Financial illiteracy affects the whole community. Let’s do something about it!

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Financial literacy is probably the least recognized educational topic. The education system has ignored this very critical topic for generations due to their commitment to the basics: math, science, literature and history. Here’s why this is so incredibly important: it affects enormous life decisions that can impact the loves of others – in either a really positive way or a really detrimental way. When was the last time you heard of someone negatively impacting another’s life because they failed an algebra test?

Here are a couple of examples. While serving on a local board for Junior Achievement a number of years ago, I was asked to teach a class on how to build and use credit to a classroom full of inner city high school students. This was a very rough neighborhood! So, here I was, the white guy in the suit trying to engage this group of kids who didn’t connect with me on a social level and who really didn’t want to be there at all. I had to think fast. I threw out a challenge to them. “If I offered to give each of you $1 million OR one penny doubled each day for thirty days, which would be there bigger outcome?” This worked!!! They couldn’t wait to figure this out. We went through the math together and everyone was really surprised to learn that the power of doubling your money was bigger than a one time lump sum. My challenge resurfaced, however, when I began discussing the importance of building good credit. The reason: they had given up on the idea of ever being able to own their own home, start their own business, or attend college. THIS is the real consequence of not having financial literacy. It is now generational. One generation after another made poor decisions about finances and now younger generations have no confidence in the capitalistic system.

On the other side of the wealth spectrum we see people who have achieved some of level of success in their lives (I call these people middle-class millionaires) who look like all of us, but have enough money to be dangerous. The reason I say this is because their level of financial literacy is also challenged. The result is they end up trusting manipulative salespeople who make outlandish claims about insane investment performance rates they can achieve, or scare tactics about the stock and bond markets in order to sell some kind of high commission guaranteed product that isn’t really intended to be a long-term investment but instead, an insurance policy. Others become so fearful of these salespeople that they don’t talk to anyone! They end up making it up based on what the next door neighbor says. Oh no.

Financial literacy needs to be addressed in the schools, colleges, and at the community level. The decisions that each of us make affect our families, the community (more successful people pay more in taxes to support community services), and these decisions offer the potential to realize the kind of dignity we all seek.

In support of this mission, Real Intelligence LLC (which officially launches on January 1st, 2020), will be challenging many of the basic and fundamental financial planning concepts that have been accepted over the last few decades. Dynamic Mapping, a more human-centric approach to financial planning will eliminate the need to address “risk profile questionnaires” that are often incorrect anyway and eliminate basic investment principles like rebalancing portfolios in favor of “aging” portfolios. The math behind this methodology is complex. However, an advanced Dynamic Mapping calculator will be available as an app to make all of this very easy for financial planners and easily understood by average, everyday middle-class millionaires. The app will be able to answer life’s most challenging questions: do I have enough to retire? Will I run out of money in retirement? How do I handle inflation? What do I do in a bear market? How much will I need to fund my newborn’s college education? At what point will I truly be able to call myself wealthy?

As you engage in conversations with financial planners, wealth managers, or trust company representatives, ask them about the Dynamic Mapping app, available on the app store in January. Real Intelligence LLC is committed to making this training and education available to these professionals to better serve the needs of the investing public who so badly needs a better way of achieving financial literacy.

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