Thinking About Poverty

Poverty seems to be an important issue lately. It has been an important issue for millenia. There have always been poor among us and we must notice that and address it.

The fallacy is that addressing it does not alleviate it. It depends on how you define poor.

Government assessment

The current standard for policy purposes says the bottom quintile is poor. Policymakers must have some standards but that one is not very nuanced. They pay little attention to context. In New York  poverty is quite different than it is in a small town in Iowa. The difference is missed in the “fifth quintile” We can assume the resultign policy address some middle ground and likely is not very useful in either Iowa or New York.

More importantly politicians have a vested interest in promoting poverty rather than curing it. Dependents vote for who they must. An insidious situation

What do we mean by poverty?

Income is an element. If you have too little income you will tend to be poor but it is not defining. How much income you need depends on other circumstances:

  1. How much does food cost?
  2. How much does shelter cost?
  3. How much can someone earn working 40 hours a week?
  4. How available is childcare?
  5. How good are the available schools?
  6. How much does health care cost?
  7. How much does transportation cost?
  8. How old is the person?
  9. How large their family?

Context matters. I talked briefly about ergodicity yesterday and you can see how government poverty policy assumes an ensemble statistic but individual statistics matter more. You tend to get wrong answers when you assess a problem poorly

An approach

Solving poverty begins with education. THat will take a while to repair os in the interim notice that poverty relief, not cure, is a local matter. You can do more for the poor people you meet because you can address their specific needs. Maybe a child needs school supplies, or a warm coat. Maybe food is short. Maybe the hydro bill is overwhelming.

Pay attention what matter sand how you can help. Maybe better schools. Maybe job opportunities. Maybe less intrusive governments.

Notice what is happening near you. Act locally. You will do more good than you think.


I help people understand and manage risk and other financial issues. To help them achieve and exceed their goals, I use tax efficiencies and design advantages. The result: more security, more efficient income, larger and more liquid estates.

Please be in touch if I can help you. don@moneyfyi.com 705-927-4770

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