't the cakewalk you make it out to be. And absolutely, kids need mentors, but good mentors also don't come cheap, and they usually aren't willing to work with kids who has behavioral issues originating in financial stress and cheap entertainment distractions.

Volunteer mentors want to work with the "diamonds in the rough" kids, because the reward for mentorship is feeling like a super hero who "made a difference in one child's life".

That approach doesn't scale. The mentorship program that scales is the one right on front of us: financially stable parents and community, who have an inherent interest in the child's development.

>No. Poverty is a lack of education and, more importantly, mentorship. This is because [insert story about "neighbor"]

To put it very bluntly: I don't give two shits about your neighbour. This is the kind of thinking that justifies racism and other types of discrimination. I have a gypsy neighbour who collects welfare and does not work while he sells drugs in his neighbour |= therefore gypsies are leeches and criminals. You see the problem? For every story of yours I can tell you a story about a guy who had caring and hardworking parents, a nurturing environment, was he himself very hardworking, but simply had not enough money to make it in this world (not enough money to attend good schools, do extracurricular activities, had to care for his siblings or work after school himself, etc.). What does that tell me about this problem?

I don't care for anecdotes about your neighbour (because everybody has "a neighbour", or his cousin's wife has a friend from work who knows a guy who...), I don't care for "common sense opinions". I care for research, data, in short: meaningful facts about large-scale trends rather than individual cases, of which you can find every sort.

Poverty is a vicious cycle, and it has different causative factors and outcomes for different people. Inner city poverty and rural poverty share many common things, but are very different situations. I've seen both. I have been broke, but I've never been poor, and the difference largely had to do with my upbringing and my own personal character. To a large degree, my very belief that I could overcome being broke and didn't need to become poor is a component of that very upbringing.

People in poverty feel defeated, that there is nothing that they can do which will resolve their situation. They exist in a concentric sphere of negative feedback loops, where the only dopamine hit they can find to make them feel "okay" even for a little bit is found in illicit substances, meaningless sex, or conspicuous consumption that earns them the adoration of their peers. These are the high points of their life, and yet none of them help to break the cycle, they just reinforce it.

It's not enough to throw money at the problem. Poverty must be arrested, like the putting on of brakes. At a certain point in life... people are basically unsavable themselves and too set in their ways, but they can be convinced to save their children. The only effective program I've ever seen to actually combat the cycle of poverty was based on providing pre-teens and young adults in poverty with funds, education, and resources that their parents could not take advantage of or interfere with. Something as simple as providing thorough financial literacy education and a place where pre-teens could bank and their parents couldn't steal from them was very effective, especially when combined with no-cost after school programs which kept them off the streets and out of abusive and dangerous home situations for further education and mentorship. Unfortunately programs like this are contentious and very very expensive to operate and hard to scale. The program I observed had 40 kids in one neighborhood and took nearly 200 volunteers to pull off and 10 paid staff, plus facilities.

When I look at the situation as a whole, it's obvious to me that one of the single biggest factors in why this has become such a serious issue in the Western world is due to the breakdown of the nuclear family. Single-parent homes aren't in the financial position to spend time focused on their children's mentorship and education in the way that a two working parent home is, simply put. And educational outcomes, life outcomes really, are heavily tied to having parents which value education and good financial literacy and ensure that their children value those things as well, regardless of how many dollars are in their bank account or stuffed in the mattress.

EDIT:

To a large degree, how you think about the poverty problem comes back down to the classical philosophical question of nature vs nurture. The reality has always been that life is a little bit of both. But when it comes to poverty, enough time in those circumstances can effectively destroy someone's mental health and make them incapable of escaping. They become effectively addicted to escapist dopamine rushes and impulses, without any ability to plan for the long term. It has real, serious, negative mental consequences for adults and children both. But children can be saved, adults are often a lost cause. The best thing we can do is focus on breaking the cycle so the next generation of adults is better off than the current generation.

This is beyond insulting, at least in the way it is worded. Your example of the single mom who squanders charity money on expensive toys sounds exactly like right-wing propaganda, even if I am absolutely certain it does happen.

The reality is that the vast majority of poor people just don't have the money to squander. Sure, some of them may squander the money even if they had them, but the reality is that only a minuscule percentage do. Financial education would help these people, and can't hurt. But minimum income of some kind (I'm not necessarily convinced UBI is a good idea) will help all poor people.

A much more common story of poverty is families who can't afford to get their children through school, who live paycheck to paycheck and get forced into predatory lending when they hit financial difficulties (e.g. plumbing problems).

Negative impacts of that disposition can be compounding, and psychologically harmful without a break.

Yep, you nailed it. A friend of mine was ranting on how the poor people(in Europe) spend their money on iPhones, cigars, alcohol and cable TV instead of saving it. Lately, I realized that poor people spend their money on those things since it's their way of short term escapism from feeling poor and if they were to save it, the amount would be too small to suddenly lift them out of poverty so they don't even bother.

However, if poor people were clever, or had good mentorship, they would save that money and spend it on some courses in tech like sys-admin or getting certified as a professional plumber for example and get a better paying job, leading to a path out of poverty.

Unfortunately, most popele don't have the will or the guidance to figure this out by themselves.

Edit: Sorry, replied to the wrong parent

I think there’s a psychology term for that, Learned Helplessness:

https://en.wikipedia.org/wiki/Learned_helplessness

I believe the psychological term for this is 'learned helplessness'. https://en.wikipedia.org/wiki/Learned_helplessness

A lot of poor people resent society due to their poverty. There's a constant meme that their poverty is some one else's fault ("the man", "the rich", "white people", "government", "minorities", "foreigners" are all common ones, depending who you're talking to). It's a defeatist point of view, but it does two things. It allows them to protect their egos by directing blame for their situation at other people. It also allows them to justify poor decisions, because the world is setup against them, so why bother? You will often see this kind of rhetoric if you spend casual time with people in poverty.

You'll also see a slightly different permutation of this, where some people in poverty see the way out as only possible through someone else's actions. Whether that be a charity, the government, or just a personal relationship. They feel very disempowered and defeated, and often look for events out of their control to "save" them, rather than taking actions to correct their situation. Again, why bother saving money if you can't fix the situation. You might as well have a good time while you wait for someone else to save you.

I, personally, believe these mental traps to be a non-trivial part of what keeps people in poverty.

A number of years ago my parents heard of a very young single mother in their community. She was being housed at a local woman's shelter, but was kicked out for continually breaking the rules regarding use of the stipend that was provided for each mother. She had two kids and nowhere to go, so my parents took her in for what they thought would be a couple weeks.

The weeks bled into months, and by the time that my parents thought she would be fine moving out, they had housed her for close to half a year.

My parents learned many new things about poverty by having her and her kids there for so long. One of the most significant was the severity of the mental/emotional/psychological strain that someone who is destitute is burdened with. My parents were able to find her a part-time job, they paid for everything, and cooked most of the meals. She struggled though to even just get up in the morning, let alone make it to work on time or even go at all. She lost the job. And sometimes all she could do was sit on the porch and chain smoke.

About a half a year later my parents decided that she was probably well enough to be independent. They worked with some other families in the community to get her an apartment, a car, and a new job (good pay and part-time). She still has a lot of struggles, but can now fend for herself.

I'm guessing some people who lift themselves from poverty are both lucky and have a psychological makeup which keeps them stable enough to do the necessary work in getting there. We either forget, ignore, or are ignorant of others that need a lot more hand-holding along the way.

At least in my northern coastal state, there are lots and lots of family resources that were put in place as a result of the persistent work of the "intellectual class". Free library programs for all ages of children, free health education programs, and so on.

If there is neglect or abuse at home, it doesn't matter if there's some mildly positive neighbours / aunts / church people, I think it's hard for that to make a real difference.

It's a cold, clinical approach that lets "leaders" feel good and appeals to people at first glance but doesn't actually solve problems.

The things that will change people, families, and cities require true leadership, mentoring, holding people accountable, and friendship. It requires deep personal investment in people and neighborhoods and can't be done from an office downtown.

I don't see attention being spent on church helping the community... some churches may spend 10-20% of their efforts helping the community, sure, but why not go to a soup kitchen or animal shelter or litter pick-up? Then 100% of your effort is helping others, not listening to stories from ancient books or discussing how mythical beings would view our sins.

Community-wise, I'd prefer to play music, sports, sing in a chorus, head to a farmer's market or pub trivia. All of these don't require an abandonment of reason and enlightenment whilst still building community. And even when I have attended church, most people consider it a perfunctory duty to ensure they aren't put into Hell or, more closely, that they aren't judged by themselves or others for being pagans.

+ A lack of hope

+ A dearth of empirical evidence supporting the above

Is that what you're going for?

My ex has very little chance of being anything but poor, no matter the decisions he makes. He's on disability due to a mental disorder: Anyone that is on disability, especially at a young age (no matter reason), is in the same boat.

The business you work at could close. Even if you made good enough decisions so far, you may or may not bounce back well. You might not have ever made enough money to be able to save 3 months worth of expenses, for example, and this is more likely if you are young and simply haven't had a chance. Or you might get cancer while working somewhere that isn't covered by FMLA (in the US, anyway) - and while you aren't likely to die, you also have no job and no insurance.

On the contrary, you can pretty much pile on debt if you make enough money to make the monthly payments and never really be poor. Just indebted. Heck, this might even mean you qualify for loans easier in the future as long as you don't fall behind. The person that lives in their means cannot always find the same fate.