Financial Education

I’m a bystander to all this housing market stuff going on these days. I’m not trying to buy or sell a house. I’ve got a mortgage with a locked in interest rate and income that will cover the payments. None of my investments are in any mortgage backed securities. But I am very concerned with what is going on, and not for the reasons one might guess.

 

I could talk all day about predatory lending, agreeing to unaffordable re-payment terms and rates, excessive leveraging of investments, or whatever else could be brought into this subject. My view is that all of this is another example of a lack of financial education in our society.

 

I still to this day can hear something my father said a lot when I was a kid.

 

“When you get a job, make sure it has good hospitalization.”

 

Not really the best financial education. He really should have been telling me this:

 

“When you get a job, invest some money into an asset that will provide you a consistent stream of income into the future.”

Or

“When you negotiate your mortgage, make sure the deal favors you, and not the bank.”

Or

“Anyone can get paid for how much they sweat. Get paid for how much you know.”

 

These are all examples of a sound financial education we need to learn and to teach. For me it wasn’t until I was married, with a family, and in the midst of a graduate education that it hit me that I did not have a financial education. Not really the best time and place to learn that. Since then I’ve worked very hard on improving my financial knowledge. I’m not talking about knowing when my credit card payment is due. I can set up an automatic electronic transfer to take care of that. I mean having understanding that disposable income spent paying down debt takes away from the opportunities to invest for future income. The other day I was very excited when an interest rate on a loan I have adjusted with the most recent Federal Reserve cut.  Why? Not because any new balance would have a lower rate, but because my future payments would allocate a greater amount to reducing the principal than to interest. It was like a party in my wallet! It felt really good to know that this was getting me closer to financial independence.

 

Luckily, I don’t personally know anyone who may be losing their home. Maybe they just won’t talk about it with me. I believe that they have the financial knowledge to keep them out of that position, and if they wanted to talk about it I’m here for them.

 

I have three small children. They aren’t ready for any of these things now. But my oldest child is excited every day to know that Daddy’s stock portfolio is up or down. He likes to tell people “when the people at the hot dog store (Costco) do good things, Daddy makes money”. I’d like him to remember that we talked about things like that.

 

Here is my advice on anyone else’s financial education. Go get one. Get it from wherever you can. It’s not in one book, one class, or one seminar. This is because everyone needs a financial education for their own level of risk. You need to know a few things, like how to get a better interest rate from the credit card company. But if you don’t have the stomach for the Dow Jones gyrations, you don’t need to have an in-depth knowledge of trading options.

 

Take a little time, take stock of what you know, and then ask yourself if you want to know more. You will be surprised by the answers.

 

Some of my financial education resources: Rich Dad, Poor Dad; The 4 Hour Work Week; Jim Cramer’s Real Money; The Wall Street Journal; CNNMoney; Google Finance; Bloomberg Radio/TV; Fox Business; CNBC.

 

Merry Holidays to anyone who blogs!

So it’s a Monday afternoon and I’m on my way home from work and I’m wondering what to write about for the blog this week. I walk into the door and my wife says to me “Did you hear about Eliot Spitzer and the prostitute?”
JACKPOT BABY! For every blogger, comedy writer, radio show host, talk show host, this is every holiday rolled up into one. Since this blog is about me, here are my three main thoughts about this.
Since I live in New Jersey, I’m just happy that this scandal did not involve out governor for a change. Jon Corzine chalks up one controversial subject a month (click here) Christie Whitman had her share (click here) Richard Codey was a good guy caught but got caught up in a spat (click here) and of course there is the ongoing saga of Jim McGreevey (wikipedia, not wikipedia) and his wife Dina Matos (most recent divorce update). It’s really unfortunate given the great people I have met here in New Jersey, that as a state we don’t always elect the best candidates. This time the residents of some other state get to take the verbal beating. Until this news item came out.
I work in the insurance industry, one of the many that Eliot Spitzer took aim at when he was Attorney General. I’ll admit, I’m feeling a little schadenfreude right now. Maybe he felt above the law, maybe he thought he wouldn’t get caught, maybe he rationalized that this behavior was okay. When you are in the spotlight for any reason, there are people who want to sour the spotlight. Reality stars will have naked pictures posted on the web. Actors will have addiction problems, politicians will have sexual escapades. There are a lot of people who smiled when they heard this news. The biggest parties are on Wall Street.
I am really starting to wonder about the female role models this world is developing. Mrs. Spitzer, Mrs. McGreevy, heck even Hillary Clinton, are standing behind their husbandsduring the time of crisis. Where are the women who should be smacking their husbands in the back of the head and saying “Take off you hoser”. It’s okay to forgive the act, but can you forgive being stupid? When is a woman going to stand up and demand some r-e-s-p-e-c-t? Are we going to be left with the woman from The Moment of Truth? Yikes!
Thanks again for stopping by. As always post your comments. Next week I'll be back on track for subject I have planned.

In my own mind I’m never late for work.

You came back for more? Great! So did I!

First, an announcement about the blog. The Robert Blog is now appearing in two locations: www.blog.robertraber.com and http://the-robert-raber-blog.blogspot.com/. It’s the same content in both places so feel free to access it from either site. Also, you should find the subscribe link on this page (look down or look to the left) and set instant notification of when the blog is updated. That will get you back here sooner rather than later.

I received some great feedback regarding the blog. Please continue to feel free to send along your comments and support. Some of the comments I received were recommendations about what subject to discuss next. Always feel free to post your comments directly on the blog itself.

Recently I was over at www.linkedin.com and was posting answers to questions when I stumbled across this one “Would you show up to work on time if it increased your chance for success??” (permalink) Of all the different ways you could look at this question, here is my thought. It doesn’t matter how many hours you put in, it matters the ideas you bring in. It’s not because Henry Ford took five years to make an assembly line work, or because Ray Kroc spent his life growing McDonalds. Their success was from having an idea that was able to strategically change their industry. Did it really matter if they came to work at 10:00 AM? When your responsibilities are critical analysis or strategic transformation or sales leads, which is more important: that you contribute to the success of the company, or that you spent 40 hours in week developing a plan? In the information age with mobile devices I’m sure there are already people doing their entire jobs waiting on lines at amusement parks. With the opportunities for telecommuting, remote employees, and virtual teams many people don’t even need to go to work these days. Let me fill you in on something about Voice over Internet Protocol systems (VoIP). I’m keeping this example really simple. The phone plugs into the computer. The computer plugs into the network. Does it matter where in the world the computer is? Wherever I am, that’s were my phone rings. From a management perspective I love VoIP. Makes business continuation plans very easy to design.

It is unfortunate that throughout my career I have seen, and continue to see, credit given to employees who work longer hours than others. This actually goes against everything I have been taught and learned myself as a manager. There are employees who come in early, work through lunch, and are the last ones out of the office. What do I think of this group? They can’t prioritize their work or eliminate time bandits; they have no work life balance; they are working harder instead of smarter. Or, to think even worse thoughts, they might be trying to take advantage of the workplace or might already be taking part in something a manager needs to know about.

I am not advocating we all go to work for only five minutes tomorrow. The workplace needs to have operating hours to be productive. Planes fly, trucks drive, customers call and place their orders. There are designated start and end times for multiple shifts everyday. You are risking your job if you are 30 minutes late everyday. Getting to work on time will help you keep your job. I believe, and I want to nurture this as a member of management, that an employee’s knowledge and ability far outweighs the fact they are always 15 minutes early for work.

As always thanks for stopping by and be sure to visit my sites:

www.robertraber.com www.rjrabersports.com