21st century poverty and how to overcome it (Part 1)

3 months ago 73

The typical Nigerian family is “blessed” with liabilities but poor in assets. This means that by the time your working career is beginning to take off, there are more forces working to pull you down than there are those working to lift you up. To rise above these forces, you must resolve to fight against them and you must also decide to take a different path from that of your parents, which may not lead you to wealth.

Poverty in the 20th century is different from poverty now. Back then, it was seen as a lack of education. Education was the golden ticket to a job, which was synonymous with financial success. If you wanted to be successful then, all you needed was an education, as the lack of one relegated you to lower sources of income. Hence, the lack of education was seen as the cause of poverty.

READ: How to increase your income by paying taxes

Thus, in the 20th century, traditional education was the gold standard, and it is still prioritized today. Parents sacrificed their savings to send their children to school with the hope that they would return the favour upon graduation. Children returned home to lucrative jobs with juicy benefits and packages, and parents seemed to be reaping the rewards.

Until the 21st century when it all changed. Today, parents are still sacrificing their savings to educate their children, so most families are now educated. But instead of prosperity increasing, poverty is thriving. Education is now more of a cost centre than a profit centre.

READ: Unemployment: ITF to take 7 million out of poverty by 2030 – FG

Why is education no longer effective for success? And how can you achieve financial success in the 21st century?

Follow my line of thought as today, I will show you what you need to know.

There are more people looking for jobs today than there are jobs available to cater for them. When job opportunities were more than the number of qualified people, it was ok to focus on qualifying more people through education. But as the number of qualified people now surpasses the jobs, the focus should no longer be so much on education.

The focus should now be on helping people develop the ability to produce income without a job, as this is where the future seems to be heading. This is not to say that education is irrelevant (people should go to school), but parents should stop sacrificing so much for education as it now has the least return on investments. Without a job, your education investment effort will go to waste.

To succeed in the 21st century, poverty must be defined in a different way, and our approach to financial prosperity must change. If we keep applying the same principles and strategies that worked in the 20th century for our parents, we will end up in the exact place as they did.

Research shows that 80% of working professionals are already heading in this direction and some may end up worse than their parents. This means that without deliberate planning and a different kind of approach, you will be no different from your parents when you reach their age. Prosperity today is not a guarantee for prosperity tomorrow.

To achieve lasting financial success, you must know what poverty means today and how to overcome it.

But before I delve into the meat of my message, let me first show you what we will cover in today’s article. This article is broken into four sections. The first is understanding 21st-century poverty; the second is knowing how to end poverty in your own life; the third is staying away from factors that perpetuate family poverty; and the fourth is knowing what to do next to elevate your life.

What is 21st-century poverty?

Poverty in the 21st century must be defined differently if we are to end up in a better place than our parents. Before now, poverty was defined as the condition in which a person lacked the financial ability to maintain a certain standard of living.

So, if you were working and could maintain your living standard, you were seen as rich. But this definition is incomplete as it does not cover who you will be when your job is no more, and what standard of living you will have then. The old way of defining poverty is thus flawed and is the reason why many one-time vibrant working professionals ended up poor in retirement.

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If you must succeed in the 21st century, you must ditch the old way of defining poverty and embrace the new way. Poverty in the 21st-century is defined as the current financial state of a person, plus the future state, and the presence of certain risk factors that can take the person back into poverty. There are four such risk factors and I call them the 21st century Poverty Markers.

The first marker is the lack of income security (IS). This is the inability to control, protect or replenish one’s income and maintain the same standard of living in the event of a job loss.

The second marker is the lack of financial stability. This is the inability to maintain a smooth and stable current life, be free from emergencies, and invest without sudden financial distractions or urgent needs.

The third marker is the End Destination marker (ED). This is the inability to maintain the same quality of life, preserve purchasing power over time, and be free to spend money in retirement.

The fourth marker is Inheritance (I). This is the inability to leave assets behind, expand family advantage, increase family opportunities and decrease generational poverty.

These are the four poverty markers that let you know whether you are rich or poor; thus, a rich person in the 21st century is not just rich today, he is rich tomorrow and will be rich in the future. The four poverty markers thus divide the members of a family into three categories of people. The first category of people is the “poverty in-service” category. The second category of people is the “poverty in the waiting” category. And the third category of people is the “Prosperity aboard” category.

The poverty in service category is the group of people that are already in poverty. The poverty in the waiting category is made of working professionals who could go into poverty at any time. And the prosperity aboard category has those who have jumped the poverty ship, and are heading towards wealth and prosperity.

Only the third category of people will be wealthy in the 21st century. And you must join this group if you want to be wealthy


So now that you know what poverty is in the 21st century, let’s move on to the second component.

How to end poverty in your own life

Going by the 21st-century poverty markers, the majority of people are poor. To get out of poverty, you have to first recognize where you stand with each of the four markers, and what you can do to get out.

i. The Income security market

If you lack income security, there are only two things you can do. The first is to create your own income security fund through big portion savings, and the second is to develop portable high-income skills that can replenish lost income. To build solid income security, you must save big, make your savings fail-proof, and invest in safe investment vehicles. The income security fund you create will serve as a financial wedge that will sustain you in the absence of a job. You need it to be there when you need it.

To bring in new income and build solid cash reserves, you need portable high-income skills. And there are three portable skills to develop. The first is creativity: the ability to make your own ideas profitable with little resources and to turn nothing into something. The second is rich relationship building: the ability to connect with high achievers, grow a rich network and get other people invested in your success and advancement. The third is sales and marketing: the ability to command high and profitable income for your solutions and services.

Without these skills, you cannot grow rich, earn high income or replenish lost income. You also cannot leverage high-income earning opportunities and platforms. If you need help developing high income skills and building solid cash reserves, send an email to [email protected]

ii. The financial stability marker

Financial stability is the ability to enjoy a stable life, shield oneself from emergencies and invest long-term without financial distractions. To achieve financial stability, you need three things- A high earning ability, a disciplined savings culture, and a solid investment plan. If you earn low income or channel the majority of your income into expenses, you will be financially unstable, if you save less than 25% of your income you will be unstable, and if you keep making money and losing money through investing you will be financially fragile.

The key to achieving lasting financial stability is to invest your money in the direction of your dreams, never lose money, and to make your money work harder on your freedom than it does your expenses. This is because, without financial stability, you cannot achieve financial freedom.

True financial freedom is achieved through long-term investing. Wealth and financial success are all long-term games. But you can only put money aside for long-term investment if your current life is working and stable. Without financial stability, you will always abort your financial freedom effort for urgent needs. Your current life must work for your future life to work.

About the author

Grace Agada is the most sought-after Financial Planning expert in the country and is quoted frequently in leading Newspapers, magazines, and blogs. Grace is a Renowned Keynote Speaker, Author, and Column Contributor in Punch Newspaper, This Day Newspaper, Vanguard newspaper, Business Day Newspaper, Leadership Newspaper, The Tribune Newspaper, and Online Platforms like Nairametrics, Proshare, and Bellanaija. Grace is the Founder of “The University of Wealth” The author of “The Financial Freedom MBA Program”, “The Better Life in Retirement Planning Blueprint” and “The Wealthy Business Blueprint.”

Grace is on a mission to shrink the middle class and populate the upper class. She has been featured on BBC Africa. Business Day TV. Inspiration FM. and inside Naijatv. And she consults for numerous top organizations, Company Directors, CEOs, Senior Executives, and High-Income Professionals.

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