Great conversation about Why the Poor Will Always Be With Us. I wanted to continue that by addressing some of the issues raised from the ‘soap box’ I’ve been given. (wink)

I raised the issue that more money does not solve the problems of people who do not know how to manage it. JDawg and Lisa asked me what my solution would be. Financial education is my solution. There is a lack of people who are financially educated, not that there is lack of resources. Money cannot solve poverty. Allow me this fabulous quote:

The one problem money cannot solve is poverty. While there are many underlying causes of poverty, one of the causes is lack of financial education. The problem with throwing money at the issue of poverty is that money only creates more poor people and keeps people poorer longer…

As your financial education increases, you will start to see opportunities everywhere.”

Why We Want You To Be Rich

One commenter, Steve , nailed it on the head when he stated that it is people that are the problem. Steve also mentioned that it’s difficult to create a broad finance program solution. As my partner in crime (over at NLL) Kimber likes to say, “Personal finance is just that- personal.”

In this country, in this day and age, anyone can make it. Opportunity is all around. People who have achieved a remarkable level of financial success all know that they started somewhere, and for many of them, it was with nothing. But they wanted it more and hustled harder. They figured out how to make it happen.

You will not find a lot of sympathy from people who have been successful. They know it can be done. They know you can do it too if you want to. Sympathy, according to the Dalai Lama implies pity for someone, making you better than them.

If you want to better your financial situation, there are resources everywhere. First you have to accept personal responsibility for your own life, your actions and your consequences. We are all exactly where we have chosen to be.

Just as it is not Mc Donald’s fault you’re a little extra cuddly, it is not the credit card company’s fault that you are in debt.

Phil John suggested that some people might just be dealt a bad hand in life. A friend of mine who is a professional poker player told me once that the cards you are dealt mean very little. It’s everything else that matters, such as how other people play their cards, and being able to anticpate what they are going to do. I believe the same is true in life.

If you find yourself poor and uncomfortable, you may not be as uncomfortable as you think you are. When the pain becomes too great, you will do something about it. As another good friend of mine says, “When you are ready to make money, you will.” In order to be rich, you have to be afraid of being poor. I believe anyone and everyone is capable (with very few exceptions) of educating themselves about how to make money, manage money, and keep that money. It comes down to the person taking the steps to do something about it. Everyone can. Not everyone will.

Two Men - One Message

Hmmm…. I think we are all missing many things on this topic.

1) Why must we define poor lack of money? Why must we define that we all want to have excess of money? I know one person in particular who has four kids, one dog and a wife. He lives day to day with his money. His income is good, but he gives all of his money out on his family and considers himself incredibly rich. Sometimes I talk finance with him and his eyes glaze over. My point is that he has no desire in wanting to have an excess of money. He is rich and counts his blessings everyday.

2) The quote is from Donald Trump and company. I do not consider those individuals to be model citizens of people with money. In fact I would say I detest those guys because they make you feel like garbage for not having money. For example has once Bill Gates (who happens to many times richer than the mentioned people) come and said that poor people need education so please buy my book? Donald Trump *sells* a book, whereas Bill and Melinda Gates are using their money to help people by building schools and helping distribute vaccines. Donald Trump is a cheap skate (http://www.thesmokinggun.com/archive/trumpcheap1.html)

3) If we are dealt a bad hand can we recover? Poker ain’t life. In poker if you are dealt a bad hand you can fold and wait for the next round. Life aint that simple. There are times when you want to fold, but you cannot because those are the rules of the game. I don’t believe in blind socialism, but I do believe in providing a support net when things go wrong as sometimes things do go wrong. My sister who lives in Quito Ecuador sees poverty everyday. Is the sugggestion to help those poor people , “buy this book from Donald Trump?”

4) Yes you will find sympathy from rich people. Look at Gates, Buffet, Woz, Branson, and others who have an extreme amount of money. In fact if there is anybody who I want to be like, its Richard Branson http://news.bbc.co.uk/2/hi/uk_news/magazine/4942704.stm. An incredibly wealthy, but compassionate man. He runs fair businesses and tries to help human kind. Consider the following quote from the link.

“Being successful is not about dog-eat-dog selfishness – he believes the tough-guy approach typified by the hit TV show The Apprentice is out-dated.”

If you want to understand the youth of today and what to invest in, you better understand Richard Branson. I myself have no children, but I have nieces and nephews. And the teenagers today are much more in compassionate than I ever was. They want to make this world a better place and are only buying from companies that make this world a better place. We can’t ignore this trend.

Your views are so horribly American and so horribly wrong.

Perhaps I am becoming confused again when you say “poor”. If you mean middle class but spending all their money and can’t make ends meet – then I can agree. But your tone of “everyone can help themselves” leads me to think your definition includes homeless people living on the side of the road (there is one in KY just outside of lexington living in a tent that I will never forget). If that is so, then your views represent everything that is wrong with the American system.

I have travelled to the USA 4 times. Each time I am both impressed and disgusted. Impressed by the wealth some display…

but disgusted at the price you pay. As I have explained it to friends – if you are rich in America, you are rich. But when you are poor, you live worse than a dog.

Let me put it to you this way: both Australia and America are predominantly anglo-saxon, both have western economies, a common law system and two political parties to run the show – one slightly left, one slightly right.

How is it that in Australia, we have very little “poor”? The only differences I can see are that we have:

– public education system
– public health care system
– public housing system
– a sense of “fair go for all”

If you had friends who were poor or struggling, you would understand that many are doing EVERYTHING they can to get themselves to a better situation. Not all, but a large portion. I know one man with a family who is a metal worker. He is not the smartest man, but he tries to provide for his family – I tutored his son in mathematics. They are frugal in their spending habits and drive a 15 year old car. How do you become wealthy when the cost of living is not much below the minimum wage?

If you were in his situation and had saved some money would you:
a) invest it
b) save it under the mattress;
c) take your family on a holiday they would never forget; or
d) get some credit cards and attempt to start your own business to make your way to financial freedom.

My point – no matter how much they save, they are NEVER going to be rich. The amount they are saving is too small. If you suggest option d) – then you have never read about all those businesses that fail, nor do you grasp why these people do not take huge risks – yes they have little to lose, but precisely because of that, they value what they do have all that much more.

Appreciate those who do the menial tasks that you, with your entrepreneurial spirit, would never do. I suggest you watch the Australian movie “Kenny” that just came out to gain some understanding – it’s about a toilet cleaner. Would you treat him the same way those in the movie do?

I won’t post anymore – this kind of attitude makes me too angry. All I will say is – next time you see a poor person on the street, ask yourself how different things would be for you if you had been placed in their shoes from birth.

Phil: While I can understand your anger, and can relate to your posting the only issue I would have is the first sentence. Not being an American, but having many many American friends, they are a diverse lot. There are those that annoy you, and those you agree with.

Like I illustrated in my comment, there are types like Bill Gates, and Buffet, and those like Trump. Sadly we hear more about Trump than the good that Bill Gates and Buffet are doing. For example, we seem to have forgotten about Ted Turner… He donated quite a bit of his monies to good UN projects.

Erin good job!! This article is vast improvement over all your others. It was well thought out, has an opionion, even a quote.

Good Job,

J Dawg

Although I agree with some of your points a lot is missing. There are a lot of social pressures that if you are weak willed you will succum to. And I think you can not pretend to be better than these people and shake your finger at them for not taking control of their finances.

People want the new car, people want the expensive clothes and companies take advantage of consumers’ weak will’s. How many people do you know in the US that have a pickup truck that are afraid to scratch the bed of the truck? Go to Europe, everyone that onws a truck or utility van uses it for their trade. Walk along a street in Europe and the streets are lines with SmartCars and compact cars. Practical and fuel efficient. There is no need for oversized gas guzzlers and people don’t buy into the hype. That is a major problem here, bigger automatically means better. Overconsumption is the name of the game, and everyone is guilty of it at some point.

Another problem is that people are afraid of finance and investing when really anyone can do it if they spend the time to learn a little about it. People are overperscribed. They have too much on their plate. They do not make time for investing, they either neglect it to leave it up to someone else who most likely is not looking out for them. If you could fix your car you would, same way if you could handle your investments you would.

Another huge problem, what is the savings rate in this country? .5%, or some number close to that. This is a widespread cultural problem. This comes from the top down. We are a consumer driven society, if we do not spend we crumble. Recently when oil prices started to drop, and people saved a little at the pump what happened? People went out and started shopping again, retailers started doing better (excluding Wal-Mart, which shows are not trying to save). Public Officials need to make sure that they encourage everyone to save, and invest in places that will make them money. Your home isn’t an asset its a liability. People spend money on things that make them spend more money.

These problems run deep and it will take a lot to correct them. No one is perfect.

“Your views are so horribly American and so horribly wrong.”

What does this mean? How is this view “American”? Isn’t America the land of opportunity? Isn’t it here where immigrants come in search of the American dream? If that’s what you mean then I agree, her views are very American. Now how is that so horribly wrong? Are you saying that a homeless or poor person has no chance here?

An excerpt from “Wealth of nations” by the father of capitalistic economics, Adam Smith.

“Wherever there is great property, there is great inequality. For one very rich man, there must be at least five hundred of the poor, and the affluence of the few supposes the indigence of the many. [. . .] It is only under the shelter of the civil magistrate [read, the police] that the owner of that valuable property, which is acquired by the labor of many years, or perhaps of many successive generations, can sleep a single night in security.”

…nuff said

Kevin: I agree with you, but let’s look at the entire quote as I think you are taking it out of context.

“Wherever there is a great property, there is great inequality. For one very rich man, there must be at least five hundred poor, and the affluence of the few supposes the indigence of the many. The affluence of the rich excites the indignation of the poor, who are often both driven by want, and prompted by envy to invade his possessions. It is only under the shelter of the civil magistrate, that the owner of that valuable property, which is acquired by the labour of many years, or perhaps of
many successive generations, can sleep a single night in security. He is at all times surrounded by unknown enemies, whom, though he never provoked, he can never appease, and from whose injustice he can be protected only by the powerful arm of the civil magistrate, continually held up to chastise it. The acquisition of valuable and extensive property, therefore, necessarily requires the establishment of civil government. Where there is no property, or at least none that exceeds the value of two or three days labour, civil government is not
so necessary.”

My reading of this quote in the context of his document is the following. When people were hunters and gatherers there was no construct called property. We just happened to wander around, kill animals and live as we please. Once we created the notion of property things changed completely and the quote addresses that change.

He makes the case that “subordination” was different when there was no property. When we were hunters and gatherers the leader was the one who could beat the head of two lesser people. That was justice plain and simple.

Another form of subordination before property was age. Elders made the decisions. If you were the youngest of siblings then you pulled the wrong straw and had to listen to the eldest.

Yet another form of subordination was fortune. The one that had acquired the most fortune was the one making the rules.

Adam Smith makes the point that with property somebody who is weak, young, and poor can own something. Yet that individual is powerless to protect themselves. Thus there exists the need to create a civil government, as Adam Smith puts it, whenever anybody gets a piece of property others will want to take it away.

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