What Do Poor People Not Understand? - AskReddit

the rich will purchase assets as an investment whereas poor will buy consumer goods which will lose value what do rich people understand that poor people don't the value of money very well off people spend less of their disposable income granted it's proportional to their overall wealth those with less should save more and be weary of large purchases but they are often not cars are a great example of this a new car is a pretty awful investment they lose value instantly a 12k used car is indistinguishable from a new 30k car in terms of utility and oftentimes aesthetics when you look at the median household income we shouldn't see so many 25 000 to 35 000 cars on the road but we do meanwhile they don't have savings a retirement plan and they're sending their kids to college with debt i am in a pretty high percentile for income but i drive a 12-year-old car and i'm aggressively saving for retirement and my kids college the power of compounding interest my grandfather used to work for the local bank in the town where he grew up and he made a point to talk to us about basics of economics and compounding interest it blew my mind then and it blows my mind now just how much money you can accumulate by starting to put away money in your 20s as opposed to your 30s or 40s with a decent compound interest rate rich people don't just put their spare cash on their bank account savings accounts are not where compounding comes from the power of compounding comes from the stock market the average return of the stock market is 78 per year with a rate of return like that let's assume 7.5 for argument's sake one can double their money every 10 years and that's assuming every year is average invest into a diversified low-cost index fund portfolio set it and forget it then in 20-30 years retire like a boss that's what the rich do they play it safe invest in etfs and get a steady six to ten percent return on investments annually with no risk unless the entire market collapses which is unlikely connections can take you farther than you can think in more relatable terms you can be the hardest worker most productive worker an absolute perfect employee but if the only person that knows it that matters is your immediate boss you will never get anywhere it is not a single person that decides your future meet and have a good standing with everyone of any importance where you work and you will be given chances to succeed this is how people work i notice people i know every day and i notice people i don't once a week or less this is just human nature if i'm going to recommend someone for a position not that i'm high enough to have an opinion unless someone asks or given a choice between someone i know and someone i don't i'm going to at least have knowledge of whether a person i know would be a good fit versus a person i've never talked to if you're a good worker and everyone knows it you'll go far if you work hard enough and everyone knows it you'll still go some places if no one of importance knows who you are then they'll choose the people that they at least know will be capable and pass you over because they simply have never noticed you that time and money are mutually tradeable it sounds like a bizarre concept but when you have money it's possible to spend some of it to get other people to either simplify your job by providing already made tools to do it or even to do the job for you thus you get to have less things on your mind and or have more time to do something more important the more money you have the higher you can value your time and effort like when i grocery shop i'm looking for the cheapest option the best deal the most efficient way to feed myself when my mom shops she buys whatever brand name product she always buys at a higher price than generic often there's no difference bush's black beans taste the same as generic but she's not really paying for a better product she's paying for the luxury of not having to expend very much mental energy grocery shopping the extra dollar or two are what she spends not to have to compare prices her time and energy can be valued higher because she has more money essentially having money means that your decision tree gets a lot easier like the old adage better faster cheaper pick two if you're rich then it's always better and faster because cheaper doesn't really affect you when you're not rich or in fact if you're poor or broke then you have to default to cheaper a lot being cheap means you can afford something it just hurts to buy it so you don't that's a huge difference money and how money works if you don't have money then you don't buy stuff you don't need far too often you see poor people spend their money on stuff they don't need phones tvs shoes tattoos etc most rich people spend less than their income i.e they live within their means i know it's easy when you have a lot of means but i've seen blue-collar workers accumulate substantial wealth through budgeting discipline and sacrifice wealthy people just do it on a larger scale sure there are exceptions but rich people who don't follow the above don't stay rich for long conversely people who struggle the most seem to have no idea what is coming in and what is going out it's a constant state of choosing which bill to pay to avoid shut off it isn't because they have no money it's because they have no plan the rich understand spend less save more that money most definitely buys happiness for people who've never experienced it at least anyone who is poor and says money doesn't buy happiness is either jealous or willfully ignorant and will most likely stay poor i came from doing eight dollars an hour to 65 i know what it's like to be broken count the months to finally buy an xbox and not be able to walk into a nice restaurant and order anything i like yes most definitely money changes everything it changes your reality and the perception of value everything becomes an option on the menu it doesn't buy happiness in a literal sense but it sure as hell made me happy from where i was at i think you would have to know what it's like to be poor though i feel like rich people aren't affected by it since they were born into it so they don't put as much weight onto it to elicit strong emotions i've been on both sides of the spectrum and i still have friends in both worlds complacency and drive are two big factors that separate the two a lot of my friends who have been in the same dead end jobs are complacent and lack initiative to put in the work or dedication to make something better of themselves my successful friends realized they needed to create the right environment to put themselves in positions to be successful whether it be go to grad school learn a new trade work to save enough to start their own businesses they understood it was a process that required time and diligence a lot of my broke friends have never switched jobs or made an effort to gain more skill they tend to sell flow than victim blame and are overall just complacent i can't count how many times i've had friends ask me for a break and they usually wind up sabotaging themselves you can lead the horse to the trough but the horse has to drink a little about my position i grew up in a trailer park dirt poor i paid my way through university by working full-time in restaurants and basically didn't sleep for five years after college no one was hiring because the economy was bad so i had to start my own business from zero while working nights bartending to pay the bills it took a few years but i'm doing okay now never borrowed a dime in my life working for money versus money working for you if you wake up to go to work to earn money you're losing if you are asleep in your bed and still generating money you're winning the issue is the rich will purchase assets as an investment whereas poor will buy consumer goods which will lose value a rich person will spend twenty thousand dollars on a stock or antique car or something whose value will go up the poor person will spend that same twenty thousand dollars on a new car or alcohol or food all of which either hold no value or will greatly lose value also work smarter not harder i did my whole team's required by the day job in three hours or so the other day because car troubles and vacations for the first day of the year i couldn't help but think holy hell do you guys do nothing all day like don't get me wrong they have other things to do but we have to do this every monday of the week i got in heard they wouldn't be in and i put my headphones in and powered through it's all excel so i've practically automated my job so i can do side projects i actually want to do plus when you've done all that you're still the star and you can go and connect with people and get more work you've got to hide your wealth away poor person gets some cash and tricks out the rims on their ride while a rich person realizes that causes envy and resentment my dad is what people would call rich that word is probably the worst word you can say in their house though literally makes my parents cringe anyways dad drives a regular pickup with over 150k miles on it he could buy a new 60 000 truck every week and pay cash if he really wanted to you'd never know he was a rich guy if you saw him out and about poor people are actually more likely than rich people to spend money on things like expensive or new cars rich people understand that cars go down in value and go down very fast like 10 to 15 per year so they buy gently used cars that are only a few years old and they pay cash for them they don't use debt to buy depreciating assets they minimize their spending on things that go down in value and maximize their spending on things that go up in value like stocks and property your average broke person in america says they can't invest in a retirement account because they don't have the money but they have a 500 per month payment on a car that's plunging in value faster than they can pay off the loan they've got to buy the damn car in the first place check out thomas j stanley's books like the millionaire next door or stop acting rich he goes into detail about the spending habits of wealthy people just because you can buy something doesn't mean you can afford it never make yourself financially vulnerable just to go somewhere or buy something no matter how badly you want it if you're clueless about the state of your checking account and are scared of looking you're failing at this no it's not funny stop what you're doing and take control asap constant growth in whatever you do is mandatory learn and do things that are above your pay grade because later on you can leverage that skill at your current job or another one to actually get a better pay grade if you've been at the same dead end job for two plus years and nothing is moving forward you're failing at this get out of their asap bonuses and raises aren't given as motivation to work harder they are rewards for working hard you don't have to quit your job to find a better one look around and apply when you're at home and schedule interviews on your days off it's not as cutthroat as you might think when applying for jobs don't be shy blast your resume everywhere the worst they can do is not call you not like they were anyway and you'd be surprised how many recruiters bend or break their requirements for a good candidate especially with regard to experience that entrepreneurial success primarily relies on your drive and ability to influence others through personal charisma people wrongly think success relates to intelligence or wisdom or schooling or even the ability to get stuff done those other attributes apply to people who take jobs not people who make jobs how and when to lie the most successful people i've met are some of the most skilled liars it's not like they're compulsive liars but in order to gain an advantage or overcome something preventing or hindering income they ate lunch that investing spare money no matter how little into an index fund is basically a foolproof bet even if you make 23k a year and are still able to toss some money every month into an index fund you could be a very well within a decade and a half suffer now prosper later i was stupid poor myself cut back to bare bones expenses now i have money so why not help your future self so many people say that's a lot of work i need to eat out i need to buy random bs the average person on reddit isn't in extreme poverty delayed gratification is a marker for development in children the fact that people scoff at decent advice and spend rampantly keeps them in a low consumer class buy what you need invest in your future alternatively spend rampantly enjoy remaining poor in an era where it's so easy to make money it's basically free i'm not wealthy or rich i make a very comfortable wage though and that allows me to save a couple thousand a month into emergency funds or to allocate towards purchases or projects if a car problem occurs or i have an unexpected expense it's not a stressful situation but living paycheck to paycheck bad luck can break your existence removing the stress of worrying about that especially as a homeowner is unimaginable until you've experienced it at least some portion of success can be attributed to attitude and your demeanor if people think you belong you do regardless of the circumstances but you have to be able to keep up i got a bs liberal arts degree and basically worked the system into a phenomenal job that pays way more than it should because i know i can charm my way into or talk my way out of nearly anything my parents have crazy money but i haven't taken a dime since i graduated because it always comes with strings attached but it was the environment i grew up in the social graces they taught me and the mentality that they gave me that really got me where i am that it's not about what you have or how much it's who you know if you surround yourself with poor people you're gonna remain poor surround yourself with the rich and you'll have higher level opportunities at your disposal also don't hate your employer especially if it's a small business that business is their baby and they have most likely come close to losing everything to get it running and your paycheck in the mail thanks for listening to radio tts hit the subscribe button and activate the notification bell for more things your parents and teachers don't tell you about click the right box for the related playlist let us know in the comments what you think about these statements

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Keywords: reddit, reddit stories, best of reddit, askreddit, reddit story, ask reddit, reddit cringe, askreddit funny, reddit funny, r/askreddit, top posts, reddit best, r/, reddit top posts, askreddit top posts, reddit top post, radio tts poor, habits that keep you poor, poor people, reasons why you will always be poor, reddit poor people, reddit poor financial decisions, being poor reddit, this is keeping you poor, things poor do that rich don't, Habits of the wealthy vs poor

Id: DNn8kV3qXLM

Length: 14min 13sec (853 seconds)

Published: Sun Mar 21 2021