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Portfolios of the Poor: How the World's Poor Live on $2 a Day

3.92  ·  Rating Details ·  660 Ratings  ·  68 Reviews
Nearly forty percent of humanity lives on an average of two dollars a day or less. If you've never had to survive on an income so small, it is hard to imagine. How would you put food on the table, afford a home, and educate your children? How would you handle emergencies and old age? Every day, more than a billion people around the world must answer these questions. Portfo ...more
ebook, 296 pages
Published April 20th 2009 by Princeton University Press (first published January 1st 2009)
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I had the wrong idea in my head about what this book was about. I thought it would be individual stories about people who struggled to get by; the choices they had, the trials they faced, the final outcomes they arrived at.

It is no discredit to the book that it was not. Instead, it was an account of data collected and conclusions drawn from a large number of 'financial diaries' that poor families in Bangladesh, India and South Africa kept over a long period of time. The focus was on how the very
Mal Warwick
Jul 16, 2012 Mal Warwick rated it really liked it  ·  review of another edition
Understanding the Daily Reality of Global Poverty

This book makes a major contribution to our understanding of global poverty.

Portfolios of the Poor reports the findings of a series of detailed, year-long studies of the day-to-day financial practices of some 250 families in India, Bangladesh, and South Africa, including both city-dwellers and villagers. The authors conducted monthly, face-to-face interviews with each family, focusing on money management and recording every penny spent, earned, or
Jonathan Biddle
Nov 08, 2013 Jonathan Biddle rated it it was amazing  ·  review of another edition
Shelves: kindle, 2014
This is a really helpful, data-based book that focuses on how the poor use money and survive on less than $2 a day. One key takeaway is that the poor are not poor because of weak money management skills; their ability to manage multiple sources of money is incredible and puts many Westerners to shame. They are poor, rather, because of their chance societal positioning which is reinforced by lack of access to regular and consistent cash flows and reliable sources of money.

I'll post a fuller revi
A more important study than it is an interesting book, Portfolios of the Poor presents the results of several years' worth of "financial diaries" kept by extremely poor people in India, Bangladesh, and South Africa. The diaries-- detailed interviews conducted with a household regularly over the course of a year-- illustrate how families manage their income and expenses over time. The main "conclusion" of the diaries is that the poorer you are, the more financial management you must engage in. Th ...more
Farwa Khtana
This book was alright. I didn't particularly like how it constantly went from making some sort of sense, like in the introductions and conclusions of each chapter, to simply getting lost in research details. A simpler account would have been more appreciated.

But the central idea behind it was intriguing and thought-provoking. The poor CAN be helped, and poverty CAN be eradicated. The poor need to be provided with more reliable and flexible financial instruments, to help them save better for the
Karel Baloun
Sep 04, 2015 Karel Baloun rated it really liked it  ·  review of another edition
Fascinating absorbing stories of survival, along with a scientific data set.

I'm furious that even these most poor people are regularly cheated and stolen from. Reliable financial and insurance products would provide real value here. Facebook/whatsapp could really help.
Shweta Nigam
This book doesn't really tell a captivating story but is an eye opener at so many levels and it makes no claim to solve the challenges of development. Instead it provides helpful advice and observations.

Would I recommend it?
It is well worth the time and effort.
Jun 13, 2013 Nick rated it it was amazing  ·  review of another edition
This is a must read for anyone interested in the lives of the materially poor,especially for those interested in alleviating poverty through financial mechanisms. In particular, chapter 5 on the price of money was especially enlightening and chapter 3 on dealing with risk was also extremely helpful,giving a small glimpse of the now emerging industry of microinsurance. The strength of this book, however, is the approach the authors used in gathering the information. Rather than one-time surveys,t ...more
Michael Shaw
Feb 20, 2017 Michael Shaw rated it really liked it  ·  review of another edition
A Zuck book club book, I found much of the writing rather bland. For a while, I felt the same way about the conclusions—it argues that the usurious lending rates to the poor aren’t really so bad, and that we should have more financial services available to the world’s poor. The rates aren’t bad because its not a fair comparison to think of them as annual rates like we do for longer term, middle class loans. They should instead be thought of as fixed fees.

Now, there’s some merit there—the cost of
Liam Polkinghorne
This review has been hidden because it contains spoilers. To view it, click here.
Feb 21, 2017 Priya rated it really liked it  ·  review of another edition
Pretty detailed and useful insights into how the poor manage their finances. The varied financial tools used, sometimes complex, and the way this is managed without formal 'financial management' tools or 'advisors' is quite an eye opener.
The initial chapters are very repetitive and unnecessarily lengthy; this could've easily been cut down by 50-60 pages.
Michael Pennington
A recommendation of Mark's and not a good one. This read as a jc dissertation rather than something in wide distribution.
Some very good ideas, but fairly dry presentation. Portfolios of the Poor describes the findings of four researchers who studied how extremely poor households in India, Bangladesh, and South Africa manage their household finances. Their approach was to select 20-30 case study households per region and study their finances from a longitudinal perspective by tracking their cash flows and household balance sheets over a long period of time. If I were to reduce their findings to a single bullet poin ...more
Dec 26, 2016 Korey rated it it was amazing  ·  review of another edition
This is a 4 1/2 star book. It was on the harder side to chomp through. Lots of dry data. An important topic and massively revealing how some of the world's poor manage their financial affairs. I've never read or seen this topic covered anywhere. Really enjoyed the coverage.
Jun 11, 2011 Jamie rated it really liked it  ·  review of another edition
Quite fascinating to learn that the poor need and use various financial instruments; poverty does not mean simply hand to mouth subsistence. The challenge for the poor is that their incomes are low, cash flows irregular and existing financial instruments not ideal due to unreliability and lack of privacy and transparency. No one financial product will provide a complete answer, but access to a portfolio of financial products can help to manage uncertainty and provide greater security and peace o ...more
Nick Klagge
Jan 29, 2011 Nick Klagge rated it really liked it  ·  review of another edition
Shelves: economics
A usefully different perspective on the global economy. Morduch (a professor at NYU Wagner) and his co-authors structured the book around a series of financial journals kept by poor households in Bangladesh, India, and South Africa. The main takeaway is that the world's poor also tend to be heavy users of (mostly informal) financial instruments by necessity because their incomes are also unpredictable. It was interesting to read the authors' description of how it took their survey team several v ...more
Timothy Chklovski
An interesting study; I was looking for insights about how people more broadly interact with financial institutions and think about their savings and spending. I thought that learning more about the people living on a few dollars a day may provide an unusual perspective.
In a way, it did. The key points are that there is a broad range of borrowing and lending that one engages in, and that having very little income does not mean one does not need to -- or manage to -- save and mostly repay loans.
Dave Golombek
Nov 23, 2009 Dave Golombek rated it it was amazing  ·  review of another edition
I started with this book with a much different picture of its subject matter than the reality. Looking at its title, I focused on the subtitle more than the the real title, unconsciously discarding the word portfolios. Because really, how much of a portfolio does someone who makes $2 a day have? Quite a complex one it turns out, even more complicated than my own.

This superb book discusses why the poor need complex financial mechanisms to survive, the problems with the tools that they have availa
Dec 10, 2015 Daniel rated it really liked it  ·  review of another edition
Very insightful look at how exactly the poor live on less than $2 a day. Some of the insights:

- Their financial acumen is surprisingly sophisticated, as most employ many different types of financial instruments simultaneously. No one lives hand to mouth - they all save and borrow.
- A huge problem they face is not just their absolute income levels but the fact that it's irregular. So they have a much greater need for financial services that help address this than strict microlending.
- They ration
Erik Bloom
Nov 01, 2014 Erik Bloom rated it really liked it  ·  review of another edition
There are many books in the development field that are worth reading. However, there are few that give as much insight (surprising insight?) into the life of poor than this book. Although it can be a hard read, due to the repetition and level of details, it is well worth the time and effort.

The book uses a qualitative approach to look how the poor (in Bangladesh, India, and South Africa) allocate their resources, particularly their savings, borrowing, and lending, and why these deacons really ma
Oct 06, 2009 Kim rated it really liked it  ·  review of another edition
This book answers the question "how do people live on two dollars (or less) per day?", and it answers it well. This is an excellent companion to the various international political economy books out there which deal with a lot of very large numbers and statistics, because while those are quantitative studies of problems that a generalized "Third World" faces, this is a qualitative study of how people and families in that World survive (and sometimes thrive) on what would seem to the "First World ...more
Ryan Greer
This is an incredibly important book for dispelling certain assumptions that we rich folk have in regards to the poor and how they spend their money. The writers did their homework, and provide the global community with concrete ideas for ways to help the worlds poorest climb out of poverty.

With that said, its a pretty boring book. Microfinance is a hot ticket right now, and it really has revolutionized the way global economies view the poor, but I really dont see it as the silver bullet that wi
Sep 24, 2015 Helen rated it really liked it  ·  review of another edition
If you are interested in issues of global poverty and how people manage their financial lives in developing countries, then this book is for you. It is based on an academic study of people in India, Bangladesh and South Africa, enlivened by detailed portraits of individuals and families. Basically, people who live on a few dollars a day have much more complex financial lives than you might imagine, always saving and borrowing. The book looks at the roles played by microfinance institutions, savi ...more
Lauren Adams
This book should be titled, "Financial Portfolios of the Poor." I thought "portfolio" meant the general sense of the term—a holistic view on daily life, relationships, jobs, health, etc of the poor. Instead, "portfolio" means the fiscal sense of the term—a strict analysis of the cash flow of several households. Once I accepted this fact, I was able to enjoy the book more, though the title is very misleading. From an economic perspective, I learned a lot about money management in poverty and am g ...more
Jun 26, 2016 Karen marked it as to-read  ·  review of another edition
* 20 books Mark Zuckerberg thinks everyone should read

Researchers Daryl Collins, Jonathan Morduch, Stuart Rutherford, and Orlanda Ruthven spent 10 years studying the financial lives of the lowest classes of Bangladesh, India, and South Africa.

A fundamental finding that they include in "Portfolios of the Poor" is that extreme poverty flourishes in areas not where people live dollar to dollar or where poor purchasing decisions are widespread, but instead arises where they lack access to financial
Apr 06, 2010 Hollis rated it really liked it  ·  review of another edition
I found this a fantastic and thought-provoking book. THe authors follow the detailed financial transactions of a group of the world's poor (those who live on less than $2/day) from S.Africa, india and Bangladesh. What they find is that despite the size of their income, their need for money management tools is greater than the average. in fact, the amount of total 'turnover' that flows through the households is far greater than a snapshot of their asset value would suggest. It suggests improvemen ...more
Nov 28, 2014 Tim rated it really liked it  ·  review of another edition
This book is good for what it is--a very academic study of the way the poor live their lives. It has only a few messages, though, and can easily be skimmed. The stories in the book can be rather dull, since they are based solely on financial diaries. They are similar to what someone would write if they tried to tell the story of your life based on your Mint account. If you're interested in the economics of being very poor, though, there are few more thorough or well-researched books out there. I ...more
Aug 02, 2009 Nina rated it liked it  ·  review of another edition
As an academic book I think this book was quite good, I just think I was the wrong audience for it. It would have been an extremely valuable book to read if I were to say work in microfinance or if I were a student of it, but this was far too detailed and repetitive for someone like me who just picked it up because I am interested in the topic. Like so many nonfiction books I have been reading lately, I think this would make a great essay or a feature NY Times Magazine article or something like ...more
J. Trott
If I was and investor who was looking for a way to help the poor, I should read this book. I want to help the poor but I'm not investing and no bank is asking me how to do stuff.

Here is a summary: the authors kept financial diaries for groups of families in Bangladesh, India, and South Africa who lived on 2 dollars a day or less. They found out that the poor are ingenius at managing their money though they have a lot of ineffective tools to do so, because the poor of the world always live in fi
May 05, 2013 Naomi rated it really liked it  ·  review of another edition
A fine study of how people living on an average of $2/day utilize a variety of financial instruments and practices to manage their money, and reasons for community leaders to provide better instruments and ways to practice this management. Collins et al provide many useful examples, and I encourage other readers to go from this go from this book to Roger Thurow's _The Last Hunger Season_ for an example of how the One Acre Fund is practicing exactly the kind of responsive innovation with its memb ...more
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“At any one time, the average poor household has a fistful of financial relationships on the go.” 0 likes
“irregularity of their income compounds the problem by ratcheting up the need to hold reserves, or to borrow when the income fails to arrive. For these reasons, we would argue that poor people need financial services more than any other group.” 0 likes
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