Just in case you’re having trouble telling the difference:

Rich-People Money Poor-People Money
living (grows) dead (decays)
interest-bearing accounts (accounts that pay you to keep your money with them)

  • checking w/minimum balance
  • savings
  • trust funds
  • IRA
  • money-market
non-interest-bearing accounts (accounts that CHARGE you to hold onto your money for you)

  • checking w/no minimum balance
  • cash under the mattress
  • check-cashing services
  • service charges
Debt backed by assets

  • mortgage
  • car loan
  • student loan (the asset is the increase in your likely annual salary)
Unsecured debt

  • credit-card debt
  • “payday” or “cash advance” loans
dividend-paying healthcare or life insurance policies
Insurance Savings accounts (like for healthcare costs or car insurance costs, legal in some states)
mandatory non-dividend-paying car or health insurance

The real test of where you are poverty-wise is whether you can afford to have any rich-people money. There are certainly plenty of barriers to entry — the primary of which is a relatively massive lump of money you can leave lying around without needing to spend it. Here are examples:

  • The minimum balance for an interest-bearing checking account
  • A savings account with no service charges that would cancel out any interest earned
  • A downpayment for a car or a house
  • Equity (value above the remaining balance due on your mortgage) in a house or property
  • A retirement account
  • A trust fund

Many people, if not most, who currently have rich-people money received seed-money in a lump from a family that had enough rich-people money to be able to share some of it — and so far have managed not to squander it. Other owners of rich-people money budgeted for savings accounts and used that money to seed downpayments and minimum balances.

The largest barrier to transitioning from poor-people money to rich-people money is the ability to stop spending it all month-to-month, which is quite possibly the ultimate luxury in the current economy. The difference is really triggered by rich-people vs poor-people cash flow, i.e., the ability to pay all of your existing obligations while still putting at least ten percent of your income into a savings account — or the lack thereof.

There are very few barriers to transitioning to poor-people money from rich-people money. In fact, here are some relatively easy ways to cross the threshold downward:

  • Spend or give away all of your rich-people money. (After all, it just seems like its sitting there doing nothing, right?)
  • Lose your rich-people money in a financial crisis, like:
    • a serious medical emergency that isn’t covered by health insurance
    • a sufficiently long spell of unemployment that forces you to spend your reserves
    • a crash in house values that makes your house more expensive than the cost of your mortgage (wipes out your equity)
    • become a victim of theft or arson (without appropriate insurance)
    • be forced to replace some destroyed large appliance, like a refrigerator, hot-water heater, central heat/AC, or a necessary vehicle
    • suffer a divorce (with insufficient prenuptial armor)
    • bury a loved one (who died without appropriate insurance)
    • lose a law suit or have to pay a crippling fine

Given the huge number of ways it is possible to lose all of your rich-people money (if you have any) or be prevented from saving enough poor-people money to use for seed, it would seem that the biggest factor in holding onto rich-people money is good luck. Or the absence of bad luck. Or generous wealthy relatives to lend you money to help with crises. Or enough rich-people cash flow to be able to afford a huge suite of insurance premiums. However, I am routinely informed that it is a skill.

Regardless, I strongly recommend that at the first opportunity you scale back your spending and expenses to be able to afford socking away ten percent of your income into an interest-bearing savings account and put the maximum amount you can afford/legally invest (usually caps out at 15% pre-tax) into a Retirement Account. You may still have to dump it should a crisis occur, but at least you will have a cushion.

That’s all. Thank you for your attention.


October 11, 2009 · Posted in Everything Else  


DOWNLOAD AND READ, PRINT AND READ, OR READ ONLINE my 2002 humor/sci-fi piece titled “Nobody Here But Us…” in any of the following ultraconvenient formats:

Rich Text Format (RTF)Adobe Portable Document Format (PDF)ePub Format (Sony eBook – ePub)PalmDoc (Palm/Treo – PDB)MobiPocket (PRC)Read in a Browser (HTML)


Seeing as this is Breast Cancer Awareness Month, please visit my good friend Carole Edrich’s Cyclist-On-Chemo Donation Page for Cyclists Fighting Cancer. You can also follow her progress at @CyclistOnChemo on Twitter.

Chemotherapy is God-awful grueling. Doctors wouldn’t make you go through it if they didn’t think it would improve your quality of life and extend you a few years — or, in the cases of the lucky and early-diagnosed, cure you outright. Cyclists Fighting Cancer are taking an extra step to provide bikes and enablement for families for exercise-based rehabilitation for children undergoing or recovering from cancer treatments.

IF YOU ENJOY MY WRITING and think nearly 10,000 words (~30 pages in a mass-market paperback) of humorous fiction is worth a little kickback, please click the link above and give a little. If you don’t have the money right now, that’s fine, but sometime in the years ahead remember that you owe a dribble of coins to some cancer charity or other on my behalf.

ABOUT THE STORY: What happens if you actually do get contact with extraterrestrial life and can’t make out what the message is supposed to be? The best and the brightest the government has to offer, involved at the highest level, might not quite be good enough. But hell, if the aliens look tasty enough you can always just eat them…. “Nobody Here But Us…” by Laszlo Xalieri, © 2002

LICENSE: Not much of one. All the downloads are DRM-free. You’re entitled to as many copies in as many different formats as you can stomach. Hand them around, to all your friends — I don’t care. Don’t change the words, the title, or the byline, but you can feel free to send me your copy-edits for fixing typos. If you fix little formatting issues or come up with cover or inline illustrations for me to add, send ’em along to me and I’ll post the best as replacements for the versions here. Feel free to re-host or mirror these files elsewhere, but try to stay current as the files get updated AND PLEASE PROVIDE THE ABOVE INFO REGARDING @CyclistOnChemo’s CHARITY OR ELSE THIS EXERCISE IS POINTLESS. It’s probably just best to link back to this blog post at http://bit.ly/X-NHBU-COC and let me play air-traffic-control for versions, bandwidth, and incoming links.

Pass the link to here around to all of your free-fiction-lovin’ cancer-hatin’ friends and thank you kindly: http://bit.ly/X-NHBU-COC



Because it’s a bit lost in the text above, here’s the link to Carole’s donation page nekkid: http://www.justgiving.com/Cyclist-On-Chemo/

Thanks again!


October 5, 2009 · Posted in Everything Else