Resilient and Fragile, Money

In the last post I asked a question about what we might do about knowledge gaps that occur over generations that tend to affect certain races disproportionately. I want to start by saying that I am no expert and I try to approach the topics on this blog from the perspective of an everyday person. I try to think in terms of someone who is working everyday, paying bills, trying to save a little, and has the concerns of everyday life. I’m not an economist or a historian.

To start, why do the rich get richer? Well, I suppose it’s a momentum thing. Assuming prudent decision making, if you have access to a 6 figure salary and a reasonable amount of foresight and care about what happens to your income, you probably are investing in some form of long term savings and working on some sort of asset that produces immediate passive income (like a business, rental property, or financial markets). If you are living with-in your means, then you have money to easily handle surprise health issues, you have money to invest in a gym membership or home gym, you live in a secure neighborhood, you eat quality food that includes regular fruits/veggies, you drive a reliable car etc. If you handle your money and income producing assets well, you probably don’t have to work but you may choose to work anyway or you may choose to invest time in a passion project. Or, you may choose to spend more time with family, investing in the transfer of knowledge about wealth to your immediate family members. You may even employ some of those family members in a business you own. The hope is that in a nurturing environment knowledge of wealth building can be transferred and the next generation can build upon it. If the momentum is maintained, each generation gets wealthier and wealthier. It’s not automatic because people have choices. I’m certain there are kids that could care less about propagating their parent’s wealth.

A good example of this is what happened in the 2008 crisis with real estate. If you had money already, when the price of housing crashed as so many people defaulted on bad loans, you would have been able to buy properties at a fraction of their normal cost during normal times. Properties that could then be sold for a profit later on or held as rental properties producing monthly income. A wealthy person with a strong work ethic has the ability to truly accelerate wealth generation/accumulation in the American Economy.

To look at the flip side of this I’m going to use an example from my time working as a Hospital Security Officer. I worked for St. Joseph Medical Center in the middle of Hill Top Tacoma, WA. Hill Top is an area of Tacoma that is know for it’s gang activity from the 80’s and 90’s. The legacy of gangs and drugs is still very visible in the community that surrounds the hospital.

It was an interesting challenge engaging with the local community members. Our uniforms resemble that of Police Officers: navy blue with a metal shiny badge. As we all are currently becoming very aware of, the police don’t have a good reputation in poor communities of color. (Side Note: When I first moved to Tacoma one of the first things I noticed was the fact that, often times the only time I saw other Black people was when I was driving through Hill Top. It was a bit demoralizing.) In dealing with homelessness, drug addiction, mental health and a litany of other possibly unaddressed issues in the poor people that sometimes frequented the grounds of the hospital, I learned to try to focus on whether people were doing one of two things:

  • Abusing Property or Creating a Disturbance
  • Causing Harm to Themselves or Others

If a person was in the hospital during the day and they weren’t doing either of these things, my personal policy was to be kind and move on. In particular, if I saw someone sleeping I tried to let them rest. If that individual was sleeping next to several bags/suitcases, more than likely they were homeless. Technically, people aren’t allowed to sleep in common areas in the hospital unless they have a family member in surgery or something of that nature. The hospital is not for ‘hanging out’ but my thought was if a person is either high on drugs, homeless, mentally ill, or some combination of all these things, they’ll probably be able to make better decisions if they can get a little rest, versus not. Same thing with charging a cell phone or taking crackers from the cafeteria. Technically, is it allowed? No. But when a person is experiencing serious poverty simple things can make the difference between having a moment of clarity versus making choices in pure survival mode.

Sometimes I would get a visitor in the hospital who would come to me with visible concern and say, “There’s a person over there in the lobby sleeping. They look homeless.” I would sincerely respond with, “Thank you! I’ll go check on it!” I would check. No mess being made, no property being damaged, no scene being caused, no physical harm being done. Just someone trying to get some sleep in a relatively safe environment. I let them sleep. On the weekend, sometimes people might sleep for a few hours. Most of the time they would wake up and just move on.

A safe place to sleep for a few precious moments… maybe after wondering the streets in cold wet Washington State Winters… maybe with mild trench foot for lack of dry feet… hungry of course… without much for friends or family… maybe addicted to drugs… maybe with a cancer diagnosis. I’m trying to point out the simple human needs that people go without. It’s hard to find the energy to fill out job applications everyday, ride buses to various appointments, or pay attention to the quality of food you eat when you have a constant threat to your safety and stability (I’m a huge fan of Maslow’s Hierarchy of Needs). I can only imagine…

I think it’s a massive oversimplification to write off the failings of Policing to merely racism. It’s an economic issue as well. When you are poor and living paycheck to paycheck, an economic downturn (as we are seeing in the midst of the COVID-19 crisis) can mean the choice of having food or paying rent… which could mean homelessness. This is why I’m such a huge advocate of financial literacy. It creates resilience against lots of sudden adversity. A car accident, tooth ache, musculoskeletal injury etc. can change your life if you don’t have any cash reserves… Financial Fragility…

So what does this mean? What do we do about poverty? Let me say this, I’m not sure at all, but, it’s got to be of some help to understand the mechanics of financial fragility. Racism is one cultural phenomenon that has the capacity to exacerbate the problems people may face when trying to meet basic human needs. I think it’s fairly easy to see that the more wealth you have the less likely you are to have to choose between being a Law Abiding Citizen or Eating That Day.

We’ve talked about lack of generational knowledge as a legacy of slavery and today we talked about the spectrum of financial resilience (or fragility). But if the issue is Police Brutality then we’ve got to talk about some of our systems as well (like public education, healthcare, and law enforcement).

We’ll do that next week. Be Safe, Be Kind.

What are some very basic habits you can embrace to bring more financial resilience into your life?


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