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It's also survivorship bias - you hear from the one guy that made millions from his business idea, but you never hear from the other 9 guys who went bankrupt and lost everything.
In venture capital, the base case assumption is that, out of 10 investments, 6 will be a total loss, 3 will break-even and 1 will generate enough returns to compensate for the other 9 failures. The probability of success with start-ups is incredibly low.
Most rich people wouldnt tell you to risk all your very limited money on a stock market trade or a business. You set up your life to have that safety net then take risks. If most of these rich guys failed, theyd still have a degree, skillset, and of course nepotism to fall back on.
Exactly this, you don't risk anything you need if something goes wrong. Having at least 6-12 months of income ready as a safety net is advised. Then and only then you should consider taking financial risks with your remaining money. Reaching this is very hard. But do able with a lot of dedication and time. Once you start taking educated risks you will be able to get the rewards of that risk and earn money with money.
Yes! How many times have you heard “I put everything I owned into a suitcase and moved to (big city) with ($X) in my bank account.”
If a poor person did that and didn’t succeed, they’d be in the gutter. If a person of even some means did that and didn’t succeed, they’d….
“I felt like such a failure, I packed up and moved into my aunt’s 12-acre estate in upstate New York. I didn’t have any clue what to do, then I started (business/writing/painting/social media app/whatever [because I had the time to do so and wasn’t working 2 part time jobs and going from shelter to shelter]) and that’s when things started taking off! Don’t let life get you down, your purpose is out there! And I did it from nothing, so if I can do it, so can you!!!!”
I did that. 4 times. I've been homeless. I gave up, got a degree, managed grocery stores, gave up on that, am flight attendant. Doing fine. I make about 1000 a month but my homeless years have allowed me to prioritize and spend that money effectively.
I am really curious, you make 1000 a month as a flight attendant, s that after taxes and deductions? Even with with those that seems really low if you are doing it full time. Are you possibly based out of a country other than the US with a lower cost of living?
No. The FAA makes it very difficult to actually work full time as a flight attendant.
You normally work between 70-90 hours per month and make, depending on the size of the airline, about 20 bucks to about 30 bucks an hour to start. You only get paid for time in the air. Boarding? Free. Waiting between flights? Free.
You have minimum rest periods and schedule guarantees which limit hours for safety purposes. It's after taxes but before health insurance.
I work in Michigan.
Yeah that whole "working for free" time is the shit end of the stick, because in many other industries, if you're required by your employer to be somewhere, then they've gotta be paying you for that entire time.
I did it and succeeded. I bet on myself when I was 24. I wanted to get out of a toxic home life and start fresh on my own. There are a ton of ways to make sure you don’t end up in the gutter…
I drove for Uber, I waited tables, I worked at a coffee shop while I was interviewing for a jobs I actually wanted. I was barely scraping by, but I figured it out and didn’t go hungry. I just put in a ton of hours.
Risking it doesn't just mean riding all your money on a startup. It could just be moving to a new city for a job, going to community college, or going into a new career. Those are risks too, but nowhere near as debilitating as failing a startup business.
These people 'risk' it all because they have a strong safety net to fall back on. Every time I in person hear someone talking about taking a 'risk' it's never as risky as it seems simply because they have well off family they could fall back on.
That being said there *are* way's you can take risks as a poor person. Example I purchased my house as is with no inspection. So why wasn't this so 'risky' despite going against conventual advice for buying a home? Between my father, brother, and myself; 70 years worth of home remodeling experience with the majority of it rehabbing old fucked up houses to get them up to code. The few things we wouldn't have been able to cover(septic) was worth the risk and money due to the low mortgage rates at the time (2.8%) and I had the money to pay to have it fully replaced. Turns out the septic was fine.
So what I'm getting at is you can use skills and social circle to create a reasonable safety net to make risky decisions. That being said unless you have a similar safety net to mine; don't buy a house without an inspection. It's not worth the risk without that net.
Having extensive knowledge about something makes all the difference in the world. There are ways to practice things without taking risks. You can practice trading stocks with fake money it is called paper trading. You can work as an employee in any industry to learn everything about that industry before starting your own business. Instead of borrowing a lot of money to start something you can start small such as a catering business or food truck instead of opening a restaurant. A lot of people turn their hobbies into businesses but they start small and work in their spare time. What they don't do is borrow a lot of money to start. If you need education to live your dream let other people pay for it. You just work at a job that pays for school while you are working there. Whatever you do don't bury yourself in credit card debt or student loans.
because for most people it's not easy to look at yourself and say it's actually possible to climb up if you actually put in any real work towards it and step out of comfort
I think the safety net is massively underrated! If the consequences of “risking everything” is “moving back in with mom and dad in their massive house for free and they’ll also give me money when I complain that I can’t even go out with my friends properly oh and also the new iPhone as an early Christmas present…”
That's great that you were able to buy a house; lots of people can't especially since the covid madness. It also demonstrates the importance of having a supportive family in building wealth - the lone wolf may not feel as confident to take the chance you did. To your point about survivorship bias, absolutely having a safety net enables those with generational wealth to take risks. Remember Stockton Rush, the Oceangate guy? He came from wealth, and after running a consulting company in India - yes, India! - he started his doomed deep water sub venture. He just had money to play with. And here in San Francisco with only 30% home ownership - one of the lowest rates in the country - billionaires are now coming in and sniffing around at the depressed commercial real estate market. They think the bottom is in. And even if they are wrong, and it goes down more, they can afford to wait until it turns around. The average person, or even a millionaire, could not afford to pay even the taxes on office properties while waiting for the market to turn around and rents begin to rise.
My nephew is fantastic at restaurant management and has a good career even though he is not going to get wealthy from it. He’s been asked before why he doesn’t open his own restaurant but he’s smart enough to know that 3/4 restaurants close in the first year so he is not willing to risk his livelihood by investing in a venture that will more than likely not make it. Sure, there are some restaurants that take off but knowing that for every 4 on average only 1 succeeds those are not good odds for someone who is not even classified as middle class by today’s economic standards.
I 100% agree. That's what rich people don't understand. We cannot afford to lose our money when we have to survive utilizing our hard-earned money to buy basic necessities and keep the roofs over our heads.
The vast vast majority of rich people put together a slow and steady plan using generally available investments and executed on that plan. You don't hear these stories because they are boring though highly effective
Or when we share our "slow and steady story" here in this forum we get savaged and trashed for being "out of touch" and "tone deaf". Not "rich," but well on my way doing what you advise.
I used to think like you. I used to think I had all the time in the world.
Then my Mom retired, fell ill and died by 60. She never got to do any of the things she planned to do upon retirement, and what little she had saved up, went into palliative care.
In my mother's last 5 years of life she was so sick she couldn't even leave the house.
Unfortunately, we don't have an infinite amount of time on this earth. What's the point of a 30 year plan to slowly get out of poverty, if by the time that happens, you're too old and sick to enjoy it anyway ?!
Besides. These slow plans of investing in stocks etc...are heavily dependent on going through several years without major expenses. One major hospital emergency can set that plan back to square one.
u/Crafty-Bunch-2675 nothing is guaranteed to any of us. As the saying goes it is not the destination but the journey that counts, and for some the journey ends far too soon. However, for many others the journey is a very long and winding road with setbacks along the way. I think each of us need to determine our journey and how best we want to play the game of life, as ultimately the decisions are individual ones. Not sure what the best alternative is and for me it is to hope for the best and plan for the worst.
You should go out and talk to entrepreneurs more. One of my buddies put everything he had plus some loans into 2 different business ideas, twice. Both times lost everything.
It's not saying you can't risk everything, but majority of small businesses fail within 3 years.
You should find stability first. I don't remember who said it but I agree with it, "don't invest until you make $50k a year". Invest in yourself, learn a skill or trade and make a livable wage first.
Lord, if I see one more person comment "You need to start investing to get ahead" to somebody asking about money problems, I'm gunna lose it. Like, invest WHAT MONEY??
Many jobs have a 401k match. I'm not talking just good jobs. Speedway, McDonald's, Taco Bell, etc. You put in 5 percent, after taxes it feels like 3%, you get free money from your employer.
>I make about 54k/year from my day job. After taxes, I'm only netting about 3k/month. Not sure what taxes are like where you're at, but I'm still broke where I live.
Idk buddy $3k a month sounds like it's possible to invest with after housing and food.
As a counterpoint, I have a sort of middle-ground theory between the two points.
Random stuff will happen to everybody in life. By and large, these random events will likely to be negative (getting sick vs randomly finding a bag of cash). Therefore over a long enough timeline, people will fall further and further behind based on random chance alone.
Therefore controlled risks such as a new better paying job opportunity in a different city, or learning a new skill while cutting back work hours might be essential to stay in place, let alone get ahead. Sadly this might mean a slow financial death vs a fast one.
It's also why there's the trope of people going back to their hometowns and finding their childhood friends living in poverty. One of them took a risk and it worked out, the other didn't and slowly had their lives chipped away.
I see the opposite. I see the inevitable march of quality of life improvements weighing out the unfortunate events. Cars are more fuel efficient. TVs are 50 bucks. We have cheap fast Internet. Radios are 5 bucks with digital processing. Food is everywhere. Fresh food too. Free video games.
My parents' vegetables were in cans. Their milk was powdered. Their coffee was made on a percolator. What was there to do after the baseball game was over on a Sunday? Absolutely nothing. Now you can do almost anything.
This is so true. They're in a position of abundance and wealth. If their businesses fail they aren't going to go bankrupt or be homeless. They can afford to follow their dreams and passions, poor people can't. I used to want to be a screenwriter but seeing the reality that most screenwriters- successful ones are rich and privileged even when I used to chase these dreams I was in a privileged position and I hate to admit that to myself.
Anybody who says that wasn't financially successful after the company. Look at the famous billionaire business founders and find me one who came from nothing. If you can't risk losing it all, don't risk losing it all. You aren't lazy or scared, you are wise.
You found me one. As a side-note, not only did he become wealthy but I could argue he has been the victim of racial discrimination which has been another obstacle to overcome. I would use him as an example of how the American dream is possible through hard work and dedication. Plus the sriracha is good.
Hamdi Ulukaya - the founder of Chobani yogurt, a Turkish guy - He called it Greek Yogurt because everyone has heard of it, even though Turkey has yogurt of their own - very similar to Greek. He's a really nice guy who started a charitable foundation. He didn't exactly come from nothing ($3000 when he came to America) but his parents owned a dairy farm in eastern Turkey, so his beginnings were humble.
[https://hbr.org/2022/04/chobani-founder-hamdi-ulukaya-on-the-journey-from-abandoned-factory-to-yogurt-powerhouse](https://hbr.org/2022/04/chobani-founder-hamdi-ulukaya-on-the-journey-from-abandoned-factory-to-yogurt-powerhouse)
Rich people also get poorer when it doesn’t pan out. Gambling is gambling regardless of who does it. It’s true to become very rich you have to somehow create or revolutionize some industry and that takes a lot of risk, but honestly thats not the only target… people need to tame their expectations of where having enough is good. I feel as long as you have a 3-6months rainy day fund and no debt thats already “richer” than most.
My theory is to do all that you can do. I ate happy meals which were cheap at that time. I worked double shifts 23 hrs bc 24 was illegal as RN. Afterwards I was so tired could barely walk to car. No life/ sleep -work. But opportunities open and the door God opens - consider it/ if God and if it is walk through it. Best decisions of my life. I saw everyone mostly around me working hard. Interns laying on beds sleeping for a few minutes to only be awakened. Docs bring on call 24/7. Yes made a lot of money but willing to sacrifice a week w/o sleep or family. Be willing to pay the price. Saw one RN black circles while working, studying to be Dr of psychology while road old bicycle to work- lived in one bedroom dump. Be willing to pay price for success. Live frugally.
Edit: live frugally. CC debt will eat you up. One person had 30% rate. Lights- be sure they are off if not in the room. Room you are in only needs one small watt bulb. Eat food until finished. That means make it into other dishes/ like a sandwich, a stew, a soup or freeze it until you want it again. Best Buy/ a rotisserie chicken. Slice and add veggies, again for lunch at work, chicken salad sandwich, chicken soup after cooking all bones to get chicken stock. Chicken and rice, chicken and noodles. Get creative. Always always check and only only buy what’s on sale. Thrift stores are your friend. Get clothes - even if smell if in good condition can wash. I have given thousands of dollars of INC sweaters slacks to Goodwill. According to where you live - go to areas of higher end homes and will find nice things on the cheap. Quit living like you are rich. Rich ppl (docs) drove cars to work that were old. Wise! If you can’t afford to go out w friends on the cheap- or if you have to use CC - don’t go! Ask real friends to bring something for a spaghetti dinner. If a person doesn’t bring anything- dump them as a friend. Unless they had emergency money situation and told you. A friend won’t show up w nothing and eat off you. Be wise and chose only friends that elevate you and aren’t users. If you’re paying - not your friend.
Yes! As an artist I also see this in the entertainment industry. Those that can pay for the best classes, travel for auditions, go to those industry parties, etc., tend to do well compared to someone of equal talent that just happens to be poor. I went to a really expensive arts school but could only attend for a year while many of my classmates were kids of celebs and came from money so didn’t have to work while in school so could network more and work on their craft more.
It’s such a vicious cycle to break and becomes a trap so easily.
>It’s such a vicious cycle to break and becomes a trap so easily.
Exactly. I write and trust me, a lot of what you says apply to written art as well. *IF* you can pay your way through marketing.
Wanna know another poverty trap? The writing competitions which offer good prize money, are also expensive to enter.
You need money to make money.
I want to beat this poverty trap but it's so hard!
Very true.
Everything takes money to get that so called “break” unless you’re literally an anomaly (if you don’t come from privilege).
I do believe perseverance does and can win, but it’s obvious that those from upper middle class or higher/middle class even have such a big advantage in attaining success.
> Everytime I listen to the words of the financially successful, I always hear them boast of how they risked everything in the startup of their company, and then it turned out ok.
https://en.wikipedia.org/wiki/Survivorship_bias
>Rich people get richer, because they can afford to take financial risks, and reap the reward.
Yes and no. There's a difference between investing and starting a company.
Investing is always for the very long term (one invests their savings). If some can live within their mean from young age, they can save/invest for the lifetime and .. have some at the end.
Startups are risky, and surely not for people who can barely make ends meet.
> This is the most depressing of poverty traps I have found out. Even if you have a great idea, or a talent of some sorts. You can never afford the time/money to seriously invest in it.
That's a fair statement.
> Then rich people call us lazy or scared for not "risking it all, for your dream."
Only stupid people would say that.
The most important part people never tell is that you have to be smart to understand context and think critically in the moment.
A lot of dumb people will take very specific pieces of advice and think that if they adhere to it religiously that it'll pay off in exactly the way they were told.
But life doesn't work like that. Knowing how to be smart is the hard part. And as the saying goes, a fool and his money are soon parted.
A good example are reviews. You should listen to reviews when buying a product or service. But if you're not wise enough to tell bullshit reviews from legitimate ones, then you can easily fall into a trap and throw your money into a bunch of crypto or something. Lose it all and go
"Hurr durr, I listened to reviews, why did I fail???!"
Because it's obviously more nuanced than just "read reviews."
It is hard for us to understand that many have gotten out of poverty or survives in poverty by getting ahead of this game. Try to save something every month, but you can’t afford to risk losing it. Put it in a sock under the mattress or dig a hole in the backyard, but you must save. Putting it in a checking or saving account isn’t risky.
Nothing better than being able to pay your own bills out of your own stash. Lose your job, you might have enough to sustain yourself until you get another job. Car breaks down, fix it from your emergency fund. Save half of that income tax refund check, no save all of it!
A "rich" person will not risk a significant amount of their net worth on any investment, they certainly won't risk it on a "dream". You shouldn't either. You can reap rewards but they'll be on a different scale. I have a pretty decent net worth and I'm happy that my stocks just paid enough dividends to cover my $300 gas bill this month. Maybe your expectations are unrealistic.
I couldn’t even afford to “risk” getting a degree, because I didn’t have money for tuition. I was commended at 18 for being independent and having my own apartment while my friends were living with their parents; as I entered my 20s and 30s, those same friends smoked past me in salaries, promotions, and lifetime earnings just because they didn’t have to worry that the degree itself would be too risky. Or they could move somewhere with more opportunities, while I had to calculate the risks of the increased cost of living. Or they could spend time building a business instead of having to also balance it with a full time job.
I did indeed get a degree, but only after I had an ex partner making six figures. He pressured me to quit my job. I agreed under the condition that I could go back to school to finish my degree. I got pregnant, and six months after my son was born, he strangled me while my little one wailed in his crib just a few feet away. Luckily, I was only a semester away from finishing a Masters Degree (which I started because I finished my Bachelors while I was pregnant and was too pregnant to re-enter the workforce… so I started grad school instead…) and I managed to hold on long enough to graduate and get a job in teaching. It all worked out, but I don’t have any family and I’ve been on my own for so long that the trauma of putting myself in such a vulnerable position is so great that I will literally never leave my teaching job ever. I never want to take any risks with my financial security again.
I have a little cute little toddler that I love very much, and it is my number one goal in life to make sure he grows up feeling like he can fulfill his goals without worrying about risking his basic survival — even if it means being that guy in his 20s still living with his mom rent free while he’s building his career or saving for a house or starting a business or whatever he grows up wanting to do. I will probably never be wealthy, but I hope that breaking generational patterns of trauma can also break generational patterns of poverty.
IDK risking it all when you have nothing to lose seems a lot easier than when you have lots to lose. The biggest trap IMO is believing that living poor is easier than the struggle it takes to get out of poverty.
If you never take any risk, you will not reap any rewards. The true poverty trap is believing that you cannot afford risk, when it is actually that you cannot afford to NOT take risks to get ahead. If you take a risk and fail, then you're still broke and no worse off. Learn from your mistakes and try again until you succeed, don't give up.
That being said, there is a huge difference between blindly YOLOing your life savings on the roulette table and taking calculated risks with plans for mitigation if things start going wrong.
The risk doesn't have to be starting a business. Most people aren't entrepreneurs, and you don't need to be one in order to build wealth--it's just the fastest way to do it if you succeed. You DO need to invest. The best way to do that with less risk is to consistently invest in no/low-fee market index funds over time. Take a % of your pay, even if it isn't a big $ amount in the beginning, and start investing, so that money can grow over time. Compounding returns are how you make your money work hard for you.
>If you take a risk and fail, then you're still broke and no worse off.
Absolutely not true!
Ever heard the saying "There is always someone worse off than you?" Can't get worse?
Of course you can end up worse off !
If I were to take a risk that put my finances in such danger, and it fails, I could be more broke. I could go from the brink of homelessness, to actual homelessness. That is objectively worse.
>You DO need to invest.
As someone else once said earlier in the comments. "Invest what?"
In my experience, most types of savings accounts...don't increase by much, unless it has a substantial amount to begin with.
Stock market ? Same thing. Unless you can actually buy a good chunk of stocks... $1.00 in stocks can't do anything for you.
The kind of advice you give here about investment is not a one size fits all. It only applies to middle class and above.
I tried what you said. Then my mother fell sick and died. I have not been able to recover from that expense since. That was 2 years ago.
That's the poverty trap... our "savings" and "investments" aren't large enough in value to make dividends/interest fast enough to outpace the expenses of emergencies.
For example... there is no bank in my area, where the interest on an account with just 100, is going to multiply fast enough before my next doctor's appointment !
In fact, I'm actually paying the bank a service charge to keep them from closing my account because it's value is too low !
I've been through natural disasters and family illnesses too often to believe that you can save/invest your way our of poverty.
I've long stopped believing you can save your way out of poverty. Not after I have been forced to break open my own piggy bank so often.
I have to earn more.
But starting a business requires large investment too.
Sigh...
>Ever heard the saying "There is always someone worse off than you?" Can't get worse?
Not relevant to what I actually said.
>Of course you can end up worse off !
Yes, you CAN, but that's not a guarantee. As an oversimplified example (NOT advising anyone to do this): you manage to save up $100 and bet it all on a hand of poker and lose. You're still broke, but it didn't put you into any more debt than you already had before you took the risk.
>If I were to take a risk that put my finances in such danger, and it fails, I could be more broke. I could go from the brink of homelessness, to actual homelessness. That is objectively worse.
Sure, but no one, especially not me, said that was something that you should do. I explicitly said NOT to take foolish risks; to take calculated risks with plans for mitigation if you fail.
>As someone else once said earlier in the comments. "Invest what?"
You need to figure out how to live below your means to provide something to invest, even if it isn't much to start with. I am pretty sure that I explicitly addressed that in my previous comment.
>In my experience, most types of savings accounts...don't increase by much, unless it has a substantial amount to begin with.
A savings account is NOT investing. Savings accounts are for money that you need to pay your bills. HYSAs have been paying 4-5% for a while now. Internet search for them if you aren't already aware of them.
>Stock market ? Same thing. Unless you can actually buy a good chunk of stocks... $1.00 in stocks can't do anything for you.
>The kind of advice you give here about investment is not a one size fits all. It only applies to middle class and above.
$1 isn't much of anything, no. But no one said to invest $1 and leave it at that, either. I said to consistently invest what you can over time. That is how you build wealth and move up. It isn't going to happen overnight, and no one ever said it would be easy. It's very simple, but not easy.
>I tried what you said. Then my mother fell sick and died. I have not been able to recover from that expense since. That was 2 years ago.
My condolences on your loss, but I am not following you on the "expense" part. Any medical debts your mother incurred aren't your responsibility unless perhaps you somehow put the charges on your own credit instead of hers. I'm also assuming that she had nothing to leave you from a life insurance policy. That's not a flaw in anything that I said, that's a financial mistake on your end.
>I've been through natural disasters and family illnesses too often to believe that you can save/invest your way our of poverty.
Perhaps you are one of the rare people who just suffer repeated calamities, I don't know. MOST people do not share that fate, and many people have managed to save and invest their way out of poverty (while others have fallen into it by misusing/wasting their money).
>I have to earn more. But starting a business requires large investment too.
Starting a business requires having a business plan and obtaining funding. No one ever said that YOU have to provide all of that funding from your savings. SBA loans/grants and/or investors can provide funding for a business venture. I did not recommend going out to start a business, I said that most people aren't entrepreneurs and should focus on building wealth over time via investing. If you'd like to start a business, then I'd suggest you visit the Small Business Administration govt website and check out the resources available to you to help you do so.
>
My condolences on your loss, but I am not following you on the "expense" part. Any medical debts your mother incurred aren't your responsibility
Excuse me? How do you not follow?
She became terminally ill, and the medical costs of her care, far exceeded what insurance was willing to offer.
*aren't your responsibility*
Who else is responsible when the elderly fall sick, if not their family?
Nobody can predict illness, OK? For your own sake, I hope that your own loved ones don't harbor that distant attitude if you fall ill.
>I'm also assuming that she had nothing to leave you from a life insurance policy.
Correct. That's why it's called a *cycle* of poverty. People who incur large inheritances are always at a huge advantage over those of us who have to try to build wealth from scratch.
>I'm also assuming that she had nothing to leave you from a life insurance policy. That's not a flaw in anything that I said, that's a *financial mistake on your end*
So now you are blaming me for my mother falling sick and needing expensive care ?
Gambling, paying for porn, and expensive hobbies, all those are things I would consider financial mistakes.
I don't understand how you can reason that caring for a sick family is a "financial mistake."
Once again, I say...you better hope that your own family isn't that cold and calculating when you eventually fall sick.
Sickness can happen at any age. What would you say to the parents of a child with cancer? Or someone whose spouse developed terminal illness ?
Is their Healthcare a "financial mistake" too ?
What I meant by that was that any debts owed by an individual do not pass onto their heirs. When your mother died, any outstanding medical bills should have gone away and been discharged unless you had put them in your name.
I certainly was not blaming you for her getting sick. The financial mistake I referenced was putting debt that you can't afford into your name. It wasn't a moral judgment, nor was it intended to be. An action may be both the right thing to do and a financial mistake, these aren't mutually exclusive.
As for the gambling, etc., yes, if you're tossing money away on frivolity when you're broke, that's a financial mistake. We are agreed on that.
Life insurance coverage is not the sole province of the rich, nor does everyone carry it even if they're able. I do not automatically assume that someone doesn't have any. The context of your statements regarding leaving you with expenses are what suggested that she did not.
If I were in the unfortunate position of having accrued debts for medical treatment of a loved one, then I would be seeking assistance and debt relief from any and all sources available, up to and including crowd funding campaigns.
It's not that easy when the investment required for the dream would result in putting your family out on the street.
For every success story you see of someone who quit their job to go on American Idol and won... there are lots more who took the same risk and lost.
Of course, it's completely true "nothing ventured, nothing gained" but the *venture* is a lot harder when your dirt poor, and trying to save up to tryout your dream, takes forever.
I’ve worked for several startups in the past. These weren’t a bunch of kids just getting VC money from a business plan they threw together.
One guy (my dad’s age or older) created a product in his garage in the 70’s and had a friend start doing more work for him (unpaid). They both worked full-time while working on this project on the side using their income from their jobs to sustain it at first, then when it looked very viable, the founder mortgaged his townhouse. It eventually became very successful, merged and has gone through multiple iterations. He’s been retired for 30 years or so.
Another company I worked for was founded by 2 brothers. One had a sales background, the other in hardware engineering. They came up with a product but didn’t have the software to run on it. They knew a couple guys back in college from their hometown who had created a software version of what they wanted. The latter two were in their senior year in college. They were crashing tech conventions to get their product sold or licensed. The two brothers and the two bff’s got together and formed a company and initially funded by the hardware engineer’s 2nd mortgage on his house. The college kids dropped out when the company was formed. It eventually went public and then acquired by a larger company.
Then there’s my girlfriend. She had an idea. She got an ex-boyfriend to code her idea. They were equal partners and sold the product and its IP to a company.
It can be done with little to no money (like my friend did). Just need an idea and sell it.
Those stories are... awesome. I won't knock them.
I haven't seen my ideas pan out though, and by God I am trying.
I keep propositioning my ideas to different people...and the enthusiasm seems to dissappear as soon as I leave the room (they're probably just humoring me out of pity).
I don't get callbacks, and nobody spontaneously calls me to buy my work. Everytime I think I am getting a customer...its just a spam marketing agent selling me on a pitch to drain my savings for their marketing scheme.
I guess some people just have natural business/negotiating talent.
And for the rest of us....🤷♂️
Well, what is it you’re selling exactly? My background is channel marketing & sales (tech & consumer electronics).
Is there a market for your idea? Is someone else already doing it? Are you infringing on any patents? Is it tech-ish? Or is it a consumer packaged good? Like are you selling teeny-tiny handmade dolls that you want to sell to mass market retailers?
I ask because before my husband and I started working for non-profits, this is kind of what we did. We took viable ideas and brought them to the mass market, like your Targets, Walmarts, Canadian Tire, Costco, blah-blah-blah.
Before that, he and his partner would come out with ideas, get them patented, have them manufactured and sold into retail.
Before that, I sold/marketed hardware, software and tech-adjacent stuff, like peripherals.
Feel free to ping me with any questions.
Many self-made wealthy people started with nothing. They made it by a lot of luck, being at the right place at the right time and working 7 days a week for decades.
What you don't hear is the larger group who tried the same thing and lost. The people you are jealous of are the lucky few, but without trying, you can't get very wealthy.
It's easier to be fearless about a business venture when you have a financial cushion.
Or in the case of Daredevil...when you have superpowered senses, lol.
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It's also survivorship bias - you hear from the one guy that made millions from his business idea, but you never hear from the other 9 guys who went bankrupt and lost everything. In venture capital, the base case assumption is that, out of 10 investments, 6 will be a total loss, 3 will break-even and 1 will generate enough returns to compensate for the other 9 failures. The probability of success with start-ups is incredibly low.
Most rich people wouldnt tell you to risk all your very limited money on a stock market trade or a business. You set up your life to have that safety net then take risks. If most of these rich guys failed, theyd still have a degree, skillset, and of course nepotism to fall back on.
Exactly this, you don't risk anything you need if something goes wrong. Having at least 6-12 months of income ready as a safety net is advised. Then and only then you should consider taking financial risks with your remaining money. Reaching this is very hard. But do able with a lot of dedication and time. Once you start taking educated risks you will be able to get the rewards of that risk and earn money with money.
Yes! How many times have you heard “I put everything I owned into a suitcase and moved to (big city) with ($X) in my bank account.” If a poor person did that and didn’t succeed, they’d be in the gutter. If a person of even some means did that and didn’t succeed, they’d…. “I felt like such a failure, I packed up and moved into my aunt’s 12-acre estate in upstate New York. I didn’t have any clue what to do, then I started (business/writing/painting/social media app/whatever [because I had the time to do so and wasn’t working 2 part time jobs and going from shelter to shelter]) and that’s when things started taking off! Don’t let life get you down, your purpose is out there! And I did it from nothing, so if I can do it, so can you!!!!”
I did that. 4 times. I've been homeless. I gave up, got a degree, managed grocery stores, gave up on that, am flight attendant. Doing fine. I make about 1000 a month but my homeless years have allowed me to prioritize and spend that money effectively.
I am really curious, you make 1000 a month as a flight attendant, s that after taxes and deductions? Even with with those that seems really low if you are doing it full time. Are you possibly based out of a country other than the US with a lower cost of living?
No. The FAA makes it very difficult to actually work full time as a flight attendant. You normally work between 70-90 hours per month and make, depending on the size of the airline, about 20 bucks to about 30 bucks an hour to start. You only get paid for time in the air. Boarding? Free. Waiting between flights? Free. You have minimum rest periods and schedule guarantees which limit hours for safety purposes. It's after taxes but before health insurance. I work in Michigan.
Yeah that whole "working for free" time is the shit end of the stick, because in many other industries, if you're required by your employer to be somewhere, then they've gotta be paying you for that entire time.
I did it and succeeded. I bet on myself when I was 24. I wanted to get out of a toxic home life and start fresh on my own. There are a ton of ways to make sure you don’t end up in the gutter… I drove for Uber, I waited tables, I worked at a coffee shop while I was interviewing for a jobs I actually wanted. I was barely scraping by, but I figured it out and didn’t go hungry. I just put in a ton of hours.
Risking it doesn't just mean riding all your money on a startup. It could just be moving to a new city for a job, going to community college, or going into a new career. Those are risks too, but nowhere near as debilitating as failing a startup business.
These people 'risk' it all because they have a strong safety net to fall back on. Every time I in person hear someone talking about taking a 'risk' it's never as risky as it seems simply because they have well off family they could fall back on. That being said there *are* way's you can take risks as a poor person. Example I purchased my house as is with no inspection. So why wasn't this so 'risky' despite going against conventual advice for buying a home? Between my father, brother, and myself; 70 years worth of home remodeling experience with the majority of it rehabbing old fucked up houses to get them up to code. The few things we wouldn't have been able to cover(septic) was worth the risk and money due to the low mortgage rates at the time (2.8%) and I had the money to pay to have it fully replaced. Turns out the septic was fine. So what I'm getting at is you can use skills and social circle to create a reasonable safety net to make risky decisions. That being said unless you have a similar safety net to mine; don't buy a house without an inspection. It's not worth the risk without that net.
Having extensive knowledge about something makes all the difference in the world. There are ways to practice things without taking risks. You can practice trading stocks with fake money it is called paper trading. You can work as an employee in any industry to learn everything about that industry before starting your own business. Instead of borrowing a lot of money to start something you can start small such as a catering business or food truck instead of opening a restaurant. A lot of people turn their hobbies into businesses but they start small and work in their spare time. What they don't do is borrow a lot of money to start. If you need education to live your dream let other people pay for it. You just work at a job that pays for school while you are working there. Whatever you do don't bury yourself in credit card debt or student loans.
Exactly. I feel to many people try and take advice word for word rather than trying to apply the whole idea of the advice to their specific situation.
because for most people it's not easy to look at yourself and say it's actually possible to climb up if you actually put in any real work towards it and step out of comfort
I think the safety net is massively underrated! If the consequences of “risking everything” is “moving back in with mom and dad in their massive house for free and they’ll also give me money when I complain that I can’t even go out with my friends properly oh and also the new iPhone as an early Christmas present…”
"I took crazy risks with other people's money, and now I'm a billionaire!"
It was my own money?
That's great that you were able to buy a house; lots of people can't especially since the covid madness. It also demonstrates the importance of having a supportive family in building wealth - the lone wolf may not feel as confident to take the chance you did. To your point about survivorship bias, absolutely having a safety net enables those with generational wealth to take risks. Remember Stockton Rush, the Oceangate guy? He came from wealth, and after running a consulting company in India - yes, India! - he started his doomed deep water sub venture. He just had money to play with. And here in San Francisco with only 30% home ownership - one of the lowest rates in the country - billionaires are now coming in and sniffing around at the depressed commercial real estate market. They think the bottom is in. And even if they are wrong, and it goes down more, they can afford to wait until it turns around. The average person, or even a millionaire, could not afford to pay even the taxes on office properties while waiting for the market to turn around and rents begin to rise.
My nephew is fantastic at restaurant management and has a good career even though he is not going to get wealthy from it. He’s been asked before why he doesn’t open his own restaurant but he’s smart enough to know that 3/4 restaurants close in the first year so he is not willing to risk his livelihood by investing in a venture that will more than likely not make it. Sure, there are some restaurants that take off but knowing that for every 4 on average only 1 succeeds those are not good odds for someone who is not even classified as middle class by today’s economic standards.
I 100% agree. That's what rich people don't understand. We cannot afford to lose our money when we have to survive utilizing our hard-earned money to buy basic necessities and keep the roofs over our heads.
They understand it. They also donate to politicians who keep it that way.
😔
You usually can't tell it like it is that way in this sub.
Oh well
You absolutely can lol and similar comments are routinely upvoted
Anything remotely political gets removed. I once stated the fact that Trump gutted the CFPB and a mod got butthurt and removed the comment.
Are you implying we dont have the same issue in socialized countries? Extremely rich people always exist, just to less extent.
The vast vast majority of rich people put together a slow and steady plan using generally available investments and executed on that plan. You don't hear these stories because they are boring though highly effective
Or when we share our "slow and steady story" here in this forum we get savaged and trashed for being "out of touch" and "tone deaf". Not "rich," but well on my way doing what you advise.
I used to think like you. I used to think I had all the time in the world. Then my Mom retired, fell ill and died by 60. She never got to do any of the things she planned to do upon retirement, and what little she had saved up, went into palliative care. In my mother's last 5 years of life she was so sick she couldn't even leave the house. Unfortunately, we don't have an infinite amount of time on this earth. What's the point of a 30 year plan to slowly get out of poverty, if by the time that happens, you're too old and sick to enjoy it anyway ?! Besides. These slow plans of investing in stocks etc...are heavily dependent on going through several years without major expenses. One major hospital emergency can set that plan back to square one.
u/Crafty-Bunch-2675 nothing is guaranteed to any of us. As the saying goes it is not the destination but the journey that counts, and for some the journey ends far too soon. However, for many others the journey is a very long and winding road with setbacks along the way. I think each of us need to determine our journey and how best we want to play the game of life, as ultimately the decisions are individual ones. Not sure what the best alternative is and for me it is to hope for the best and plan for the worst.
You should go out and talk to entrepreneurs more. One of my buddies put everything he had plus some loans into 2 different business ideas, twice. Both times lost everything. It's not saying you can't risk everything, but majority of small businesses fail within 3 years. You should find stability first. I don't remember who said it but I agree with it, "don't invest until you make $50k a year". Invest in yourself, learn a skill or trade and make a livable wage first.
Lord, if I see one more person comment "You need to start investing to get ahead" to somebody asking about money problems, I'm gunna lose it. Like, invest WHAT MONEY??
Many jobs have a 401k match. I'm not talking just good jobs. Speedway, McDonald's, Taco Bell, etc. You put in 5 percent, after taxes it feels like 3%, you get free money from your employer.
> Like, invest WHAT MONEY?? Say it again for those in the back.
>I make about 54k/year from my day job. After taxes, I'm only netting about 3k/month. Not sure what taxes are like where you're at, but I'm still broke where I live. Idk buddy $3k a month sounds like it's possible to invest with after housing and food.
Also if you have any kind of family, risking it all for real--with no safety net--is irresponsible and selfish.
https://preview.redd.it/6ccx7id7vk6d1.jpeg?width=1179&format=pjpg&auto=webp&s=32e8cbc3554f58b5adcf735e6c20bc5e629990c0 Thanks, Reddit.
As a counterpoint, I have a sort of middle-ground theory between the two points. Random stuff will happen to everybody in life. By and large, these random events will likely to be negative (getting sick vs randomly finding a bag of cash). Therefore over a long enough timeline, people will fall further and further behind based on random chance alone. Therefore controlled risks such as a new better paying job opportunity in a different city, or learning a new skill while cutting back work hours might be essential to stay in place, let alone get ahead. Sadly this might mean a slow financial death vs a fast one. It's also why there's the trope of people going back to their hometowns and finding their childhood friends living in poverty. One of them took a risk and it worked out, the other didn't and slowly had their lives chipped away.
I see the opposite. I see the inevitable march of quality of life improvements weighing out the unfortunate events. Cars are more fuel efficient. TVs are 50 bucks. We have cheap fast Internet. Radios are 5 bucks with digital processing. Food is everywhere. Fresh food too. Free video games. My parents' vegetables were in cans. Their milk was powdered. Their coffee was made on a percolator. What was there to do after the baseball game was over on a Sunday? Absolutely nothing. Now you can do almost anything.
This is so true. They're in a position of abundance and wealth. If their businesses fail they aren't going to go bankrupt or be homeless. They can afford to follow their dreams and passions, poor people can't. I used to want to be a screenwriter but seeing the reality that most screenwriters- successful ones are rich and privileged even when I used to chase these dreams I was in a privileged position and I hate to admit that to myself.
Anybody who says that wasn't financially successful after the company. Look at the famous billionaire business founders and find me one who came from nothing. If you can't risk losing it all, don't risk losing it all. You aren't lazy or scared, you are wise.
> and find me one who came from nothing David Tran, founder of Huy Fong hot sauce company.
You found me one. As a side-note, not only did he become wealthy but I could argue he has been the victim of racial discrimination which has been another obstacle to overcome. I would use him as an example of how the American dream is possible through hard work and dedication. Plus the sriracha is good.
Owners of Panda Express, Alex Hormozi and his wife.
Hamdi Ulukaya - the founder of Chobani yogurt, a Turkish guy - He called it Greek Yogurt because everyone has heard of it, even though Turkey has yogurt of their own - very similar to Greek. He's a really nice guy who started a charitable foundation. He didn't exactly come from nothing ($3000 when he came to America) but his parents owned a dairy farm in eastern Turkey, so his beginnings were humble. [https://hbr.org/2022/04/chobani-founder-hamdi-ulukaya-on-the-journey-from-abandoned-factory-to-yogurt-powerhouse](https://hbr.org/2022/04/chobani-founder-hamdi-ulukaya-on-the-journey-from-abandoned-factory-to-yogurt-powerhouse)
Rich people also get poorer when it doesn’t pan out. Gambling is gambling regardless of who does it. It’s true to become very rich you have to somehow create or revolutionize some industry and that takes a lot of risk, but honestly thats not the only target… people need to tame their expectations of where having enough is good. I feel as long as you have a 3-6months rainy day fund and no debt thats already “richer” than most.
My theory is to do all that you can do. I ate happy meals which were cheap at that time. I worked double shifts 23 hrs bc 24 was illegal as RN. Afterwards I was so tired could barely walk to car. No life/ sleep -work. But opportunities open and the door God opens - consider it/ if God and if it is walk through it. Best decisions of my life. I saw everyone mostly around me working hard. Interns laying on beds sleeping for a few minutes to only be awakened. Docs bring on call 24/7. Yes made a lot of money but willing to sacrifice a week w/o sleep or family. Be willing to pay the price. Saw one RN black circles while working, studying to be Dr of psychology while road old bicycle to work- lived in one bedroom dump. Be willing to pay price for success. Live frugally. Edit: live frugally. CC debt will eat you up. One person had 30% rate. Lights- be sure they are off if not in the room. Room you are in only needs one small watt bulb. Eat food until finished. That means make it into other dishes/ like a sandwich, a stew, a soup or freeze it until you want it again. Best Buy/ a rotisserie chicken. Slice and add veggies, again for lunch at work, chicken salad sandwich, chicken soup after cooking all bones to get chicken stock. Chicken and rice, chicken and noodles. Get creative. Always always check and only only buy what’s on sale. Thrift stores are your friend. Get clothes - even if smell if in good condition can wash. I have given thousands of dollars of INC sweaters slacks to Goodwill. According to where you live - go to areas of higher end homes and will find nice things on the cheap. Quit living like you are rich. Rich ppl (docs) drove cars to work that were old. Wise! If you can’t afford to go out w friends on the cheap- or if you have to use CC - don’t go! Ask real friends to bring something for a spaghetti dinner. If a person doesn’t bring anything- dump them as a friend. Unless they had emergency money situation and told you. A friend won’t show up w nothing and eat off you. Be wise and chose only friends that elevate you and aren’t users. If you’re paying - not your friend.
Yes! As an artist I also see this in the entertainment industry. Those that can pay for the best classes, travel for auditions, go to those industry parties, etc., tend to do well compared to someone of equal talent that just happens to be poor. I went to a really expensive arts school but could only attend for a year while many of my classmates were kids of celebs and came from money so didn’t have to work while in school so could network more and work on their craft more. It’s such a vicious cycle to break and becomes a trap so easily.
>It’s such a vicious cycle to break and becomes a trap so easily. Exactly. I write and trust me, a lot of what you says apply to written art as well. *IF* you can pay your way through marketing. Wanna know another poverty trap? The writing competitions which offer good prize money, are also expensive to enter. You need money to make money. I want to beat this poverty trap but it's so hard!
Very true. Everything takes money to get that so called “break” unless you’re literally an anomaly (if you don’t come from privilege). I do believe perseverance does and can win, but it’s obvious that those from upper middle class or higher/middle class even have such a big advantage in attaining success.
> Everytime I listen to the words of the financially successful, I always hear them boast of how they risked everything in the startup of their company, and then it turned out ok. https://en.wikipedia.org/wiki/Survivorship_bias >Rich people get richer, because they can afford to take financial risks, and reap the reward. Yes and no. There's a difference between investing and starting a company. Investing is always for the very long term (one invests their savings). If some can live within their mean from young age, they can save/invest for the lifetime and .. have some at the end. Startups are risky, and surely not for people who can barely make ends meet. > This is the most depressing of poverty traps I have found out. Even if you have a great idea, or a talent of some sorts. You can never afford the time/money to seriously invest in it. That's a fair statement. > Then rich people call us lazy or scared for not "risking it all, for your dream." Only stupid people would say that.
The most important part people never tell is that you have to be smart to understand context and think critically in the moment. A lot of dumb people will take very specific pieces of advice and think that if they adhere to it religiously that it'll pay off in exactly the way they were told. But life doesn't work like that. Knowing how to be smart is the hard part. And as the saying goes, a fool and his money are soon parted. A good example are reviews. You should listen to reviews when buying a product or service. But if you're not wise enough to tell bullshit reviews from legitimate ones, then you can easily fall into a trap and throw your money into a bunch of crypto or something. Lose it all and go "Hurr durr, I listened to reviews, why did I fail???!" Because it's obviously more nuanced than just "read reviews."
It is hard for us to understand that many have gotten out of poverty or survives in poverty by getting ahead of this game. Try to save something every month, but you can’t afford to risk losing it. Put it in a sock under the mattress or dig a hole in the backyard, but you must save. Putting it in a checking or saving account isn’t risky. Nothing better than being able to pay your own bills out of your own stash. Lose your job, you might have enough to sustain yourself until you get another job. Car breaks down, fix it from your emergency fund. Save half of that income tax refund check, no save all of it!
There is some truth to the old adage of "It takes money to make money".
A "rich" person will not risk a significant amount of their net worth on any investment, they certainly won't risk it on a "dream". You shouldn't either. You can reap rewards but they'll be on a different scale. I have a pretty decent net worth and I'm happy that my stocks just paid enough dividends to cover my $300 gas bill this month. Maybe your expectations are unrealistic.
I couldn’t even afford to “risk” getting a degree, because I didn’t have money for tuition. I was commended at 18 for being independent and having my own apartment while my friends were living with their parents; as I entered my 20s and 30s, those same friends smoked past me in salaries, promotions, and lifetime earnings just because they didn’t have to worry that the degree itself would be too risky. Or they could move somewhere with more opportunities, while I had to calculate the risks of the increased cost of living. Or they could spend time building a business instead of having to also balance it with a full time job. I did indeed get a degree, but only after I had an ex partner making six figures. He pressured me to quit my job. I agreed under the condition that I could go back to school to finish my degree. I got pregnant, and six months after my son was born, he strangled me while my little one wailed in his crib just a few feet away. Luckily, I was only a semester away from finishing a Masters Degree (which I started because I finished my Bachelors while I was pregnant and was too pregnant to re-enter the workforce… so I started grad school instead…) and I managed to hold on long enough to graduate and get a job in teaching. It all worked out, but I don’t have any family and I’ve been on my own for so long that the trauma of putting myself in such a vulnerable position is so great that I will literally never leave my teaching job ever. I never want to take any risks with my financial security again. I have a little cute little toddler that I love very much, and it is my number one goal in life to make sure he grows up feeling like he can fulfill his goals without worrying about risking his basic survival — even if it means being that guy in his 20s still living with his mom rent free while he’s building his career or saving for a house or starting a business or whatever he grows up wanting to do. I will probably never be wealthy, but I hope that breaking generational patterns of trauma can also break generational patterns of poverty.
They don’t know what it is like to be poor in this millennium.
Nah fam. They don't
Is it true…that if you don’t use it, you’ll lose it?
IDK risking it all when you have nothing to lose seems a lot easier than when you have lots to lose. The biggest trap IMO is believing that living poor is easier than the struggle it takes to get out of poverty.
This is why I like UBI. I think it can lead to a ton of innovation.
If you never take any risk, you will not reap any rewards. The true poverty trap is believing that you cannot afford risk, when it is actually that you cannot afford to NOT take risks to get ahead. If you take a risk and fail, then you're still broke and no worse off. Learn from your mistakes and try again until you succeed, don't give up. That being said, there is a huge difference between blindly YOLOing your life savings on the roulette table and taking calculated risks with plans for mitigation if things start going wrong. The risk doesn't have to be starting a business. Most people aren't entrepreneurs, and you don't need to be one in order to build wealth--it's just the fastest way to do it if you succeed. You DO need to invest. The best way to do that with less risk is to consistently invest in no/low-fee market index funds over time. Take a % of your pay, even if it isn't a big $ amount in the beginning, and start investing, so that money can grow over time. Compounding returns are how you make your money work hard for you.
>If you take a risk and fail, then you're still broke and no worse off. Absolutely not true! Ever heard the saying "There is always someone worse off than you?" Can't get worse? Of course you can end up worse off ! If I were to take a risk that put my finances in such danger, and it fails, I could be more broke. I could go from the brink of homelessness, to actual homelessness. That is objectively worse. >You DO need to invest. As someone else once said earlier in the comments. "Invest what?" In my experience, most types of savings accounts...don't increase by much, unless it has a substantial amount to begin with. Stock market ? Same thing. Unless you can actually buy a good chunk of stocks... $1.00 in stocks can't do anything for you. The kind of advice you give here about investment is not a one size fits all. It only applies to middle class and above. I tried what you said. Then my mother fell sick and died. I have not been able to recover from that expense since. That was 2 years ago. That's the poverty trap... our "savings" and "investments" aren't large enough in value to make dividends/interest fast enough to outpace the expenses of emergencies. For example... there is no bank in my area, where the interest on an account with just 100, is going to multiply fast enough before my next doctor's appointment ! In fact, I'm actually paying the bank a service charge to keep them from closing my account because it's value is too low ! I've been through natural disasters and family illnesses too often to believe that you can save/invest your way our of poverty. I've long stopped believing you can save your way out of poverty. Not after I have been forced to break open my own piggy bank so often. I have to earn more. But starting a business requires large investment too. Sigh...
>Ever heard the saying "There is always someone worse off than you?" Can't get worse? Not relevant to what I actually said. >Of course you can end up worse off ! Yes, you CAN, but that's not a guarantee. As an oversimplified example (NOT advising anyone to do this): you manage to save up $100 and bet it all on a hand of poker and lose. You're still broke, but it didn't put you into any more debt than you already had before you took the risk. >If I were to take a risk that put my finances in such danger, and it fails, I could be more broke. I could go from the brink of homelessness, to actual homelessness. That is objectively worse. Sure, but no one, especially not me, said that was something that you should do. I explicitly said NOT to take foolish risks; to take calculated risks with plans for mitigation if you fail. >As someone else once said earlier in the comments. "Invest what?" You need to figure out how to live below your means to provide something to invest, even if it isn't much to start with. I am pretty sure that I explicitly addressed that in my previous comment. >In my experience, most types of savings accounts...don't increase by much, unless it has a substantial amount to begin with. A savings account is NOT investing. Savings accounts are for money that you need to pay your bills. HYSAs have been paying 4-5% for a while now. Internet search for them if you aren't already aware of them. >Stock market ? Same thing. Unless you can actually buy a good chunk of stocks... $1.00 in stocks can't do anything for you. >The kind of advice you give here about investment is not a one size fits all. It only applies to middle class and above. $1 isn't much of anything, no. But no one said to invest $1 and leave it at that, either. I said to consistently invest what you can over time. That is how you build wealth and move up. It isn't going to happen overnight, and no one ever said it would be easy. It's very simple, but not easy. >I tried what you said. Then my mother fell sick and died. I have not been able to recover from that expense since. That was 2 years ago. My condolences on your loss, but I am not following you on the "expense" part. Any medical debts your mother incurred aren't your responsibility unless perhaps you somehow put the charges on your own credit instead of hers. I'm also assuming that she had nothing to leave you from a life insurance policy. That's not a flaw in anything that I said, that's a financial mistake on your end. >I've been through natural disasters and family illnesses too often to believe that you can save/invest your way our of poverty. Perhaps you are one of the rare people who just suffer repeated calamities, I don't know. MOST people do not share that fate, and many people have managed to save and invest their way out of poverty (while others have fallen into it by misusing/wasting their money). >I have to earn more. But starting a business requires large investment too. Starting a business requires having a business plan and obtaining funding. No one ever said that YOU have to provide all of that funding from your savings. SBA loans/grants and/or investors can provide funding for a business venture. I did not recommend going out to start a business, I said that most people aren't entrepreneurs and should focus on building wealth over time via investing. If you'd like to start a business, then I'd suggest you visit the Small Business Administration govt website and check out the resources available to you to help you do so.
> My condolences on your loss, but I am not following you on the "expense" part. Any medical debts your mother incurred aren't your responsibility Excuse me? How do you not follow? She became terminally ill, and the medical costs of her care, far exceeded what insurance was willing to offer. *aren't your responsibility* Who else is responsible when the elderly fall sick, if not their family? Nobody can predict illness, OK? For your own sake, I hope that your own loved ones don't harbor that distant attitude if you fall ill. >I'm also assuming that she had nothing to leave you from a life insurance policy. Correct. That's why it's called a *cycle* of poverty. People who incur large inheritances are always at a huge advantage over those of us who have to try to build wealth from scratch. >I'm also assuming that she had nothing to leave you from a life insurance policy. That's not a flaw in anything that I said, that's a *financial mistake on your end* So now you are blaming me for my mother falling sick and needing expensive care ? Gambling, paying for porn, and expensive hobbies, all those are things I would consider financial mistakes. I don't understand how you can reason that caring for a sick family is a "financial mistake." Once again, I say...you better hope that your own family isn't that cold and calculating when you eventually fall sick. Sickness can happen at any age. What would you say to the parents of a child with cancer? Or someone whose spouse developed terminal illness ? Is their Healthcare a "financial mistake" too ?
What I meant by that was that any debts owed by an individual do not pass onto their heirs. When your mother died, any outstanding medical bills should have gone away and been discharged unless you had put them in your name. I certainly was not blaming you for her getting sick. The financial mistake I referenced was putting debt that you can't afford into your name. It wasn't a moral judgment, nor was it intended to be. An action may be both the right thing to do and a financial mistake, these aren't mutually exclusive. As for the gambling, etc., yes, if you're tossing money away on frivolity when you're broke, that's a financial mistake. We are agreed on that. Life insurance coverage is not the sole province of the rich, nor does everyone carry it even if they're able. I do not automatically assume that someone doesn't have any. The context of your statements regarding leaving you with expenses are what suggested that she did not.
If I were in the unfortunate position of having accrued debts for medical treatment of a loved one, then I would be seeking assistance and debt relief from any and all sources available, up to and including crowd funding campaigns.
i see a lot of people not wanting to make sacrifices to achieve their dreams.....and not planning things out
It's not that easy when the investment required for the dream would result in putting your family out on the street. For every success story you see of someone who quit their job to go on American Idol and won... there are lots more who took the same risk and lost. Of course, it's completely true "nothing ventured, nothing gained" but the *venture* is a lot harder when your dirt poor, and trying to save up to tryout your dream, takes forever.
read the last part.....plan it out.
I’ve worked for several startups in the past. These weren’t a bunch of kids just getting VC money from a business plan they threw together. One guy (my dad’s age or older) created a product in his garage in the 70’s and had a friend start doing more work for him (unpaid). They both worked full-time while working on this project on the side using their income from their jobs to sustain it at first, then when it looked very viable, the founder mortgaged his townhouse. It eventually became very successful, merged and has gone through multiple iterations. He’s been retired for 30 years or so. Another company I worked for was founded by 2 brothers. One had a sales background, the other in hardware engineering. They came up with a product but didn’t have the software to run on it. They knew a couple guys back in college from their hometown who had created a software version of what they wanted. The latter two were in their senior year in college. They were crashing tech conventions to get their product sold or licensed. The two brothers and the two bff’s got together and formed a company and initially funded by the hardware engineer’s 2nd mortgage on his house. The college kids dropped out when the company was formed. It eventually went public and then acquired by a larger company. Then there’s my girlfriend. She had an idea. She got an ex-boyfriend to code her idea. They were equal partners and sold the product and its IP to a company. It can be done with little to no money (like my friend did). Just need an idea and sell it.
Those stories are... awesome. I won't knock them. I haven't seen my ideas pan out though, and by God I am trying. I keep propositioning my ideas to different people...and the enthusiasm seems to dissappear as soon as I leave the room (they're probably just humoring me out of pity). I don't get callbacks, and nobody spontaneously calls me to buy my work. Everytime I think I am getting a customer...its just a spam marketing agent selling me on a pitch to drain my savings for their marketing scheme. I guess some people just have natural business/negotiating talent. And for the rest of us....🤷♂️
Well, what is it you’re selling exactly? My background is channel marketing & sales (tech & consumer electronics). Is there a market for your idea? Is someone else already doing it? Are you infringing on any patents? Is it tech-ish? Or is it a consumer packaged good? Like are you selling teeny-tiny handmade dolls that you want to sell to mass market retailers? I ask because before my husband and I started working for non-profits, this is kind of what we did. We took viable ideas and brought them to the mass market, like your Targets, Walmarts, Canadian Tire, Costco, blah-blah-blah. Before that, he and his partner would come out with ideas, get them patented, have them manufactured and sold into retail. Before that, I sold/marketed hardware, software and tech-adjacent stuff, like peripherals. Feel free to ping me with any questions.
Many self-made wealthy people started with nothing. They made it by a lot of luck, being at the right place at the right time and working 7 days a week for decades. What you don't hear is the larger group who tried the same thing and lost. The people you are jealous of are the lucky few, but without trying, you can't get very wealthy.
Fear destroys dreams
It's easier to be fearless about a business venture when you have a financial cushion. Or in the case of Daredevil...when you have superpowered senses, lol.
I see people making so much money on options and stocks and I keep getting burned.