Financial Answers "IN SIMPLE LANGUAGE"

 

I want to take a look at a topic that is near and dear to my heart.  It’s one of the reasons that I started this blog, financial literacy or the lack of.   Maybe I will dedicate this whole week to financial literacy?

 

Who’s Doing What?

 

One of the biggest pet peeves that I have is that we are not taught much of anything, or in many cases nothing, about financial literacy when we are in high school or middle school.  In light of what’s been happening to our financial institutions lately, this lack of financial literacy has taken on a whole new meaning for me and probably a lot of other people.

 

The good news is help is on the way.  The bad news is it is going to take time and a lot of hard work.  But don’t worry because an organization called the National Council on Economic Education (NCEE) is on the case.

 

The NCEE, founded 60 years ago, is based on the premise that economic and financial illiteracy is learned and not intuitive. That’s good. Because now we know we can fix the problem that many of our public school systems have and are still ignoring .  We need to do what needs to be done now.  We need to take these impressionable children at this early age and stage of their lives and prepare them for the “real” world.  More on the NCEE in the following week’s posts.

 

The Real World

 

Looking back on my early school years, I remember I didn’t like school very much.  There were so many courses that I didn’t care about because they weren’t of interest to me then and aren’t of any interest to me now.  I often wonder why a student who is, let’s say creatively gifted in art or singing, is “forced” to take a class on some math class on a subject that s/he may never use or see again.

 

Think back to high school on some of the subjects that you were “forced” to take.  I studied mostly business classes-I was lucky now that I think about it-and never had to take subjects such as calculus, trigonometry, geometry, advanced algebra and various science subjects.

 

Sure, if I was interested in being a mathematician than all of the aforementioned subjects would be important.  But ask yourself, ”How many mathematicians do you know”?  Yet “everyone is “forced” to take at least one of these subjects.

 

The argument then, as it is now, is that you take these subjects so that you are a more rounded person.  What BS.  I did not take any of these classes nor have I had any time in my life needed to depend on knowing any of these subjects.  Nothing I do today or yesterday has depended on me knowing anything about these subjects.  Ask my friends if they think I am well rounded.  They may call me a blockhead at times but no one has ever said to me that I was not well rounded.

 

Useable Information

 

What young people need, what all people need, is useable financial information that they can apply to real life so they can handle what life throws at them. 

 

Wouldn’t it make more sense to teach a 12 year old or an 18 year old what it is like to have a checkbook and a responsibility of using it correctly?  Wouldn’t it make more sense to have these children understand that they need to save and teach them how to do it so they won’t have to depend on  government welfare programs  later in their lives.  Yes, I know, this makes too much sense. That’s why we continue to turn out students who can’t balance a checkbook or even worse, write a check.

 

I think I will devote this week to financial literacy.  Stay tuned for the next post when I get to more of the meat of this issue.  See you then.

 

If you read this far there may be something about this post that you are relating to.  There may be some financial related pain In Simple Language is talking about.  Tell us your story. We really do want to know.

 

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Thank you for taking the time to visit In Simple Language.  J  Copyright 2008.

 

Looking for a financial speaker or financial writer?  Contact Rich today at rsowa@insimplelanguage.com or call Sowa Financial Media now at (502) 569-1714.

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Following up on my previous post discussing African-American women , I was reading an article about a recent study that was released from Demos, a public policy institute located in New York.

 

Middle Class Woes

 

The study was based on middle class African-Americans and Latino families with household incomes between $40,000 and $120,000.  The study measured certain economic factors such as education, housing costs, assets, health care costs, and household budgets.  When the factors were pooled together they showed that only one in five Latino middle-class families and one in four African-American families could be considered financially secure.  These are scary statistics.

 

Getting Financial Help

 

Financial advisors, who have been working with both these groups, are stating that they are seeing increasing concern among their clients.  More and more of their clients are diverting their savings or retirement planning monies to daily living expenses. Their clients are talking about and more concerned with just surviving day to day. 

 

Several advisors said their middle-class Hispanic clients have always had a propensity to spend more than they should based on what they make.  What that leads to is very little savings and very little going into a 401k or other retirement program.  Most of these advisors are recommending that their clients increase their percentage of savings and investments, decreasing debt, and not making any major purchases unless they have the cash in full to buy the item.  This all sounds good but if you are just getting by now it is difficult to increase any type of savings or investments.

 

If the income is going to remain the same, then the only way you can save or invest more is by cutting back on your daily expenses and saving and investing the difference.  Hard to do if you’re already doing that and still struggling like a lot of people are.  How far can you cut back?

 

Change Your Thinking

 

Spending habits are no different than any other habit.  You must change your thinking before any of these savings and investment ideas will work.  Some advisors stated that so much of what their Hispanic clients do is emotional, so they, as the advisor, have to drill down and find out how they can make their clients feel comfortable with the financial suggestions they are making.  Not an easy thing to do.

 

If you read this far then there may be something about this post that you are relating to.  There may be some financial related pain that In Simple Language is talking about.  Tell us your story.  We really do want to know.

 

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Thank you for taking the time to visit In Simple Language.  J  Copyright 2008

 

 

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Let’s take a look at women & finances again, only this time with a little different twist.  I want to take a look not only at women but African-American women.

 

What’s The Difference?

 

I’m doing my usual research for items of interest for In Simple Language and I come across information about a study that was completed recently in Atlanta.  This study surveyed over 1,000 African-American women over age 18 with incomes of at least $25,000.  This study also included about 450 non African-American women so we have to assume that most of the responses given in the study were from the African-American women.

 

It seems the study suggested that most of these women were having a difficult time maintaining their life styles because of their family obligations.  Many of these women are helping handle financial obligations of their families which is creating problems for themselves.  They were loaning money to family members, the survey didn’t say whether or not they were being paid back, and not investing for themselves for today or for their retirement years.

 

No Plans Or Planner

 

Amazingly enough, 7 out of 10 of the respondents didn’t have a financial advisor let alone a financial plan.  They were just winging it.  The survey showed that many women were not only giving much financial support to their families but also to their religious organizations.  They put themselves in second and third place when it came to financially supporting themselves. 

 

The survey also showed that many of these women had held jobs, consistently, and had probably accumulated a decent amount of money.  Yet, they were handling family finances, paying for their children’s education and helping their parents with their financial health issues.  And again, not doing much of anything financially for themselves.

 

The survey also said that African-American women tend to be very loyal to family members.  Does that mean that the other women in the study aren’t?  Yow! 

 

No Time

 

This survey also stated that African-American women are less likely to have a financial plan in place as compared to other women.  Why?  The study said that they just hadn’t gotten around to it.  Over all, African-American women are financially confident.

 

Their just like everyone else. Too busy with their families and religious organizations so they just haven’t gotten around to working on their own financial plans.

 

If you read this far there must be something about this post that you are relating to.  There must be some financial related pain In Simple Language is talking about.  Tell us your story.  We really do want to know.

 

• Please ask your questions of In Simple Language.
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Thank you for taking the time to visit In Simple Language.  J  Copyright 2008

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In discussing yet another posting about women & finance, I have come across another recent survey that discusses the issue of women and their relationship with a financial advisor.

 

Who Do You Trust?

 

I’ve discussed this “trusting of financial advisors” topic in past blogs but not in any detail.  It seems that women do trust their financial advisors.  However they trust their accountant, banker, and insurance agent more.  Sounds like some financial advisors need to get their act together on how they work with women. 

 

Basically women are complaining that their financial advisors are not listening to them.  Since I was a financial advisor-stockbroker for 16 years-I have seen this many times.  There is something about  being a financial advisor that makes many people want to prove how smart they are by talking way more than they should.  Maybe it’s just an ego thing with those people.

 

So Whose Listening To You?

 

Any successful financial advisor worth their salt became successful and stayed successful, both monetarily and longevity of their business, because they were good listeners.  They talked with the client when it was necessary and appropriate but were listening more often than not.

 

How can you solve a person’s financial problems if you don’t know what they are?  Yet it still holds true today.  Too many financial advisors talk way too much and especially when it comes to talking to female clients.  I’ve heard this complaint over and over again from my female relatives and friends that have dealt with financial advisors.  And this is true of both male and female financial advisors.

 

Communicate

 

The name of the game today and always has been effective communication between client and financial advisor.  Yet, this communication gap, of talking too much and not listening, is still alive and well today.   There is an old saying, and yes maybe it’s a tired old saying, but it does make sense.  That saying is, “we have two ears and one mouth.  There must be a reason”.

 

 I have been a member of Toastmasters International, a communications and leadership organization, for about five years.  And although a lot of what we do has to do with speaking, there is still that element of listening effectively that is practiced and encouraged through the various roles we take during our meetings.  Unfortunately, I have not seen many classes on effective listening that are available anywhere.  It is something we need more of.

 

If you have read this far than there must be something about this post that you are relating to.  There must be some financial related pain In Simple Language is talking about.  Tell us your story.  We really do want to know.

 

• Please ask your questions of In Simple Language.
• Please give In Simple Language your comments and suggestions about this post and/or future topics of interest to you.
• Like what you read?  Send it to a friend.  Click on “share this post” right above leave a comment below.
• Did you remember to book mark this blog?

 

Thank you for taking the time to visit In Simple Language.  J Copyright 2008

 

Looking for a financial speaker or financial writer?  Contact Rich today at rsowa@insimplelanguage.com or call Sowa Financial Media now at (502)-569-1714.

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To all my In Simple Language friends:  Thank you for being patient with me while I was without electricity since last Sunday-7 days-because of the remnants, 82 mile per hour wind gusts, of Hurricane Ike.  I felt like I was going to have to live by candlelight and flashlights forever. 

But In Simple Language is back and will begin posting interesting and timely information once again beginning tomorrow, Monday, September 22, 2008.  Thank you for your patience and loyalty.  It is sincerely appreciated.

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