Illogical Things We Do That Help Keep Us Poor
Fix these and you can turn your life around
When I was a child, my family was relatively poor. My father had a good job, and we had a roof over our heads and food on the table. But we never seemed to have enough money for the nicer things in life.
In most of my twenties, I continued to live a rather poor life. At age 28 I didn’t have a job and was in debt.
But then I somehow managed to get my life together. I got my first proper job at age 29 and reached financial independence at age 50. I haven’t had a day job since then and will never need one ever again.
During my life, I’ve known homeless people, people just getting by, people that are well off, and a few millionaires. After years of observation, I can clearly see what the differences are between these groups.
What I discovered is that the poorest in society have some completely illogical habits that help keep them poor. This was me in the early years of my life.
I managed to move up the social ladder. If I can do it, there’s no reason that you can’t.
These are the illogical things that people do to keep them poor.
#1 We buy crap that we don’t need
I see this over and over again. People have a desire to keep up with the Jones’. If your neighbor can afford a brand new car but you can’t, it makes no sense to buy one anyway just to look good.
Maybe your neighbor can’t afford that car either but maxed out his credit card to get one. Now you’re both in debt? What for? To pretend to each other that you both have more money than you actually have?
You don’t have to play the game of buying expensive stuff you don’t need just because other people buy them.
When I look at some of my wealthier friends, they rarely buy a new car. They will either buy a good secondhand car or buy a new one that will last them 10–20 years.
In contrast, I know people with much less money, yet they buy a new car every 3–5 years. It makes no sense to me.
I don’t have a car, but my wife does. It’s 17 years old, has 300,000 km on the clock, and still runs almost perfectly. She loves her car.
Yet friends keep asking why we don’t buy a new car. Well, the answer is simple. We don’t need one. We don’t need to impress anyone. We do what suits us, not what suits others.
#2 We don’t save/invest for the future
This is one of the best things you can do if you want to get out of being constantly poor.
But wait, you say, I’m too poor to save.
Of course, you’re not. Everyone is capable of saving at least a small amount every month.
I’ve heard people saying they can’t possibly save, as they only earn $30,000 a year. Another person can’t save because they only earn $50,000 a year. Another one earns $100,000 but can’t save.
What’s common is that they all think they have to spend everything that they earn. I know people that live on $20,000. If they can, then so can all the others that earn more.
I’m not saying you should live on $20,000 if you earn $100,000, but it does prove that you can save if you wanted to.
Surely someone earning $30,000, $50,000 or $100,000 can save $150 a month.
You may think it’s not worth it. But did you know that if you invest $150 a month at a 10% rate of return over 30 years, you’ll end up with over $300,000? Is that worth doing?
I wrote an article about it.
How to turn your $150 a month in Medium earnings into $300,000 (Definitely not Clickbait)
#3 We don’t continue educating ourselves
Poorer people tend to think that education ends when they leave school. Assuming they leave at age 16, they will likely live another 70 years. That’s a long time to spend without continuing your education.
Just think how much the world has changed in the last 20–30 years.
When I was a child, we had a black and white TV with three channels. there’s wasn’t any way to record programs to watch later. We didn’t have a phone at home. Mobile phones didn’t exist. The internet wasn’t even a thing.
Since then the world has been totally transformed and continues to do so at an increasingly rapid rate. If you don’t update your skills, you’ll eventually get left behind.
I know people that had great jobs and a great life. Then one day their job disappeared and that it is. They slid back down to poverty and never recovered? Why? Because they neglected their education.
Meanwhile, some of their friends moved on to bigger and better skills. They had continued educating themselves and updating their skills.
I will do this for the rest of my life. We need to move with the times and stay relevant.
#4 We want instant gratification
Some people have the money but want to spend it right away. They would rather spend $1,000 today than have $2,000 to spend next year.
They then wonder why others around them can afford a better life. The answer is simple. They others delayed their gratification.
I’m not saying you have to put off spending for years and not enjoy your life. But you need to have some balance. Don’t spend everything today and then complain tomorrow that you’re broke.
I buy expensive products from time to time. I want to own quality products. I want to own products that improve my life. I use my laptop every day, so I bought a top-of-the-range model. It makes my day to life so much easier.
What I don’t do is upgrade a perfectly worked TV for a bigger model every few years. You still get to watch the same TV programs, so the extra spending isn’t offering any value for money.
Think carefully about what you’re spending. Try to delay at least some of your spending. Invest the money and you’ll have more later.
#5 We don’t have any goals in life
This is another huge one. If you know what you want out of life, you can plan ahead. If your goal is to buy a property, you know you have to save for a deposit, so you’ll start doing that.
If you don’t have any goals, you’ll just spend all your money right away, as you’d have anything specific to save for.
A poorer person will just spend what he wants on what he needs right now. A wealthier person will prioritize what gets them to their goal.
Years down the line, the poorer person wonders why they can’t afford to buy a property. The answer is that they never had a plan to buy one.
I wish I had set some goals much earlier in life. I would have been way ahead of where I am right now.
I’m doing pretty well though, so it’s never too late to start. I started late and still turned my life around.
I hope you’ll use the above to help turn your life around for the better. I have observed these patterns in people throughout my life. I know that we’re all capable of changing if we put out minds to it.
Changing these habits worked for me. Why shouldn’t they work for you as well?
Next, sit down and write some goals for yourself. Then re-read this article again and make some plans to change any of these illogical habits that you may have.