Next Big Thing: the super-poor

The myth is starting to erode – that the mega-rich will continue to spend their way through the deepest recession for 100 years, because they are immune.

Those bling BRIC economy oligarchs and titans have all seen their paper fortunes wiped. So they are having to rely on savings that are squirrelled away or leverage that is rapidly losing its collateral backing.

Meanwhile, the super-poor don’t fear losing their job or their savings. They never had either. They live off benefits, or casual cash-in-hand top ups. They don’t have any loans because they weren’t even sub-prime borrowers – renting is the order of the day.

What’s one factor in the quest to establish the Next Big Thing? It’s consistency. Staying power. Not dropping back, but continuing to generate cash and profits for your business even as the rest of the world unpacks the fantasmic growth spurts that tripped up this year. The last businessmen standing will have the deep pockets to buy up distressed assets that are floored today but will bounce back with an upturn.

Check out BrightHouse – if you can’t afford a 42″ flat screen Phillips for £999, then rent it for £9.12 as a weekly payment over the next three years and it’s yours. So, you’ve ended up paying near £1500 for it, but you’ve had those three years of Premiership excitement and shoving it to the Jones’s. (But, actually, another interesting thing about the super-poor is that they aren’t keeping up with the Jones’s… they’ll be sharing it with them. Because that’s the way they survive. Another lesson for the Pinkerton-Smythes).

There’s a book in there which I’ve always wanted to write. The Wealth Management Characteristics of the Desperately Poor. Lessons for us all, while India Knight has only scratched the surface with her latest book Thrift.


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1 Response to “Next Big Thing: the super-poor”

  1. 1 Hoover November 27, 2008 at 1:15 pm

    “There’s a book in there which I’ve always wanted to write. The Wealth Management Characteristics of the Desperately Poor.”

    This may have already been written by Charles Murray. Check out “Losing Ground”.

    Essentially, it’s a question of time preference. Spend a pound today, or save it and have more than a pound tomorrow?

    What lessons do the poor have for us in wealth management? Only that the government has given us high inflation and low interest, thereby debauching our currency, taxing ordinary people in a way that they canot see, and wiping out savings.

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