These days, who is really 'poor' in western countries? I recently marveled at how many of my "broke" friends had the iPhone, which is one of the most expensive phones on the market. So many people in western countries actually have an easy time getting access to credit and loans. I thought about it and realized that these so called "broke" friends actually live quite a comfortable high-consumption life, with widescreen televisions, nice cars, expensive luxury holidays, fine clothes, and every latest gadget. Even though they are living paycheck to paycheck, and are usually in debt. If they truly go broke, the government will pick up the tab with lots of benefits. Nobody in Western countries is dirt poor to the point of starvation as the benefits system will take care of them.
A recent This Is Money article says many banks are just going to write off the thousands of pounds of credit card debt which UK consumers owe. This sometimes makes me wonder what is the point of saving, when the spendthrifts are simply borrowing gigantic amounts of money and living the high life. The article said that last year, banks wrote off more than 10 per cent of their credit card loan balances, and that over the past 12 months banks have written off more than £4.5bn of credit card loans.
The UK government said (when declaring the recent UK budget), that people must curb their personal expenditure, as Britain is now the most indebted country in the world.
In the UK at least, people are richer than they think they are, and actually have a good standard of living compared to third world countries. As long as you have a roof over your head and can get a regular supply of food, you're actually doing quite well in terms of survival. The problem is that living from paycheck to paycheck and being constantly indebted is mentally stressful and when it comes to making much bigger investments like property, such peoples credit score severely restricts them from creating great wealth.
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