Comment by DoreenMichele | Hacker News Reader

Comment by DoreenMichele | Hacker News Reader

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You end up with some of the following barriers to saving:

1. Cost of housing.

We mostly don't have affordable housing. This is a serious burden for many Americans. It's not legal to live in a hut without electricity or the like, even if you wanted to.

2. Our public transportation and walkability sucks.

Most Americans need a car. This is a huge financial and logistical burden for many people.

3. Healthcare

The US spends insane amounts on healthcare and people who are poor let problems linger because they aren't sure if it's worth getting seen and having the bill for it.

I've escaped that pattern. It was really challenging to escape it and I've been dirt poor a long time, in part because not having a car is a logistical barrier to earned income and even if isn't, it's a social signal that "I'm an incompetent loser" which helps suppress my income.

I'm gradually making progress on all of it, but it is tough to swim against the tide and our current tide is highly problematic and burdensome for most people in the US. So it's a damned if you, damned if you don't situation.

I can see people at one point being burdened by some of the scenarios you mention but do they happen every year or every other year to everyone without 20k in the bank?

Yes, cars being the biggest problem. If you're broke and you buy a new car, you end up with a lease or something with a big down payment; the other option is you have a huge finance issue, where you won't finish paying off your car for 7 years after it has 100k+ miles, and now you still owe 5k on a car that's breaking down, with monthly payments of $500/month+.

During this time, your rent has likely been raised each of these years.

Also during this time, you started making 50k, and are probably still making 50k.

The United States is in a very vicious cycle, mostly based around living, working, and commuting.

Why would you buy a new car? Buy a $2000 used 15 year old Honda Civic. You need to be able to go from point A to point B, perhaps a working A/C and heat in the car.

This is the thing, middle class people have been spoiled to spend $$$ in entertainment, useless gadgets and 65" TVs where they could just entertain themselves with frugal means - there are many! Go hike. Play chess and board games.

Stop buying sugary drinks at Starbucks for $5 every day. Everytime I think about middle class folks living paycheck to paycheck - I have no sympathy.

If you don't have disability, and have good physical and mental health, and are earning a middle class wage - you can become wealthy by saving and investing wisely.

What level of wealth are you talking about? Cancelling your Starbucks habit will save you 1-3k a year. What are you investing in to turn savings like this into real wealth?

Stick it in a mutual fund or index fund. If that's too adventurous and risky, get a CD[1] or buy government issued bonds

[1] https://www.schwab.com/public/schwab/investing/accounts_prod...

If you saved 150 dollars a month for 50 years and got 2% interest on your savings, at the end you'd have an extra 150k or so. That's nice, but not really wealthy. Especially because we're not taking into account fifty years of inflation.

If you want to be wealthy you need to figure out ways to earn gigantic amounts of money, not save small amounts by cutting out the pleasant parts of life. Wealthy people tend to either inherit or produce their wealth, not save it by a lifetime of penny pinching.

Yeah, save that money and may be invest in education or learning a new skill? Living paycheck to paycheck is a problem of lifestyle and not the problem of affordability.

Why would you buy a new car?

I bought a new car when I got a corporate job. The first 90 days were training. Missing any of the training -- even just being late -- could get you booted.

I had been a homemaker for about two decades. I was like 41 years old and it was my first full-time job. I have a bunch of college, but had job hunted a long time before finally getting a job offer. My POS older car was not reliable and was potentially going to cost me the job.

This was kind of "my big break" and I was sharing a single room with my teenager sons while living at a relative's house and going through a divorce.

People often spend money trying to make sure they can adequately qualify for a good job and it may not pan out. This is also essentially the TLDR behind a lot of crushing student debt in the US.

I will note: I'm pretty tired of the "poor people just need to stop drinking Starbucks coffee" trope, and have spoken about that previously:

https://news.ycombinator.com/item?id=19585270

https://news.ycombinator.com/item?id=19585789

> "It's generally disingenuous to act like if poor people just give up a few small luxuries, they, too, can invest their way to being millionaires. This is generally not true."

I read some of your arguments but I am not convinced, at all. You can't just say "This is generally not true" without substantiating your argument. Its a bold claim to say "Keep enjoying your $120/month coffee" when your condition is dire and you're trying to lift yourself from poverty.

> My POS older car was not reliable and was potentially going to cost me the job.

That's twisting the argument at hand. I didn't say buy a $2000 honda civic that's gonna leave you astray for your job interview.

I've lived and pulled myself out of poverty - just FYI.

No, it's not twisting anything.

People make decisions in the context of their actual lives. People trapped in poverty usually need something more than "one cool investing tip" or so-called self discipline.

> If you're broke and you buy a new car

That right there sounds like a self-created problem.

You need a car to get a job. You need a job to afford a car.

It's a systemic problem in the US where employers don't really want to hire you if you have no car because our public transit sucks, so they assume you can't get to work without a car.

And cars tend to be the second biggest household expense, after rent.

My brother has been in the automotive industry most of his life. Thanks to how computerized cars are, you can't really service your own vehicle anymore, even if you are a talented mechanic.

And cars just don't last like they used to. If it isn't new, you are probably paying so much more on maintenance that it isn't really saving you money compared to getting a new car.

Americans are prisoners of the need to own a car. It's a huge financial burden and my life works as well as it does because I escaped that trap more than a decade ago. It's part of why I can survive at all while supporting three people on well under $20k annually.

But most Americans can't imagine escaping it. I get a lot of deer in the headlights looks and have largely stopped talking about the fact that it's possible to make other choices because it's just so unimaginable for many Americans and they just act like I'm a loon and out of my mind completely.

> You need a car to get a job.

You don't need a new car though. I've managed to hold down a job for years driving used cars.

> employers don't really want to hire you if you have no car because our public transit sucks, so they assume you can't get to work without a car

Other than delivery jobs, I didn't think employers even asked "do you have a car?" in job interviews. It seems like such a weird thing to ask in a country where, as you say, pretty much everyone has a car.

> And cars just don't last like they used to.

This is straight-up BS. Cars last longer than ever these days. [1] Buy Honda or Toyota and it will likely last over 200k miles.

> If it isn't new, you are probably paying so much more on maintenance that it isn't really saving you money compared to getting a new car.

New cars cost a lot more in insurance and interest than used cars. That's extra money you will definitely spend if you buy a new car - versus money you might spend if your used car turns out to be a lemon requiring a ton of repairs.

New cars also depreciate faster. The minute you drive a new car off the lot, it's worth 20% less than you paid for it. That's literally money out of your pocket, but no one seems to count it when saying "used cars cost more in maintenance."

1. https://www.consumerreports.org/car-reliability-owner-satisf...

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