Maybe ERE is really not so extreme in the greater scheme of things:
Sometimes its good to get a little perspective(23 posts)
Moving to a developing nation is part of my ERE-plan. Hear people like bigato talk about prices around Sao Paulo makes me think, not knowing Spanish [EDIT TO CLARIFY: my destination would be Ecuador, which is cheaper and has lower inflation than many other developing nations] is costing me some amount in unneeded increased savings (and it sounds like a cool place). At an assisted learning rate (SRS + pirated spanish dramas for 24/7 immersion), I could get a pretty good return on my effort.
Brazil isn't India, and India isn't the C.A.R., but I suppose my assertion is, there isn't any technique that's out of bounds when I plan my future. If $1/day can do it, then you need ~16k to retire at 2% SWR. I could do that before I learned about ERE, so this voyage is simply a calculation of precisely which luxuries I would prefer to purchase given their fully-loaded costs via a perpetuity.
and they speak portuguese in brazil ;)
@dragline, thanks for the article, it's good to remember we are fortunate to be able to make the deliberate decision to live on "so little"
Excellent find Dragline.
And J.O.S.H. has a great point...for all of us who feel like we are cutting things to the bone compared to our peers...it's really important to remember the context we're living in. Change your peers...and suddenly you're living like a king.
"In poor countries without national health care or retirement programs, families have to conserve what they can..." THIS. Americans have been trained for generations to trust their entire future, well-being, savings and safety to the government. That compounded by central banking (punish savings and encourage debt) have made almost the entire US population completely beholden to the political system... Sad.
The premise of the article was to take a look at how people who live on $2 per day manage to save, unlike Americans. I see three Americans.
Hamid and Khadeja are in debt. Did they lose their son? I couldn't tell from the article but they said they were "lucky" they didn't have to pay for the funeral? Que?
Thembi is taking out loans left and right.
Feizal's broken leg pushed his family deeper into poverty.
All three of the people profiled are in debt. Why did the author choose to profile three people who live just like Americans at 1/100th of the scale?
Is there a part where they profile people living successfully on $2 per day? That would be an enlightening read.
If anyone is interested in reading about how very poor people make, spend, and save money, I recommend "Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty" by Abhijit Banerjee and Esther Duflo. It was fascinating and there is information in it both depressing and hopeful.
Thanks a lot for the recommendation. I've been thinking about these issues very much recently so it came at a perfect time.
Having lived for a short while in very similar places described in that story has always given me a great perspective of what poor really is. The inability to afford a car or a new t.v. is not poor, laying in the dirt all day hoping someone will give you something to eat because you suffer from leprosy is.
Last year, when I had a tiff with @photoguy on trade 'plus and minus', on the "Canandian Content blog" thread, I wrote a four part post on the minuses, on my blog. Part II had a review of that very book.
ETA: My posts are longer than Jacob's, but shorter than Venkat's and I use images and cartoons to retain reader interest.
@ Surio - does that book have any "success" stories? People or families that are doing "well" and not simply one bout of bad health/luck away from financial devastation?
Ha Ha! Liked that question.
You need to change your diet from the staple fare of feel-good-ending-with-redemption-now-cue-uplifting music-hollywood-films to real drab-arthouse-european-cinema!
Oh Yes, there's a splendid wedding from all that savings, and an auto rickshaw purchase and some jewels as well. But the book makes for an incredibly gritty read. I remember one of them has their entire wad of money stolen as well.
Basically, this book is more "Les Miserables" rather than "Shawshank Redemption"
But it cures you of "TED talk optimism" forever
My post summarises the book (Hope you have read it?)
Now that we are on the topic of "favela chic" meets "poverty porn", here's my wife's recommendation on the subject:
DW also adds:
There's an "IT India" that everyone knows, there's a "land of milk and honey" USA that everyone knows. These two books (Portfolios of the poor, Everybody loves a good drought) show the other side of India, and I know there's a similar "other side" for the USA also.
I did read it. No Watterson? I've come to expect it...
Just curious if "success" was an aberration or occurred at a higher rate due to those stronger social connections (as opposed to the Cowboy way of doing things). The social angle works well (financially at least) for the Amish so I wondered if it worked elsewhere.
Oh, come on people. Are you really expecting folks to live on $2 per day and then thrive? Of course these stories are sad, and most of the times these people are one small setback away from disaster. And that is why we call them poor. They do survive on $2 per day until they don't survive anymore. And then they starve and die. So let's stop comparing ourselves to them and stop blaming them for not managing their money better or so. We are the very very lucky ones, and maybe we should try to help them get from two to three to twenty dollars per day, so they finally can stop surviving and start living.
Oh yes, it is mainly social cohesion that drives success rates. In fact, social cohesion in such settings exist not just between extended families, but also friends, strangers, the whole community as well.
They are also more welcoming, gregarious and accepting of strangers and other people into their midst than their poverty would suggest.
Indeed, there are case studies of the converse. Paranoia, suspicion (the opposites of trust and goodwill) undoes all the progress to the ground, and even that is documented.
Still, I only notionally like the book and don't like some parts of the book very much. Chiefly because, bulk of their questionnaires are designed with "leading questions" in order to extract answers that satisfy Western prejudices and loaded Western notions of liberalism and more such nonsense. If I had written the book I would have described (interpreted) some scenarios very differently, designed the questionnaires differently and asked different questions.
They are World Bank sponsored studies and books after all. Still, it is better than nothing, and I grudgingly accept that fact.
Anyway, that's that.
Now, that's what I would call a 'perspective'. +1 to that thought.
@DutchGirl: Please don't underestimate human ingenuity. I'm positive there are countless examples of people who are thriving... Also, they are already surviving without anyone's help and to suggest they require charity might be considered insulting.
Not saying that life in the EU/US shouldn't be appreciated. But to insist that these "poor" people "need" our help doesn't give them enough credit.
I think they do need help. They deserve all the help they can need. And there is nothing wrong with offering help too. Local charities pitch in with providing collateral for auto rickshaw, standing guarantee for shops, etc. Dutchgirl never said "charity". Nor did I use that word. It is help. Genuine help, as opposed to charity.
While I agree that all our lives are one step away from disaster, they (the heroes of the book) are more vulnerable to it than we are.
I second @before45's reading suggestion: "Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty". Esther Duflo's papers have some very innovative DoEs on these lines.
Also read Paul Polak's book on fighting poverty.
Those two books and papers give brilliant ideas on how to approach charity as a socio-capitalistic endeavour and not the insulting manner that is currently being adopted. So, charity itself is not insulting. How you go about it is.
Esther duflo (a petite French woman
;-)) has a TED talk too, and she has such a beautiful French accented English that will make the talk appear shorter than it is.
Remember, it is 'help' they need, not 'charity' (as the PWE has brainwashed us into believing)
@ DutchGirl - if you're talking to me then yes, I expected to see how they "thrived". The title of the article is, "How the Other Half Saves: Financial Planning on $2 a Day".
It's not called "Face Clawing Misery on $2 per day". I'm cynical enough to imagine how living on $2 per day fails. I'm not optimistic enough to imagine how it succeeds. Hence the curiosity.
And surely this discussion leads back into discussions of comfort. Yes, we have more comfort. We own more things that bring comfort to many.
But I'm not entirely sure simply saying that 'we should make them rich' is complete, not in this context. With so much talk about Hedonic Adaption, I'm surprised no one says, these guys are in a situation that is ideal for us. That their situation should be emulated with our resources.
I live in the LA area. I am forced to pay obscene amounts for rent. There are simply zero options in the $200-$400 range, not unless I can share a studio with several other people, which is a tough sell (and believe me, I'm trying to make that sale). But the weather is perfect. If I was legally allowed to live under a piece of sheet metal, I would. Partially because of the money, partially because I don't wish to rely on physical things for my happiness.
So, yes, life sucks for a lot of people. And yes, they can do little about it. But I think we all over-estimate how much it sucks, and further over-estimate how much we can mitigate the fundamental troubles of the world. Variation in quality of life (measured in happiness, not in dollars, not in widescreen TVs) varies more from person to person than it does from culture to culture. Savings, comparative versus absolute poverty, and charity are all red herrings.
In all seriousness, the title and original post of the thread says it all. We are pansies compared to billions who spend so little that a signing bonus at a job in this country could fuel someone's ERE dreams. So why not step up?
Firstly "thrive" is a very relative word, in the same way that the term "Face Clawing Misery" was used by me exclusively when forced to watch 'FRIENDS' on TV by 'friends' in college. But I am very sure many here would differ on that.
The point I am making is that context matters a lot when you use certain words. The book goes on to establish the context of the people and their lives, right in the beginning, before going on to recount their daily routines. I assure you, all of them in the book "thrive" from their "relative" positions within the "World" that they inhabit.
The title is *not* a misnomer as you have been constantly bringing up. So far, I have been answering to the "sense" of your questions so far, in order for you to grasp the modality of the situations that look so far-fetched (to most of you). But I have to highlight these above points to you now.
That does not mean they are 'well-off', but they are making the most of their situation in a better manner than our own imaginations allow us to see. They are also making the most of their situation in a way better than the "bourgeoisie" are doing with their own situations.
ETA: JOSH's reply above very much captures what am saying, that too, with LA being the "context".
Clearly I don't get this article.
Here's what I'm doing wrong. I'll try and be literal and concrete.
I see the title and my Danny Kahneman system 1 says, "I've always wondered how people live on so little, and this article promises to show me not only how they don't just curl up and die, but actually *save*! Holy crap amazing. Read now."
Subtitle reinforces the above. Those ERE journals are going to look pretty opulent when I get done with this...
Americans can't save. I know. Shameful. Enough admonishment, let's get to the story Thompson.
Hmm they use social collectivism to leverage their limited means. I wonder if those micro loans truly are useful? I always suspected it was a way for management companies to prey upon "feel-good-capitalism" but maybe it works...?
Case study 1: in debt
Case study 2: in debt
Case study 3: in debt
...unfortunate. They were saving but bad luck blew away their tiny savings margins. Well the study was from 10 years ago so it'd be interesting to see if this sort of debt is surmountable on $2 per day...umm...nothing? Am I supposed to buy the book to find out?! Was this a @#^*! ad for a book? RAGE! Crap, my library doesn't have it. RAGE x2.4!
Wait, why would Thompson profile these three people from the book in the first place? So that we greasy Americans can feel a kinship? Hey we're all in debt from $2 per day to $200 per day. Shouldn't Thompson have shamed we fat, stupid, Americans by using examples of people who make ends meet AND "get ahead" on $2 per day? That's some perspective.
Hmm maybe this was just a lead in to get we spoiled and poor-at-standarized-test-taking-Americans to consider the plight of the truly poor. Here I am with my 3 SUVs with flat screens in each one, yet I'm in debt...but I shouldn't complain because Atul suffers more than me. No this isn't a tear-jerker story...
Maybe I should ask if this book has any "success" stories.
The book goes on to establish the context of the people and their lives, right in the beginning, before going on to recount their daily routines. I assure you, all of them in the book "thrive" from their "relative" positions within the "World" that they inhabit.
Awesome. That's all I wanted to know. Thanks.
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