In 2013, the Brookings Institute performed an analysis on which influences lead people into poverty or the middle class. The U.S. government spends a trillion dollars a year to help people living in poverty. From the zillions of theories on paths leading to being poor or middle class, they were able to determine 3 factors that made the largest difference, by far.
If these 3 factors are present, anyone has a 75% likelihood of moving into the middle class, nearly a guarantee. However, if you violate all three of these items, your likelihood of falling into poverty is 76%, also nearly a guarantee.
These are the 3 rules they discovered:
- Graduate from high school.
- Have a full-time job.
- Do NOT have children out-of-wedlock or get married before age 21.
So if you want to follow the path of poverty: drop out of high school, have kids with no spouse, and avoid full-time employment. The Brookings Institute found that these 3 rules applied to all ethnic groups and backgrounds. When a culture allows these 3 rules to be routinely violated, then that culture becomes impoverished. As an example, the report mentions that 70% of inner-city black children and 50% of Hispanic children are born outside of marriage. In general, single-parent households are less stable and less likely to provide the educational and financial support needed to graduate high school and launch a successful career. As a result, children growing up in single-parent households are 4 times as likely to become another generation living in poverty. Note: even if the children grow up in a family where parents are serially married, their financial outcome is far better than children living in a household with both parents who are committed to each other but unmarried.
Meanwhile, those in the upper-middle class do these:
- Graduate from college and may attain advanced degrees
- Have full-time high-paying professional careers.
- Get married after age 25 and have children only after they are married
So do what you can to keep your family and friends on track.