Poverty is currently one of new Zealand’s big issues.
National’s approach has been to make financial and business conditions conducive to economic and employment growth, to incentivise and assist unemployed people to get jobs, and to target the worse off with additional assistance.
Labour’s approach is to criticise National’s approach.
Green’s approach is to give the poor much more money and to guarantee them comfortable living conditions, seeing this as a right regardless of any individual’s capability or willingness to work.
The hard right want the Government gutted and for everyone to manage on their own – swim or sink.
The hard left (including some Greens) accuse the Government of deliberately making the poor poorer so the rich can get richer – I’ve never seen anyone explain how that would work.
Some people are not competent to manage their lives or their finances so a decent society should support them.
There are certainly hard luck stories that result in people being poor.
But why, generally, do people who have had money and go broke manage to climb back up the money ladder? While others seem to start poor and remain perpetually poor? Can poverty be a habit?
I saw a link to an article by Thomas Worley on Facebook. He is described:
About Thomas C. Corley
Tom Corley understands the difference between being rich and poor: at age nine, his family went from being multi-millionaires to broke in just one night.
For five years, Tom observed and documented the daily activities of 233 wealthy people and 128 people living in poverty. He discovered there is an immense difference between the habits of the wealthy and the poor. During his research he identified over 200 daily activities that separated the “haves” from the “have nots.” The culmination of his research can be found in his #1 bestselling book, Rich Habits – The Daily Success Habits of Wealthy Individuals.
When I travel the country speaking to high school and college students about exactly what they need to do to become financially successful in life I always begin my presentation by asking three questions:
“How many want to be financially successful in life?”
“How many think they will be financially successful in life?”
Almost every time I ask the first two questions every hand rises in the air. Then I ask the magic third question:
“How many have taken a course in school on how to be financially successful in life?”
Not one hand rises in the air, ever. Clearly every student wants to be successful and thinks they will be successful but none have been taught by their parents or their school system how to be financially successful in life. Not only are there no courses on basic financial success principles but there are no structured courses teaching basic financial literacy. We are raising our children to be financially illiterate and to fail in life. Is it any wonder that most Americans live paycheck to paycheck? That most Americans accumulate more debt than assets? That many Americans lose their homes when they lose their job? Is it any wonder that most Americans cannot afford college for their children and that student loan debt is now the largest type of consumer debt?
That sounds very similar to New Zealand. I was never taught any financial principles at home or at school. I left home and got my first full time job when I was sixteen and started to teach myself – and I learned to manage fortnight to fortnight with my pay (beginning at $66 a fortnight) from there with no plan for the future. I’ve learned and taught myself a few more things since then.
I’ve experienced how easy it is to get in a financial rut. And I’ve managed to do ok at times to. I certainly don’t regard myself as rich but I think I have a pretty good life overall.
I’ve never planned or aspired to making myself rich. Doing ok has been ok enough.
What about the hundreds of thousands of people deemed to being in poverty? Are they stuck there?
By today’s measures I grew up in poverty. It was tough times for my parents trying to manage on an orchard that was sold to them as frost free but was devastated by frosts at times, at one stage in two out of three years. At times both my parents worked elsewhere to survive. But the both ended up financially quite comfortable, able to live their later years as they liked.
But some people seem to start in poverty and remain stuck in poverty. Corley writes:
The fact is the poor are poor because they have too many Poverty Habits and too few Rich Habits. Poor parents teach their children the Poverty Habits and wealthy parents teach their children the Rich Habits. We don’t have a wealth gap in this country we have a parent gap. We don’t have income inequality, we have parent inequality.
My parents didn’t teach me to get rich, but at least they taught me to work hard and to battle away until I wasn’t poor.
Corley lists fifteen statistics that separate the rich from the poor.
- 72% of the wealthy know their credit score vs. 5% of the poor
- 6% of the wealthy play the lottery vs. 77% of the poor
- 80% of the wealthy are focused on at least one goal vs. 12% of the poor
- 62% of the wealthy floss their teeth every day vs. 16% of the poor
- 21% of the wealthy are overweight by 30 pounds or more vs. 66% of the poor
- 63% of the wealthy spend less than 1 hour per day on recreational Internet use vs. 26% of the poor
- 83% of the wealthy attend/attended back to school night for their kids vs. 13% of the poor
- 29% of the wealthy had one or more children who made the honor roll vs. 4% of the poor
- 63% of wealthy listen to audio books during their commute vs. 5% of the poor
- 67% of the wealthy watch 1 hour or less of T.V. per day vs 23% of the poor
- 9% of the wealthy watch reality T.V. shows vs. 78% of the poor
- 73% of the wealthy were taught the 80/20 rule vs. 5% of the poor (live off 80% save 20%)
- 79% of the wealthy network 5 hours or more per month vs. 16% of the poor
- 8% of the wealthy believe wealth comes from random good luck vs. 79% of the poor
- 79% of the wealthy believe they are responsible for their financial condition vs. 18% of the poor
Parents and our schools need to work together to instill good daily success habits as follows:
- Limit T.V., social media and cell phone use to no more than one hour a day.
- Require that children to read one to two educational books a month.
- Require children to aerobically exercise 20 – 30 minutes a day.
- Limit junk food to no more than 300 calories a day.
- Require that children set monthly, annual and 5-year goals.
- Require working age children to work or volunteer at least ten hours a week.
- Require that children save at least 25% of their earnings or gifts they receive.
- Teach children the importance of relationship building by requiring them to call friends, family, teachers, coaches etc. on their birthdays and to send thank you cards for gifts or help they received from anyone.
- Reassure children that mistakes are good not bad. Children need to understand that the very foundation of success in life is built on learning from our mistakes.
- Punish children when they lose their tempers so they understand the importance of controlling this very costly emotion.
- Teach children that seeking financial success in life is good and is a worthwhile goal. Children need to learn what the American Dream is and that it is something to be pursued in life.
- Children need to learn how to manage money. Open up a checking account or savings account for children and force them to use their savings to buy the things they want. They need to learn that they are not entitled to things like cell phones, computers, fashionable clothes, flat screen T.V.s etc.
- Require children to participate in at least two non-sports-related extracurricular activities at school or outside of school.
- Parents and children need to set aside at least an hour a day to talk to one another. Not on Facebook, or on the cell phone, but face to face. The only quality time is quantity time
- Teach children how to manage their time. They should be required to create daily “to do” lists and these lists need to be monitored by parents. The goal should be to accomplish at least 70% of their tasks on their daily “to do” list.
And he concludes:
Wealthy people do certain things every single day that sets them apart from everyone else in life. Wealthy people have good daily success habits that they learned from their parents. These daily habits are the real reason for the wealth gap in our country and the real reason why the rich get richer. Unless we teach our children good daily success habits, and level the playing field, the rich will continue to get richer and the poor will continue to get poorer.
Food for thought. Especially for our politicians.
I’m sure that to an extent poverty can be a habit.
Should out Governments feed that habit or try and break that habit?