Today’s post is from Soles4Souls’ CEO, Buddy Teaster:
One of the things that continues to amaze and surprise me is the incredible amount of topics about which I know nothing. That is one of the main reasons I love to read and travel. No better way to embrace my ignorance than put myself right in the way of it!
I recently had a chance to read some testimony from a 2010 congressional hearing regarding microenterprise in Haiti. It was surprisingly interesting. One of the people testifying recommended a book called “Portfolios of the Poor,” about the nearly three billion people around the world who live on less than $2 a day – and almost one billion on less than $1 a day.
The authors dug into the details rather than just staying at the macro level. Averages are not the entire story. They wanted to know if people actually make two dollars a day . Or is their cash flow much more unpredictable than that? Can they save money? How do they handle emergencies or life events like weddings and funerals? These are questions we think we know the answers to for this huge segment of the population. But like most things that “everyone know” it is a little more complex than that.
To say that this book opened my eyes would be an understatement. The research looked at weekly financial diaries that, for the first time, showed how sophisticated even the poorest of the poor are at looking at their incomes and wealth. People who make less than a dollar a day manage to save a little each time they receive their wages. They borrow money, mostly through informal channels, that allow them to bridge the difficult times that will inevitably hit their vulnerable finances. They pay it back and help others in the same situation when they can. Families at this income level are more flexible and savvy than I would have ever guessed. They understand risk and portfolio diversification in ways that would impress most financial advisors in the United States!
via portfoliosofthepoor.com
The reason I urge you to read the book, or at least visit their website and spend 30 minutes reading their conclusions, is that these findings really matter. Rather than inducing pity or cynicism, what I read in “Portfolios of the Poor” gave me hope. I hope it does that for you as well. The work we do at Soles4Souls isn’t just about momentary relief -it’s about working to end poverty. It is key to believe that the people we work with in developing countries have the knowledge and drive to change their futures. Unfortunately, they lack the tools and stability to make those changes. This makes me more optimistic than ever that, with the hundreds of thousands of people who support Soles4Souls, we will “make a dent in the world” as Steve Jobs said. That’s a big challenge. But it is worth every bit of the effort it will take to make it true.