The Rich Get Richer

[maat55]

The rich get richer because they use good sense with money, the poor get poorer because they use bad judgment with money.

[julee_m]

Sometimes people with good judgement have bad luck, and conversely those with bad judgement have incredibly good luck. Someone could work hard and save and then get a debilitating disease and see their savings disappear. Many people who claim bankruptcy have medical bills despite having health insurance. I hate over-generalization. There are so many different factors impacting wealth, including having good examples, good looks, social contacts, education and just plain luck.

[RedThunderBird]

I wish I could remember who said " I believe in luck . the harder I work , the luckier I get " , but there are variables in the equation of life . an emergency fund for those times when things go wrong is the best way to go .

[snafu]

The poor spend nearly their entire income to cover basic needs, rent, utilities, food, clothes, auto/transportation, entertainment. There is no money left for savings, ER fund, investment.

[RedThunderBird]

Originally Posted by snafu

The poor spend nearly their entire income to cover basic needs, rent, utilities, food, clothes, auto/transportation, entertainment. There is no money left for savings, ER fund, investment.

I was in that situation , and you will be in shock how much we spend in those things that we don't need at all , and some how we perceive it to be " basic needs ' . I saw an article in today's newspaper about free cell phone for those who cannot afford it , for emergency needs === I say to myself , what a great country we live on , I hope I never take it for granted . so as you can see there are many ways in which the poor have access to many benefits , that will help them ====== until they get back on their feet .

[disneysteve]

Originally Posted by snafu

The poor spend nearly their entire income to cover basic needs, rent, utilities, food, clothes, auto/transportation, entertainment. There is no money left for savings, ER fund, investment.

That is true to an extent, however the poor also have a much higher rate of cigarette smoking, alcohol use, lottery ticket purchasing, etc.

The poor tend to blow a higher percentage of income on frivolous stuff. Their priorities tend to be out of whack. I once did a house call to a home of a very poor family. The living room had a beautiful big flat screen TV on a decent stand and nothing else in the room. This was a number of years ago when TVs like that were a few thousand dollars. The poor, in my experience, are often much more attached to material items for appearances and status - the latest cell phone, manicured nails, fancy earrings, etc., even though they can't really afford any of that stuff.

[arthurb999]

I was serious with my comment.

There is ZERO reason to be poor... barring extreme reasons like disability, breadwinner death (but should have life ins), etc. A layoff is temporary and should not automaticly make you poor.

I grew up pretty poor for american standards. dad worked as a welder, mom stayed home with kids, we lived with grandmother, no cable, a/c, etc. I had a paper route to pay for the stuff i wanted.

What happened. I took out student loans and went to college. After that I got a decent job and went to grad school at night for my MBA. fast forward, I'm not poor anymore. there is no reason anyone couldn't do this. I'm not super smart, gifted or lucky. All it takes is desire and a plan.

No one told you to drop out of high school, become a janitor, smoke a pack a day and have 5 kids before the age of 25...

People need to take responsibility for their own lives... most of the time... you are where you are beacuse of your own choices.

[disneysteve]

Originally Posted by arthurb999

There is ZERO reason to be poor... barring extreme reasons like disability, breadwinner death (but should have life ins), etc. A layoff is temporary and should not automaticly make you poor.

So breadwinner should have life insurance. Who is going to pay the premiums for they family struggling to pay the normal bills? When a patient has to choose between filling a prescription medicine and buying food, do you really think they are going to keep sending money to some insurance company?

As for a layoff, it may or may not be temporary. If you've been living paycheck to paycheck, you've got no savings or reserve or EF to fall back on when the job disappears. Sure, you collect unemployment, but that isn't as much as you earned on the job and it doesn't last forever. I have many patients who have been out of work for a year or more at this point. They are barely surviving. It isn't so simple to overcome stuff like that.

[Broken Arrow]

Hmm, I have to be careful here.

Back in Sociology class, we've read several academic papers that studied and even measured being poor, and what causes it.

Of course, this was many many years ago, and that was on hard copies, so I don't have any links handy. But I do recall some of the thesis was that the economic environment is the cause, or is at least a major contributor, to being poor.

Consider a typical case example of "poor". Let's say you're born to a mother who is an alcoholic, or worse drug user. You have no idea who your father is because he's obviously gone. Household income is low, you struggle with school, some of your childhood friends have already been jailed or got shot, and you are both intimidated and tempted by gang recruiting.

Could someone, who is born into this sort of environment, rise above all that and become wealthy and successful? Of course. Is that what generally happens? No. In fact, these studies suggest that only a small percentage of the population ever rise above the economic condition they are born into.

But I did say I have to be careful, because true or not, it's all too easy for us to point our fingers and blame it on anything and everything else except ourselves. I do agree that, in the end, it is indeed up to us to rise above our environment and create our own success.

That said, I also believe that it is harder for some than it is for others, and to simply say that people are poor because they are lazy is rather unfair....

[arthurb999]

"So breadwinner should have life insurance."
Hell Yes.

"Who is going to pay the premiums for they family struggling to pay the normal bills? When a patient has to choose between filling a prescription medicine and buying food, do you really think they are going to keep sending money to some insurance company?"

They should not be in this sutiation if they made good decisions in life. If they made bad decisions, tough crap. If they can't afford where they live, move. If you can't afford food, get a better job... 2nd job... buy cheaper food, get food stamps.

"As for a layoff, it may or may not be temporary. If you've been living paycheck to paycheck, you've got no savings or reserve or EF to fall back on when the job disappears." [/quote]

Living paycheck to paycheck is 100% their own fault. Live below your means and save. This means spend less or make more... pick one and go for it.

People make it seem like being poor is just the hand you were dealt and you have to be poor forever. That's not the way it has to be...

[GREENBACK]

Enviorment certainly plays a critical role in whether people succeed in life. It would have been very easy for me to have dealt drugs and to have ran with the wrong crowd. What kept me away from that lifestyle was (TWO)
loving parents and athletics. I saw many kids go down the wrong path and end up in jail, dead, drug addicted, or some combination of the 3. When you see this stuff everyday as an impressionable youth you assume everyone behaves this way and before you know it you're trapped in this cycle. I don't know if many grasp this if they haven't lived it.

Poverty is a mindset in many ways and yes it's possible to break out of it but it can be hard for many to even dream that they can better their situation because they've been around the wrong people for the majority of their lives.

I worked part time at a battery factory and part time in a lumberyard many years ago. These were both potentially hazardous jobs. I had no health benefits from either job. I had no health insurance period. I shutter to think what my life my be like today if I had experienced an accident at that time. This type of situation can make you legitimately "poor".

[disneysteve]

arthur, I don't think any of us are suggesting that poverty can't be overcome but rather that it is exceedingly difficult to overcome. When you have no education, no money, no transportation, no family support, no health insurance, etc., it is very, very difficult to make any progress in life. The poor, as GREENBACK alluded to, often work manual labor, physically demanding and dangerous jobs where they are unlikely to have health insurance. One simple injury can be devastating. I could tell you any number of stories along those lines from my practice.

As for getting 2nd or 3rd jobs, that is nearly impossible when your 1st job requires 10-12 hour shifts 6 or 7 days each week, often with fluctuating hours and mandatory overtime. Also, you are dependent on public transit so may spend an hour or more commuting in each direction. If you also have a family to care for, it doesn't leave any time for much else.

It is also undeniable that the poor spend a much larger percentage of income on necessities. They pay the same prices as the rest of us pay for stuff. In fact, because of the retail options available to them, they often pay even more than the rest of us. I can get a gallon of milk for $2.09, for example, at my nice suburban market. That same gallon of milk in the poor neighborhood may be $3.50.

For those fortunate enough to own a car, they get hit with higher insurance costs because of where they live. Someone earning $250/week who spends $35 to fill his tank is putting out 14% of his weekly gross income whereas that $35 would only represent less than 2% of my income.

I could go on and on with examples. The point is that even someone trying to do everything right has struggles that the rest of us don't have in our lives. That makes rising above the poverty surrounding them very challenging.

[Broken Arrow]

Incidentally, I came across a chart by the Spectrem Group that measures the number of millionaire and affluent (net worth < $500k) households.

Unlike the dot com bubble, it seems that all sectors of the rich have clearly taken a hit last year.

[GREENBACK]

Doesn't look like the rich are getting richer there B.A.. Do they also have a poor chart to show that the poor are getting poorer?

[Broken Arrow]

Originally Posted by GREENBACK

Doesn't look like the rich are getting richer there B.A.. Do they also have a poor chart to show that the poor are getting poorer?

Well, I suppose it does seem that way.

However, 2002 through 2007 wasn't all that bad for all economic classes. People were having a good ole time spending borrowed money through the housing bubble.

The original point is, "The rich gets richer, while the poor gets poorer", to imply a widening gap. Maybe.

But as 2008 shows, that's not entirely true. In 2008, the rich trended down along with everybody else.

So, the rich does not always get richer.

[watsoninc]

Additionally, the ultrawealthy (net worth of at least 30 million) were hit harder than the merely rich.. Consider the results of 13th Annual World Wealth Report. It showed that although both the magnitude of wealth and the number of millionaires decreased by about 19% in 2008. The ultra-wealthy saw their ranks drop 25%, with their wealth dropping 24%.

This is particularly relevant in interpreting such data because the loss of wealth among the ultra-wealthy disproportionately affected the overall trends. Although the ultra-wealthy make up less than 1% of the total millionaires, they hold 34.7% of the wealth.

[happygirl]

I think the cycle of poverty is very real for many. When you are a toddler, you look to the adults in your life to teach you everything.

For example, if parents use poor grammar, a child will most likely learn poor grammar. Then when that child is a teen and trying to get a job, he stands less chance of being hired than a child raised with parents who used proper grammar and taught their child how to present himself in a positive manner. Then, in addition to having more difficulty finding a job, that teen's self esteem starts to erode when he is rejected time and time again and the cycle continues. So, this teen decides he could never make it in college, after all he can't even find a good after school job, so he gives up and settles for whatever low paying job he can find. Then he'll become a parent and will be a role model to his children so they will follow his example and it starts all over.

This is obviously not the case with all poor people, but just one example. I think as a society we too often fail to take responsibility for our own actions and situations, but we also fail to show compassion and understanding and offer a helping hand to those who need it.

[Alex_Adviser]

The richest 2% of adults in the world own half its wealth, the richest 10% own 85% of it, and the bottom half with just 1%.- (From James Petras, “ Rulers and Ruled in the U.S. Empire”)

The above statement speaks everything about why the rich are getting more richer.

[RedThunderBird]

Originally Posted by Alex_Adviser

The richest 2% of adults in the world own half its wealth, the richest 10% own 85% of it, and the bottom half with just 1%.- (From James Petras, “ Rulers and Ruled in the U.S. Empire”)

The above statement speaks everything about why the rich are getting more richer.

Here is the best example , that education does not equal wisdom , and wisdom is what Mr Petras lacks . He is quoted by tyrants [ one in particular just 90 miles away from the U.S ] with such gusto , that makes you wonder why would they do that , until you realize that he is but a fool on a hill . I would love for him , to know how it feels in the "Socialist Paradise " , that he preaches so much `, but for that he would have to live there , as regular citizen or " slave" take your pick , the terrorist of Colombia also loves this fool [ F.A.R.C ] , so Hamas , which he defends with the same passion he attacks Israel . how does he sleeps at all , I don't know but his hypocrisy , and down right lies used by the worst kind of people alive ==== makes me realize how easy is to sell your soul for fame , even if it is brief ==== the ego always gets in the way , what a paradox believing himself wise , he became a fool . many arguments can be used to disprove , what he says but it would like talking to some one who believes that the earth is flat ==== there could never be a dialogue . I once read George Orwell's [ he insisted , that it was just a fairly tale , and no more than that ] Animal Farm , and let me tell you I was blown away , besides the dubious advantage of living the "experience " I gained an insight about why socialist movements ==" every one is equal , though some are more equal than others " could never replace a true free Republic like this one , and in those pages I found more wisdom , that in all the propaganda from Petras ==== I will finish with the words of some one who also lived the experience === Communism / Socialism is the fascism of the poor === Think !

[money blogger]

Originally Posted by jIM_Ohio

The poor will always have a few attributes in common from one generation to the next:
1) they are closer to earning zero than anyone not deemed poor
2) when others make more money than another, that person might have a feeling of being poor
3) what really needs to be measured is if the people which are poor now, are also the same people which are poor in 15 or 25 years.

Rich get richer- of course
2 main reasons
If I have capital or the ability to borrow it, I can make money
and no matter how much money a certain segment of the upper class makes, they will always want to make more.

It is very possible the difference between the rich and the poor is not just the money, but also in the attitudes and value people have about money.

Thanks for the comments Jim,

I'm so glad you picked up on and mentioned the attitudes. This is the most important part. If people are comfortable being poor, they will never make a transition to middle class and eventually wealth.