Philosophy Tristan on 16 Jul 2008 10:47 am
Why poor people smoke and drink, and why smokers/drinkers are poor
I’ve been reading Rich Dad Poor Dad this week, it’s a book I’ve read before, back in 2004, so I’m re-reading it this week as I’ve been in need of some inspiration.
What I’ve taken from re-reading RDPD is that idea of reducing your liabilities and living costs, and always paying yourself first. I fully understood the idea of passive income, and the various ways of achieving passive income, however, I had fallen into the trap of thinking that I needed to earn more money to be able create spare cash that could be invested.
Another thing that has caught my attention whilst reading the book again, is that concept of people being pushed around by life, with the mark of a true winner being someone who will push back. It strikes me that a lot of people who have been pushed around, find it hard to push back, through lack of confidence or self-esteem issues, and invariably turn to things like alcohol and cigarettes to help them deal with the daily struggles.
And of course, if you go to the pub on a daily basis to have a few pints it will cost you - a lot of money. For example, I went to the pub the other night, had three pints and that came to almost a tenner. If I smoked, I would probably be getting through a pack of twenty a day, which is another £5 a day. So without being an alcoholic or a heavy smoker, you can easily spend £15 a day on unwinding and dealing with stress, which is £105 a week or £472.50 a month.
If you didn’t go to the pub every night, and smoke 20 a day, you could put that money into savings/investments.
It’s this lack of self discipline that can cause financial ruin. It’s no surprise that in RDPD, Robert Kiyosaki states that as a key differentiator between the rich and the poor, the self discipline to pay yourself first and pay your bills last, only spending the income that you’ve generated from your assets.
The more I think about this, the more profound it becomes. Everyone I’ve met who has been wealthy has been a very strong willed person, and everyone who I’ve met who is poor has been almost a polar opposite, always blaming someone/something else for why they have no money.
I can say with all honesty that I’ve been like that, when I was a student, I was always skint. That’s because I didn’t earn much money (I was studying after all), and I went out to the pub or the student union almost every night. And I smoked…
My advice to anyone struggling with their finances is to go cold turkey on cigarettes and alcohol. By not spending money everyday on cigarettes and alcohol, mentally you will feel like you are more in control of your finances. Do some excercise, and do it regularly. I read somewhere that to stay healthy, both physically and mentally, you should walk your dog every day, even if you don’t have a dog.
Lastly, be prepared to push back whenever life pushes you, if you don’t, you will be weakened by each successive knock-back, until you eventually give up.
on 16 Jul 2008 at 8:27 pm 1.Curt said …
Ten years ago I quit smoking when I calculated the yearly cost.
on 16 Jul 2008 at 11:12 pm 2.John said …
IIRC the Automatic Millionaire talks about the starbucks/latte effect. Pointing out that if you drop your £2 latte on the way to work each morning and your £3 sandwich (make your own) you can easily save £4 per day, or £1,000 per year which invested over your working life comes to over £100,000.
Makes you think…
on 22 Jul 2008 at 1:14 am 3.Blogging Down Debt said …
Rich Dad Poor Dad is really an amazing book. He puts so bluntly what people really need to hear sometimes. It has great tips to completely change your life around.
on 24 Jul 2008 at 10:26 am 4.Chris Miller said …
I love the comment that if you missed those coffees and sarnies you could save £1,000 a year. If you were to start this early enough using compound interest or growth from property, you could end up a very happy bunny.
Plus, with the massive amounts of caffeine and salt you would’t have been taking, you could probably live another 10+ years aswell, further adding to you fortune!
on 24 Jul 2008 at 4:23 pm 5.MoneyEnergy said …
Great to see others that also like Rich Dad instead of just beating up on him!:)
I think inspiration is one of the most important things in life. It gives hope, it gives vision, it gives motivation, it helps you change your perspective. Letting yourself get inspired by something can be an amazing process!
I used to smoke, for a few years only, then quit for health reasons. My money problem now would be with coffee. I’m like the red-wine drinkers who rave on about all the anti-oxidants they’re getting in their red wine as justification for the alcohol:)