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21st Century Illiterates

The author Alvin Toffler said it so well when he wrote “The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn, and relearn.” For many years public education (K-12) has been void of any financial education. Even for those fortunate enough to go to college, a personal finance class was usually not required. Pray tell where is the average American getting their financial education? Where did you get your financial education? Where are your children or others you care about, going to get their education?

For the time being, let us assume everyone has been getting their financial education from a number of different sources, but mostly from radio talk shows and television programs. Ok, so we all have a sound financial education. We know exactly what to do so we can have a comfortable retirement, right? For example, when we specify for each paycheck how to allocate our 401(k) contributions, we are certain of the outcome. When we borrow money to purchase a house, we are certain of the best way to pay that mortgage off. Or when we drive off the car lot having paid cash for our car, we are certain that we have purchased the car in the best possible manner. And one last one: we are certain that using a 529 plan is the best possible way to invest for a college expenses for our loved ones.

Consider now a very important question: If something you thought to be true turned out NOT to be true, when would you want to know? I am quite certain most reading this blog post would say “duh – right now” or maybe some would say “yesterday.” Here is a follow up question, ??????What if that new information is in stark contrast to what you have learned to be correct? Do you have the ability to unlearn what you have learned, thoughtfully go through the new information and relearn a concept? If you can, this is a skill that will serve you well in the coming years.

We are living into a financial paradigm unlike anything anyone has ever seen before. The road ahead is going to be bumpy, but manageable. Because things are so different than they were even 10 years ago, we have to be willing to unlearn and re-learn. We have to come face to face with the realization that some of the things we have learned about how money works and how wealth is created are simply NOT true.

Let me give you an example. Paying cash is not the best way to acquire something. Now you have to remember my background and where I am coming from on this. (To refresh your memory go to http://financialfreedomrestored.blogspot.com/2014/06/my-awakening.html.) It has taken me a very long time to unlearn what I learned growing up ???????? it was hammered into my head, time and time again, that paying cash is the best way. What I re-learned was that owning the debt of a purchase was a better way to go. What I learned in addition to this was that we finance everything we buy, even when we pay cash. SI know that cuts against the grain for those of you that, like me, have a desire to be prudent with spending. But it is true and I can prove it to you.

I had a client who taught economics for 30 years at the state university here in Utah. When approached with this information, he at first was reluctant, because, like me, he had based most of his financial decisions on the “fact” that paying cash was best. But he was willing to relearn a few things, When I showed him how to own his own debt, he was astounded. Now, after several years of using his own personal finance system I helped him create, he had this to say; “In short, I wish I would have known about IBC 43 years ago. Not only would my family have enjoyed the benefits much sooner, but during my professional career as an Economics Professor, I could have given my students more valuable advice.”

When someone comes to you with information that is contrary to what you believe, you can do one of three things. 1) Dismiss it without consideration. 2) Consider it; then decide it is foolery. 3) Consider it; then discover it is correct. If the information is correct, you will probably have to unlearn something. Once you do you can then adjust your world view to include the new information.

Are you one of the illiterate of the 21st century who is able to read and write, but cannot learn, unlearn, and relearn? If you think you can unlearn, have I something wonderful to share with you…..www.financialtailwinds.com

leverton

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