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You’re Broke and Your Paycheck Isn’t the Problem

A staggering 63% of Americans have less than $500 in their savings account for emergencies. In theory, they are just one paycheck away from disaster. Why is this? Why can’t we seem to make ends meet anymore?

If you polled a hundred people in your city and asked them why they’re broke, they’d probably all give you the same reasons:

  • the economy is still struggling
  • they can’t live on minimum wage these days
  • medical bills are keeping them down
  • the cost of rent is skyrocketing

Are these legitimate reasons for being broke? Forgive my lack of compassion, but I think all these reasons are bull.

You’re Broke and Your Paycheck Isn’t the Problem

There are two main reasons why people are still struggling to make ends meet today and they have nothing to do with the minimum wage or the state of the economy. Here comes a shocking truth. Are you ready??

you're brokeIt’s not the government’s fault that you’re broke, it’s yours.

People are broke today because:

  1. They self-medicate with stuff, and
  2. They lack self-confidence

I know I’m going to get a lot of hate mail for this, but I (along with many of my PF blogger friends) think it’s as simple as this. People spend money they don’t have – not for survival, but for a sense of belonging – ie. to keep up with the Joneses.

Before you get all red-faced and start screaming at your laptop or smartphone, hear me out for a minute.

Self-Medicating With Stuff

We live in a world where everyone’s a winner. Every kid receives a trophy (even if they don’t finish the race!) because we want them to feel just as special as the kid that wins by a mile.

That’s great and all, but what happens when these kids grow up and face the real world? Suddenly, just participating isn’t good enough. Simply showing up won’t get them a better job and it certainly won’t earn them a raise. Real life is painful and can beat you down if you aren’t taught how to win at an early age.

With constant suffering (due to your own inadequacy) comes the self-medicating stuff. Because you feel down in the dumps about your not-so-great life, you decide to perk yourself up with a treat…things like:

  • Going out to eat
  • Buying the latest iPhone
  • Buying designer clothing
  • Going on trips

While these “medications” make you feel good for a moment (or at the most…3 days or so), they aren’t long lasting. And, they actually put you in a deeper hole than where you were just days before, which ultimately makes you feel worse.

When you step back and look at this crazy cycle, it’s clearly debilitating, but people just can’t seem to help themselves. And, it’s one of the main reasons broke people stay broke. In short, self-medicating with stuff is clearly not the answer.

Feeding Low Self-Confidence

It seems to me like the more America evolves, the fewer people can comfortably stand on their own two feet. By this, I don’t mean that they have trouble surviving without the help of others (although this is probably true…achhem, credit cards…). What I mean is that they simply aren’t comfortable in their own skin anymore.

America is bombarding her citizens with an explosion of technology – tablets, smartphones, television, radio, Facebook, Twitter, SnapChat, Pinterest, YouTube… We are more connected today than we’ve ever been before. But do you know what that means?? Increased competition.

A hundred years ago you maybe knew 100 people and saw 5 of them on a consistent basis (ie. your farming neighbors). Most of the time, nothing changed. Same plow, same horses, same vegetables…cool. Once in a blue moon (or longer) would your neighbor buy a new horse so he could properly tend to his field. It made you a bit jealous, but you soon got over it and didn’t think about it for another five years.

Today, we are flashed with everyone’s greatness ALL.THE.TIME.

you're broke - car loan

*ding* – A picture of Sally in Paris

*ding* – Carlos sporting his new rims

*ding* – Jim and Alice are touring Australia

*ding* – Becky and Dave have the cutest house ever…and made YET ANOTHER IMPROVEMENT

ding…..ding….ding…. When will it be your turn to blow up someone’s phone with your awesomeness?! It seems like FOREVER since you’ve done anything cool.

It’s time for you to be confident in yourself again. You know what would help that? A brand new car (P.S. This is your thinking, not mine).

You can picture it now….

** It’s 8:15am (why you’re always late, you’re not quite sure) and you pull into the parking lot at your work. The music is thumping and your hair is absolutely perfect. You swing in between those yellow lines like you own the joint.

…and then the slow motion begins…


The door swings open slowly and your left foot strikes the pavement. You rise up from your seat – sunglasses firmly stating your coolness factor – you rise fully, plant the other foot and pause. This ride is yours and you are unstoppable. Nothing can stand in your way. **

…And then you head inside to flip burgers like always. Truly, nothing has changed. You just got sucked into the life of the Joneses and are now worse off for it.

Your quest for confidence lead you to buy more stuff. You tried to build yourself up by making others jealous, but instead you just constructed a mask. Everything beneath that mask is still exactly the same – insecurity, vulnerability, and stagnancy.

How to Become Rich

Millions – heck, maybe even billions – of people are interested in becoming rich these days. When they pose the question to others, they want to hear advice like:

  • Invest $1,000 in penny stock XYZ – it’s a sure winner
  • Find a super easy job that pays big bucks
  • Invest in this certain start-up company – they’re going to be big

In other words, they want to know how to become rich with very little effort. This just doesn’t happen. If you want to become rich, don’t set out to do it by accident (ie. the lottery or a crazy penny stock investment). Set out to think and act like the rich. Only then will the piles of money find you.

I wrote a post just over a year ago titled: “9 Things the Rich Do That The Poor Do Not“. It was a huge hit – mainly because it speaks truth. If you want to become rich:

  • serve others
  • find opportunities, not obstacles
  • network with other wealthy people
  • understand your worth and believe in yourself
  • learn and grow (and never stop)

Becoming rich takes time and effort, and you might have to change yourself (ie. become better!) before you get there. But, if you’re done making excuses while staying broke, then I suggest taking the first step toward your future riches… Step 1: Understanding that you’re the problem. 🙂

Are you sick of your broke habits? Are you ready to start on the road to riches?



My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.


  1. You are 100% correct. Poor financial literacy/education is a major problem.

    The other problem is politics of bread and circuses. By placating the masses with food and entertainment, the powerful are rewarded with more power and wealth. Our society feeds into it very heavily.

    • Yup. And for some reason our country is continually leaning toward socialism… Arggg….

  2. OUCH!

    Thanks Derek for speaking the truth via this blog.

    • I just felt like something needed to be said. There are too many people out there that are struggling financially and are really earning enough to thrive! It’s making less and less sense every day…

  3. I respect your well thought out ideas about why people are broke.

    However, i’d like to remind you that what you just wrote is your own .. or a few of yours biased personal opinion.

    There are millions of Americans, who are spending money on the necessities and still cannot get ahead. It is irresponsible for you, and your peers… to believe that our current state of economy where the rich become richer and the poor become poorer… is majorly based on the buying of “stuff.”

    I would also like to remind you that people are not robots. Unless you want to lead the world into a mental depression, but you are asking them to act like mindless robots and only spend their little earnings on food and shelter and nothing “flashy.” Instead of mass poverty you may instead see mass suicide. Yes I realized I’ve exaggerated your ideas, however this is the mentally you are heading towards.

    A healthier ideal … would be to acknowledge the very real problems with people not being payed enough for their hard earned work. And using your ideas about how people spend to much on “things.” To help them be more financially fit… however stating that it’s “not your paycheck” is ridiculous.

    • I recently watched a CNN news video on a single mom that worked at McDonald’s. She earned only $6,800 and received assistance from the government (for daycare, food, medical, and housing). I started to feel sorry for her. …And then I saw that she had the latest iPhone (REALLY??)…. AND, I started wondering. “Why McDonald’s?” Why not work in manufacturing where you can earn 4 times the amount (at least) and wouldn’t need any assistance at all?

      Yes, I realize that some are truly in a bad situation, but the majority of people living paycheck to paycheck SHOULD NOT be in that situation. They should have savings, invested monies, and a rainy day fund. Instead, they have a nice car with a huge payment. THIS is the problem I’m speaking to, and it happens all.the.time.

  4. Just recently started reading your blog, love this post, image obsession is alive and thriving – everyone wants to spend the most money on their outward appearance

    • They sure do. I see Mercedes cars everywhere, and it’s certainly not because they’re more reliable or cheaper to operate. It’s all about image and prestige. Pretty sad really.

  5. I;ve taken into account both points of view and still dare to offer my own opinion 🙂

    I honestly believe that many of the money problems people face today can be directly related to the poor financial education (or lack off)kids/students receive while receiving their high school education.

    It’s crazy to think that something so import as knowing how to file a personal tax return is blatantly omitted in our high school curriculum. Imagine if our high school kids fully understood the simple “10% rule” and the importance of saving early in their working career.

    Not to push a product here but I’d recommend the first edition of The Wealthy Barber”(the one with the barber pole 🙂 )to anyone in financial stress. Read just one chapter each day and read it at least 4 times within a year.

    This book will not replace the education we should have received in our school system but it’s darn close !!!!

    Have a great one!!!

    • It is pretty sad that the education doesn’t exist in the home either. That’s where kids used to get it from, but now many of their parents don’t have a clue, or just don’t take the time to teach their kids! Money should absolutely be discussed at the dinner table – it’s the only way kids are going to learn today.

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