Monday, May 05, 2008

How to be Poor.

There are some people who are born with handicaps and disadvantages and must struggle to overcome their disadvantages, but for most people they have to do really stupid things to stay poor. It is hard to stay poor in America. Having worked with poor people most of my life, I have observed some of the things that people do to achieve poverty. Here is a list. If you want to be poor, these are some of the things you can do.

Become a single mom. This is almost guaranteed to make you poor. A single mother with one child earning $22,000 year is poor. A father, mother and child with a family income of $44,000 are not so poor.

Have children early. Have your children before you finish school or before you are established in a career.

Father children and don’t marry the mother. If you do this then you will have child support payments. If you are determined to avoid child support, you can work in the underground economy and constantly change jobs.

Drop out of high school.

Enroll in college, take out lots of student loans, but don’t graduate. This way, you will have big loans to repay, but won’t have the benefit of the earning power of a college graduate.

Become a criminal. Most criminals are poor. Most drug dealers with their momma. Once you become a criminal it will be very difficult to ever get a good job.

Become a drug addict or an alcoholic.

Take this job and shove it. If your boss is unappreciative, a customer is rude, or you get tired of working the third shift, just walk off the job. It is important to do this without having another job lined up and don’t give a two-weeks notice.

Become satisfied in your dead-end job, stop looking for new opportunities, stop leaning new skills, and stop growing.

Smoke cigarettes, drink beer, smoke dope and play the lottery. If you do this in moderation, it may not make you poor. You may need to do a lot of it.

Don’t learn delayed gratification. Live for today. You want it, you deserve it, get it now.

If you are short of money, use payday lenders. With a payday lender you can borrow $200 and on payday pay back $230. If you don’t have the $230, you can pay $30 and borrow the money for two more weeks, this is only 780% interest. Worrying about the interest rate is something middle class and rich people do.

Don’t take advantage of your employer’s matched retirement plan. If your employer will match up to 3% of your income in a retirement saving plan, don’t fall for it. If he matches your 3% that is a 100% return, and since that is money you do not pay taxes on, that is another 25% return, and if your money and your employers money earns 5% that is a 10% return for you for a total of 135% return. If you do this you will find you are becoming middle class.

Don’t put money in an IRA every year. If you do, that is money you won’t get to pay taxes on. Anyway tell yourself you need it now. You can’t afford to save.

Use the Rent-a-center. If you need a washer and dryer, don’t buy a reconditioned used set for $150; pay $25 a week to rent a new set from the rent-a-center. Also, you can rent nice furniture and a TV and VCR and stereo.

When you do your taxes, get a “rapid refund”. Sure you have waited all year for your money, but you look forward to your refund. Why wait another two weeks when you can have it now? If your refund is $2000 and if cost you $100 to get the rapid refund, since you are only borrowing the money for two weeks that is a 130% interest rate. Don’t worry about the interest rate and don’t wait two more weeks for your money. That is the way middle class and rich people think. You want it now; get it.

Buy a new car. Did you know that most millionaires have never bought a new car? A new car is a rapidly depreciating asset, but a new car smells so good. You deserve it. It will make you happy. Do it!

Always rent; never buy a home. A home is an appreciating asset and the biggest wealth builder for most people.

Value your government handout. Don’t earn too much money or you may lose your section 8 or public housing, food stamps, and Medicaid.

Think like a poor person. Be envious and jealous of people who have more than you do. Keep telling your self that life is unfair and that if other people did not have so much you would have more.

Don’t get “above your raising.” If you are black, don’t let yourself ever be accused of “acting white”. Don’t let anyone ever accuse you of acting like you are better than they are.

Have lots of poor friends. They will make sure you do the things and have the attitudes that keep you poor.

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  1. So true! I look at this list and think "well, that's a given, this is common sense." Obviously it's not common sense to many Americans.

  2. Rod - so perfect. I'd love to see this posted nationally!! I will definiately share this with my kids and their friends - it just reinforces what I'm saying to them everyday!

  3. I was just blog surfing when I came upon this post, and I love it. My blog is dedicated to helping people understand stocks, investing, and money management etc. (without the non-sense of flipping, multi-level marketing, etc). I started by allowing my friends, family, and co-workers to watch what I do and I explain it as I go. They are amazed at how easy it is to make money, invest money, and prosper in America. With your permission, I'd love to copy your article to my blog

  4. Is it "stupid" to become a single mom when you have to leave an intolerable marriage and then receive no child support. I always worked full-time to raise my son myself, but on a secretary's salary it was not easy. I have never been able to save money, even with us shopping at Goodwill's and Thrift Stores. But I don't consider myself to be "stupid" and my son has become a very fine young man.

  5. I searched through Rod's entry and found that he used the word "stupid" one time. If he has used, "short-sighted", would it have been better? You did however, make his point, and that is that you experience the same hardships that my own mother did, from one major life miscalculation. He's not here to argue who is to blame, that's Dr. Phil's job. What he is saying is that you have to be aware of how to fail, in order to know how to succeed. A single parent with limited means, is trapped in a cycle of poverty. I know! I grew up poor, with a single parent. It was a revelation for me, when I was around wealthy people. They thought differently. They knew things of value to me. Their world was bigger than trying to simply get fed. They had choices. I don't know you, but I know my mother was and is a very smart person, and I'm a few IQ points shy of being a genius, for whatever that's worth. It's not about intellect. It's about life choices.

  6. No child support. Have you visited any site to see what you can legally do? I Googled "child support", and one of the first matches is a State by State site that has a lot of useful information. What these comments are telling you is that you have to stay professional about your circumstance, get proactive and clearly and unemotionally state your case, and explain exactly what you would like to have happen to public servants and legal advocates. Use the system to set things right, then make a plan, budget, and so on. Your son will be a great resource. Give him a focused mission on how to help.

  7. I think a lot of the statements here made some sense and while I am not sure of the vein this post was written in I can see the point.

    If the writer was saying that people 'choose' to become single moms then it was a very shortsighted point to make because it was not always a choice for some people.

    However if it was written in a more humorous tone then it goes along with reality.

  8. I grew up working class/poor in NYC during the 70's and 80's. And I must say that most of the points made in this post are spot on. My siblings and I stayed in school, two of us are college graduates and we all waited to have kids. While we are not "rich," we certainly have come a long way since those tough early days. Great post.

  9. Some good ones in this list. I have a few more from experience.

    Become a writer.

    Move to another country to teach English. Try moving back home with the money you make.