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comment by francopoli
francopoli  ·  1022 days ago  ·  link  ·    ·  parent  ·  post: How poor people stay poor

    is being poor different from being very frugal and living with very little? I mean, I understand it probably is, but - how, exactly, is it different? Maybe what I really want is the simple life and not a poor life, and I'd like to figure it out.

This is a grand question, thank you for asking it and I will give you the best answer I can.

I was just in a car accident. Because I live frugally, I save to the point that I have a year's income sitting in liquid accounts. I could pay cash for a new car, but due to no debt on frivolous items such as luxury goods etc, I was offered a car loan that ends up being less than the rate of inflation, and less than the interest rate I get on my CD's. I do not live paycheck to paycheck and fortunately have a job with banked sick time that I was able to use to cover doctor's visits and time off for car shopping, lawyer visits etc. The whole experience has been annoying,frustrating and inconvenient, yes, but I am not going to go hungry or lose my house over the accident and new car. I got a new car because used vehicles come with their own issues and are not that much less expensive in the grand scheme of things. I was able to spend more on a machine that comes with a 10 year warranty and should last me a good 12-14 years as I take care of my stuff.

Frugal, to me, simply means living slightly below your means to generate savings so that you are prepared for the bad things that come your way.

Now, we talk about when I was poor. (The following is a summary of people I knew and what they went through) If this accident happened back then, I'd miss two days of work. As it took every cent I made to keep a roof over my head and pay the bills, this means that I lose out on roughly 1/10 of my monthly income, assuming 20 work days a month. I am now on a work restriction, which I am currently working around, however, If I was working a physical job that needed me healthy, I'd not get the hours I was pulling in before the accident, or fewer hours, or worse case, I'd get fired for not being able to work. Yes, it is legal to do that in most states. Now, I am out a car, have a broken arm and severely less income for the month, AND NO SAVINGS. It takes a month to get money from the car being totaled, and as I was driving a barely legal rust bucket at the time, there is no way I would get enough money from the settlement to do more than pay a down payment, assuming I could afford the car payments in the first place. Or you can go to the auto auctions, get a beater car and hope that it does not break down or need a major repair because money is very tight now and your job is on the line so every purchase you make is a knife in the gut. Sure, buying a better car that needs fewer repairs and will last longer is the best choice, but I don't have that money. Let's be generous and say that the place you are living in is with people who have your back, or can get you side jobs, or help you fix the new car etc. Maybe they know you are good for a loan, so they cover your rent for the month; this only adds to the stress as your buddies are all in the same boat you are: they live paycheck to paycheck have no savings and need every cent incoming to just keep the lights on and food on the table. So the arm is in a cast for 6-8 weeks. That is two months where I cannot work as much as before. The check for the car is gone due to the new car and giving money to the housemates, and you have to swallow your pride and apply for unemployment. That takes weeks to work out, and (at least when I had to deal with them) the people in the office hate you. Hopefully it is better but back in the day I honestly felt as if they were unpleasant just to kick you in the ass to get a job so you no longer had to deal with them. And hopefully you pull in enough cash to keep the roommates happy enough that they don't kick you out in favor of someone who can pay the bills. Or, with no other options, you work hurt, which makes it take longer to heal, increases medical bills that the insurance promises to pay and hope that the lawyer you found in the phone book is not ripping you off. If one more bad thing happens, all your options collapse. This is what being poor in the US does to you.

Being Frugal is a luxury. Being frugal means that you have the options to not buy stuff, to save, to build up a bit of money. Frugal means you have the money to buy in bulk, for example, and you have the space and resources to absorb a big purchase like that. Frugality is a way that can be used to enforce budgeting as well. Being poor, on the other had, means in many cases that you are one or two unplanned expenses away from a cascading set of failures that ends up in a bad place. If you get a utility cut, you have to pay a reconnect fee on top of what you owe, foe example. Overdraft a check on accident and that can run you $50-$100 when it is all said and done, which may be the difference between eating and not eating that week. One funny (sad) story I have is that a church was offering families a free Costco Membership, at the time about $40 a year. The families that jumped on that as a great way to get cheap food ran into the problem that yes, food was cheaper, but they lacked the money to buy the big packages to start the ball rolling. The church eventually got wise, pooled all the money together and started running a sort of community shopping run to try to kick start savings and budgeting. The thing everyone seems to forget is that if you give poor people money, they spend it on stuff that they were putting off due to lack of funds (replacing clothes, new shoes, TV, fix the car etc.) Oh, and I watched a shit ton of TV when I was poor; TV is cheap and watching TV you don't go out and spend money in bars etc.

Living a simple life is a goal I can get behind. I do it myself. But I have a ton of options and can do pretty much whatever I want. I don't have the fear and stress of worrying about keeping a roof over my head and food on the table.

I got lucky as shit and got out of the cycle, was able to save up over $100K and connect with friends who saw me doing crazy physical labor instead of mental work that was more my style and talents. Most of the people who are poor, at least from my interactions are poor for the simple fact that they lost the birth lottery and ended up in single parent families in impoverished areas with bad schools and no hope. It used to be that the military was a way out, not so much any more. Or College, but we are sending too many kids to college IMO and that is not a guarantee; it can even make the problem worse if they end up with tons of debt. Better men and women than us have looked at this problem, and honestly the only way to break the cycle is strong families, decent school, access to health care in childhood, strong role models, and an economy that can absorb the influx of new labor into the work force. None of these issues are easy and the solutions are not going to fit on a bumper sticker. I am doing my part to chip away at the problem, hopefully I will have a bit of an impact.




ThatFanficGuy  ·  1022 days ago  ·  link  ·  

Thank you for the break-down. I now see the difference clearly. Indeed, I was hoping for something far more romantic than that.

That being said, I'm still curious: can you live without money (or, at least, with the absolute minimum)? Have you ever heard of people doing that? I've heard of one vagabond posting of his penniless living online, but I never dug any deeper than that. I know that one can get odd jobs as they travel (since they have no shelter) - and, even though unreliable, this is somewhat feasible (and I understand that the pay is shit in this case - it's just better than nothing). I have no idea about where one would sleep/rest and other such activities, though.

francopoli  ·  1022 days ago  ·  link  ·  

    That being said, I'm still curious: can you live without money

In a modern country? No. Land needs money for taxes, and no one person can make or produce everything they need. Even the Amish have jobs and sell goods.

    Have you ever heard of people doing that?

People working resource extraction jobs (lumber, fishing, oil) who live cheap and bank everything they make, which is what I did, can come out of the experience with enough money to live for a year or three before the money runs out. This is very hard to do, but it can be done with character and discipline.

    I have no idea about where one would sleep/rest and other such activities, though.

I lived on a boat, with the expectation that I was working 20 hour days when the product was being harvested. Logging camps for some people I knew in Alaska provided shelter, which amounted to glorified heated tents and not much else.

    Indeed, I was hoping for something far more romantic than that.

I blame the movies and TV selling a fairey tale. The reality is so bad most people honestly can't understand nor handle the truth. At least you are asking questions and trying to understand.