Read on Twitter
6 Reasons Why Being Poor Costs More Than Being Rich
The 5th is the most important
/THREAD/
The 5th is the most important
/THREAD/
1. Financial Services
Most people consider it normal to have:
• A checking account
• A saving account
• A debit card
• A checkbook
But it becomes complicated for low-income people
Most people consider it normal to have:
• A checking account
• A saving account
• A debit card
• A checkbook
But it becomes complicated for low-income people
Once your account balance falls below a certain threshold (usually around $1,200 to $1,500) the bank will start charging you monthly maintenance fees
And if your balance is not enough to cover a purchase they charge overdraft fees for every transaction
And if your balance is not enough to cover a purchase they charge overdraft fees for every transaction
Also if you withdraw from out-of-network ATMs you maybe pay a $1-$3 fee
This may not seem much if you withdraw $100s at a time
But for those living paycheck-to-paycheck with not much left in their account, that's not an option
This may not seem much if you withdraw $100s at a time
But for those living paycheck-to-paycheck with not much left in their account, that's not an option
Withdrawing small amounts every few days will incur a lot of ATM fees and charges
These add up very quickly
The basic banking services that are free for the rich, come at huge costs for the poor
That's one of the reasons low-income people avoid banks
These add up very quickly
The basic banking services that are free for the rich, come at huge costs for the poor
That's one of the reasons low-income people avoid banks
But even that comes at a cost
They still have to pay fees outside of banks to
• Cash a paycheck
• Buying a money order to pay the bills
• Mail money orders to pay bills due soon
These services are completely free with a bank account and a mobile banking app
They still have to pay fees outside of banks to
• Cash a paycheck
• Buying a money order to pay the bills
• Mail money orders to pay bills due soon
These services are completely free with a bank account and a mobile banking app
2. Loans
Getting a business or mortgage loan from a bank with low interest seems easy if you have a high credit score
But what about those with a bad credit history, due to missed bills, an eviction, or unemployment?
Getting a business or mortgage loan from a bank with low interest seems easy if you have a high credit score
But what about those with a bad credit history, due to missed bills, an eviction, or unemployment?
Well, their best option would be a high-interest credit card
Or even worse, a payday lender that charges interest of up to 800%
Or even worse, a payday lender that charges interest of up to 800%
3. Food
Having many affordable options to buy food and groceries might seem ordinary in your neighborhood
But that's not always the case
Big retail chains are notorious for avoiding poor neighborhoods, also known as "food deserts"
Having many affordable options to buy food and groceries might seem ordinary in your neighborhood
But that's not always the case
Big retail chains are notorious for avoiding poor neighborhoods, also known as "food deserts"
This leaves poor people with two options
• Go by car (if they can afford one) to one of the big stores and pay more for gas
• Shop at the local convenience stores that are much more expensive
Either way, shopping costs more for low-income families
• Go by car (if they can afford one) to one of the big stores and pay more for gas
• Shop at the local convenience stores that are much more expensive
Either way, shopping costs more for low-income families
4. Housing
Paying 2 months rent in advance and giving a security deposit might seem like a no-brainer
But what about those who don't have that money set aside?
Their best next option would be to stay at a low-price extended-stay motel that doesn't require so much cash upfront
Paying 2 months rent in advance and giving a security deposit might seem like a no-brainer
But what about those who don't have that money set aside?
Their best next option would be to stay at a low-price extended-stay motel that doesn't require so much cash upfront
However, on a yearly basis staying at a motel will cost significantly more than renting an apartment
Besides, motels don't have all the basic amenities, like kitchen and laundry
This leads to extra costs for eating out and using laundromats
Besides, motels don't have all the basic amenities, like kitchen and laundry
This leads to extra costs for eating out and using laundromats
5. Inflation
The lower your income, the more your monthly expenses are affected by inflation
The reason?
Inflation has the biggest impact on:
• Food
• Housing
• Transportation
These make up the majority of income allocation for poor families
The lower your income, the more your monthly expenses are affected by inflation
The reason?
Inflation has the biggest impact on:
• Food
• Housing
• Transportation
These make up the majority of income allocation for poor families
And to make things worse?
Rich people can invest in assets that can protect them against inflation
• Stocks
• Real estate
• Cryptocurrencies
On the other hand, poor people watch inflation eat away their purchasing power year by year
Rich people can invest in assets that can protect them against inflation
• Stocks
• Real estate
• Cryptocurrencies
On the other hand, poor people watch inflation eat away their purchasing power year by year
6. Decision making
When you have to constantly worry about
• Paying rent
• Paying your bills
• Putting food on the table
You experience decision fatigue
This does not allow you to think clearly when you make other important decisions, like taking a high-interest loan
When you have to constantly worry about
• Paying rent
• Paying your bills
• Putting food on the table
You experience decision fatigue
This does not allow you to think clearly when you make other important decisions, like taking a high-interest loan
To summarize:
Being poor costs more than being rich when it comes to:
1. Financial Services
2. Loans
3. Food
4. Housing
5. Inflation
6. Decision making
I hope this thread helps you appreciate all the things you take for granted and be grateful for what you have
/END/
Being poor costs more than being rich when it comes to:
1. Financial Services
2. Loans
3. Food
4. Housing
5. Inflation
6. Decision making
I hope this thread helps you appreciate all the things you take for granted and be grateful for what you have
/END/
If you liked this thread click below and retweet the first tweet, and follow me to stay updated https://twitter.com/itsKostasOnFIRE/status/1387756618536919044?s=20
Check below my master thread with all my threads on
• Finance
• Investing
• Stock market history https://twitter.com/itsKostasOnFIRE/status/1345790210441928708?s=20
• Finance
• Investing
• Stock market history https://twitter.com/itsKostasOnFIRE/status/1345790210441928708?s=20
