Can You Overcome Poverty?


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Poverty isn’t just one thing. It’s complicated.

In my five-year Rich Habits Study, I was able to interview 128 poor people. I learned a lot about poverty. More than most. Understanding poverty, I believe, helps inoculate you from it.

For some, poverty is thrust upon them, through no fault of their own. For others, poverty is their own doing.

While each of the stories of the 128 poor people I interviewed is unique, I did find some commonalities.

According to my research, there are 5 types of poverty.

#1 Functional Poverty

The poor in this category are comprised of people who just don’t make enough money in the work that they do. These individuals are good people. They have strong family values. Their households are run by good parents who love their children. They are hard-working. Frugality is forced upon them, so they learn to squeeze more out of every dollar.

They don’t make a lot of money because the work they do is not highly valued by society. They are able to provide the bare necessities for their children.

Because functionally poor children are raised in a stable, nurturing, loving environment, they are given the tools by their parents to break out of poverty. Many do. Most of their children wind up in the middle-class, but some are able to excel and become rich.

The vast majority of the poor who do become rich, come from this category.

#2 Dysfunctional Poverty

The poor in this category were raised by dysfunctional parents. Addictions are a common variable among those raised in Dysfunctional Poverty. One or both parents may struggle with drugs, alcohol or gambling. Consequently, single-parent households are commonplace in this category.

Hatred is another common variable among the poor in this category. They hate and disrespect the law and society. They are frequent law breakers. Theft and assault are the tools of their trade.

Psychological problems are yet another common variable of those stuck in Dysfunctional Poverty. They are mentally and emotionally unfit. Those with psychological deficiencies somehow slip through the cracks of society; their mental deficiencies ignored or unaddressed.

Incarceration of one or both parents is a common theme in these households. Children are raised by a single parent, or assisted by others – a grandparent, foster parents, charitable organizations, governmental institutions, etc.

The vast majority of the poor, come from Dysfunctional Poverty. This is the number one source of poverty in America.

#3 Exploited Poverty

The poor in this category are individuals who are lulled into dependency through government entitlement programs. They are given the bare necessities of life through these government entitlement programs. Because these programs lack meaningful accountability or an exit strategy for the poor, the individuals caught up in these programs learn to game the system in order to maintain their entitlement benefits.

Many illegal immigrants in America are trapped inside these government entitlement programs, and poverty becomes generational – meaning it spans multiple generations, each one forging the habit of dependency on these programs.

#4 Temporary Poverty

The poor in this category are forced into poverty through misfortune or bad luck. Death of a parent, disability of a parent or family member, disease and health issues, loss of a job, an accident, etc.

Most individuals in this category are eventually able to recover from their misfortune or bad luck and pull themselves out of poverty.

#5 Self-Inflicted Poverty

The poor in this category have no one but themselves to blame for their poverty. These individuals have Poor Habits. They are lazy. They do nothing to improve themselves. They take uncalculated risks with their money. They overspend. They do not save. And they are woefully incompetent in managing their money.

Many of the individuals in this category wind up poor in their old age; dependent on their children, family or friends to sustain themselves.

This is the second greatest source of poverty.

So, can poverty be overcome?

The short answer is yes.

However, Dysfunctional and Exploited Poverty are without a doubt the hardest to overcome. Individuals raised in these households are really placed behind the eight ball in life. Overcoming these two types of poverty is possible, but it requires an almost superhuman effort. But, still, it is possible, if the desire to change is strong enough.

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Thomas C. Corley About Thomas C. Corley

Tom Corley is a bestselling author, speaker, and media contributor for Business Insider, CNBC and a few other national media outlets.

His Rich Habits research has been read, viewed or heard by over 50 million people in 25 countries around the world.

Besides being an author, Tom is also a CPA, CFP, holds a master’s degree in taxation and is President of Cerefice and Company, a CPA firm in New Jersey.
Phone Number: 732-382-3800 Ext. 103.
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  1. I’m sending to friends and colleagues who will benefit from your research. Thank w.

  2. Self Inflicted Poverty seems to be the worst from what I have seen. I’ve seen several people in both dysfunctional and exploited poverty rise above what they were born into. With self inflicted, there’s no way to help them if they aren’t willing to try to do anything to better themselves.

  3. My great ecomonics Professor Meyer Burstein would say that “poverty is not the problem — the poverty of wants is the problem. How do you make people ‘want’ better?” Your article defines the problem (and a good argument for not throwing more entitlements at people). Now we need a solution.

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