Why don’t some people accept that Poverty in America is a lifestyle choice?

[Luminaire]

Again, my example didn't have Person A with a lease or a mortgage, just very limited equity. When you have to change the hypo, you're simply acknowledging the point that I made.

Ok, so where does Person A live? With his parents?

So then Person B sells his home, takes his 500k and moves in with his parents.

In what scenario can Person A not become Person B or the other way around?

Person A could also take his 500k cash, buy a home and flip his asset classification.

In both situations, their net worth is identical, unless you factor in something else which hasn't been included.

 

[Beastman09]

If only it were that simple.

 

[sickc0d3r]

You don’t need to sell your home to get money from it. Home equity loans are a powerful tool for getting a lot of money quick. My father said he can get a few hundred thousand in a home equity loan anytime he wants.

Yes, these days you can usually get up to 80% of your LTV. The money is a direct asset once you take out the loan, but your payments also increase. So I personally wouldn't include all of the 80% LTV in my net worth.

The other caveat is I think I would adjust my home equity relative to the market. There is equity from paying down the mortgage, and then there is equity as a result of the growing market, which essentially is all lost if you sell and buy a new one.

 

[panamaican]

Ok, so where does Person A live? With his parents?

So then Person B sells his home, takes his 500k and moves in with his parents.

In what scenario can Person A not become Person B or the other way around?

Person A could also take his 500k cash, buy a home and flip his asset classification.

In both situations, their net worth is identical, unless you factor in something else which hasn't been included.

He lives in his house with $5 equity. Person B lives, sorry...lived, in his house with $500k equity.

You disliked my assertion that people who bank on their primary residence equity are misleading themselves about their actual economic position.

I presented you with an example where the on paper net worth between 2 people were identical and asked you if you saw them as the same. You obviously didn't.

First, you made one person have to give up his home while the other person didn't. Then you insisted that one person must have a lease or a mortgage. Every time you altered the scenario despite the fact that the net worth's were equal, you were demonstrating that you didn't see their economic positions as equal. You preferred the position with $5 equity and $500k cash and sold the other person's house to get there (and now he's living with his parents...I'm not sure how that's a step up).

Anyway, you're going to fight against this point because you don't want to admit being wrong. But ask yourself why you needed to change anything about Person B's position if you really thought the financial positions were the same just because the on paper values were?

 

[HunterSdVa29]

Who paid or is paying for your doctorate? If it's you, good job.

Who paid for your education up until then and what job did they have?

scholarship freshmen year undergrad, revoked thereafter as my stepdad got promoted and made too much money
took personal student loans the last three years as clearly I did not qualify for Work Study or Federal/State grants or even scholarships from the university itself.

I have never pursued a Doctorate, perhaps later, but I have two Masters which I used the Post 9/11 GI Bill to pay for, which one has to serve honorably for at least 36 months in the GWOT era to qualify for.

In the state of California, the dependents of Disabled Vets get tuition waived at public schools, so both my younger sisters went to college for free. I didn't qualify for that as both my dad and stepdad were still active duty then and hence weren't disabled Vets.

 

[HunterSdVa29]

I have to disagree. I once worked at Burger King (high school and I only worked one day and then quit - I'm not cut out for that life) but you do need training for those jobs. OTJ training but even the most rudimentary MW job requires some training.

Now my job packing books into boxes probably required the least amount of training out of every job I've ever had (which is probably 6 different jobs at this point in my life). It wasn't MW though.

i too worked at BK in HS. Short of being able to read, it takes like five seconds to train somebody to make drinks or use the cashier. Even less to be the porter/clean the waiting room, etc....

There's buttons w/ timers and pictures for the friers. I understand what you're saying, but if one is borderline competent it's staggeringly easy to pick up.

 

[Luminaire]

He lives in his house with $5 equity. Person B lives, sorry...lived, in his house with $500k equity.

You disliked my assertion that people who bank on their primary residence equity are misleading themselves about their actual economic position.

I presented you with an example where the on paper net worth between 2 people were identical and asked you if you saw them as the same. You obviously didn't.

First, you made one person have to give up his home while the other person didn't. Then you insisted that one person must have a lease or a mortgage. Every time you altered the scenario despite the fact that the net worth's were equal, you were demonstrating that you didn't see their economic positions as equal. You preferred the position with $5 equity and $500k cash and sold the other person's house to get there (and now he's living with his parents...I'm not sure how that's a step up).

Anyway, you're going to fight against this point because you don't want to admit being wrong. But ask yourself why you needed to change anything about Person B's position if you really thought the financial positions were the same just because the on paper values were?

The only difference here is liquidity.

If Person A needed 500k cash this week... he might have a shot at getting it.

If Person B needed it this week, he'd have to sell at a discount, otherwise, if he had some time he'd also have 500k.

The net worth calc would still be the same, which is my point.

In any case, home ownership tends to be an excellent wealth building tool over time, assuming that you would otherwise be paying to live somewhere. If you're content to live with your parents for free then sure... skip the interest on a loan and invest the money.

 

[panamaican]

i too worked at BK in HS. Short of being able to read, it takes like five seconds to train somebody to make drinks or use the cashier. Even less to be the porter/clean the waiting room, etc....

There's buttons w/ timers and pictures for the friers. I understand what you're saying, but if one is borderline competent it's staggeringly easy to pick up.

Oh it's definitely not rocket science but it's still training.

 

[HunterSdVa29]

Oh it's definitely not rocket science but it's still training.

that's my fault for apparently being hyperbolic about that training not counting, fair enough

but comparatively, for even the most menial MW type federal NF-1 position on a military base (cashier at exchange, sales associate, movie theater, the pool or gym or bowling alley, etc..) there's a 3-5 day introductory mandatory training where much of the annual Federal training requirements are gone over (OpSec, Anti Terrorism, Ethos and Values, SHARP, EO, dress code, etc...), and then another 3 days of cashier training if that's required, and then exponentially more if the job is even slightly above MW but has an email, or any MW job that has safety training. Generally done separately from your individual workplace, as part of like in-processing.

TBH, i prefer the former, b/c the latter is the most ridiculous check the box bs in the history of mankind. The monthly 'don't rape people or kill yourself' training is worse, but only by a fractional margin.

 

[Thames]

Seems like you are lacking a lot of variables in that analysis there.
Do you honestly believe that no matter the circumstances of your birth in the U.S, everyone is on equal footing when it comes to economic opportunities? What about aspects like environment, health, education, network etc.? You don't think those aspects has a lot to say about your economic future?

Once I finish my Masters I am planning on working 5 jobs. My only problem is there isn’t enough hours in the week.

 

[AviatorShades]

Minimum wage: $7.25

Annual Minimum Wage: $7.25 * 2080 = $15,080

2017 Federal Poverty Level for a single individual: $12,060

"Lifestyle choice"

The numbers in your post suggest that it is indeed a 'lifestyle choice' yet you post a laughy face.

Even an adult with a severe skill/earning deficit who spent their entire life making $7 an hour wouldn't meet the poverty threshold — and the US poverty threshold is an arbitrary figure nowhere near actual/absolute poverty to begin with.

Barring freak accidents/drug habits/etc. if you work full time, realize you can't live in San Francisco and have an income-proportionate number of offspring, you won't live in poverty.

Now let's examine the number of people making $7 their entire life who don't have a drug habit or poor family planning etc... Those are life choices.

 

[grimballer]

Pretty much this. The fact that over 20% of adults are on psych meds just shows how far America has gone downhill. Everyone thinks they are depressed or anxious and just want magic pills to make them feel better.

Those were same kids who were stoners in school cause it was “cool” thing to do

 

[Revolver]

150+ posts about poor people. lmao. who cares.

 

[panamaican]

The only difference here is liquidity.

If Person A needed 500k cash this week... he might have a shot at getting it.

If Person B needed it this week, he'd have to sell at a discount, otherwise, if he had some time he'd also have 500k.

The net worth calc would still be the same, which is my point.

In any case, home ownership tends to be an excellent wealth building tool over time, assuming that you would otherwise be paying to live somewhere. If you're content to live with your parents for free then sure... skip the interest on a loan and invest the money.

See, this is always the part I dislike, after I've made my point and the other simply can't acknowledge it.

I do like how you refuse the accept the possibility of low equity and home ownership simultaneously and resort to implying that any such person must be living with their parents...as opposed to simply buying an inexpensive home in an inexpensive neighborhood and paying it off.

Home ownership as a wealth building tool is oversold when we're talking about primary residences. I'm assuming you're unfamiliar with the term "house poor"? It's when someone owns a house but doesn't have much money for actual living expenses. They are "house poor" because on paper they have a house but, in practice, they're as poor as someone who doesn't.

So, if someone was planning for their post-retirement life and said "Look I have $1 million net worth and $500k is home equity," when it comes down to actually living their post retirement life, they only have $500k to live on. The other $500k is worthless to them except as a debt instrument. Now, you can say that they'll just sell the house but that means they've had to give up the house they spent all those years living in and paying off so that they could retire in it.

It's a very simple and important distinction that more people should be paying attention to. They talk about home equity value as if that pays for food or electricity or travel. Now, the second house...that's a completely different conversation.

 

[HunterSdVa29]

nobody is saying that people are born on equal footing, well certainly I nor the rational people aren't...

but this is the US, correct? who generally benefits from economic benefits given for higher education? it's certainly not the upper middle class or wealthy, particularly because most college age kids are on a Parent's income for the FAFSA

Sure, Trump became President, highlighting what can happen when one is born in wealth and continues to build wealth and prestige from there. W Bush is another excellent example of this, as I likely doubt he'd have even gotten into an Ivy League if his dad wasn't head of the CIA at the time or a the President of a Bank, or Ambassador to China/Taiwan, whatever that badass was doing then....none the less become Gov of Texas, owner of a MLB team, or President.

But Obama, and Bill Clinton both became successful through education despite not coming from privileged backgrounds. Arnold Schwarzenegger moved here, couldn't even speak English and became world famous and governor of a state he couldn't even pronounce out of sheer will.

Are these outlier examples? yes, but there are thousands to millions of normal, everyday examples of people that rise above poverty or are born into wealth and screw it up. Regardless of your birth situation, you still generally need to have discipline, drive, and determination to leave earth better than you came into it.....

I can guarantee one thing that absolutely WON'T help: blaming others for your situation or not actively trying to better it....
edit: obviously many of you here may not be in the US, change that to Western first world nation and it pretty much applies, even more so in others due to larger safety nets through higher taxes. My bad for being US centric though, respect

 

[Mark Hunts FIST]

Not all rich people are rich because of work ethic.
Not all poor people are poor because of their work ethic.

I think if you look at the majority of successful people you will see a lot of common traits.

Same for poor people.

How much drive do you have?
Are you content with where you're at in life?
What are you willing to risk to get where you want to be?

 

[panamaican]

that's my fault for apparently being hyperbolic about that training not counting, fair enough

but comparatively, for even the most menial MW type federal NF-1 position on a military base (cashier at exchange, sales associate, movie theater, the pool or gym or bowling alley, etc..) there's a 3-5 day introductory mandatory training where much of the annual Federal training requirements are gone over (OpSec, Anti Terrorism, Ethos and Values, SHARP, EO, dress code, etc...), and then another 3 days of cashier training if that's required, and then exponentially more if the job is even slightly above MW but has an email, or any MW job that has safety training. Generally done separately from your individual workplace, as part of like in-processing.

TBH, i prefer the former, b/c the latter is the most ridiculous check the box bs in the history of mankind. The monthly 'don't rape people or kill yourself' training is worse, but only by a fractional margin.

That's fine, the direction I'm going is that the level of training required for entry level jobs is gradually increasing and that's going to exert some pressure on the workforce. And it's only going to get more pronounced.

My dad and I were talking about this re:mechanics. When he was a kid and had his first car, he could get under the hood and do almost everything himself as long as he had the manual nearby. Nowadays, the complexity of that stuff has passed beyond the hands of the layman.

 

[boomertx]

On the lower end of my compensation plans I 'incentivize' them to make more money. And by incentivize I mean just do your job. I pay them more than minimum to start and they can make $4 or more per hour to just do the job.

They get more money to:
1) Show up on time.
2) Fill out paperwork completely.
3) Return with receipts
4) Handle checks/cash properly

I just let a guy go that decided it's easier to steal my money than earn the same amount by just doing his job correctly. I even sat down with him and calculated how much he would make annually if he would just do his job as asked. It was thousands of dollars.

Apparently, that's too hard. It's easier to see if you can get away with stealing from your employer.

 

[Luminaire]

See, this is always the part I dislike, after I've made my point and the other simply can't acknowledge it.

I do like how you refuse the accept the possibility of low equity and home ownership simultaneously and resort to implying that any such person must be living with their parents...as opposed to simply buying an inexpensive home in an inexpensive neighborhood and paying it off.

Home ownership as a wealth building tool is oversold when we're talking about primary residences. I'm assuming you're unfamiliar with the term "house poor"? It's when someone owns a house but doesn't have much money for actual living expenses. They are "house poor" because on paper they have a house but, in practice, they're as poor as someone who doesn't.

So, if someone was planning for their post-retirement life and said "Look I have $1 million net worth and $500k is home equity," when it comes down to actually living their post retirement life, they only have $500k to live on. The other $500k is worthless to them except as a debt instrument. Now, you can say that they'll just sell the house but that means they've had to give up the house they spent all those years living in and paying off so that they could retire in it.

It's a very simple and important distinction that more people should be paying attention to. They talk about home equity value as if that pays for food or electricity or travel. Now, the second house...that's a completely different conversation.

It's pretty simple. Net worth is calculated including equity in assets. Is it as liquid as cash? No, is it still part of your net worth, yes.

If you buy a home, as a 34 year old, you should have plenty of options down the line. You could keep the home, own it outright, which will nearly eliminate housing costs down the road, you could sell, move, downsize etc... in order to have some of that cash and still own something else outright.

You could rent it out and use that as supplemental income for as many years as you like.

Your scenario of a guy with $5 in equity and 500k in Cash isn't realistic in most cases and if it were then that person is either renting, living for free on someone else's dime, or bought a house that lost value that somehow netted out to $5 equity, in which case I'd wonder why he's sitting on all that cash and paying interest on a mortgage.

No one is advocating buying more house than you can afford... but sometimes being a little "house poor" in the beginning still works out very well for people down the line. Generally your first year of mortgage payments will always seem rougher than your last. ($3k today won't be the same as 3k 25-30 years from now)

 

[BangersAndSmash]

Nowadays, the complexity of that stuff has passed beyond the hands of the layman.

Not to mention, on many car models, any operation more advanced than an oil change or changing the air filter requires no less than two expensive-ass proprietary tools.