This might be one of the bravest articles I have read in a long time. Without blaming anyone else and taking full responsibility, the author really lays out the plight of the American Middle Class (and himself).
https://www.theatlantic.com/magazine/archive/2016/05/my-secret-shame/476415/
Inspires me to keep investing and building assets and saving so I can spend on what I need and in times of emergencies.
@Amit P. I agree with your assessment: it inspires me to keep investing and building my asset base. But I am not in the camp of blaming society, government or the education system. This is a case of not understanding simple arithmetic - literally, addition, subtraction, multiplication and division. Any 5th grader understands the basic concept.
If people refuse to take personal responsibility, then what can one do?
Hey @Amit P., thank you for sharing this totally fascinating and terrifying (and yes, very brave) article!
Just another reminder that the "reality" we see around us can be so completely different from what's really going on beneath the surface!
I'll be sharing this piece with my friends and family right now!
I know most people won't read this long article but I thought it was really fascinating and kind of sad. It's great that so many people are trying to find a way out of the rat race though so many people try and hide their financial inadequacy. In my opinion, it is the failure of the public school system to not teach basic finance and accounting and investing.
I know most people won't read this long article but I thought it was really fascinating and kind of sad. It's great that so many people are trying to find a way out of the rat race though so many people try and hide their financial inadequacy. In my opinion, it is the failure of the public school system to not teach basic finance and accounting and investing.
How can we change this?
Great share, thank you!
I don't think it's just a failure of the public school system to teach personal finance and investing, although that is a huge component. Private schools, in my experience and based on what I've heard, are absolutely no better in this realm.
Also, it comes down to society and psychology. The author wrote that he was earning middle and upper-middle class salaries. H also wrote that he doesn't go out to eat and drives an old car. To me, it sounded like this was a more recent development and they were not doing that in the 80's and 90's. How were his spending habits back then? I don't think decisions like that are made only based on intellectual education received in schools. It also stems from how we grow up and who we interact with. Our social values.
On a personal note which may be relevant - I used to have Amazon Student way back when (I don't know if they even still do that). When I graduated and lost that benefit, I did not move my account over to Amazon Prime. And immediately, I spent less money. When society is so driven by convenience, it causes us to spend more, to want more, and to "need" more. If we can rein that in, we'd all have a better chance of building savings/reserves/investments.
I commend the author for writing this piece, and if it wakes even one person up, I'm sure he will feel that he succeeded by pushing himself to put his story out there. I will be sharing this with my network.
@Amit P. I agree with your assessment: it inspires me to keep investing and building my asset base. But I am not in the camp of blaming society, government or the education system. This is a case of not understanding simple arithmetic - literally, addition, subtraction, multiplication and division. Any 5th grader understands the basic concept.
If people refuse to take personal responsibility, then what can one do?
I know most people won't read this long article but I thought it was really fascinating and kind of sad. It's great that so many people are trying to find a way out of the rat race though so many people try and hide their financial inadequacy. In my opinion, it is the failure of the public school system to not teach basic finance and accounting and investing.
How can we change this?
I don’t think it can be changed. It is how capitalism work. The rich getting richer thing. On the other hand, one can change themselves. While making 100k plus annually and have hard time raising 1k is an indicator of poor personal finance. Some questions to ask ourselves are:
1) Are you having ego/dignity problem which you always compare yourself with your peers. You must buy the fancy stuff while cheaper options are available? Want vs need.
2) Are you too lazy to save money for investment or emergency reserve? Ask yourself how often you dine out instead of bringing your own lunch? How often do you use taxi and uber?
3) Are you planning on your next vacation trip so you can put some glorified selfies on FB or Instagram?
The lists can go on forever, but the point is we are where we are because of our past decisions. We put this on ourselves by spending relentlessly over our budget. Majority of financial freedom will not be achieved without sacrificing the quality of life.
"This is a case of not understanding"
I do not believe it can be demised as not understanding. I believe the pay check to pay check life style is the result of a materialistic society that has everything at their finger tips sitting on a couch at home. Life is too easy. They do not make decisions to spend based on what they can afford it is based entirely on what they can afford to make payments on. It is a epidemic in the US grown out of greed that in many ways is unique to the US. Life is too easy for too many making the acquiring of material items and a leisurely life style all that they care about.
Take a look at the reason many state they want to get into real estate investing with no money and poor credit. To get out of the rat race. It is not a desire to get ahead it is a desire to escape working and at the same time have more money to spend. They will fail to start due to having the wrong motivation.
This mentality is not shared to the same extent by citizens of other countries.
“Don’t tell me what your priorities are. Show me your checkbook, and I’ll tell you what your priorities are.”
-Unknown
"This is a case of not understanding"
I do not believe it can be demised as not understanding. I believe the pay check to pay check life style is the result of a materialistic society that has everything at their finger tips sitting on a couch at home. Life is too easy. They do not make decisions to spend based on what they can afford it is based entirely on what they can afford to make payments on. It is a epidemic in the US grown out of greed that in many ways is unique to the US. Life is too easy for too many making the acquiring of material items and a leisurely life style all that they care about.
Take a look at the reason many state they want to get into real estate investing with no money and poor credit. To get out of the rat race. It is not a desire to get ahead it is a desire to escape working and at the same time have more money to spend. They will fail to start due to having the wrong motivation.
This mentality is not shared to the same extent by citizens of other countries.
I do believe a good portion of this is personal responsibility. I am not an American but every time something like this comes up on the forums everyone chimes in and says "American society is materialistic" or something to that extent. Which is completely not true!
Whereas there is a chunk of American society that is materialistic, this forum has a ton of Americans (and international investors) who are not spending every last dime from their paychecks. Folks are diligently saving and investing their hard-earned money.
Like others, I, too, have a ton of options at my fingertips. But just because I have an option doesn't mean I need to exercise it. We need to help and encourage others to move up in life especially because we, too, could be in their situation one day. But there is a high degree of personal responsibility that plays into this. If an individual doe snot want to accept responsibility for their actions, why blame the most prosperous society in the history of mankind?
'Children do what feels good. Adults design a plan and follow it.' Dave Ramsey
I like 'Children BUY what feels good...' then que The Joneses. Now the Joneses are on Facebook putting their 'successes' LOL in your face. I should fb my latest rental rehab. Work clothes, beater loaded with material, family pic dirty from working... How many likes would that get?
Just watch tv for 5 minutes. Without discipline, you'll buy or lease a new car on payments, get 3 new phones at $800+, 2 credit cards and skinny jeans. For most (not talking about dire poverty and such) this is a discipline issue. Blaming the school system? They could do more relatively easily, but the blame for most falls squarely on their own shoulders.
Fancy Manhattan apt, private schools, fancy cars, etc. Broke but lookin good. Not one asset that provides income. All except the apt lose value. The author had guts stating they were in the same boat. That was impactful and will hopefully encourage others to look in their own mirror.
My thoughts are partially on the same page as @Omar Khan I do feel that it's part simple math in a sense that most people really don't know how money works and the associated cost of purchases with that money, the other part is information and education.
1) Person buys a new car expecting a monthly payment of $300, didn't have the vision/understanding to factor in beforehand his increased insurance payment on a new car, higher annual DMV licensing tax for a new car, desire to want to show off that car, i.e. more, increased fuel cost. That simple math Omar is talking about also requires vision and understanding on how to use it, that $300 car payment is really $450-$500 a month.
Four years ago I told one of my brothers who was looking to buy a new car and was going to pay cash because he didn't want a car note. I first explained to him when the cost of debt is very cheap, never use your own cash, use the banks money, they have more money than you do. I told him to wait 12+ months to buy the car and take these steps which he did.
A) use his cash for a OO HUD property at a discount, and he gets to purchase without investor competition since owner occupants get priority. He purchased with 5% down and below value.
B) He stayed in the property almost 19 months, then turned property #1 into a rental and purchased a different property #2.
C) After moving into his 2nd property, he then used a small down payment on the new car purchase and then just used the monthly income from property #1 to pay the monthly car payment.
D) After 5 years the car will be paid off, he'll have his car and he'll also have monthly Cash Flow going forward.
In a life filled with additions and subtractions, always have more additions on your personal income statement.
Simple math on the two scenarios yield completely different life changing results, the only caveat is most people don't have the information, vision, or discipline to execute the better scenario which is what @Thomas S. was getting at with the bad credit, no money crowd chasing the "Get rich quick" deals, they tend to lack several or all of these skills.
The real world is hard, the system is set up to distract you with shiny items, false information, and blame game. We are so fortunate to live in America and have so many opportunities than the rest of the world.
I think the faster you realize that your circumstance can always be worst and there is no one else to blame but yourself is when the real transformation can begin. No one cares about how hard your life is, everyone's life is hard. Accept that everything is your fault and everything can be changed by you. You always have a choice.
"This is a case of not understanding"
I do not believe it can be demised as not understanding. I believe the pay check to pay check life style is the result of a materialistic society that has everything at their finger tips sitting on a couch at home. Life is too easy. They do not make decisions to spend based on what they can afford it is based entirely on what they can afford to make payments on. It is a epidemic in the US grown out of greed that in many ways is unique to the US. Life is too easy for too many making the acquiring of material items and a leisurely life style all that they care about.
Take a look at the reason many state they want to get into real estate investing with no money and poor credit. To get out of the rat race. It is not a desire to get ahead it is a desire to escape working and at the same time have more money to spend. They will fail to start due to having the wrong motivation.
This mentality is not shared to the same extent by citizens of other countries.
I do believe a good portion of this is personal responsibility. I am not an American but every time something like this comes up on the forums everyone chimes in and says "American society is materialistic" or something to that extent. Which is completely not true!
Whereas there is a chunk of American society that is materialistic, this forum has a ton of Americans (and international investors) who are not spending every last dime from their paychecks. Folks are diligently saving and investing their hard-earned money.
Like others, I, too, have a ton of options at my fingertips. But just because I have an option doesn't mean I need to exercise it. We need to help and encourage others to move up in life especially because we, too, could be in their situation one day. But there is a high degree of personal responsibility that plays into this. If an individual doe snot want to accept responsibility for their actions, why blame the most prosperous society in the history of mankind?
I agree about people needing to meet financial freedom in the middle.
While I also agree that any broad stroke of "X society is Z" is generally not true, materialism in America certainly has its place. There is a good amount of time, energy, and creativity spent with the intention of separating Americans from their money and the less they realize it the better. This endeavor isn't inherently wrong (when achieved within the rule of law), but it is something that is perhaps so effective that some do not realize it is happening; like being in the matrix.
I think the education piece stems not from teaching people to win the chess game of financial freedom but rather showing them the board and the pieces and how they work. What each individual chooses to do with that information is then up to personal responsibility.
BP is a fantastic conduit for this education as it pertains to real estate. It is unsurprising to see the names on this thread that are able to speak from a perspective outside of the matrix.
@Frank Wong I agree with you 100%, I will also add that I believe the mentality that things can always be worst contributes to the lack of growth and success in many people. With so many people wanting the path of least resistance in life, it's easy to become complacent with life when looking at society as a whole and where you fit in.
One thing I would like to see happen...STOP BLAMING THE SCHOOL SYSTEM!!!!
This is a parenting issues.....PARENTS need to teach their kids how to handle $$. Schools need to provide the basics, but the parents have to handle teaching about the real world of handling finances. No one semester class is going to prep kids for the real world.
Parent need to lead by example.....the majority of kids will follow their lead....not all....but many will repeat the same financial ignorance or success that their parent do.
Want your kids to handle real life $$? Then start teaching them at home....
One thing I would like to see happen...STOP BLAMING THE SCHOOL SYSTEM!!!!
This is a parenting issues.....PARENTS need to teach their kids how to handle $$. Schools need to provide the basics, but the parents have to handle teaching about the real world of handling finances. No one semester class is going to prep kids for the real world.
Parent need to lead by example.....the majority of kids will follow their lead....not all....but many will repeat the same financial ignorance or success that their parent do.
Want your kids to handle real life $$? Then start teaching them at home....
Boom! Could not agree more. Schools aren't designed to teach everything. Parents can't absolve themselves of their own responsibilities.
I agree that parents should be teaching their kids about money but if parents don't know, then what? I grew up exceptionally poor. My parents are blue collar. They grew up in another country, with a different language, and found their way here for a better future for their kids. I couldn't expect them to teach me as they didn't know. I would have expected at least some basic finance and accounting in school.
I don't care if it is public or private but there are plenty of kids worse than me, no parents or parents without knowledge. Do kids really need to be taught art, music or even Calculus BC over basic accounting and financial basics? If parents don't know, given that this article says that 47% of people don't, then how can you expect kids to learn from them.
To be fair, I'm not the sob story. I have done exceptionally well for myself through education and hard work, just expecting a bit more and wanting people to have a chance. I believe that having the initiative and taking responsibility for your own money and investments is very important.