Lessons from a Homeless Shelter provides timeless tips for financial self-sufficiency. It is based on a personal experience that actually took place in 1993 as my financial advisory practice was just getting started. The lessons have clearly stood the test of time and are still relevant:
After attending a seminar sponsored by a local nonprofit, career networking organization entitled Reengineering Your Finances for a Smooth Career Transition”, a man named Mr. Booker approached the guest speaker, a young financial adviser, and asked if the adviser would be willing to speak to his organization. The adviser routinely mentioned that he spoke regularly at career fairs, civic organizations or to local investment clubs. When the adviser asked for the name of the organization, Mr. Booker replied, “The East Oakland Community Project.” The adviser agreed to make the presentation and asked for a date. Mr. Booker mentioned that he was not the contact person for the organization, but he would put an officer from the organization in touch to schedule.
At that moment, the adviser suddenly realized that Mr. Booker’s organization was a homeless shelter in the heart of the Oakland, California projects, one of the toughest neighborhoods in the country, and that he was asking the adviser to address a group of about fifty homeless residents. Furthermore, Mr. Booker identified himself as one of the shelter’s residents! The adviser immediately wanted to know, “what good could it possibly do to talk to homeless people about their financial matters.” The content of the presentation covered the basic building blocks of sound financial management including setting goals, budgeting, establishing adequate liquid emergency reserves, sound debt management strategies, and tracking household net-worth. Unfortunately, from the adviser’s perspective, a homeless audience, by definition, is not in a position to focus on any of these issues. Their needs were perceived to be at a much lower level of basic survival according to the classic Maslow’s Hierarchy of Needs.
Mr. Booker’s offered these three financial rules to follow that he summarized from the presentation that he had just attended. He correctly perceived that these rules could apply to all:
1. Wealth is accumulated gradually over time.
2. In order to accumulate wealth one must understand the concept of delayed gratification.
3. All people, both poor and wealthy, need to practice sound money management principals.
The adviser agreed to do the presentation. It was certainly an experience outside of the general comfort zone of the adviser and required the adviser to meet at 7:30 PM at the shelter. From the adviser’s perspective, there were Maslow Hierarchy issues of basic survival as well!
Although this lesson took place several years ago, the essence of Mr. Booker’s words of wisdom recently appeared in the recent best seller “The Millionaire Next Door”. The authors, Stanley and Danko, studied a broad sample of the affluent market and reached this conclusion: “The key to building wealth is not luck, inheritance, advanced education, or intelligence. Wealth is accumulated by hard work, careful planning, self-discipline, consistency, and personal sacrifice.”
Mr. Stan Booker is to be commended for challenging the adviser to make the presentation at the East Oakland Community Project. The adviser was able to broaden his perspective and dispel the incorrect assumptions that he and the general public have about the homeless. Being able to make a positive difference in several lives rewarded the adviser. Creating a positive change in just one person was enough to make this endeavor worthwhile.