Simple Steps to Get Out of Poverty
Have you ever heard the phrase, the rich keep getting richer & the poor are getting poorer? Well, it's not just a phrase unfortunately it's the truth. Despite the fact that millions of people are leaving poverty behind & even becoming millionaires. Most people will never make it, having said that in 2020, America's 614 billionaires net worth exceeded 3 trillion dollars.
The stimulus bill that supposes to help your average folk ended up helping the billionaires the most. At the end of the day, most people spent that money either on their basic needs or purchased some gadgets on amazon. I guess Bezos was the ultimate beneficiary of the stimulus bill. Even though he has stepped down as the CEO of Amazon, he is still the biggest individual shareholder.
“A man who procrastinates in his choosing will inevitably have his choice made for him by circumstance.” ~ Hunter S. Thompson, The Proud Highway: Saga of a Desperate Southern Gentleman, 1955-1967
But the question that I want to focus on in this article is ~ how do you get out of poverty? What if you are born into a poor family, it's not your fault, what do you do? How exactly do you build wealth & become financially free?
Understand that no one is going to help you except yourself. There’s no difference. It's a blessing when there is someone who can help you. Either it's the government or your parents, but the reality is no one really cares about you except yourself. Of course, your parents want you to have a better life.
However, they don't always have the ability to provide you with multiple opportunities, & if they have grown up in a poor family, it's very unlikely that they can give you good financial advice. Otherwise they would have gotten out of that position long ago. If you talk to people who are struggling financially, they will always blame someone, especially the government who suppose to take care of them.
I am not saying that the government shouldn't take care of you, but if you rely on outside factors, you will have to wait for a long time. You have to make it crystally clear to your self that no one can help you as much as you can help yourself. That's the first step to make any meaningful change.
Fear & Loathing for Complacency
Don't settle for a low paying job, I am not against getting a job. In fact getting a low paying job when you are a teenager is a perfect opportunity to teach yourself the basics of business, money & learn how to be responsible with money. However, a low paying job is a trap that most people get into & never leave. When you grow up poor, every penny matters, every dollar makes a difference, you grow up with very little needs & wants.
As my pops always says, "You don't have any money management." The truth hurts, which he read me like a book. I think about my father as a young man back in Iran, driving his Peykan with his siblings & frolicking with joy.
Everything you want can be fulfilled with a few thousand dollars. All you want is a proper roof over your head, some good food, & gadgets that everyone else around has. So when you get that first job as a teenager, it provides you with enough income to fulfill those needs, but in return, you have to give up most of your time. So you get to a position where you just work the entire day on a job that doesn't provide you with skills to increase your income year after year but at the same time fills your basic needs at least, so you get trapped in that job. A low paying job gives you instant gratification but a very little reward in the long run. You can quickly earn enough to be able to take a car on credit, get the latest iPhone & start going out with friends.
But, at the same time, it won't give you the luxury of free time to work on yourself & make your time worth far more valuable in the long run. Hence, you have to teach yourself how to delay gratification. The best way to do that is to start going to the gym. No matter who you are, no one is going to see any progress after hitting the gym once, or twice or an entire month. Real progress comes after many months of hitting the gym at least 3-4 times a week, & if you want to see a substantial difference, then you might need to go to the gym for a few years, maybe. That experience will teach you how to work hard for something you will get years later.
Consolidate a Clear Plan of Action
Have a clear plan, if you don't have a plan of how you are going to become financially independent, you will forever be trapped in poverty. It doesn't matter how long that goal is going to take. If you don't have the plan, you won't have the discipline to save & invest. Let me just give you a hypothetical example. Let's say you spend 50K a year. If you don't know how you are going to create a passive income of 50K, then you are wasting your time.
But how do you create such a plan? You have to buy assets that generate income over time, it could be anything from real estate to stocks to bonds or a business that can function with minimal management. A 200K dollar house can be rented for 2K dollars a month, for example, or 24K a year. So, for you to become financially free, you need at least to purchase two properties that will provide you with a rental income of 48K dollars. That's just one way to do it. There are a million other ways. You can take a mortgage, for example, & let your tenants pay the mortgage & have a small cash flow with every property. Or you can consider the stock market, where you can expect a 10 percent rate of return in the long run.
It doesn't matter what the plan is as long as it's there, & it seems like it has a good chance to work. Whether you are going to save 10% of your income to get there or 90 percent, it depends on you. But here is what most people are going to say, my income barely covers the bills. How am I possibly going to save that much & invest?
Focus on Educating Yourself
if you are making 50K a year, it's impossible to imagine yourself making 200K, for example or half a million dollars or a million dollars. Because you are comparing that million dollars to your current job. If you are making 20 dollars an hour, then you have to make at least 250 dollars an hour assuming you will work for 12 hours every single day to be able to make seven figures, & as far as it seems, no one is going to pay you that much for a such a job.
However, that doesn't mean, there aren't ways to earn that much. There are people who make far more than that, the only problem is, you have to find out how! that's why you have to educate yourself. But if you spend all your time on a low-paying job, you won't be able to do that. So what should you do, either find extra time after you are done with your job or what I did back then is just minimize my expenses, deny myself some of the nice to have things so that I could work less to pay the bills & suddenly I had some extra time to work on myself. If you are just starting out, pick up some books, find out what your strengths are, learn how the latest technologies work, & start something in that field. It's not going to happen overnight, but remember that you are in it for the long run.
Begin Strategic Planning Process
Set up a boring but effective routine. Once you come up with a reasonable plan of action, it's time to set up a routine. SWOT analysis stands for Strengths, Weaknesses, Opportunities, & Threats. To do a SWOT analysis, you should focus on what you believe are the key areas of imperfection. Once you have completed a SWOT analysis, you should begin to develop goals for each of the subpar areas of disappointment. The goals should be specific, measurable, agreed-upon, realistic, & have a time constraint.
Forget about having adventures every single day. You can't be productive if you don't have a routine. That life you see on Instagram is nonsense. Trust me, everyone who makes real money almost never lives like that. The life of a person who makes a lot of money is super boring! Yes, it's boring but yet effective. You wake up every day at the same time, do the same thing, over & over & over a long period of time, which could be years, you achieve meaningful progress.
Remember the example of the gym. Building a great body is a result of going to the gym every day & repeating the same excercises. Yeah, sometimes you try new equipment, but overall you do pretty much the same thing. You train your chest, back, biceps, shoulders at least once a week. After 2 or 3 years of hitting the gym 3-4 times at least a week, you start to see the fruits of your hard work.
That's how everything works in life, including wealth. So don't feel miserable when you scroll through your Instagram feed. Just focus on what you are good. We don't choose how are we born. Some of us are lucky to be born rich, while others aren't fortunate.
But as a wise man once said, "It's not how you start that's important, but how you finish!" ~ Ikechukwu Joseph
If you are born poor, it's not your fault, but if you stay poor for the rest of your life, then it's your choice. Of course, circumstances change from country to country. Being born poor in a first-world country like the United States is different than being born in the middle of Iran, where you do not have a surplus of opportunites within the infrastructure to start building wealth.
Albert Einstein is reputed to have said, “Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn't, pays it.”
However, with the rise of the internet, that has changed, you could be anywhere & yet still educate yourself & even build an entire business online.
"Don’t grieve. Anything you lose comes round in another form." ~ Jalaluddin Rumi
Copyright Disclaimer under Section 107 of the copyright act 1976, allowance is made for fair use for purposes such as criticism, comment, news reporting, scholarship, & research. Fair use is a use permitted by copyright statute that might otherwise be infringing. Non-profit, educational or personal use tips the balance in favour of fair use. This is not financial advice, & everything that's present in this article is for educational & entertainment purposes. Having said that if I hypothetically happen to be in the 12% income tax bracket earning thirty eight thousand to seven hundred dollars or less I will optimize & receive 99.9 percent of my dividend income tax free up to thirty eight thousand six hundred dollars. If I'm fortunate at that point to be married & I'm good to go then that could be as much as seventy seven thousand two hundred dollars of dividend income tax free which that's a pretty freakishly large dividend portfolio. But who knows maybe I'll have that much maybe I won't, have no idea but to be my own devil's advocate I would get a Roth IRA if one of two conditions were met condition:
- I was employed & my employer would help me set one up & actually match my contributions
- I made so much money I didn't know what to do with it & I would just invest it for some extra diversification income in retirement
But that is kind of ironic because if you make a hundred twenty two thousand dollars a year or more one of the disadvantages is you can no longer contribute to your Roth IRA.
“As Jim Rohn would say, 'Don’t wish it were easier; wish you were better.' When you hit the wall in your disciplines, routines, rhythms, & consistency, realize that’s when you are separating yourself from your old self, scaling that wall, & finding your new powerful, triumphant, & victorious self.” ~ Curated Excerpt From: Darren Hardy. “The Compound Effect.” Apple Books.
Curated via Proactive Thinker. Thanks for reading, cheers! (with a glass of wine & book of course)
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