It is a household’s inability to access wealth resources that are sufficient to provide for basic needs for a period of three months.
The reason for this difference is that asset poverty accounts for a household’s total wealth, and not just the current income level.
However, the official poverty rate released annually by the Census Bureau highlights just one aspect of household finances, namely the percentage of people with insufficient income to cover their day-to-day expenses.
It does not count the number of families who have insufficient resources – money in the bank or assets such as a home or a car – to meet emergencies or longer-term needs.
When these longer-term needs are factored in, substantially more people in the United States today are facing a future of limited hope for long-term financial security.
Education level, household structure (race, age, gender, marriage status), and home ownership are all unifying factors of the asset poor.
[2] To be more specific, high school dropouts were three times as likely as college graduates to experience asset poverty in 1998.
In general, families with children are the second highest in rates of asset poverty, but they are half as likely to fall into this category if a father is present in the home.
[6] Home ownership also plays a role in increasing or decreasing the likelihood of falling into asset poverty.
However, in order to be successful in helping low-income and asset-poor families escape impoverished lifestyles, home ownership needs to aid in building assets, improving housing, and creating higher-quality neighborhoods.
These accounts require financial education, they target the poor, and they provide funding through matches, not through tax breaks.
[8] Wealth provides economic protection in difficult financial times and it allows people to invest and prepare for the future.
Wealth and Transformative assets, however, are long term sources of money that could be used in emergency situations; or, assist in improving one's living conditions or standards.