December 1, 2012


advisor or you?Who decided that November is the right time for Financial Literacy Month? We need skill with numbers all year round.

Besides, financial literacy is boring  compared to Black Friday and the latest Apple iDevice. Maybe that’s why we need a special month.

You Already Pay

You pay for advice for financial decisions relating to banking, financial planning, investments, insurance and tax. Thirty days hath November.  How did your advisors specifically help you improve your financial literacy?

Maybe you received generic information from them or the financial institutions they represent. That doesn’t count. Maybe you received sales pitches disguised as advice. That doesn’t count either.

Financial Literacy Month You are paying — directly or indirectly — for advice. What are you getting? Do you get emails from advisors telling you that instead of sending you a holiday card, they’re donating an undisclosed amount to a worthy charity? That’s fine but how charitable are they being to you? Information is free. Emails are free. Videos are free.

Your advisors don’t even need to create fresh, original content, They can send you links for free. What did they send you?

Too High A Price

As you become more educated, you become more discerning and demanding. Will that make your advisor more money? If not, don’t expect much help. We saw how a pizza flyer deceives. Financial offerings are far more complex.

You pay a higher price when you don’t take the initiative to learn on your own. If you’re passive, you might get advice which is better for the giver than for you. How would you know? By improving your skills, you can ask better questions, evaluate the answers, and spot what’s left out.

Your Advocates

When you’re ready to learn, you’ll find help. Here are three excellent free sources:
  1. Your Financial Toolkit on the Financial Consumer Agency of Canada  website
  2. Get Smarter About Money from the nonprofit Investor Education Fund
  3. Canadian Money Forum from bloggers Million Dollar Journey and Canadian Capitalist
You can also visit the Riscario wiki which started in 2006 and accompanies this blog.


imageThere are other sources of information with potential conflicts of interest. For instance, VISA offers  Practical Money Skills. You won’t find standard debt-fighting advice like
  • pay off your credit card balance every month
  • borrow from less expensive sources (if you must borrow)
  • cut up your credit card
Instead, there’s an example of paying 18% interest on a $3,000 loan. If you pay the monthly minimum of $60, you pay an astounding $2,870 in interest. If you pay $110 monthly, you pay “only” $1,070 in interest —  a “saving” of $1,800. Wow, let’s borrow $6,000 to “save” $3,600.

Similarly, there’s a cost to getting advice from your banker.

Noble Intentions

We get in the way of our own plans. You might need outside help or discipline. If you have a spouse, friend or colleague with the same goals, support each other. A 12-week Pick Four goals program may be ideal: each member has their objectives (may not be financial).

Your paid skilled advisors can certainly help you improve your financial literacy. That doesn’t mean they will. You can also improve without their help. That doesn’t mean you will. Will you?


Podcast 197

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PS How do you learn?

1 comment:

MDJ said...

Thanks for the mention Promod!