Being Poor vs Having No Money

A week ago my girlfriend and I were discussing various periods of our lives and the discussion of growing up poor came about. My girlfriend grew up in rural America and I grew up in rural Wales (a childhood where monkeys were involved) and we both knew what it was like to be children in households where months would go by with no income, no prospects and very little food on the table. Today the both of us are working professionals of upper middle class means but there is always that concern of either of us returning to an earlier time in our lives when we had no money. With the economic recession in full swing and the future looking uncertain for much of the world she has some reservations and concerns that make her wary of not having a job, of being without income. “I don’t want to be poor” she said to me. What she is afraid of is somehow losing her income, of having no money and of being unable to dig her way out of any financial hole she may fall in to.

And I had to explain that there is a huge difference between being poor and having no money.

Being poor is a scarcity mindset.

Having no money is just a number on a balance sheet.

When you’re poor you believe there is not enough money to go around. You believe you were never meant to have nice things. You say “People like us were never meant to be rich. That lifestyle is not for the likes of us.” You look at the lives of people you see on television and escape in to a fantasy realm living vicariously through other individuals, you consume rather than produce, you watch other people doing what they enjoy, consuming their product, rather than doing what you enjoy, producing something that can be consumed. When you’re poor you are trapped in poverty with that mindset, with a lack of prospects and with “stealth taxes” that keep you in the poverty trap.

Being poor means you live in a motel that costs $50 a night that may or may not have a microwave to let you reheat corner store pre-packaged food and the poverty trap keeps you there unable to leave because you can’t raise enough cash to pay the first and last month’s rent on an apartment. And even if you could get the rent money together you wouldn’t be able to afford the deposits for the utilities. The saying “She’s the sort of person who buys her own furniture” refers to someone who comes from a family that couldn’t afford really good furniture that lasts generations so each generation in the family must buy new every time. The furniture lasts 5 years, 10 years at best, and then you get new all over again. I can’t say that a poor person is that sort as they don’t have the ability to buy their own furniture.

When you’re poor you live in cheap apartments and your furniture is either rent-to-own at astronomical rates or it is acquired from dumpsters. Maybe if you’re very lucky you were able to acquire some good furniture at a garage sale.

Being poor is a lack of prospects. Being poor is a lack of choice. Being poor is a lack of skills and tools. Being poor is a financial pit that at any minute can get deeper.

Having no money is vastly different to being poor. There are no “stealth taxes” because even if you backslide you have the tools and the skills to move forward again. When you have no money you may live in a cheap $40 night motel room unable to rent an apartment but your employment prospects are greater than minimum wage that will keep you in the motel. The simple fact of having no money really is just a number on a balance sheet. When all you simply have is a lack of money you still possess the skills and tools to know how to get out and you know that you will get out because being poor isn’t in your list of choices you can make.

If you shift your viewpoint from scarcity to abundance, if you believe that there is money out there, and you do not recklessly pursue high risk, low return endeavours, i.e. the short-term get rich quick schemes, and only pursue those investments that guarantee a pay out over a long period of time, and you are persistent in your application towards them, you will change the value on the balance sheet from negative to positive,

Having no money means you cannot buy the things you once had in abundance or aspire to having. Being poor is realising you will never have those things.

And if you think I’m one of those upper middle class white guys who never knew poverty, I grew up on a farm in Wales, a farm we didn’t own but rented from the local landholder which we worked while at the same time my father was employed on the docks as a boilermaker. I am the youngest in my family of ten children and my father came from a family almost as large. When my father became too sick to work on the docks and we were no longer able to keep up the farm without him we moved from the very rural and very poor countryside village to the inner city. I’m the only one of my siblings to go to university and get a degree and I worked my entire way through college.

Being poor is a mind set. Having no money is just a mistake.