Breaking free
Lets face it. Poverty has existed since the times of kings. Every coming generation brings along hope to make the world a better place and to get rid of poverty once and for all in vain.
While education and facilities for the economically backward must be available, the most important thing that even the employed people need is financial education.
In the long run it is lack of financial education not imparted that destroys people. While subjects like physics, chemistry, etc are part of the school curriculum they end up being waste of educational time once you have chosen a career not related to this in any sort of manner whatsoever.
The U.S. house bubble was a clear example where people with disproportionate income purchased the most expensive houses expecting appreciation on the house, and banks in their wild, unscientific risk taking spree sanctioned the loans. The scene in the end of the bubble was a total mess.
An other was the dot com bubble in the share market. Those who new nothing about shares behaved like seasoned investors/traders and ended up loosing up a chunk of their money to such an unstable investment.
The cause of bankruptcy of major global companies was also buying assets way beyond their means. The government thus pays up for their follies in stimulus packages, a phenomenon noticed by the whole world.
While education will create opportunity-the most important think anyone can be given, if not given with financial literacy will be disastrous. The clearest evidence will be in credit card splurge-something very common in economies flush with disposable incomes from well paying jobs. Advertisements will lure you to make purchases that not just burn your pocket, but turn your pants to half-pants. And suddenly you have people who buy stuff they never needed until they saw the advertisement.
Another very important factor in eradicating poverty is micro-finance, a relatively new concept to the world. Here small loans are given to the financially disadvantaged to start their own small businesses. Though the interest rates could go as high as 30%, very few defaulters are seen due to sound business practise. All over the world this concept has been quite a success.
Closing words-change will not come through ideals and half-steamed determination. It will come through application of sense and practicality.
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Very interesting and well put together. Everything that I'd have said has already been said so I can only stand on a good foot. I liked it. It really seemed as if you put a lot of thought into this paper. So I give you a round of applause and give you a curt bow. Keep up the good work.
Hi.
I could tell that you spent a lot of time researching and writing. So, I commend you on that.
Should be "knew nothing"
First, another spelling error.
But, more importantly, this doesn't flow right. Maybe something like: While education will create opportunity, it will be disastrous if financial literacy is not taught.
This statement really stands out. I like the idea of losing your pants rather than just the pocket.
I have been taught not to use things like "Closing words", because the reader should understand that that is your closing. But, the words themselves are a very smart choice.
McMourning
This doesn't make sense.
I agree that financial education would help solve poverty to a certain extent. However, there are more variables to it than that. In countries where poverty is a major problem, such as all through Africa and some areas in Asia, financial education will not be enough. The problem there is that there isn't enough food to go around, because the population has grown faster than they can take up technology with which to produce more food.
The solution needed in those sorts of places is help from more technologically advanced countries to establish high tech farming practices that will increase food production. Of course this will never happen, because it is an expense to those countries. Greed is therefore the problem, not so much lack of financial knowledge.
You seem to be talking about protecting middle class citizens from losing money, rather than the gigantic problem that already exists.