"Gentlemen. This is a football." -Vince Lombardi
Wednesday, January 31, 2024
Like many people, I sometimes fall into the trap of being deeply discouraged when I read the news. Sometimes it can feel like things are getting worse every week, and we are powerless to change it.
To combat this feeling, my wife and I developed a saying: We can’t change the whole world, but we can change our world. What we mean by this is; we have little to no effect on war in the middle east, famine in Africa, or the people currently occupying capitol hill. But we do have a direct effect on everyone we interact with on a daily basis. This can take many forms, from helping a neighbor carry groceries, investing in the life of a friend or family member needing a helping hand, or generally trying to be pleasant to people. As simple as it sounds, this can be a challenge. Some days the last thing I want to do is smile and forgive someone for cutting me off in traffic.
We can't change the whole world, but we can change our world!
So how does this connect to finance? A recent article I read reporting on financial literacy in America I found to be discouraging. According to the 2023 Personal Financial Index report from the TIAA Institute and the Global Financial Literacy Excellence Center, American adults have shown a sub-par level of financial literacy. The study finds that “functional knowledge is consistently lowest in the realm of comprehending risk”.
Every year, millions of young men and women graduate high school without a foundational understanding of core concepts relating to money. Despite some not fully understanding what an interest rate is, these same young adults will be encouraged to take out hundreds of thousands of dollars in student loans. This lack of knowledge most certainly contributes to the record levels of consumer debt we are seeing. Just last year credit card debt in the US hit a $1 trillion dollar record.
When looking at this topic, how do we change our world? If you have children or grandchildren, ask them about money the next time you have dinner. Gauge their understanding and help them fill in the gaps. Teach them about the benefits of savings and investing. Explain what a mortgage is. It sounds simple but financial literacy is an essential piece of education that is sadly being left out by many schools across the country.
"When you have financial security, you have options; when you have options, you have freedom; and when you have freedom, you have genuine wealth." -Jim Pannell
Knowledge is power. It’s the power to confidently navigate the financial challenges that everyone will inevitably encounter. It’s the power to not fall prey to a predatory lending scheme. It’s the power of having options. Because, as Jim often says, when you have options you have freedom.
At Riverfront, we would be happy to be involved in this process! If someone you know has questions or needs some assistance with their finances, please don’t hesitate to give us a call! We have a passion for finance, but more importantly we have a passion for people.
Below is a link to an article explaining the basics of personal finance, and a video explaining a few financial terms. Hopefully these resources can help empower the next generation to lead financially free lives.
I hope you all have a blessed week,
Grant
Helpful Links:
Article- The Ultimate Guide to Financial Literacy
(The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.)
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