The Price of a Poor Financial Education
October 7, 2011 in Finance
My personal philosophy on financial matters is that each person is responsible for his or her financial well-being. This is one of the reasons I support the Occupy Together Movement. I believe many of the participants understand this. In addition, they understand the global financial situation and have the courage to take steps to resolve it.
They have realized that the education system did not prepare them for life by providing a financial education. This practice initially left them confused about how to make a living. They were taught that society owes it to them. Now, they realize it is up to them and they are trying to learn what they were not taught in school.
Politicians, like Mayor Bloomberg of New York City and leading Republican Presidential Candidate, Herman Cain, are so out of touch they don’t realize this is happening with the majority of the people in the United States. Apparently, they don’t know that nearly half of the American households receive some form of government benefits.
In other words, we have a world of people who don’t know how to make a living led by those who don’t understand why it is this way.
This doesn’t surprise me. I’ve spent much of my life studying and working within the financial and tax industries and most of my clients don’t understand the system either. This isn’t because these people have a below average intelligence. It is because the information they have heard comes from those who need others to be uninformed so they can sell their products. Therefore, the “education” is full of misinformation.
For example, financial and investment advisors, including “Certified Financial Planners,” are trained to sell products that benefit the wealthy at the expense of the middle class. The CFP title makes it appear these individuals are more educated about wealth creation. The truth is CFPs are trained how to perform advanced formulaic tasks. A review of most CFPs’ portfolios will reveal they are NOT experts on investing or wealth creation.
Consumers have misplaced confidence in these financial industry “experts.” They think they are receiving accurate advice, so they follow it. Then, when their investments go sour, they are ashamed to talk about it because they feel they must have misunderstood what they were supposed to do.
The Occupy Together Movement is bringing light to these types of issues. Those who control the money and the power are doing everything they can to discredit this movement because, if things change, it will change the way they have to do business. An educated population asks questions and that makes leaders uncomfortable because the truth will reduce their money and power.
I recently received confirmation of this through a personal situation and I’ll write about that in an upcoming article.
How comfortable are you with your financial education? Do you understand the financial system? Leave your comments below.
