How much more expensive is it to live poor than rich?

Question

I wonder if there has been studies to show how much more expensive it is to live poor than rich?

For example:
- Poor pay interest in credit card, rich pay credit card instantly and get the rewards.
- Poor pay high prices for small items, rich pay high price for bulk items which in turn costs less overall per quality.
- Poor rent, rich own houses and put monthly payment into equity.
- Poor borrow money paying interest on student loans, rich go to best school with no debt at the end.
- Poor tend to eat worse and have more health problems than rich which ends up costing more.

Some items paid over time end up costing twice as much. Bottom line is poor people pay a lot more than rich people and many times go into bankrupcy just trying to live normally. A rich person looks at the poor person's monthly rent and yearly income and wonder why the person can't live. It's because the cost to poor people, that rich people do not have to go through, is so great that it cripples them.

Answer 1

I make about 20k a year so I'm far from rich. However..
1. I own my home, and no I didn't inherit it. I bought a place I could afford, and paid it off quickly by doubling my principle payments. I did this, by not squandering money on crap like flat screen TVs and car stereos. I even went 2 years with no TV hooked up, so I could put that extra $40 a month onto the house note.

2. I don't have credit cards, ergo I do not pay interest. If I want something that badly, I'll save up the money for it, since I don't charge myself interest.

3. I eat very well, because I cook at home rather than eating out all the time. I buy healthy food, and I also grow a lot of my own veggies and whatnot. I did that when I lived in an apartment too, on my tiny little patio, in a bunch of 5 gallon pickle buckets, so anyone can do that.

4. I buy a lot of stuff in bulk, like toilet paper, paper towels, etc. Gotta love Sam's club. Again, this goes towards setting money aside so that I can go on a big grocery binge once a month, rather than nickle and diming it every week.

It's all about managing your money wisely. I think a lot of so called poor people are poor because they're crap with money management. They refuse to go without 100 channels on Dish Network, or those bi monthly nail appointments, or that gas suckin SUV. They charge charge charge like it's free money, and credit cards are the fastest way to ruin your finances... believe me I learned the hard way back in my early 20s.

Answer 2

Your approach does not address earning ability nor efficiency. In countries that are under-developed, most of a person's time (everyone gets 24 hours, rich or poor) goes toward subsistence. Food, shelter, clothing, etc.

In industrialized and developed countries, very little of a person's time goes to these tasks.

To pick some numbers, compare the poor who make less than $15,000 annually and don't even pay income tax to the middle class which makes $150,000 annually. The expense difference therefore is $135,000 per year for the poor.

Answer 3

That's some serious stereotyping you got there, but yes, there have been studies.

It is true that poor have to pay more - for groceries for example to cover theft in bad neighborhoods, convenience stores shopping if they can't get transportation to a grocery store, etc.

Not all poor people use credit cards, and rich people waste a lot of money on items they don't need.

Answer 4

You said it all right here,my friend!You are absolutely correct.
I have been in bankruptcy & lost my home due to the high cost of loans & just trying to feed my two kids!
The rich are self absorbed & ignorant of how just living impacts the poor.
Everyone wants to be rich also,which causes alot of problemsWe all want nice furniture,nice cars,our own home,fine clothes etc...
I am living proof that even if you own your own home,if you are poor,you still get bossed around & told what you can & cannot do with your own property.I walked off from mine because the struggle became too much!

Answer 5

But rich are taxed more and are not allowed to participate in Roth IRA's or tax deductible IRA's. Rich do not get special loans for their houses like poorer people do. Rich people cannot deduct student loan interest.

There are minuses to having more money too.

Not having as much money may make life different, but it's possible to save and elevate yourself via wise budgeting, investments and better jobs (better education via student loansor grants).

Answer 6

um... well technically poor don't have money to be buying luxury items like big houses, so that's why they need to rent, if they had a lot of money at one time they would probably buy a house or a car, but they have very little money and they need to spend it on essential items. but yes, you have a good point. ☺

Answer 7

It is immense, we have been struggling to make it and are not ever able to get to a place where we are not teetering on the edge of survival. We are frequently told that it should be easier, but very few people understand it the way you do.

Answer 8

ABOUT $100,000 SHEKELS A YEAR.

Answer 9

Well said....thank you.