Mapgirl had a post earlier today that linked to a New York Times story concerning “Ghetto Tax.” The story certainly validates what Dave talks about often. “If you do what poor people do, you will be poor.” The opposite of this is also quite true, “If you do what rich people do for long enough, you will be rich.”

The story talked about the two biggest rip offs that the poor fall prey to; payday loans and rent to own. In the past, I have fallen for each of these, thankfully not as often as many people I know. Of course as you leave any military post, these businesses line the roads just outside the gates.

Without saying, these payday loan and rent to own places are absolute scum! Their usury of the poor can not be morally justified. Despite this, the poor do not recognize this, and continue to sacrifice long term financial stability for short term wants. This cycle forces the poor only deeper into their broken state.

This not only occurs with the poor, but also with the middle class. It may not be payday loans and rent to own, but it most likely is the car dealer or furniture store. Always having a car payment on a new car, buying furniture with 90 days same as cash robs the middle class of the money it needs to climb out and become wealthy. Those are things that poor people do, and if you continue to do it over and over, you will be poor.

Rich people buy used cars (and everything else)?with cash, spend less than they make, and save money. If you will do this over and over again, for a period of years you will begin to build wealth. It does not matter if you have an upper middle class income, or a “ghetto income,” the formula still works. It all comes down to the decisions we all make!