A few days ago, I wrote a post where I responded to a reader who felt I had nothing to offer her because my income was significantly higher than hers. I strongly disagreed – I feel very much that the principles of personal finance apply to everyone. I used the example of sharing money-saving tips with my parents, who earn significantly less than I do – we both benefit from a lot of these activities. Similarly, my father is an entrepreneur who has a thriving fishing and gardening side business – he doesn’t have a big bankroll, but he has passion. I learned entrepreneurship from him and it led me to have the courage to start Money360 and run with it.
Underneath that, though, Marjorie did have another interesting point worth discussing. There are simply some people in very difficult financial situations that I can’t help. If you are in a position where your earning potential is low and you have to work every spare minute to make ends meet, the idea of shaving a few dollars from your budget to help keep yourself above water is laughable. Most people in low-income situations already follow most of the frugality tactics I mention, not because it’s a good way to help get themselves in better financial shape, but out of pure necessity.
Larry Winget, in his very solid personal finance book You’re Broke Because You Want to Be, hit the issue right on the head. He made a distinction between the idea of being poor and the idea of being broke in a very clear way. Here’s what he had to say:
Please don’t say, “But what about the poor people, Larry? They don’t want to be broke.”
Great point. You’re right. I’m not talking about being poor.
Poor is a condition I find very sad. Sad, yet inevitable. Jesus said, “The poor will be with you always.” And they will. There are people who live in soicieties and countries where there are no opportunities for advancement and it takes all their effort just to survieve. They are not going to have enough to eat well or live well or take care of themselves.
So let’s get this straight from the outset so you can get off your high horse and understand what I am really saying. I didn’t write this book for the poor people of the world. I know it is going to take a lot more than a book to help truly poor people. To think otherwise would be insulting.
I am talking about broke. Broke is not a condition like being poor. Broke is a situation you find yourself in because you are either underearning or overspending.
In short, being poor means that you don’t have the resources available to you to improve your financial situation. For some, this may mean a personal challenge, such as a learning disability or physical disability. For others, it may be a confluence of events in life that close doors to progress, such as having children before you’re adequately prepared. I know some people in these situations and I know that there are many more in this group throughout the world. It will take some significant social progress to reach these people
Poverty is not something I can help. It’s something far beyond the ability of an internet blog to help. It requires significant social change and a very large commitment to lift all of the boats in the world. If I want to actually help with poverty, I can go over to the food pantry and help gather for them, I can donate some of my financial gains to charities that help with poverty issues, or I can get involved in political causes. No list of “tips” I can write can help with genuine poverty.
On the other hand, being broke means that you do have resources available to you to help improve your financial situation, whether you see them or not. This is usually due to a lack of personal finance education, poor time management skills, a lack of willpower, and so on. What I’ve found is that almost everyone who can access Money360 falls into this category – they have some resources somewhere that they’re not utilizing well, and by utilizing them better, they can achieve their dreams.
Being broke is something I can help. I can offer up my own experiences in a very detailed fashion. I can suggest fixes that work in a wide variety of lifestyles. I can offer all kinds of insights on how to better manage your time and how to use that excess time to increase your income.
If you’re reading this, you’re probably in the “broke” boat, were in the recent past, or desperately want to avoid ever going there. Welcome aboard. Let’s sail beyond the sunset together.
Yes, some people can fall into both camps. They are in a situation without many resources to spare and because they’ve been led to believe they can’t succeed, they don’t believe in those resources and don’t believe in themselves. I know some people in just this situation – they believe they’re in the “poor” camp when they’re actually in the “broke” camp. I would rather reach these people more than anyone else, and that’s why Marjorie’s email struck such a chord with me, because I believe she’s in this group.
The fact that some people have resources and some people do not is a very broad societal issue, one I can’t hope to solve. All I can do is try to reach out to the people who have resources available to them and help them to discover how to really use those resources. I don’t profess to have any kind of solution for any greater societal problem, but I do find a lot of value in helping people find ways to succeed themselves.