Being poor has nothing to do with income.

[Rick Lee]

Another painful one last summer was a woman in a trailer park, whose water heater had died minutes before I got there. She was stressing over how she'd be able to replace it. I showed her the lead card she had mailed in, asked what she was looking for. She said she wanted to add coverage to what she had so she could leave her daughter more $$. Took me forever to get all the info I needed and to close her, but I was able to get her more coverage for the same payment, skip a month and she'd get $900 cash back from the old company, which was more than enough to replace her water heater.

She called me a week later to cancel. She said she had been with that other company so long, she just didn't want to leave them. I talked her out of it. A week later she called the insurance company I wrote for her and canceled with them directly. I went back to door knock her. She came out and said it was just too much to deal with. I reminded her that I had already done everything - sent the faxes, canceled the old payment, got the new policy in place and was just about to send the fax to get her refund processed. She said it was too much work. I said, "Ruth, all you have to do in endorse and deposit the $900 check they mail you. That's it. Nothing else." Nope, couldn't convince her. That's why she's poor.

[masraum]

Originally Posted by Rick Lee

Another painful one last summer was a woman in a trailer park, whose water heater had died minutes before I got there. She was stressing over how she'd be able to replace it. I showed her the lead card she had mailed in, asked what she was looking for. She said she wanted to add coverage to what she had so she could leave her daughter more $$. Took me forever to get all the info I needed and to close her, but I was able to get her more coverage for the same payment, skip a month and she'd get $900 cash back from the old company, which was more than enough to replace her water heater.

She called me a week later to cancel. She said she had been with that other company so long, she just didn't want to leave them. I talked her out of it. A week later she called the insurance company I wrote for her and canceled with them directly. I went back to door knock her. She came out and said it was just too much to deal with. I reminded her that I had already done everything - sent the faxes, canceled the old payment, got the new policy in place and was just about to send the fax to get her refund processed. She said it was too much work. I said, "Ruth, all you have to do in endorse and deposit the $900 check they mail you. That's it. Nothing else." Nope, couldn't convince her. That's why she's poor.

Your stories in this job have been sad, interesting, and eye opening.

[GH85Carrera]

Way back in the 70s, I worked with a chick that lived paycheck to paycheck and was out of money before the next paycheck, and she had zero savings . All US currency is signed by the Secretary of the Treasury. One of them was Joseph W. Barr. He had a very short term, and few bills showed his signature. There was a rumor that bills showing his signature would be collector's items, and worth more than just face value.

The chick I worked with was convinced, and after a few months she had almost $100. The good news, as a collector's item, they were at least face value and worth what you paid for them, unlike most collectables. Anyway, the point is she suddenly realized that by skimping just a bit, (mostly by cutting back on drinking) she actually could save some money. In the end, I told her they had printed hundreds of millions of bills with Joseph W. Barr's signature, and they were worth only face value. But she had saved money when she thought it was impossible. She actually took that money to the bank and started a savings account. She still saved the Barr dollars and that was how she was able to save money and start an savings account.

[KFC911]

^^^^ Yep!

My mother "bless her heart" was going to write a check at her decades long "friends" funeral home for about $25K recently (they have the cash .... no problem). They talked her into a monthly payment plan that would have cost her an additional $17K in interest over three years.....

I went through the freakin' roof when I found out 3 weeks later .... and got her to cancel .... just in time (the payment plan).

Some people just suck .... Rick doesn't

[2.7RS]

Natural Selection.

Mother's nature millenarian law.

Being stopped by stupid humans. Some survive some perish. The circle of life

[Rick Lee]

Originally Posted by KC911

^^^^ Yep!

My mother "bless her heart" was going to write a check at her decades long "friends" funeral home for about $25K recently (they have the cash .... no problem). They talked her into a monthly payment plan that would have cost her an additional $17K in interest over three years.....

I went through the freakin' roof when I found out 3 weeks later .... and got her to cancel .... just in time (the payment plan).

Some people just suck .... Rick doesn't

I sometimes record my presentations and we dissect them on conference calls with other agents. Last night, while driving home from an insane day in the field, I listened to some of my old recordings. Your post reminds me of one because the woman was four yrs into a 20 (years) pay funeral plan. She was paying $67/mo and the funeral benefit was $5300. The woman is now 56 and in good health. So if she makes it to natural life expectancy, $5300 won't do much at a funeral home in 21 yrs from now. But do the math - she's already paid in $3200. If she finished the 20 year payment plan, she will have paid in $16,080 for a $5300 benefit. I fixed it as best I could, but I got to her about four yrs late.

[asphaltgambler]

Originally Posted by Rick Lee

The perfect example of these people's mindset is the sheer number of Dollar General and Family Dollar stores in poor areas. Even though the stuff in those stores is dirt cheap, the unit cost is many times higher than if you bought in bulk somewhere else. I will buy the largest amount of paper towels I can buy at Costco and it will last me eight months. Ok, it costs $18 for 36 rolls. But go to a dollar store and pay $1/per roll and go there every other week for a new roll. That's how these folks "roll." And don't even get me started on the CarShield warranties they buy. I've seen plenty of these dirt poor folks paying north of $140/mo for it and their car isn't worth what they've paid into the warranty.

^^Absolutely true. Also, Dollar stores are even less of a 'bargain' now than years before. Not much in there = $1

[fintstone]

It is really hard to break out of being really, really poor. It is the lower middle class and the middle class that have the ability to advance their situations the most easily. The best bet for the really poor is to avoid doing anything when young to preclude their joining the military. The military instantly takes them away from most of what would hold them back (without having to tug/push-pull of friends and relatives). If wise, they can choose an area of work/training that has excellent job opportunities on the outside/private sector. If they have any ambition at all, they will learn from colleagues from other places/circumstances. They can leave in four years with a good deal of money in the bank, job skills, personal skills and an education if they even remotely try. If they choose to stay for 20 (or more), they can leave very young with a good chunk of money every month (to invest) for the rest of their working life (while they live on their post military job/income).

[Rick Lee]

BTW KC911, I don't know the timeline for that funeral home's preneed plan's commission payment, but it's likely whoever sold her that policy got a huge commission and then had to pay it all back as soon as you canceled. I think the company that handles that pays an upfront commission on the full first year premium. So that one stung that guy.

[cassisrot]

Originally Posted by GH85Carrera

And some of them work at coffee shops.

Maybe they have a sense of humor…

[asphaltgambler]

Recent example in our area: There is an app called 'Nextdoor' (some of you are familiar with it) it's similar to, say, a local bulletin board of sorts. Just last week there was a young woman; 25 with 2 kids and her boyfriend who posted they need help. They are being 'kicked-out' of her mother's home from the 'cruel' landlord 1st of Dec.

Her post had more transparency. Her mother passed early 2022. The landlord gave written notice that he was selling the home, everyone out by Dec 1st.....................in April this year. She stated that her parents had rented the home for over 25 years..........Reading between the lines of her post it is doubtful they ever responded to the landlord's notice. Then on the 1st of Sept, she admitted that there was another written notice left of the home's front door, but her "Brother must've thrown it away".......hmmmmm

So now, it's Thanksgiving week after, she is posting for financial help (of course) as they are having a tough time getting a place because of their 'terrible' credit. They did eventually find somewhere to go but was short of the total amount needed.......... I'm shocked

Believe it or not, people chimed in with cash and then someone suggested a GoFundme account.......which another person set up for them...............

Here's a few things I would like to address: What is a grown woman with 2 kids and her boyfriend obviously living with her mother ? -or- more to the point, living off of her mother?
What are the odds that after her mother passed, no one else living there paid the rent? How about the question why were the family renting for over 25 years? UFB

[Rick Lee]

Originally Posted by fintstone

It is really hard to break out of being really, really poor.

If you have bad judgment, yes, it's really hard. The people I deal with have gotten every single life decision wrong - every single one. Eventually that catches up with you. If you're living on nothing by SS and think you'll get around to saving up $10-20k when you've never saved a dime in your life, well, you know how that will end. Next year's SS COLA increase is a big one. Some people will think it's free money, even when their rent goes up by more than their COLA increase. Lots of these people don't pay full price for anything but their cigarettes and tattoos. They get Section 8, welfare, food stamps, Medicaid with a low income subsidy, even get free bus passes, shop at a food bank, etc. You can break out of that if you're young and motivated. But no one does. People who get into that situation were always going to get into that situation and the gov't. makes it easier than ever to get there and stay there.

[aschen]

The sampling here is people who buy questionable (IMHO) insurance products, not a random sample of people who are poor.

Income certainly has something to do with being poor. It is literally half the or the equation. Tons of above median earners pissing money with bad and non-rational decisions, that are not poor (though maybe low net wealth).

[Rick Lee]

These people would be poor if they earned a lot of money. They make bad decisions and that poor judgment has nothing to do with income. Give any one of them a onetime, large financial windfall, which is what happens a lot when it takes several years for a SSDI claim to be approved after a lawsuit, and the money is gone in days or weeks. And then they're living on nothing but that monthly SSDI payment for the rest of their lives and not allowed to earn anything on the side.

A real sad one I met a while back was around 54 yrs old and had lost her professional job during the Covid lockdown. She hadn't saved any money, but had earned ok. Now she was living on UI and the stimulus money. When that all dried up, she had just lost the motivation to go back into the rat race, fearing she'd have to take a few steps back before getting back to her prior earning level. So she applied for SSDI, claiming chronic back pain made her unable to work. She was a year or so into the process when I met her and it was finally approved. She called me, so overjoyed and was dying to buy life insurance now. I couldn't bring myself to tell her she would be dirt poor for the rest of her life, but still had time left to turn things around.

[wildthing]

Sometimes it's not having the opportunity, because you were born into certain circumstances... and then of course there's stupidity.

[LWJ]

I have not read "Rich Dad, Poor Dad," but I believe the premise is that some people simply educate their children on financial education.

Certainly true in my house. We have never purchased a new car and my son commented one time that we were different from most Americans. How so, I asked? "Car payment." was his response.

Bingo.

This is often generational. I have lived with very little cash for many years. But, I really have never been "poor."

[masraum]

Originally Posted by asphaltgambler

Recent example in our area: There is an app called 'Nextdoor' (some of you are familiar with it) it's similar to, say, a local bulletin board of sorts. Just last week there was a young woman; 25 with 2 kids and her boyfriend who posted they need help. They are being 'kicked-out' of her mother's home from the 'cruel' landlord 1st of Dec.

Her post had more transparency. Her mother passed early 2022. The landlord gave written notice that he was selling the home, everyone out by Dec 1st.....................in April this year. She stated that her parents had rented the home for over 25 years..........Reading between the lines of her post it is doubtful they ever responded to the landlord's notice. Then on the 1st of Sept, she admitted that there was another written notice left of the home's front door, but her "Brother must've thrown it away".......hmmmmm

So now, it's Thanksgiving week after, she is posting for financial help (of course) as they are having a tough time getting a place because of their 'terrible' credit. They did eventually find somewhere to go but was short of the total amount needed.......... I'm shocked

Believe it or not, people chimed in with cash and then someone suggested a GoFundme account.......which another person set up for them...............

Here's a few things I would like to address: What is a grown woman with 2 kids and her boyfriend obviously living with her mother ? -or- more to the point, living off of her mother?
What are the odds that after her mother passed, no one else living there paid the rent? How about the question why were the family renting for over 25 years? UFB

Yep, and that's the sort of thing that usually keeps me away from gofundme stuff. A lot of the gofundme stuff is due to poor decisions and a lack of willingness to figure out what it takes to get things done or just not do them. We help our kids. If my mom needs help, great, happy to do it. I'll donate to a charity. I think I have donated to a gofundme once or twice, but I'm VERY selective about giving my money away.

[masraum]

Originally Posted by LWJ

I have not read "Rich Dad, Poor Dad," but I believe the premise is that some people simply educate their children on financial education.

Certainly true in my house. We have never purchased a new car and my son commented one time that we were different from most Americans. How so, I asked? "Car payment." was his response.

Bingo.

This is often generational. I have lived with very little cash for many years. But, I really have never been "poor."

"Rich Dad, Poor Dad" was a fictional work that didn't actually tell you what to do, but I'm sure that there's some truth to it. Some people know how to grow wealth, and many don't. Some, like the folks that Rick deals with are the most handicapped in that they only seem to know how to get rid of it as quickly as possible.

Unfortunately for most folks, whatever group your parents are in is also the group that you will be in. Then how well you do comes down to how good you are at earning money.

[GH85Carrera]

Originally Posted by LWJ

I have not read "Rich Dad, Poor Dad," but I believe the premise is that some people simply educate their children on financial education.

Certainly true in my house. We have never purchased a new car and my son commented one time that we were different from most Americans. How so, I asked? "Car payment." was his response.

Bingo.

This is often generational. I have lived with very little cash for many years. But, I really have never been "poor."

When I was a few months shy of 16 years old I was bugging dad about a car for me. He said I can have any car that I can afford. He gave me an interest free loan of 600 bucks for a 60 VW bug, and I paid 100% of every single expense, except insurance. I got free room and board, and genuine love from my parents, but the car was all mine. Pride of ownership was real, but it was not a car one single friend cared anything about.

It got me to my job after school and I had it paid for in under 9 months. I have had to pay 100% of the cost of all my cars, and even the insurance since I turned 18.

[zakthor]

Who doesnt' love a good deal?

But I got a bunch of creeps from reading the first post. Someone trying to fast talk me on insurance application I'm assuming its some sort of scam. Sure you might be on the up and up but the vibe is creepy. I'd not sign on the line until I'd had time to work it through myself and read the fine print and understand the motivation. Reminds me of brokers that want me to move money to them.

I've been around 2 people in my career that could talk people into anything. Frankly I thought it was extremely disturbing. They honestly have a super power, a reality distortion field.

In one case the guy was selling pure evil, a terrible software architecture that would create generational pain. He had all sorts of fancy justifications but at its heart he was trying to convince us that night was day. That guy was an absolute malice. He ended up convincing upper management and it was 6 years of pain before his stuff could be put to bed and forgotten.

The other case the guy had the reality distortion but used it for good. Was awesome to watch him jiujitsu bureaucratic knife fighters into doing the right thing. He'd be in extremely contentious meetings and was just so gentle and let the other guy hang himself.

These days when I meet a pressy salesperson pressing an obvious choice I'm almost toxically averse.