Q about wealth/poverty

[Catwoman]

That's crazy! What on earth are they buying? I could hope that most of that is spent on giving people money for their kids 529 plans, but somehow I doubt it.

Things like computers and other electronics are expensive. Depending on where you shop, the cost of clothing and jewelry can add up very quickly, as well. Hobbies can be expensive, and even big toys can get awfully pricey.

 

Unfortunately, when you think about it, it's not difficult to spend 4k.

[kiana]

Things like computers and other electronics are expensive. Depending on where you shop, the cost of clothing and jewelry can add up very quickly, as well. Hobbies can be expensive, and even big toys can get awfully pricey.

 

Unfortunately, when you think about it, it's not difficult to spend 4k.

 

Yeah. I definitely knew kids who got a new car as a present when they turned 16. Even ignoring any other kids that's definitely going to put your amount over $4k. Ski trips? Jewelry? A personal ATV? A motorcycle? A snowmobile? A remote-controlled helicopter? Once you leave the realm of stuffed animals and Legos it's pretty easy to hit $4k.

 

I don't think it's really THAT common though -- I think it's outliers pulling the average up.

[LucyStoner]

I think that some people have a tendency to get large things as presents and others have a tendency to get them as they need them or want them. Neither is better or worse, just different. We'd probably not do computers as a present because we'd get them when they became important to get and wouldn't see it as Christmas related. Same thing with a phone or say the tablet that my son uses for writing (dysgraphia).

 

My Christmas present from my husband will cost around $10, a tradition we have stuck to in fat and lean years because it forces funny outcomes. But it's not like that's all we buy for ourselves through out the year either and I am aware of that. I suspect it more or less evens out with families of our general socioeconomic situation. Every year we shop for a piece of art for our anniversary and skip buying anything else for that or Valentines. Part of the reason we limit Christmas is so we have the money for that. Different names for the purchases, but probably a similar outlay.

[kiana]

Good point as well, Lucy. In retrospect I think there were some years my parents probably spent close quite a lot on Christmas presents, but there were many things like warm winter clothes and educational books/curriculum that others might not have considered as presents.

[LucyStoner]

What a super good idea!

It makes for a nice album of our years together. Though we are going to need to stop at some point because there's only so much space on our walls, lol.

[LucyStoner]

Good point as well, Lucy. In retrospect I think there were some years my parents probably spent close quite a lot on Christmas presents, but there were many things like warm winter clothes and educational books/curriculum that others might not have considered as presents.

This is one reason why we generally spent more on the families we sponsored for Christmas presents because it's not like my middle class kids need clothes, underwear, shoes, socks etc. they have that stuff. So to get the needs met and then add in cheer/fun of course it would be more than my generally well provided for kids. Also my sons have a well off generous grandmother with only 2 grand kids, lol.

[creekland]

4 in 5 American families are grossing 80k a year or less. Half of families earn at or under $50k or so. That's commonly more than one job per family, be it two workers or one worker with more than one job. The vast majority of people do not have $4000 to spend on Christmas. The average is about $700, many spend less. It is not common for people to spend that much on Christmas. Average per family Christmas spending has never exceeded $900 or so adjusted for inflation.

 

I don't think it is wrong for people to spend their money at Christmas but let's not pretend that most people can even find that kind of money to spend on Christmas. Way more families are living off less than that in a month than are spending it on Christmas.

 

Phew - thanks for posting this.  I KNOW we're not "normal" with our spending (Christmas or otherwise), but I didn't think we were that far off.  We're still less than average according to your stats, but Christmas has never been a big "present" deal with us - even when our kids were younger.  I'm just not that into "things" I guess.

 

That last statement in no way means I think less of those who do differently.

 

We all choose what to spend our money on.

 

Some I know get their paycheck each week (or every other week) and spend most of their "non-slotted for essentials" part in the bar and/or other things on the weekend.  They know they do this and they do it because they like to do it (so they say).  To each their own.

 

Then there are many, many others.  We all spend our money (whatever we have) where we want to.

[LucyStoner]

Switch to busts? Haha

Move it to our other palace.

[Guest]

Why would you feel self-conscious about it? :confused:

See, I totally get that. When we bought our Cadillac, it was hard to get over how conspicuous I felt in that car at certain locations. #1 at homeschool co-op. #2 at Goodwill.

[Reefgazer]

1.  Because when the simple act of owning a home or taking a yearly vacation is out of reach, you spend money on smaller and more visible pleasures because everyone needs some escape.

 

2.  Because you may not have had a decent financial education from your family.

 

3.  Because living hand to mouth makes it cheaper in the short term to buy some things new than to buy used at what would be a cheaper price long term.

 

4.  Because once you get a bit of money, you spend it right away because you realize it could be gone in a flash.

[Guest]

((Sadie)) This thread seems to be hitting some sensitive areas for you. I'm sorry if I am forgetting financial troubles you have posted in the past.

 

I don't think anyone is trying to make superficial suggestions to you. Or judge you.

 

The Millionaire Next Door is not a simple list of suggestions to build wealth. It's based on scientific research the authors conducted regarding the habits of millionaires. I found it interesting, but it's not a money advice book. I am going to meekly suggest you stop being angry about it if you haven't read it.

 

:grouphug: :grouphug: :grouphug: :grouphug:

I love the book The Millionaire Next Door, and the authors' data does mesh with most of my experiences (NOT observation of who drives what car, but people like my MIL, who are actually wealthy in net worth).

[Reefgazer]

Yup.  This is my dad.  Depression-era guy who wastes nothing.  He looks homeless, actually says and believes that as long as he has a roof over his head, a kerosene heater and a can of beans, he's fine.  And he lives like that - almost to the point of it being a bit of a mental illness.  He went to buy a new car because his old rust bucket finally bit the dust and when the dealer asked how he would like to finance the car, he said he wouldn't finance it, he would pay cash.  Because he wouldn't finance anything.  He got a better price because he paid cash.

I can explain it.  The "Millionaire Next Door"  book explains it also.

Most people who have money (excluding Hollywood) live very modest lives.  They don't like to show off their wealth.  

They have money in the first place because they are good bargain hunters.  They pay attention, and spend as little as possible on necessary items.  They buy older cars outright for cash, rather than get huge loans and pay monthly.  . Many of them had Depression-era parents and they grew up economizing

 

One of my kids played travel hockey for years.  Some of those parents appeared incredibly wealthy, if you looked at their cars, and their houses, and their travel RV's. 

 

More than one lost it all and went bankrupt in the last crash. 

 

[Audrey]

My daughter is a total fashion diva and wears some gorgeous and upper-end name brand clothes that she always gets comments on....all of them have come from the thrift store.  Someone could very well assume that I spent a ton of money on them, but I did not.  Also, family has occasionally gifted us some very nice things that we would not have purchased for ourselves.  

 

I don't know that you can always judge things like that.

 

I do that, too.  When I go into the big city, there are a couple of thrift and consignment stores where I can usually find designer clothing and accessories at drastically reduced prices.  I get more positive comments on those items than I do my quite inexpensive items, but I tend to mix them up to extend my wardrobe options.  I have sometimes had someone make a comment that my job must pay really well.  People make all kinds of assumptions based on what you look like and what you wear.  I mean, really?  I work for government for Pete's sake.  It should be pretty obvious I'm not buying this stuff new at full retail prices, but people will jump to their assumptions anyway.

[Farrar]

I don't know anyone who spends $4k on Christmas. Maybe if you have a huge family and you gift generously to everyone? I wouldn't count a trip exactly. If we chose to take a trip at Christmas, then we wouldn't be taking a trip later. It would be like, this is the big trip for the next two years. 

[justamouse]

That's crazy! What on earth are they buying? I could hope that most of that is spent on giving people money for their kids 529 plans, but somehow I doubt it.

One ring for over 2 grand, some decent rods and reels, maybe some art. A new macbook... 

 

It's really easy to spend that much. 

 

And, actually, we don't spend that much on Christmas because ... we just don't. But don't think that even if we did, that we wouldn't be saving for our children, though not in a 529. Saving for the future isn't a once a year thing, it's a lifestyle choice. 

[Indian summer]

I think wealthy people often get wealthy or stay that way by making wise financial decisions, which might include buying used items. And some poorer people get that way, or stay that way by making unwise financial decisions like over paying for items. so which came first, are they wealthy (or not) because they make wise decisions consistently (or not).

 

Then there's the matter of discipline. Now, I'm not saying that all wealthy people are more disciplined than all poorer people, but I think it's a factor some of the time. People who can delay gratification until they find the item at a fair price may end up saving a lot more than an impulse shopper. I wonder how many people are poor because of an inability to deny themselves their whims?

 

I have seen poorer people make very unwise financial decisions sometimes out of ignorance and sometimes just because they have fewer options to begin with. It's ironic that wealthy people tend to pay less interest than the poor, because they are less of a risk and sometimes (I've seen this) just knew the banking system better. A wealthy person may never have to pay interest in their lives, but many poorer people can only have what they want by making payments and paying interest that gives the wealthy a huge advantage toward building their wealth.

 

I think a lot of people have no idea just how much interest they pay out in their lives and accept it as a fact of life, when it isn't always and that alone can make a huge difference between becoming poor or rich.

[Guest]

Then there's the matter of discipline. Now, I'm not saying that all wealthy people are more disciplined than all poorer people, but I think it's a factor some of the time. People who can delay gratification until they find the item at a fair price may end up saving a lot more than an impulse shopper. I wonder how many people are poor because of an inability to deny themselves their whims?

Yes, true. Another characteristic that goes along with this is planning. A planner can save tons of money just by being alert to a purchase for a long time (even years) before it is necessary to spend. A non-planner is at a disadvantage because, if they were not thinking ahead, they will have to pay whatever is necessary when the need is upon them. This can be as simple as having to pay rush shipping because he or she did not order something earlier, or can be a major purchase need like "ignoring" the bald tires until they shred on the highway.

[Mergath]

I think wealthy people often get wealthy or stay that way by making wise financial decisions, which might include buying used items. And some poorer people get that way, or stay that way by making unwise financial decisions like over paying for items. so which came first, are they wealthy (or not) because they make wise decisions consistently (or not).

 

Then there's the matter of discipline. Now, I'm not saying that all wealthy people are more disciplined than all poorer people, but I think it's a factor some of the time. People who can delay gratification until they find the item at a fair price may end up saving a lot more than an impulse shopper. I wonder how many people are poor because of an inability to deny themselves their whims?

 

I have seen poorer people make very unwise financial decisions sometimes out of ignorance and sometimes just because they have fewer options to begin with. It's ironic that wealthy people tend to pay less interest than the poor, because they are less of a risk and sometimes (I've seen this) just knew the banking system better. A wealthy person may never have to pay interest in their lives, but many poorer people can only have what they want by making payments and paying interest that gives the wealthy a huge advantage toward building their wealth.

 

I think a lot of people have no idea just how much interest they pay out in their lives and accept it as a fact of life, when it isn't always and that alone can make a huge difference between becoming poor or rich.

 

A lot of wealthy people get that way because they're raised in an upper middle class home, receive a stellar education, have parents who can afford to send them to an Ivy or Ivy-equivalent college, and then make the connections at that college that allow them to find a job that pays enough to make them wealthy.  They KEEP their wealth by making wise financial decisions.  But they don't make it that way.  No matter how financially literate you are, how little you spend on clothing or how many coupons you clip, if you received a horrible education, are barely literate, and can't afford college, you're not going to end up wealthy unless you win the lottery, period.

[Mergath]

Yes, true. Another characteristic that goes along with this is planning. A planner can save tons of money just by being alert to a purchase for a long time (even years) before it is necessary to spend. A non-planner is at a disadvantage because, if they were not thinking ahead, they will have to pay whatever is necessary when the need is upon them. This can be as simple as having to pay rush shipping because he or she did not order something earlier, or can be a major purchase need like "ignoring" the bald tires until they shred on the highway.

 

But you have to have the capability to make enough money to save enough to accumulate wealth in the first place.  If someone is making $18,000 a year by working at a low wage job, if they manage to live absolutely for free and literally save every penny, after fifty years they'll only have saved $900,000.

[unsinkable]

When I hear about people spending $4000 on Christmas, I don't think of a nuclear family of 3 spending all that simply on each other and piling presents under the tree.

 

I think of people with an above average income who spend money on extended family and friends.

 

I know one woman whose DH was an automotive engineer and she spent thousands buying gifts for his department bc her DH wanted to give gifts to everyone.

 

I know a grandma who gives $100 to every child, spouse, grandchild and spouse. It is well over $4000.

[Sdel]

A statistical handful of wealthy ppl, Stephanie, do not negate the experiences of the chronically impoverished millions.

 

Okay.  I'm honestly not in the mood to argue with you.

 

Stefanie

[Elisabet1]

I live in a wealthier area and am frugal and save money and drive old cars. But, my birth sister lives way beyond her means, her children have had iPhones since grade school, they wear all new wardrobes every few months, and she drive an expensive luxury SUV. She also has serious financial issues and cannot even have a credit card now. She makes fun of my house because it is literally worth about 5 times her house, telling me my house is a waste and "I would hate to live there, it would make me feel gaudy." Meanwhile, she spews of jealousy and hatred and calls me "Ms Moneybags." When I bought my new minivan, 5 years ago because I had another child and needed more seating, she said stuff like "this van is great for you, but I could not live without my luxury SUV and leather and such." Whatever. Meanwhile, I can see online she has had criminal charges against her for hot checks. And she recently tried to steal from my daughter. I do not trust her in my home at all. Oh, and she claims she hates even driving through my town "because everyone there is a bunch of snobs" when in reality, she is the real snob. She says her children wouldn't be caught dead in public without an iPhone and will openly make fun of those who don't have them. It is sickening actually. Perhaps her lack of money sense and common sense is why she is always so broke.

[justamouse]

A lot of wealthy people get that way because they're raised in an upper middle class home, receive a stellar education, have parents who can afford to send them to an Ivy or Ivy-equivalent college, and then make the connections at that college that allow them to find a job that pays enough to make them wealthy.  They KEEP their wealth by making wise financial decisions.  But they don't make it that way.  No matter how financially literate you are, how little you spend on clothing or how many coupons you clip, if you received a horrible education, are barely literate, and can't afford college, you're not going to end up wealthy unless you win the lottery, period.

Let me smash all of your assumptions. 

 

We DO own our own business after making ZERO for one year and going into 30k worth of debt. I have no college education, and Dh didn't go to anything more than a glorified community college. Our first apartment was heated with space heaters and we had that plastic stuff over the windows. Kids kept coming. 

 

We built it, and we keep it. 

 

It's not only about education (I know people who can't speak grammatically correct English and yet have accumulated wealth), but it totally is about financial acumen. And sometimes no matter how much you try to teach people how to build it, they really would rather stay where they are because it is easier. That is just a truth. And it's a truth about many things. It's the truth about why people with diabetes eat pounds of sugar, it's the truth about why people have certain weaknesses, it's the truth about why parents choose to parent in questionable ways. 

[Mergath]

Let me smash all of your assumptions.

 

We DO own our own business after making ZERO for one year and going into 30k worth of debt. I have no college eduction, and Dh didn't go to anything more than a glorified community college. Our first apartment was heated with space heaters and we had that plastic stuff over the windows. Kids kept coming.

 

We built it, and we keep it.

 

It's not only about education (I know people who can't speak grammatically correct English and yet have accumulated wealth), but it totally is about financial acumen. And sometimes no matter how much you try to teach people how to build it, they really would rather stay where they are because it is easier. That is just a truth. And it's a truth about many things. It's the truth about why people with diabetes eat pounds of sugar, it's the truth about why people have certain weaknesses, it's the truth about why parents choose to parent in questionable ways.

I'm happy for your success, but statistically it's far outside the norm. A lot of business owners work hard and do everything right, and end up losing everything.

[justamouse]

Yes, true. Another characteristic that goes along with this is planning. A planner can save tons of money just by being alert to a purchase for a long time (even years) before it is necessary to spend. A non-planner is at a disadvantage because, if they were not thinking ahead, they will have to pay whatever is necessary when the need is upon them. This can be as simple as having to pay rush shipping because he or she did not order something earlier, or can be a major purchase need like "ignoring" the bald tires until they shred on the highway.

My single brother blows SO MUCH $ on buying stuff when he has to, and not when it's on sale (planning). And then he complains about not having $. But if he needs a ..toothbrush, for example, and goes and pays 3.50 for it, instead of buying 4 when they're 77 cents...(which would have been roughly the same amount of $).

 

That simple thing, built up over time and purchases, adds up. 

[justamouse]

I'm happy for your success, but statistically it's far outside the norm. A lot of business owners work hard and do everything right, and end up losing everything.

Stats? Most business owners I know are still in business. And they're not HUGE businesses, they're just mom and pop places that provide good service. 

 

 

[mom2scouts]

We have never spent 4K on Christmas, even with 5 kids. My kids have always had more than a few presents, but that's because we rarely buy anything for them other than on Christmas and birthdays.  Many of their Christmas presents are socks, underwear, toothbrushes, gloves, hats, needed clothes, bath products, and school supplies.

[Catwoman]

Let me smash all of your assumptions.

 

We DO own our own business after making ZERO for one year and going into 30k worth of debt. I have no college eduction, and Dh didn't go to anything more than a glorified community college. Our first apartment was heated with space heaters and we had that plastic stuff over the windows. Kids kept coming.

 

We built it, and we keep it.

 

It's not only about education (I know people who can't speak grammatically correct English and yet have accumulated wealth), but it totally is about financial acumen. And sometimes no matter how much you try to teach people how to build it, they really would rather stay where they are because it is easier. That is just a truth. And it's a truth about many things. It's the truth about why people with diabetes eat pounds of sugar, it's the truth about why people have certain weaknesses, it's the truth about why parents choose to parent in questionable ways.

:iagree:

 

We have several very successful clients who literally started with nothing and have done very well for themselves despite the odds against them -- including some who moved from other countries in their teens and didn't speak a word of English when they arrived.

 

I have heard people say they just got lucky, but there was no luck involved. They had ambition, drive, and motivation, and they worked like dogs for every bit of their success. They studied hard to learn the language, and studied hard to learn the things they needed to know in order to move toward success. And it's not as though they were overnight successes -- but when they weren't doing well or even had outright failures, they never gave up on the dream of being successful.

 

It is very easy to say there are no opportunities, but it is definitely possible for a reasonably intelligent person to find and make their own opportunities. It is absolutely not easy, but it is possible.

[Sdel]

A lot of wealthy people get that way because they're raised in an upper middle class home, receive a stellar education, have parents who can afford to send them to an Ivy or Ivy-equivalent college, and then make the connections at that college that allow them to find a job that pays enough to make them wealthy.  They KEEP their wealth by making wise financial decisions.  But they don't make it that way.  No matter how financially literate you are, how little you spend on clothing or how many coupons you clip, if you received a horrible education, are barely literate, and can't afford college, you're not going to end up wealthy unless you win the lottery, period.

 

Not always accurate.  Most self-mades surveyed in The Millionaire Next Door attended state schools and made Cs and Ds, if they even finished or attended college in the first place. 

 

Stefanie

[Catwoman]

You can't be serious. You think MOST businesses succeed?

http://www.forbes.com/sites/ericwagner/2013/09/12/five-reasons-8-out-of-10-businesses-fail/

She never said that.

[Sherry in OH]

Why would you feel self-conscious about it? :confused:

 

The clothing felt ostentatious.   It was out of keeping with our lifestyle and usual manner of dress.   Plus day care employees and some parents commented on him wearing what appeared to be very expensive clothing to day care.     They did not know he was at least the fourth child to wear the outfits and that we would never have paid retail for them.  We wouldn't have bought them on sale, but couldn't  turn down free clothing in good condition.

[Mergath]

Not always accurate. Most self-mades surveyed in The Millionaire Next Door attended state schools and made Cs and Ds, if they even finished or attended college in the first place.

 

Stefanie

Quite likely because that kind of book sells copies on the premise that anyone can get rich. If it talked about all the rich people who started out in fancy private schools, it would be kind of a downer.

[Catwoman]

Quite likely because that kind of book sells copies on the premise that anyone can get rich. If it talked about all the rich people who started out in fancy private schools, it would be kind of a downer.

Define rich.

 

How much wealth are you thinking about?

 

Because IMO, a whole lot of people who got "rich" never started out in fancy private schools, nor were their families particularly wealthy.

[justamouse]

You can't be serious. You think MOST businesses succeed?

http://www.forbes.com/sites/ericwagner/2013/09/12/five-reasons-8-out-of-10-businesses-fail/

I can think up a TON of reasons why some fail. Dh and I drive around all the time and ask ourselves WHY did they rent that place? The traffic flow is in the opposite direction and the parking sucks. Or the wait staff is too slow to turnover the quantity of people walking through the door. Or the building is wrong for the type of business that they're putting in. They didn't fire who they needed to fire. 

 

In the end, this is the sum total. Fail to accurately achieve product/market fit where money gets made, and you’re sunk. Entrepreneurs can actually have each of the four above reasons solved, but still miss the business model boat. Twitter is a perfect example of this (although 2013 may be the year they finally turn black in the profit/loss column).

 

 

And there's the fly in the ointment. Twitter is being thrown in as a business and I'm talking about small time entrepreneurs who are plumbers, and welders, and electricians, or product manufacturing. So no, I don't know many of those who have failed. Not many of us want to start up twitter. Our dreams are much smaller but we derive quite a bit of income from them. I don't want to be Zappos. I want a house down on the Jersey Shore right on the beach on 7 mile island. The NY Post doesn't even know who I am and I'm really happy with that. ;)

[Catwoman]

The clothing felt ostentatious. It was out of keeping with our lifestyle and usual manner of dress. Plus day care employees and some parents commented on him wearing what appeared to be very expensive clothing to day care. They did not know he was at least the fourth child to wear the outfits and that we would never have paid retail for them. We wouldn't have bought them on sale, but couldn't turn down free clothing in good condition.

OK. :)

 

I guess I just don't understand how it would be a problem to have well-dressed children. I don't get the idea of feeling like you have to apologize for having nice things.

[Sdel]

Quite likely because that kind of book sells copies on the premise that anyone can get rich. If it talked about all the rich people who started out in fancy private schools, it would be kind of a downer.

 

But they can.  It happens every day.  I take the broader view.  For me, it isn't about getting rich, it is about making better choices with what I do have, and that is the value the book has for me.

 

Stefanie

[Catwoman]

But they can. It happens every day. I take the broader view. For me, it isn't about getting rich, it is about making better choices with what I do have, and that is the value the book has for me.

 

Stefanie

Yes, and even if they don't get rich, they can still move ahead in life and be more successful than they were in the past. There is a lot to be said for self-improvement, even if it involves making thousands of dollars more a year and not millions.

[Guest]

A lot of wealthy people get that way because they're raised in an upper middle class home, receive a stellar education, have parents who can afford to send them to an Ivy or Ivy-equivalent college, and then make the connections at that college that allow them to find a job that pays enough to make them wealthy.  They KEEP their wealth by making wise financial decisions.  But they don't make it that way.  No matter how financially literate you are, how little you spend on clothing or how many coupons you clip, if you received a horrible education, are barely literate, and can't afford college, you're not going to end up wealthy unless you win the lottery, period.

 

 

Yes, it is true - a lot of wealthy people are wealthy because of advantages of their own comfortable upbringing. But there are also people who built what they had despite disadvantages or no important advantages. My MIL grew up on a hog farm in Nowhereville, USA. Very poor. One of 8 kids, mostly girls. One-room-schoolhouse education. Her father read about an opportunity for "girls" (young women) to go to Washington, DC and learn business clerical skills. She and her sisters did this. That is an amazing amount of nerve! She told me they were so backward, they did not know what they were supposed to do with their paychecks, so they just kept putting them away in a drawer for months! FIL's story was similar. Came from nothing. High school education. Learned a trade - plumbing. Made a lot of smart decisions. Were a good match for each other. Ended up with very significant assets and no debt.

 

I disagree with your last statement because I have seen so many people who did do exactly that without winning the lottery.

 

Do not misunderstand me - I do not think it is easy, and I am aware of the many advantages I have enjoyed, DH has enjoyed, and so many people who pulled up from little have enjoyed. Sometimes people have one or more disadvantages which make it highly unlikely they will ever gain wealth if they didn't start out with it. But people can and do move up from a lower economic level, even with no college, no seed money, a poor background, and so on. They may have to take some drastic measures, though...can you imagine putting five daughters on a train bound for the nation's capital, a thousand miles away?

 

 

But you have to have the capability to make enough money to save enough to accumulate wealth in the first place.  If someone is making $18,000 a year by working at a low wage job, if they manage to live absolutely for free and literally save every penny, after fifty years they'll only have saved $900,000.

 

 

I understand that, but nobody gets wealthy on 18k a year. One has to come up with a better plan, clearly. Can't get blood from a turnip.

 

 

Let me smash all of your assumptions. 

We DO own our own business after making ZERO for one year and going into 30k worth of debt. I have no college education, and Dh didn't go to anything more than a glorified community college. Our first apartment was heated with space heaters and we had that plastic stuff over the windows. Kids kept coming. 

We built it, and we keep it. 

It's not only about education (I know people who can't speak grammatically correct English and yet have accumulated wealth), but it totally is about financial acumen. And sometimes no matter how much you try to teach people how to build it, they really would rather stay where they are because it is easier. That is just a truth. And it's a truth about many things. It's the truth about why people with diabetes eat pounds of sugar, it's the truth about why people have certain weaknesses, it's the truth about why parents choose to parent in questionable ways.

 

Yeah. This.

[Sdel]

Define rich.

 

How much wealth are you thinking about?

 

Because IMO, a whole lot of people who got "rich" never started out in fancy private schools, nor were their families particularly wealthy.

 

Also, net worth and income are different.  Most people when they talk about "rich" talk about disposable income....which is not what is measured or talked about in TMND book.  Net worth is not money accessible for spending. 

 

Stefanie

 

[justamouse]

Quite likely because that kind of book sells copies on the premise that anyone can get rich. If it talked about all the rich people who started out in fancy private schools, it would be kind of a downer.

 

If you keep thinking that being rich is only for those who went to fancy private schools and ivy leagues, you're talking yourself out of the possibility before you even can start making the changes that would enable you to succeed. 

 

 

 

 

[Catwoman]

No ones opinions on this have to be taken into account. Using rich people mathematics, folks have already figured all this out.

http://inequality.org/wealthy-parents-inherited-advantage-declining-mobility/

http://nces.ed.gov/programs/coe/indicator_cbc.asp

http://en.m.wikipedia.org/wiki/Socioeconomic_status

 

 

And most saliently to this convo: http://www.washingtonpost.com/blogs/wonkblog/wp/2014/10/18/poor-kids-who-do-everything-right-dont-do-better-than-rich-kids-who-do-everything-wrong/

"Rich people mathematics?" Seriously? :glare:

[Catwoman]

if you keep thinking that being rich is only for those who went to fancy private schools and ivy leagues, you're talking yourself out of the possibility before you even can start making the changes that would enable you to succeed.

:iagree:

 

Exactly.

 

It's a great excuse to use if you're trying to find a reason why you shouldn't even bother trying, but that's about all it is.

[JumpyTheFrog]

These conversations often leave me feeling like some peple think it's pointless and impossible to dig out from poverty to middle class no matter how hard they work. Yeah, if you have health problems, you can be stuck. And while not everyone can become rich, the sense of doom and hopelessness of even trying to save any money astounds me.

 

What about all the immigrants who come here not even knowing the language who move up to middle class? Sure, the ones from certain countries might be educated, but many come from places with terrible educations and manage to work and send money home, even working for $8-10 per hour. Are they all working under the table and taking food stamps, housing allowances, etc? They must have some trick, either with frugality or scamming the system, in order to survive on low wages and still send money home.

 

The third ranked kid in my high school moved over from China with his two older sisters and parents when he was seven. I don't know what they did there, but here they ran a takeout restaurant. They didn't know English, so he and his sisters had to work there a lot. He went on to engineering school. I don't know what happened to him, but I doubt he's stuck in poverty.

 

So while not everyone can become rich, if so many people with so many disadvantages can improve their kids financial future, I have a hard time understanding how multiple generations of a family can get trapped in poverty, despite knowing the language and getting a free education, unless there are addiction or family culture issues (or the economy has been destroyed). What am I missing? It's hard to believe that all of these people are permantently unemployed in areas with terrible schools and ridiculously expensive unsafe housing with ten other severe problems and no way to buy a bus ticket to another city to start over. Sure, some people have situations this hard, but do we really have tens of millions of people that can't improve their lot even slightly over the long hall in the richest country in the richest period in world history?

 

I can't help but wonder if our culture has become too present-oriented, rather than future-orientented. Yes, I can understand how someone in poverty might find it pointless to save and therefore spend their money on small luxuries. But if they continue to do this, they are guaranteeing they will be stuck. Maybe they can't save enough to improve things, but isn't it worth a try? But yet whenever someone who is more frugal or future-oriented tries to point this out, we are told to stop "judging" the poor. At times in various threads it has almost come across as "the poor can do no wrong" and only some judgmental upper-class person would think that some are poor because of impulsive or foolish purchases.

[justamouse]

And most saliently to this convo: http://www.washingtonpost.com/blogs/wonkblog/wp/2014/10/18/poor-kids-who-do-everything-right-dont-do-better-than-rich-kids-who-do-everything-wrong/

That is salient. And why? because the largest changes a parent would have to make to enable their child's success is fully reliant on the POV of their situation. It proves that what I said before is true; that it's lifestyle changes that are the hardest to make --when not made-- hold you back. It has little to do with $. 

[Catwoman]

Yes serious,.glare. sadie was told that she should do some math and "think like a wealthy person" if she really wanted to stop being poor. Its tongue-in-cheek. Non-wealthy people are permitted to make small jokes, ya'know.

 

I have to go.

I don't understand the bitterness toward wealthy people.

[hornblower]

No ones opinions on this have to be taken into account. Using rich people mathematics, folks have already figured all this out.

http://inequality.org/wealthy-parents-inherited-advantage-declining-mobility/

http://nces.ed.gov/programs/coe/indicator_cbc.asp

http://en.m.wikipedia.org/wiki/Socioeconomic_status

 

 

And most saliently to this convo: http://www.washingtonpost.com/blogs/wonkblog/wp/2014/10/18/poor-kids-who-do-everything-right-dont-do-better-than-rich-kids-who-do-everything-wrong/

 

^^ this.

 

I think what was true in the past is just not true now & not likely to be in the future - esp with the decimation of the manufacturing sector.

[aggieamy]

Stats? Most business owners I know are still in business. And they're not HUGE businesses, they're just mom and pop places that provide good service. 

 

 

 

DH and I own our own business.  My father owned his own business.  My grandfather owned his own business.  My great-grandmother owned her own business. (None of us inherited a business from the other.  We all started our own doing our own thing.)  

 

None of us went to an Ivy league school.

 

My great-grandmother was an off the boat immigrant with a husband that gambled every penny he had away so everything was in her name only.  She *um* sold unmentionables to prostitutes.  I only found that out much later in life.   :laugh:

 

My grandfather started an aerial photography company in the 1950's.  He went to a state school on the GI Bill.  My grandmother paid the bills by teaching piano while they were trying to get the business profitable.

 

My father dropped out of high school before he was kicked and joined the army and went off to do a few tours in Vietnam.  He came back to the states, got into a lot of legal trouble, had more kids then he could afford, went to school on the GI Bill, married my mom, and had a bunch more kids.  He also started his own computer programming company in the 1980's.  

 

DH and I have an engineering company.  We saved every penny we could for a year and then both quit our jobs.  We spent a few years working all the time/worried about if we were going to make it/living like the poorest of church mice.  Now we're doing pretty good.  

 

 

I don't like it when people say that you have to go to an Ivy League school to be rich or to be successful.  It discourages people from trying hard and taking risks.  DH and I aren't where we are because we're smart or had some sort of secret network of old school cronies to help us out.  We saw an opportunity and took a big RISK.  

 

Like Justamouse our circle of friends is filled with successful people and quite a few small business owners.  I can't name a friend that went Ivy League.  I came from very sucesful parents but DH didn't.  My parents gave me a four year education at a state school and that was the end of the financial help.  When DH and I met he had $65k in student loans.  (Eeek!)

 

If you think that you can't be successful for whatever reason then you won't be.

[justamouse]

Your family and experience sound very much like mine.

 

Liking the post wasn't enough.

:iagree: 

 

Awesome post. And so very true. 

[JumpyTheFrog]

Am I the only one who feels that some are pretty much saying that if a poor person with the deck stacked against him can't get rich, what's the point of trying to save money? Maybe they should just aim for lower middle class, with the hope their kids can be solidly middle class.

 

Really, nobody expects someone to "save" their way to becoming a millionaire. That requires investing, too. Talking about the impossibility of saving a million dollars already shows the different in financial mindset because really only the top few % could ever save their way to a million. A self-employed business owner earning $150,000 per year has to pay about $40-50,000 in taxes (depending on the state), which means even someone earning that much won't save into being a millionaire unless they are super, super frugal. Even then, it would take most of their life. Investing might get them there faster.

[idnib]

Aaargh. I wrote a long post about the book and tried to submit w/o realizing I had lost my internet connection. Post eaten.

 

TMND is not a self-help book or a "get rich cheat sheet". It's simply a survey of millionaires and how they live and the results challenge Americans' views of millionaires. Perhaps we are less naive now, but at the time the book was popular, a fair summary would be to say not all rich people live like Dynasty, and not all people who live like Dynasty are rich. People really seemed to have this idea and were surprised to find that the average millionaire does not have a glamorous job and drives a 10-year old American-made pickup.

 

Stuff like that.