Let’s set some odds of whether these things are likely to happen:
-The Canucks winning the Stanley Cup next year?
-Your son, daughter or grandkid getting a good deal on buying a vehicle? The typical sales person sells three or four vehicles a week. Your son, daughter or grandkid buys three or four in a lifetime.
OK, how about getting a good deal in the dealership finance office? There are usually two business managers, so they see 3 or 4 customers a DAY. They’re former sales people who are 100% on commission and your 18-30 year old has no idea of what they need to avoid, or ask, or even understands a lot of what they’re being told or are signing.
-What are the odds they’ll get a better than most people deal with anything at their bank? I bet the odds are tiny. If you don’t believe me, just google all the bank investigate reports of rip-off under: CBC Go Public. You’d be amazed how easily they can sell them an overdraft they’re stuck in for a decade or more, a service charge package that’s overpriced, or a line of credit they’ll have for an average of 16 years.
A new JD Power survey found that eight out of 10 people want financial advice from their bank. That’s way too many and from the totally wrong source! The staff of financial institutions are on commission or bonus pay! They are sales staff – period. That is not the people from whom you should want – or should get – financial advice if you want it to be of benefit to you versus them! Big commissions, big fees, annual fees, low returns, selling you an overdraft, or another credit card, aren’t likely what those eight out of 10 people are looking for, especially your 18-30 year old.
-Credit cards: Millennials tend to use their debit card more than a credit card, and that’s a great thing. But what are the odds they’ll shop around for the right credit card versus just being sold the one from their bank?
Credit card marketing staff consists of some of the best marketing minds in the country…your graduate has never had a credit card in his or her life… Having one is so convenient and always lets them buy today and pay…well – whenever…until they reach their limit and then their statement will show that little line hidden on there: At minimum payments, it will take 27 years to pay off your balance.
Victory doesn’t happen in the game – it happens in practice. The same way, financial wins aren’t in retirement – they’re in your today actions.
George Boelcke – Money Tools & Rules book – yourmoneybook.com
When we borrow money, get the student loans, two or three credit cards, or line of credit that won’t be paid off for an average of 16 years, we just need a decent credit score and a paycheck. Nobody talks us through it first, nobody (especially the lender) gives us any warnings, and we sure don’t need a permission slip to jump headlong into debt.
To explain that, I want to play a TV commercial for you. This is an ad for Cymbalta. I’m not picking on them – these commercials are all pretty typical by law. But I want you to really listen to it. I want you to count how many warnings there are embedded in this one minute ad. Are you ready? (You can click this youtube.com link for the ad:
What did you come up with? In total there are more than 25 pretty serious warnings in this ad. I used one for an anti-depressant because that seemed appropriate when our debt levels keep rising, almost half the population couldn’t find $400 for an emergency, and two-thirds couldn’t miss one week of pay without serious financial trouble.
The point is that this is an ad for a prescription. You cannot even get it filled without first seeing a doctor. A professional with at least six years of medical training has to examine you, explain it, and then – maybe – write the prescription.
Do you see the irony of this? You cannot just go get this medication. Yet, in the world of borrowing, there are way more than 25 warnings that you really should know. But nobody does – few people asks, because they don’t really know what to ask, what to avoid, how to negotiate, etc.
THAT is the reason the Money Tools and Fighting Back book is so critical. It’s the medical warning equivalent for every type of borrowing and then the part of paying it off. Lenders have no obligation and no interest in having you financially educated – none!
Whether you’re 18 or 80, the book is THE best present you will ever get for yourself, or gift to someone. The $20 for the book turns into tens of thousands of dollars. It’s a must-have and must-read until lenders have to provide the same warnings as drug companies do.
80% of teenagers never take a class on financial literacy, then we set them loose to sign for student loans, then their first credit card, then they sign for a bad cell phone contract, and not long after that, for a car loan with no financial knowledge. At some point, they may get a mortgage, and the 70% chance they’ll sign up for a line of credit, too. By the time they’re 40, they’re broke, have no idea how to dig themselves out, or what to do. Then, they have kids and pass zero financial knowledge onto them. It’s true: 80% of parents do not talk to their kids about money and finances.
Since California is next door to BC, and teachers are now back at work, a huge survey of teachers on their attitudes towards teaching financial literacy courses was very interesting. I’d suggest the information wouldn’t be much different if it were done in BC. It’s also great feedback for parents, because, if it doesn’t happen in school, it’s gotta happen at home!
Here are a couple of the questions from the survey:
-When should financial literacy courses be introduced in school?
Two-thirds of teachers think it should be kindergarten to grade six at the latest. One-quarter think it should be by grade two. Think about that: It’s totally contradictory to what’s being done now – if it’s done at all! Kids that are lucky to even have a financial literacy course get it in grade 11 or 12 – if at all. It’s currently a P.S. to their education, and not the foundation of something they’ll need for life. Surely that can’t be up for discussion.
Kids start handling money (an allowance, gifts from grandparents, etc.) by age four, five or six. By the time the school system gives them some tools, it’s 10 to 12 years too late and all the habits – good or bad – are formed.
-The vast majority of teachers believe it finance courses should be taught as a stand-alone course as well as embedded into other courses. That simply means us money concepts in other courses. That’d be something that could be implemented next week!
Remember the old math examples: Train A is going 50km/h and train B is going at 40 km/h. Which train, etc. etc. Well, convert the examples to money lessons: Karen saves $20 a month and Sam saves $14 a month. At the end of the year, who has more money, and how much?
In higher grades, that can get to include fractions and percentages: Nigel has $2,000 invested at 3.5% compounded annually. How much money will he have at the end of three years? In Social Studies or English, it’d be pretty easy to do a book report or research project on researching a stock and defending their decision. Every student knows Walmart, Esso,The Gap, GM, Rona, and tons of other publicly traded companies with a ton of information available for research.
-What are the biggest obstacles to financial literacy courses?
Most teachers rate them as having the time. That wouldn’t be an issue if the information is at least integrated into other courses. Teachers, the people the front lines, think there are major challenges in implementing financial literacy classes – to the tune of 91% of them!
And one more insight from the survey: When teachers were asked about their own confidence level in understanding personal financial concepts, 42% confessed they were ‘not at all’ or only ‘somewhat’ confident…that doesn’t exactly inspire confidence…