Yes. Emphatically so. I have to remember this when counseling students, pointing out things even explaining taxes/withholding. I've learned to stop mental cpr on the walking dead.
Recently I was talking to a grad student who was lamenting bills, low pay. I suggested in exchange for a lower return he raise his exemptions and itemize rather than EZ 1040. He freaked out, then shutdown and then turned on law & order on his phone. He then repeated "I'm not going to change my mind." I then pointed out I wasn't trying to change his mind, I was just explaining a legal way to get $200 more in his weekly check. $800 every two weeks not enough for his bills. This would be another $800 plus and still a couple of thousand back from taxes. Its not what you make, its what you keep. There was a moment, true cognitive dissonance where I realized we both realized the opposite idea. He realized I wasn't trying to change his mind about anything.
I realized I was trying to fundamentally change his mind about everything.
I was suggesting that the modality he was operating from geared questioning that an HR person saying put 0 or 1 was only saying that because they had been told so too. No one who didn't do some thinking and investigation engaged money like that. But if you've just got the job, under $40k a year, you're happy.....and scared.
My suggestion of asking why and even taking agency to do differently blew his mind.
The tyranny of poverty is it forces people away from critical thinking.
A construction contractor mentioned taxes and that his preparer hasn't gotten him back a return in over 20 years. But costs $200 to prepare the taxes and last year the IRS took another $500 on top of the 38% fed and 15% state and 9.7% fica. I suggested he stop treating the preparer like an oracle and go to somewhere like hr block and treat them like a partner, even better a knowledgeable but directed employee. He froze.
I saw the same cognitive dissonance brain jerk in him.
A third employee (its a big campus/building) felt he was paying too much but was scared of questioning his tax guy. Scared! When I asked him whose money it was he hesitated then said his----and got my point.
All three examples make between $30-75k a year but have a poverty mindset. It can feel like being in the bottom of a slave ship if I get into conversations. Honestly I find myself being selective about company at work or just disappearing to go out for lunch.
Harsh reality that I realized a decade ago: Not everyone will make it. Some people are grist for the mill, chum for the rapacious hunger of capitalism through consumerism.
I estimate 50% of blacks over the next 100 years and 25-50% of whites and Latinos based on family histories. 10% of Asians. 50% of native Americans.
The real hot entrepreneurial business of the future is poverty management----real estate, job centers, food supply, entertainment sources----oh, wait that's kinda true now.
The first coworker is job-hunting but has had no success in 3 months because he's chasing a number. So say he's offered $40k a year. He leaps from $32k to $40k without understanding that he's just gone from the 30% tax.bracket to 38%. So his net before was around $19k, it would then be an extra $100 a week. $200 biweekly. Or a real gain of only $4k. A year later, maybe two until he's dancing with the credit devil to make the $40k feel like more. Because he's only getting $25k in cash, taxes, not counting sales tax and financial fees, another 20% "invisible tax".
He would leave $32k for $40k to ultimately make maybe $1k more. But he'll look at the salary number and mentally boast he's making $10k more! And in order to validate himself---a Black reaction to social discrimination, he'll lease or car loan buy a vehicle and the $25k car will make him feel like he's making/worth $65k a year. Then you know loan servicers sell your info to banks right? So here comes the Chase, Citi, TD Bank $5000 Visa....because you deserve it. Actually its because you have been flagged as a sucker.
Now your girlfriend or boyfriend becomes a financial necessity....so you shack up . Hetero world you spend enough no married time sexing, there will be a baby/babies. A child is now a flat $12,000 cost per year if you stay together, 17% of your adjusted gross WORTH not simply salary, courts have seen men get McDonald's jobs . Courts have amended how they measure income/worth.
The bonus of LGBT relationships is generally a planning for children and a lack of legal marriage. Dudes I've, shacked up, just child support, married and divorcing, alimony.
The child support Armageddon is real, keeping people in poverty.
Two other coworkers, 1 has one daughter, finished paying $400 a month after 21 years, in August.
Another was a grandfather by the time he'd paid off out of arrears for three adult children.
Back to Dude at $40k and inevitable breeding.
. $30k in car, credit and another $10k plus in miscellaneous added to your salary is $100k, and 17% is $17k.
Without the ability, skill to recognize financial management and how money works, money itself will keep him in poverty.
And he desperately is seeking a girlfriend, he'll have a couple of kids before 35. Probably broken up by 40. Paying child support until he's 50. Another 17% tax.
Which means he'd have to realize a 20% salary increase yearly to meet childcare cost for 18 years plus 3% in inflation.
Focusing on survival and using sex and entertainment as distractions and then sleep, I realized talking to him he was one of the Future 50, the direct opposite of the Talented Tenth. But by the time he realizes it, if ever consciously it will be too late.
But the unconscious mind speaks first and what did he say after my discussion with him.....?
"I won't change my mind...."
I heard him.
I'll never interrupt that feedback loop with anything above 6th grade conversational drivel again.
He announced that fundamentally the infection of poverty has consumed the host rendering him powerless.
It’s the “now” mindset. People don’t think long term but paycheck to paycheck.
I was raised this way. I worked at Walmart and was not happy. MY parents told me I should be happy to have a job. I bought into this up until I turned 26 and had a WTF moment.
12 years later, a lot of reading and learning and I am at $85k. No longer trying to get a large return at the end of the year because that is just an interest free loan to the government. Instead, I try to break even in order to be able to put more money into 401k and get even more tax breaks.
Now I am trying to learn short term investing to create a 2nd stream of passive income. Money should work for you not the other way around.
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