Definition: The critical financial safety net that allows someone to navigate setbacks (job loss, medical bills, car explosions) without experiencing catastrophic freefall into destitution. It’s not about funding luxury ski trips; it’s about having enough reserves to ensure a flat tire doesn’t mean choosing between food and getting to work. Without a Poverty Parachute, every minor problem risks becoming a life-altering disaster. Rich people often forget theirs is automatically deployed at birth.
Example: “Her emergency fund acted as a Poverty Parachute when her freelance gigs dried up. She ate ramen for a month, but didn’t lose her apartment or max out credit cards. Total lifesaver.”