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Poverty is a Choice

By Derick Gant,
Smart Money Management, LLC
The Truth Contributor

Your outlook on money and life is based on the images and beliefs that you have been exposed to and adopted. No one gets to choose his birthright, but we all get to choose our mindset.

Poverty is the result of the choices a person or generation has made. It begins in the mind of the beholder and is controlled by the daily choices that aggressively captivate the benefactor. In some generational instances, poverty may be instilled and taught to newbies simply as a way of life, possibly survival.
 


Derick Gant

When your caretaker, parent, or provider says this is the way, that is the way. Period. The good news is that as an adult, you get to change your mind and your life.

Let’s agree that we live in a nation that has immense abundance in wealth and opportunity all while unequally distributed or acquired. In life, poor begets poor and wealth attracts more wealth. The reality is that the rules to acquiring more wealth appear to be kept under cover mired in secrecy, lock, and key while poverty is open and advertised to all.

The problem is there are existing confluences of forces in life that work against us. Considering that 50 percent of working families have less than $500.00 in savings, they are only an emergency away from a significant crisis. Nowadays, solving personal financial problems begins with borrowing against future income or taking money on credit.

The enemy has surfaced and he owns a payday loan company. On average, payday loans charge 15 percent per advance and the spiral death trap usually occurs on multiple checks for unending months. If used for a 12-month period, the total expense can be over 360 percent of the amount borrowed.

The other foe, charge cards, traps 38 percent of families to the tune of $16,000 per balance carrying household. Borrowers are often left paying three or four times the price of any purchase due to the high interest charged and the inability to pay the balance in full at the end of the month. Lenders are doing everything they can to increase access to credit because low credit scores prevent consumers from qualifying for credit loans.

Recently, FICO, the Fair Isaac Credit Organization announced FICO Score XD (XD stands for extra data) which will help consumers increase and obtain better credit scores. The changes include adding utility payments, cable bills and other widely used expenses to potentially increase currently lower credit scores.

On the surface this sounds wonderful and is a great way to feel better as a citizen with a good credit score. You are now eligible to be in the game. The reality is that without a change in habits, education, and mindset, there will simply be more people in debt.

Another major force in motion that blinds the senses and alters buying patterns is the BILLIONS of marketing dollars poured into our subconscious mind. Advertising is designed to target specific individuals into deciding to purchase an item that fills a suggested need. This is done by associating a product with love and sex, peoples’ most basic desires. Advertisers also use fear and personal messages.

Ever see the commercial where the guy is half man half horse with no shirt on while glistening in the sun? He tells ladies to look at their mate and then look at him. This goes on several times and believe it or not, it is a deodorant commercial. Have your guy use this deodorant and he will magically be gorgeous and you will love and keep him

To sum up the problem would simply be to say that we have been inundated into becoming and living as consumers not investors. Poverty is a choice because we choose with our dollars to consume instead of investing. Renting instead of owning. Following instead of leading. Consumer Mentality equals poverty. Remember, poverty is the state of being inferior in quality or insufficient in amount.

Rising out of poverty begins with the recognition that living pay-to-pay is unacceptable and no longer tolerable. The first ingredient is deciding that the consumer mindset has worn out its welcome while replacing that with an investor mentality. A mentality that demands that every dollar possible will be allocated to maintain lifestyle needs or increase assets.

The process of developing an investor mindset includes budgeting, education, aggressive action, and most of all, consistency. In most situations, budgets are a reminder that we are likely living over our means and by how much is not of interest. It is the mirror to our money and we are afraid of what we might see.

What most fail to realize is that if you do not look in the mirror, you cannot see what you need to change or fix to look better. Looking better makes us feel better and feeling better leads to more confidence. Confidence produces greater results. Society pays for results.

Depending on your consumer mindset, solutions are just a Google away. Investing in education can begin in a classroom or with a computer click. The variety of access to solutions is vast and available to anyone who truly seeks to learn. Reducing your $100.00 cable bill and investing those dollars in a money management or a carpentry course is an investor’s mindset. If you are going to spend money to watch something, make it something that improves your life.

It takes relentless fortitude to pick and remain on the right path. If it were easy, the average savings balance would be well over $10,000. Sounds like a lot of money! Did you know that according to the IRS, the average annual tax refund is $3,120.00.

This means that if you lived on your actual bring home paycheck and saved your annual refund, you could have $10,000 in approximately three years.  Poverty is a choice.

While investing sounds exciting, it takes a long boring path to acquire enough money to get out of danger. Building wealth is sort of like watching paint dry, you like the new color but can’t stand waiting to hang pictures and return the furniture to its rightful place. Part of investing is creating momentum over many years and consistently making wise monetary decisions. Create the habit of asking if the next dollar spent is an asset or liability. Increasing assets means financial freedom while adding to liabilities keeps you in bondage. Live Free.

Sources:

Loans typically cost 400% annual interest (APR) or more. The finance charge ranges from $15 to $30 to borrow $100. -

-      http://www.paydayloaninfo.org/facts

Average American Household Debt: $5,700. Average for balance-carrying households: $16,048 and 38.1% of all households carry some sort of credit card debt.

-https://www.valuepenguin.com/average-credit-card-debt

            -http://www.census.gov/people/wealth/data/debttables.html

            -http://www.federalreserve.gov/releases/g19/default.htm%20

            -http://www.federalreserve.gov/econresdata/scf/scfindex.htm

            - Robert Harrow- updated on March 29, 2017

Almost half of Americans would not be able to cover an unexpected expense of $500 or less. About 25% of America would not be able to cover even $100. 23% of America says that they don't have at least $100 in their emergency fund.

-https://www.creditdonkey.com/average-american-savings-statistics.html

            -Rebecca Lake- Updated on May 18, 2017

Contact Derick Gant at dg@derickgant.com or 866-500-7717

 
   
   


Copyright © 2017 by [The Sojourner's Truth]. All rights reserved.
Revised: 08/16/18 14:12:38 -0700.


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