The success sequence is a study that showed the following three things differentiate the majority of those who are poor vs. those who are wealthy. If someone who is poor following these three simple steps, their path out of poverty is greatly increased:
1. Get a high school diploma
2. Get a job
3. Get married before you have babies.
More info on the “Success Sequence: can be found here:
https://www.wsj.com/articles/the-sequence-is-the-secret-to-success-1522189894
I would add three points to those steps:
1. Learn about finance. Teach children in schools basic finance. Simple stuff like how to balance a checkbook. The importance of paying bills on time. How compound interest can help you. What a mortgage looks like. How to pay off debt. But none of these concepts are taught in school. So the kids rely on learning this from their parents and peers. And as seen in Rick’s examples - a lot of these parents aren’ good examples, and aren’t equipped to teach their kids about finances!
2. Live below your means: I have lived by a simple rule: live below your means. If you an do that comfortably, I would venture to say that you are wealthy. I know many lower to mid middle class families that live below their means. I consider them to be more wealthy than the person who makes $250k a year, but spends $300K on lavish items like summer homes, fancy cars, fast boats, and luxury items. If Mr. Richie Rich were making $400K a year, then that’s a different story! But no matter how much you make, if you live above your means, you are setting yourself up for financial disaster!
3. Practice delayed gratification: Start putting money into long term savings as soon as you can! This holds true especially if your place of employment has some type of 401K plan. But if it doesn’t, it is still advisable to put money into long term investments. Even with mediocre returns, over time, that money can grow into something that can help support you! At least Rick’s customer’s kinda understand this notion, but had they learned about basic finance in school (see point #1), they would understand how they can make their money grow better for them!
So in my opinion, these six steps can be a springboard into helping get out from below the poverty line.
Getting off my soapbox…