You have lost your job and your house, your down to your last $1,000. How will you make out at the end of the month?

by purplesofa 130 Replies latest jw friends

  • Robdar

    May I have a hanky too Robdar?

    Yes, of course. And may I also offer you a nice, hot cuppa tea?

  • sammielee24

    Choices like that are why I'm not poor, not because I'm more fortunate than the next guy.


    Hope the air is clean up there!

    Did you have alcoholic parents? Parents addicted to crack? Did you have to learn to steal food at 7 because there was nothing to eat at home? Did you ever go a week without any food at all? or heat? Did you ever wake up at 5 years old alone in the house and terrified? Did you ever go without clean clothes for a few weeks or tie bags over your feet to keep them dry inside your shoes?Did you have to leave school in the 6th grade to help out at home? Did you have to dodge bullets and gangs just to get to school and back every day? As a child, did you have to put your drunk mother to bed and watch over her because you were fearful of her dying on you and leaving you alone? Did you get locked in a closet or tied to the bed so your mother could go out to work? Did you ever get beat by your abusive father until your were put in the hospital? How about getting your teeth knocked out by an angry spouse? Did you ever get stalked or threatened with death if you tried to leave an abuser? Were you raped?

    If not - you are more fortunate than some of the 'guys' next to you.

    Sometimes choices are made as a direct result of our circumstance and environment.

    You want to give everyone an even shot - don't start by pushing the notion that all poor people, or even most of them, make bad choices - try understanding that not everyone starts out on equal footing and thank your lucky stars that you got a better start than some. sammies

  • corpusdei

    Well, since you asked:

    - Did you have alcoholic parents? Yes, father, didn't clean up till I was 19 and well out of the house. Well, "cleaned up" for him counts as less than a six pack.
    - Parents addicted to crack? Not sure what else Dad was hooked on besides the bottle. Mother was addicted to the Witnesses. Still is, or was at the point I quit having anything to do with her. I might have better feelings for her if she did hit the crack pipe. A crack pipe seems easier to quit than religion. I know it took less out of me to quit speed then it did to quit God.
    - Did you have to learn to steal food at 7 because there was nothing to eat at home? From the store on the way home from school. I preferred Snickers, cause they were easier to pocket and actually seemed more filling than 3 Muskateers. And off the other kids lunch trays when I didn't have money for school lunch. I got whipped with the handle off a set of window blinds until I bled when I dared steal food off my fathers plate because I was hungry. Even up to the point where I got a job waiting tables I was occasionally hungy enough to take leftovers that other people left. Cutting the bitten half off a burger because the customer only ate half and I couldn't buy groceries until next week isn't something I care to remember, but I did it.
    - Did you ever go a week without any food at all? I streched a pack of ramen noodles over three days. Also see above.
    - or heat? I have. It was either the propane bill or the electric bill. My blankets stunk because the laundromat was more expensive than I could afford, but they were something at least.
    - Did you ever wake up at 5 years old alone in the house and terrified? No, but I was left at middle school for ~6 hours on several occasions because my mother forgot about me or went to meetings. That wasn't fun.
    - Did you ever go without clean clothes for a few weeks or tie bags over your feet to keep them dry inside your shoes? Shoes from Goodwill, too big for my feet because I'd grow into them, held together with duct tape I took from the woodshop class when the soles came unglued.
    - Did you have to leave school in the 6th grade to help out at home? Pulled from school every tuedsay to help with Field Service until the school put a stop to it. Gods work.
    - Did you have to dodge bullets and gangs just to get to school and back every day? Can't say as I did that one. I did get beaten regularly because I was a Witness, though (I've still got a chipped tooth and a couple of scars from some of those fights). Rednecks don't take kindly to folks who don't say the pledge of allegiance.- As a child, did you have to put your drunk mother to bed and watch over her because you were fearful of her dying on you and leaving you alone? No, but I did have to wrestle my father out from under the table after putting out the fire on the stove. Apparently, his drunk, passed out ass thought making hashbrowns at 4 AM would be a good idea. Prolly somewhere after the 18th can of Milwaukee's Best.
    - Did you get locked in a closet or tied to the bed so your mother could go out to work? She didn't have a job. unless you count Field Service. Which was too important for my soul to be kept home for.
    - Did you ever get beat by your abusive father until your were put in the hospital? No, they couldn't afford the hospital, or doctors, and after all, I earned every ounce of blood that my fathers belt buckle drew, because I sassed back at him. Don't need a hospital to tell him how to raise his kid.
    - How about getting your teeth knocked out by an angry spouse? No, but a girlfriend did put a sword through my bedroom door, does that count? I started trying to make some better relationship choices after that. I did have to worry about an angry husband with a lot of guns for awhile though. I'm still not fond of going over into that part of the state.
    - Did you ever get stalked or threatened with death if you tried to leave an abuser? Stalked, yes. Threatened with death? Not that I recall (though that sword was pretty damn big). I was threatened with false paternity, accusations about various STD's and being framed for a suicide, though. Again, better relationship choices after that one.
    - Were you raped? Physically? No. But that's not the only kind of abuse out there.

    The "better foot" that I started out with was a 115 year old house that you could see through the cracks in the walls in places. If I wanted to be warm, then my brother and I sure as hell better get started getting the firewood together and god help us if we didn't put the cover back on the firewood pile. Up until I was 8 or 9 my parents didn't file income taxes because there wasn't enough taxable income.

    Anything else you'd like to know about me?

    The environment that you're in influences your choices, no doubt. I made plenty of bad choices along the way and paid for them until I didn't think I had anything left. Then I got up and made the choice not to do that again. And if I had spent all my time asking "Who's going to help me out of this?" I'd still be there, I'm certain of that. I'm out because I knew that I was the only person I could ever trust or depend on to change my life. Not my parents, not some politician on his high horse, not my neighbor down the street, certainly not God. When I failed, I was the only one that owned the fault for that, no one else. When I succeed, I owned that too, and I've got piss-poor sympathy for those folks too weak and whining to take responsibility for their own lives. There are plenty of people out there who've done more than me with less to start with for me to think any different.

  • Robdar

    Research Note #25: Ponzi Schemes vs. Social Security

    The Real Ponzi

    Charles Ponzi was a Boston investor broker who in the early months of 1920 was momentarily famous as a purveyor of foreign postal coupons who promised fabulous rates of return for his investors. Ponzi issued bonds which offered 50% interest in 45 days, or a 100% profit if held for 90 days. The supposed source of this windfall was the differential earned on trading in postal coupons. The actual profit on the postal coupons never amounted to more than a fraction of a penny each, but it didn't matter to Ponzi since this was not the true source of his profits.

    Ponzi opened his company, "The Securities Exchange Company," at 27 School Street in Boston the day after Christmas 1919. He was penniless at the time and had to borrow $200 from a furniture dealer in order to furnish his new office. Within days he was collecting money from his initial rounds of investors. He then expanded the circle of investors by collecting money from a larger round of investors. When the bonds of the first investors came due he paid them, with their miraculous profit, using the money collected from the second round of investors. The news of these extraordinary profits swept up and down the east coast and thousands of investors flocked to Ponzi's office for an opportunity to give him their money. Using the money from this new surge of investors he paid off the next round of bonds as they came due, with their full profit, which excited even more frenzy.

    During the heady days of the spring and early summer of 1920 Ponzi was the toast of the northeast as people rushed to place their economic security in his capable hands. As Ponzi himself described the result:

    "A huge line of investors, four abreast, stretched from the City Hall Annex . . . all the way to my office! . . . Hope and greed could be read in everybody's countenance. Guessed from the wads of money nervously clutched and waved by thousands of outstretched fists! Madness, money madness, was reflected in everybody's eyes! . . .To the crowd there assembled, I was the realization of their dreams . . . The 'wizard' who could turn a pauper into a millionaire overnight."

    The Problem With A Ponzi Deal

    The problem with Ponzi's investment scheme is that it is difficult to sustain this game very long because to continue paying the promised profits to early investors you need an ever-larger pool of later investors. The idea behind this type of swindle is that the con-man collects his money from his second or third round of investors and then beats it out of town before anyone else comes around to collect. These schemes typically only last weeks, or months at most. There is of course always the temptation to stay around just a little longer to collect another round of investments--especially since each new round has to be bigger than the ones before. But Ponzi made another, equally fatal, error. He became a member of high society and once he had gotten the taste of this life, he couldn't give it up.

    The Decline & Fall of the First Ponzi Scheme

    Although he started his business as a penniless coupon clipper, by the end of May 1920 Ponzi was able to purchase a palatial home in the banker's colony of historic Lexington. He also acquired a 38% interest in Boston's Hanover Trust Bank and became an instant pillar of the community.

    Ponzi started his scheme on December 26th. Precisely seven months later, on July 26th, at the insistence of the Massachusetts District Attorney, Ponzi quit accepting deposits from new investors. It was estimated that Ponzi had been taking in $200,000 a day of new investments prior to the halt. At that point he had already collected almost $10,000,000 from about 10,000 investors. As word got out about his legal troubles, worried investors swarmed his office. Ponzi confidently greeted them and assured them all was well. He announced he would continue to pay matured notes at face value. Unmatured notes would be refunded in the amount of the original investment for those not willing to wait. He assured investors and law enforcement personnel that he had millions in banks here and abroad, far in excess of his liabilities.

    From July 26th until he was jailed on August 13th, Ponzi kept up this practice, appearing at the office each day and redeeming bonds from worried investors. During this time he actually redeemed $5,000,000 of his bonds in a futile attempt to convince the authorities that he was on the up and up. At his bankruptcy trial, it was discovered that Ponzi still had bonds outstanding in the amount of $7,000,000 and total assets of about $2,000,000. Indeed, the seemingly lucky investors who redeemed their bonds after July 26th had to return their windfalls to the bankruptcy court to be distributed among Ponzi's larger circle of creditors. Ultimately, after about seven years of litigation, Ponzi's disillusioned investors got back 37 cents on the dollar of their principal, with, of course, no whiff of any profits from the nation's first and most notorious Ponzi scheme.

    During his trial Ponzi's attorneys considered a defense of "financial dementia." Ponzi's acquaintances testified that for more than twenty years he was obsessed with devising various grand plans for amassing immense wealth. Perhaps, after all, Charles Ponzi believed in his own scheme.

    The Logic of Ponzi Schemes, Chain Letters & Pyramid Schemes

    The essence of the Ponzi scheme was that Ponzi used the money he received from later investors to pay extravagant rates of return to early investors, thereby inducing more investors to place their money with him in the false hope of realizing this same extravagant rate of return themselves. This works only so long as there is an ever-increasing number of new investors coming into the scheme.

    To pay a 100% profit to the first 1,000 investors you need the money from 1,000 new investors. Now there are 2000 "investors" in the scheme, and in the second round of payouts to pay the same return to these 2,000 investors in the next round, you need the money from 2,000 new investors--bringing the number of participants to 4,000. And to pay these 4,000, you will end up with 8,000 "investors," then 16,000--and so on.

    If all the investors stay in the scheme, the number of participanats would double after every round of payouts. Even starting with only 1,000 "investors," by the 20th round of payouts you would need more new investors than the entire population of the U.S. Eventually, the number of new investors that would have to be found would exceed the population of the earth. Typically, however, Ponzi schemes collapse long before they reach their theoretical limit as an ever-increasing number of new participants cannot be found.

    Ponzi Progression Starting with 1,000 "Investors"
    Payout RoundsNumber of Participants

    Round 1
    Round 2
    Round 3
    Round 4
    Round 5
    Round 6
    Round 7
    Round 8
    Round 9
    Round 10
    Round 11
    Round 12
    Round 13
    Round 14
    Round 15
    Round 16
    Round 17
    Round 18
    Round 19
    Round 20


    In the classic chain-letter scheme 1 person gets, say, 10 people to make an investment and each in turn get 10 additional people to invest, who then in their turn must each get 10, and so on. The money for the first 10 "investors" comes from the 10 they enroll, and the money for the second group of 10 comes from the 10 investors that each of them enrolls, and so on. Diagrammatically, such a scheme looks like a pyramid--hence its alternative name


    The reason that this is a scheme and not an investment strategy, is that the geometric progression it depends on is unsustainable. You must continually get more and more new people into the system to pay-off the promises to the earlier members. After a few rounds of this kind of increase, the number of new participants in the next round would be larger than the number of persons on the earth. That's why all pyramid schemes must inevitably come crashing down

    (The U.S. Securities and Exchange Commission has a one-page factsheet on their Web site explaining why pyramid schemes are not legitimate investments.)

    The Logic of Pay-As-You-Go Systems

    In contrast to a Ponzi scheme, dependent upon an unsustainable progression, a common financial arrangement is the so-called "pay-as-you-go" system. Some private pension systems, as well as Social Security, have used this design. A pay-as-you-go system can be visualized as a pipeline, with money from current contributors coming in the front end and money to current beneficiaries paid out the back end.

    There is a superficial analogy between pyramid or Ponzi schemes and pay-as-you-go programs in that in both money from later participants goes to pay the benefits of earlier participants. But that is where the similarity ends.

    So we could image that at any given time there might be, say, 40 million people receiving benefits at the back end of the pipeline; and as long as we had 40 million people paying taxes in the front end of the pipe, the program could be sustained forever. It does not require a doubling of participants every time a payment is made to a current beneficiary, or a geometric increase in the number of participants. (There does not have to be precisely the same number of workers and beneficiaries at a given time--there just needs to be a fairly stable relationship between the two.) As long as the amount of money coming in the front end of the pipe maintains a rough balance with the money paid out, the system can continue forever. There is no unsustainable progression driving the mechanism of a pay-as-you-go pension system and so it is not a pyramid or Ponzi scheme.

    In this context, it would be most accurate to describe Social Security as a transfer payment--transferring income from the generation of workers to the generation of retirees--with the promise that when current workers retire, there will be another generation of workers behind them who will be the source of their Social Security retirement payments. So you could say that Social Security is a transfer payment, but it is not a pyramid scheme. There is a huge difference between the two, and only a superficial similarity.

    If the demographics of the population were stable, then a pay-as-you-go system would not have demographically-driven financing ups and downs and no thoughtful person would be tempted to compare it to a Ponzi arrangement. However, since population demographics tend to rise and fall, the balance in pay-as-you-go systems tends to rise and fall as well. During periods when more new participants are entering the system than are receiving benefits there tends to be a surplus in funding (as in the early years of Social Security). During periods when beneficiaries are growing faster than new entrants (as will happen when the baby boomers retire), there tends to be a deficit. This vulnerability to demographic ups and downs is one of the problems with pay-as-you-go financing. But this problem has nothing to do with Ponzi schemes, or any other fraudulent form of financing, it is simply the nature of pay-as-you-go systems.

    The Start-Up Problem In Pension Programs

    There is one other aspect of Social Security, and many private pension systems, that sometimes leads people to a mistaken analogy with Ponzi schemes, and that is the "bonus" paid to early participants in a pension system.

    During the start-up of a new pension system the money paid to early participants is usually much in excess of their contributions and higher than the "return" to later participants. This is because people who are nearing the end of their working career will not have an opportunity to participate in the pension system long enough to accrue a significant benefit if computed strictly on an actuarial basis. There are three options: exclude such people from the system; leave them with an inadequate pension; or provide some kind of subsidy to early participants beyond what is justified by their contributions. In private pensions this differential is usually made up by subsidies from the employer. In public pensions this differential is funded by assessing higher taxes than would otherwise be necessary to pay a level benefit to all participants and using these additional taxes to pay higher benefits to early participants.

    The first recipient of monthly Social Security payments was Ida May Fuller. Miss Fuller worked for about three years under the new Social Security program and paid $24.75 in payroll taxes. Her first Social Security check in January 1940 was for $22.54--she almost got her money back in her very first payment. Miss Fuller lived to be 100 years old and collected more than $22,000 in benefits.

    This type of "bonus" to early participants should not be confused with the mechanics of pyramid schemes. This type of benefit to early participants in a pension system has nothing to do with an investment scheme using Ponzi-like progressions to show false returns to early participants. In private pensions this bonus is simply an expression of the employer's beneficence. In public pensions it is an expression of public policy. In the context of the early years of the Social Security program it was an expression of a public policy which held that workers already old should not be turned away penniless. This spirit of public generosity has nothing to do with Ponzi schemes.

    Ponzi vs. Social Security

    Social Security is and always has been either a "pay-as-you-go" system or one that was partially advance-funded. Its structure, logic, and mode of operation have nothing in common with Ponzi schemes or chain letters or pyramid schemes.

    The first modern social insurance program began in Germany in 1889 and has been in continuous operation for more than 100 years. The American Social Security system has been in continuous successful operation since 1935. Charles Ponzi's scheme lasted barely 200 days.

    Larry DeWittHistorian's Office
    updated January 2009

  • botchtowersociety

    Robdar, the SS/Ponzi Comparisons were originally made by the Left, going back to the 1960s. Here is a more recent excerpt by Paul Krugman:

    Social Security is structured from the point of view of the recipients as if it were an ordinary retirement plan: what you get out depends on what you put in. So it does not look like a redistributionist scheme. In practice it has turned out to be strongly redistributionist, but only because of its Ponzi game aspect, in which each generation takes more out than it put in. Well, the Ponzi game will soon be over, thanks to changing demographics, so that the typical recipient henceforth will get only about as much as he or she put in (and today’s young may well get less than they put in).

  • Robdar

    But SS isn't an investment vehicle, it's an insurance policy. It insures you against the risk of not having income when you retire. Unlike typical investments, you cant outlive your money. It also has a disability and life insurance aspect. The disability and life insurance components are the equivalent of a half a million dollars worth of insurance for the average participant.

  • journey-on

    (((((corpusdei)))))) Those hugs are not because I feel sorry for you after reading your story. They are for you because you overcame your disadvantages and rose above it. There are many stories out there like yours. People have something in their core that either causes them to think like a victim or think like a survivor. You, my friend, are a survivor. Here is another one: {{{{{{{corpusdei}}}}}}}

  • ColdRedRain

    3$ for spaghetti sauce!? 750$ for rent!? Which bleeding heart trust fund idiot that wrote this joke?

  • corpusdei

    journey-on>> Thanks. I know my position and opinion sounds cold and cruel and elitest, but it's not that I wish ill on people, anyone who's in a bad place. If you're constantly depending on someone else to get you out of a bad spot, you're always going to wonder what will happen when they're not there. Being able to know that you can do it yourself is independance, freedom, and that's a strength that makes life so much easier. Always knowing that it doesn't matter if you screw up, someone else will always be there to bail you out, seems to me like an addiction only slightly less crippling than one that comes through a needle.

  • NewChapter

    What is rent in your area? If you have kids, a one bedroom won't do. I live in a semi large city and the house in front of me rents out for over $900. It's a 3 bedroom with no yard. It is definitely IN the city with their school system. I suppose a single person could choose to stay in a rat infested hole, that would be prosperity, but the realities are quite harsh. $750 would be a deal where I live, and it was ranked one of the poorest cities in the nation a few years ago.


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