5 ms·

I feel like this might be coming from a position far above minimum wage, because in practice the poor aren't that stupid. You get trapped in cycles of incredibl

by zanny 7y ago

I feel like this might be coming from a position far above minimum wage, because in practice the poor aren't that stupid. You get trapped in cycles of incredible housing expenses keeping you in constant short term debt and the lack of income leading you to constantly seek new revenue sources, but being in that condition is inherently expensive and money in is always trying to fill up a bucket with a hole in it.

bluGill 7y ago
Back in my college days I was able to live on minimum wage, including paying tuition. I knew several other people doing the same thing and even supporting a family on their income. Their housing expenses where a lot lower than you would believe possible: they lived in a tiny apartment in the bad part of time: they had a warm place (hot in summer: no AC), a dry roof, a kitchen and bathroom. We all had a cheap car, with enough money set aside to fix it as required. Of course we were the minority. Most people live exactly at their means (including whatever they can borrow). I understand, I like more space as well: I like my toys as much as everybody. I just believed my future was better if I didn't get myself into debt now.
- Spellman 7y ago
  But this was temporary pain for future gain. Imagine doing that for your whole life.
  - ndiscussion 7y ago
    The thing is.. when you refuse endure this temporary pain, the natural consequence is that the rest of your life will be filled with more pain. Sadly for some of us (myself included at many times in my life), we just can't make those decisions as easily as we hoped. Willpower and determination seemed so easy when I was young.
  - the_gastropod 7y ago
    This is where a little knowledge can go a long way. Assuming a ~10% interest rate (just to make the math easy, and is approximately what you'd expect in the stock market), it takes ~6.5 years of constant savings before your saved money earns more than the amount saved each year. In other words, you can give future you (6.5 years in the future) a raise over 100% of your current income by beginning to save some percentage of it (e.g. 10%). At 6.5 years, the 90% you can spend will be greater than your 100% from 6.5 years prior, and you get to continue to save 10%, further increasing both your income and your nest egg.
SkyBelow 7y ago
>because in practice the poor aren't that stupid I think it would be far better defined as learned helplessness in financial matters instead of being stupid. They can be overall smart people, but past experience has taught them views of money that are not beneficial to financial stability. They might even be able to give a lesson on good financial decision making, but on an emotional level they have trouble applying it to themselves. A much more jarring example of this is behaviors resulting from food insecurity in children. Children who come from very food insecure situations will hoard food even when they are now in a food secure environment. Often this will include hoarding food that does not keep, and any attempts to change this behavior just result in the hoarding being better hidden. From what I remember the advice of foster/adoptive parents in this situation is to provide food meant for hoarding that the child can stockpile and to let the next few years of food security slowly get the child to adjust, recognizing that some level of food hoarding might occur throughout their lifetime.

by zanny 7y ago

bluGill 7y ago

Back in my college days I was able to live on minimum wage, including paying tuition. I knew several other people doing the same thing and even supporting a family on their income. Their housing expenses where a lot lower than you would believe possible: they lived in a tiny apartment in the bad part of time: they had a warm place (hot in summer: no AC), a dry roof, a kitchen and bathroom. We all had a cheap car, with enough money set aside to fix it as required. Of course we were the minority. Most people live exactly at their means (including whatever they can borrow). I understand, I like more space as well: I like my toys as much as everybody. I just believed my future was better if I didn't get myself into debt now.

Spellman 7y ago
But this was temporary pain for future gain. Imagine doing that for your whole life.
- ndiscussion 7y ago
  The thing is.. when you refuse endure this temporary pain, the natural consequence is that the rest of your life will be filled with more pain. Sadly for some of us (myself included at many times in my life), we just can't make those decisions as easily as we hoped. Willpower and determination seemed so easy when I was young.
- the_gastropod 7y ago
  This is where a little knowledge can go a long way. Assuming a ~10% interest rate (just to make the math easy, and is approximately what you'd expect in the stock market), it takes ~6.5 years of constant savings before your saved money earns more than the amount saved each year. In other words, you can give future you (6.5 years in the future) a raise over 100% of your current income by beginning to save some percentage of it (e.g. 10%). At 6.5 years, the 90% you can spend will be greater than your 100% from 6.5 years prior, and you get to continue to save 10%, further increasing both your income and your nest egg.

SkyBelow 7y ago

>because in practice the poor aren't that stupid I think it would be far better defined as learned helplessness in financial matters instead of being stupid. They can be overall smart people, but past experience has taught them views of money that are not beneficial to financial stability. They might even be able to give a lesson on good financial decision making, but on an emotional level they have trouble applying it to themselves. A much more jarring example of this is behaviors resulting from food insecurity in children. Children who come from very food insecure situations will hoard food even when they are now in a food secure environment. Often this will include hoarding food that does not keep, and any attempts to change this behavior just result in the hoarding being better hidden. From what I remember the advice of foster/adoptive parents in this situation is to provide food meant for hoarding that the child can stockpile and to let the next few years of food security slowly get the child to adjust, recognizing that some level of food hoarding might occur throughout their lifetime.