Why Do Poor People Stay Poor?

 

The question we are discussing today is “Why do poor people stay poor”? There isn’t a lack of incentive for the poor to become rich, and there isn’t a lack of people that dream of becoming rich. So, why do they stay poor? Before we can answer this question fully, we need to answer some other questions. We need to figure out what rich and poor actually mean. Then we will discuss The cause behind poor people remaining poor. Finally we will discuss what you can do about it.

 

What is Rich and Poor?

 

There is a lot of debate about what rich and poor actually means. Some say it’s a mindset, other’s say it’s happiness or spiritual fulfillment. For this article, let’s keep it very simple so we can all be on the same page. There is a spectrum, a straight line, that represents the amount of money that you can make in a year. There is a second spectrum, a straight line, that represents the amount of money that you have saved. These lines can go from negative infinity all the way to positive infinity. These 2 combined create rich and poor as we speak of it here in this article.

Then there’s the question, at what point on these spectrums is considered rich? Is it considered rich if one spectrum is high and the other is low or vice versa? These questions are very personal and subjective. This is where you need to do some soul searching to find the answer for yourself. Keep in mind, this definition can change. It’s not set in stone. Also keep in mind that your personal answer to this question is irrelevant to the topic. So it’s not a big deal if you don’t know the answer about at which point on the spectrum you finally reach wealth.

 

Rich and Poor is a System

 

This idea may seem strange at first, but it’s 100% true. Rich and poor is a system. Similar to the class system. You know, in America there is low class, middle class, and high class? It’s a similar system, but only applies to money. Here’s the interesting thing. There’s only 2 categories in this system: poor and rich. Sometimes there is a third category called “ultra rich”. Strange, isn’t it? What do you call someone with a decent amount of money, but not enough to be rich? To fill this gap, a lot of people use the class system to define richness. They might say low class are poor, the middle class have a little money, and the high class are rich. However, this is not true. Someone can act low class and be rich. Likewise, someone could be poor and be extremely classy.

The point is, money is a system. You can work your way up in the system and you can work your way down in the system. In other words, you can move your location on the two spectrums mentioned earlier. The system of money is closely tied to perceived value. Value can come in several ways. Let’s go over these real quick and break them down.

 

Value

 

• Knowledge, capability, and productivity.
• Risk.
• Income producing.

Knowledge, capability, and productivity influence both spectrums of richness. If you have knowledge, capabilities, or produce a lot, a company will likely pay you more for your expertise thus raising your ability to earn more. Also, this would apply to investing knowledge. You’ll have the capability to grow your savings which also raises you on the spectrum on richness.

With risk comes reward, but there’s also the possibility of disaster. When you take on a job with more risk, the pay usually follows. This could be the risk of physical injury, or it could be liability. Risk also applies to investing. The more risk you take, the bigger the reward and the bigger the downside. By taking risk, you could increase your savings.

Income producing also applies to both spectrums of richness, but in different ways. If you take on a job that directly produces the company money, such as marketing and sales, you will get paid according to how much money you make the company. On the other spectrum, you have assets that produce income. These assets are usually referred to as cash flow investments. These can help you increase your savings.

 

What’s the cause behind people staying poor?

 

There are Six main reasons people stay poor. Let’s break each of them down.

• They Don’t Want to be Rich
• Fear
• Stubbornness
• Lacking Knowledge and skills
• Difficulty
• Luck

 

They Don’t Want to be Rich

 

This is pretty easy to understand. Many people will say, “Oh, wouldn’t it be nice to live in a home like that” or “I would love to be rich”, but the truth is, they are happy with their life the way it is. Just because someone says something does not mean that it’s true. Many people dream of being rich, but those are just dreams and nothing more. A lot of people love their lives the way they are. For example, a musician often makes less money than they could in another field of work. However, musicians choose this work because they love it. They know it pays bad, but they choose it anyway.

 

Fear

 

The first reason that most people remain poor is out of fear. To become rich, their life must change. When I say life, I mean everything. Their mindset must change, their skill set must change, their circle of friends will likely change, and their comfort zone must change. This transition is extremely scary and the average person is not up for this challenge. Fear is debilitating. This is the major reason why the majority of people want to become rich, but never take any steps to improve their finances.

 

Stubbornness

 

Another reason that people remain poor is out of stubbornness. They don’t want to change, they want everything else around them to change. They want more money for the same work. They want to spend just as much as before and have their investments grow at the same time. They want to become a genius without studying. They would rather stick to their old ways and find a short cut to success. Success is not easy, but the stubborn person thinks they can trick the system into unfair gains that give them a better life. A lot of times, stubbornness will show up as complaining, victimizing, or looking for the shortcut / secret to success. Next to fear, this makes up a huge reason why most people remain poor.

 

Lack of Knowledge and Skills

 

This goes two ways. First, most people do not know that they need additional knowledge and skills to become successful. The once they realize this, most people have no idea about which skills they need to develop. So, this is a big hurdle to start with. Second, learning the knowledge and skills required to become rich takes time and consistent effort. Most people are not dedicated enough to the idea of becoming rich to develop the knowledge and skills. They give up before they reach the level they need to be at to become rich.

 

Difficulty

 

Becoming rich is difficult. If it was easy, everyone would do it. Remember earlier I said that a poor person would need to change their entire life to become rich? This is hard. Just a moment ago I said that learning the knowledge and skill to become rich takes dedication and time. This is hard. Moving up the corporate ladder is hard. Having a high paying job is hard. Building your own business is hard. Creating a strong network is hard. Everything is hard. It is so much easier to take the easy path. It’s easier to relax and do the minimum to enjoy the little pleasures in life. Most people that get past the first few obstacles are then faced with the difficulty of all of it. Most people give up due to the difficulty. This is a big reason why poor people stay poor.

 

Luck

 

It’s undeniable that luck plays a role in success. Many people will deny this, but it’s absolutely something that plays a role. Many things in life are completely out of our control, so luck does affect success and richness. However, luck doesn’t have the impact that most people think. Luck plays a role in 2 major areas: speed, and maximum potential.

Outside circumstances definitely play a role in success. For example, you could post a video on YouTube and it becomes viral providing you a million followers over night. This would be luck that increases speed. However, without this luck, you’ll be stuck growing at a normal speed. Or let’s say that you get IP banned for a year, this would slow progress. However, you can still grow to have a big following. Luck only determines the speed at which you become successful.

In addition, luck plays a role in determining your maximum potential. Let’s say you’re a runner. Your genetics may limit your fastest run ever to a 4.5 minute mile. You may never make it to the Olympics at this speed, but most people will never run that fast. Your goal should be to reach your maximum potential. Luck may limit you, but your maximum potential is still more than enough to live an amazing life.

What does all this mean? You may never be a billionaire. You may not become rich quickly. However, if you strive to become the best you can, you’ll definitely improve.

 

So, what can you do about it?

 

Now you understand why poor people stay poor, but you want to break this chain. What can you do? It all begins by developing yourself. Developing your character, developing your mindset, developing your skills and knowledge, and developing your understanding. Have you ever heard the phrase, “Invest in yourself”? It applies here. The first thing you must do to break free is to develop yourself.

As you start developing yourself into the kind of person that becomes rich, you’ll need to start making some changes in your life. There is no time-frame for this. I am not rushing you. As you learn more, you’ll begin to understand what changes need to be made. It could be a new job, a new skill, a new friend, or anything else. You cannot change your life if you continue doing the same things you use to do. Have you heard of the phrase, “The definition of insanity is doing the same thing over and over while expecting different results”? It applies here. You must change. As you continue to develop yourself, these changes will become easier.

Then finally, you need to remain dedicated and consistent to the idea of finishing your journey. This can take a long time. This is where you need to overcome the difficulty. Develop the mindset that you will never quit. Once you give up, you cannot succeed unless it’s out of pure luck.

 

Resources

 

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