By Terry Carter, Editor

A poor man knows only that he needs money desperately while a rich man has options. The poor man is often backed into a corner either to receive medical care (aka Wake Up! Obamacare does not provide affordable medical insurance for anyone paying a deductible) or feed his family (Damn! Food prices are still sky rocketing). 

What defines a poor man? To begin with, if you can save 10 percent of your income each month, your cost-to-income ration is at least favorable. That demonstrates discipline on your part. But being poor suggests more than a low income — and it’s subjective.


For my friend George or most veteran engineers/executives of the oil and gas world, poor is a state of mind when your annual income has been six figures for more than a decade. $50,000 may be broke for them, but it would simultaneously be a gold mine for a janitor, receptionist. 

It all depends of your spending habits (whims), insurance and other expenses and how it compares to your income. If the income falls, the whims (aka glitter toys) go first. But when you have stopped the following, and you still don’t have money for rent, groceries or medical insurance and/or medicines — all of these are items I say are necessities — then you have reached the poor category in my book.

When you have done the following and still cannot find money for your savings account, you are temporarily among the poor: A) Stop eating out at all; B) Disconnect cable or satellite TV; C) Stop professionally grooming your pets; D) Request and purchase only generic medications where possible; E) Use the lowest-priced gasoline on your route home; F) Re-invent your canceled gym membership by walking at the park; G) Divide every check into bills due now and mortgage/rent due on the 1st; H) Take the ATM withdrawal cash of your wallet and put it back in the bank — whether it’s coffee, doughnuts, gambling, cigarettes or liquor, it’s a waste if money is this tight.

So how did you do? I have used, at times, each of these techniques to survive financially in my life, and so far, my spouse has not shot, departed or fired me. We have become home owners and made upper-middle income cash. But I have also been unemployed for months, in the hospital for others and just made bad choices. No one makes perfect choices, however…

If you fit the general “poor” financial picture at this moment and have not implemented the starting suggestions listed above — those are just a measuring stick to determine how poor you currently are — plug them in. They work for all ages, sizes, sexes, styles, backgrounds. 

Plug those in, use them daily for 1-2 months and monitor your balance carefully. Is any deduction showing up, and you are not aware of its origin, timing? If so, put an end to it immediately or close your bank account. I recently eliminated an automatic account renewal by Active.com that started when I signed up for a 5K racemore than a year ago. I was shocked to find it — it is a byproduct of online shopping. So be careful having any site remember your credit card.

After careful evaluation — and yes, I know some of you are shaking your head YES already — you may know these changes and others are still leaving your balance in the red. Therefore you feel poor — trust me, it’s temporary if you options exist. Two quick choices here, and both rest solely on your shoulders: A) Get Serious about finding a higher-paying career;  B) Either sell the extra items you are no longer using (aka: Art, old equipment, gear, collectibles) or step up with a side gig like teaching dance lessons, singing or being a DJ. Even $200 a month can save you from sleeping in your old truck with no heat nor A/C.


Imagine you make $100,000 annually and have for 20 years. It’s a safe bet you would have upped your spending on vehicles, perhaps a home and non-essentials like a pool, boat or condo if you currently make half of that or less. Based on the American Dream of generations gone by, owning a home would be a natural purchase for most people with this 6-figure income. As would a nice newer vehicle every 4-5 years, like a Lexus or Infinity. 

Reality check: After a modest home purchase (30-year mortgage/ monthly payments between $900-1,800) and a upscale vehicle, the 6-figure income now requires you to live on the same  budget as a less well off person with a used Honda and living in an apartment. The new car/SUV is costing about $700-1,200/month depending on your downpayment. Combined you are spending about $2,500+ of a monthly income of $8,000 on those two items. And one excess leads to another. I’m hoping, if this is you, you have a $2,000-$3,000 minimum going to your 401/IRA.  Those items aside, Mr. Six figures now has about $3,500-$4,000 to buy the necessities and service the pretty Lexus, which requires pricy service work that starts at $200+ for oil changes.

You see those vehicles in your garage each week, and you know the people who climb out — whether married or single — likely used their credit to buy those fancy rides when a Honda or Toyota would have worked for half the price.

Credit cards account for the downfall of even the wealthy people in your world. When your wealthy neighbor has his vehicle repossessed or loses his home, the options are few: A) A primary income vanished; B) Mortgage company screwed you; C) Lucky Significant Other has departed; or D) The World as you know it is about to end.

Either way, even billionaires can identify with broke. Donald Trump was pretty close once. Back on Earth, however, any of us can feel broke if we can a pay cut, lose a job (even on an unpaid day off) or transfer to a new position, only to discover the pay rate  or hours worked does not benefit you.

But you are not truly broke if you can still pay for gas, groceries, your abode, medications and a few other items. Bottom Line: We can all be dead broke within days, weeks or 3-6 months unless we are millionaires. And studies prove that very, very few of us save even $500/month, and even fewer still have 3-6 months of income if employment or then niche field falls apart.

More on this another day…