Some people are so poor they can’t even afford to pay attention. But jokes aside, this is an important issue. About 15% of Americans, and 10% of Canadians live in poverty. Since each country has its own criteria for defining the poor it wouldn’t be fair to compare the two. However, I have a simple solution to reduce both country’s national poverty rate to effectively 0%. 😀
The Current Problems Around Poverty
North America has an abundance of wealth and there is enough food and other resources today to go around for everyone who lives here. But there are barriers in place that prevent some people from becoming financially literate and a self sustaining part of society.
- A lack of practical education.
Education is the best chance for a poor person to get out of poverty. The current public education system does a great job of testing our memories, but not so much on teaching us how to critically think for ourselves in the real world, especially when it comes to the application of mathematics and financial knowledge.
Furthermore, a lot of information that we do learn in school are quickly forgotten because there doesn’t seem to be a clear incentive to retain the information for purposes outside of the school walls. 
Of course we can’t rely solely on the government. It’s also the parent’s responsibility to teach their children the importance of money management and not going too much into debt. The issue however, is that many parents are not very skilled handling money themselves. 🙁
- Ineffective social assistance programs
Not including Social Security and Medicare, the U.S. Congress allocates hundreds of billion of dollars in federal funds to welfare programs each year. But there is a clear conflict of interest for government workers who are employed in social services. In order for these civil servants to continue working, they need to be supplied with a constant supply of poor people applying for social benefits.
If I worked in administration at a food stamp program such as SNAP, then my primary motive is to maintain my job security so I can continue to get paid and keep my standard of living.
“I eat all I can, when I can, from a can.” ~Anonymous food bank user
The Solution to National Poverty is Blogging
It’s not easy to fix the education system or government social programs. But there’s still a way to help the poor in Canada and the U.S. I believe the solution to poverty is for everyone to have their own personal finance blog. 😀
There are a lot of good reasons to legitimize this argument.
- Individuals and households who own or write for personal finance blogs generally have a higher net worth than the average person. This is a strong correlation.
- A PF blog stimulates someone to think about and write down their thoughts about money, and whatever we focus our attention on tends to grow. 🙂 Writing things down also make people more accountable and likely to follow through with their goals and intentions.
- PF bloggers naturally develop or find networks of others who are like minded and can share strategies and real life personal stories about how to overcome financial difficulties.
- Blogs can be used as a journal to help people keep track of their money, helping them with financial self awareness and knowledge.
- Creating a PF blog is very accessible. Many free platforms exist like blogspot, wordpress, or tumblr.
Personal finance blogs are highly customizable. We can keep it private, like a financial diary, or share it with the world. The important part is putting something down in writing so that everyone, especially the poor, don’t feel marginalized because of their financial situation. People will realize there are many other people who are in the same boat at themselves, and money will become less of a taboo subject in social circles. We will become more open to share ideas on savings, spending, investing, building businesses. Those who are currently poor will have more options and inspiration to get themselves out of poverty. When a poor person reads their neighbor’s blog about turning their life around, then that gives the reader tremendous internal motivation to become financially literate and succeed as well. If someone else can do it, then so can they.
Unlike social assistance or public schools where people are given fish. A robust blogging community will encourage everyone to want to learn how to fish for themselves. This internal motivation is much stronger than any superficial external support. 😀
Putting Action in Place
The government can publicly announce this initiative and call it the National Personal Finance Blogging Act.
Links and helpful guides would be on all government websites to help everyone start their own finance blogs. Everyone in the country may register one PF blog with the government. Each year everyone who’s blogged at least once every month would get a congratulatory email, and a $100 non-refundable tax credit. Furthermore, any costs of maintaining a personal finance blog would be tax deductible. 🙂 We already have the technology to do this. Let’s make everyone a personal finance blogger!
Some neighborhoods are so poor rainbows only appear in black and white.? But the national poverty rate should start to fall as soon as more people starting blogging about personal finance. After 10 to 15 years of this program I’m confident we will pretty much eliminate all poverty in Canada and the U.S. 😀 Other countries around the world can do the same. Change is good, and change makes cents. 😉
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Random Useless Fact:
How to save money on a tombstone.
Make Payday Loans illegal and severely regulate the Credit Card industry.
Personal Finance blogs are only good if they convey actionable and factually correct information.
I doubt 100% that poverty will be eliminated permanently. Nature abhors a vacuum, even in finance and economics, thus society must always contain poverty. What needs improvement is economic mobility so people don’t have to stay impoverished on a continuous basis.
Besides, Picketty claims the Natural state of the economy is Wealth and Poverty only; Middle Class is an anomaly.
If it were up to me I’d ban all payday loans in Canada. The most financially vulnerable people shouldn’t be subject to usury by those kinds of companies. I think Picketty is on to something. The middle class seem to be getting smaller and smaller.
It’s worse in America where some 20-40% of the working population relies on payday loans, essentially paying 10% of their income just to access the other 90% of their money. It’s expensive to be poor.
Continuing on Picketty’s theory, two areas in which we can see it reflected is 1) the normal growth of the economy. It is much lower than our recency biases (1950+) have us believe. Thus, we are returning to wealth being based on ownership/rent instead of growth. And 2) the demise of “middle class” consumer products. It’s fairly apparent that most goods now fall into either a cheap, low-quality mass market basket, or an expensive, quality made, exclusive high-end basket. Both markets are growing.
I’m pretty sure “poverty levels” or “low income cut-off” levels are essentially arbitrary numbers chosen by government agencies. So, they could say the lowest quintile of income earners, which would mean 20% of people would be labelled “low income” despite the relative dollar amount. Or they can use a specific dollar amount, but then there may be some people (likely some frugal financial bloggers) who would meet those criteria although they are by no means poor. For example, you could have a huge portfolio of dividend stocks, no other income, and I believe you could make somewhere around 35 000, yet pay no taxes. Does that mean you are in poverty, or just frugal and tax smart? Although I certainly agree that providing education is key, the more important issue in my mind is motivation – if you really and truly want to get out of the bottom, you will find a way. I look at it like personal health – everyone knows smoking, excess drinking, drunk driving/distracted driving, poor eating, no exercise lead to poor health. However, a significant number of people choose to smoke, drink excessively, drive drunk or distracted, eat terrible food and never exercise. They could… Read more »
That’s very true. Without the proper motivation or incentive, no amount of knowledge can get someone to do something. I wonder how much of financial prowess is nature vs nurture. If it’s possible to teach the vast majority of children to be responsible with money then maybe society has been doing it wrong all this time. Maybe instead of providing free education and financial services to the poor, we should put more effort into better parenting since learning starts at home.
The arbitrary standards of a “poverty level, or a “living wage” bugs me a lot. Arbitrary limitations on anything is very subjective. The other issue is that policy makers often look at incomes, but don’t ask about assets or wealth. Making $35,000 and paying no tax like in your example is how many people who don’t need social assistance, yet they still qualify for tax benefits like the GST rebate. To be honest I’ll probably get there some day and do the same thing.
I have a very different perspective as I was home schooled through elementary school. I was in school 3 hours a day and was years ahead (I’d estimate about 2 grades) of most of my friends in public school by 5th grade. I mostly taught myself, with my mother checking some of my work… It wasn’t what I learned, but that I learned HOW to learn on my own and how to think critically (as a caveat, I’m not a genius or anything, I’m very much a regular person and believe firmly similar or better results would be easy to replicate). I think we as a society are failing our children by rewarding parroting information rather than championing critical thinking, logic, and creativity.
I also think anyone who wants to get ahead can. It takes a lot of hard work and discipline, but it is possible, especially with the wealth of knowledge on the internet from bloggers and other sites (like freedom 35!).
I consider myself a regular person too. It’s amazing what people like us with ordinary intelligence can do if we put our minds to something. As Les Brown once said, “accept responsibility for your life. Know that it is you who will get you where you want to go, no one else.”
I enjoy reading your blog liquid. However this is a dumb idea that wouldn’t work. I agree with Chirs’ comments.
Thanks Nolan. To be frank I don’t think my idea would ever be successful either. It would be an exciting social experiment, but eliminating poverty across the entire country is pretty much impossible.
Parents aside as they can only do so much after changing your diapers and feeding you. There is a big part of personal responsibility that I think just comes into play. I knew about Taxes, voting, banking, and buying a car all in High School… The school or my parents didn’t teach me.. I learned it by reading books and researching the process… I needed to know the basic math behind it to understand how it worked, but the rest of learning what to apply it to was my responsibility. Math and the Pythagorean theorem is very basic and a universal language that shows relationships between numbers and shapes. The application of learning how to speak it and apply it to other facets of life can be a challenge, but if you want to do something you will teach yourself how… Not to sure how I feel about everyone having a PF Blog. There is already enough garbage on the web we really don’t need to fill it with more inaccurate and useless crap. Granted it would cause people to atleast think about what they are writing and maybe do some research. But with the success rate of those folks… Read more »
For sure. The amount of inaccurate and misinformation out there on the internet about money is already worrying. If more amateurs were encouraged to start blogs then financial discussions could get even more messy and confusing.
Perhaps a simpler experiment on a smaller scale could be practical enough to actually pull off. Maybe some high school could get a class of students to create PF blogs. It could be implemented as an ongoing assignment as part of their existing career and personal planning course. Then 10 or 20 years later, see how well those graduates are doing financially compared to another class who attended the same school at the same time but weren’t told to blog about money.
Give man a fish and you feed him for a day. Teach him how to fish and he will be sitting in a boat a drink beer all day.
I do not think we need to learn how to do taxes or vote in the high school. Idea of education is to teach how to learn new things and find the information. This is to teach how to catch fish. The rest we need to do ourselves, imho…
In part I’m in agreement with you. Younger folks these days just want to whine and complain that it isn’t fair… (The squeaky wheel gets the grease)
The real question is what kind of beer will said man be drinking in this
boat??
Very thoughtful idea. The challenge is getting these people in poverty to talk to people who aren’t in poverty & then getting them on a path out of poverty. The blogs can be a good way to add some accountability, my opinion, if done properly.
Yeah the blogging initiative can be a good start but more needs to be done to motivate poor people into talking and focusing on how to bring them out of poverty.
Mr and I often joke whenever we watch the TV, we get the “education”. The contents are given to us, even the McDonald, and other fast food chain, processed food advertisements plague all the channels. Disney channel often have Lunchable ads, the advertiser did a great job at brainwashing our children at the tender age. Put that in the money perspective, in the 60s, 70s, even the 80s, TV channels are limited to public television. They don’t have to pay for cable tv, cable internet, landline, one cellphone per family member, all with unlimited text, talk, and data. They still can afford after school curriculum like piano or tennis lessons, etc. Now, they save money to buy game console and games to play on those consoles. Worse, they pay real money to buy virtual coins to buy more bells and whistles for the characters in the game. Back in the day, family would take a week or two to the back country camping and vacationing. Now, they expect white water rafting, zip-lining, horse-back-riding, etc. Every excursions on each vacation. Middle class nowaday demand a “lavish” lifestyle that they can’t afford. Middle class don’t spend like middle class. Therefore the saving… Read more »
No wonder I liked Lunchables when I was a kid. Actually, I still kind of do. Darn those advertisers. Yeah 10% savings rate is considered high these days because the average is lower lol.
“For example, you could have a huge portfolio of dividend stocks, no other income, and I believe you could make somewhere around 35 000, yet pay no taxes. Does that mean you are in poverty, or just frugal and tax smart?” You just described The Idiot Millionaire Derek Foster to a tee. Except he utilises low-income family government subsidies under the guise of being poor, with perhaps half of his total income comprised of government transfer money, allowing him to keep even more of his money. I doubt he’s ever discussed his strategy with an actual poor family. So the government thinks he is poor, yet he knows that he is not but does nothing to correct them. The downfall is also partly the government’s fault for not doing a full spectrum assessment on these claims. These people — high net worth, low income, and subsidised — are a very minute fraction of the population, which means there are still far too many. The Fraser Institute calculates Basic Needs poverty level — the absolute minimum resources necessary for long-term physical well-being, usually in terms of consumption goods. Includes all modern necessities: food, shelter, clothing, health care, personal care, essential furnishings,… Read more »
I like the Fraser Institutes’ definition of poverty. It seems more practical to me. I heard about that Derek Foster guy. He allegedly retired in his 30s and then continued to make money writing books and giving public talks.
I totally agree that many people need help in learning to handle money and our school system does not address this. And unfortunately, if you’re not brought up in a home where this knowledge is vauled, it may not be passed to you. I like the idea of keeping a personal finance blog or diary but often the working poor are working multiple jobs and don’t have the extra time to spend blogging. I
Time can be seen as a form of wealth. People who are busy working to scrape by are poor in more than one way.
There’s a program that is run nationwide in Canada that is aimed at exactly this, reducing poverty through education. It’s called Pathways to Education pathwaystoeducation.ca/
It has produced investments unparalleled in the market. 1:24 $ return on investment. Including a 300% increase in college and university attendance.
Great info CJ. Thanks for the link. Those results are pretty impressive. We need more programs like these.
‘Prosper Canada’ is another great organisation with great programs and results in moving people out of poverty.
http://prospercanada.org
re: “It has produced investments unparalleled in the market. 1:24 $ return on investment.” False — and a great example of just how much garbage information is published on personal finance blogs, let alone the Internet as a whole. The “1:24” is total lifetime social benefit — NOT return on market investment; the program does NOT “produce investments”. Not only that, but it’s not “unparalleled”, the long-term returns of many stock markets are 10%/yr. Included in the assumed calculation, extrapolated from a short two year analysis (if you took the effort to actually read the report instead of just the marketing blurb) are sums for increased taxation, decreased government transfers, and lower health care costs. However, it also contains such magical gems as increased volunteerism and charity donation, having less children, and the grand assumption those children will be high economic producers (the last two items account for 20% of the return! wtf?! Is this a joke?). The analysis assumes the program achieves a 10% IRR. Two things: first, the analysis is based on a two-year period yet they were somehow able to calculate the economic production of not only the initial participant but also of the participant’s off-spring, or… Read more »