Give Money to Rich, Not Poor

[Sumyr]

It took me a while to understand this concept. Remember when Warren Buffet one of the richest men in the world said he would leave his millions to Bill and Melania Gates instead of giving it to the poor. For the life of me, I couldn’t understand it – at first. I mean why give all that money to someone who already has a lot of money. He wanted to give it to someone that knew what to do with it and would put it to good use. At that time, it still didn’t dawn on me.

Then it hit me! (like this morning) I thought about all the people I knew who were poor or living on meager means. I thought about how even after they were blessed with a lot of money (some millions) how after a few years, they returned to their same impoverished lifestyle. All blew or squandered the money they were blessed with.

Some personal examples: This lady in our neighborhood won a Phen-Phen settlement of about 3 million or so. She is now broke. A lady my moms works with was left a couple hundred thousand from her husband’s death. She now works for $7 an hour trying to pay the mortgage off when she had the money a few years ago. More recently my husband’s friend got an insurance settlement from his brother’s death a month ago. He’s spending a lot of money, but not investing or saving like he should. He too in 2-3 years will be impoverished again.

The reason they blew this money was because they weren’t taught how to properly manage finances and invest/save a percentage of their money. Seems like the more you give “some” poor people the more you have to give as they will always have their hand out. We’ve all heard of the “teach them to fish and they will eat for a lifetime”. Well teach them to save/invest and they will have money for a lifetime. Your thoughts?

[MzKwietStorm]

I definitely understand where you're coming from. I watched a show on some of the people that won the lottery and it amazed me how they blew their moneywithin a 3 to 4 year time period. One guy won like 300 million and he passed away 2 years later. His family didn't have enought to bury him and that's a shame. It's not so much as being raised with money management, it's about common sense and what you know you need to do. My mom was TERRIBLE at managing money and I saw that and I learned from that, and I made sure that I would make better financial decisions than she did. If I were to receive a large settlement of hit the lottery, of course I'm going to do something for myself, like buy a nice house, but I'm also going to invest because my house may be paid for, but I still have to pay taxes on it and I'm still going to have other bills to pay.

[robbboy2003]

You pretty much stated in your last paragraph,what would have been my argument to this sis. Less well off folks haven't been taught,or had the experience of dealing with quite alot of money.

There are a few,who would be good candidates for a windfall however. These are usually folks,who pay their bills on time,and or conscientious. Folks aren't taught dealing with marriage,or childrearing,but some prosper at it,while others don't.

Yes, a understanding of economics,or business what have you would help. I feel that there are folks,that would handle it poor,as well as if they were lucky enough to be well off. I feel anyone could prosper with a little common sense. Just my thoughts young sis very good post!

[Sumyr]

MzKwietStorm: He blew $300 million - dollars!?!?!?! How in the hell do you blow $300 million???? This is soooooo sad. If you only got $1 million, invest at least 1/4 ($250,000). You could just spend the interest in five years on expenses and leisure. If you get at least 3% interest, over 5 years that is $37,500.

Robbboy: This was my reasoning for now understanding or at least trying to understand why he (Warren Buffet) didn't just give it all to the poor - they aren't educated enough in financing to handle that much money.

I'm really afraid for my husband's friend. In a few years, he will be back to nothing. I want to talk to him, but I'm not even suppose to know as when he showed my husband the receipt from the bank deposit, he made him promise not to tell a living soul. But how do you let someone just squander away that much money. I told him to talk to him and tell him to invest some. But he said if he does he will know he told me as he doesn't talk like that.

[Gorilla]

I can agree with some people living in poverty might not have the skills necessary to manage money very will, but I can not really picture the well off making their needs a priority in decision making. This problem doesn't seem like it could not be overcome with people doing something as little as volunteering a bit of time. If I'm ever in a position to leave some wealth towards a good cause, I'd personally pick a trusted public organization with a proven track record, policies for transparency, and thorough auditing protocols.

Nice topic.

[matrixone05]

I can understand the concept. Bill Gates has a large foundation that gives away lots of money daily. By giving it to him, he probably knows it will be funneled to people and causes that need it. He in essence is giving it away through a middle man.

I had an uncle that won a large settlement from FREON, because he lost an eye when a can of Freon exploded in his face. He was the reason they put warning labels on the can. All of his money was gone in less than 3 years as well and he didn't pay off his house either. Fortunately for him, he was on permanent disability from Chevrolet, where he worked when the accident occured and he continued to have an income until he died a few years ago.

[Sumyr]

Gorilla: That's a good idea to funnel the money into an established, trusted organization. Most people think in the "here and now" and are not worried about tomorrow. I know we are told to take life one day at a time, but what happens if tomorrow does comes. We should all be prepared.

Matrixone: It seems we are hearing more and more about people being able to pay off their home mortages and not doing so. My mom says she looks at the lady she works with everyday and shakes her head - wondering how could you have not paid your house off. This lady spent it all on the young men "that all of a sudden showed interest in her old @ss". They were interested alright - until the money ran out, they left with the money. Now, she's working for a job that only pays her $7 an hour.

I don't know what's worse that some of these people lived in poverty to begin with or that they had the money and was well off for a while and are now back to poverty. Unless it was medical expenses that caused them to loose all this money, I can't sympathize. Period. I say that but you can't be held accoutable for what you don't know. And some of these people really don't have a clue.

[pink_panther]

Originally Posted by MzKwietStorm

One guy won like 300 million and he passed away 2 years later. His family didn't have enought to bury him and that's a shame.

I have a hard time beliving that. What did he do, did he use 1000 dollar bills as toilet paper?

[Samoon]

Sumyr,

Thank you for this very informative post. I have long advocated our black parents teaching our young about financial literacy/money management from the cradle on up. Unfortunately, as MsKwietStorm has pointed out, "generational money management" is a problem in many families. For many, it IS a repetitive practice, but can be stopped with knowledge and know-how. And evidence will illustrate that in many school systems of poor, inner-city areas, teaching entreprenuer skills are NOT at the top of the list from grade-school throughout high school. And this should be mandatory.

For example, when we look at all of the "red-lining" that is practiced towards minorities, with an emphasis on African-Americans? We need to pay attention to that. Red-lining is but one of the many variables that black people face in discriminatory practices. Because of perceived stereotypes, it is EXPECTED that many of our people are not responsible in meeting financial obligations. Our children DO learn what they live. That being said, then you know that as parents, you must BE the example that your child(ren) can follow. A smart parent is one that will seek out information in helping them to become financially savy. Books are free at the library. Community work-shops are oftentimes free. Classes may be offered at Community Colleges, etc. Just a few examples. In short, information IS out there, it is up to an individual to get it. The best excuse one could offer up in not being informed is...well an excuse.

If an individual is not financially literate, then yes, I agree with the likelihood that a "windfall" of money will, in the long run, prove to be detrimental.

(Preaching, but what the hell) Lastly, but VERY crucial: "VISION." I have noted that with many of our people, many were never TAUGHT to have vision. Feed these children! Make our children hungry. Give them a chance to realize thair dreams and aspirations. And a parent does not have to be a rocket-scientist to accomplish this! It is imperative that parents NOT be limited in THEIR vision. What behooves me are children that want designer-threads, the bling, "tangents," etc. and generally this is a telling attitude...of what is really going on at home. WHY would an individual want to have so and so's name on their body...WHAT has so and so done for YOU and your community lately? Folks, many of us DO have it backwards. That "material therapy" is just that ONLY--material therapy. It provides no economic empowerment, etc. And with a mentality such as this...how long would it really be before a windfall of money played out? Just food for thought.

Please. Help others that you know are victims to realize and break this vicious cycle---for it does hurt our communities in that there is no empowerment. All, be well.

[MadameX]

Originally Posted by Samoon

For example, when we look at all of the "red-lining" that is practiced towards minorities, with an emphasis on African-Americans? We need to pay attention to that. Red-lining is but one of the many variables that black people face in discriminatory practices. Because of perceived stereotypes, it is EXPECTED that many of our people are not responsible in meeting financial obligations. Our children DO learn what they live. That being said, then you know that as parents, you must BE the example that your child(ren) can follow. A smart parent is one that will seek out information in helping them to become financially savy. Books are free at the library. Community work-shops are oftentimes free. Classes may be offered at Community Colleges, etc. Just a few examples. In short, information IS out there, it is up to an individual to get it.

If an individual is not financially literate, then yes, I agree with the likelihood that a "windfall" of money will, in the long run, prove to be detrimental.

(Preaching, but what the hell) Lastly, but VERY crucial: "VISION." I have noted that with many of our people, many were never TAUGHT to have vision. Feed these children! Make them children hungry. Give them a chance to realize thair dreams and aspirations. And a parent does not have to be a rocket-scientist to accomplish this! It is imperative that parents NOT be limited in THEIR vision. What behooves me are children that want designer-threads, the bling, "tangents," etc. and generally this is a telling attitude...of what is really going on at home. WHY would want want to have so and so's name on their body...WHAT has so and so done for YOU and your community lately? Folks, many of us DO have it backwards. That "material therapy" is just that ONLY--material therapy. It provides no economic empowerment, etc. And with a mentality such as this...how long would it really be before a windfall of money played out? Just food for thought.
Please. Help others that you know are victims to realize and break this vicious cycle---for it does hurt our communities in that there is no empowerment. All, be well.

Well Stated my sista. All these issues that you've touched base on are critical in our community and need to be addressed.