Author Topic: Mindset and poverty  (Read 7096 times)

Kyle Schuant

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Mindset and poverty
« on: June 14, 2018, 08:29:07 AM »
Here is an excellent example of the importance of mindset. A bipolar woman on a disability pension is, as you might imagine, struggling. But consider,

"After housing costs has to live on: $331.20 a week."

I emphasise: after, since in most Australian cities housing is the biggest single expense, and the most difficult one to reduce, since moving is harder than changing your shopping or internet provider, etc.

"Once I have been paid, I have money for that day and perhaps the next if I am lucky. After rent, electricity, phone, gas, internet, registration for the car and petrol for college there is no discretionary income at all. Notice that I haven’t included food. That is because I buy that last with whatever is left over. [...] I regularly go from one fortnight to the next with not a cent in my pocket. I’m used to that now. I have picked mould off food and eaten it anyway. People are kind enough to give me food for my two chooks (Freya and Houdini-Boo) which I then pick over to see if there is anything edible for me." (etc)

For comparison, the electricity, natural gas and water for my household comes to $60pw. Electricity is more expensive in her town of Adelaide than in mine of Melbourne, but mine is a household of four (2 adults, 2 small children), so let's assume the worst and that she has to spend as much as us. Gas and water aren't any more expensive but let's pretend they are.

Internet can be had for $80 a month. Most people are on Facebook or the like, so if you have internet then you can call them from home through that and it costs you nothing extra. But let's suppose you have a lot of landlines and government and business numbers to call, you can get a prepaid phone with 250 minutes of talking for $25 each recharge. Let's assume the person is chatty and talks on the phone for four hours a week.

In her state, vehicle registration for a small car is about $800 annually, and this is halved for people on pensions. So that's $400. She doesn't say how much she drives, but the average Australian small car in an urban area fills up every two weeks, and it's about $50 a tank.

With mental health issues there'll be some medication, but that's mostly covered by the pharmaceutical benefits scheme so wouldn't be over $20pw or so.

Weekly
Income: +$330
Utilities: -$60
Internet: -$20
Phone: -$25
Car rego: -$10
Car fuel: -$25
Medicine: -$20
Balance: +$170

She's not well-off, FIRE is impossible, but she should not be picking through her chicken's food. She doesn't discuss it, but she is pictured with a dog. Dogs are money-sinks, you can spend endless amounts on fresh meat and treating all sorts of health issues they have (particularly if they're a purebred). Nor does she mention going out to eat or the like. I suspect that, along with packaged food, is where a chunk of her money is going.

She tells us how her dog got sick and needed the vet, and this bill came at the same time as several other bills, so she sat at home without a phone or anything to do or anyone to see because she was broke. All those bills were known to her ahead of time, and could be planned for, money set aside. Only the vet bill was a surprise. But the known ones were not planned for, so they overwhelmed her and led to a depressive episode and suicidal ideation.

Now, all this is not to judge, but to illustrate. As a child I was poor so I understand what happens. And in my adult life I have been homeless, going from couch-surfing to actually being on the street for some nights. So I get it. Budgeting means being conscious of your poverty, which is gloomy and sad. To the poor person, being "rich" would mean "not having to worry", ie not thinking about money at all, just spending without thought. So by spending without thought the poor person gets to pretend to be rich... for today.

Of course, this mindset then perpetuates the person's poverty. If you don't think of the future then you don't plan for it, and you remain where you are. You can't get an education (she jokes she should have a PhD in first year, since she's started and abandoned so many degrees), start a business, improve your job prospects or get a promotion, or anything like that.

Another aspect of mindset is relationships. If you have a "helpless" mindset, then people step up and try to help you find that their efforts get no lasting results (her chickens will still be hungry tomorrow) and eventually give up on you, even cutting off contact entirely. I speak from experience in this. Whereas if you have a "growth" mindset, then the people who help you continue helping you; I speak from experience in that, too.

Again, this is not judging the woman, because but for the grace of God, there go you and I. Her depression obviously contributes to her poverty, and vice versa. But many people are poor and stay so without being depressed, so her story is relevant to many. The extremes illustrate principles most clearly, and this is an extreme of mindset. In doing anything to improve your life, mindset is key.
« Last Edit: June 14, 2018, 08:36:17 AM by Kyle Schuant »

inline five

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Re: Mindset and poverty
« Reply #1 on: June 14, 2018, 09:17:11 AM »
I've slowly come to the conclusion that we can't help everyone. I tend to be liberal but fiscally conservative (in the US liberal means being ok with gay marriage, taxes, helping those in need etc) however as much money is thrown at the issues the people won't change or improve.

Giving everyone a chance to get ahead is key but as you go through life you realize there are a large amount of people who do not invest in their futures, they live in the here and now. Also nearly everyone's sob story has a beginning, and the chain that exists leading them to where they are today has many links and places where their trajectory could've been altered.

In the US almost 8 out of 10 full time workers live paycheck to paycheck. This includes both higher wage earners or low skilled ones. You just can't help people that live life perpetually on the edge.
« Last Edit: June 14, 2018, 09:24:47 AM by inline five »

Nicholas Carter

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Re: Mindset and poverty
« Reply #2 on: June 14, 2018, 09:46:45 AM »
Here is an excellent example of the importance of mindset. A bipolar woman on a disability pension is, as you might imagine, struggling.
Weekly
Income: +$330
Utilities: -$60
Internet: -$20
Phone: -$25
Car rego: -$10
Car fuel: -$25
Medicine: -$20
Balance: +$170
I know that bipolar mania can be quite bad, and cause things like "spending all of your money on a new car, then driving that car directly into the ocean, and not being able to remember tomorrow that you did that and now you don't know where your money is." but also, looking at those prices...
Is it possible that someone is using her disorder to take advantage of her, you think? I've known a few people who couldn't seem to make ends meet, and it was because the people who were supposed to be working for them or taking care of them were robbing them blind.

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Re: Mindset and poverty
« Reply #3 on: June 14, 2018, 10:27:04 AM »
The other thing rarely discussed is that we (collective we) have a portion of the population that is not very intelligent.  I don't mean that to be insulting, but the way IQ tests are laid out, an IQ of 100 is the mean, with a standard deviation of 15. 

Theoretically, 13.6% of the population has an IQ between 70-85, and then more hover between 85-92ish.   The vast majority of these folks do not qualify as intellectually disabled (formally known as mentally retarded).

So in order to succeed in America, we expect people with low intelligence (not everyone who is poor is low intelligence), most likely also has some sort of difficult upbringing, most likely poverty is all they have ever known, most likely never taught any skills to get out of poverty or even encouraged to do things like read or learn skills, overcome the massive advertising that trains people to be consumers, and then magically overcome all those hurdles and become middle class. 
 

Just Joe

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Re: Mindset and poverty
« Reply #4 on: June 14, 2018, 12:25:45 PM »
There is that whole lifestyle compounding cost every time a person buys something. A person on a razor thin budget needs to be doubly careful of this as now they own another thing that needs eventual replacement, parts, maintenance, or upgrades.

Applies to kids, homes, cars, dogs/cats, and the dating scene among a million other things.

Who ever considers the total cost of ownership of anything but perhaps accountants and MMM readers?

Then from an outsider's perspective: are these people income challenged b/c of their spending or lack of income? Lack of more sophisticated long term planning skills? Lack of motivation?

The right answer is probably "yes". A hundred potential causes and a hundred potential outcomes.
« Last Edit: June 14, 2018, 12:50:24 PM by Just Joe »

Kyle Schuant

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Re: Mindset and poverty
« Reply #5 on: June 14, 2018, 07:09:12 PM »
Is it possible that someone is using her disorder to take advantage of her, you think? I've known a few people who couldn't seem to make ends meet, and it was because the people who were supposed to be working for them or taking care of them were robbing them blind.
No, she's living independently and no-one else is handling her finances but her, according to the article. Abuse does happen, but self-abuse is the most common kind.

The dog will take up a good chunk of her finances. It's actually very common for people on pensions to get a dog and spend a fortune on the damn thing. People on pensions are more socially isolated, typically, and want some company, and when society is taking care of you it feels good to take care of someone - or something - else. She won't be buying the $10 big bag of biscuits for it, or the pet minced meat, but the occasional rump steak, that sort of thing.

If she smokes it wasn't mentioned in the article, but the rate of smoking among the poor is much higher than in higher income brackets. Everyone has to have some pleasure in their lives, and the prospect of dying in twenty years isn't so terrifying when because of being elderly, disabled, unemployed or a single parent, your days are bleak and empty anyway. And taxes in Australia take a pack of smokes up to $30 or so. A pack every day or two can easily eat up all the disposable income of someone on a pension. Likewise alcohol, of course.

It's useful to look at mindset to examine ways our own mindsets help or hinder us.

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Re: Mindset and poverty
« Reply #6 on: June 14, 2018, 07:42:28 PM »
The other thing rarely discussed is that we (collective we) have a portion of the population that is not very intelligent.  I don't mean that to be insulting, but the way IQ tests are laid out, an IQ of 100 is the mean, with a standard deviation of 15. 

Theoretically, 13.6% of the population has an IQ between 70-85, and then more hover between 85-92ish.   The vast majority of these folks do not qualify as intellectually disabled (formally known as mentally retarded).

So in order to succeed in America, we expect people with low intelligence (not everyone who is poor is low intelligence), most likely also has some sort of difficult upbringing, most likely poverty is all they have ever known, most likely never taught any skills to get out of poverty or even encouraged to do things like read or learn skills, overcome the massive advertising that trains people to be consumers, and then magically overcome all those hurdles and become middle class.

This exactly. I have a cousin who the family suspects probably falls in this zone. He's not mentally retarded but may have a learning disability (such things weren't really diagnosed in our rural area almost 50 years ago.) He is a sweet, kind, good person who will probably be first in line at the Pearly Gates. It's just that modern life is too...complicated for him. He would have done very well about 75 years ago--get a factory job or work in someone's small business, maybe save up enough for a house, retire on a little pension + Social Security. No need for complicated insurance, tax paperwork, or investment options. No possibility for getting in trouble with credit cards--they weren't available to most people then. No internet, so you are dealing with most people face-to-face, and in a small town like his, you've known them all your life. Nowadays--he does have a family who looks after him, thank heavens, but you can explain certain things to him as simply as you can (especially abstract issues like money) he just.doesn't.get.it. If he didn't have a family safety net he'd probably look similar to this lady.

I think the 21st century has provided a lot of amazing opportunities with those who have the ability to navigate it, but those who don't...the breakdown of paternalistic systems has really left them behind.

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Re: Mindset and poverty
« Reply #7 on: June 14, 2018, 07:47:10 PM »
OP did you happen to see this article in the same series about life in the breadline https://www.theguardian.com/australia-news/2018/may/17/life-on-the-breadline-its-a-relentless-daily-struggle-to-not-feel-bad-about-yourself

This lady has $167 for the week after expenses - almost half of the other lady, also living in Adelaide. She is well aware of her financial situation. Although her arthritis keeps her from working continuously she has found temporary work in the past.

She has this to say:

Quote
There is a certain “tut-tut, why is she spending her money on that?” And this is a very tacit, underhanded way of keeping people in their place. You want to take pride in your appearance, you want to blend in and be normal, but then when you start talking about poverty, that slight comfort is not seen by others to be your right.

You start getting questioned on all the things that you have that are visible, which people assume you have spent quote “their hard-earned tax dollars on” unquote. It’s a relentless daily struggle to not feel bad about yourself when everywhere you turn you are being told by media and society that you don’t deserve to have any comfort, any safety, any kind of dignity. When you try to look nice, people start saying you’ve wasted your money on clothing. Poverty is basically an invitation to everyone who has a job to cast judgment on your life.

That last sentence bears repeating: Poverty is basically an invitation to everyone who has a job to cast judgment on your life.

Is this a poverty mindset or is this an MMM mindset?: 

Quote
...– just going to the supermarket can be crushing. The daily grind of agonising over small decisions that most people would not have a second thought about is relentless. Life becomes a series of endless justifications, one after the other. It is navigating a thousand different decisions and spending ridiculous amounts of time on deciding purchases. If I buy these new shoes, which are necessary, can I afford my electricity bill next week? If I spend this amount of money, can I put petrol in my car? If I buy this meat, which is better quality, will I have enough money for food for the rest of the week?

No one chooses to be both ill and poor..... 

Rosy

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Re: Mindset and poverty
« Reply #8 on: June 14, 2018, 08:02:58 PM »
The other thing rarely discussed is that we (collective we) have a portion of the population that is not very intelligent.  I don't mean that to be insulting, but the way IQ tests are laid out, an IQ of 100 is the mean, with a standard deviation of 15. 

Theoretically, 13.6% of the population has an IQ between 70-85, and then more hover between 85-92ish.   The vast majority of these folks do not qualify as intellectually disabled (formally known as mentally retarded).

So in order to succeed in America, we expect people with low intelligence (not everyone who is poor is low intelligence), most likely also has some sort of difficult upbringing, most likely poverty is all they have ever known, most likely never taught any skills to get out of poverty or even encouraged to do things like read or learn skills, overcome the massive advertising that trains people to be consumers, and then magically overcome all those hurdles and become middle class.

This exactly. I have a cousin who the family suspects probably falls in this zone. He's not mentally retarded but may have a learning disability (such things weren't really diagnosed in our rural area almost 50 years ago.) He is a sweet, kind, good person who will probably be first in line at the Pearly Gates. It's just that modern life is too...complicated for him. He would have done very well about 75 years ago--get a factory job or work in someone's small business, maybe save up enough for a house, retire on a little pension + Social Security. No need for complicated insurance, tax paperwork, or investment options. No possibility for getting in trouble with credit cards--they weren't available to most people then. No internet, so you are dealing with most people face-to-face, and in a small town like his, you've known them all your life. Nowadays--he does have a family who looks after him, thank heavens, but you can explain certain things to him as simply as you can (especially abstract issues like money) he just.doesn't.get.it. If he didn't have a family safety net he'd probably look similar to this lady.

I think the 21st century has provided a lot of amazing opportunities with those who have the ability to navigate it, but those who don't...the breakdown of paternalistic systems has really left them behind.

Yes, I've often thought how much better some people would be off had they been born in another century. In addition, it is almost as if those on the edge become more "dumbed down".
Good people who can't make it in our society - indeed there are quite a few. I'll even take it a step further alluding to the increasing deaths of despair.

We as a society seem to have taken a new and different path - those who continue on the old path find it leads to an abyss.

Kyle Schuant

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Re: Mindset and poverty
« Reply #9 on: June 14, 2018, 09:19:36 PM »
OP did you happen to see this article in the same series about life in the breadline https://www.theguardian.com/australia-news/2018/may/17/life-on-the-breadline-its-a-relentless-daily-struggle-to-not-feel-bad-about-yourself

This lady has $167 for the week after expenses - almost half of the other lady, also living in Adelaide. She is well aware of her financial situation. Although her arthritis keeps her from working continuously she has found temporary work in the past.
I didn't see that. And there's an example of someone in a similar situation who does better for herself, demonstrating what I said about mindset.

Quote
She has this to say:

There is a certain “tut-tut, why is she spending her money on that?” And this is a very tacit, underhanded way of keeping people in their place. You want to take pride in your appearance, you want to blend in and be normal, but then when you start talking about poverty, that slight comfort is not seen by others to be your right.
Absolutely. In other threads I have noted that we judge the wastefulness of people on $10k differently to the way we judge the wastefulness of people on $100k. The argument "but it's our taxpayer dollars!" is less persuasive when the speaker has received a free or subsidised education from the state, etc, and does everything they can to minimise those taxes they pay. All of us benefit from tax revenues spent for the public good, both directly and indirectly.

For example, my household on $130k or so can, if we wish, get 3 days a week of childcare, and its cost from July 1st this year is subsidised at about 65% by the government. Since it costs about $120 a day, we could be subsidised - effectively given - $240 a week. This happens to be equivalent to the unemployment benefit. To get the unemployment benefit the person must put in forms fortnightly in person and attend regular interviews and small short courses (in theory) designed to help them get a job, and missing any of these leads to a "breach" where they may have benefits cut off for six weeks. The government is constantly cross-matching any money paid them for working, and using an automated system which assumes that if they happened to earn $100 this week then they are getting $5,000 for the year and thus must pay some benefits back, and so sends threatening letters which take months of back-and-forth and legal nonsense to deal with, etc.

Whereas for us to get the childcare subsidy we need only fill in one online form once a year updating our circumstances (hours worked, volunteered, etc, and income), and there is no ongoing check of this.


So one person getting $240pw of public money is treated with aggressive suspicion and impatience, and another person getting $240pw of public money is treated with friendly trust and patience. And if we waste that money we are not judged in the same way that the unemployed person is.

So I certainly agree that there is a definite inequality in the way people are treated, and this is unjust and wrong. For example, I am against the debit cards that set aside some of a person's benefits for groceries - since then everyone near you can see that you're on benefits and what you're spending it on. It's your freedom to spend or waste your money as you wish.

Nonetheless the two cases illustrate well the difference mindset makes in improving someone's life, or keeping them miserable. I work as a trainer, and have helped people get off walking frames. I am not interested in judging people, I am interested in seeing people improve their lives.

Quote
No one chooses to be both ill and poor..... 
It depends on the illness, since many illnesses are those of lifestyle, and many can be mitigated by changes of diet and activity.  Likewise, some aspects of poverty are a choice. For example, one woman I know in one particular week stole her adult daughter's food because she'd spent all her money on cigarettes. Now, family has a duty to take care of one another, and when her daughter was in need she took her in, so turnabout is fair play. But it shows that it can be a choice in the sense of inertia, of continuing to do what you're already doing, however badly it's working.

But as I said, I understand why an impoverished person can't see beyond the struggles of today and does not worry about a few months let alone twenty years from now. I've been there, and it's part of the reason I had to build wealth in my 40s - I threw it away in my 20s and kind of muddled through my 30s.

I changed my mindset.


Part of that change in mindset was a sense of perspective. Many people here and in similar discussions think they have it tough. Well yes and no...

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Re: Mindset and poverty
« Reply #10 on: June 14, 2018, 09:52:41 PM »
Pets can be a lifeline for many people. Please don’t criticize this.?

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Re: Mindset and poverty
« Reply #11 on: June 15, 2018, 06:45:03 AM »
Pets can be a lifeline for many people. Please don’t criticize this.?

This is true but if it's a choice between feeling needed and loved now vs. the chance of a brighter future where you have the money to feel some stability in your life... It's still a tough choice but most people severely underestimate the cost of owning a pet, not to mention the limitations they put on your ability to move, have roommates, rent certain housing and the potential heartbreak when circumstances force you to give them up, not be able to afford a vet bill, or just the eventual loss of the pet, which is inevitable.

ETA: I didn't see others' comments as critical so much as questioning the decision.

Davnasty

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Re: Mindset and poverty
« Reply #12 on: June 15, 2018, 07:31:44 AM »
OP did you happen to see this article in the same series about life in the breadline https://www.theguardian.com/australia-news/2018/may/17/life-on-the-breadline-its-a-relentless-daily-struggle-to-not-feel-bad-about-yourself

This lady has $167 for the week after expenses - almost half of the other lady, also living in Adelaide. She is well aware of her financial situation. Although her arthritis keeps her from working continuously she has found temporary work in the past.
I didn't see that. And there's an example of someone in a similar situation who does better for herself, demonstrating what I said about mindset.

Quote
She has this to say:

There is a certain “tut-tut, why is she spending her money on that?” And this is a very tacit, underhanded way of keeping people in their place. You want to take pride in your appearance, you want to blend in and be normal, but then when you start talking about poverty, that slight comfort is not seen by others to be your right.
Absolutely. In other threads I have noted that we judge the wastefulness of people on $10k differently to the way we judge the wastefulness of people on $100k. The argument "but it's our taxpayer dollars!" is less persuasive when the speaker has received a free or subsidised education from the state, etc, and does everything they can to minimise those taxes they pay. All of us benefit from tax revenues spent for the public good, both directly and indirectly.

For example, my household on $130k or so can, if we wish, get 3 days a week of childcare, and its cost from July 1st this year is subsidised at about 65% by the government. Since it costs about $120 a day, we could be subsidised - effectively given - $240 a week. This happens to be equivalent to the unemployment benefit. To get the unemployment benefit the person must put in forms fortnightly in person and attend regular interviews and small short courses (in theory) designed to help them get a job, and missing any of these leads to a "breach" where they may have benefits cut off for six weeks. The government is constantly cross-matching any money paid them for working, and using an automated system which assumes that if they happened to earn $100 this week then they are getting $5,000 for the year and thus must pay some benefits back, and so sends threatening letters which take months of back-and-forth and legal nonsense to deal with, etc.

Whereas for us to get the childcare subsidy we need only fill in one online form once a year updating our circumstances (hours worked, volunteered, etc, and income), and there is no ongoing check of this.


So one person getting $240pw of public money is treated with aggressive suspicion and impatience, and another person getting $240pw of public money is treated with friendly trust and patience. And if we waste that money we are not judged in the same way that the unemployed person is.


So I certainly agree that there is a definite inequality in the way people are treated, and this is unjust and wrong. For example, I am against the debit cards that set aside some of a person's benefits for groceries - since then everyone near you can see that you're on benefits and what you're spending it on. It's your freedom to spend or waste your money as you wish.

Nonetheless the two cases illustrate well the difference mindset makes in improving someone's life, or keeping them miserable. I work as a trainer, and have helped people get off walking frames. I am not interested in judging people, I am interested in seeing people improve their lives.

Quote
No one chooses to be both ill and poor..... 
It depends on the illness, since many illnesses are those of lifestyle, and many can be mitigated by changes of diet and activity.  Likewise, some aspects of poverty are a choice. For example, one woman I know in one particular week stole her adult daughter's food because she'd spent all her money on cigarettes. Now, family has a duty to take care of one another, and when her daughter was in need she took her in, so turnabout is fair play. But it shows that it can be a choice in the sense of inertia, of continuing to do what you're already doing, however badly it's working.

But as I said, I understand why an impoverished person can't see beyond the struggles of today and does not worry about a few months let alone twenty years from now. I've been there, and it's part of the reason I had to build wealth in my 40s - I threw it away in my 20s and kind of muddled through my 30s.

I changed my mindset.


Part of that change in mindset was a sense of perspective. Many people here and in similar discussions think they have it tough. Well yes and no...

Thank you for outlining this example. It's a good way to frame it, and one you don't hear often enough.

I would also consider that not all of the judgment comes from the mindset you describe of "wasting my tax dollars". There are some (perhaps a majority?) who comment or judge because people are wasting their money and hurting their own chances of getting ahead. This nuance may not be apparent to the person being judged but in reality the judgment can come from a place of sympathy. Unfortunately the outcome for the judged is likely the same, feeling that they aren't allowed to enjoy the little things.
« Last Edit: June 15, 2018, 07:34:07 AM by Dabnasty »

Kyle Schuant

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Re: Mindset and poverty
« Reply #13 on: June 15, 2018, 05:13:59 PM »
I think it's fair to question the value of a pet when the pet led to her being so broke she couldn't go out of the house or talk to anyone for weeks and it led - in her words - to "suicidal ideation." So the animal didn't help her, it made her worse. Of course, I'm sure there were many other occasions where it helped her a lot.

The issue here is not having an animal, but simply that if you have one, you have to plan for it. For example, one person in her situation might manage to set aside $20pw so that once a year they could have a week-long holiday somewhere nice within the state. But someone with a pet might save that money aside in case of vet bills. In this example, the pet would be helping her twice - first with company and something to care for, and second with giving her motivation to get her finances in order.

After all, her dog got sick just before she'd paid other bills, but what if she'd paid all her bills the day before her dog got sick and needed the vet? Then she'd have nothing to pay the vet, and her dog would die. Poor planning of finances could lead to the death of the pet that gave her so much comfort. "But I care so much for this animal!" Great: then plan for its care. Don't just sit around staring vacantly at the TV gaping and then start waving your hands frantically when something happens. Plan.

My paramedic friends have a term for this sort of person: acopia. The person just can't cope with life. They get called out to panic attacks and "fits" and so on. And part of this is a sense of helplessness, that whatever they do nothing will work. There are a rising number of people like this in society, people with (relatively) minor mental health issues who just can't cope with life - or better-expressed, don't cope with life.

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Re: Mindset and poverty
« Reply #14 on: June 15, 2018, 05:23:51 PM »
I can relate to this because my mother could be very well taken care of but she has structured her life, continually taking out me car leases, to render her, end of the month poor, every month. She refuses to accept my help because she thinks I will take away her luxuries. It’s maddening. I think the paycheck to paycheck mindset becomes so ingrained people can’t even imagine another life. Hell, they probably have rarely seen it.

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Re: Mindset and poverty
« Reply #15 on: June 16, 2018, 06:50:21 AM »
I really don't think the story adds up actually.  I suspect some very important details are missing - is she having to pay old debts or something like that?  Some of the things she said also seemed truly odd and I wonder if they are not reflections of a phase of her illness (e.g. competing with the hens for food, taking glass slivers out of coffee powder on the floor).

I think the point that Kyle was trying to make though is that some people are really bad money managers (I'd suggest probably most people actually) and I agree that sometimes a lot of that is about mindset.

I've been helping a couple of friends with their budgets lately and they were amazed at the "magic" they thought I did when I rehashed them for them.   They had enough money to start saving (quite a good amount each week as it happens) and get on a different track but no one before had shown them a better PLAN than the one they already had (which was no real plan basically).

Jim Rohn used to say, "if you had a better plan....". It's a simple concept but can be life changing.


marty998

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Re: Mindset and poverty
« Reply #16 on: June 27, 2018, 04:41:21 AM »
I can relate to this because my mother could be very well taken care of but she has structured her life, continually taking out me car leases, to render her, end of the month poor, every month. She refuses to accept my help because she thinks I will take away her luxuries. It’s maddening. I think the paycheck to paycheck mindset becomes so ingrained people can’t even imagine another life. Hell, they probably have rarely seen it.

I think it's because her luxuries make her feel that she is not poor.

The millionaire next door doesn't feel the need to show that she is rich. As the previous responses have intoned, the one below the poverty line does.

canuckystan

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Re: Mindset and poverty
« Reply #17 on: June 28, 2018, 11:33:57 AM »
I am of the view that people are not generally stupid just because they don't make FIRE a priority or save like mad.  Fact is, people enjoy spending their money and they are ok with paycheck to paycheck (and maybe at some point they aren't ok with it and seek out resources to help).  I don't judge - it's a free country and there are plenty of ways to live one's life as one chooses.  May not look smart to you, but it's not your life.  I'm sure lots of people look at others driving a crappy car and saving every nickel and think that they are not intelligent either.

Kyle Schuant

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Re: Mindset and poverty
« Reply #18 on: June 28, 2018, 07:41:48 PM »
I don't think it's stupidity, in most cases. There is a difference between ignorant and stupid; ignorant is when you just don't know but can learn, stupid is when you can't learn, or when you have learned but ignore what you learned.

Now, I define "wasteful" as "spent without giving you happiness in proportion." Most people spending wastefully are not stupid, but some are ignorant. However, beyond stupid and ignorant there's simply thoughtless, never sitting down and thinking about what you want from life and how you should go about it. And I think that thoughtlessness accounts for most wasteful spending. For example, many people don't even know how much they spend on groceries. If you don't know if you spent $100 or $300, how can you decide if the money was well-spent?

This thoughtlessness is, I believe, more common in wealthy than in poor people, but the consequences for the poor person are more serious, such as this woman having a suicidal episode. This is why the thoughtlessness isn't as common with poor people; the accountant can waste half his income and still be okay, the guy on the dole can't. In all honesty I strongly judge the wastefulness of the wealthy, and not at all the wastefulness of the poor; but I do worry about the wastefulness of the poor, since as I said the consequences for them are greater and I don't want to live in a society where we just let people get depressed and kill themselves. We can do better than that.

Here in Australia with the recent changes to childcare benefits, in my household with an income of $140k or so before tax, we are legally entitled to subsidised childcare for 3 days a week (7am-6pm) and, if we used it all, would get about $240pw. Coincidentally, this is about what people get for unemployment benefit.

The person on the dole must put in a form in person at an office every two weeks with jobs they've applied for, and if they don't their dole is cut off. They must go to an appointment at that office about every six weeks, usually these appointments run 1-2hr late, and if the person themselves is even 5' late then they are breached and lose the dole for six weeks. After six months or so they start getting sent on various little courses to teach them to write resumes etc. If they happen to live with a non-relative of the opposite sex (such as in a sharehouse), the govt assumes they are in a sexual relationship and demands proof they're not, and if they actually do have a relationship, then the dole will be means-tested against the spouse's income. If they do any paid work then part of their dole is held back, and if a computer system spots any discrepancy between their reported income and what the computer system thinks is their income, their dole is cut off and they are sent threatening letters demanding it back. The computer system is of course more often wrong than right, and correcting it takes months of presenting documents and filling in forms and arguments. And the newspapers insult people on the dole and call them all stupid and lazy, and many people will call the person a "dole bludger." $240pw.

Whereas my family on $140k need only fill out a form online once a year, if our circumstances change then we let them know at leisure, if we end up owing money they just tell us and we pay it some time whenever, and not only does no-one hassle us about receiving these benefits, the newspapers and tv commentators frequently demand we should receive more. $240pw.

This is a manifest injustice and we can do better than that, and this is one of the reasons for charity. One of the reasons to be frugal and build wealth is so that we are well-off enough to give some away. But all that aside, a poor person is better off with a certain mindset than with being thoughtless and wasteful with their limited funds.
« Last Edit: June 28, 2018, 07:51:57 PM by Kyle Schuant »

BussoV6

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Re: Mindset and poverty
« Reply #19 on: June 29, 2018, 08:36:03 AM »
If they happen to live with a non-relative of the opposite sex (such as in a sharehouse), the govt assumes they are in a sexual relationship and demands proof they're not,

How do you provide proof of no sexual relationship?

EnjoyIt

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Re: Mindset and poverty
« Reply #20 on: June 29, 2018, 09:51:04 AM »
I've slowly come to the conclusion that we can't help everyone. I tend to be liberal but fiscally conservative (in the US liberal means being ok with gay marriage, taxes, helping those in need etc) however as much money is thrown at the issues the people won't change or improve.

Giving everyone a chance to get ahead is key but as you go through life you realize there are a large amount of people who do not invest in their futures, they live in the here and now. Also nearly everyone's sob story has a beginning, and the chain that exists leading them to where they are today has many links and places where their trajectory could've been altered.

In the US almost 8 out of 10 full time workers live paycheck to paycheck. This includes both higher wage earners or low skilled ones. You just can't help people that live life perpetually on the edge.

+1
I'm all for making it easier for people to achieve and succeed in life.  The reality is that most people don't have the intelligence, desire, and/or motivation. I look at some single moms who are taking care of their kids, working a full time job, and taking classes to get ahead. It is unbelievable the motivation these strong women have. I don't think I could do it all.  Then I see people who work their 40 hours a week, just doing enough so they don't get fired and then wonder why they don't make more money. 
It is true that hard work does not always equal success but it more often than not helps.

I work with a really nice guy with a business degree who is riddled in debt. He keeps on complaining that he can't get out from under the debt while in the same breath shows off his new apple watch or some other toy he just bought. He has a business degree, has the intelligence, works hard, but does not have the motivation to change his spending habits. 

Such is life I guess.

Kyle Schuant

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Re: Mindset and poverty
« Reply #21 on: July 14, 2018, 12:49:54 AM »
Further in that Guardian series, there's a guy who is poor but remains positive about life. His conclusion is worth reading.

Retire-Canada

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Re: Mindset and poverty
« Reply #22 on: July 14, 2018, 06:34:50 AM »
Here is an excellent example of the importance of mindset.

Without the complete set of details about this person this thread is just an exercise in poor shaming. I'd still struggle to find the purpose of this thread even if you had a complete picture of her spending. Poverty and metal illness are both significant challenges. Together...wow she has my sympathy.

AnnaGrowsAMustache

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Re: Mindset and poverty
« Reply #23 on: July 14, 2018, 03:47:43 PM »
If you work all hours in your own business, it's very hard to have the mental room to have an objective viewpoint and make the perfect planning decisions. If it's your personal life, it's even harder. We can recognise the problem for the small business owner, but we expect people in poverty to be somehow different. It's exactly the same thing. It's about being overwhelmed by the day to day.

Paul der Krake

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Re: Mindset and poverty
« Reply #24 on: July 14, 2018, 04:03:13 PM »
If they happen to live with a non-relative of the opposite sex (such as in a sharehouse), the govt assumes they are in a sexual relationship and demands proof they're not,

How do you provide proof of no sexual relationship?
It's probably the reverse of something like this:
https://www.nytimes.com/2018/04/19/us/green-card-marriage-interview-test.html

Basically they don't care about your sex life or lack thereof, they just want to see if you behave like a couple.