Get Rich Or Die Trying 50 Cent's first mainstream album title is what the average American spends much of their life trying to do. The rich seem to stay rich and the poor stay poor. I just read an article which talks about the "Ghetto Tax". What it basically talks about is how expensive it is to be poor. Insurance is higher, you pay premiums on mortgages and car loans, check cashing stations charge a 500% APR, rent-to-own places are a ridiculous rip off, the "hood" has no quality food stores, overdraught fees at banks are crazy expensive (and it's only the poor who are usually in trouble of overdraughting, making it a catch 22 that keeps you poor!).

The article: The High Cost of Being Poor

After reading the article I also noticed some great feedback that was thought provoking (Here are a few):

I'm white and well educated. I also spent six months six years ago living in a transient motel. I enjoy watching people and finding patterns and links. Here are a few:

1. The poor often make bad decisions, period. Having a TV seems to be a priority, and it better be big and with cable. Expensive Nike's, high alcohol consumption, and drug usage are way too often part of the lifestyle. As someone notes here, they buy cars that both buyer and seller know will be repoed within two months, wasting incredible amounts of money that could go towards necessities.

2. Once upon a time if you had $25 or $100 you could walk into a bank, open an account, and pick out your check pattern. For 25 years now almost all banks have a minimum creditworthiness to become a customer. Once, when I worked for a bank I was refused an account! This is the real reason all those payday loan and pawn shops have popped up like mushrooms after a rain.

3. Rent to owns are a rip, even the customers know that. But ego and desire overwhelm common sense. No RTO store has ever forced a poor customer to sign a contract, it's all voluntary.

4. I have had low income people ask me if they could have a computer free (I was rehabbing them) at the very same moment a cable installer was there to start a $60/mo habit.

5. Boy, how true about no grocery stores or gas stations nearby! Where I used to live has lost the one gas and repair station for miles around. And my insurance dropped $200 a year when I left the hood!

I guess I'm saying that there are some issues which are the poor's fault, and there are some issues that they can't help. Like so much in life, it ain't simple. As The Duke said, "Life's difficult, and being stupid makes it more difficult."

Here is one more:

The reason that the rich were so rich, Vimes reasoned, was because they manged to spend less money.

Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, where they were sort of OK for a season or two and then leaked like hell when the carboard gave out, cost about ten dollars. Those were the kinds of boot Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles.

But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that'd still be keeping his feet dry in ten years time, while a poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet.

This was the Captain Samuel Vimes 'Boots' theory of socio-economic unfairness.
--Terry Pratchett, Men At Arms, pg 35

For my next post I am going to give three or four (out of the hundreds of possible) examples of how to get out of the poorhouse. My only problem is that I am not ever good at following the advice I dish out. I don't think that changes the quality of the advice, though. Check back next time for some good pointers (backed by tried-and-true financial advisors).  ¶ 9:13 AM