In the United States, the extremely rich often come from privileged backgrounds. Mere millionaires, however, tend to come from fairly humble beginnings. While the rich may get richer, not all of the poor remain in poverty. Yet the majority of those born into humble financial circumstances will also pass from this earth under those same less-than-desirable conditions.

The determinants of who moves up the economic ladder have little to do with external factors. There is no intellectual or physical advantage. There is, however, a difference in money mind-set.

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Challenges of Escaping Poverty

Poverty has its challenges. It can be difficult to escape. It’s hard to save when you’re having trouble meeting basic needs. And it’s impossible to save when you can’t meet basic needs. It is by no means easy to escape poverty.

Many people are convinced they can’t get out of poverty, and they’re right. Others are convinced that their escape is inevitable. They, too, are right. The difference between the two is key. It's not usually an external factor. Rather, it's internal.

And it's beyond just your thinking — it's a state of mind. If it were simply your way of thinking, you could change it and reason your way out.

Discipline is also not the answer. In addition to being hard to maintain, it doesn’t work. But if we can see the primary difference between those who stay on the bottom rung and those who climb, then we should be able to influence it. Especially if it's us.

Characteristics of the Forever Poor

It is also enlightening to examine what the will-stay-poor mind-set looks like. Then we can compare and contrast.

The eternally poor sometimes justify their poverty. They are victims, whether because of society, chance, luck, or a myriad of other reasons.

It isn’t necessarily always the same reason, but there is always a reason. And it's always external.

When the eternally poor overspend on nonessentials, they also justify it. They deserve it. The big-screen TV they’re paying a fortune to rent-to-own is, according to them, something they deserve — their one luxury. And since everyone deserves at least one luxury, it is really a necessity.

Then there is comparison — one-way comparison. As in, my neighbor has it, so I should, too. One-way comparison, as it is never that my neighbor works two jobs, so I should, too. It's just that my neighbor bought this, so I should, too.

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Beliefs of People Who Stay Poor

There are three beliefs that hold people back more than any others. Those who believe they can't overcome poverty hold these beliefs close.

First is the belief in limitation over abundance. Those who believe they cannot escape the cycle of poverty believe that resources are scarce and hard to obtain.

Those who believe they can escape from poverty feel that resources are obtainable for those who learn how to get them. They believe in abundance. They never equate their lack with someone else’s possession — they always see unlimited supply.

Second is the overassessment of knowledge. Many poor people think they know a lot about money. Many wealthy people don’t think they know all that much about it. Those who think they have more knowledge than they need will not seek out more.

The third belief is an issue of personal responsibility. Those who will remain in poverty do not feel that they can change. Nor do they feel it is up to them.

They think they need some change in the system or in regulation — something beyond their control. Certainly, some external changes could make it easier. Some of those changes really need to happen. But they have needed to happen for a long time, and waiting for them is not a solution.

Those who ultimately escape poverty know that it's up to them to do so. They understand that no one will do it for them.

They accept that as nonnegotiable fact. It’s their job; they are responsible. They may not have caused the situation, but they see themselves as the solution.

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Escaping Poverty: The Solution

In an ideal world, a solution wouldn’t be a big issue. There would be no disparity in education or in opportunity. But the real world is not so kind. The real world, however, is what it is. Waiting for the world to change is not a solution.

Trying to change via discipline tends to be a fruitless exercise. Discipline is no match for a mind that doesn’t believe change is possible. It is not always possible to be strong when you want to give in, when you’re too tired to fight. Much like with diets, discipline is rarely the answer. We need something more.

The biggest problem with discipline is that it is internal. We are human and fallible. Even if we can make great progress through willpower, failure always lurks nearby.

The difference for those who do versus those who try is that they move the locus of control from internal to external. Those who make it submit to a process. The process becomes the deciding factor, so discipline becomes less important — not if you have really committed to the process.

Here is what the difference looks like:

If you are relying on your thinking, a.k.a. discipline, when faced with a challenge, such as purchasing something you want but don’t need, you think, I shouldn’t. You have to dig deep to resist the pull of your want. You are in conflict. You may win most of the time.

But once you crack, each crack becomes easier. And soon you have no more resistance. Poverty wins.

If you have submitted to a process, and you are likewise faced with a similar challenge, you think, I can’t. It’s not part of my program. You may feel some regret, but you don’t have to summon the wellspring of energy that discipline requires.

The control is external: Your process doesn’t allow it. It’s not that you choose not to, it’s that you can’t. Big difference.

It can be a struggle to not have something you want because you shouldn’t get it. But it's far less of a struggle to not have what you can’t get it. Moving the locus of control outside yourself frees you from the struggle by removing the option to misbehave. Your appropriate behavior becomes nonnegotiable.

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Moving Forward

There are a lot of policy changes that would benefit the most marginalized in society. We should pursue those wholeheartedly. But we should also recognize the impact an individual’s money mind-set has on his or her life performance.

Commitment to a process of financial improvement may be different for different people. Some will choose a path of employment, others entrepreneurship.

The commonalities between the two are educating oneself on the options, developing a plan that includes a budget, and sticking with it — until that time when you have something better to stick with, then moving to that new plan. Financial literacy can be a real difference-maker.

Hope and belief in one’s own ability can be cultivated. It is certainly easier to move forward from higher ground. Challenges with access to education and resources make things more difficult. But given that the constraints are what they are, those who prevail in the near term will be those who believe that they can and act upon that belief.

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