How to escape poverty

Short answer: organize and cooperate.

Long answer:

I am of the firm belief that you can’t escape poverty by yourself. Individuals are frail. Networks are resilient. The individual is one accident away from being wiped out, whereas networks can survive any catastrophe as long as it stays coherent. I will make the case that to escape poverty you must organize and cooperate.

In the past the family unit consisted of people all fulfilling their expected role; women managed all household affairs, children went to school to prepare for a well-paying job given the chance, and men went off to work for a paycheck. Life’s changed significantly since then. It’s beyond the scope of this blog post to go over how life’s changed. The takeaway from this is that society was set up for people to greatly increase their wealth; the underlying mechanism that made this possible was the family unit as the de facto support network.

What’s required to escape poverty in today’s ever-changing world? You must design your own support network.

Rally people to your cause

To design your own support network you must first get people to believe in you. If you have a functioning family unit then you are already well on your way; you must argue that working together with other families is their best shot at improving their circumstances. If you have a dysfunctional family unit then you must carefully choose who to collaborate with and whom to leave behind; then you must aggressively increase the size of your network in whatever way you see fit. If you have no family to rely on you must learn to make friends or convince the friends you already have that organizing is the best way to escape poverty.

Assign roles

Once you have a group of people to work with you must assign each member a role. It would be best to assign roles based on what any one member is best at. You should prioritize skills that are marketable in today’s world. I call them “value creators”. The “value creators” need support and leadership to succeed. Leadership is responsible for uniting all members under a common cause. The “support members” form the foundation of the entire operation. The goal is to become owners; owners of a business, property, financial instruments (e.g. stock), or land, because assets are the true drivers of wealth.

Let’s say you have a member who excels at, or has shown interest in, programming. That’s an in-demand skill. Then they should work closely with another member who excels at selling/marketing. Ideally, either one would also possess leadership skills. If not, you’re going to need a third member; preferably an entrepreneur. Together they have a shot at creating a successful business. The fallback plan is for the programmer to take a high-paying job as a developer, but again, the goal is to become owners of a wealth creating asset, not to find jobs that pay well, although that may help in the short-term.

Adapt to become resilient

Networks grow resilient when members share in the responsibilities required to keep the network alive and adapt to change quickly. Value creators aren’t just value creators, support members aren’t just support members. They fulfill whatever role is necessary in the moment. Assigning default roles is helpful though. That way everyone is clear on what purpose they fulfill, which makes it easy for every member to direct their attention where it’s required. It’s vital every member feels like their contributions are appreciated and equally valuable; that’s leadership’s responsibility.

I would assign at least one member to be responsible for household tasks. That’s a full-time job when there are many members working together under one roof. Assign one member to be responsible for groceries, food prep, and meal management. Every member should take part in cleaning the toilet and bathroom, to serve as a reminder to be respectful towards everyone pitching in. We’ve so far assigned three people as value creators and two as support members, with no money coming in; what gives?

You’re going to need a handful of members working jobs to keep everyone afloat. I would assign at least four to work whatever job they can. One works to pay for utilities, another for rent, another to save, and plan, for retirement of the entire group (including looking into investment strategies), and one more for stuff required to live a decent life (e.g. entertainment, vacation). That should account for most of the expenditures, but you’re going to need a buffer to function as a shock absorber. I understand that assigning four people to work everyday jobs that don’t pay much is quite a challenge. Make do with what you have, but I urge you to recruit more to your cause. Many hands make light work.

Plan for the future

Money must be set aside for future use. Use whatever remains after all checks are paid to shore up your savings account. The group will be without work at times, but hopefully never all at once, whatever was set aside will function as a buffer to absorb the cost of living while being without a job. Those in charge of creating a business and obtaining assets should, upon achieving success, lift the entire family/group out of poverty.

Create or buy assets

The “value creators” can’t succeed without the support of the entire network. You must pick members who are knowledge-hungry, smart, resourceful, and preferably charismatic. They should focus on learning how to create online businesses because they scale much more easily than other types of businesses and they insulate you from risks normal businesses are exposed to (e.g. a pandemic stopping people from reaching your brick-and-mortar store).

Imprint this message on your retinas: build businesses that scale. A store that sells goods is difficult to scale. You would have to rent another property and manage an ever increasing number of resources. It’s costly to operate businesses like that. Online businesses don’t have that problem. All you need is a computer and an Internet connection. You may need to rent a server computer too, but not necessarily so, and they’re dirt cheap. The point is that an online business hosted on a single server can serve millions of customers with today’s technology, a single brick-and-mortar store can’t do that.

Never give up

The average entrepreneur fails about 17 times before they achieve success. Continue to support the “value creators” until they strike gold. Invest some of the money earned into the business, but reserve some of it to improve the living conditions of every other member; buy homes, buy land, buy stock, buy other businesses. Buy whatever value-creating asset you can afford and learn how to manage that new wealth. The value creators must then find people to manage the day to day tasks required to operate the business. Then they’re free to help the “support members” reach a higher standard living as well. They might even be able to quite their jobs entirely! That’s the dream, and the social contract you sign when you become a member.

Remember: networks are strong and resilient, individuals are not.

Created on July 9, 2021
Published on August 7, 2021