0:00 I just got hipped to this phrase, luxury poverty. This is new to middle America, but it's how folks in the hood been living for as long as the hood been in the hood. There's a whole group of people on the internet who ain't never seen a whole housing project full of people buy a pair of Jordans and a new Gucci outfit for Easter, but they constantly face eviction because they don't have enough money for their low ass rent in the projects. Now, before I tell you exactly what luxury poverty is, just know that poor people, especially poor black people from the projects, have been talking about and living in luxury poverty for as long as I can remember. Now, it's mainstream and people are flipping out. Apparently, Jenz is being hit the hardest. Jenz is drowning in debt to access comfort, status, and distraction in an economy where ownership, stability, and long-term progress are increasingly out
0:46 of reach. There's a song that came out in 2001 called My Projects by Cuckoo Cow with a line that captures the idea of luxury poverty perfectly. Dog, my projects got taste. There ain't nothing but 250, but we sporting $5,000 drapes. That whole song is about to projects. But that line sums up the mentality behind luxury poverty. We just called it something else. Hood rich. The first time I ever heard the phrase luxury poverty was in a video by Cole Hastings called Why Gen Z Lives in Luxury Poverty. And in that video, he credits Art Chad with the first place he heard it. Art defines luxury poverty as a state in which someone has the buying power to splurge on meaningless consumerism without ever having enough money accumulated to make important
1:31 life-changing purchases. Now, that's a lot of words to describe what Cats from the Ghetto just call hood rich. However, exploring this new idea of luxury property will give you some insight into what drives people to spend money they don't have on things they don't need to impress people who don't really give a damn. Now, I got to age myself again with some more song lyrics, but based on my demographics, most of you were teenagers in 2002 when Bigers with all of its members who were born and raised in the projects in New Orleans came out with the song Still Fly. And its iconic chorus captures the heart of living in luxury poverty, aka being hood rich. Gator boots with a pimped out Gucci suit. Ain't got no job, but I stay sharp. Can't pay my rent cuz all my money spent, but that's okay cuz I look
2:19 fly. The other videos on luxury poverty dive deep into the history and the economic causes and how consumerism and debt drive it. But in this video, I'm going to look at this problem from a different angle. They don't explore. mainly because they ain't never been to the hood or seen hood life. Now, for this to make sense, I do have to do a very quick breakdown of how we got here. Sorry, I got to do it. [snorts] Uh, from World War II to the 1970s, the country was built so that essentials were affordable, and luxuries were rare. Housing was plentiful, mortgages were simple, and college was heavily subsidized. One income could support a family and lead to home ownership. There's a meme that goes around uh show that shows a scene from the old show Married with Children. It says Al Bundy could afford a house, two kids, and a
3:04 stay-at-home wife while living in the Chicago suburb all on the salary of a shoe salesman. The stuff you need was cheap while the cool consumer goods you wanted like TVs, computers, and electronics were expensive and clearly marked as signs of wealth. And then that all flipped in the 70s and 80s. Inflation crisis and interest rate shocks weakened the workers, crushed unions, and kicked off decades of wage stagnation while productivity kept rising because you got to keep making stuff to sell to people. States cut funding for public universities just as federally backed student loans expanded, making college easier to access but way more expensive. After all, if I know you got the money to pay for it, why wouldn't I charge you more if I know you
3:49 can't get it somewhere else? At the same time, globalization and deregulation flooded the market with cheap goods. Manufacturing moved overseas. Technology advanced fast and mass production drove prices down. The kind of good news that came out all this was that electronics that once caused three months of rent could now be purchased with a single paycheck. I remember my 20s thinking that getting a flat screen TV on a wall would be a sign that I finally made it. When I moved back to the states in Portugal, I went to furnish my new apartment. My 50-inch flat screen was only two $298, barely 300. And that's really cool, but it does not weigh the bad that came with all this. Housing prices surged as zoning tightened and buildings slowed.
4:36 Tuition outpaced inflation. Then 2008 wiped out the housing, construction, and job security market, locking in shortages while demand kept climbing. Wages lagged. Student debt exploded. and owning assets became increasingly dependent on family wealth. But you could buy a lot of stuff and you could buy that stuff quickly. Two day shipping now down to one day shipping with Amazon. The credit cards buy now pay later though we used to just call that layaway in the hood made you look comfortable but you weren't really stable. You can now finance convenience and status while remaining locked out of life-changing purchases like a home or debtfree education. So that's what America is like now for the younger generation. Now if you've never been poor, here's
5:22 something you got to understand about being poor. And if you have been or currently are poor, then this next part is going to speak to you. When you are struggling to survive, you are not thinking about the future. You're thinking about the now. I discussed this in my video, Living in the Projects. Taught me the real reason why people stay poor. But here's the simple idea. When you barely have enough money to pay for the things you need, you aren't thinking about putting away money for things that will get you out of your situation. If you only make $12 an hour and you don't have any outside support, then you don't have the money for a house or a car, and you definitely aren't saving money for retirement or to invest. And while we have the internet and you can accumulate all the skills you need for free or at a cost so low that money is not an obstacle, your next issue is time and stress. A few years
6:07 ago, my wife and I rented a two-bedroom apartment in an okay part of town for $700 a month. It wasn't luxury, but it easily passed the will of God delivered pizza to you test. And if you call the cops, they showed up. At $700 a month for rent, your other living expenses, food utilities different insuranceances, gas for the used car you don't have any payments on will come out to about $1,500 a month. At $12 an hour, working 40 hours a week, you're only bringing home $1,920 a month. And that's before taxes. But let's be real, happens. Unexpected expenses pop up. And I'm probably being a bit generous on the monthly expenses. And this was in Pittsburgh, a city with one of the lowest cost of living in the country. I bring this up to say that you have to keep working because you don't have the
6:52 time to better yourself to get more out of life. I've watched this happen to so many people I grew up with. Many, not most, but many, wanted a better life and busted their ass to try and get out. But when you live in a place where your rent is based on your income and your credit is shot because you're poor, so loans for anything are out of the question, you realize the game is rigged, so you stop playing. It's depressing as hell, but people choose the path of least resistance over the one with the greatest potential. And then the attitude gets passed on and multiplies as everyone tries to maximize comfort and convenience. And let's say you're one of the rare ones with the drive and determination to not give up. You try to study and learn new skills while working holidays and overtime because you need new clothes in a space heater because it's a deep winter freeze. You need to go to Meta
7:39 Express for what is either a tough flu or a light pneumonia and the hospital is completely out of the question because you don't have insurance. You need to pay $500 ticket or else they're going to suspend your license. And to pay that ticket, you need to get your car inspected. But you've been avoiding that because the repairs cost as much as you make in a month. When you feel like you can't get ahead, no matter how hard you work or how much you push, you decide to make the most out of your life. Right now, you'll never own a nice house or get a better job. So, at least you can look fly and have some fun distractions along the way. TVs [snorts] and computers are cheap, unless you want a MacBook, and then it's you can just get it on credit. YouTube is free. Amazon Prime is $15 a month, but a good Netflix Prime is $26 a month. At least you get to watch whatever you want, whenever you want, so you can distract yourself until
8:25 the next shift. Full price for the newest iPhone is $1,500 roughly. But you can just get that and small payments attached to your phone bill, so it's easy enough to upgrade all of your little distractions. I grew up in the 80s and 90s, so we didn't have all that cheap fancy tech to buy. But you did see people buy expensive shoes and clothes because having a good image made them feel better about their situation. In fact, one of the most common insults, or rips, as we called them, I heard growing up was, "You shop at the Goodwill." Once I got around people with things of actual value, like a home and a retirement account, I learned that when your finances are in order, shopping at a thrift store is seen as a good thing. It's almost a status booster. Which brings me to the next parallel between being hood rich and living in luxury poverty. When you're at the bottom of
9:12 society, you know it, and so does everyone else. But people still need to feel a sense of dignity, so they create their own status games. It seems crazy that people kill folks in the projects over colors and street corners, but that's just the status game at the heart of it. It's one of the reasons I learned very early on that saying my bad can literally save your life. Because no matter what someone is going through, they don't want to feel disrespected, even if they're being disrespectful. The other classic way status projected in the hood is through material goods. If you take those lyrics from still flying my projects I gave you at the beginning of this video and translate them to sociologist speak, you get back something like, "I'm too poor to take care of the things that are important. So to feel better about myself and my life, I'm going to spend a lot of money
9:58 on so ostentatious that people won't be able to ignore me and my self-esteem will rise." What the rest of America is finding out is that when you don't have money, you can't play the traditional American status game. So instead, you flex with stuff. No one wants to be seen with an old iPhone, even though it does the same thing as the new one that just came out. You don't need the newest gadget to hit you with an ad on Facebook or IG, but it feels better and it makes you feel like you have control when you buy it. So, when someone asks you where you got it, you don't sound broke when you say you just bought it from an ad. You especially feel good because someone noticed that you bought it in the first place. When you can't win the long game, you stop playing it. Traditional American status used to be built on
10:43 delayed rewards. Education, a stable job, a house, a family, and assets you owned outright, but a lot of that is now out of reach. Every road to stability is blocked by debt, wages that don't move, and prices that won't come down. So, you play the only status game still open to you. Short-term visible wins. Not because people are stupid or responsible, but because status doesn't disappear when resources do. It just changes shape. In the hood, everyone knows you're broke. The rent is subsidized. The buildings all look the same. The problems are obvious. So status becomes hyper local and hyper vvisible. Shoes, clothes, jewelry, electronics, anything loud enough to say, "I'm not invisible." And middle
11:29 America is learning that lesson right now. When housing, education, and ownership get pushed out of reach, people don't suddenly become monks. They start optimizing for what gets noticed and what feels like progress. You can't buy a house, but you can't upgrade your phone. You can't get ahead, but you can still look fly. You can't build long-term security, but you can rent short-term dignity. This isn't really about luxury. It's about control. Buying stuff is one of the last areas where people still feel a sense of agency. You choose it and it's yours. It doesn't reject you, deny you, or require permission from a bank, a landlord, or an institution that decided you're not worth the risk. And that's why this spending isn't random. It clusters around things that are cheap, visible, and immediate. Phones, clothes, tech,
12:14 subscription, small indulgences that say, "I exist. I matter. My life isn't completely awful." Luxury poverty isn't people trying to look rich. It's people trying to not feel powerless. So, what's the solution to luxury poverty? The same solution of dealing with the hood rich mentality. And I know what I'm about to tell you works because it's what I use to get out the projects. And it's the same advice I give to any family who decides to reach out and ask for help. The solution isn't just make better spending decisions or be smart with your money. It's to realize the world is different, but what allows you to make a difference is still the same. You got to accept that the world and economy we live in now is different than the ones your parents grew up in. Once
13:00 you accept that your credentials and degrees are worthless, there is no job security and no government legislation will change things, you're free to figure out what actually matters. I didn't fall into the trap of being hood rich despite growing up in the hood because I ended up focusing on sports. I didn't even really play video games once I got to high school. That got me used to world where results more than anything else matter. I could be the bumiest dude at practice and I often was. But no one said anything after I dusted them in sprints and threw a mean block. When I got older, I started boxing, playing chess, and writing. Again, these are areas where I earn my status. You need to spend all of your time developing a skill or constructive hobby. I talked earlier about how it's
13:45 hard to find the time to develop new skills, but a great way around this is to figure out constructive hobbies. When your only hobbies are passive, playing video games, scrolling on your phone, watching Netflix, it makes you lethargic. They function as escapism. And when you have to step away, they remind you of how powerless you are. This, of course, makes you way more susceptible to buying nonsense that only gives you a temporary boost of self-esteem and control. But a constructive hobby, say training for a fight, learning a foreign language, learning how to code, or even volunteering, get you away from the world of comparison on status and get you into the world of skill building, even if not directly transferable. You end up with a set of additional skills that you can use to improve your career. It's one of the reasons why starting a blog can be so effective. And yes,
14:31 people still read those. Mine does about 20k visitors a month. If [snorts] you want f if you want to further understand the mindset that leads to poverty, watch this video here where I explore what else I learned about poverty from living in the projects. There's a reason why the poor get poor and it's got nothing to do with the government. See you there.
