Wealth & Debt LO: To explore how people become rich and why people end up in debt

Inheritance Excessive salaries Poverty trap Leaving money in a will for someone when you die ‘fat cat’ wages that people earn/ bonuses Not being able to break out of poverty Minimum wage The lowest wage a person can earn in the UK Key ideas

How do people become rich? Using the following pictures, make a list of ways people become rich.

Born into Money/ Inheritance

Marry someone who is rich

Given money as a gift/ Inheritance

Win the Lottery

Investing in stocks/ Shares/ bonds

New invention/ e.g. Facebook/ Dyson Hoover

A talent/ e.g. Actor/ Musician/ Footballer

Worked hard/ Education/ Training to do something E.G. Doctor/ Alan Sugar

Memory task! oIn teams you have a set of questions oSend one member of the team up to find an answer, they then memorize it and bring it back to teach the group- oThen the next person goes up for another question

Why are people poor?

Unemployment- Where a person is not in paid/ or unpaid work. There are over 400, 000 unemployed people in the UK People are unemployed for a number of reasons, for example they may have an illness or condition that stops them from working. For others, there is a lack of jobs available / they don’t have the skills or qualifications to do jobs. There are a small group of people who are lazy/ can’t be bothered to work.

The minimum wage was brought in by the govt in For workers over 21years old it is £5.93 and hour and for year olds is £ 3.64 an hour The minimum wage stops bosses from paying their workers too little. They must pay a standard minimum wage. Stops sweat shops/ people working for next to nothing The minimum wage only covers basic needs to live/ housing. They do not cover luxuries only essentials. People struggle to get by on the minimum wage.

Wasteful spending is where people spend money un necessarily They may waste money on alcohol, gambling, tobacco and other such products This may result in them being poorer. It may mean they do not have enough money for other things/ members of their family/ e.g. Children. May spend money on alcohol and then not provide enough food/ school clothes for the children

Debt is where people owe or borrow more than they have People can get into debt in many ways e.g. mortgages, loans, credit cards, investments failing People may get into debt by taking out credit cards. This can cause debt if you do not meet the monthly payments, you get charged and the amount you owe can grow

Solutions to money problems

With good education, people can gain qualifications which can lead to higher paid jobs and therefore help people out of the poverty trap

There are many different types of Education available to people after they have finished school such as literacy and numeracy courses There are also vocational skills such as Bricklaying, work in local businesses. You can also work for a company and attend college part time to develop your skills.

Schools and colleges offer specialist careers advice e.g. connexions to help people decide on careers, learning, health, housing, money and rights Speaking to someone can help people become informed of their choices for the future.

The government help people in many ways. They created the minimum wage to protect workers and they also provide benefits to help those out of work

Benefits are money provided to families to help them with their financial situations You can claim benefits if you: Are unemployed and seeking a job You need to support someone in your family who cannot work due to illness If you have children to help wih costs If you cannot pay your rent and tax Tax credits if you are on a low wage Old age pension for all those who have retired