Beyond Financial Literacy to Increasing Financial Capacity

It completely befuddles me why the financial literacy teaching being presented as good solid financial management has under-emphasized, or completely overlooked, income creation. This lack of information and yet the overwhelming need for it, has certainly been reinforced over the past month during all telephone interviews I’ve had with applicants for the Project M Leader’s initiative being offered in conjunction with The MoneyMinding Foundation.

In case you missed it, Project M is the blueprint training and application program integrating solid financial management and entrepreneurial skills from a new paradigm perspective to create over $40,000 within the year long program – starting with only $10. If you didn’t see any of these messages and think you might be interested in becoming a Project M leader or in participating in a Project M or Project M program, then send and email to info@moneyminding.com with your phone number and best time to call so we can discuss details and opportunities.   Or to find out more about how to get started with this unique and powerful program see below as well…because all of this is ultimately about how to move Beyond Financial Literacy to Increasing Financial Capacity.

Financial literacy is the foundation of financial knowledge needed to make day-to-day solid financial decisions. Unfortunately, a big issue with financial literacy is that many people who have not grown up with any financial teaching have learned what they know about money basics through trial and error and experience. This means that we have an entire generation that is essentially financial illiterate and doesn’t know it. Just because someone has accumulated material wealth does not mean they are financially literate. This is extremely important as many people value material wealth and continue to miss the value of financial basics like we have with reading, writing and arithmetic.

Overall, we have a society that is consumer centric, meaning consumers want and need to be able to spend money on material goods. Consumer spending and consumer confidence are key measurements of our economic strength. This is a problem with our current accepted financial literacy teaching that presents solid financial management in a way that focuses on elimination of debt and accumulation of savings for retirement. This approach is counter productive for our economy. Consumer spending benefits the business community which creates more opportunities for jobs which creates more opportunities for our economy through additional spending.

The problem is that financial literacy and economic growth are at odds and consumers feel it even if they don’t immediately recognize it as such. The consequences of this are an overall attitude of fear, scarcity, and lack that creates a dependency on a ‘secure pay-check’ and money in the bank.  Furthermore, the constant pull to ‘watch spending’ while also accumulating savings puts an over-emphasis on chasing rate of return and ‘get rich’ schemes.

In order for financial information to be effective, we have to recognize that there is a big difference between a mind-set of “spend less than you earn” and “earn more than you spend”.

An ‘earn more than you spend’ attitude is developed through the application of foundational financial information that is specifically delivered to facilitate a sustainable increase in financial capacity. This approach will assist in shifting the mind-set, as well as the competence, and confidence to create income starting from perhaps nothing more than an idea. The application of solid financial management combined with income creation is what will help the income to create more wealth and to become sustainable for life and our economy.

The problem is that everyone wants to know ‘how’ to create more money before they understand and apply the basics. The secret is in the process. The combination of missing knowledge with the desire for the lifestyle presented in the marketing messages, and an overall intimidation to admit or talk about money issues, is what keeps people, and our economy stuck.

The ‘how’ is actually the easy part. The willingness to admit that there might be alternative ways to look at your personal finances, and to actually begin small and to trust that the small, seemingly insignificant actions will and can pay off faster than the ‘get rich’ attitude approach of chasing high returns and lottery-type programs.

Ultimately it’s the small things repeated consistently that produce the biggest results in the shortest amount of time. For finances, that means beginning with what resources, talents and ideas you currently have an applying some strategic analysis to create sustainable income. This begins today with what you have available to you – not what you’ll have when you have money to invest!

Blessings,

Sam

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