The way out of poverty, as this video lays it out, is a sequence: accept that things must change, cut spending to survival level, raise income, clear high interest debt, build savings, then build a skill the market pays for. The video starts from the view that poor people usually work as hard as anyone, but poverty is a system built for survival, not growth. With no clear path out, it says, you have to brute force your way.
What follows is 15 steps in order, starting with a hard talk with yourself and ending with working alongside other people. A bonus on how many people actually make it out closes the piece.
Watch the full video here, or skip to the breakdown below.
The 15 steps at a glance
- Accept that things have to change (0:40)
- Honestly analyse your life and put everything down (1:56)
- Identify the bare minimum for survival (2:57)
- Cut everything else out for at least 6 months (3:35)
- Get a job or increase your work volume (5:08)
- Prioritise immediate high interest debts (6:07)
- Save one month of essential costs (7:10)
- Pride aside, take every handout you can get (7:59)
- Identify sustainable opportunities to increase your income (9:07)
- Start building good credit (10:37)
- Refinance long-term debts for better terms (11:40)
- Save four months of essential costs (12:37)
- Use free resources to build your skillset and monetise it (13:40)
- Become a contractor instead of an employee (14:56)
- Group-source your way out of poverty (16:04)
- Bonus: 18% of those in poverty learn these lessons and get out
1. Accept that things have to change
Sit down and think about your life, the life your children will live and what happens if nothing changes. The video’s observation is that most poor people get good at living the poor lifestyle. They find a rhythm and get complacent, which doesn’t mean they like it, only that they’re not in a rush.
Escaping means making change a priority, and that means losing a current identity most people are scared to give up. You may have to step away from people who don’t help your growth, even friends or family. You can’t help others until you help yourself.
2. Honestly analyse your life and put everything down
You need a detailed inventory, and it isn’t meant to flatter you. Start with finances: what comes in and what goes out each month, broken into food, transportation, subscriptions, utilities, entertainment, clothing, family care and health.
Most people have no idea where their money goes. If you’ve never tracked it, do so for 30 days, honestly. The video promises you will be shocked at how much could go to better use.
3. Identify the bare minimum for survival
Go through the profile you just built and find the minimum you need to survive: lights, water and gas on, and food that is just good enough.
The speed of your escape depends on how minimal you can live. The script admits it will be unpleasant, but notes that life is unpleasant right now anyway.
4. Cut everything else out for at least 6 months
Poverty keeps you in constant urgency. You need cash now, not dividends in three to five years, and you can’t spend months training or searching for better openings when every week is eaten up by unavoidable bills.
Cutting everything non-essential builds a few months of breathing room. Growth is the result of sacrificing the present for a better future, and most people won’t. The hosts asks what you really have to lose: six months of relative misery for a shot at a better life.
The longer you stay in poverty, the higher the price of getting out. Generational poverty, it says, happens when people never stop the bleeding.
5. Get a job or increase your work volume
Use the resources freed up in step 4. If you have no job, get one. As much as you’d like to be a millionaire eventually, the focus is the next 6 to 12 months and raising income by any means.
With a job, the simplest lever is more hours: one or two extra per day while living minimally, especially if overtime is paid. If your workplace has no extra hours, use the gig economy, such as deliveries, driving or local odd jobs. It’s too early to get fancy. You need as much extra cash as possible.
6. Prioritise immediate high interest debts
Spending less and earning a bit more lets you tackle the biggest pain, which is debt. The script says the system is set up to take advantage of the poor and less educated. Throwing away a credit card doesn’t make the debt disappear.
From now on, no payday loans. List every debt, find which carries the highest interest, and send almost everything not needed for survival to that one. Each day it stays unpaid, you owe more.
Debt is the modern version of chains.
7. Save one month of essential costs
Step 3 told you exactly what a month of survival costs. Now save that amount. Saving may not be your strength, but the script calls this step vital.
Without it, a job loss or medical emergency pushes you into more debt, which means more chains and a longer stay in poverty. Think of savings as protection against darker times that will inevitably arrive. Getting this minimum fund built fast is your first big step away from the urgency poverty creates.
8. Pride aside, take every handout you can get
There are more support systems than you know, because they are bad at advertising themselves. Eat for free if you can. Let a neighbour mind your child while you work. Use public transport discounts, and don’t feel too good to ride the bus or walk to work.
Every saved dollar goes to bad debt or your savings fund. Use food stamps, don’t spend a stimulus check on a games console, and look for local programs. Libraries are among the most underused resources: if they were invented today, the subscription would cost a fortune.
9. Identify sustainable opportunities to increase your income
Extra hours get the job done for a while but take a toll. Now the aim is a higher rate per hour, through a promotion or a better paying job elsewhere. The key word is sustainable: you should be able to confidently predict earning more for the next 12 months.
That takes effort in the little time you have left. Use your good work to build trust with prospective employers and be honest that you are disciplined and would move for a specific salary. An extra $5 an hour on $15 is a 33% raise. If a promotion needs more responsibility or a new skill, say yes and figure it out.
10. Start building good credit
Credit is just another word for debt, and the more confident the system is that you’ll repay, the better your terms. The script gives three ways to build it fast.
- Pay bills on time, every time. Payment history is the single biggest factor in a credit score, and late payments can stay on your report for 7 years.
- Pay more than once a month. A lower balance lifts your score faster, so pay every two weeks instead of once at month end.
- Ask for higher credit limits. If the limit rises and your balance stays put, your credit utilisation drops.
Once you’ve shown you are consistently good with money, you are ready for the next step.
11. Refinance long-term debts for better terms
Heavy debt means you are never free, and the video says debt is how poverty is measured in the modern world. After the earlier steps, you should be able to get better terms when you refinance.
The result is either a lower monthly payment or the same payment and an earlier exit. Walk into a bank, explain the debt on bad terms, show your improved credit and have it replaced with something less straining. Banks offer these consultations for free, and their competition works in your favour.
12. Save four months of essential costs
Life now feels more under control, which is when people tend to fall back on old habits. Others notice you doing better and come to drag you back. No becomes your most common word, and money vacuums, meaning people or services that just want your money, are easy to spot.
Use this position to set aside four months of essentials. Trouble will arrive at some point, and without a cushion everything you’ve built could fall like a house of cards. You didn’t come this far to go back.
13. Use free resources to build your skillset and monetise it
The first half got things under control. The second half is how you leap into the middle class. The marketplace pays in proportion to what you can offer it, so you need a valuable skill.
This is the best time in history for it, with a free library at your fingertips. Its examples include restoring old furniture, using Excel (which it claims can double a salary), managing social media profiles and graphic design. Never pay for what you can get free, and watch anyone who wants your money.
As a rule of thumb: there are no get rich quick schemes, only people who will get rich off of you.
14. Become a contractor instead of an employee
This is where the leap happens. It gives two reasons being a business beats working in one. First, flexibility: you aren’t locked into one revenue source and can serve more than one client at a time. Second, taxes and benefits: it says society treats contractors better than employees, with lower taxes and more freedoms.
The day you work for yourself, the marketplace starts treating you differently. Coming from poverty also gives you a hunger others can’t relate to, which becomes a competitive advantage. When the time comes to expand, you bring in help.
15. Group-source your way out of poverty
On your own you can cross into the middle class, but it all still depends on you to keep performing. To be safe, keep moving up until you are far from your old life, and that needs other people who help you as you help them.
People bring extra reach, and the collective is stronger than the sum of its parts. You have strengths and weaknesses, and others can cover the weaknesses. Having made it out, you have a responsibility to help others do the same. Be careful whom you pick, though, because some want to be helped and others want to take what you have.
Sacrifice, and put the long term ahead of the short term.
Bonus: 18% of those in poverty learn these lessons and get out
The script says 1 in 5 people born into poverty manage to move up, giving their children better odds of upward mobility. It cites a Fidelity Investments study that found 88% of millionaires are self-made, with only 12% inheriting, and a number it says is dropping.
It also cites research by Thomas C. Corley that approximately 41% of self-made millionaires came from poor households. This part then warns that the middle class is shrinking and the gap is widening, with technology, education, money and health about to be commercialised to an unseen degree. Its phrase is that the world is slowly becoming pay-to-win.
The order matters
These steps work as a ladder. Cutting costs buys breathing room, breathing room lets you raise income, income pays down debt, and savings keep one bad month from undoing it all. Skills, contracting and other people come after the base is solid.
The hosts’ point is that this is a decision to prioritise the long term over the short term, and that the number of people who make it out is higher than most expect.
FAQ
How do you get out of poverty step by step?
The script’s order is: accept change, audit your finances, cut to survival level, raise income, clear high interest debt, save a month then four months of essentials, build credit, refinance, learn a monetisable skill, contract for yourself and work with others.
What should you pay off first when you are in debt?
The one with the highest interest. It says almost everything not needed for survival should go to it, because the debt grows every day it stays unpaid.
How much emergency savings do you need?
The script suggests first saving one month of essential costs, then building up to four months, using the survival budget you calculated earlier.
How can you build good credit quickly?
Pay bills on time, make more than one payment per month so balances stay low, and ask for higher credit limits so your utilisation falls.
Is it possible to escape poverty?
This part says 1 in 5 people born in poverty move up, and cites a study finding 88% of millionaires are self-made.
Why become a contractor instead of an employee?
It gives two reasons: flexibility to serve more than one client, and better tax and benefit terms. It also says the marketplace treats you differently once you work for yourself.
Keep reading
- 15 Steps to Force Your Way Out of Poverty
- 15 Steps to GET RICH (Ultimate Guide)
- 15 Ways to Increase Your Financial IQ
