In popular American mythology, the rich work hard for their wealth. They’ve earned it. They deserve it. While this is often true, everyone can cite instances of people who have money due to fate and circumstance, not because of hard work and perseverance.

The same holds true for folks at the opposite end of the spectrum. Yes, there are plenty of people who are poor or in debt due to their own bad choices. But this isn’t true in all cases. GRS reader Amy wants to know how you can possibly tell when a person’s poverty is their fault and not the fault of someone (or something) else.

She writes:

I’m a newcomer to the personal finance blogosphere. I recently came across another blog that took a position that shocked me. The author thinks that all the people who live in poverty in this world are simply moaning and crying instead of getting up and doing something about their situation. As a student of international relations, I know that this is simply not true.

It’s one thing to actually be just whining and complaining about your situation, but isn’t it just as bad to completely ignore or deny systemic roots of oppression and inequality? I guess what I’m trying to ask is: When is it not your fault?

I’m all about having a ‘can-do attitude’ and not ‘settling for mediocrity’, but then again, someone has to be the mediocre to your excellence. Does that mean they deserve to live in abject poverty while slaving away day after day? I’m all about working to better yourself, but is it so horrible to just admit that sometimes things are working against you?

As an example, my best friend is from Norway. We attend university together here in the U.K. She has a less stressful time concerning money than I do for several reasons.

  • Most of her student loans get turned into grants upon successful completion of her degree.
  • In her summer of working at Norway’s minimum wage, she made £6000, and in my summer of working back home in the US I made about £1,600. She worked full time for two months and I worked full-time plus overtime for three-and-a-half months.
  • She could go back home after graduation and work as a waitress and still have more than enough money to live on, even if she decided to have a family, while in the US this would be a difficult life.

Where do we draw the line between crying and complaining, and just plain unluckiness in life? And what can we do about it?

Poverty is complex. To simply dismiss each case as an indication of personal failure is absurd. When entire cultures and countries languish in poverty, it’s not a result of collective laziness or lack of spirit. There’s much more going on.

Closer to home, it’s still a mistake to dismiss all poverty as a product of personal choice. Fate and circumstances do play a role. (I don’t like the word “luck”, but that’s really what I’m talking about.)

Sometimes it’s tough to tell if a person is struggling due to poor choices or because the system is broken. One of the problems, of course, is nobody actually thinks, “Well, I’m bankrupt and it’s all my fault.” Each individual thinks he’s done the best he can, and the reason he’s screwed is that bad things have happened to him. This is true even when his friends and family can tell him, “No, you’ve pretty much brought this on yourself.”

In many ways, I think the question of “fault” is a wrong one. It doesn’t really matter who’s responsible for a person being in poverty. What matters is who’s responsible for getting them out of the situation. And in this case, I always come back to one of key points of the Get Rich Slowly philosophy.

Nobody cares more about your money than you do. No matter why you’re in financial dire straits, the person who’s going to be best able to help you escape the situation is you. Instead of waiting for someone or something to save you, save yourself. It’s those who decide to take matters into their own hands who have the greatest odds of finding financial freedom.

Yes, I know this is far easier said than done. That’s why I’m a fan of Muhammad Yunus and others who work to create opportunities for the poor to improve their situations. That’s why I’m an advocate of financial literacy programs. If we want folks to pull themselves up by their bootstraps, we have to give them boots with which to do so.

What do you think? Are there clear answers to Amy’s questions? In poverty, where’s the line between chance and choice? How can you tell whether your situation is your fault or the fault of fate? Does it matter? And how do we fix the problem?

Note: This question is likely to lead to a political discussion. As always, please be respectful of other commenters. It’s fine to disagree. It’s not fine to be a jerk about it. Stay civil and things will be fine.

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