A Short Guide To Getting Out Of Poverty

Trying to get ahead while you are broke or poor or low income in general can be tough. I don’t want to get into the sob story of this scenario so don’t run away just yet. What I want to do here is offer a way to improve your situation by learning how to manage your money better. Everyone’s situation is different I know. And I’m not saying this will work for everyone, but it will work for most people. If you are reading this, you probably don’t live in a third world country. You probably have some means of improving yourself. I understand that not all countries are the same and there are different obstacles for us all to overcome. Your geographical position is for each of you to navigate yourselves since you understand it better than anyone else. What I will focus on here is mostly ideas and suggestions for you to think about or try on. Much of what I will write about here is from my own experience.
The first thing I want to discuss is how we got so bad at managing our money. After this we will get into things like discipline, goal setting, making good decisions, wasting, and finally, investing.
So why are some of us so bad with money? Why are so many people good at it? It took me many years to figure this out. Money management is taught for the most part. I believe some people are born with this skill, but that is another article all together. This is a skill that our parents are supposed to teach us. I come from a broken home where money management was not a top priority. This is why I spent most of my life broke. I wouldn’t waste time blaming your parents though. They probably were not taught this skill either. Or it could be that your parents figured the public schools would teach it and they did, kind of. It is very important to educate yourself in these matters. Learn all you can and don’t rely on someone to do it for you. But also, don’t hesitate to ask for help. The ultimate goal here is to improve your situation. One step towards educating yourself is how you start.
Many of us have spending habits that hurt our chances of getting a grip on our finances. If you want to improve your situation, you must have discipline. You have to consider everything you purchase. When you are about to make a purchase, ask yourself if this is really needed, or if this will move you forward to a better place. Be honest with yourself. If you find yourself battling it out in your mind, then don’t buy it. If you end up really needing it, you can buy it later. Try hanging on to some money until pay day even if it’s five dollars. One step towards discipline is how you start.
Goal setting and discipline work well together. Setting goals gives you a foundation to build on. Make your financial goals REALISTIC. I can’t emphasize that enough. Set short term goals that build to your long term goal. Each small goal is a building block. I tell my nephew all the time “a little at a time, a little at a time.” I always say it twice, because its multiple little things that builds larger things. I tell him this because he is young and lacks patients. I am teaching him these skills. Not only does setting goals build your main goal, it is also a reward system. It should feel good to reach that goal and every time you reach a goal, you will be rewarded. After a while, you will find it easier to reach these goals. Eventually, you can set these goals so they are a little more challenging, but if you make them more challenging, they should also add more to your long term goal. In the end, you should be able to support yourself, and have money in the bank for emergencies and have at least small investments. One step towards goal setting…hell I think you get the idea.
Making good decisions is a no brainer, or you would think. The problem here is that our ability to make these good decisions goes out the window when we get bedazzled by want. This is where discipline comes in. One bad decision could the one thing that sets you back to square one again. A bad decision could be anything; driving drunk, losing your temper at the wrong time and place, or blowing your tax return or inheritance on pet snakes and chrome rims. Don’t do this. If you are fortunate enough to receive a lump sum of money, don’t blow it. Use this money to improve yourself or your situation. Invest it in yourself or your career. Other good things to put the money towards are a new car if you actually need a new one, work clothes, food and toilet paper, this only works if you continue to buy food and toilet paper as you always did. The benefit is you have a place to take money from if you need it.
I see poor people waste things all the time and it makes me cringe. If you are having financial trouble, please do not waste food and other needed things. It really is disgraceful. It is disgraceful for two reasons, people really are starving and you could be one of them soon, and by wasting food, you are wasting money that you don’t have. Another way of wasting is buying food with no nutritional value. Having said that, I understand the food situation when you are broke; mac and cheese is cheap, I get it. Not changing your motor oil is wasting the life of your automobile; not rotating the tires is wasting the life of the tires. This is a task of changing your mind set. To start thinking of these things is a step in the right direction.
Stay away from credit!!! Credit is living beyond your means. If you can’t afford to buy it out right, then you can’t afford it. It’s that simple. I can understand getting a loan for a house or equipment for your business. Getting a loan for a car? Eh, that is a subject of debate. It is nice having a new car I’m sure. I wouldn’t know. I’ve had at least 10 cars in my life; I have never spent more than $450 for one. Granted I can work on cars if I had to so it makes it easier. If you start off with a cheap car and take care of it, you can improve your next car purchase by selling the old one and adding the money to the new purchase. It just takes patients and discipline. Be wise when it comes to credit.
Now that we have talked about the behaviors and the cause of your mismanaging money, let’s talk about preserving it and increasing it. The first thing you need to be concerned with is investing in your health. If you fall ill, you can kiss all of your new growth good bye. I’m not going to get into that so let’s move on. The safest investment is to invest in yourself. If you can pull yourself out of poverty, you already have an idea of what it means to invest in yourself. Improve your career or start a small business. Educate yourself about investing. Learn how the market works and see if that is something you would be interested in.
Now that you have improved your situation, you will need to build your liquid assets. This is where Silver and Gold come in. About twenty years ago, I bought a ten ounce silver bar for $75. I still have that bar and it’s worth $175 now, roughly. If I were to put that $75 in the bank at the time, I would still only have $75 and that $75 would be worth less today. I protected my money by investing in silver. The intrinsic value of silver kept pace with inflation. It may be slightly higher or lower, but it’s more than I would have had if I put my money in the bank twenty years ago. It is easy to buy silver. You can buy it at coin shops, or gold and silver exchanges. You can buy it on line if you wanted to. If you bought one ounce every week for a year, you would have 52 oz if you held on to that silver for 20 years, you would still have your money at the same value at least. At the time of this writing that would be $903.76 in a year. In twenty years it may be $1,500 - $2,000. That doesn’t mean you made money, that means you preserved your savings.
There you have it; a short guide to get out of poverty. It’s not easy, in fact it’s very hard, but so is living in poverty. If you don’t do any of these things, then at least do your kids a favor and teach them these things. Thanks for reading. –Paul Fitzpatrick