money advice is geared only toward people who actually have money

[Gin1984]

Yay, another thread about the same article!

I hate when people trot out anecdotal stories about the fact that they dragged themselves out of a bad situation by their bootstraps, so everyone should be able to.  It just shows an incredible lack of critical thinking and an empathy deficit.

1) "You" are a sample size of 1.  "You" have a different background/personality/intelligence/appearance etc....  than someone else.  What you are capable of is not what others are capable of. 

2) What you are actually saying, when you really think about it, is "I suffered, so you should suffer too."  That is just petty.  Why not turn it around?  "I suffered.  What can be done so that others in my situation don't have it so bad?"

Birth control - the pill is incredible effective for most people if taken perfectly, which is not really hard to do.  When the alarm goes off, take the pill when you first wake up before getting out of bed.  Hell, I haven't taken the pill for 10+ years and I still sometimes reach for the pack in the morning, out of habit.  Even better though is the IUD because you don't have to remember anything.  They are starting to make ones to market to younger women and teenagers now.
[/quote
This is all true, but people forget how expensive drugs are off insurance.  Not all drugs in a class work well, without side effects, for all people.  And they can get very expensive.  My current birth control is $50/month before insurance.

[goodlife]

[/quote]

Fascinating graphs! They support my reaction to Bob's post, which is this: "People don't always use it correctly" is not the same as "The pill does not work". It's not hard to remember to take it. Set an alarm on your phone if you need to. Also, there are many varieties of the pill where you don't have to take it at the "exact same hour" each day for it to be effective. As for antibiotics, etc., part of being a responsible birth-control-using adult is having a backup method for when you're taking something that could interfere with your pills' effectiveness.

I'm personally at 6.5 years of perfect use with no unplanned pregnancies. According to the NYT article, after 10 years - 10 years! - there's only a 3% chance I'll have an oops-baby. I'll take those odds.
[/quote]

Thanks, this is exactly what I wanted to write. Come on, how hard it is to take a pill every morning when you brush your teeth? And if you take antibiotics, how about not having sex if you don't want to use a backup method? All goes back to self-control, this is not rocket science and we are not animals for God's sake. Whenever I hear someone who got pregnant by accident...I really want to ask them what exactly they mean by that.

[Gin1984]

Fascinating graphs! They support my reaction to Bob's post, which is this: "People don't always use it correctly" is not the same as "The pill does not work". It's not hard to remember to take it. Set an alarm on your phone if you need to. Also, there are many varieties of the pill where you don't have to take it at the "exact same hour" each day for it to be effective. As for antibiotics, etc., part of being a responsible birth-control-using adult is having a backup method for when you're taking something that could interfere with your pills' effectiveness.

I'm personally at 6.5 years of perfect use with no unplanned pregnancies. According to the NYT article, after 10 years - 10 years! - there's only a 3% chance I'll have an oops-baby. I'll take those odds.
[/quote]

Thanks, this is exactly what I wanted to write. Come on, how hard it is to take a pill every morning when you brush your teeth? And if you take antibiotics, how about not having sex if you don't want to use a backup method? All goes back to self-control, this is not rocket science and we are not animals for God's sake. Whenever I hear someone who got pregnant by accident...I really want to ask them what exactly they mean by that.
[/quote]
Yes we are.  What do you think we are?  We are primates, a type of animal.

[rocksinmyhead]

Something that sometimes goes unsaid in these discussions is intelligence.

We're all damned smart.  This forum is a witty maelstrom of intelligent discussion.  I'd be willing to bet that this forum's median IQ is significantly higher than the US population.

When we laugh about subtle advertising strategy, or instantly do the math in our heads to calculate the price/oz of different size bags of lentils, it's sometimes hard to remember that there are _plenty_ of people out there who are completely flummoxed by the same cognitive tasks.

I think anyone who has done work with the chronically poor can think of examples of folks who are kind, hard working, but just not that bright.  The sort of people who 30 years ago might have made a decent wage stocking grocery store shelves, or doing simple work in a warehouse.  But jobs that require little thought are fast disappearing.  What are these folks supposed to do?  Go be "re-trained" for a high skilled job?

And all those money pitfalls that we think are so obvious?  There are plenty of people to whom those tactics aren't obvious at all.

I'm not saying that everyone who is poor is stupid. Poverty is a multifaceted beast, and intelligence is only a small part.  But whenever some wealthy college kid "goes poor" and talks about how easy it is to pull yourself up by your bootstraps... I always wonder if he'd consent to being hit over the head with the shovel first to level the playing field a bit.

This, totally.

And to reference a comment someone made recently on another thread, if you are well-educated and work in a professional/technical job, you are probably seriously overestimating what constitutes "average intelligence" just based on who you interact with most.

[Noodle]

Something that sometimes goes unsaid in these discussions is intelligence.

We're all damned smart.  This forum is a witty maelstrom of intelligent discussion.  I'd be willing to bet that this forum's median IQ is significantly higher than the US population.

When we laugh about subtle advertising strategy, or instantly do the math in our heads to calculate the price/oz of different size bags of lentils, it's sometimes hard to remember that there are _plenty_ of people out there who are completely flummoxed by the same cognitive tasks.

I think anyone who has done work with the chronically poor can think of examples of folks who are kind, hard working, but just not that bright.  The sort of people who 30 years ago might have made a decent wage stocking grocery store shelves, or doing simple work in a warehouse.  But jobs that require little thought are fast disappearing.  What are these folks supposed to do?  Go be "re-trained" for a high skilled job?

And all those money pitfalls that we think are so obvious?  There are plenty of people to whom those tactics aren't obvious at all.

I think occasionally about this when the "Why don't they just..." conversations start up. I have a family member whose brain just does not work as fast as the average person's. He is kind, generous and incredibly patient with people who drive me bonkers; if they line us up for heaven according to merit, he'll be a lot closer to the Heavenly Gates than I will. But critical or abstract thinking is  beyond him. I often think that he was born into the wrong generation; 75 years ago he could have found a wage-paying job in his small rural town and lived there happily his whole life, surrounded by the people who know and appreciate him. Luckily he has plenty of family who can walk him through the complicated stuff, but if he didn't have that family support network he'd be sunk--and even so, he's made some decisions that would make this forum sigh, and even the clearest explanations of why wouldn't make any sense to him. It's made me a lot more compassionate about the ways mental capacity or health can compromise people's ability to move themselves forward (and the fact that you can't always tell by looking who has challenges)...not even getting into all the other complications poverty can bring.

[Hannah]

Something that sometimes goes unsaid in these discussions is intelligence.

We're all damned smart.  This forum is a witty maelstrom of intelligent discussion.  I'd be willing to bet that this forum's median IQ is significantly higher than the US population.

When we laugh about subtle advertising strategy, or instantly do the math in our heads to calculate the price/oz of different size bags of lentils, it's sometimes hard to remember that there are _plenty_ of people out there who are completely flummoxed by the same cognitive tasks.

I think anyone who has done work with the chronically poor can think of examples of folks who are kind, hard working, but just not that bright.  The sort of people who 30 years ago might have made a decent wage stocking grocery store shelves, or doing simple work in a warehouse.  But jobs that require little thought are fast disappearing.  What are these folks supposed to do?  Go be "re-trained" for a high skilled job?

And all those money pitfalls that we think are so obvious?  There are plenty of people to whom those tactics aren't obvious at all.

I'm not saying that everyone who is poor is stupid. Poverty is a multifaceted beast, and intelligence is only a small part.  But whenever some wealthy college kid "goes poor" and talks about how easy it is to pull yourself up by your bootstraps... I always wonder if he'd consent to being hit over the head with the shovel first to level the playing field a bit.

I know this is a bit nit-picky, but I know several poor people who are bright and witty, but still struggle to find high paying work for a variety of reasons. I would argue that intellect is one of the least important success factor in my experience.

In the huge number of menial jobs that I've worked, I would say the majority of people that I worked with were intellectually capable of more than stocking shelves, flipping burgers, cleaning hotels, and processing orders. Some have horrible attitudes, some have tumultuous personal lives, some have poor work ethic, some are sick, some are unlucky, and some just aren't trying for success too hard.

The break room at the WalMart where I worked during undergrad was full of 20-70 year olds who were witty, politically astute, and had less jack than a deck of cards.

One friend is a single mom of two toddlers who have chronic illnesses. Her life is currently spent bouncing from one government agency to another to be sure they stay alive. She has no game plan at all, and because she's pretty hood, she doesn't give off the appearance of intellect, but it turns out she's quite smart- as in she could easily intellectually take over my $80K per year job, but she would have to change her demeanor to one more befitting of an upper middle class office worker (I won't say white because my office is neither white nor native to the US for the most part)- and she would also have to have more stability to take over my job.

Another friend has a college degree, but has never earned more than $9/hr in her life. She has quite a defeatist attitude which is quite unfortunate since her skill set (including hair dressing and massage) are easily worth more if she would just try.

I also know people who actually aren't that smart, but have high paying jobs. In fact, on many frustrating days, I would say I work with a lot of them.

So yes, intellect is important, but I think its easy to underestimate intelligence in most people.

[MrsPete]

Except that when you give hiring managers or HR resumes with minority sounding names or a picture, they judge the minority to be less skilled than a white male.  Same for females.  Does not matter if the skills are identical, the white male will be judged as better.  So those minorities that have everything going for them, have to, otherwise they won't get anywhere near a good position.

Missing my point:  This may be true for a first job . . . but after that, once the quality employee has proven himself and is "worth" recommending, the HR rep isn't going to choose based upon his name alone.  Rather, the person doing the recommending is going to say, "I have worked with this guy for a couple years.  These are his strengths." 

I'm saying that the recommendation trumps the name. 

Has anyone read FreakONomics?  Did I get that name right?  They discuss the impact of having a "super black name" on a person's career.  I think their final comment was that people with "super black names" do tend to be less successful in their careers -- but they couldn't determine whether that was because these people were "held back" by their names, or are families who choose "super black names" prone to providing less enriching environments? 

[MrsPete]

I'm not saying that everyone who is poor is stupid. Poverty is a multifaceted beast, and intelligence is only a small part.  But whenever some wealthy college kid "goes poor" and talks about how easy it is to pull yourself up by your bootstraps... I always wonder if he'd consent to being hit over the head with the shovel first to level the playing field a bit.

Well, I suspect intelligence and good income usually gang together; whereas, lack of intelligence and poverty tend to together.  However, you could certainly find outliers -- people who aren't 'specially smart but who are good with money, people who are very smart but fritter it away (like my dad, who was brilliant, yet drank all his money away). 

[Gin1984]

Except that when you give hiring managers or HR resumes with minority sounding names or a picture, they judge the minority to be less skilled than a white male.  Same for females.  Does not matter if the skills are identical, the white male will be judged as better.  So those minorities that have everything going for them, have to, otherwise they won't get anywhere near a good position.

Missing my point:  This may be true for a first job . . . but after that, once the quality employee has proven himself and is "worth" recommending, the HR rep isn't going to choose based upon his name alone.  Rather, the person doing the recommending is going to say, "I have worked with this guy for a couple years.  These are his strengths."

I'm saying that the recommendation trumps the name. 

Has anyone read FreakONomics?  Did I get that name right?  They discuss the impact of having a "super black name" on a person's career.  I think their final comment was that people with "super black names" do tend to be less successful in their careers -- but they couldn't determine whether that was because these people were "held back" by their names, or are families who choose "super black names" prone to providing less enriching environments?

Based on the research, not true.  Even when the strengths are listed as equal, the white male is judged as better.  This is not a beginning job thing, this is consistent.  Because it is determining the person less valuable, with the same characteristics and recommendations as less because they are a minority or female.  And guess what, a minority or female is less likely to have a white male to get mentorship from,which is who would even give the rec.
http://eds.a.ebscohost.com.gate.lib.buffalo.edu/ehost/detail/detail?sid=a6ffb97d-08c9-4663-a593-133de37860b0%40sessionmgr4002&vid=0&hid=4108&bdata=JnNpdGU9ZWhvc3QtbGl2ZSZzY29wZT1zaXRl#db=bth&AN=4409216
http://psycnet.apa.org/journals/apl/81/3/297/

[Zamboni]

^Gin is right on the mark here.  Severe biases against resumes with female or minority-sounding names printed at the top have been proven all the way up to PhD-level academic hiring.  I would say it becomes a bigger and bigger problem as one moves up the pay-scale for jobs.  While many people seem to be working to try and reverse this effect, progress is being made on a geological timescale, at best.   

I'm not saying that everyone who is poor is stupid. Poverty is a multifaceted beast, and intelligence is only a small part.  But whenever some wealthy college kid "goes poor" and talks about how easy it is to pull yourself up by your bootstraps... I always wonder if he'd consent to being hit over the head with the shovel first to level the playing field a bit.

This image made me lol.

It actually annoys me quite a bit that poor people are indeed often assumed to be stupid (having experienced this bias several times in my life.)  My experience growing up is that lots of poor kids are really very smart, but that our system often doesn't recognize this and track these kids according to their real ability in school.  A local study where I live has shown this to be absolutely the case for African American male children in public schools whose tests show very high intelligence in elementary and early middle school:  they still get disproportionately put into the lower level academic tracks by teachers. 

As a counter point, my family member who works in social services does work with very low IQ adults who just really can't figure out how to balance their check book or get their bills paid.  In a more wealthy family situation, this type of person would be given resources by their family such as a group home or someone else in the family would take care of these financial tasks for them.  If the person has a poor family who is strapped for time and/or doesn't have the resources to hire help for them, then they really do need help from society.

[SwordGuy]

I have read the entire book that article is excerpted from and a lot of the author's problems came from mental health issues plus her estrangement from her family.  People in that situation have a lot more trouble getting out of poverty than others.  Plus, she also mentions repeatedly how the fatigue of working two jobs for 16 hours a day interferes with a person's ability to make good choices for themselves.  It isn't quite as "complainy-pants" as it first seems.

I worked one job 14 to 16 hours a day, 6 to 7 days a week, for several years.    I didn't have time to make stupid decisions.  I was working.

Seriously, her argument is a load of BS.

[SwordGuy]

Here's a situation for you, bootstrappers:

I have a basketful of chronic illnesses that were diagnosed when I was a teenager.

I hit the workforce just as the economy was in the garbage. The only work I could find was contract work--it was well-paid, but it was still contract work. No benefits.

Prior to ACA, I wouldn't have been able to get insurance in that situation, thanks to my pre-existing condition. During a flare, my illness can cost tens of thousands of dollars a month, nothing close to what I was earning--and this assumes I could continue to work while sick, which is a generous assumption. Folks in this situation will often marry their SOs to get insurance, but my SO was a woman, and gay marriage has only been legal in my state for about 18 months.

There is truly nothing I could personally do to protect myself from financial ruin if I were in that situation. Taking the bus, eating lentils, and keeping the AC off wouldn't come close to creating the surplus I'd need to pay for medications, diagnostics, specialists, surgery.

I'm not in that situation, but that's because ACA went live just in time to cover me. I didn't avoid that situation because I'm smart and played my cards right; I avoided that situation because legislation changed to protect me.

When folks "whine" about financial crises that aren't their fault, what they mean is that the factors most crucial to their success are outside of their control, like ACA and marriage rights. Able-bodied, white, straight people (I'm looking at you, folks) tend to forget that if your problem can be solved by eating lentils and taking the bus, you've been dealt a much better hand than you realize.

First of all, I'm sorry for the VERY REAL obstacles you've faced.     Those are real reasons people might fail to do well financially.

In my experience, people with those kind of REAL problems don't whine all that much.  They don't have time or they are too tired or they know it's just a waste.

The whiners are those are generally those who could fix their self-inflicted problems if they would listen, learn, and act intelligently.

[AgileTurtle]

I have read the entire book that article is excerpted from and a lot of the author's problems came from mental health issues plus her estrangement from her family.  People in that situation have a lot more trouble getting out of poverty than others.  Plus, she also mentions repeatedly how the fatigue of working two jobs for 16 hours a day interferes with a person's ability to make good choices for themselves.  It isn't quite as "complainy-pants" as it first seems.

I worked one job 14 to 16 hours a day, 6 to 7 days a week, for several years.    I didn't have time to make stupid decisions.  I was working.

Seriously, her argument is a load of BS.

You must have so fantastic genetics, be happy about that. Having been in the military I have seen what fatigue does to some people. Some people have no issue with it while others Ive notice turn dumb or careless. Even people who are not normally dumb cannot handle chronic fatigue. If you really worked 16 hour days almost non stop for years without it affecting your decision making ablities you are extremely lucky.

[golden1]

Quote from: MoneyCat on December 06, 2014, 08:05:05 AM
I have read the entire book that article is excerpted from and a lot of the author's problems came from mental health issues plus her estrangement from her family.  People in that situation have a lot more trouble getting out of poverty than others.  Plus, she also mentions repeatedly how the fatigue of working two jobs for 16 hours a day interferes with a person's ability to make good choices for themselves.  It isn't quite as "complainy-pants" as it first seems.

I worked one job 14 to 16 hours a day, 6 to 7 days a week, for several years.    I didn't have time to make stupid decisions.  I was working.

Seriously, her argument is a load of BS.

Ok, but "you" are not everybody, right?  Not everyone has the health or stamina to work 100 hour weeks.  In fact, I would argue that most people could not do that for a sustained period of time. 

And also, do you want everyone to have to work 100 hour weeks to be successful and get out of poverty?  Is that what you think should be the requirement?  Couldn't we make it easier for people than that? 

[Kaspian]

What do you guys think of that old saying which goes something like, "Take away a millionaire's fortune and they'll make it back.  Give the fortune to a homeless person and they'll end up homeless."   I think it's extremely harsh and jagged-edged but probably not without some sad truth.  I don't think there's any way to solve the overall issue permanently.  That said, we should still try.  But giving away fortunes probably is not the correct way to go about it.

[eyePod]

What do you guys think of that old saying which goes something like, "Take away a millionaire's fortune and they'll make it back.  Give the fortune to a homeless person and they'll end up homeless."   I think it's extremely harsh and jagged-edged but probably not without some sad truth.  I don't think there's any way to solve the overall issue permanently.  That said, we should still try.  But giving away fortunes probably is not the correct way to go about it.

Reminds me a lot of NFL players. Most come from a poor socio-economic status before getting into college based on their talents, and then they go right back after. Something like 78% of NFL players are bankrupt 2 years after playing.

[MoneyCat]

I worked one job 14 to 16 hours a day, 6 to 7 days a week, for several years.    I didn't have time to make stupid decisions.  I was working.

Seriously, her argument is a load of BS.

Ok, but "you" are not everybody, right?  Not everyone has the health or stamina to work 100 hour weeks.  In fact, I would argue that most people could not do that for a sustained period of time. 

And also, do you want everyone to have to work 100 hour weeks to be successful and get out of poverty?  Is that what you think should be the requirement?  Couldn't we make it easier for people than that?

I don't know how much I buy that story about working 100 hour weeks for years with no negative effects.  That sounds to me a little too much like somebody trying to justify an unsupportable ideology.

[Fallenour]

How about making ACA affordable, for starters? As more & more people get priced out, how is that a win?

Compassionate conservatives know that people prefer to make their own decisions rather than trust Big Brother. One size of health insurance does not fit all. If you think single payer is the answer, go see how our government runs the VA. That ought to make you sick and angry.

The one thing that Obamacare got right was to eliminate the pre-existing condition requirement, but it shoots itself in the foot by not requiring that a person be continually insured. This is equivalent to letting you get home insurance after your house burns down. The "tax penalty" is a farce & doesn't begin to contribute to the insured pool.

Dictating prices to doctors while presenting insurance to consumers as unlimited care is another huge flaw in our health delivery system. Instead, every hospital & provider should be allowed to publish prices & let the consumer make the choice.

Finally, make health insurance portable, across state lines & not tied to any employer. This is not single payer; multiple insurance companies keep it competitive.

Most rare, and untreated diseases, run costs in excess of 100 million dollars in most instances to successfully research and create a cure for, of which have in many instances less than 200,000 individuals diagnosed for those diseases.

Even if they had to pay over 500 dollars per treatment for my cure, I would barely break even on my investments alone.

There simply isnt any more there for me to have a motivation for.

Im not sorry to say that people die. Its a reality of existing, and theres no way to avoid that. The reason why they die is merely a formality of process.

[irishbear99]

I'm personally at 6.5 years of perfect use with no unplanned pregnancies. According to the NYT article, after 10 years - 10 years! - there's only a 3% chance I'll have an oops-baby. I'll take those odds.

I just passed 19 years on the pill...and no babies. It is definitely do-able, and now with the ACA, very affordable.

[Rural]

I'm personally at 6.5 years of perfect use with no unplanned pregnancies. According to the NYT article, after 10 years - 10 years! - there's only a 3% chance I'll have an oops-baby. I'll take those odds.

I just passed 19 years on the pill...and no babies. It is definitely do-able, and now with the ACA, very affordable.

Thirty years here, no oops. God, thirty years...

[sheepstache]

I'm personally at 6.5 years of perfect use with no unplanned pregnancies. According to the NYT article, after 10 years - 10 years! - there's only a 3% chance I'll have an oops-baby. I'll take those odds.

I just passed 19 years on the pill...and no babies. It is definitely do-able, and now with the ACA, very affordable.

Thirty years here, no oops. God, thirty years...

I wonder, for the women who have never had kids, at what point the odds of having an 'oops baby' on the pill are large enough that your (or your partner's) likelihood of being naturally infertile trumps it as an explanation.

[Kaspian]

I think we have a major underlying assumption wrong here.  (OK, other than setting up extreme examples of why a particular individual can't be rich--straw men arguments, really.)  We are assuming it's a level playing field--that everyone understands how to make and manage money the same.  That if you gave them some, they'd automatically understand and become the next Donald Trump.  And this is certainly false.  Here I can think of many friends with money woes (and bitch vocally about it) who have never taken a second out of their precious day to pick up a finance book or even read a single thing about money.  (Plenty of time for Facebook, video games, and YouTube cat videos though.) Why would you not want to learn anything about the thing which is vexing you the most?  Why or why?!!  I mean, they seriously don't want to learn a single iota about the subject.  Isn't it important?  One of the most daily important things?  Especially if it's causing you stress?

Since starting FIRE I'm slowly coming to a conclusion that smart money management is like a playing a musical instrument.  It's a skill.  We can't assume it's an innate level playing field where everyone knows what they're doing.  Because many don't and never will.  You can be born with it, you can learn it, but some will never get it.  You can say that someone who comes from a well-to-do family has a better shot, because their parents can afford the instruments and the lessons.  That doesn't guarantee they've ever learn to play or be a proper musician.  You can take the poorest and argue that they'll never have a chance because they don't have access to an instrument.  Then that person will surprise you by finding an old piano in the corner of a bar, sitting down, and being a naturally born Mozart and becoming famous.  If he/she's good at it, they'll definitely find a way if they want to.  The whole, "can't win so don't try," argument doesn't help anything.  And it can be brought up from the past well into the foreseeable future.  You're born being a natural at it or you can learn it (and become good or still suck) or you don't.

[2ndTimer]

Something that sometimes goes unsaid in these discussions is intelligence.

We're all damned smart.  This forum is a witty maelstrom of intelligent discussion.  I'd be willing to bet that this forum's median IQ is significantly higher than the US population.

When we laugh about subtle advertising strategy, or instantly do the math in our heads to calculate the price/oz of different size bags of lentils, it's sometimes hard to remember that there are _plenty_ of people out there who are completely flummoxed by the same cognitive tasks.

I think anyone who has done work with the chronically poor can think of examples of folks who are kind, hard working, but just not that bright.  The sort of people who 30 years ago might have made a decent wage stocking grocery store shelves, or doing simple work in a warehouse.  But jobs that require little thought are fast disappearing.  What are these folks supposed to do?  Go be "re-trained" for a high skilled job?

And all those money pitfalls that we think are so obvious?  There are plenty of people to whom those tactics aren't obvious at all.

I'm not saying that everyone who is poor is stupid. Poverty is a multifaceted beast, and intelligence is only a small part.  But whenever some wealthy college kid "goes poor" and talks about how easy it is to pull yourself up by your bootstraps... I always wonder if he'd consent to being hit over the head with the shovel first to level the playing field a bit.

This, totally.

And to reference a comment someone made recently on another thread, if you are well-educated and work in a professional/technical job, you are probably seriously overestimating what constitutes "average intelligence" just based on who you interact with most.

I notice this at our house.  The Hub sometimes bewails the fact that he is only "average"  I say, "Darling, you are a PhD married to a PhD.   You work in field where the entry card is a B.S. in science or engineering and promotion requires an M.S.  Most of your coworkers are PhDs or MDs.  The dumb brother in your family just retired as a police lieutenant.  You haven't even met an average person in years."

[libertarian4321]

Okay, folks.  Here's the deal.

Linda Torado is largely a FRAUD.  She grew up upper middle class.  Went to private schools.  She went to college (and dropped out- poor decision number 1).  Made a shit ton of poor choices (having kids without any means of support, etc) and was essentially disowned by her parents.  So she did, briefly, live "poor" (or at least kinda sorta poor).  Later reconciled with her parents who bought her a house.  She's also a military wife (and that means she is NOT living hand to mouth).  She was effectively "downwardly mobile" because of her own stupid, immature decisions. 

I actually read her angry screed, er, book.  Just finished it a couple of days ago.  And it was worth every penny I paid for it (I got it free from the library).

She took a bunch of "conventional wisdom" about "the poor."  Combined it with her VERY limited "poorish" experience, and created a semi-fictional blog post that she later expanded into a book.

She actually did make some salient points, but like a Robert Kiyosaki "Rich Dad" seminar, there was a liberal dose of BULL SH*T tossed in with the accurate points.

I know this, because I actually did grow up poor.  I wasn't "temporarily kinda sorta poor for the purpose of writing a blog/book."

But the liberal left poverty pimps will suck it up with a straw, just as they did with Barbara Ehrenreich's absolutely asinine "Nicked and Dimed" (a story of a wealthy, well educated white woman, daughter of a Fortune 500 CEO, trying to play "poor" for a few weeks, and, as expected, failing- a book I recommend to any person who has actually been poor, just for comedy value).

[SwordGuy]

Quote from: MoneyCat on December 06, 2014, 08:05:05 AM
I have read the entire book that article is excerpted from and a lot of the author's problems came from mental health issues plus her estrangement from her family.  People in that situation have a lot more trouble getting out of poverty than others.  Plus, she also mentions repeatedly how the fatigue of working two jobs for 16 hours a day interferes with a person's ability to make good choices for themselves.  It isn't quite as "complainy-pants" as it first seems.

I worked one job 14 to 16 hours a day, 6 to 7 days a week, for several years.    I didn't have time to make stupid decisions.  I was working.

Seriously, her argument is a load of BS.

Ok, but "you" are not everybody, right?  Not everyone has the health or stamina to work 100 hour weeks.  In fact, I would argue that most people could not do that for a sustained period of time. 

And also, do you want everyone to have to work 100 hour weeks to be successful and get out of poverty?  Is that what you think should be the requirement?  Couldn't we make it easier for people than that?

No, I don't want it to be that hard for everyone.  I didn't want it to be that hard for me, either.

Buy you've totally missed the point.

If I had sat on my butt waiting for people like you to make things easier, I would still be poor 30 years later.

People who want to improve their lot in life have to take control of the things they can take control of and not depend upon well-wishing strangers who talk a good game about improving the system to fix their problems for them.

For those of you who made snarky comments about good genetics and how other people can't work those hours, what's your point?
I used the advantages I had.  I didn't try making a living at art because I had no talent and training.  I didn't try making a living at dance because I can't dance.  I didn't try a host of other strategies because they wouldn't work for me.  I used what worked for me.

I'm not telling other people they have to blindly do what I did.  That would be stupid on their part.  I'm telling them to take stock of their assets and situation, and do the things they can control that will improve their situation.   It may be hard, but it has a chance of working.    Sitting on their butts and whining has zero chance.

[MoneyCat]

Quote from: MoneyCat on December 06, 2014, 08:05:05 AM
I have read the entire book that article is excerpted from and a lot of the author's problems came from mental health issues plus her estrangement from her family.  People in that situation have a lot more trouble getting out of poverty than others.  Plus, she also mentions repeatedly how the fatigue of working two jobs for 16 hours a day interferes with a person's ability to make good choices for themselves.  It isn't quite as "complainy-pants" as it first seems.

I worked one job 14 to 16 hours a day, 6 to 7 days a week, for several years.    I didn't have time to make stupid decisions.  I was working.

Seriously, her argument is a load of BS.

Ok, but "you" are not everybody, right?  Not everyone has the health or stamina to work 100 hour weeks.  In fact, I would argue that most people could not do that for a sustained period of time. 

And also, do you want everyone to have to work 100 hour weeks to be successful and get out of poverty?  Is that what you think should be the requirement?  Couldn't we make it easier for people than that?

No, I don't want it to be that hard for everyone.  I didn't want it to be that hard for me, either.

Buy you've totally missed the point.

If I had sat on my butt waiting for people like you to make things easier, I would still be poor 30 years later.

People who want to improve their lot in life have to take control of the things they can take control of and not depend upon well-wishing strangers who talk a good game about improving the system to fix their problems for them.

For those of you who made snarky comments about good genetics and how other people can't work those hours, what's your point?
I used the advantages I had.  I didn't try making a living at art because I had no talent and training.  I didn't try making a living at dance because I can't dance.  I didn't try a host of other strategies because they wouldn't work for me.  I used what worked for me.

I'm not telling other people they have to blindly do what I did.  That would be stupid on their part.  I'm telling them to take stock of their assets and situation, and do the things they can control that will improve their situation.   It may be hard, but it has a chance of working.    Sitting on their butts and whining has zero chance.

You make a good point here.  Things are stacked against the poor, but sitting around complaining about it doesn't fix the problem.  It is what it is and you have to deal with it.  That's why I put together my plan to escape poverty years ago.  I decided to move to another state to improve my job prospects, live in a rented room instead of an apartment to save money, go minimalist to pay off debt, etc.  This is the message that the poor need to get and nobody is giving it to them.  Instead, they are being told that they should be ashamed of not already having wealth and they desperately seek status because our culture tells them that their only value is in what they can consume.

[ChrisLansing]

Yay, another thread about the same article!

I hate when people trot out anecdotal stories about the fact that they dragged themselves out of a bad situation by their bootstraps, so everyone should be able to.  It just shows an incredible lack of critical thinking and an empathy deficit.

1) "You" are a sample size of 1.  "You" have a different background/personality/intelligence/appearance etc....  than someone else.  What you are capable of is not what others are capable of. 

2) What you are actually saying, when you really think about it, is "I suffered, so you should suffer too."  That is just petty.  Why not turn it around?  "I suffered.  What can be done so that others in my situation don't have it so bad?"

Birth control - the pill is incredible effective for most people if taken perfectly, which is not really hard to do.  When the alarm goes off, take the pill when you first wake up before getting out of bed.  Hell, I haven't taken the pill for 10+ years and I still sometimes reach for the pack in the morning, out of habit.  Even better though is the IUD because you don't have to remember anything.  They are starting to make ones to market to younger women and teenagers now.

I agree with you and yet I want to argue that you (and I) are wrong.     

Poor people have different numbers of obstacles and different abilities, but if we are talking about someone of average IQ (100) or better, and not too many obstacles then the cold hard fact is  they can improve their situation by learning and then applying what they learned.   They'll have to do something different than what they've been doing if they want some type of success.    It seems to me anecdotal stories might serve to inspire, at least on occasion.      A sample size of 1 is all that is needed for inspiration.   

I don't think people are saying "you should suffer too" so much as they are saying I went through hard times and it didn't kill me, and it probably won't kill you either.     

There's only so much that can be done to make it easier.   At some point people have to develop some "badassity".       

[clifp]

In the long term, it makes way more sense to buy a good toaster. But if the good toaster is 30 bucks right now, and the crappiest toaster of them all is 10, it doesn’t matter how many times I have to replace it. Ten bucks it is, because I don’t have any extra tens.

It actually costs money to save money.

I had to laugh at this because when I was a poor college student I bought a $10 toaster (prolly cheaper this about 1980)  and sure enough it was awful, probably spent $10 in burned bread before it quit working a year or so latter.  But my response was not to buy another $10 toaster but to go without a toaster until I had $30 after I had real paycheck.  Also when your car gets towed, I'd have been shocked if they towing company didn't tell her, we charge a $$$$ money each day for storage fees.  At this point you drop everything borrow money from your friends, search your couch, open the kids piggy banks, and even if necessary get a pay day loan to get the car of the tow facilities.

Yes it does cost money to be poor there is no doubt about that, but it cost even more to be lazy, and stupid.

[MoneyCat]

I think the poor should just die and reduce the surplus population [/sarcasm]

[waltworks]

Every time the poor-people-need-to-make-better-choices thing comes up, I post this:
http://www.washingtonpost.com/national/health-science/poverty-strains-cognitive-abilities-opening-door-for-bad-decision-making-new-study-finds/2013/08/29/89990288-102b-11e3-8cdd-bcdc09410972_story.html

And every time, everyone ignores it...

If you don't want to bother reading it, here's the bottom line: "people wrestling with the mental strain of poverty suffered a drop of as much as 13 points in their IQ — roughly the same found in people subjected to a night with no sleep."

-W

[SwordGuy]

Every time the poor-people-need-to-make-better-choices thing comes up, I post this:
http://www.washingtonpost.com/national/health-science/poverty-strains-cognitive-abilities-opening-door-for-bad-decision-making-new-study-finds/2013/08/29/89990288-102b-11e3-8cdd-bcdc09410972_story.html

And every time, everyone ignores it...

If you don't want to bother reading it, here's the bottom line: "people wrestling with the mental strain of poverty suffered a drop of as much as 13 points in their IQ — roughly the same found in people subjected to a night with no sleep."

-W

You don't have to be a rocket scientist to follow MMM's advice.    Anyone who is a  bit below average intelligence can understand it. 

MMMs advice REALLY is very simple to understand and (emotional immaturity aside) quite easy to follow.

The problem that folks have is that well meaning folks keep telling them there is nothing they can do because the system isn't FAIR. 
(You have to say "isn't FAIR" in an extremely whiny voice to get the full effect.)

Well-meaning folks tell them not to try because it will be HARD.   (Ditto on whining about how hard it will be.)

Well-meaning folks tell those of us who give useful advice not to do that because telling people they can fix the mess they are in implies they might have fixed it sooner, and that might HURT THEIR FEELINGS.  (Don't forget to throw in a gasp! of dismay at the thought of someone's "feelings" being hurt.)

I don't give a rat's ass about their feelings if they can't pay their bills and can't feed their family.   I care about helping them solve the damn problem that they're poor.

General Patton was chastised by a reporter because he didn't consider his soldiers "feelings" of self worth.   His reply was "Dead soldiers don't have egos."   He said that it was his job to make sure they killed the enemy and lived to go home afterwards.   They could deal with their feelings on their own time after they got home.

Personally, I think they'll have much better "feelings" about themselves and their situation after they can reliably take care of themselves and their family that they'll feel just fine.  And, according to your study, they'll be smarter so they'll know why. :)

If well-meaning folks would follow the following plan of action those that need help would be a whole lot better off:

1) Tell folks that need help specific guidelines so they can properly evaluate a good decision from a bad one.   
2) Tell those same folks that it will take hard work for them to fix the problems they have, but that they are strong enough to do it.
3) Tell those same folks specific ways that have worked for others, how long to expect it to take before seeing any improvement, and how to tell if any give specific plan isn't working (so they can try another one).
4) Offer to be a mentor and help them come up with plans to fix their situation.
5) Anytime you get the itch to tell them how there is nothing they can do about it to fix it, shut your mouth.
6) Anytime you get the itch to tell them how none of the decisions they chose to make were the cause of their problems, when in fact those decisions they made were the cause of their problems, shut your mouth.
7) If you break rules 5 or 6 slap yourself in the mouth and apologize to the person you are mentoring for telling them a load of crap.
8) If you repeatedly break rules 5 or 6, stop mentoring and don't talk to people about their problems ever again.  You are now part of the problem.
9) Contact the various charities, governmental agencies and elected officials and explain how specific policies could help level the playing field and better educate people, both for employable skills and to avoid foolish decisions.
10) Vote for those who follow the above guidelines.  Maybe people in 5 to 20 years will have it easier.
11) Put your money where your mouth is (instead of just our tax dollars where your mouth is) and contribute to individuals that are in need of help or to charities that follow the above guidelines.
11) Tell your well-meaning friends to follow this plan.

[waltworks]

Didn't read it, did you? 13 IQ points! That is an insane amount -  a slightly below average person to *mentally handicapped* territory! And yes, MMM advice can be *too difficult* for someone in that situation.

-W

[SwordGuy]

Didn't read it, did you? 13 IQ points! That is an insane amount -  a slightly below average person to *mentally handicapped* territory! And yes, MMM advice can be *too difficult* for someone in that situation.

-W

So, 100% of poor people are below average intelligence?  Is that what you are saying?   100%???!!! 

Not a single one of them could help themselves because they are all naturally stupid to begin with and the stress makes them retarded on top of that?  100% of them???!!!

With friends like you, the poor don't need heartless Republicans to squash them.   You'll do just fine on your own.

I've met quite a few poor folks over the years and a whole lot of them are plenty smart.    They, like God's plenty of the middle class, just don't know the right things to do, so they do the wrong things instead.  And, because they are poor, they have less margin for mistakes.   That's the real difference between the poor and the middle class : small to non-existent safety buffers and a whole lot fewer good examples to emulate.

But I'll humor you.   Let's assume that you're half right.   Let's assume that half the poor are naturally stupid to begin with and that the stress of their situation has made them retarded on top of that.  Let's assume they are totally unable to improve their situation on their own.

Did it occur to you that means that half the poor can improve their lot? 

Did it occur to you that means that the number of the poor could be cut in half if we just taught them what to do, how to do it, expected them to follow thru, and they actually did so? 

Ok, let's assume that only half the people who could help themselves choose to do so.  That still means the number of poor has been cut by 25%.   That's huge!

Do you also know what that means?  More tax revenue to fund better education because all those folks are now paying taxes.  It also means fewer people needing help, so that means more tax dollars to help each person who needs it.

Isn't that one hell of a lot better than convincing all the poor folks that they are too stupid and too oppressed to do better for themselves?  Especially when there are proven examples of how they can do better?

How about we start writing hero articles about those who did the right things to get out of poverty, instead of articles that glorify clueless idiots for doing stupid things?    Give people a plan that can work and the principles behind that plan and help them follow it.  Don't invent obstacles to their success!

[waltworks]

I'll point out that I made no policy prescriptions. I'd be happy to hear about how you'd like to teach people to make good choices - while keeping in mind that providing a decent social safety net is probably the easiest way to start (remove that intelligence-lowering money stress, to some extent?)

And yes, people of low intelligence are overrepresented among the (American) poor. I don't think there is any controversy about that. That doesn't mean they're bad people or that there aren't any stupid rich people. But it means that if you want to help people *not* be poor, you have to understand that they're not all going to go become software engineers.

-W

[NumberJohnny5]

The reason I'm elaborating on this is because when people whine about the alleged impossibility of getting around without a car, it is universally bullshit. What they really mean is that they aren't hardcore enough to use alternatives, and would rather be broke instead. I chose not to be broke.

*Sigh* No, it's NOT "universally bullshit".

Try rural Tennessee (or, even better, rural Appalachia).

"Ooh, look at Mr. Fancypants, with his public transportation!" Yeah, we don't have that. Ok, if you're in K-12 you get a yellow school bus. But if you want to go to the grocery store...nope. Cab? Nope. Bike path? HAHAHAHA!

"Dude, grow a pair and ride a bike."

Um, that's sexist, and YOU ride a bike on a curvy 1.5 lane road, where people take up all two lanes (of a 1.5 lane road) coming around the blind curve.

"Stop yer whining, just walk on the sidewalk."

Sidewalk, yeah we have those in the "city" (i.e., the small section of town with two traffic lights next to each other...I swear those were for bragging rights, the county next to us didn't even have one!).

"Fine, walk on the side of the road, you complainypants!"

The right of way is mowed once, maybe twice a year. And the road might have about a foot of gravel on either side, then a huge ditch, then...could be woods, maybe a fence for a farm. Feel free to walk in the high tick-infested ditch. Might be hard to keep that high-paying minimum wage job when you're out sick with Rocky Mountain Spotted Fever or Lyme Disease.

So, in many parts of the US, a vehicle of some kind is a virtual necessity. It's hard to take care of the basics of life without one. Instead of going "woe is me, I must have a car therefore I'll always be poor", let's look at what you CAN do.

I've bought many cheap cars in Tennessee. Best deal was probably a $300 Buick Regal that I later sold for $500. Another was a station wagon for $100, it lasted several months (I think it may have lasted nearly a year before it caught fire on the side of the road and the fire department came out to investigate). With car registration at nearly $80/yr, it cost almost as much to register as it did to buy! I've bought numerous cars under $1,000. None were great by any stretch of the imagination, but if I had been good with money (and I surely wasn't at the time), I could have slowly made my way up to a nice dependable (and of course used) car.

[Zikoris]

I definitely notice in Vancouver that my friends who have cars all "need" them, and friend who don't have them don't feel that they need them. The big difference? The ones with cars don't think about things like proximity to work/school/grocery stores/entertainment when they choose where to live. Shocker, by planning your life around driving, you end up "needing" a car!

[waltworks]

Whoa. Think of all the money you could save if you stopped moving around *inside* the house, too! Less wear and tear on the carpet, no need to buy shoes ever again, fewer calories to consume...

I really hope you just moved.

-W

Aside from going to work (and a couple times to the post office), I actually haven't been out of my home since I moved to the USA.

[NumberJohnny5]

Sounds like complainypants to me.

What are these "basics of life" that require going outside anyway?

I buy food, soap, toilet paper, and similar items on amazon.com, because there is no grocery store particularly near me and I don't drive. This is the year 2014, not 1953, so there's never any reason to go to a physical store.

I chose my apartment location specifically so that it would be easy to get to work.

Ok, so someone living in Podunk USA gets to move across the country with WHAT money? He needs a job to get that money to move. He needs a car to get that job to get that money to move. THEN he can choose a nice big city with apartments close to lots of places of employment. Back home, I can walk the equivalent of five city blocks, and not a single business. I could knock on some doors and assuming I don't get shot, I could beg to work on the farm. If I'm lucky, the person living there will know the person who owns the farm. There is a possibility I could walk to work on a nearby farm, then save enough for a car so I can work on many farms nearby, then get something more reliable so I can drive to college two days a week, and then....

Aside from going to work (and a couple times to the post office), I actually haven't been out of my home since I moved to the USA.

Ding ding ding! We have a winner! You leave the house, so you can get some money. We're not talking about people who have already made it, and move to a rural area to live the rest of their lives (there's certainly a lot of those type of people where I'm from, get too many and the COL starts to creep up). We're talking about people who are just starting out, or who have just seen the MMM light and are going to work toward FI.

Heck, you know that even if you're on welfare and/or food stamps and/or Section 8 and/or whatever, you still have to regularly go to the office to fill out forms and what-not. Even if many of the forms can be mailed in, I think the initial meeting has to be in person.

"Get a ride!" you say. Sure, if you have family, and they want to help. But it means at least ONE of your friends/family has to have a car. Being a bum might be ok short-term, but it's not a long-term solution.

Where I'm from, you can get deliveries from USPS/UPS/Fedex. There's parts of the US that's so rural, some/none of those will go to your residence. You make weekly/monthly trips to the post office. We used to live in an area remote-enough that, though they technically would deliver, at least 50% of the time they didn't bother. I actually called the Fedex driver once, he said he was running late on time and just didn't bother coming to our house. This was not an isolated occurrence.

[clifp]

I'll point out that I made no policy prescriptions. I'd be happy to hear about how you'd like to teach people to make good choices - while keeping in mind that providing a decent social safety net is probably the easiest way to start (remove that intelligence-lowering money stress, to some extent?)

And yes, people of low intelligence are overrepresented among the (American) poor. I don't think there is any controversy about that. That doesn't mean they're bad people or that there aren't any stupid rich people. But it means that if you want to help people *not* be poor, you have to understand that they're not all going to go become software engineers.

-W

Did you actually read the study or just the summary?

It wasn't a an awful experiment, although I am skeptical about drawing conclusions from 100 folk in NJ shopping mall.   Hell doesn't being poor and at shopping mall already show bad money management? From the study.

Although remarkably consistent, these findings have limitations. The causal attribution made possible by laboratory studies comes at the expense of some external validity. For example, in experiment 4 the hypothetical scenarios themselves—even after answers were given—may still have weighed on people’s minds. More generally, in all the experiments we explicitly primed monetary concerns. Such explicit priming may not mirror naturally occurring circumstances. It is possible that environments in which one is richer bring to mind other concerns (such as bigger purchases), creating load comparable with that experienced by the poor. It is also possible—though less plausible—that the poor structure their lives to avoid these concerns.

So there are other explanations besides be poorer drops your IQ, and richer people performed better on all the test not just the ones involving a hard money matter.

I didn't fully understand the Indian sugarcane farmer experiment but I'll give the researchers credit for  originality.  But it seems even harder to translate findings from them to poor people in America.

However, from big picture what they say makes sense. Being poor causes stress, most people make bad decisions when under stress, therefore being poor causes people to make bad decisions.

We could take Gates and Buffett's money and divided up among all households last I check that would be about $1,000/household, thus making folks less poor temporarily and smarter. When that runs out move down the list of billionaire, until everybody makes smart financial decisions or we run out of Billionaires. 

An alternative solution is to genetically engineer people who are smarter, and make better decisions under stress.

In the meantime eating the poor people seems like good first step.

[MDM]

Sounds like complainypants to me.

I buy food, soap, toilet paper, and similar items on amazon.com, because there is no grocery store particularly near me and I don't drive. This is the year 2014, not 1953, so there's never any reason to go to a physical store.

There is not enough housing for everyone to live in an urban environment.  Good that you have amazon.com to deliver food, but that is not a universal resource:

[Gin1984]

Sounds like complainypants to me.

I buy food, soap, toilet paper, and similar items on amazon.com, because there is no grocery store particularly near me and I don't drive. This is the year 2014, not 1953, so there's never any reason to go to a physical store.

There is not enough housing for everyone to live in an urban environment.  Good that you have amazon.com to deliver food, but that is not a universal resource:

Hell, I live in an urban area and amazon fresh does not deliver here.  I could be without a car, however, I'd be going through some pretty unsafe areas and I'd have to leave even earlier from work to pick up my daughter which would risk my job, chose a more expensive daycare that I could get to on the bus eating into that savings. $3000 is the additional cost of the daycare on the bus line (my daycare has a sliding scale and most of the others don't), looking at my car cost, I come close to that but actually spend that annually on the car so it is cheaper to have a car.  Lol

[RetiredAt63]

N=1    I was on the pill for 20 years.  Went off it (on purpose) and was pregnant three months later.  200 years ago I would have had 10 children.

Taken properly, at the appropriate dose for that woman, the pill works.  The biggest issue with it has always been compliance.  Lack of compliance =/= carelessness either - illness can have a big effect there.  Or wrong dosage for that person's endocrine system.

I wonder, for the women who have never had kids, at what point the odds of having an 'oops baby' on the pill are large enough that your (or your partner's) likelihood of being naturally infertile trumps it as an explanation.

[starguru]

I posted on another thread the observation that saving $10/day ($3650/yr), and getting average 7% return will yield over $1MM compounded over 45 years, the typical American idea of working between the ages of 20 and 65.  Once we accept this is true, the question becomes "do people have a responsibility to order their lives around saving $10/day, or at least not complaining if they have less as a result of not saving?".  Is reasonable to expect someone, even making minimum wage, to be able to save that amount? 

I think if more people realized that all it takes to build serious wealth is $10/day and time, the range of excuses we accept as a society (and particularly the left) seem a bit silly.  Whenever the debate comes up nowhere, NOWHERE, is it mentioned that we as a society are driven by consuming useless junk.  It has become popular is political discourse to use ideas of "fair share" to absolve people of any hint that somewhere they have responsibilities.

Are there exceptions?  Sure.  There are some people that genuinely got dealt a shitty hand, and we should have safety nets for those people.  But what we accept as signifying a shitty hand is way too tolerant. 

Re the car discussion above, I can accept that sometimes a car is necessary.  But at the same time, if one's resources are limited, they should be looking at a used beater, not a shiny new Camry or F150.  Financial Samurai (another finance blog) has the notion of the 10% rule, which says its reasonable to spend 1/10th of ones salary on a car.  So someone making $100k/yr should spend no more than 10k on a car.  I think this is a reasonable notion for those that want a car. 

[ChrisLansing]

The single biggest poor choice that most people in US and Canada make, poor or otherwise, is buying an automobile. It's always justified with complainypants stuff like "there's no way to get around without a car!", or "I can't get to work without a car!", and other nonsense.

I spent most of my life in a city with very minimal public transit. It only covered about 10% of the city and ran very infrequently. During winter, there was always heavy snow, and temperatures were below -40 C (coincidentally equal to -40 F). The bus schedule was unreliable and buses would often just not come, leaving you to freeze for hours. The routes were so poor that a trip that might take 15 minutes by car could take over an hour by a series of buses with transfers that had to be carefully timed, and if one bus was late, it would add another hour to the transfer.

As you might expect, everybody whined about how it was impossible to get around with a car and so they all bought one and ruined any chance of ever getting ahead financially.

Of course, I didn't buy a car. I didn't even learn to drive, because I knew it wasn't financially responsible as a non-millionaire. During university, my commute to work took about 80 minutes and included a 20 minute walk. During the winter months (roughly November to March) that walk portion was utterly brutal and I often arrived at work in tears.

The reason I'm elaborating on this is because when people whine about the alleged impossibility of getting around without a car, it is universally bullshit. What they really mean is that they aren't hardcore enough to use alternatives, and would rather be broke instead. I chose not to be broke.


In terms of education, teaching people that you don't need a car to participate in society would be the single biggest thing in terms of making more people rich, but that will take a serious shift in cultural attitudes.

One of my brothers was an architect (now retired) and never owned a car.   He always chose to live within walking distance of work.   (Never married or had kids either).     This isn't someone trying to escape poverty but rather someone who realized he'd be several thousand dollars ahead each year he didn't own/operate a car.   

[sol]

Financial Samurai (another finance blog) has the notion of the 10% rule, which says its reasonable to spend 1/10th of ones salary on a car.  So someone making $100k/yr should spend no more than 10k on a car.

I'd be interested in reading that post, because that numbers seems pretty stupid for someone making $200k/year.  That kind of bad advice makes me angry.  Why spend 10%/year on your car when you could easily spend 5%, put the extra 5% towards increasing your savings rate from 10% to 15%, letting you retire a whole decade earlier?  Why would anyone advise someone to work an extra decade?

<sub>The fine print:  Unless he means 10% of your salary on the purchase price, one time only, and then keep the car for 15 years.  If he means 10% of your salary per year (on the loan/lease payment, gas, insurance, and depreciation) then that's stupid.  If you're making $20k per year and spending $2k/year on your '94 geo metro, you must drive too much or have a risky insurance profile but I could maybe give you a pass.  If you make $200k/yr and are spending $20k/year on your car(s), you're an idiot.

For comparison, our family of 5 has a gas guzzling SUV that costs us about $5k/year in gas, insurance, repairs, and depreciation.  Mostly gas.  Following that 10% rule, this car would be acceptable for a family making $50k/year, which strikes me as asinine.  If we made $50k/year, we'd be driving a Honda Accord from like the early 90s and our costs would be half what they are now.</sub>

[APowers]

I posted on another thread the observation that saving $10/day ($3650/yr), and getting average 7% return will yield over $1MM compounded over 45 years, the typical American idea of working between the ages of 20 and 65.  Once we accept this is true, the question becomes "do people have a responsibility to order their lives around saving $10/day, or at least not complaining if they have less as a result of not saving?".  Is reasonable to expect someone, even making minimum wage, to be able to save that amount? 

I don't know if it is reasonable to expect someone making minimum wage to be able to save that. For example, WA minimum wage is $9.32/hr:

$1491 = Monthly Gross
$1377 = Monthly Net Pay

-545 rent
-200 food
-120 electric
-125 gasoline
-75 personal care/diapers
-65 auto insurance
-50 household supplies
-30 clothing
-28 auto maintenance/licensing
-25 internet
-20 renters insurance
-20 phone
-20 fun money
-17 life insurance
-15 education/school supplies
____
$22 remainder/savings

This is based off of my actual budget for my family of four (me, wife, toddler, pre-schooler). This is also assuming that we get free health insurance; I currently get family coverage through my employer for $23/week, which, if I included that in this budget would mean trimming other categories (maybe education/fun money/gasoline/electric?), including all $22 of leftover/savings.

Where does someone like this save $10/day ($300/mo) while working for minimum wage?

[iris lily]

...I actually read her angry screed, er, book.  Just finished it a couple of days ago.  And it was worth every penny I paid for it (I got it free from the library).

...

That's what I took away form her book: man, this is one angry woman. I can't help but think that mental health problems fed into her poor choices.

But she does do a nice job of illustrating the daily challenges of being in the working poor class, it doesn't all have to be true or true-to-her to be good at showing others how hard the daily grind is.

[starguru]

Financial Samurai (another finance blog) has the notion of the 10% rule, which says its reasonable to spend 1/10th of ones salary on a car.  So someone making $100k/yr should spend no more than 10k on a car.

I'd be interested in reading that post, because that numbers seems pretty stupid for someone making $200k/year.  That kind of bad advice makes me angry.  Why spend 10%/year on your car when you could easily spend 5%, put the extra 5% towards increasing your savings rate from 10% to 15%, letting you retire a whole decade earlier?  Why would anyone advise someone to work an extra decade?

<sub>The fine print:  Unless he means 10% of your salary on the purchase price, one time only, and then keep the car for 15 years.  If he means 10% of your salary per year (on the loan/lease payment, gas, insurance, and depreciation) then that's stupid.  If you're making $20k per year and spending $2k/year on your '94 geo metro, you must drive too much or have a risky insurance profile but I could maybe give you a pass.  If you make $200k/yr and are spending $20k/year on your car(s), you're an idiot.

For comparison, our family of 5 has a gas guzzling SUV that costs us about $5k/year in gas, insurance, repairs, and depreciation.  Mostly gas.  Following that 10% rule, this car would be acceptable for a family making $50k/year, which strikes me as asinine.  If we made $50k/year, we'd be driving a Honda Accord from like the early 90s and our costs would be half what they are now.</sub>

Here is the link: http://www.financialsamurai.com/the-110th-rule-for-car-buying-everyone-must-follow/. 

He doesn't explicitly say it, but he doesn't mean "per year", he means more like the "one time only" scenario. 

Also, he does not espouse mustachian philosophy; it is not a RE at all costs sort of blog. Not everyone is a mustachian. :)

[starguru]

I posted on another thread the observation that saving $10/day ($3650/yr), and getting average 7% return will yield over $1MM compounded over 45 years, the typical American idea of working between the ages of 20 and 65.  Once we accept this is true, the question becomes "do people have a responsibility to order their lives around saving $10/day, or at least not complaining if they have less as a result of not saving?".  Is reasonable to expect someone, even making minimum wage, to be able to save that amount? 

I don't know if it is reasonable to expect someone making minimum wage to be able to save that. For example, WA minimum wage is $9.32/hr:

$1491 = Monthly Gross
$1377 = Monthly Net Pay

-545 rent
-200 food
-120 electric
-125 gasoline
-75 personal care/diapers
-65 auto insurance
-50 household supplies
-30 clothing
-28 auto maintenance/licensing
-25 internet
-20 renters insurance
-20 phone
-20 fun money
-17 life insurance
-15 education/school supplies
____
$22 remainder/savings

This is based off of my actual budget for my family of four (me, wife, toddler, pre-schooler). This is also assuming that we get free health insurance; I currently get family coverage through my employer for $23/week, which, if I included that in this budget would mean trimming other categories (maybe education/fun money/gasoline/electric?), including all $22 of leftover/savings.

Where does someone like this save $10/day ($300/mo) while working for minimum wage?

Hmm I'm not sure I want to respond; I don't want to make this a personal thing.   Note I made it a question.  I guess your answer is you do not think saving $10/day is reasonable. 

[sol]

Here is the link: http://www.financialsamurai.com/the-110th-rule-for-car-buying-everyone-must-follow/. 

He doesn't explicitly say it, but he doesn't mean "per year", he means more like the "one time only" scenario. 

Also, he does not espouse mustachian philosophy; it is not a RE at all costs sort of blog. Not everyone is a mustachian. :)

Thanks for sharing. 

First I was relieved to see he recommended spending no more than 10% of your annual salary on a car.

Second, I was confused by his table of recommended cars for each income level, because it seems to suggest spending way less than 10%.  Then I realized he was STILL advocating purchasing NEW cars for anyone who makes more than 100k/yr, so those recommended models were figured using new car prices. Ick.

My family is rapidly approaching millionaire status, we've never bought a new car, and I don't think we ever will.  Why would anyone purchase brand new when you can get "one day old" cars for a 20% discount?  It's going to be one day old tomorrow anyway, is it really worth 20% of the purchase price to have it brand new for a single day?