Poverty Lines and Lives

What is being poor?

Well, this depends on many factors, as well as opinions about what it means to be rich also, because there are plenty of people who will argue that having money doesn't necessarily make you wealthy, especially if it isn't combined with health and social wellbeing. It also depends on location, where in some areas, getting a 1000 dollars a month is living in severe economic oppression, but is a decent lifestyle in others. I live in Finland, so that is the baseline reference for me, and with Finland being an expensive country, the low amounts to someone in another place will seem at the higher end of the scale.

According to the report published by Statistics Finland in December 2021, there were 678 800 low-income earners (persons at risk of poverty), or 12.5% of the dwelling population in 2020. A single person was statistically poor when his or her monthly income was € 1 277 or less. In a family of two adults and two children, the poverty line was 2 681 euros per month. The number of children at risk of poverty was 114 300 (11.1%) in 2020. source

That €1277 is an interesting number, because it is almost exactly what I earn...ed - in 2003. So, I have some experience with that amount, but it was nineteen years ago, making it worth significantly more then. And, I will tell you, I lived in a crappy studio apartment, drove a crappy 1989 Honda Civic (needed for work), and most months, was in a minus. Due to circumstances beyond my control, it was in that first year I was forced to get my first credit card and euro by euro, I started building a debt profile.

There is no way I would be able to have even that level of "lifestyle" on that amount now, but as a 23-year old in a new country and friends still in university, it wasn't all doom, because while life sucked financially, it kind of went with the territory and I was still able to scrape enough together to have a few drinks on a Friday night.

It has to be mentioned that the number of low-income earners, as well as, the share of children at risk of poverty decreased in 2020 compared to the year before. source

Ah, but it also has to be mentioned that in 2020, the government was dishing out money left, right and center to people who were affected by layoffs and economic challenges from Covid-related restrictions, which was often the same people who were living in poverty.

Do you see the issue?

While this money might have "kept them afloat" during those times, as we can see now using "old" economic theory (two years ago they tried to sell a different story), handing out money without value-adding business activity to back it up, causes inflation. So, fast-forward a couple of years and those who were able to keep their head above water by taking that money, are now likely in a worse off position for it, as not only have the centralized payments stopped, inflation has further eroded the value of what they do have incoming.

As they say, there is no such thing as a free lunch and while the cost might not be immediate and it might even look like a gain, the debt is incurred and the "collectors" will be along in due course to make their claim. What many didn't want to recognize, is that this period over the last couple years has seen the largest wealth transfer from poor to rich ever, as the money that poured into poor pockets to "help" them, was swiftly shifted into the pockets of corporations to provide service. Then, those corporations expanded their ownership holdings with that money to increase market share.

Even those who invested what they got might be suffering, because the devaluation of currency has meant that what they are earning is less and, a lot of those business investments that household investors went into, were hype-based. In general, households are also the lost holders. So, they bought inflated and then the early investors dumped on them.

Part of this is because of the "buy what you know" mentality, which makes sense if what you know is investment opportunities. For the average retail investor, the clue is in the name - they buy retail, off the rack. They are consumers and what they know is consumption, so they are also going to invest into what they know, meaning into the consumer business models. However, the professional investors are all about derivatives and hedge funds, that are able to leverage the "knowledge" of the retail investors to increase their own earnings.

On top of this, the average retail investor doesn't think as long as the average investment institution, meaning that they are looking to improve their financial wellbeing in a shorter timeframe in order to be able to feel the difference. The institutions however have no feelings at all, because while they can own and have a goal to maximize wealth, they are entities without a heartbeat, and the board of humans that run them will be replaced if they don't deliver adequate ROI to the shareholders.

Ironically perhaps, poverty is not something that can be fixed by throwing money at it, because doing so will always lead to greater inequality down the track, as the reliance on handouts and the power balance gap increases, as to does the ability to generate income from what is held. There is no way that handouts (for the average person) will be great enough to invest with to become self-sufficient, because if they were, it would break the earning potential for those who hold the investments now, effectively devaluing their investment. So, the handouts will only ever be at best, just enough to keep things ticking over on the lower end, so that wealth accumulation can happen at the higher end. This applies to any kind of universal basic income (UBI) plan also.

For the individual, the only way out of this cycle is to make the handouts non-compulsory, meaning that generating alternate sources of income so that there is no reliance on the government incomes. That doesn't mean not taking them necessarily if available, it is just that when it is taken, it is "extra" that is used to invest to build, not used to consume. If this was done effectively, what would ultimately happen is that there would be a greater amount of owners, but the amount that ownership attracted would be less, distributing a lesser amount more widely, which disrupts the entire ROI model that has been benefitting the fraction of the population, at the expense of the majority.

This disruption in ownership however is very disruptive and effectively, the economy would "break" as shareholders are forced to reconsider how they invest and, what they invest into. The response would likely be to throw "more money" at it, which will ultimately speed up the demolition. This opens the door for healthier models to attract attention and investment value - in what ever form that comes, which is unlikely to be money, because the economic policies and investment strategies using it, has led to its devaluation to the point it is worthless.

While it is very hard to do, ultimately, all economic activity is driven by supply and demand, which means consumption. Without consumption, there is no economy at all, but don't believe the hype that it is up to us to consume retail alone, as investment consumption is where most of the wealth is not only circulating, but also generating more wealth. If we want to have a better economic balance, we need to start consuming as investors, not retail buyers.

From my perspective, looking into the future of the current trends and directions, this may be most possible through mechanisms like crypto, which seems could offer an alternative structure for wealth to travel upon alongside the tradition fiat economy. As fiat all over the world inflates and devalues, wealth can move onto the blockchains, which not only decentralizes the control of the tokenized currencies, but also reimagines what it means to be an owner, introducing new forms of ownership and business activity, that wasn't possible through the centralized systems.

Like it or not, we are the masters of our own reality and experience and financially, we are responsible for ourselves today and tomorrow. This doesn't mean we all have equal power though, nor does it mean we have the same skills in how to wield whatever power we have, but, we can all do something to improve our lot in life. Possibly, the real power of crypto is the ability to connect, collaborate and build together globally, so that the best way to improve our own financial wellbeing, is through the improvement of other's wellbeing too.

No government or corporation is interested in raising the standard of living of people, if it is not in their financial interest to do so. They don't live the lives of their consumers or constituents, they are entities with a purpose to survive, no matter the cost. It is us as people who have to live this experience and that is part of the problem, because, people are people and "free" seems like a good deal -

To begin with.

Taraz [ Gen1: Hive ]