Only education can solve poverty. To be more specific, the kind of education the poor needs is financial education.
The story of Bonnie and Clyde
If a person is poor in mind and financial education, no matter how much money he has now, he will become poor after all. Bonnie earns as little as Clyde, below the average earning of a typical adult. Bonnie thinks that striking a big lottery will solve her financial problem. As her dream comes true one day, she made a few million dollars out of a lottery ticket. She became rich in cash for several months before she ended up being even poorer than before. Meanwhile, Clyde hasnâ€™t bought any lottery ticket but he is much richer then Bonnie, even though he save money the stupid way. This is the story of Bonnie and Clyde.
The big difference between Bonnie and Clyde is financial IQ.
Why Money Canâ€™t Solve Poverty
If money can really solve poverty, the simple solution is to distribute wealth equally amongst every person on earth. Do you think this will solve poverty? I certainly donâ€™t think so.
The rich people donate a lot. Think of Bill Gates and Warren Buffett. A very big chunk of their wealth is donated to help the world. The money is not simply distributed to the people who are â€œpoorâ€. It is because they know that giving money to the poor will only accelerate poverty, not solving it.
In fact, money is the root of all evils. And these evils are limited only to the poor. The poor face financial problem because they donâ€™t know how to manage their money. They donâ€™t really need more money (although thatâ€™s what they think â€“ more money will solve their problem). What they really need is financial education.
The ultimate solution is financial education
Think of the scenarios discussed below. I bet you will realize why financial education is the best solution to end poverty.
Financial gurus such as Donald Trump and Warren Buffett write books on making money by doing business and smart investment. They want to educate us to increase our financial IQ.
Why isnâ€™t there any curriculum on financial education in our school system? I heard that it is a conspiracy. Thatâ€™s why Robert T. Kiyosaki is writing a book about it and giving you total access for free.
Ask around the poor people you know, â€œDo you read personal finance books, magazine, blog or â€¦..?â€ 99% will say NO. They are too busy (actually it is an excuse). But I do believe them. You stay rich in order to be free. So the poor must be busier than the rich in this sense!
Some of the richest people are born in the poorest family. And some of the poorest people are born in the richest family. Of course, it is also through the other way round. Some people are already born rich, and then become even richer later in their life. This shows that it is not the money you have that dictate your financial status. It is the difference of financial IQ, which is totally linked with the amount of financial education we learn throughout our life.
During a recession, it is harder to find a job, especially for fresh graduates. Rising unemployment rate worsen the situation and most of them will go back to school to get more education. Most of them borrows more money to get educated and hope that when they are going to graduate years later, the economy has already recovered. Do you think they will be better off compared to those who didn’t go back to school?
Again, money canâ€™t solve poverty, financial education does!