Here’s Why Poor People Stay Poor

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TOM@RICHHABITS.NET

When too many people access the Internet at the same time, it can cause the Internet to slow down. You’ve no doubt experienced this when you jump on your home computer after work.

This slow down occurs because an Internet Provider’s service lines become clogged with too many of their customers. The Internet Provider’s bandwidth is pushed to the limit and this slows down Internet service for all the customers.

Put another way, bandwidth limitation impairs performance.

Our brains operate in much the same way. When we are faced with too many problems or worries, our brain’s bandwidth is pushed to the limit and it’s almost impossible to think clearly.  

Everyone’s brain, when hit with too many problems at once, slows down and this interferes with our ability to think, which we desperately need to do, in order to solve all of those pressing real-time problems.  

If you grew up in poverty, go back to your life as a poor person and try to remember how much your family struggled financially. Never ending problems, am I right?

Almost on a daily basis, poor people are confronted with a too many problems all caused by one thing – not having enough money.

Poor people are burdened with trying to figure out how to feed their families, make rent, pay utility bills, pay car loans/leases, make the minimum payments on credit cards, fix things that broke, pay medical bills, afford transportation to and from work and a whole host of other cost burdens that weigh on the minds of every poor person, often daily.

Poor people have to constantly worry about survival. This worry causes poor people to focus, almost daily, on procuring the money they need, or stretching the money they have, just to survive.  

Various studies have shown that this constant worry and stress reduces the IQ of poor people by an average of 13% (Mullainathan & Shafir, 2013, p. 52).

Imagine trying to solve real-time financial problems and then being forced to do so with a brain that is not functioning properly, making it impossible for you to think your way out of those financial problems.

Poor people have less bandwidth than non-poor people. This bandwidth limitation impairs their brains and causes poor people to make bad decisions, which only perpetuates their poverty

Citations: 

Mullainathan, D & Shafir, E. (2013). Scarcity: Why Having Too Little Means So Much. Times Books. 

Tom Corley

Tom Corley is an accountant, financial planner, public speaker, and author of the books “Effort-Less Wealth: Smart Money Habits At Every Stage of Your Life” and “RichKids: How to Raise Our Children to Be Happy and Successful in Life“.  Corley’s work has appeared on CNN, USA Today, The Huffington Post, SUCCESS Magazine, and many other media outlets and podcasts in the U.S. and 27 other countries. Tom is a frequent contributor to Business Insider and CNBC.