This assumes that everyone is a rational actor. Unfortunately, assuming that everyone is effective at allocating resources or time is unsafe and wildly inaccurate. My mother's hours spent cutting coupons rather than finding a job (over years) misvalued the long term impact of having a job and developing a career. My father's allocation of money that we did not have to cigarettes rather than a savings account had extremely negative long term effects.
I grew up around poor people, and I saw their mistakes. I made their mistakes, and I still do. Which isn't to say that all poor people are incapable of making effective financial decisions, just that the distribution is skewed; there are "better" and "worse" valuations of things, and fundamentally people who are worse at making these valuations will on average be poorer.
This assumes that everyone is a rational actor. Unfortunately, assuming that everyone is effective at allocating resources or time is unsafe and wildly inaccurate. My mother's hours spent cutting coupons rather than finding a job (over years) misvalued the long term impact of having a job and developing a career. My father's allocation of money that we did not have to cigarettes rather than a savings account had extremely negative long term effects.
I grew up around poor people, and I saw their mistakes. I made their mistakes, and I still do. Which isn't to say that all poor people are incapable of making effective financial decisions, just that the distribution is skewed; there are "better" and "worse" valuations of things, and fundamentally people who are worse at making these valuations will on average be poorer.