I have paid a little attention to what passes for financial literacy. If I take out how credit cards work and how much they cost, take out mortgages and car loans, take out the long term cost of money managers, take out a smattering of stock and bond information, take out the tax deductibility of retirement plans, I would have little remaining.
Literacy is about competence. Competence demands the ability to use tools, not just know about them.
Tools matter, but less than you think
I could go to Home Depot and buy every tool in the place and every piece of material in the place and yet I could not build a house. Probably not a dog house. Expensive tools and good materials are important, but absent the craftsmanship, they come to nothing.
Tradespeople know things I do not. You lose a little material with each saw cut. Tradespeople measure a little differently than I. Lumber has a crown and you must put it up when building a deck. It is easier to trim a room when it’s square. When renovating, put the drywall up square and accumulate the error to someplace, like a closet, where you can hide it. Expensive tools work more reliably and more precisely than cheap tools.
Applying the tools is what makes the project come out as expected.
Strategic financial literacy would help you design projects, select tools and material, and apply those to the purpose.
Strategic financial literacy focuses on the end point and uses more resources than tools and materials. It uses people and time as essential elements. Few projects are there for the purpose of the project. Most are there to enhance the life of the people they affect. Most cover long time frames. Most recognize the scarcity of resources. That leads to priority definition.
Tools address none of those first. Applying specific tools to match resources and purposes is the outcome of strategic thinking.
We can be better tool users. There are strategic ideas in financial planning that people miss:
Tools first is always a mistake. There is no reliable way to select without the strategic layer in place. With a strategic view tool selection is effortless. It fits or it does not, given the priorities.
You might need some help in the beginning because there is so little emphasis on the strategic. Do you know why? Providers make money only on tools, so why would they tell you about anything else?
You will find that most of financial literacy relates to behaviour. Your behaviour. Be involved. No one else is motivated the same way as you will be. You are a “mark” until you learn to govern your future strategically.
I help business owners, and professionals understand and manage risk and other financial issues. To help them achieve their goals, I use tax efficiencies and design advantages to acquire more efficient income and larger, more liquid estates.
Please be in touch if I can help you. firstname.lastname@example.org 705-927-4770
Do- it – yourself financial purveyors are at variance with long term individual financial success. The difficulty lies in finding your trusted advisor, educator , coach. The journey is long. Time invested is the most important element . See above . People who ignore these facts will fall short of their goals . The data is there to prove it. Thanks Don for reminding us. It never gets stale.