And 7 talks about establishing an emergency fund. Believe it or not, a well-sized emergency fund actually allows you to skip certain types of insurance, like collision/comprehensive car insurance. If you wreck your car or it gets stolen (the 1 in 1M chance you talk about), just buy another one with the money out of your emergency fund. If you avoid debt, you never need mortgage insurance. The only types number 6 talks about are risks that threatens your complete net worth, and these are liability and death, if someone depends on your income. Please don’t tell me that you drive without liability car insurance.

The author assumes people are stupid not to understand the risk involve in their financial obligations. Taking in debt is good because if anyone is willing to give you money, they trust you can pay back, the person giving you money knows how to adjust their financial risk by allowing you to borrow/loan. Otherwise, of course, they wouldn’t let you. I don’t think accumulating debt is a bad thing, being irresponsible about the debt that may ruin your potential to buy a house or large items on debt may come back. Though, if you estimate that you have good future potential, go ahead and accumulate the for your future investment.

As for 7, it’s go without saying, you can pay insurance up your crack hole and never have it ever bite you. The fact that insurance is high is because 1) government requires it 2) there’s people like the author in scaring people to buy insurance. The fact that people pay on average $60/mo on car insurance if they have one car, $250/mo on medical insurance, $90/mo on mortgage insurance, if they put less than 20% downpayment, pay $230/mo on PMI, and life insurance at $60/mo. These insurances do not take into account their spouse and children. Eventually insurance will surpass the amount people pay monthly for their car payment or even to the extent mortgage. And what’s even worse is that, when a disaster comes unexpected, the insurance company can fold, and they don’t have to pay you a PENNY. These kinds of insurance is not FDIC insured which is backed by the government up to $100,000 for each deposit. And even this has risk that the FDIC may default which they have yet in their existence YET. But insurance companies have.

The author needs to do more research. It’s funny, the statements are qualitative without any data to back up. Articles like these are weak and does a disservice to readers.

So true, so completely and totally true. I wish more people would read that and understand it.

I agree with you partly, but most fortunes are made with OPM, other peoples money. So, to those that may have been born into a poor situation still have the advantage of keeping their credit rating/scores in check and then they can arm themselves with the knowledge of cashflow and investing. Nobody enters the world with bad-credit. Their is good debt, by the way. Debt that generates more money than the debt itself. Of course you still can have too much. Moderation is the key. The library is a free resource for all that dare to enter. You have nothing to lose and everything to gain.

At best we have to “risk-adjust” each of these. Based on time left to “retirement”, you have to adjust the value of that IOU based on the risks.

@Maria: Brad nails it, these are very “middle-class”-centric issues. (but hey, if you’re not at least middle-class, you’re poor right?)

Fundamentally, there are two problems that will put you “in the poor house”:
1. spending too much
2. not earning enough

Of your 9 points, only 1 deals with problem #2, and even then it’s questionably worded and explained:
8. Working the minimum

“Working more than the minimum” is not the solution. In fact working more than the minimum can just be a waste of your time. You are describing a symptom, not the problem.

The problem is “Failing to generate enough value in work”. The goal is to create more value for your employer. You don’t need to work more, you need to work better, you need to learn about your job, your field, your competition, your customers. You need to create opportunities, find ways to generate more revenue.

Most people aren’t “work poor” because they’re lazy and working the minimum. Most people are “work poor” and failing to progress b/c they’re doing all the wrong things.

Social security will remain in some form or another. Almost all of our politicians, of any affiliation, are terrified of letting it crumble. The political consequences are too much so they will do something to keep it running.

We may not like the something, but baring a total collapse of the US economy, it will be done.