Why poor people make bad decisions

[Wolfie]

I know several "poor" people living off the government who have iPhones.

Maybe we just know different people.

 

[das_nut]

I know several "poor" people living off the government who have iPhones.

Maybe we just know different people.

I'm just saying I know cooler poor people.

iPhones? How conventional!

 

[Spang]

The world would be a better place if poor people didn't have nice things.

 

[beancounter]

The world would be a better place if poor people didn't have nice things.

If people did not make a habit of purchasing things they can't afford, their lives would be better in the long run.

 

[Clueless Git]

If people did not make a habit of purchasing things they can't afford, their lives would be better in the long run.

Aye,

Micawbers Law: "Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery."

 

[LuvOurMother]

I can see what you're trying to say, but I'm not sure if I'd be so quick to raise the mental health flag. Depression, in and of itself, is not a clinical disorder. It can be a normal response to the person's environment.

I'd have to say chronic poverty is hard to understand if you haven't lived it.

[/quote]

Does living below the poverty line for 15 years count? Because I am technically "poor" and have been my entire adult life.

The author mentioned depression herself in the article, depression IS a clinical disorder. It does make sense that depression can be a response to living in poverty, but that isn't true for all because there are poor people that aren't depressed and conversely rich people that are depressed. Take the poor depressed person and give them money and resources not to be poor, depression isn't guaranteed to subside and for many will continue despite better living conditions and higher income.

 

[das_nut]

The world would be a better place if poor people didn't have nice things.

Can we extend this to net worth? After all, if we're going to judge "poor" people, many of which don't have house or student loan debt, for buying something nice, shouldn't we also judge the person with $60k in student loans and $220k left on the house? Why should they buy nice things - they are deeper in debt than the poor person!

Does living below the poverty line for 15 years count? Because I am technically "poor" and have been my entire adult life.

I'm not sure. For the purpose of discussing depression and poverty, I'd make a distinction between those without much, and those who aren't making it. It's the difference between those who are eating rice and beans and those who aren't eating at all today because the money had to cover another necessity.

The author mentioned depression herself in the article, depression IS a clinical disorder. It does make sense that depression can be a response to living in poverty, but that isn't true for all because there are poor people that aren't depressed and conversely rich people that are depressed. Take the poor depressed person and give them money and resources not to be poor, depression isn't guaranteed to subside and for many will continue despite better living conditions and higher income.

Depression isn't guaranteed to subside, that is true. But is it a mental disorder if the environment someone is living is capable of dragging you down?

I get the feeling that a lot of people think that poverty is just like middle class, except that everything is a little more shoddy and worn, everything is a cheaper version, a cheaper brand. A few luxuries may be missing. Poverty can be like that, if you're lucky.

If you're unlucky, poverty is horrible.

 

[LuvOurMother]

I'm not sure. For the purpose of discussing depression and poverty, I'd make a distinction between those without much, and those who aren't making it. It's the difference between those who are eating rice and beans and those who aren't eating at all today because the money had to cover another necessity.

Depression isn't guaranteed to subside, that is true. But is it a mental disorder if the environment someone is living is capable of dragging you down?

I get the feeling that a lot of people think that poverty is just like middle class, except that everything is a little more shoddy and worn, everything is a cheaper version, a cheaper brand. A few luxuries may be missing. Poverty can be like that, if you're lucky.

If you're unlucky, poverty is horrible.

For me eating comes first and I often go without other "necessities" to buy and forage for food. I didn't have a stove or oven for several years for example. It's possible to make it without much to muddle your distinction.

Yes it is a mental health issue if the environment is "dragging you down". There are people in the same environments that are not depressed or being drug down.

I don't know anyone that thinks poverty is like middle class.

 

[Clueless Git]

I don't know anyone that thinks poverty is like middle class.

People on benefit level incomes who spend as if they were on middle class incomes must think exactly that?

These would be type of people who end up in overspending (as opposed to 'investment' debts like mortgages/student loans etc) debt.

If we don't all know, or have known, at least one of those I'd be very surprised.

 

[Clueless Git]

Can we extend this to net worth? After all, if we're going to judge "poor" people, many of which don't have house or student loan debt, for buying something nice, shouldn't we also judge the person with $60k in student loans and $220k left on the house? Why should they buy nice things - they are deeper in debt than the poor person!

Because such people are borrowing against 'investments' they have already made in bricks'n'mortar and the higher earnings potential that education and qualifications brings.

There is a big difference twix being in debt for those reasons and being in debt simply because you've '****** your money up against the wall', if you'll pardon the phrase.

 

[Spang]

If people did not make a habit of purchasing things they can't afford, their lives would be better in the long run.

How can you prove that a poor person with an iPhone would be better off in the long run if they didn't have that iPhone, or that flatscreen, or whatever else poor people shouldn't have, according to some?

 

[beancounter]

How can you prove that a poor person with an iPhone would be better off in the long run if they didn't have that iPhone, or that flatscreen, or whatever else poor people shouldn't have, according to some?

They would have less debt and/or more money available for necessities.

I think it could be reasonably argued that a basic cell phone is a necessity. But there is no way a smartphone, especially a high end smartphone is a necessity.

 

[Ann Chovie]

They would have less debt and/or more money available for necessities.

I think it could be reaonably argued that a basic cell phone is a necessity. But there is no way a smartphone, espcially a high end smart phone is a necessity

My workmate is a CAB money/debt specialist and sits opposite me at work. I listen to her advising people who are trying to deal with poverty and move forward. The first rule is to eliminate luxuries.

She ruthlessly scrutinises their incomings and outgoings.

She always encourages them to exit expensive smart phone contracts where possible, or sell smart phones if they are owned. But she never tells them to leave themselves without mobiles. Most of her clients do not have access to landlines and are reliant on mobiles for contact with the Jobcentre and possible job opportunities if they are unemployed.

She also advises them to retain older, cheap run around cars so that they are mobile if they are called for interviews as the price equates to what they would pay on public transport and do not have cash available for in the case of a chance job offer. But she does advise them to extract themselves from expensive hire purchase agreements by selling off more expensive, newer cars they are not able to pay for.

 

[das_nut]

Because such people are borrowing against 'investments' they have already made in bricks'n'mortar and the higher earnings potential that education and qualifications brings.

There is a big difference twix being in debt for those reasons and being in debt simply because you've '****** your money up against the wall', if you'll pardon the phrase.

If it's fair to judge the poor for their finances, why isn't it fair to judge the middle class for their finances?

Does that middle class family really need that large home? Or could they get by with a more modest one? What about the credit card debt they are carrying, they must have lived beyond their means? Or getting that new car with the new car loan - why couldn't they just continue to drive old cars until they could afford a new one outright, or why didn't they buy a cheaper used car? Why did they take out such massive debts to go to school - they could survive on rice and beans. And just look at the ones still in school - taking grants and loans, and yet plenty of them still have iPhones.

Isn't this all valid criticism?

Or is it different when it applies to a class you're part of?

 

[nigel1]

If it's fair to judge the poor for their finances, why isn't it fair to judge the middle class for their finances?

Does that middle class family really need that large home? Or could they get by with a more modest one? What about the credit card debt they are carrying, they must have lived beyond their means? Or getting that new car with the new car loan - why couldn't they just continue to drive old cars until they could afford a new one outright, or why didn't they buy a cheaper used car? Why did they take out such massive debts to go to school - they could survive on rice and beans. And just look at the ones still in school - taking grants and loans, and yet plenty of them still have iPhones.

Isn't this all valid criticism?

Or is it different when it applies to a class you're part of?

I judge all iPhone owners equally.

 

[Clueless Git]

If it's fair to judge the poor for their finances, why isn't it fair to judge the middle class for their finances?

Because such people are borrowing against 'investments' they have already made in bricks'n'mortar and the higher earnings potential that education and qualifications brings.

There is a big difference twix being in debt for those reasons and being in debt simply because you've '****** your money up against the wall', if you'll pardon the phrase.

If you don't see a not at all subtle difference twix the two then this exceeds my ability to explain.

Or is it different when it applies to a class you're part of?

I am part of whichever class it is that survives on less than minimum wage Das.

Sitting on an ever multiplying pile of cash made by investing and reinvesting the few shillings I originaly saved though.

Technicaly the class I belong to is the cash rich poor.

 

[Clueless Git]

I judge all iPhone owners equally.

This makes a much sense as judging everyone who owns a pneumatic drill equaly.

 

[nigel1]

This makes a much sense as judging everyone who owns a pneumatic drill equaly.

No, it makes as much sense as judging everyone who owns a particular expensive brand of pneumatic drill with pink sparkles and a cutout on the case so their friends can see the orangutang logo on the pneumatic drill inside equally.

 

[Clueless Git]

No, it makes as much sense as judging everyone who owns a particular expensive brand of pneumatic drill with pink sparkles and a cutout on the case so their friends can see the orangutang logo on the pneumatic drill inside equally.

Oh, I see ...

You mean like the iPhone is not neccesarily the best value for money 'efficiency tool', kinda thing?

I have to concede you may have a fair point, at face value, there.

 

[das_nut]

Because such people are borrowing against 'investments' they have already made in bricks'n'mortar and the higher earnings potential that education and qualifications brings.

So how is having a brand new car that you're still paying of and is depreciating an investment?

How is an iPhone an investment? How about cable TV? Vacations? Expensive clothing and shoes? Eating out?

The middle class tends to be in debt. Much of it may be "good debt", but it is still debt. And there's still plenty of bad debt.

There is a big difference twix being in debt for those reasons and being in debt simply because you've '****** your money up against the wall', if you'll pardon the phrase.

I'm seeing a middle class that frequently complains how they are being squeezed for money, yet engages in extravagances that they'd criticize the poor for having. I'm seeing a middle class that has atrocious savings. I'm seeing a middle class where most have underfunded retirements and lack an emergency fund. I'm seeing a middle class that treats carrying credit card debt as normal.

If you don't see a not at all subtle difference twix the two then this exceeds my ability to explain.

There's a difference. The poor spend less, and tend to have less total debt. They also have less assets and make less.

I am part of whichever class it is that survives on less than minimum wage Das.

Sitting on an ever multiplying pile of cash made by investing and reinvesting the few shillings I originaly saved though.

Technicaly the class I belong to is the cash rich poor.

Congrats. Don't buy a smartphone, else some people will judge you.