A common question that many people ask in the West is “What causes poverty?” It’s a fairly complicated question, as there are many factors at play, including how one defines poverty.
But contrary to the trend, I maintain that this is not what we need to ask, because it operates on an unstated assumption that is not true. No, what we need to ask is far deeper than this.
The question we ought to ask is “What causes prosperity?” Why is that? Well, I’m glad you asked.
Why Ask About Prosperity Instead of Poverty?
I consider the issue of poverty in a unique way because of my unique background. I have studied history and economics, and have worked with many dozens of families as a financial coach for years.
Long before becoming a coach, I noticed something about world history: the typical state of things has been poverty. Many people died of starvation and malnutrition throughout the past. There was fairly little opportunity for entrepreneurship and “bootstrapping” in the ancient world. And barely anyone, except maybe the nobility, had any concept of disposable income and leisure time.
This was the default state for thousands of years. And it ultimately goes back to the fateful day that humanity fell into sin.
Poverty is a Result of the Fall
When Adam and Eve ate the forbidden fruit and brought sin into the world, man and woman were each cursed for all time. The curse placed on man is that we shall work by the sweat of our brow, and shall have to fight the earth to cause food to come from it.
Reading between the lines, this means that having sustenance is not our default state. We have to do something outside of the natural course of things to cause food, clothing, and shelter to come into existence.
Think about what would happen if we just sat around and did nothing for months and months. Whatever money we do have would run out; our bills would fall terribly behind; we would have no food in our kitchens; our housing would start to deteriorate.
This is the default state: poverty, lack, and want. It is only when we overcome this natural state that we will have the things we need, contrary to the situation in the Garden of Eden.
So What Causes Prosperity?
Well, for one, work. We must put our nose to the grindstone and produce something that other people find valuable. This can be any number of things, especially in a market economy. But sitting around and waiting for lottery winnings or a rich relative to pass away just will not cut it (those situations are exceptions, not rules).
Wise handling of the money we currently have is also critical. This is a core part of what I do as a financial coach: teach you how to handle what you currently have to work with (even if it seems like little), so that you can actually accomplish the things you want in life.
We must also place our money into reliable investments so they grow over time. Especially with inflation beginning to rise again, not investing is simply not an option. Time is not something we can get back. We may be able to make more money as our skills and networks develop, but time can never be recovered. And time plus investing equals wealth.
On top of individual actions, it is also important for civil institutions to provide societal stability and predictability. One of the reasons why few companies are willing to invest in places like Somalia, and it stricken with poverty, is because the government cannot maintain social order and the rule of law. That is a complicated set of problems that must be established first before there is more opportunity to create wealth.
But it’s important to remember that such unsurety has been the natural position of mankind for almost all of human history. Then the free market economy developed and enabled individuals to serve other people and to make a living in the process. That, as a business owner, is marvelous to me.
Personal finance is personal, and our results are highly dependent on our attitudes and mentality. Certain attributes of social order are necessary conditions for wealth creation, but in the miraculous circumstances we still find ourselves (even with all the problems), we still have to actively fight against the natural course of events to stave off poverty.
Poverty is the natural state of things. When we operate from that fundamental premise, it changes how we interact with the world. Rather than having presuppositions about entitlement to wealth, this renewed understanding frees us to know where we currently stand, and take up the responsibility for what we must do to have financial gain.
Taking up responsibility for your situation is the only path to wealth. To learn the process for doing so, and to have someone walking alongside you on the journey, schedule your free Discovery Session today.