- Today I wanna talk with you about five things
that poor people do with their money.
Hey, I'm Jared from Debt Free Blueprint,
where I show awesome people like you
how to get out of debt and create freedom
through your finances using The Debt Free Blueprint.
Sometimes becoming poor is in our control,
and sometimes it isn't.
But staying poor is absolutely a choice
when you understand how money works.
If you find yourself falling into any of these groups
that I list, then please understand that you can change.
This is about recognizing the problem
and finding a solution to that problem.
At the top of our list is a special one:
counting on Social Security for retirement.
If you're 20, 30, or even 40 years from retirement,
then the way that people are currently paid out
by Social Security is going to be completely
different for you and I.
It's slowly running out of money.
The amount being put in, isn't enough to sustain
the amount being paid out at the same rate forever.
Will money even be there for younger generations
to pull from?
It all depends on how our government leaders
decide to fix this problem in the upcoming years.
I highly doubt that they'll allow it to get to that point
since an end to that system would destroy
the country as a whole.
Cause most people are expecting to get a lot from
Social Security at this point and time.
I honestly think that you and I will get some money,
just not as much as they're getting today.
Most current elderly people rely on that money.
They weren't given a long enough heads up to financially
prepare for it not actually being there.
By knowing about this future situation we, you and I,
are being given a fair warning, right now, that
Social Security will look completely different for us
once we get to that age.
You should be investing for the future like
government help won't even exist.
We honestly don't know exactly what the future holds for us
in that area,
but that's not a good enough reason not to take it upon
ourselves to plan for it.
The solution that I suggest is as you get closer
to retirement age and get a better feel for how much
will be available to you, then you can decide whether
or not it makes sense for you to scale back in your
current investments since some of your retirement income
will be supplemented by the Social Security program.
Plan your financial future around that.
By looking at it this way it will force you to
find ways to invest and to make more money today,
so that you don't get to the age of retirement,
hold out your hand for some help, and end up empty handed.
I'm not a big fan of putting my financial future
in the hands of the government.
They already suck enough when it comes to managing
the country's money, so what in the heck makes me think
they're going to do a good job with my money?
Another thing poor people do is spend money based on a
monthly payment.
Back when I was younger, poor, and in debt,
this is all I ever did.
Cars, televisions, vacation.
If it wasn't a large purchase I thought,
if I can charge this to my credit car,
then can I still afford the minimum payment?
I was basically stacking monthly payments
on top of each other.
If you have a $500 monthly payment
but you have outstanding debt that totals $12,000
then you owe $12,000 dollars, not $500 dollars a month.
It makes me cringe when I hear people say
Well, if I buy this, then it's only gonna
cost me $50 a month.
No, no it's not!
Even if it's 0% interest.
Wealthy people look at the actual cost of something
and the opportunity cost as well.
If you continue to buy depreciating assets with debt,
then I promise you will always be poor.
Poor people think that gambling and playing the lottery
will fix their money problems.
Have you ever been to Las Vegas?
It is absolutely beautiful.
The colors, the buildings, the designs, the sounds.
It just makes you wanna stay up and have fun all night,
it is so exciting.
When I visited Vegas years ago I spent roughly
21 hours there and I slept for about three of them.
Which means I was awake for 18 of them.
That was back in my gambling days.
Gambling is a losers game, period.
Whether it's at a casino, online poker, the lottery,
or betting on sports.
I know this first hand because I used to be one of
those gamblers back in college.
I lost thousands and thousands of dollars
because it seemed like an easy way to make a buck.
The people I know today who constantly gamble
either have no money or they gamble like crazy
and are lucky enough to have a high income
to cover all of their loses.
In the long run there's a 95% chance
that you will lose more than you will win if
you continue to gamble your money.
Full disclosure, I made that stat up
but it's probably about right.
Casinos weren't built, and don't stay in business,
because people win all the time.
Just go to Vegas and you'll quickly understand who
are the real winners and who are the losers.
By the way, an article from Time Magazine mentions
that 70% of lottery winners go broke within a couple years.
This shouldn't be a surprise because the people who
play the lottery are poor and don't understand
how bad of a financial move it is.
They obviously don't know how to manage their money
so when they actually win, they blow it all right away.
You will very rarely find someone who truly understands
how money works, play the lottery.
So the next time you wanna play the lottery
remind yourself, only poor people play the lottery.
Even if it's only for $1.
Poor people have no idea where their money is going.
It's even the difference between people who are wealthy
and people who are rich.
If I told you that someone that was making $75,000 per year
has a higher net worth than someone making $150,000
per year, that lived in the same exact city
would you believe me?
It's very possible, and probably more common than you think.
The difference is in the details.
The person making a $150,000 dollars per year
has a healthy income.
Hell, they're even able to pay their bills
on time every single month,
but they're spending in the wrong places
because they're not paying attention.
I bet that the person hitting their financial goals
every single month, who is making $75,000 per year,
and has a budget, has way more money than the person
that doesn't track their spending who makes
$150,000 per year.
You can't out earn stupid choices with money.
I've got all kinds of budgeting videos and tools
if you wanna learn more about that.
I'll throw links down in the description.
Poor people buy things to show off.
I know what you're gonna say,
I don't buy things to show off.
Are you sure about that?
Who are you buying that for is a good
question to ask yourself whenever you wanna buy something.
If no one would ever see it, or know about it,
then would you still buy it?
I think we call it pea cocking?
Except, most people that are pea cocking
can't actually afford it, or they have mommy and daddy
supplementing their income.
That Rolex watch tells the same time that mine does.
And by the way, no one knows what kind of watch
that you have unless they stop you on the street,
grab your wrist, and inspect it.
Or, when you take a close up picture of it
to post it on social media. (burps)
And in that case it's obvious you only bought
it to show off.
This is one of the biggest traps when it comes
to making you poor.
Why do you opt for the cheaper brand of Q-tips
when you go to the store?
Because no one sees you shoving those things in
your ear every single morning.
The people who matter most in your life
aren't the ones thinking any more or less of you
based on the things that you buy.
If they do, then you are not the problem,
they are, and you should remove those people
from your life as soon as possible.
Like I said before, staying poor is a choice.
If you live in America and understand the concepts
we just talked about, then there is no excuse.
All of our actions have consequences.
What separates the winners from the losers
is understanding, correcting, and limiting those mistakes
that poor people make with their money.
Let me know in the comments down below of something
that you've noticed that keeps people poor.
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I'll see you on the next one friends, Adios.