Financial Illiteracy - A Worldwide Scourge

Some years ago, I was at a men's breakfast at church talking with my pastor about my business.

To be honest, I was bitching about my business to my pastor.

The conversation revolved around the willful ignorance of clients and potential clients, when it came to the financial actions that they should be taking.

I said, "Even when it costs them nothing and gives benefits to them and to their kids and grand-kids, they refuse to change their behavior "

My pastor grinned and said "Welcome to my world!'

Since then, in conversations with many in my industry, I’ve learned that my frustration is common to professionals in our industry.

And, I’ve learned that the behavior is endemic across the world.

And, the behavior has a cause. The cause is financial illiteracy.

To understand the term, let's talk about just illiteracy - it is defined: unable to read and write: an illiterate group. having or demonstrating very little or no education. showing lack of culture, especially in language and literature.

What are effects of illiteracy?

The social impact

A person who is unable to read may have low self-esteem or feel emotions such as shame, fear, and powerlessness. Students who struggle with literacy feel ostracized from academia, avoid situations where they may be discovered or find themselves unable to fully participate in society or government

Financial illiteracy is all that but focused on an individuals ability to deal with financial matters.

An example is the "sub-prime crash" of 2007-2010. Millions of American families were harmed by a combination of government and banking industry malfeasance and misfeasance.

To clearly see the impact of financial illiteracy, we focus on the families who, finally, were told they could afford to own a home.

These families were lied to! They were sold loans that they could never pay off. They were offered a false dream of owning a home.

If these families had not been financially illiterate they'd have recognized the lie. They'd have been able to "do the arithmetic".

Take a moment, close your eyes and feel what those families felt when they lost the home that had been their dream and found themselves with debt and destroyed credit, into the bargain.

That's what financial illiteracy is and does.

So why does financial illiteracy exist?

In 2019, only 17 of 50 states require any personal financial education in K-12. While terrible, that's up from 1 in 1998. Americans are tied for 14th in the world in the percentage of adults who are financially literate. [link] Whatever else these numbers may demonstrate, they clearly show that the state and federal governments in America are not serious about solving the financial illiteracy problem.

In 2018-2019, a group of financial professionals said ENOUGH and began creating a program to address the financial illiteracy problem. The program was rolled out the week after Christmas 2019 with the publication of How Money Works - Stop Being A Sucker and a national media tour featuring the authors Steve Siebold and Tom Matthews.

As of 15 June 2020, over 250,000 copies of How Money Works - Stop Being A Sucker are in print. You can buy one from Amazon for $16.99 or I'll send you one free