This is going to be an honest conversation focused on the fundamentals, the things you need to get right otherwise you will be trapped in generational poverty.
This is going to be an honest conversation focused on the fundamentals, the things you need to get right otherwise you will be trapped in generational poverty.Nobody can choose where and to whom they are born to, but if we do everything right, we can choose where and how we die.
This premise of you being able to alter your destiny is at the core of every person who ever got out of the trap of poverty.
My pathway here will take you through the complete journey from poverty, into the middle class first and then on your way to riches.
This piece will focus on the very start: how to force your way out of poverty.
A study by The Brookings Institute shows the 3 main factors that guarantee poverty living as a family of 4 once you’re over the age of 30. These are:
Not completing a high school education. – you probably know my position of the educational system if you follow me on Facebook and Twitter, but if you’re starting out poor the straight path out is through traditional education systems. You’re struggling, you do not have the luxury to look down on school.
Children outside of wedlock early on in your life. – An early pregnancy can take the wind out of your sails, even more so if the couple does not stay together.
Lack of wedlock. Two heads, and two paychecks are better than one especially as a single parent.
And although the marriage part doesn’t sit that right with me, on a macro scale I believe it makes sense.
Escaping poverty has two fundamental premises:
A minimum predictable income that is enough to cover the basics
Ability to access growth opportunities
Without these 2 elements, one gets stuck in a poverty spiral.
Leaving that and all of the theory behind, here are the practical steps you need to take if you want to force yourself out of poverty:
1 Accept That Things Have to Change
It’s time you and yourself have a talk and finally learn how to earn money by making some simple changes. So sit yourself down and think about your life, the life your children will live and what will happen if things remain the same.
Contrary to what you’re thinking
Most poor people get really good at living the poor lifestyle!
They find a rhythm and although it sounds hard to believe, they get complacent.
This doesn’t mean that they like or enjoy their lifestyle, it just means that they’re not in a rush to change.
In order for one to escape the trap of poverty, this needs to become a priority. Everything about the poor lifestyle will need to change and for most people, this is their current identity and of course they’re scared to lose it.
The truth is: This person needs to die!
You will have to kill your current self and become someone else!
There’s going to be no way, but to sacrifice. For your well-being and that of your children you will most likely need to sacrifice the people who are not benefiting your growth – sometimes these are your friends or even family.
You can not help others unless you help yourself first!
Right now you’re in no position to help anyone, so things need to change!
Once you understand mentally and emotionally that you have no other option but to change, the process finally begins.
2 Honestly Analyze Your Life and Put Everything Down
You can not make any real progress unless you get a clear inventory of your life in as much detail as possible.
This isn’t about making yourself look good, instead be brutally honest with you.
Begin with your finances:
How much money do you earn and have coming in?
How much do you spend every month? Break everything down relevant topics like: food, transportation, subscriptions, utilities, entertainment, clothing, family care, health and so on
Yes, poverty is more than a money problem, but I am positive that money would solve a lot of the problems you have in your life right now.
So will you make it a priority to solve the money for yourself?
Most people have no idea just how much money goes where.
If you never tracked your expenses, do it for 30 days, but do it in a brutally honest fashion.
The moment you close in to getting this personal report done, you will be shocked at how much money you spend that maybe you could put to better use.
Knowing how to save money, is in fact knowing how to earn money.
Either way, you need this clear image because it will allow you to move to the next step.
3 Identify the Bare Minimum for Survival
This is where you’re going to put in some work.
Go through the personal profile and identify the minimum you need to SURVIVE.
You’re gonna enter the Survival mode. This means you will allocate resources to only the most vital parts: keep the lights on, keep the water and gas on and some food that’s just good enough to get the job done.
And no, your Spotify or Netflix subscription isn’t a necessity.
The speed at which you’re able to escape poverty depends on your ability to live as minimalistic of a life as possible. I know it will suck, but your life sucks right now.
Either way… if you want it to stop sucking, you’re gonna have to make some tough choices, only such decisions will teach you how to earn money the right way.
After you identify the bare minimum for survival you’re ready for the next step.
4 Cut Everything Else Out for at Least 6 Months
This is the part people don’t want to do. It’s also the reason why people never escape poverty.
Growth is the result of sacrificing the present for a better future!
And most people don’t want to sacrifice anything. They want all the upside without any effort or pain on their behalf, which is why years go by and nothing changes.
No matter how much you try to attract money in your life, send out positive thoughts and prayers, one thing is certain:
Jesus ain’t coming to pay your rent or teach you how to earn money for yourself.
Be brutal with yourself for what do you REALLY have to lose? 6 months of relative misery for a shot to have a better life long term..
You will get out of this situation by making the most out of the resources you already have at your disposal. Give yourself every advantage you can and rid yourself of everything that’s making your journey longer.
And this needs to happen NOW!
The longer you stay in poverty the higher the price to get out is!
This is why some people end up in generational poverty, they never stop the bleeding.
Your priority becomes spending as little money as possible, so that with the little that’s left you can begin to build momentum.
5 Get a Job or Increase Your Work Volume
Don’t allow pride to get in the way of you achieving your long term objectives.
If you don’t have a job get one. As much as you’d like to become a millionaire long term, you need to focus on the next 6 to 12 months of your life.
You have to do anything you can to increase your income.
If you already have a job, the simplest way to earn more is to increase work volume. So even 1 or 2 hours extra per day while living minimally, will make the difference.
Especially if your current workplace will pay for overtime. Remember that everything over 40hours per week will be paid 50% more.
If there are no opportunities to increase the volume at your current workspace, use the gig economy.
You’re doing this for yourself and so that your children will not have to go through the same pain you’re going through right now.
What better reason is there to do what you must! Deliver for Doordash or Grubhub, drive for Uber. Find jobs on craigslist, help small businesses in your area, in any way that gets you paid now!
6 Prioritize Immediate High Interest Debts
Because you are not spending less than you were before and hopefully you found a way to slightly increase your income, it’s time to address the biggest pains in your life: DEBT.
The system is set up in such a way that it takes advantage of the poor and less educated.
Just because you throw a credit card away doesn’t mean the money you owe goes away as well.
NEVER, from this day forward, will you ever use PAYDAY LOANS AGAIN! Sure people want to believe that’s how to earn money fast, but that’s also how you make debts fast.
Look at all the debt you have and see which one has the highest interest.
The Interest is that percentage in your contract of what you will pay on top of the money you borrowed. If you don’t know, make it a priority to find out.
Almost everything you earn that doesn’t go to your survival should go to paying off the highest interest debt you carry.
Why? Everyday that debt isn’t paid you owe more and more money.
Debt is the modern version of chains!
As long as you have it, you can not be free!
7 Save 1 Month Worth of Essential Money
Because you’ve done the analysis at step 3, you now know exactly how to earn money you need to survive month to month.
I know saving money is not your forte, but this step is crucial.
What happens if you lose your job or you have a medical emergency? Without savings you would have to go into more debt… more chains… less freedom… more poverty for an even longer period of time.
This is how you need to think about savings. You have them there to protect yourself against darker times, because you know damn well that it’s just a matter of time until they come.
You’re literally in a race to get this minimum fund ready as quickly as possible.
8 Pride Aside, Take Every Handout You Can Get
You have no idea just how many systems are set in place to help you, because the truth is they suck at letting everybody know.
But these systems are how to earn money that’s free and very well within the range of your rights.
If you can eat for free, do it.
Your neighbor can take care of your child while you’re at work? Do it.
The city allows you to use public transportation because of your financial status? do it.
You’re never too good to ride the bus or walk to work. Especially now, where this money can go towards paying off the bad debt you’ve got yourself into.
Or it can be used for your savings fund.
Use the food stamps, don’t buy yourself a PS5 with the stimulus check, find programs in your area designed to help.
One of the most underutilized resources out there are libraries.. You know those buildings you never go into.. Libraries are extremely cool and if they were to invent them today, the subscription to them would cost a fortune.
At this stage it’s all about making progress. Put your pride aside, keep your head down and keep pushing forward. Always remember the long term game you’re playing.
9 Identify Sustainable Opportunities to Increase Your Income
At step 5 you’ve forced yourself to increase your work volume. Although this gets the job done for short to medium periods of time, it will take a toll on yourself.
If your last focus was to increase the numbers of hours per work-day that you can monetize, now it’s time to increase your pay per hour.
There are 2 ways to get this done:
A promotion within the organization you currently work for
A higher paying job in a different organization
The keyword here is SUSTAINABLE; meaning once you make the switch you can confidently predict you will earn more than you’re currently earning for the foreseeable 12 months.
This will not happen on its own. So you will need to use the little remaining time in your day to look for other employment opportunities.
Leverage the good work you’re doing to build trust with your prospective employers.
Be honest, let them know you’re disciplined and a hard worker and would be willing to make the switch for this specific salary.
It’s easy to scoff at an additional $5 per hour, but if you’re currently earning $15 per hour, and extra 5 would mean you just increased your work-income by 33%.
That’s how to earn money fair and square!
Some promotions will require you to take on more responsibility or quickly build a new skillset. Since this is what will get you out of the hole, say YES to every opportunity and figure it out.
This is your priority in life, you need the extra income.
10 Start Building Good Credit
In the words of Jay-Z:
You know what’s more important than throwing money in a strip-club? CREDIT!
The reason the system has you pinned down and locked into poverty is because of debt. CREDIT is just a different term of debt.
You’ll be left for the rest of your life to figure out how to earn money enough to return the heaps you will owe.
The more the system is confident you can pay off your debts the better terms you get.
Here’s how you build good credit fast:
Pay your bills on time. – Payment history is the single biggest factor that affects credit scores & late payments can stay on your credit reports for 7 years. Make it a priority to pay on time every single time.
2. Make more than one payment per month. – the lower you keep your balance the quicker your credit goes up. Instead of paying it off once at the end of the month, pay it every 2 weeks.
Ask for higher credit limits – When your credit limit goes up and your balance stays the same, it instantly lowers your overall credit utilization, which in turn improves your credit.
Once you show the money people that you’re good with money consistently, you’re ready for the next step.
11 Refinance Long-Term Debts for Better Terms
As long as you carry heavy debt with you, you will never be free. So everything you do, should be focused on getting you out of poverty and debt is how poverty is measured in the modern world.
So, how to earn money to improve your financial situation to its best? It is by refinancing long-term debts. If you’ve done everything right up until this point, you should have no problem getting better terms when you refinance.
This means you can either pay less per month or pay the same but rid yourself of debt sooner than before.
As of writing this blog, interest rates are on a steady rise because of the economic situation, but still low compared to decades past.
Which means this is a unique opportunity to simply walk into a bank, let them know about the debt you have under the bad terms.
Show them your new good credit and get it paid with a new debt, that is a lot less straining on your finances.
Banks will offer these consultations for free. It’s their business to make sure they can offer you a better deal than their competitors. Use this competition for your personal gain.
12 Save 4 Months Worth of Essential Money
By this point your life is starting to feel a lot better, you feel in CONTROL and things start to line up for you.
This is where people usually screw everything up and fall back on old habits. Others will see you do just a bit better and immediately come to drag you back where you started.
Sorry fam, I can’t afford to give anyone money right now!
NO will become your most common word. It’s easy to identify money vacuums, people or services that just want your money.
You keep your head down and move forward. And you don’t need a better phone as long as yours still works even if the screen is cracked.
At this stage you don’t need to be cool. You know what’s actually cool? Not being poor for the rest of your life because you wanted to impress some people who never care about you!
Don’t allow anything to sabotage your mission.
Become a man, woman…person of purpose!
It worked so far which is why you finally found yourself in a position to build some runway.
Use this position to put aside 4 months of essential money. This is your new priority.
Shit will inevitably hit the fan at some point and you need to be ready to deal with it.
If you don’t all that you’ve built could fall like a house of cards and send you back to the beginning!
You didn’t come this far.. Just to come this far and go back!
13 Use Free Resources to Build Your Skillset and Monetize That
The first half of my blog here forced you to get things under control while the second half got you ready and in position for this right here: this is how you’re going to make the leap from poverty into the middle class.
The marketplace will pay you in proportion to what you can offer it!
You need a valuable skill-set that you can monetize.
Fortunately for you, you live in the best time in history for this. You have an entire library of value at your disposal FOR FREE!!
Use the internet to learn how to earn money by doing things that people are ready to pay for.
You can learn how to restore old furniture online. You can learn to use Microsoft excel on YouTube and literally double your salary.
Learn how to manage a social media business page. Learn graphic design. This is the beauty of the age we’re living in. For anything you wish you learn there’s someone out there who documented everything and made it available for free.
At this stage, never pay for anything you can get for free and pay close attention to people who want your money.
As a rule of thumb:
There are no get rich quick schemes, these are just people who will get rich off of you!
14 Become a Contractor Instead of an Employee
This is where the leap actually takes place.
The moment you go from being an employee to being a contractor is the crucial point in your trajectory. There are 2 main reasons why becoming a business is better than working in a business:
Flexibility – you’re not locked in to a single revenue source, you can serve the one that pays you more and more than one client at a time.
Taxes & Benefits – Society has decided that contractors are worth more to the marketplace than employees, so it gives them better terms. You pay less in taxes, you enjoy more freedoms.
The day you decide to figure out how to earn money for yourself, the marketplace begins to treat you differently!
If you’re decent at what you do you will make a decent living. But you come from poverty, there’s a hunger these other people can’t relate to.
This hunger will be your competitive advantage, it will not allow you to settle for just this, it will push your forward.
Sooner than later you will find yourself in a position to expand, that’s when you will bring in help.
15 Group-Source Your Way Out of Poverty
By yourself you can force your way out of poverty and cross the line into the middle class, but it’s all still dependent on you to keep performing.
To be safe you will need to keep moving up until you’re as far away as you can from the life you used to live.
That’s where you will need other people to help you and in exchange you will help them do the same.
People bring leverage!
The collective is stronger than the sum of its parts!
You have your strengths and your weaknesses. So, if this new reality you’re building is to last, you need to cover these weaknesses and other people can do that for you.
If you’ve made it out of poverty, it is your responsibility to help others do the same. But be very careful whom you choose to help, because some will want to be helped.
While others will want what you have and will make it their mission to take it from you!
The snakes are in the grass, learn to deal with them!
Maybe you are fortunate and some of these steps do not apply to you. I started out poor but fortunately debt wasn’t an issue, I simply didn’t have any money.
And had to figure out how to build from that, but the fundamentals remain the same.
Sacrifice and prioritizing Long term over the Short term!
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