Poor Reactions
This post is not about external reactions to poor people, but how people react when they think they are poor.
Case Study #1: A person believes they are poor and as a result they cut frivolous spending. They cut out the fat and only keep the bare necessities until they can save up some money and have more flexibility in the choices they make. They learn the techniques of Dave Ramsey: they pay off high credit card debt, they build up an emergency fund, they start paying things in cash, they keep track of their budget, they buy only used cars, and eventually they have enough capital to buy a house. Because they defined themselves as poor in the beginning, they work towards saving money so that they have a reasonable amount of money and end up no longer feeling poor but rather creating wealth. This person has a long-term view towards life and is able to resist the attraction towards instant gratification.
Case Study #2: A person feels poor because they feel deprived of all of the objects in life they see other people possessing. They believe they are entitled to the big house, fast cars, expensive toys, and luxurious vacations because their friends/neighbors have them. They put all those things under “needs” and cannot separate them from the “wants” in life. The person might make more money than the person in Case Study #1 but lives in a perpetuous cycle of paycheck to paycheck in order to pay the minimums on their credit card debt, lease payments on their new car, and Option ARM mortgages on their underwater 3.5% down FHA mortgage loan. If the person lost their job then they would not have enough to survive for more than a few months; since there is not enough padding in their savings to do so. They live in the here and now and are not concerned with the future. As soon as they exchange one slightly used shiny object for another shiny object, they are attracted to another slightly newer shiny object. There is no talk of retirement because that is too far off in the distant future to even contemplate. Besides, they plan on living off of Social Security (hah!) when the time comes. Because they feel poor in the beginning, they are constantly working to alleviate that feeling through material purchases that put them further in the hole. To this person, spending is essentially a sign of wealth.
In both case studies, the person feels that they are poor but their reactions to their situations are wildly different. One has an attitude of dogged perseverance while the other is one of entitlement. The single most important thing to know is that changing your attitude can change your life. Which attitude will you choose?
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