
Why poor people make poor decisions - colinprince
https://thecorrespondent.com/283/why-poor-people-make-poor-decisions/37442933638-a4773584
======
umvi
> Poverty is not a lack of character – it’s a lack of cash.

No. Poverty is a lack of education and, more importantly, mentorship.

I am battling this right now with my next door neighbors, who use HOC, a
Maryland social service that basically puts poor people in middle class
neighborhoods by subsidizing rent.

My neighbors have money. They spend it extremely poorly. It's a single mom
with 2 kids. Both kids have iPhones, iPads, PS4s, cable TV, you name it. I'm
constantly cleaning up scratch-offs and cigarette butts from the shared
sidewalk. Yet they are also on food stamps (SNAP) and near the end of the
month the 11 year old boy inevitably starts coming over to our house for
snacks because they are out of food. Just recently he boasted that his mom is
going to buy him a brand new $1500 gaming rig. I remarked that seemed quite
expensive and wondered where the money would come from. "tax return" he
replied non-chalantly. He also said once they got their tax return they would
be going to Disneyland.

I see this 11 year old boy on a trajectory for poverty. I've tried to help him
with his math homework and with reading, but he is at a level far below his
grade and seems to be constantly skipping school. He hates reading because his
reading comprehension is low which means it will never improve because there
are no adults in his life (other than me) trying to get him to read books.
It's a viscious cycle. He has virtually no adult supervision or guidance
(other than what I can offer when he occasionally comes over) because his
single mom is always absent or in the hospital or sleeping or working or with
boyfriend.

It would require an insane amount of cash to make it so the single mom didn't
have to work, and even then, she is uneducated, can't help her kids with their
homework, doesn't see the value in school having not used it herself, doesn't
know how to be a good parent, not having had them herself, etc.

These kids need mentors more than they need cash. They need adults they can
emulate who can help them break free from the viscious cycle.

~~~
wufufufu
I agree, but I also think there's social cost to not spending your money on
status symbols. You will be ostracized by the rich and educated groups for not
fitting in, and then how will you acclimate to a higher social sphere?
Example[1]

[1] [https://gizmodo.com/im-buying-an-iphone-because-im-
ashamed-o...](https://gizmodo.com/im-buying-an-iphone-because-im-ashamed-of-
my-green-bubb-1787965756)

edit: Ok this obviously isn't black and white, but I'm saying this should be
considered among other things.

~~~
karatestomp
Depending on which class you're trying to signal as, buying the latest iPhone
could do the opposite of what's intended.

For the most part class signaling on the easier end (looks, mostly) has more
to do with choices than outright spending. It's why a relatively poor college
professor on the East coast can still look "upper middle". Their clothes may
be a bit worn, some hand-me-downs, some thrifted, but they're the _right_
clothes. Swapping the legible t-shirt & hoodie for a cotton button-up and wool
cardigan or a blazer and the $100-150 sneakers for $100-150 (clearance,
seconds, or used) leather loafers will do a lot more to signal higher class
than an iPhone, and none of those clothes need look new—making the mistake of
spending money on stuff like electronics or boldly-branded expensive clothes
while getting other things very wrong _is_ a class marker, but not one most
would intentionally choose to display if they understood it.

[EDIT] in short, always having new phones and video game consoles and such
only signals wealth & higher status to poor people—absent other markers of
higher class they'll actual read as _low_ class to everyone else.

~~~
BrandoElFollito
This is an excellent point.

Teachers in my children's schools make a point to widen their verbal culture
in addition to what they teach. Also (if not mostly) so that they send the
right signals (which in France is among others your general culture)

------
andonisus
I've always thought it was unintended apathy. Making a (relatively) better
choice will seemingly have no effect on lifting them out of poverty any time
soon, so why bother? Do the thing that maximizes their pleasure, comfort,
hope, etc. in the short term, because things are never going to change in the
long term. This article seems to hint at this perspective when talking about
not being able to take a break from poverty, but it never seems to make that
leap.

~~~
ChuckNorris89
_> No. Poverty is a lack of education and, more importantly, mentorship._

Yep, you nailed it. A friend of mine was ranting on how the poor people(in
Europe) spend their money on iPhones, cigars, alcohol and cable TV instead of
saving it. Lately, I realized that poor people spend their money on those
things since it's their way of short term escapism from feeling poor and if
they were to save it, the amount would be too small to suddenly lift them out
of poverty so they don't even bother.

However, if poor people were clever, or had good mentorship, they would save
that money and spend it on some courses in tech like sys-admin or getting
certified as a professional plumber for example and get a better paying job,
leading to a path out of poverty.

Unfortunately, most popele don't have the will or the guidance to figure this
out by themselves.

Edit: Sorry, replied to the wrong parent

~~~
metalliqaz
>spend their money on iPhones, cigars, alcohol and cable TV instead of saving
it

Do _you_ spend your money on those things instead of saving it?

~~~
ChuckNorris89
Just to humour you, I work in tech, I have a 4 year old mid-range phone, 4
year old mid-range laptop, no cable, no TV, except for some gadgets that
increase my quality of life both mentality and physically, I don't smoke and
rarely drink but I do buy the best quality food that I can for cooking and
rarely go to restaurants.

Since I don't come from money, I try to save as much as I can so I can buy my
own place and start my own business in the future.

Meanwhile one of my youngest friends who works as a bike food delivery agent,
owns a MacBook Pro, the latest iPhone, a PS4 with an ever increasing library
of games, goes clubbing a lot and complains he can't _find a good
job_.<face:palm>

Unfortunately, the latter example is an ever growing category in Europe of
future failures since youngsters are told they can be and do whatever they
want and opportunities will just come to you if you're patient and if that
fails, the government is there to support you.

Not saying I'm a poster child for financial success, far from it, I have my
own guilty pleasures that keep my sanity intact, everybody has, but most
people born in lower class families seem to be clueless about how to get out
and it ain't by frivolous spending.

------
fma
This article cites several research studies as well as the results of the
casino in North Carolina and is a great read - and I hope people read it,
digest it, and then comment (rather than comment based on the title).

This is actually what presidential candidate Andrew Yang is trying to change.
He calls this the "Scarcity mindset" and it doesn't just affect poor
decisions, but also inability to think about things like climate change.

This is why his proposal for Universal Basic Income of $1000 is believed to
raise the poor's IQ by 13 points because having no money decrease your IQ by
13 points.

[https://www.inc.com/jessica-stillman/how-to-increase-your-
iq...](https://www.inc.com/jessica-stillman/how-to-increase-your-iq-
by-13-points-adopt-an-abundance-mindset.html)

New Hampshire votes today for the Democrat primary...if you're in NH, you can
change the country.

------
rurp
This reminds me of a great Matt Levine article from last year where he
discusses his rules for personal finance and mocks the usual cliche advice.

""" The important rules of personal finance are:

    
    
        1. Make a lot of money. (This one is key!)
        2. Spend less than you make.
        3. Don’t invest in scams.
    

Meanwhile most actually available personal finance advice seems to come down
to these considerably less helpful teachings 2 :

    
    
        1. Don’t spend any money on coffee, food, cars or other nice things.
        2. Compound interest!

"""
[https://www.bloomberg.com/opinion/articles/2019-04-29/elon-m...](https://www.bloomberg.com/opinion/articles/2019-04-29/elon-
musk-gets-some-new-twitter-rules)

~~~
foogazi
Everyone glosses over making more money and assumes people are just fixed to
their current situation in life

------
vearwhershuh
People don't need cash. That's the easy way out for intellectuals. And they
sure as shit don't need a casino in their town.

They need social infrastructure (families, extended families, social
institutions like churches and service organizations), cultural
infrastructure, and economic opportunity within this stable social structure.

All of which the intellectual class has been helping the financial elites
destroy for the past century or more.

~~~
miguelmota
I think churches fuel poverty more than they help. Religion teaches people
that they are the way they are because that's how 'God' intended them to be
and that they'll be rewarded with riches when they go to 'heaven'.

~~~
emblaegh
Even as an atheist myself, I can tell how ridiculously uninformed this view of
Christianity (and probably most other religions) is.

~~~
rurp
Can you explain how that post was ridiculous? It matches my understanding of
Christianity pretty well.

The idea that suffering in this life is OK because it will pay off in the
afterlife seems to be a common theme in the bible and helps explain why
Christianity has been so consistently successful within poor communities.

------
tommilukkarinen
I think this applies to companies as well. Continuous economical stress starts
to take unproductive attention such as focusing on finance instruments
(funding) instead of revenue.

------
fredgrott
Poverty is not a lack of cash alone...

Its a lack of cash, education-mentoring, and lack of good choices..ie no
economic difference between all the bad choices before them

~~~
erikerikson
\+ A lack of feeling okay

\+ A lack of hope

\+ A dearth of empirical evidence supporting the above

------
miguelmota
A lot of people are poor because they trade education and learning for cheap
short-term entertainment. People that remain poor aren't thinking about the
long-term. They spend a ton of money on fast food, they do unneeded impulse
purchases, they go for quick dopamine rushes and fall back into depression
when it wears off. Many people get 'comfortable' in their low wage jobs
complaining everyday how much they hate it, but when they go home they go
straight to watching Netflix instead of improving their skills to make
themselves more valuable. A lot of the time, poverty is a mindset.

------
hozae
The one point that is sometimes missed is that in some pockets of poverty,
those who are bettering themselves get mocked for it. It is strange mentality
that requires betterment in isolation.

------
SolaceQuantum
I am totally open to the idea as espoused in the comments that poverty is not
about money but about decisions and mentorship.

Can I ask if anyone can actually point to any studies to highlight that? The
linked article is very well sourced and I'd like to see sources that point to
mentorship programs.

~~~
rezistik
> Can anyone source articles that fit my specific viewpoint instead of the
> well sourced article that disagrees with my viewpoint?

Is that what you're going for?

~~~
SolaceQuantum
No; the above article is well-sourced but the comments heavily disagree with
it. I'd like for these comments to cite an equally sourced article so I, an
undecided reader, can decide for myself what I find more compelling.

~~~
rezistik
Gotcha, that does seem fair.

------
anonsivalley652
There's too often conflation and confusion surrounding two larger principles:

a. The layers of beliefs that build on each other that lead to amplified
productivity, wealth, success, popularity and such.

b. that poverty isn't an innate quality or fate, but a prison of the mind most
people get attached to and will defend. They can escape it if they so choose.

a.)

1\. Locus-of-control - Poor people exist in world where they are made to feel
like criminals and everything is a zero sum game. So, it doesn't _seem_ to
matter about saving a dollar here or a dollar there. (External locus-of-
control/learned helplessness). Contrast this with people who make a game, and
get a thrill, out of buying something on closeout and getting to use a coupon
on top of it. Costco: it's hard to get a poverty-oriented person excited about
saving money at Costco

2\. Saving - People who are poor don't choose to have high Marginal Propensity
to Consume (MPC), they have unmet needs and emergencies all of the time.

3\. Investing and ownership - People who don't have any savings and don't have
internal locus-of-control can't conceive on multiplying money with money, so
they can't really build balance sheet affluence. And if workers were rational,
they would consider what profits they were giving away to their employers for
a pittance, and take collective action to improve their lot or form another
company (co-op's/worked-owned enterprises). Also, people in a poverty-mindset
will often believe that lottery tickets, celebrity or special talents (magical
thinking) are their "way out."

b.) Poverty isn't strictly income or balance sheet, it begins with either
elements of virtuous-cycle or self-defeating, vicious-cycle attitudes. When
people believe a certain way or lack confidence, they continually sabotage
themselves with every choice and missed opportunity in live.

On the flip-side, continued wealth is never assured: people can convince
themselves they are invincible, have infinite money and/or otherwise sabotage
their cash cows like pissing-off their customers.

------
thsealienbstrds
It seems to me that the amount of politics discussed on a platform is related
to how popular that platform is. I like how in some technical IRC channels
they just ban any political discussions outright. It seems to keep the channel
on-topic even with thousands of users. Not saying HN should follow this
course... but this thought crosses my mind sometimes. Sometimes there's too
much political discussions on HN for my taste.

------
exposay
And poor decisions make people poor.

~~~
tejtm
Those poor decisions however need not be theirs.

~~~
0x4477
That may be so, but this idea does absolutely nothing to help someone get out
of poverty. If you were born to financially illiterate parents and grow up
poor or end up poor as a result, pointing to how it was stuff out of your
control that made you poor will lead to nothing else but continuing to stay
poor until you start doing things and making choices that lead you out of that
situation.

It sucks and isn't really fair, but the person best equipped to extract you
from poverty is you. No one can make your choices for you, and you're far
better off taking your life into your own hands and working to improve it than
hoping that greater society will intervene on your behalf simply because your
situation isn't favourable to you or because you're not entirely to blame for
ending up in it.

