SMS155 – You’re Not Poor You’re Broke
Poverty – is not about a lack of wealth it is about a lack of opportunity.
Broke – is about an insufficient amount of wealth for a chosen lifestyle.
The problem with not knowing the difference is you either try to solve the wrong problem or worse you become powerless to solving it.
You don’t have to be born into poverty to be poor, circumstances can be your undoing.
Relative poverty vs absolute poverty – relative poverty can be solved much easier than absolute poverty.
Canada’s poverty rate was 9.5% in 2017 (35,000,000 * 0.95= 3,325,000) defined as a family’s ability to afford a “basket of goods”.
Factors that would indicate poverty:
- Access to education
- Access to housing
- Access to savings/investing
- Access to the free market
Four simple factors can determine future poverty risk:
- Race – visible minority
- Education – no access or limited access
- Martial Status – single with no support system
- Age – a bad start leads to bad places
Factors that would indicate artificial poverty (broke not poor):
- Your situation is temporary with a known solution
- You have a safety net – family or debt
- You have options – choice could solve or improve your situation
- You have something to lose
Reasons you might be broke but think you are poor:
- You’re consumed with first world problems
- Compare yourself to others
- Don’t take ownership
- Don’t understand the Maslow Hierarchy of needs