Investing in Our Nation’s Future: No One Left Behind

Walter Cronkite was the legendary CBS anchorman known as “The most trusted man in America.” In 2003, 84-year-old Walter took me, then 23-years-old, on the first of many spins on his sailing vessel, the Wyntje. We talked constantly while tacking our way through the mountain-bordered waters of the British Virgin Islands.

Walter and I were both of Dutch decent, and proud of it. Having the opportunity to talk hours on end with such an iconic figure was life changing for me. And it all started with that first sailing trip. We met because Walter was also a close friend of my boss, consumer advocate Remar Sutton. He visited Remar often during the winters.

I had just returned from a tough neighborhood in Elmira, New York, where Remar Sutton was giving a presentation on money problems to a group of adults. A 13-year-old boy was also in the audience and was very focused on the conversation. The boy had been sitting close to me in the back of the room and it struck me that he was the only kid in the room. I thought he was probably there with his parents.

At the end of the meeting, the boy hesitantly came up and began talking with Remar and me. He wasn’t there with his parents. He was there to learn tips to help his parents be smarter about money and to learn tips to keep him from making the same mistakes his parents were making. This kid worked three odd jobs to help support his family!

Lucky me…I was getting ready to fly to the Virgin Islands for the winter to be with people like Walter Cronkite, but this poor kid was worrying about feeding his family. It just didn’t seem right. And when I told Walter about this boy he just looked at me and said, “Well, what are you going to do about it?”

From those wind-swept discussions FoolProof was born. With help from Walter and several national leaders in the consumer, educational, and research fields, our discussions became a reality. I gathered a group of my young friends from four countries and things really took off.

The big question we needed to answer: was financial education, as it existed, working?

How could we determine that? We decided to see how consumers of different ages were doing when it came to money management. We studied data about money habits and debt. What we found was pretty unnerving:

• 18-34 year-olds are the first generations (Millenials & Gen Y) with higher levels of debt, poverty and unemployment and lower levels of wealth and personal income than their two preceding generations at the same age.

• 55 percent of us say we only break even or spend more than we make each month.

• Gen Xers (over 55) normally have six times the debt of their parents at the same age.[1]

• 70 percent of all families say they face financial strain.

What’s happening? Literally thousands of financial literacy resources have been used by millions of people for decades. Why haven’t they worked?

We got the answer from experts; and this is the reason for my article. The wrong players were shaping the financial literacy landscape.

TIME magazine’s Dan Kadlec said it best: Financial literacy programs are basically “a bunch of disjointed initiatives funded in large part by highly conflicted banks and other financial institutions…”

The businesses shaping what kids learn about money were the very same businesses that profit when kids make poor money decisions. The businesses offering financial literacy “education” for adults were the very same businesses that prosper when adults made poor money decisions.

The Result?

Financial literacy resources financed or created by financial institutions don’t—and can’t—teach the hard truths you need to know about marketing, money and the free-enterprise system; it isn’t the job of the seller to tell you the bad stuff about its products or services.

Take a look at financial literacy resources created or funded by businesses and you’ll seldom—if ever—see any message that might hurt their bottom line.

Take, for example, a credit card company teaching about finances. Would a credit card company consistently teach kids to pay off their credit card bill in full every month? Would they constantly preach that cheaper ways to finance are out there? Would they teach never to impulse buy? They can’t. And they won’t.

Don’t get me wrong. Many business-sponsored financial resources do a great job explaining the difference between a stock and a bond, how to balance a checkbook or how to be a smart investor. And many of these resources present their info in a fun and interesting way as well.

But virtually none of these resources teach you the one essential skill you must possess if you want to make smart decisions: Existing financial literacy resources do not teach the importance of skepticism. 

Read the rest of Will's blog including financial literacy programs for teachers as well as consumer resources here - http://greenmoneyjournal.com/investing-in-our-nations-future-no-one-left-behind/ 

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