Personal responsibility is the key. Liberals, with their foundation belief that people are stupid and incapable without government intervention, cannot stand this concept. And that’s why the billions of dollars thrown away on welfare, grants, food stamps, EIC, medicaid, etc – have only served to INCREASE the number of people in poverty over the past 60 years. Socialism, ie., confiscating tax dollars from those that work hard to give to those that don’t, doesn’t make for a strong economy or a strong nation.

If this topic should arise again, I would love to offer real advice for those in this condition – as the current recession is ripe for this kind of information. (if not advice, then anecdotes for how I overcame it)

I am now 40, both children grown and doing well. I am a loan officer, credit consultant, and make the ominous attempt at steering people toward good money management.

Walter Williams wrote a column on how not be poor years ago. Here it is. Proving anyone can make it at minimum wage here in the USA.

How does Williams “prove” that anyone can make it on minimum wage? All he proves is that full-time work at minimum wage puts you above the flawed government-defined poverty level, and that is hardly the same as making it.

Williams cites the “making it” income of a married couple with two minimum wage earners. Well I have news for Dr. Williams – which shouldn’t even be news, since George Gilder wrote about it 25 years ago: men earning minimum wage are generally considered unable to support a family, and “unmarriageable.”

Indeed, men earning minimum wage have an extremely low marriage rate.

Who does Williams think he’s fooling?

That was a great post. I am a single mother of 2 who has been in the poor group, now I’m just in the middle between poor and broke. Right now I am working full time and going to college full time and am trying to work on my financial situation. As my income went up so did my spending, until I found this blog. The helpful information that you give is valuable to the poor and the broke and the wealthy. Right now I’m needing to pay bills, but next I want to get out of debt and would like to start saving for the future. No matter what type of income level your at, many of your frugal tips can help. If you can save even $5 a month your better off than you were. Now I have the knowledge and with knowledge comes success. I want to say thank you very much for this information, it has made a huge difference in my life.

I re-read the article as you suggested – I still stand by my “insulting” list of tips.

In lieu of answering your points directly, I’ll ask a question (I realize this can be considered kind of rude, but I think your answer is important to the discussion at hand.)

Imagine you meet a young poor person (In the US), who is basically a clean slate (i.e. hasn’t committed a felony, healthy (all of their parts are attached and work properly, no addictions, no diseases, etc.))*

They ask you, “What can I do to escape poverty?”

What do you say?

Trent said he had no advice for them and I offered an “insulting” list of tips.

How about you? What tips could you offer them?

*I consider foreign countries, convicted felons and the significantly disabled to be edge-cases in this discussion that would require different advice to some degree.

P.S. I fiddled with the census web pages a bit and the best advice, statistically, looks like it is to get married, stay married, don’t have any kids, and save for your retirement.

Another step is to draw a path to where you want to go. A million dollars is not good enough. A million by being a real estate mogul, or hair shop owner, etc. Then interview those that are already “there” just how they got there. Concentrate on the steps it took to get there. Then continue with education: use government resources, like the library or economic development office or the local chamber, where they have books and courses to elevate your understanding to get to that level. All of this is free. If you are struggling to make ends meat, saving may not be your best investment of time. Invest in yourself first. Get yourself to a point where you can stand, and then educate yourself to go further. In the end, it’s not the goal but the step by step pathway to get there that’s most important. All the best… Lee, Cheaplee

I decided I would be most helpful by aiming at the middle class / working class, specifically those who are struggling to stay in that lifestyle.

Even though I occasionally include announcements of interest to food stamp families, the fact is that those people already are in the charity / public assistance system and should be getting referrals to appropriate agencies if our community networks are following up correctly.

I think the financial bloggers are most effective at reaching those who trying to keep what they have already achieved … but have new financial challenges because of layoffs, higher cost of living, falling property values, expensive medical bills and such.

After all, the bloggers are talking to people who have some education and resources to the extent they know how to use a computer.

The other consideration is that the middle class is generally cut out of the loop for many traditional assistance. Many of them make too much money or have too many resources, even with the lower income, to qualify for a lot of programs that we typically think of “assisting the poor”.

So what can they do to stretch their finances and keep the bills paid?

They learn new skills and ideas from people who’ve been there, done that.

To digress a moment, consider the situation of a wealthy heir (like Paris Hilton), a trophy wife, a himbo, or someone who simply married into money. There’s no particular reason why they should be spared the suffering that the poor experience. The way they escape poverty it is by using other peoples’ money.

Now, consider the real plight of the poor.

Consider the permanent homeless. Most have a mental illness that makes it difficult for them to hold on to a job – and many can’t even get it together to deal with the welfare system. When they cannot get family help, they end up on the streets, and eventually start looking so bad that they’re not likely to be able to get a job.

Consider the war veteran with PTSD. They suffer flashbacks that drive some to withdraw from reality. They lose confidence in themselves, and need help. They’re not going to be able to hold a steady job, unless the have extraordinary skills. If they lack cash, and don’t get rescued by family or welfare, they’ll sleep on the street.

Consider the ambitious people who live in a poor country. They may have the will, but, the opportunity may not exist. Without bootstrapping capital, they may never escape poverty in their lifetime. Barack Obama’s grandfather was a good example – he was “poor”, and basically died only slightly less poor after working for the British colonists. What he could do was eke out a bit of opportunity for his son, give him some perspective on the world, so he would then emigrate to America seeking opportunity. It basically took two generations to develop some wealth, and it required that one generation move far away!

That story could apply to the USA, too, by the way.

“Opportunity” in the US is mostly in the cities. What this opportunity really is, is an accumulation of capital and people (labor), and the social structures and customs that regulate both.

Many of us Americans like to belive in the Horatio Alger stories, and the ideas of “grace of God” giving wealth to the good. It’s mostly B.S. This country has a lot of opportunity, but, most people don’t live here. Even within the country, it’s cities that have the wealth. And within cities, not every city is “equal opportunity” if you know what I mean. And within the cities, not everyone can handle the culture and get into the whole process of getting and holding a job.

Now, all things considered, it is much easier to stop being poor in the USA than in most other countries. On the other hand, because of a lack of widespread welfare, it’s also easier to become poor than in some western countries.

I think you’re making many assumptions there. You are at the very least assuming the following:

1 – That the reason a person is poor is because they’re uneducated.

2,3 – That a poor person has money but spending it unwisely (read Trent’s article again – that’s the definition of someone who’s “broke”, not “poor”. A poor person doesn’t have the money to begin with).

4,5 – That a person is poor simply because they’re lazy and/or unmotivated.

6 – That poor people are criminals.

7 – That poor people are fat.

What an insulting, stupid set of assumptions!

Please, read the article again. While there certainly are poor people who are fat, lazy, stupid and/or criminals, it’s certainly not the majority. You rail against the state helping people out, but who’s going to pay for the education, childcare, etc.? Not the poor person – if they were able to do so, they wouldn’t be poor. You talk about crime and health – many people are poor because past mistakes have made them almost unemployable or because of previous health problems. “Keep fit” isn’t going to help someone who’s poor because of a crippling disability. “Stay out of trouble” doesn’t work when it’s something you did 10 years ago that’s causing you problems now.

Yet again, another set of “tips” from a person who has clearly never experienced poverty and thinks that because he’s never had serious problems that destroyed his finances and/or employability, that nobody else has. Pathetic.

There are often ways to improve one’s lot via education, hard work, and perseverence, even if the education isn’t formal and the job opportunities are ad hoc.

There’s a Greek-owned coffee shop/diner in my NYC neighborhood, where the kitchen help are nearly all Mexican or Latin American immigrants (all legal).

One guy in his 20s was a dishwasher, spoke practically no English, and working 12 to 14-hour days/6 days a week, had no opportunity to take advantage of the available (and free) English language classes given by local social service and community groups.

He asked his fellow workers (waiters and busboys) who spoke better English to teach him the basics so he could make deliveries, which would get him tips (raising his income).

After a few months of tutoring (basics such as counting, asking directions, answering simple questions), he asked the owner of the coffee shop if he could make deliveries. The owner tried him out and he was pleased with the rapid deliveries of the dishwasher (deliveries are made on bicycle in NYC). The dishwasher got good tips for his fast deliveries, which increased his take home pay.

The owner promoted him to busboy. Busboys get higher pay, plus get a share of the tips from the waiters. Thus, two new ways he increased his pay.

Instead of goofing off when not clearing tables and refilling water/coffee, he studied the menus and asked the waiters questions (in Spanish) about every dish on the menu. He watched how they served food, and helped serve when the waiters had large groups at the tables. The waiters gave him extra shares of the tips for the extra help, another way that hard work increased his take home pay.

He worked on his English by having simple conversations with customers. When a waiter called in sick or was late, he substituted, which got him tips and even higher pay.

He’s still a busboy, but he substitutes as a waiter at least once a week.

His English is not great, he has to ask for help from other waiters when customers ask complicated questions, but he’s working on it and I know he will eventually get promoted to waiter.

It’s a hard job, 14 hour days/6 days a week, but in the two years he’s worked in the diner he’s never been late, never called in sick, and has always tried to improve his skills and thus, his take home pay.

The Greek coffee shop owner told me that he’d take one guy like this over a hundred other dishwashers. “Look at him,” the owner said. “He comes to work, he works hard, and I must have gone through 20 dishwashers in the two years this guy has been here. He asks me what he needs to do to get ahead. When his English gets better, he’ll be a waiter full-time, while the other guys will still be washing dishes.”

I’ve seen first-hand it is possible to improve one’s lot in life, even when working minimum wage, by taking advantage of opportunities, and making one’s own opportunities happen, instead of waiting for them to fall from the sky like manna from heaven.

I have lived in two third-world countries in east asia – I’ve seen hideous poverty, and I’ve watched people work their way out of it – and it IS a lot harder in the third-world – mostly due to education issues.

That said, they are not reading this blog. I know this because if they were, they would have a pretty good command of written English, which is a marketable skill basically everywhere. It might not get you rich, but it is enough to get you a roof over your head and enough food. They would also have basic Internet skills the ability to type a bit, etc, which are also marketable.

Education is not always about school, for the very poor it is often learning a simple trade and often this can be done without money – in the third world trades are often learned on an unpaid basis or via barter arrangements. (we’ve short-circuited this in the US with minimum wage and other well-intended labor laws – in pretty much any country in the world I can hire a maid, gardener, and errand boy on a cash basis giving them the opportunity to be in the labor force and earn wages – here none of these are worth the $6.25/hour to me that I’d have to pay them so the portion of the work force that would take these jobs cannot enter the work force)

Anyway – I don’t dispute that there is hard to escape poverty in the third world. People do escape it, and I believe that they way they do is generally aligned with my list of tips (some obviously may not apply).

For the US, if you are making less then the poverty level, follow the tips and your standard of living will rise.

P.S. I know a single mom here in the US, with no real skills and no high school diploma. She works in fast food and is going to school at night to get her GED. She works out her child-care arrangements on a barter level with several friends in similar situations. I suspect that she would be quite angry if I suggested that she should just be happy with her circumstances since they are inescapable.

Interesting that you assume I am a christian – I am not. I guess, in the same spirit, I should consider you a drunk.

Ok, now that we are (hopefully) done insulting one another – why is drinking on the list?

1. It costs money that you could be saving
2. It does not make you smarter
3. It does not make you more productive
4. It wastes time that you could be studying or working

I probably should have added smoking too.

As for the rest of the “insulting” list:

1. Get more education

This should be self-explanatory but if you don’t have any skills – learn some, if you don’t have a high school diploma – get one, if you don’t have a college degree – get one, etc. Each of these steps is pretty much guaranteed to increase your earning potential.

2. Stop watching TV/drinking/drugs/etc

Covered above.

3. Save your money

Saving even small amounts of money, as you can, will result in substantial savings over time (no beer or smokes for a year will give you at least $3000 – which would buy you about 2 years at many community colleges).

4. Work harder

No one is entitled to only work 40 hours a week. Sometimes you have to work several jobs, do overtime, etc to make ends meet. Everything else being equal, the people who work the hardest (and increase their education) are generally the people who get promotions or at least not get laid off every time there is an economic downturn (not always true, but true often enough to make working hard generally a good idea)

5. Set goals

If you don’t have goals it is hard to make the right decisions. The “you hit where you aim” syndrome.

6. Don’t commit crimes or associate with people who do

Committing a crime (well, getting convicted) will decrease your earning potential. If you associate with criminals you stand a greater chance of committing a crime, being considered an accessory, etc. Then there a lawyer fees, time out of the workforce, lost networking opportunities, etc.

7. Keep fit – its cheaper and you can work harder and longer if you are fit

Being sick is expensive, keeping fit and living healthy will decrease the chances that you will have substantial medical bills, get chronic conditions, miss work, injure yourself on the job, etc.

Keep in mind that this list is a list of my suggested tips for getting out of poverty. If that is not your goal, or you are not in poverty – then do what you like – I am not in poverty and I smoke and drink on occasion (I also have a 27″ tv I bought used 10 years ago) – these are luxuries not necessities and if you are in poverty you must fore go luxuries until you are out of poverty.

And about being poor and/or broke and having children. It is a responsibility to have children, but no one else can look at your life and tell you whether you’re “prepared” to have kids. Let’s face it, no one is every truly prepared to have kids–financially or emotionally or otherwise. Perhaps their children are the only joy and comfort in life some truly impoverished people have. Trent is always talking about how the moments that bring him the most joy are times spent with his little ones. Would any of you be willing to say that he deserves those moments of bliss because he dug himself out of debt and poor habits? And I don’t deserve mine because my financial life isn’t so picture perfect? Of course not. I think you are on thin ice whenever you say people are in financial difficulties BECAUSE they had children too soon or when they weren’t adequately prepared. I guess I’m one of those ill-prepared people and it will take significant social progress to help me… barf!

Trent, I love your blog, but I don’t want to be categorized. You just get back to the helping and let me decide if your posts are going to be able to help me.