Transcription
This is the Sunday motivational video. Every Sunday, we bring you a different type of video which should improve your life. Today, we're looking at 15 things poor people waste money on.
Welcome to a Lux.com, the place where future billionaires come to get inspired. Hey there, a Luxor's. How exciting is it to have you back for another video? This one, we feel, is going to rub a lot of people the wrong way, but we've gotten used to the backlash. The goal with this video is to shine light on possible mistakes you're making in your daily life that are keeping you from moving forward, especially in the financial sense. We always feel like the majority of people do not have a clear understanding of where their money is actually going. As you go through this list, you might want to check against yourself to see if you're guilty of the same wasteful spending. If you're new here, welcome. Be sure to subscribe and follow us on Instagram at a Lux. So, without further ado, here are 15 things poor people waste money on that holds them back in life.
Number 1: Credit cards. Credit cards are the last thing poor people should be touching. It's like digging yourself deeper and deeper into a hole you'll never be able to escape. Credit cards are used to trade temporary finance for someone's time and livelihood. The moment you go into debt, you're no longer working for yourself. Your life is no longer truly yours until that debt is repaid. Poor people max out credit cards like it's a monthly hobby, and usually on non-essential things. It's easy to get caught up in this financial whirlwind that you'll never be able to escape.
Number 2: Glam and beautification. Have you seen the nails and the haircuts on people who can't even afford to fix their cars? This is one of the most annoying things that we see that keeps people from becoming better. You've worked your butt off the entire week and then reward yourself with a new hairstyle that's going to fade away in two weeks to impress people who are not doing any better than yourself. Ever noticed how almost all rich people have the same simple haircut? Have you noticed how none of the successful women entrepreneurs have diamonds or add-ons to their nails? It's an issue of prioritization. Fix your life and then you'll be able to do whatever you want with excess capital. Instead of throwing money out the window, start fixing your windows.
Number 3: Impulse purchases. No, you don't need six phone cases, the funky socks, kitchen appliances you only used once, and the list goes on forever. You are well aware of what the essentials in your life are, the things you actually need. Everything else is just marketed to you. They are brainwashing you into thinking you need said product despite you only wanting it. The moment you learn the difference between need and want, you'll begin to take control of your life. A study done in the UK showed that the average Brit will spend over 150,000 pounds on impulse purchases in his or her lifetime, while the average American spends north of $5,000 per year. That's a lot of money you could use to make your life better.
Number 4: Food waste. You probably have no idea how much food you're throwing away. People buy what they think they will consume, and nine out of ten times, they're wrong. The average person throws away 40% of the vegetables they purchase, 17% of their dairy products, and 14% of the meat. The average American household is wasting approximately $20,000 per year on food they throw away. The food waste ratios seem to be about the same, no matter if you're poor or middle-class. It's just that it's hurting the poor a lot more.
Number 5: Miracle diets, weird fitness products, and teleshopping. It took you 20 years to get this fad. Do you think you can safely drop 50% of your weight in 3 weeks with some miracle tea you saw some hot twenty-year-old promoting on Instagram or on your TV? The super-ripped people you see in those videos are personal trainers whose job it is to work out 14 hours a day, every day. That's what they do for a living. You don't need a roll-up piano, the Shake Weight, or the Pajama Jeans. How many times do you need to get duped by lame products designed to prey on people looking for quick and easy? The only way to get in shape is to take ownership of the fact that you're out of shape and need to do something about it. You're going to stop eating so damn much, and you're going to go for a walk or run once in a while. That's all there is to it, and you don't have to spend a penny. You don't need a product, you need to work on your mindset. If you're struggling with having the willpower to make the change, go to a Lux.com/freebook and sign up. Once you do, get the audiobook "Extreme Ownership" by Jocko Willink for free, thanks to our partnership with Audible. Listen to it as many times as you need to until you take full responsibility for what's happening in your life.
Number 6: Lucky charms or spiritual items. Isn't it ironic how people without money spend the little money they do have on lucky charms or stones that are supposed to bring more wealth into their lives? You know what would make you $49 richer? Not spending $49 on rocks. And no, we don't care that you call them crystals or minerals. This is not a Breaking Bad episode. Don't even get us started on spiritual items. Even mentioning refraining from a purchase of a crucifix in Latin America or Eastern Europe will get you labeled as a heretic in the eyes of the less fortunate. But it's actually the poor that these organizations prey on to get their hands on the little they do have.
Number 7: Health. Here's the deal with health. It's an ever-increasing dragon that you have living with you. The more you ignore it, the bigger it gets, and the more damage it will do to your life. You don't want to go to the dentist to fix the cavity, you'll have to pay for an implant. You don't want to pay for a checkup, you'll have to be hospitalized if you want to survive. It's cheaper to pay for a doctor's visit than for a funeral. For some reason, the less fortunate think that if they just ignore the issue, it'll go away, and that is not working well for anyone.
Number 8: Games and in-app purchases. I'll let the numbers do the talking here. 70% of Fortnite players spend money in the game. The average amount these people spend for digital items in Fortnite alone is $84.67. Candy Crush was making $3 million a day from people buying extra lives or whatever they use to purchase in the game. The biggest value on this trivial form of entertainment is not the amount people are spending, despite the numbers being colossal, but in the vast amount of time that is wasted. It is super easy to look at your stream numbers and see the hours you put into a single game. If you consider yourself a gamer, it's easy to reach 1,000 hours of gameplay in a year. Some might say those are rookie numbers, but the average wage of the gamer is over $20 per hour. That is easily $20,000 you're leaving on the table, without factoring in the costs of purchasing the game, the console or system, and the remaining in-game purchases.
Number 9: The latest tech. It's weird to look at people who you know are not doing that well financially spend ridiculous amounts of money buying the latest tech every damn year. You cannot afford the new iPhone. You may have the money to pay for it, but you can't afford it. There is a difference. In the same fashion, you don't need a large flat-screen TV when your household obviously needs maintenance. It also boils down to the lifecycle of a product. People who take care of their belongings enjoy using them for longer periods of time, thus saving themselves money in the form of maintenance costs or the upfront cost of replacing it.
Number 10: Balling at the club. It feels good popping bottles at the club, people looking at you, and the champagne is brought to your table. But you know what doesn't feel good? Going back to that low-wage nine-to-five for another full month just so you can feel like that again for a couple of hours. You're not a boss if you throw money around at the club. You're not a boss if your bail is higher than the person next to you. You are the product. Somebody, the real boss, is monetizing your efforts to look like you're living the life in the eyes of people who are just as broke as you are. There's an old saying among the rich that goes like this: "I never see you at the club, and I never see you at the bank."
Number 11: Gambling. There it goes. When people say you got to spend money to make money, they were not talking about lottery tickets. Poor people spend exponentially more money on scratch tickets, on slot machines, and at casinos than everybody else. They all dream of winning big. The average person in Australia loses just under $1,000 per year to gambling. 70% of the UK population plays the lottery on a regular basis. A 2012 study at Yale University found those in the lowest fifth in terms of socioeconomic status had the quote highest rate of lottery gambling at 61%, and the highest mean level of days gambled in the last year at 26.1 days.
Number 12: Smoking and vaping. The same people who gamble are also the most probable to build other addictions like smoking, vaping, etc. Many packs cost more than this, but the average pack of cigarettes costs $6.28, which means a pack-a-day habit sets you back $188 per month or $2,292 per year. Ten years of smoking comes with a $22,920 price tag, and depending on where you live, the cost of smoking only goes up. If both partners smoke or vape, one of you is working an entire month just to cover the smoking expenses. There are roughly 1.1 billion people smoking in the world. One in seven people is a smoker. Vaping is taking over for traditional cigarettes, and companies are seeing higher profits than ever because of this shift. And a Luxor's, if you're looking to be healthier and quit smoking, we recommend "Allen Carr's Easy Way to Stop Smoking." It is a self-help classic with over 20 million copies sold worldwide. It's been a number one bestseller in nine European countries. It outsells all other quit smoking titles combined. And of course, you already know you can get the free audiobook by going to a Lux.com/freebook and signing up, thanks to our friends at Audible.
Number 13: Your bank. Your bank is costing you money. You pay a commission when you put the money in. You pay a commission when you ask them to give your money back. Interest rates are a joke, and depending on where you live, they're not even keeping up with inflation. Putting money in the bank in a volatile economy is costing you money on both the short and long term. Society is shifting so quickly that old lessons about saving money no longer apply. That's why we recommended "Money Master the Game" as the basics for putting your money to work as an alternative to banking.
Number 14: Your taxes. Poor people pay more taxes because they're not creating the same type of value in the marketplace as the rich are. Like it or not, it is the truth. In the U.S., the rich leverage their wealth to create more value, and their state rewards them for that fairly. This is one of those things we covered in our old video, "15 Things Poor People Get Wrong About Money," which you can check out by clicking in the top right corner. We're always shocked to see how happy people are when their tax returns come back and they get money in return. First things first, that is your money. The state is just giving it back to you. Secondly, you've just been robbed because that money doesn't carry any interest. If you were smart with your money, you could be holding more of it in your hand than you currently are. You just decided to give it away to the state for free.
Number 15: Donations. This one is going to be a controversial topic. Here's the truth: when you donate money to a cause, that money doesn't go to the people in need. It goes to paying the salaries of the people involved with the charity. Charities are one of the biggest scams in the world, and they prey on the poor because for some reason, they feel the need to support other poor people without realizing what they are actually doing. Just to put things into perspective, on average, the general manager of the charity, basically the boss of the organization, earns about $250,000 per year as a salary paid by the charity. This amount is averaged between the top 100 charity organizations in the UK. Almost everywhere in the world, you'll find a similar story. Almost 35% of the money that goes to charity is reinvested in fundraisers for the charity, and the spiral goes on and on. So instead of hitting up a telethon, buy some products for the local shelter or figure out how to create opportunities for these people. You know, teach a man how to fish instead of giving him a fish.
Well, a Luxor's, hopefully, this video has been a much-needed wake-up call. We started slow but finished on a deep note. So, a Luxor's, from personal experience or just by observing those around you, where do you feel that people waste money the most? Join the conversation in the comments. And of course, as a thank you for watching this video until the end, here's your bonus fact.
Number 16: Trying to look rich. We touched on this two weeks ago when we said, "Learn it till you earn it." It's better than "fake it till you make it." Let's say two people are given $2,000 each. One of them decides to go to the club and have a blast spending $800. He posts the pics on social media, and people think he's doing really well. The other person chooses to invest their money and gets a 10% return. He now has $2,200. And at the end of the day, one person looks like he's doing well, while the other is actually growing his fortune. The goal is to be rich, not to look rich. Your actions should always come from a place of growth. That's how you escape it. If you're making a decision right now to grow out of your current situation, write the word "GROW" in the comments and take a look for a second. That's your signature that things need to change in your life. Thank you for spending some time with us, a Luxor's. Make sure to LIKE and subscribe so you never miss another video. We also hand-picked these videos which we recommend you watch next. Thank you for being an a Luxer, and we'll see you back tomorrow.
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