Why Being Poor Is Cool; How to Make Yourself “Poor” Automatically

Are you looking to fit in? While everyone is complaining about money troubles, you can automate your investments, essentially making you as poor as your peers (at least in available cash).

Why is it socially acceptable to tell people you’re poor? Don’t get me wrong, I love when personal finance bloggers make debt announcements. These announcements take courage. It’s awesome to see someone working their way out of debt. But, for most people, being poor is a way of life and they almost enjoy venting their problems to the world. All of my life, it’s been almost cool to go around shouting about your money troubles. So, of course, I’ve always wanted to fit in — to some degree. But how can you fit in with the poor crowd without actually being poor?

Eureka! I make myself “poor” by automatically investing the bulk of my money into equities. I’ve been investing since I was 10, but putting it on autopilot assures I won’t hold back any and, as a result, spend needlessly.

Next time your buddy says: “Hey, man, you wanna go in on buying an Xbox?”  You can reply: “Sorry, bro, all my money’s gone!” Instant respect gained!

P.S. Don’t really say, “bro.”

Autopilot Investing

I invest a large portion of my money, so I never really have a bunch of cash laying around. I used to joke with a girlfriend that I didn’t have any money because I spent it on my mutual fund expense ratios. To which she would say: “That’s not really spending it, Will.”

Right now, I save 85% of my income. Most of that gets invested in equities. I save 50% in my Roth 401(k), 10% into my Employee Stock Purchase Program, $5,500 annually in my Roth IRA, and the rest of what I don’t need to live off of goes in a taxable account.

So, essentially, I’ve severely restricted my available cash, and, thus, my money-wasting possibilities. This helps keep me stay on track with my spending and also helps me blend in with the poor crowd.

If putting money away yourself each month is more than you can get motivated to do, these days there are apps that will truly put you on autopilot. Stash gives you $5 to sign up, and after that you can set up your investment account to automatically withdraw a set amount from your bank account each month. Don’t get investment terms? Stash puts them in regular English. Acorn is another option that’ll also give you $5 to sign up. Acorn rounds your purchases on linked cards up to an even dollar and puts the change into your investment account. You won’t even notice that you’re saving.

How to Be Poor for Real

Do you want to be poor? My advice: Rent a Ferrari while your credit is still good and promptly park it in a lake. Follow that up with replacing your toilet paper with “hundies” — yes, even in the guest bathroom. Next, you can use nail polish to paint your bedroom walls. And, finally, BASE jump in a national park — to the tune of a $2,000 fine.

In Summary

I don’t really suggest you pretend you’re poor just so you can fit in with everyone else. But reducing your liquid cash to a lower level is smart and it can help you match lifestyles with some of your peers. Engineering a life where you have less liquid cash can be a great thing. I recommend you automate as much of your income as possible, while still maintaining a high quality of life.

Suggested Next Article: How I Spend Just $75 Per Month on (Healthy) Groceries

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46 comments

  • I wasn’t sold until the Christmas card from Vanguard. I can’t get my dad to stop paying for meals even though I make double what he ever did. Guess people can’t figure out how rich we are because of our lifestyle. I made a comment the other day when no one would help us at the store and I told my wife I need to get a gold watch so we look “rich enough” to be helped. Guess it’s a problem to be a rich person in disguise so I’ll continue to be poor in the open.

    • William Lipovsky says:
      First Quarter Finance logostaff

      My friend had a gig in college cleaning a furniture store. A disheveled woman walked in one evening. No salesperson offered to help her. So he finally walked up and asked if he could help. She said ‘yes’ and ended up buying $30,000 worth of new furniture.

      Turns out, her house just burned down and that explained her appearance.

      My friend got the $30k commission and a sales person job. 🙂

  • I love the idea of making yourself poor – it’s an area I’m keen to work on an start increasing the amount of money that is invested on autopilot so I never see it.

    • William Lipovsky says:
      First Quarter Finance logostaff

      It’s great, let me tell ya. Life’s simpler will all that money lying around to be shuffled or spent.

  • Awhile back I had a friend who made six figures and never had money. I couldn’t understand it until I learned she was investing most of it. So she didn’t have money to waste drinking it away in a bar. She budgeted with the idea that her investments were required debt payments as if she was indebted. I say whatever works to keep one motivated.

  • Hey Will,
    Great post…it’s sometimes tough to tell people (people who actually know you have a lot of money saved up) that you can’t afford something. How do you generally get around this? If you say, “I’m just not choosing to spend money on a movie tonight because I’d rather invest it in my brokerage account”, you might come across as offensive. Tough balance indeed…

    • William Lipovsky says:
      First Quarter Finance logostaff

      I think the only way around it is to take as much control as possible of your social situations. If you’re the one making the plans for the group, then you can suggest cheaper/more creative ways to spend time. But first, of course hangout with people who don’t brag about all the money they spend.

      That’s what I try to do, anyway.

      Thanks for the comment, Wes.

  • I had an ex girlfriend who used to get pissed when I told her I was “broke”.

    “You know you’re not broke Ced!”

    I had to think on those terms even though I had money in the bank otherwise I wouldn’t have been able to save anything. Once my checking account was low, I said I didn’t have money to go out or whatever. You can’t think about your other accounts because it tempts you into dipping in them. Great article.

    • William Lipovsky says:
      First Quarter Finance logostaff

      Thanks, Ced for your kind compliment.

      I log into my Vanguard account every now and then for fun but I try to forget the investments exist.

  • Christina says:

    My husband and I found out the real importance of living below our means when we had a couple of bad life event years (job loss, medical issues, 2 paid off cars getting totaled, home repairs, and 2 high schoolers!) and we didn’t have to ask for help. Our savings is now mostly depleted but rather than accept defeat we are getting side gigs to supplement our income (meaning 2nd jobs just to pay our savings accounts). I’d rather work and earn than not have that safety net should it be needed again. Hope it won’t but live like I know it will

    • William Lipovsky says:
      First Quarter Finance logostaff

      That’s awesome, Christina! Way to take control of your situation! That attitude alone will keep your far from a financial train wreck.

  • Samantha says:

    I really enjoyed this article. So brilliant, and true, and sad. I get a lot of pushback, and at the very least, really strange looks from friends/family when we say we choose not to spend our money on something. I’ve had much more luck saying “We just can’t swing that right now” and leaving it at that. But recently, I’ve found that sharing our goals sometimes inspires people – most are shocked to hear we will have our mortgage paid off this year. And then I can just say – we buy whatever we want, but not everything we want.

    • William Lipovsky says:
      First Quarter Finance logostaff

      Hey, Samantha! Thanks for stopping by!

      That’s awesome you’re inspiring people by sharing your goals! Letting people know the method behind your madness usually goes 1 of 2 ways: they become jealous or they become inspired. It’s how people respond to wealth in general, I think.

      “We buy whatever we want, but not everything we want.” That’s an awesome saying.

  • I’m not saving nearly as much as you are, but we essentially do the same thing. My wife and I live way below are means. Part of it is to save a lot of money, but the other part is because we don’t want to get caught up in the drama of out-spending everyone else too.

    • William Lipovsky says:
      First Quarter Finance logostaff

      A lot of people focus on winning the appearance race but few ask themselves why they even want to win in the first place. Life’s so much easier when a person chooses to opt out. Smart move, MMD.

  • Excellent post, Will. I think you’ve hit on something that hasn’t been explicitly addressed (or I just haven’t read it if it has). I really think it’s odd when people follow financial advice of broke people. I remember reading a book (I don’t remember which one) where the author requested the financial statements of the advisors who were soliciting his business. He said that if they would provide them, he’d analyze them, and then determine if they’re so well off that he’d benefit by using them. I think this is just fantastic. If you want help becoming wealthy, get advice from someone who has wealth. It’s that simple. I don’t get the whole “respect for being poor” thing that’s going on.

  • It’s kind of funny that most people’s definition of poor is not having flashy clothes or the newest gadgets instead of how much you have (or don’t have) saved. I’ve never really had conversations about money – I think people just assume I’m poor and avoid bringing it up. It works out great for me – I don’t have to participate in conversations about the cutest new shows a coworker bought on sale for $200 or which new Michael Kors watch I think a friend should buy.

    • William Lipovsky says:
      First Quarter Finance logostaff

      New person, new person, new person!

      Hey, Autumn!

      Michael Kors, huh? I’m guessing that’s an expensive watch maker. Looks like neither of us would do well making watch suggestions.

  • Christine says:

    This post is funny, haha!!! I kind of act like I’m broke… I will limit my spending etc even though I could probably just go out and buy most things I wanted. My spending has gone a bit out the window as it’s the last week and a half in NZ so I’ve been treating friends to lunches, took my sisters out to breakfast, did some birthday shopping for them etc. Stuff I wouldn’t usually do so much, but I don’t know when I’ll see them all next, maybe in a year, so I think it’s a nice gesture.

    I do find it a bit hard to relate to a lot of people my age who are working for only a little above minimum wage for full time hours. I went to a party the other week and all people really seemed to talk about is how little money they had (while they drank considerable amounts of booze $$$$$)…

    My goal, when we’re ‘living’ overseas (i.e. after this initial three months of travel) is to spend less per week than I did when I was a student and studying and save the rest 🙂

    Once I have things set up in Panama, I will look into investing, but for now I am just building up some cash.

  • Stefanie says:

    I grew up around extremely wealthy people, so while I’ve never actually considered myself poor, in comparison to them, I am. And the fact that I just qualified for medicaid would suggest I am too 😉

    • William Lipovsky says:
      First Quarter Finance logostaff

      It’s all relative, isn’t it? You may not seem wealthy in that circle but I’m sure you’re ahead of at least 95% of people on the planet!

  • “Next, you can use nail polish to paint your bedroom walls.” – Or printer ink… worth its weight in gold, if gold was twice as expensive.

    Nice post – keeping money away from my conscious brain has always worked out well for me too.

    • I prefer gold leaf myself. Think “couleur Versaille”.

      One other way to get poor in a hurry: spend all your available cash on lotto tickets. You’re bound to hit the jackpot. Right? Right?

  • My boyfriend and I had been considering moving into the basement apartment in his mom’s house, and she kept asking if we could afford it. She was 100% convinced that *everyone* lives paycheck-to-paycheck (just because she did), and didn’t believe we had any savings. I just shook my head. She ended up renting to his brother who truly had no savings and stopped receiving rent. Automated savings are great, and I’m glad to have friends and family that understand that we value saving so much.

      • She was just ignorant to finances on the whole, sadly. I guess she thought her son was destined to the same financial fate as she was (in debt and never getting out). It’s just sad how prevalent these thoughts are that she questioned how financially responsible we were. We were making more than enough to cover rent, and my boyfriend broke down our budget, but she refused to believe it was possible to save on our salaries!

        • William Lipovsky says:
          First Quarter Finance logostaff

          That’s really unfortunate. It’s kind of how when I was a little kid, older people would pat me on the head and give me an ‘aw, isn’t that cute’ look whenever I talked about working hard to save money.

          Sounds like you wouldn’t have liked living with his mom anyway! You two are quite different!

  • As always, I love this post will. Investing since you were 10 huh? That rocks… you’re going to be a rich, rich man…and you know what. I bet you’ll stay humble! I don’t live poor. I’ve got a nice house and I do enjoy going out here and there, but all in all, I do save quite a bit. Thanks for yet another awesome read!

    • William Lipovsky says:
      First Quarter Finance logostaff

      As always, I love your comment.

      Thanks for believing I’ll be rich in the future. You’re house is pretty nice! Don’t ask me how I know… JK I think you posted a pic in your BBQ meetup thread!

      • Do I have a stalker Will? lol… thanks for the comment. Unfortunately the BBQ never came to fruition. Just not enough pf bloggers in this area. I know you’ll be rich. Anyone that saves 85% of their income really has no choice. The coolest thing though is that from reading your posts, I can tell you’re already rich in non-monetary ways. See ya around brotha man!

  • Right on, “bro.” It’s definitely societally acceptable to complain about money, but get your head on straight and stop wasting it every friday at the bars at saturday at the mall, and you’re now cheap and no fun. It is what it is. 85% is a pretty awesome savings rate, so seriously well done.

    • The weird thing is that it’s not socially acceptable to talk about how much money you have! That’s also one of the reasons why I haven’t published my net worth.

      Fun fact: my actual monthly expenses are far below the Belgian poverty threshold and probably will be for the next few years to come, but my savings rate far outstrips that of people earning three times as much as the poverty threshold.

      • William Lipovsky says:
        First Quarter Finance logostaff

        ‘Fun fact’ lol I always say that.

        Why will your expenses jump in the future? Are you planning on buying a house?

        • Haha, maybe you’re just the American me! 🙂

          I’m not planning on buying a house, but it will probably happen sometime in the future. Housing prices are extremely inflated at the moment (because of oversubsidizing and the fact that Belgians see it as the best investment ever), so if and when there ever is a market correction, I’ll jump on the bandwagon.

  • We don’t live like we’re “poor,” but our savings rate certainly restricts our income. We’ve gotten used to it over time and now we don’t know any different.

    • William Lipovsky says:
      First Quarter Finance logostaff

      That’s awesome! I haven’t inflated my lifestyle much since graduating college and I honestly don’t want to. FI by 30 sounds more fun than daily lunches at Panera. Sorry colleagues.

  • I don’t think pretending to be poor is a smart idea first. I never suggest doing anything to fit in with anyone. If we all just took a step back and focused on our own finances we could work towards our goals rather than against them.

    • William Lipovsky says:
      First Quarter Finance logostaff

      Thanks for the comment!

      In the last paragraph, I wrote a person shouldn’t really pretend (lie) and say that they are poor outright. But saying that you don’t have cash available for an activity (because you’re investing it instead but they don’t need to know that) is honest and people will relate to you better than if you say you’d just rather not spend the money.

  • I’ve been telling people I just prefer freedom more, but that’s not getting me far in the “cool” department. I’ll switch to “Poor, bro!” and see what happens 😉