What's in a name? This book's catchy title may not do full justice to the authors' interesting research, which provides insight about how 300 poor families in South Africa (150), Bangladesh (100) and India (50) manage their cash on a daily basis. What we are surprised to learn is that they don't live on $2 a day, nor accumulate ‘portfolios’ as we in the developed world think of them (financial assets saved to produce regular or deferred income to meet future needs). Perhaps a better title would have been “The World's Poor: Masters of Financial Leverage and High-turnover Cash Management”.

The book offers the reader a unique insight about how Wall Street techniques have equivalents on “Poor Street”. The families' stories suggest that the micro credit industry plays, and will continue to play, a vital role in the fight against poverty, and they make clear that the monies put in circulation by those institutions may not be deployed solely (or even mostly) toward business creation, but rather are used for household consumption. Further, the means to repay these loans may come not from micro-business activities, but from new borrowing. One chapter touches on the very controversial issue of pricing of (informal or formal) financial services using a flat (nominal) charge which benefits the borrower when the term of the loan is longer; this is frowned on by those who believe the APR (annual percentage rate) should be the one and only way. Finally, the authors also suggest that those involved in the eradication of poverty should go beyond the traditional and static measurement of poverty (e.g. annual income levels), to take a broader understanding of the intensely dynamic financial tools that the poor have mastered so as to live on meager incomes.

The authors conceived a very ingenious system to collect data. Using financial diaries, the household heads were asked to record the source and use of every transaction involving cash. Even accounting for the relative advantage enjoyed by South African families (thanks to that country's government subsidies unavailable in the other two), the similarities in peoples' financial behaviors are striking. Most households had near-zero financial net worth (often between the US$ equivalent of minus 50 to positive 150), and breadwinners did not earn steady dependable income. Employment among the poor, even in urban areas, tends to be seasonal, unpredictable, or both. And even if the household head migrated to a bigger city, the family's condition did not help increase job security.

Yet looking at the household balance sheets, the diaries showed substantial gross financial assets and liabilities – worth 3–5 times the household's net worth. These flows are developed and spent via some proactive financial leverage activity, where family members, local shopkeepers, employers, microcredit institutions, and money lenders are constantly and carefully asked for generally short term loans, the proceeds of which are used for immediate consumption needs, to pay back maturing loans, or simply “put-away” (as opposed to “saved” – see next sentence) toward next year's school bill, the daughter's wedding as dowry and others. In one of the book's most interesting narratives, it is said that many who live on “Poor Street” actually pay a so-called “money-guarder” to keep their “saving”, which prevents the “saver” from spending it. This reviewer also found another dimension to be significant: that gross assets on the household balance sheet were turned over on average five to six times a year. Thus, through financial savvy, Poor Streeters seem to leverage $100 into possibly thirty times this amount. However, throughout the book, this reviewer kept imagining the vision of the hamster perpetually spinning in its wheel but never moving, financially.

The elaborate leveraging activity and hyper-active cash management described in this book is forced upon the world's poor families by the daily burden of uninsurable risks (health issues, death, or disability of the breadwinner), cultural traditions (elaborate funeral ceremonies, dowries on behalf of brides), large families (many children plus the elderly living at home), and the abysmal quality, reliability, or even availability of basic and secondary education, health, and infrastructure (water, sewage, and electricity). It is unfortunate that for all the financial discipline and ability demonstrated by the 300 families, long term vulnerability remains. And we are acutely reminded that playing a high leverage game has a serious downside, whether on Wall Street or Poor Street. More discussion about this danger would have been helpful, particularly if data were available from diaries kept over a longer period of time. A cautious reader may also correctly worry that millions of households lack the financial acumen demonstrated by the 300 households examined here. For those, the daily struggle will be much harder.

To help eradicate poverty, it is important that private business as well as governments do more to develop and promote the use of locally relevant financial tools. This will make good social and business sense, and new efforts in the micro finance arena should emerge (e.g. micro investment banking, micro venture capital, micro pensions) which can service both existing and future demand. But for those further down on the totem pole, who are not the focus of the book, the global community informed by academics should collaborate to create and provide financial literacy tools. This is a necessary first step to assist those most vulnerable, because they lack the skills needed to benefit from the services provided by an army of moneylenders, micro lenders, micro guarders, saving clubs, and many others living on Poor Street.