How Growing Up Poor Can Be A Great Benefit In Helping Build Your Financial Wealth Later In Life

I grew up financially poor.

By all measures, my family struggled to make ends meet when I was young.

We lived in a very small home for a family of five. The apartment was less than 400 square feet.

Clothes and shoes were only replaced when either we outgrew them or when there was a visible hole.

It wasn’t for a lack of effort on my parents’ part to earn enough to support the household.

My dad worked hard for his income. He worked two blue collar jobs, one when he was in the “office” and one when he got home.

My mom worked a job at night after spending the day taking care of her kids.

Unfortunately, outside of their control, my parents never had a formal education.

Therefore, it was very hard for my parents to make money even while working their backs off.

However, I never felt that growing up poor was an indication of my future. I never viewed it as a life sentence for me.

My parents ensured we grew up in a household full of love and care.

We took advantage of free programs offered to us.

I went through the New York City public education system. Despite what people’s opinion about a public school education in an urban city, it was more than sufficient to allow me to compete at a high level when I attended a private university.

My parents worked hard for their money and that level of hard work surely rubbed off on me.

Additionally, I grew up respecting and appreciating money.

I never had a lot of money in my pocket growing up. That laid the foundation for my frugal gene now.

The Advantages Of Being Rich

We all know that the rich have quite an advantage in life. That is why people aim to get rich. I have never heard of anyone wanting to be poor.

I’ve even written a post as to why the rich get richer titled “The 9 Reasons The Rich Keep Getting Richer”.

It is not by accident the rich continue to get richer. There are many reasons for it.

Among some of the reasons are that the rich have assets to invest, better financing options, and better investment opportunities.

Imagine just having more assets to invest in an upward moving market. That will result in a nice move up in net worth without doing much except by simply having more assets to put to work.

The S&P 500 is up close to 30 percent so far this year.

$10,000 invested in the S&P 500 at the beginning of year would have increased by about $3,000 to $13,000 by this time.

Now, imagine if $1,000,000 was invested in the beginning. That amount would turn into $1,300,000 by this time. A difference of $297,000 in gain for the “richer” person just because that person has more money invested in the S&P 500.

Well, if being rich is an advantage, I got to thinking if being poor can also be an advantage.

The Irony: Being Poor Can Lead To Riches Later On

Malcolm Gladwell wrote many books which I enjoyed reading. In my opinion, he is a great author who combines great research and analytics into drawing unconventional conclusions in his writing.

His book “David and Goliath: Underdogs, Misfits, and The Art of Battling Giants” was a great read.

He highlights examples after examples of how something that can be perceived as a strength might in actuality be a weakness.

And how something that is a perceived weakness might actually be a strength.

A few quotes from this book:

“Giants are not what we think they are. The same qualities that appear to give them strength are often the sources of great weakness.”

“We think of things as helpful that actually aren’t and think of other things as unhelpful that in reality leave us stronger and wiser.”

He uses the David versus Goliath battle to highlight his point.

Goliath, a giant among men, is big and strong. He seems invincible in battle.

David, a small man in physical stature, seems no match for Goliath in a one on one battle. Or so it seems.

While Goliath is big and strong, he is also slow and needs proximity to his opponent in order to strike his blows.

While David is small, he is quick and nimble. He also has mastered the use of the sling which can hurt an opponent from afar.

Of course, we know how the story ends when David beats Goliath in a confrontation.

I believe growing up poor can be another example in what initially appears to be a weakness turns out to be a strength.

My Secret To Financial Success Later In Life Is Due To My Poor Upbringing 

There are a number of factors I would attribute to how I ended up where I am with my financial well-being today.

I have been fortunate to grow up in the greatest country in the world with an abundance of opportunities.

But one key factor which contributed to my financial success now is how I grew up.

Growing up in a financially poor household has many hidden benefits. What appears to be a weakness to many is indeed a great advantage.

I’ve been known to say a few times that my kids will not have the same advantage as I did because I grew up poor.

Of course they have other advantages but the environment in which I grew up helped me to succeed later on in life.

I Have A Great Respect For Hard Work

My parents worked really hard – really hard. It wasn’t easy raising 3 kids on a blue collar job paying minimum wage.

That is why they didn’t just work one job but a couple of jobs. If you can’t make it work with one job, you have to work more than one.

I remember my dad waking up at the crack of dawn to get ready for work. He left the house before the first ray of sun light.

He would always make it back home for dinner. I appreciate always being able to eat dinner with the entire family (it is no surprise I work hard myself now to be home for dinner with my family).

After dinner, my dad would move on to his next job.

My mom was no slouch in the work department as well. After spending the day caring for the kids, she would also work at night.

They worked countless hours per week.

Because I got to witness how hard my parents worked while I was growing up, I became hard working myself.

How can I complain about hard work when I know that I am getting paid multiples of what my parents got paid on a per hour basis?

That level of hard work carried with me my entire life. It served me well in my career advancement.

This hard work drive also caused me to look to create multiple revenue streams.

It even drives me to continue to write for this blog.

Now would I have the same hard work mindset if I grew up with trust fund parents who spend their days golfing and shopping? I would never know.

Education Is Incredibly Important To Me

Despite the level of hard work my parents put in, they struggled to get ahead financially.

The main driver of this was their lack of education.

More correctly, they never had the opportunity to obtain a formal education, let alone graduating from a place of higher learning.

That lack of formal education really kept them back from earning a good wage. They worked blue collar jobs making minimum pay.

That is why education was so important to my parents. They constantly stressed the importance of education and doing well in school while I was growing up.

They understood that the only way for their kids to get ahead is to do well in school.

To my parents, education is truly the great equalizer. And they aren’t wrong about that.

Their level of focus and concern for their kids to do well in school surely influenced me to try my best at school.

I worked hard to do well in school and ended up graduating from a top private university.

The degree from the university allowed me to start my career off right with numerous job offers.

The income from my jobs is one of the main drivers for my net worth today.

I Have An Appreciation For Money

I hardly had any money to my name growing up.

My parents worked hard to put food on the table. In those rare occasions they had spare change, they needed to manage the extra money carefully.

They had a great appreciation for money and what money can buy.

They never took money for granted. Money doesn’t just grow on trees. There is a lot of effort and hard work that goes into earning money.

I see their level of appreciation for money and I couldn’t help but appreciate having money as well.

It wasn’t an evil though to want to have money. I saw first-hand that if there is no money, life becomes harder.

Many Americans might treat the desire for money as taboo or something bad. Don’t be so greedy they think.

“Money is the root of all evil” so the saying goes. That cannot be further from the truth for me.

The appreciation I have for money allowed me to focus my attention on growing my earnings and accumulating my net worth.

Money wasn’t a bad thing. It is an important part of life.

That is why even at a young age, I want to teach my kids to be respectful and appreciative of money.

I Developed A Frugal Mindset

Earning is just one component of wealth building.

In addition to earning money, you have to save the money and then invest the money.

Saving was never an issue with me. In fact, sometimes I think I over save.

My expenditure is less than half my after tax income. Of course, the less you spend, the more you save. And the more you save, the less you spend. See how that works.

In fact, pretty soon, I’m hopeful I can just live off my passive income and save my entire income from my corporate job.

Some people might find it difficult to save. But it is second nature to me.

Growing up in a financially poor household made it extraordinary easy to save.

I never had money to spend outside of necessity to begin with and yet I grew up with a very happy and content childhood.

I know I didn’t need a lot of money to be happy.

Because of a combination of habit when I was younger of not having money to spend and still living a happy childhood, I grew up being very frugal.

Now if I grew up with an abundance of toys and material goods, I might have the need to keep on buying stuff as an adult.

But fortunately for me, I don’t have an urge to be a spendthrift.

I Have A Willingness To Get Down And Dirty

I saw firsthand how hard it was for my parents to make a living at a very young age.

They didn’t have the luxury of being selective with their jobs. They did what got them paid.

This mentality carried with me into adulthood.

When starting out after college, I opted to try different passive income streams.

Nothing was above what I needed to do to make some additional cash.

I finally settled in real estate as an asset class I wanted to focus on. But real estate is never as easy as people make it out to be.

Some of the properties I’ve checked out were run down and nasty inside. Some of the people or tenants I have to deal with are challenging.

In order to maximize my return (cap rate) of a property, I would invest in up and coming areas. Those areas were less safe but offered higher returns.

Because of my upbringing, I didn’t mind getting my hands dirty in order to earn an extra coin.

If I grew up in the life of luxury, would I have been as open to checking out rat infested buildings in an unsafe neighborhood. I would think it would be a lot less appealing to me.

Experiencing Positive Momentum Was Easy

It is easier to keep going if you experience positive momentum.

Once there is stagnation or regression, it becomes demotivating.

That is the reason why I paused for a month or so in working on my blog.

I just wasn’t getting the positive momentum I was hoping for. Therefore, I got discouraged to continue on with producing content.

And then lo and behold, the site started getting some traffic from Google on a few key search words.

The uptick of traffic gave me a boost to continue to produce. Positive momentum is a powerful motivation to keep going.

When you start off at the bottom of the income ladder growing up, it becomes easier to gain positive momentum.

By definition, it is impossible to earn below minimum wage. If my parents earned that amount, I had nowhere to go but up.

With each increase in my salary and net worth, I felt the positive momentum which kept me going some more.

You can see the self-serving cycle.

The positive momentum encouraged me to keep going.

Imagine if your dad is Michael Jordan and you want to be an NBA player. Everyone will keep measuring you up to your dad.

How discouraging it must be if you perform well on the basketball court but can’t compete at the same level of Jordan.

It makes it that much harder to continue playing given all the negativity from the crowd.

Determination Not To Be Poor For Future Generation

Once you have experienced being poor you really have no desire to head back to that financial position again.

Despite all the advantages I’ve listed as being poor, when given the choice, I would choose being rich 100% of the time.

That is why I work extra hard to try to have a good income and net worth.

I want to make sure my kids are given all the opportunities I never had from traveling the world at an early age to having money to help them develop better in their interests in addition to their education.

To The Audience: If you grew up poor, how did it shape you later in life? Did you view growing up poor to be an advantage? Were there positives from your upbringing which helped you later in life?

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6 thoughts on “How Growing Up Poor Can Be A Great Benefit In Helping Build Your Financial Wealth Later In Life”

  1. I think you should rethink one of your last lines in the post. The one where you say you are working hard to give your kids all the opportunities you never had. After a beautiful post where you detail all the advantages to growing up poor why would you want to put your kids in a “rich” environment? My wife and I started with nothing but built our wealth into the millions, yet we didn’t send our kids overseas or provide them with any education outside of public k-12 and the cheapest in state university educations. We didn’t pay for anything outside of the first four year degree, grad school was on them. We expected them to get jobs in high school and earn their own money. The only cars we provided were beaters, safe but definitely not cool rides. And now they’ve all got two degrees, good jobs and great relationships. I remember my daughter telling me she was raised poorer than any of her friends even though we had more money than any of their families. I was actually pretty proud of that! The best way to help your kids succeed in life is to not help them too much.

    Reply
    • Thank you for those kind words.

      I applaud you for being able to raise your kids in an environment where they had to work for what they get. I am trying to do the same.

      But the challenge I have is with our travels and housing. Obviously, I would like to travel well and live in a nice home. Our kids definitely get the benefits of that.

      Reply
  2. As someone who also grew up poor to lower middle class, the only good thing about it is nearly every thing, every accomplishment, every step up is an improvement. And when you feel like nearly everything you work at improves your life, you keep at it. As the saying goes (and you mentioned), when you’re starting at the bottom, there’s no where to go but up.

    I feel a bit sorry for the fellas that peaked in high school.

    Reply
  3. I agree with all of this. I grew up poor, became a lawyer and recently scored my first job that paid worth a damn. My husband and I have a household income around 3x what my family had growing up. My mom cleaned houses and always told me I should go to college so I didn’t end up like her.

    I’ve invested in a few nice things (designer accessories, a late model Honda, nice clothes) but we’ve been saving 50%+ of our income and have saved up a decent nest egg pretty quickly. We don’t have fancy taste, so we’re hoping to buy a modest house in the next few months, then concentrate on paying it down and saving and investing.

    Reply

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