Building Wealth When You’re Poor (or Everybody Thinks You’re Poor)
By: Rocco Pendola
Tags: Inequality, Investing, Money, Personal Finance, Saving

Building Wealth When You’re Poor (or Everybody Thinks You’re Poor)

Photo by Candice Seplow on Unsplash

Shit got real in response to my recent Making of a Millionaire article about how young people stand to benefit from the one of the biggest transfers of wealth in history.

As is often the case, a Medium user, this time April Garrido Wright, set me on a thoughtful thought trajectory. I address it broadly here. In this article, I deal with the salient points April brought up more specifically. Then I tie them to my belief that almost anyone can save and invest.

It’s all about knowledge and empowerment. And it’s imperative that we spread the knowledge and empower people to take steps, even if they’re small and seemingly insignificant (they’re not), to situate their personal finance as best as they can. We can’t get past every structural obstacle that exists, but we can organize around basic principles almost anyone can put into play.

Consider this article one small part of the push in the direction personal finance writing must head — in a more inclusive direction.

Most personal finance discussions apply across the socioeconomic spectrum. You can create a sound budget, allocate income wisely (save/invest), and build wealth over time, no matter how much money you make. All else equal, it’s about how much income you can free up relative to your cash flow, not whether or not you have the means, will, or ability to practice personal finance.

But we know all else is not equal. In fact, it’s decidedly unequal. It’s this structural inequality — and the myriad forces driving it — that makes personal finance appear as the stuff of the privileged class. But here’s the deal:

Anyone can create a budget.

Anyone can cut spending.

Anyone can round up purchases and put the change in a savings account.

Anyone can invest, given that tons of platforms set minimums at just a few dollars.

There’s no reason — other than structural and systemic ones (e.g., homelessness, extreme poverty, lack of access due to race/class issues) — why most people can’t pull off some more or less aggressive variation of one or all of the above. They just have to know it’s possible, feel empowered, and learn how to execute.

That said — and this is very important — money isn’t a mystery only members of poor and marginalized communities can’t make sense of.

I can’t count how many people I run into in my day-to-day life — middle class, upper-middle-class, even wealthy — who ask what I do. When I tell them, “I write about personal finance and investing,” they admit they have no clue about money and could use my knowledge. The difference is that generally speaking, these privileged classes face fewer practical and psychological obstacles to get on the right track. It’s not quite so easy to make the first moves when you don’t already operate from a position of relative financial strength.

That said, it’s hardly the case that all “poor” people lack the intellectual and intangible tools to budget, save, and invest. This is simply one of the ways our society eschews nuance in favor of blaming individuals for their plight or mischaracterizing their plight (or lack thereof) in the first place.

It’s at this juncture where we get to the heart of the discussion.