If you’re asking “why am I poor?” there’s a very good chance that you make choices to put you in that position. There are countless people who were dealt a bad hand yet still came out ahead anyway. What’s great is that you can take steps to get you out of the hole.
I’ve been there before. I was so poor that I lived on a $2 a day food budget for six months. After I graduated college, I lived on an after-tax, after 401k contribution income of between $20 – $25,000. A very lowly start for someone who busted his tail in college with multiple internships under his belt.
While it was a gruesome time, I can honestly say that I took measurable steps to get myself out of that situation eventually. These days, I enjoy good wealth that have given me a safety net in case the worst case scenario happens with my job.
However, I couldn’t get myself out of that situation unless I actually figured out the reasons why I was poor. It’s more important to understand and figure out the reasons why so you can take steps to fix it. I’ve been rich and I’ve been poor, and I can honestly say that rich is better.
I want you to be wealthy as well. It’s not a fun thing to not have a lot of money. They say money doesn’t buy happiness but it can sure buy the avoidance of unhappiness. It was grueling knowing that all the work that I put in goes straight to my landlord and bills. I wasn’t happy at all.
Therefore, we should all strive to have a lot of money because it’s not such a bad thing to have a lot of it.
Why Are You Poor? 11 Reasons Why
One to the answers to the question “why am I poor” is because you’re not SMASHING that social share button and posting to your favorite social media! Your friends might be asking the exact same question and wanting to get out of the financial hole that they’re in.
This article may just help your friends out when they need it the most. All you have to do is share this article and information and we can all strive to be rich together!
So with that said, let’s get into the reasons why you don’t have a lot of money.
1) You Hang Out With Other Poor People
They say we’re the average of the five people you spend the most time with. One of the reasons why the rich get richer and the poor get poor is because they hang out with people who are like them. People naturally don’t like people who are different than them.
Cliques are formed and people generally feel comfortable and safe with people who are similar to who they are. If you’re asking “why am I so poor?” take a look at your friend group. Are you spending time with people who want to be rich and are taking steps to get there? Do they even know how to get there in the first place?
People influence each other in more ways than one. We are social creatures, we need human interaction in order to survive. It’s in our genetics to do so. The birth lottery is a powerful concept that unfortunately still rings true today. Upward mobility is difficult when your innermost circle doesn’t want to or know how to reach upward mobility.
2) You Ignore Financial Literacy
This one is completely not your fault. The earliest time that financial literacy classes were taught in school was at the MBA level. By the time you reach the MBA level, which on average is between 26 – 29 years, it’s VERY late. While it’s not too late, it’s still very late.
“Why am I so poor?” It could be because financial education is not taught in schools. You have to fend for yourself. Chances are great that your parents don’t know proper financial education as well. Money is such an important yet taboo topic that people shy away from teaching about or talking about.
You can’t be rich if you don’t know how to be rich. The great part is that none of the “secrets” of the wealthy are really secrets. It’s an open secret. There’s an entire industry of people who are more than willing to lend their expertise to you. All you have to do is put in the effort to actually learn those choices you should make.
Reading personal finance blogs really helps.
3) You Want to Look Rich
The goal is to be rich not to look rich. To answer the question “why am I so poor?” take a look at your wardrobe. Is it filled with beautiful but expensive clothing that you never wear except for special occasions? To impress others that one time? That might be a reason why there’s no money leftover in your bank account.
You don’t want to look rich. By putting in all the effort to look rich, you end up broke. There’s nothing wrong with treating yourself to expensive things once in a while. However, if your default position is to buy nice things until otherwise instead of buy cheap things unless it’s for a special occasion, you are in a world of hurt.
Keeping up appearances is expensive. Instead of trying hard to keep up appearances that people will care about temporarily, try hard to build lasting wealth. Mark Zuckerberg wears the same thing almost every single day. Even when he’s worth 11 figures. Food for thought.
There are better things to do than to try and look rich.
4) You Can’t Practice Delayed Gratification
Delayed gratification is one of the most iconic reasons why someone will be wealthy. Don’t be impatient. If you can wait seven to 10 years for your money to double, you are in a good spot. The patient will always win over the impatient any day of the week.
The ones who don’t have a lot of money leftover at the end of the day can’t control their impulses. If they see something they like and want, they buy it. Right away. Without thinking it through. The rich usually plan out their purchases so they’re not making a rash decision but a well thought out decision.
One of the reasons why you are poor is because you don’t know how to wait for things. The smartest ones will always be the ones to wait until that shiny new car goes on the used car market. They end up buying it for 50%+ off after waiting just a year or two when buying technology or cars. What a steal.
5) You Put your Money in a Savings Account
These days, the savings account pay ABYSMAL interest rates. Absolutely abysmal. With interest rates so low, the banks have no other choice but to pay ridiculously low interest rates. What should you do instead? Put that money to work by investing it in the stock market.
Sure, the risks are greater than keeping it in a regular bank account but the rewards are much greater as well. Investments are a great wealth building tool that should not be taken lightly or ignored. Don’t let fear hold you back from investing. Results are not guaranteed, absolutely.
However, that doesn’t mean that there isn’t a good chance that it won’t be successful. Actually, with interest rates the way they are, you are losing money due to inflation. Don’t let money be worth less in a year from now than today. Make your money be worth more than it is today.
6) You Relax Too Much on Your Down Time
There’s nothing wrong with relaxing. Everyone does it and I LOVE to sit on the couch and do nothing but think. However, there needs to be a right balance to that. If you’re complaining why you can’t get ahead working 40 hours a week, there’s something wrong.
There are an infinite number of side hustle opportunities today. The internet and technology made endless and infinite opportunities for you to make additional money. It’s time to research additional income generating opportunities and aggressively go for it.
You don’t have to spend every other waking moment of your “me time” to actively pursue side hustles. However, if you don’t want to be like the rest of the herd, you’re going to have to do something different than the herd. Very few people look for side hustle opportunities outside of their day jobs.
You could be one of the few who do. It’s one way to lessen the control that companies have over you with a paycheck lingering over your head.
7) You Pay Full Retail Price
The ones who pay full retail price are fools. There’s ALWAYS a way to pay less money than the agreed upon amount. They could be to negotiate, find better deals elsewhere, or wait for sales. One easy trick that you can use is to leave items in your cart for a long time.
See how many companies end up magically giving you a “10% off” coupon code. Companies want to get sales and sell their inventory. You have the power because you have the money. Let them blink and lose while you get a great deal. Business is a huge game that you have to play to get the best deal.
If you’re asking why am I poor, ask yourself how many times did you actually pay full retail price? The retail price is more of a suggestion and a starting point than anything else. There’s always a way to get a better deal. You just have to find the way to get to how to get the best deal.
8) You Are Allergic to Side Hustles
Side hustles are a great way to not only generate additional income but lower your dependency on your employer. When one day, your company calls you into a room with a pink slip in hand, you can comfortably sign it and move on. Why? You already had a side hustle that covers your living expenses indefinitely.
You could be poor because you don’t want to put in the necessary additional work to put into a side hustle. Yes, it takes a long time. However, if you put in an extra 15 – 20 hours per week into a side hustle, you will be AMAZED at what you can accomplish in a couple of years.
Few people are willing to put in 1,000+ hours a year into their side hustle in the hopes that they’ll be successful. Many great side hustles are meant to generate zero additional income until after a few years of continuous effort. Don’t be one of them who just turns on the TV after work and on the weekends, be different.
I put in an extra 15.- 20 hours onto my blog without getting anything in return so far. I know that I will never regret it and I have faith that the long term play is going to work out by the end of it all.
9) You Don’t Learn from Your Money Mistakes and Remain Poor
The one who doesn’t learn from their mistake will be stuck in their life forever. Zero chance of forward progress. One expensive money mistake is to get a payday loan. That’s one of the most expensive money mistake you can make. Ever.
Another common money mistake is not contributing to your 401k at least to the company match. It would be ridiculous to turn down free money. Sure, you can’t access that money until retirement age, but that’s even better. That means you can resist temptation by letting the money sit there and letting it grow.
Whatever money mistakes you’re making, recognize that you’re making the mistakes and learn from them. After you learn from them, make sure to never repeat the same mistake twice. Like the advice that Gus gave to Walter White in Breaking Bad. It applies to the world of personal finance as well.
10) You Practice Excessive Consumerism
Excessive consumerism is when you buy things in excess even if you don’t need it. That’s a clear answer to “why am I poor?” When I was looking at buying an SSD card to improve my laptop speed, I consulted my tech friend for his advice. He advised me to get the 1T SSD, which stores 1T of information.
I told him no, I’m going to buy the 500GB SSD because I don’t need that much space. He looked down on me and he said “well but.. You never know”. Guess what? I didn’t even need the 500GB SSD for my computer. All I needed was a 250GB SSD. I spent an additional $20 – 30 for nothing.
Me buying a 500GB SSD was consumerism. Me buying a 1T SSD would be excessive consumerism. I don’t use that much space in my computer at all. I just use the computer to surf the web and watch and stream videos. There’s no need for a lot of storage in my computer because that’s not its purpose for me.
Find out whether you actually need the stuff lying around your house and see if you can get rid of some of them.
11) You Don’t Like the Minimalist Lifestyle
The minimalist lifestyle that’s exploding in popularity means that you are living on what you need. Not what you want but what you need. Don’t get sucked into the clever advertising campaigns that says you need that additional stuff. People don’t need that much stuff to live on, it’s just not true.
The minimalist lifestyle doesn’t just save you money but gets rid of additional headaches that comes with having stuff. “Why am I poor?” Take a look at your apartment. Do you have a lot of stuff that fills up a lot of space in your apartment? When’s the last time you used some of the stuff?
If the answer is almost never, it’s time to get rid of it and sell it. Embrace the minimalist lifestyle and see how quickly your net worth increases. A lot of stuff we buy are fixed expenses. Fixed expenses are things we buy once that lasts for years, if not decades at a time.
There’s no need to get a second one. How great is that? That’s an easy way to embrace the minimalist lifestyle
After Asking “Why am I Poor?” Take Steps to Change
Now that you know the reasons why you are poor, it’s time to make things happen. It’s one thing to know the reasons behind something. It’s another to use that information to your advantage somehow, someway. If you’re spending too much time with other poor people, add more people to your network.
If you relax too much on the weekends, then find a good side hustle to pursue that changes your life forever. Everyone has the same 24 hours in the day. How come some people are getting ahead while you can’t? There’s absolutely no reason why you can’t.
Even if you lost the birth lottery, you can pull yourself from the bootstraps and come out ahead. You are more than capable to do so and there’s no reason why you can’t. Learn from those who accomplished the things that you accomplished and ruthlessly apply the principles to your life.
You can find a good hero to learn from and follow their footsteps. Or you could figure out how to get there on your own. I personally prefer to see what worked for some people and copy what they’ve done instead of finding the answer myself. It saves a lot of time.
However, whichever route you prefer, just take action to get there. While you’re sitting in your house, there’s someone out there hustling to get ahead. It’s your life and an opportunity to make something of yourself. Don’t waste it. You were given the opportunity of a lifetime.
There’s never been a better time to earn more money than ever before. There’s no wars to worry about and more free information available at the touch of a button. You have the advantage here. It would be a shame to give that up.
“Why Am I Poor” 11 Reasons List:
- You hang out with other poor people
- You ignore financial literacy
- You want to look rich
- You can’t practice delayed gratification
- You put your money in a savings account
- You relax too much on your down time
- You pay full retail price
- You are allergic to side hustles
- You don’t learn from your money mistakes and remain poor
- You practice excessive consumerism
- You don’t like the minimalist lifestyle
That’s absolutely correct David!
And one of the most important thing in the above list in Financial Education.
Yes sir! Without it, making money is meaningless.
David, really like this thought of yours. “They say money doesn’t buy happiness but it can sure buy the avoidance of unhappiness.” Naval Ravikant describes ‘happiness’ as ‘the absence of desire.’ I like to tie that into the concept of ‘detachment’, which I try to practice as a way to keep moving forward in life.
re: Hanging out with your five closest friends and associates. I recognized this concept long before I saw it accurately described and analyzed by people who really knew what they were talking about. I did have some friends from school that seemed to have a ‘leg up’ on the rest of us financially and socially. The bottom line is they were smarter, and harder-working. They would often be working late into the evening during the week, or on weekends. I tried to skip the ‘hard work’ part, and thought just networking alone would move my lifestyle upwards. In a word: ‘no!’ I considered hanging out, meeting up for dinner and a few beers, hitting a bucket of golf balls at the range, going to the comedy club, or a workout, etc. as part of my networking. You will note, none of those fun activities would move the needle on anyone’s value as a worker, or their net worth!:-) The good news is that I did eventually learn that I must add value to relationships for them to be worthwhile (and they must add value to me). Some bad news is that I still have some estranged friends that still ‘hang out’ in the evenings on barstools, shoot pool, stay up late watching Steven Seagal movies, etc. All those things are fun, no doubt. But my smarter, hard-working friends (from whom I am now estranged) recognized early that free time was finite and ‘networking’ only works when there is a ‘win-win’.
Lastly, here is a 12 min. clip that I found comprehensive, concerning ‘poor’ people’s beliefs about ‘rich’ people. I hope you get to try ‘being rich’, too! If you don’t want to spend the time, I understand completely so here are the 10 points you can read.
1) You have to work too hard.
2) You are taught that rich people are greedy.
3) The negative stigma of being rich.
4) You have to pay more taxes.
5) You have to take advantage of people.
6) You won’t have a life outside of work.
7) It is against your religion.
8) Strangers will judge you.
9) You will die alone.
10) You will get bored.
10 Lies ALL Poor People Believe In That the Rich Don’t – YouTube (12 min.) from ‘Bow Tied Bull’ https://www.youtube.com/watch?v=PZ0Wopy6ejE
Wait, really? One of the biggest weaknesses when it comes to my career is the lack of a good network and I silently envy the ones who is a master networker. As the cliche goes, “your network is your net worth” (which, I generally don’t agree with, I highly dislike seeing my network as a bunch of dollar signs that I can use at my disposal).
Do you feel that the hard work was way more valuable than the networking aspect of building your career?
It pains me to say it, but ‘yes’. A highly-respected recruiter told me that ‘it is good to be the best, but better to be the best-known.’ I agree completely with your thought of dislike seeing the network as a bunch of dollar signs to be used; but it took me decades to accept that my ‘network’ was for work, and not ‘friends’. I tried to stay in touch with former colleagues, but they would only get in touch with me when they needed something; not a good look!
My best networking success was to 1) join a professional society, and go to functions (dinners, seminars, etc.) with the intention of meeting people and being met. 2) stay in touch with former bosses; my contemporaries looked at me as competition, and would only be open to helping me make a jump if I could come in at a lower title/salary than them. I get it, we are ‘work friends’ and not ‘friend friends.’ 3) have tangible accomplishments, certifications, MBA, sample proposal reporting, etc. Nothing is more offputting to potential employers than entitled candidates coming in telling you they are good and expecting you to ‘try them out’ or ‘take their word for it.’ Ugh. Again, not a good look.
Bottom line, when I capitulated and did the hard, dirty, thankless work, my fortunes changed for the better. Going to happy hours and playing softball on the company team didn’t prove valuable. Side note: if you play on a sports team, make sure you are really good. I’ve seen poor athletes make a bad play, and decades later that play is what they are remembered for. A team attorney dropped a fly ball to lose the game; better that he never played.
That’s a very interesting perspective. It makes me feel mountain times better because I focused on doing good work for so much of my career and I really don’t have a good network of people to call up and ask for a referral. The saying it’s not what you know, it’s who you did never sat well with me.
You just opened my eyes, JayCeezy!