November is Financial Literacy Month. This is an initiative of Financial Literacy Action Group (FLAG), a coalition of seven organizations that work to assist and improve the financial literacy of Canadians.
Literacy does not come from any one particular course, book, teacher or advisor. Just like literacy in any language, it comes from a lifelong conversation about financial matters.
The goal of this column is to play a small part in this conversation. I often wonder though if any of the advice I give leads to action. To inspire action I am going to start challenging you.
There is no lack of financial planning information, and at first glance this may seem to be a big part of the problem. It is far too tempting to pull the “it’s all so confusing” excuse.
All I see is a great big information “library” and an opportunity for learning. In my library, though, there can be no silence. I want to hear loud, intelligent conversations.
Too often we are afraid to begin. For many, family finances are a taboo subject and some don’t want to talk about it because they fear others will see the flaws beneath the veneer (welcome to humanity). We also tend to avoid consulting trusted advisors out of fear that someone might talk us into something.
It’s time to get over that reluctance because it is holding us back.
The first thing we need is a learning framework.
As in all goals, we need to begin with the end in mind. Let’s think about what a world this would be if we could accomplish the following:
• To know the characteristics of a good investment plan so well that financial fraudsters and opportunists are driven out of business due to the lack of gullible victims;
• Being active and knowledgeable participants in the financial planning process;
• Families that understand how to achieve their goals and live within the possibilities of an intelligently planned and implemented cash flow plan;
• Filling the many needs where people don’t experience the abundance we enjoy.
Financial Literacy Month has a set of great resources to start the conversation. I would encourage you to visit financialliteracymonth.ca.and explore.
Although there are plenty of information sources, try to discern the difference between research and entertainment. Research will require more concentration as it does not try to play on our emotions.
I often explain it as choosing science over salesmanship. At a conference I attended in Austin Texas last year, 2013 Nobel prize winning economist Eugene Fama spoke and whimsically said “I never saw a number I didn’t like.” I couldn’t agree more.
More importantly, I would really challenge you to form relationships with advisors committed to helping you improve your financial literacy. You shouldn’t walk this path alone.
The opinions expressed are those of Richard Vetter, BA, CFP, CLU, ChFC. Richard is a Certified Financial Planner and owner of WealthSmart Financial Group in Richmond, BC, www.wealthsmart.ca
