Financial Literacy

People in the US, and all over the world, don’t understand personal finance.  I love this tweet by Democratic Presidential candidate Andrew Yang.  Yang studied economics in college but still didn’t understand how his own personal finances worked until years later.  I don’t think offering “free advice” works.  Free doesn’t mean value.  I took at mandatory personal finance course in high school and the teacher was so bat crazy we learned nothing about finance.  I don’t understand why Democrats want free everything.  I mean, the “freemium” model works but it can’t be applied to every single thing under the sun.  There is no free lunch.

The lack of personal financial understanding is one reason why we invested in Holberg Financial.  Holberg offers unbiased advice.  When you get the free stuff from the investment bankers and the insurance companies it always has a catch-invest in their products.  Holberg teaches the mechanics and empowers people to make their own decisions which is the essence of personal finance.  For a very low monthly fee per employee a business gets outsize value.  Much better than just offering free donuts in the break room.

From a business perspective, Holberg is seeing businesses who use them retain employees. That means you don’t have to spend the big bucks to recruit a new one.  Your team has less turnover and can coordinate better.  That means better execution.  Employees that work in businesses with Holberg are happier and more productive.  This all indirectly falls to your bottom line.

We are seeing employees who were in credit card debt get out of debt after joining the Holberg program.  It’s a major milestone for them.  Imagine being a few thousand in debt and overcoming it to have $1000 or more in the bank.  It’s incredibly empowering and satisfying.  Academically if you look to Hackman-Oldham theory of motivation, offering a benefit like that will help employees perform better on the job.

A lot of what Holberg Financial does helps employees get over their fears.  Aaron Klein does this with financial advisors.  He created a product Riskalyze and has built a great company off of it.  The initial thrust was to help advisors empower their clients.

I think if people truly understood finance in a meaningful way, the folks in our government bodies wouldn’t be able to pull the shenanigans they pull.  We’d also be better off because we would have a less fearful society.

Pulled this post from a blog so you can understand the context of the post:

Democratic Presidential Race

Something a little different from outlier Andrew Yang, perhaps with AOC and The Squad particularly in mind:

I’d make financial literacy a national priority and provide free financial counseling to all who need it – I studied Economics in college and still didn’t understand personal finance until years later.

I think greater financial literacy in the USA is a great idea. I have my reservations about what free federal financial counseling would look like. Anyway, maybe it’s because I’ve only casually encountered him on Twitter, but Yang seems like a guy with a bunch of random ideas.