Financial Literacy: How to Close the Learning Gaps

Available for Interviews: Chris Janeway

Chris Janeway is Founder & CEO Fourth Point Wealth and coaches investors throughout southern CA.  He is also a national speaker, financial coach, and advocate for financial literacy.

What Chris Janeway can say in an interview about
Financial Literacy:

* Financial Literacy Gaps at Home & School. There’s a combination of multiple issues in the marketplace for financial literacy. First and foremost, most adults aren’t taught any form of financial literacy through either their schools or their parents at home when they were younger. As we get older it becomes harder and harder to not only understand and admit our own lack of knowledge, but we also struggle to know where to find reputable information. Along with that, we run into an issue of competing priorities. As we age we’re in the midst of our careers, raising families, and all of the busyness that life can bring. Taking the extra time to increase our financial knowledge often goes to the bottom of the pile.

• “The earlier, the better” when it comes to teaching financial education. I’ve often taught financial courses as early as kindergarten in schools. The lessons don’t need to be complicated. If anything, at the younger ages the kids really seem to pick up on the concepts. As they get older, they’re ready for deeper conversations. By high school, the questions are on these kids’ minds and they’re too afraid to ask their parents and don’t know where to go for help. They know that a financial advisor isn’t going to talk to a teenager without any money. Unfortunately, they get a lot of their information from social media. This, as we know, can be a scary double-edged sword.

* Conquering Anxiety When It Comes to Money. It’s our responsibility as advisors and professionals to make this less scary for everyone. Understanding that talking about money isn’t an uncomfortable conversation and just takes time and effort. The financial services industry does a terrible job at making information simple to understand. Often companies’ advisors, accountants, etc., talk down to or over the heads of the people they serve. I like to explain that most financial terminology is just a synonym for some simpler term. 

* Employers and 401k Plan Sponsors Should Can Help Educate Their Employees More. I think that most employers think they’re actually doing enough. They hire a company that has some form of an online training program that they call financial literacy. The user data suggests that no one is going through these online courses. I think employers need to spend time finding advisors for their plans who are willing to set a regular schedule to teach subject matter and educate their workforce. Studies show that the more that employees engage in this type of training, the better off they will be financially. If we can reduce some of that financial stress at home, it could make them more productive, happier, and better employees.

* Effective Decision-Making Is Key. You can lead a horse to water but you can’t make him drink, or can you? Personal responsibility is still going to be the core of the issue. I like to think of the example of auto-enrollment in 401(k) plans. When this feature was launched, it was very controversial. People were worried that we were taking choice away from the employee by making plans that need to be opted out rather than opted in. That concern began to fade as the numbers showed that opt-out rates were about the same as opt-in ones. It showed that ultimately, people were not getting around to making the decision at all. Suddenly, participation rates and saving rates were higher than ever before. Now that may seem like a great thing at face value, but the rates of loans and premature distributions also rise. We must take the next step in educating people on better decision-making.

* Personal Responsibility Cannot Be Automated. Let’s not kick the can of financial literacy down the road. The further removed we are from our financial decision-making and the personal responsibility that comes with it, the less attached to making responsible decisions we become. Taking money for granted is why so many children of wealthy families destroy the inherited wealth they receive. Simply giving people money or doing the saving for them, will only lead to similar results.

* Here’s an Idea! Somehow we need to make credit cards and investments similar to driving. We can do these things but it comes with a prerequisite course. Once we’ve demonstrated that we understand the concepts necessary to make good decisions and not hurt ourselves, then we earn the ability to have these accounts.

 

When Chris is away from the office, he loves to golf, coach youth sports, and enjoys spending time outdoors with his wife, Katy, and their sons, Brennan and Graham.