Poverty Mindset

The definition of a poverty mindset held by people living on less than $1.90 a day stands in stark contrast to the way financial gurus in the United States define it.

While 9.5% of people worldwide (about 696 million) live on less than $1.90 a day,[1] malnourished and struggling to afford enough food to fill their growling stomachs, many more—1.3 billion—are multidimensionally poor. This means they experience poor health, substandard living standards and income, lack of education and unsafe environmental conditions (ranging from contaminated drinking water to threats of violence).[2] Overall, nearly half the world lives on less than $5.50 a day.[3]

Both extreme poverty and multidimensional poverty contribute to a poverty mindset, in which people firmly believe that their circumstances are hopeless and that they will never have enough money.

Different worlds; different approaches

In developed countries like the United States, many financial experts and websites begin with an assumption that people already have enough money to feed and support their families. With this beginning assumption already in place, they often define poverty mentality as people’s beliefs revolving around how they shouldn’t spend money due to limited opportunities and temporary and non-replicable success. Many financial coaches solve this problem by teaching people to change the way they think by transforming their negative thoughts into positive, confident ones.[4]

But when people are struggling to survive day to day, starving and getting sick from contaminated water and inadequate sanitation, the place to start is not their thinking. They need education, healthcare, clean water, sanitation and job opportunities before they can alter their thinking. [5]


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