I purchased a Life Application Bible recently and as I read the introductory pages, it occurred to me that the description of “what is application?’ provides valuable and relevant information as it relates to the concepts of the MoneyMinding resources that have been the focus of my work since 1997. It’s still somewhat of a new concept, so bear with me through this 2 part series on what it is and why it’s important.
I am often asked what makes my message through MoneyMinding different than other financial education or from what someone can get from their financial planner. I always tell them that MoneyMinding resources are intended to complement and support your work with other financial professionals. The original concepts for MoneyMinding began while I was still working as an investment advisor. The early materials were actually initially developed when I was teaching the required curriculum for financial advisors. I have always said that a key component to MoneyMinding is the ‘application’ of the information as it relates to making real-life money decisions. Essentially the underlying theme is to help you ask questions to get better results. Or, helping you learn to ‘fish’ rather than doing the ‘fishing’ for you or simply telling you about ‘fishing’.
The reason that understanding what application is, in the realm of personal finance is important is because many adults just don’t realize what they don’t know about money. This isn’t meant to be a ‘jab’; it’s just stating that because formal financial training wasn’t (and still isn’t) part of a school education, we have all gone out into the workforce to learn about money as we went along and made up our own rules along the way. Essentially, leaning about money has been completely ad hoc. This means that when new financial information is received it likely be assumed to be helpful, but the foundation to help assess the overall concept in light of all the circumstances, will still likely be missing. In other words, anything new will likely appear to be good and helpful, but not necessarily so. What many people fail to recognize is that because applying financial information in a piece meal fashion without the underlying foundation, is how errors are made; why opportunities are missed; and how unscrupulous ‘advisors’ are able to prey on innocent victims. New financial information needs to be applied in a way that helps you ask questions so you can adequately assess the information before you make a final decision on investments, credit, insurance, purchases, etc.
This is such a personal matter, that not knowing what you don’t know doesn’t have to be detrimental if you can learn to apply the information in a way that you can understand wht you need to know to then apply all the facts to your own situation. Without the confidence and competence to assess financial information along side your own values, goals and circumstances, it is just far too easy to open the door to inappropriate decisions, or potential sales manipulation that could lead away from what’s most important to you in your life.
Unfortunately, when financial information is delivered alongside the application of that information with the purchase of some sort of product or strategy sale, you end up with an entire industry not respected for its role in navigating the world of personal finance effectively. There is also now an entire industry that has developed to deliver financial information that unfortunately has an ulterior motive of sales. Not that sales is bad, and not that educational seminars are bad, just that for such a life impacting topic as finance, when education and sales are combined and billed as the application of the information being delivered, it can lead to confusion and partial information, and ultimately end up doing more harm than good. The gap in knowledge that most adults are missing and aren’t aware they’re missing becomes most detrimental because the financial information they receive is connected to products and services and particular situations they’re dealing with at time they receive the knowledge, not necessarily because they have the full picture needed to get them the results they’re looking for (or results they didn’t even know were possible).
As an interesting side-note, I’d like to point out that in my career as a financial educator whose only product is information and the application of it for wealth creation and management, I find it interesting how higher net worth people grasp the importance of basic financial knowledge where many middle incoe people seem to think they know what’s best or, that they don’t need additional education. Perhaps this is because the wealthier people have experienced enough of the ‘hit and miss, trial and error’ decisions that they realize there are some underlying gaps in their foundation. A good comparison would be moving to a foreign country and learning how to communicate with the people there. You can live there a long time and be able to read and write and speak with people, but at some point you will realize that there are grammar and other language concepts that will help you communicate in a more effective way.
The gap these higher net worth people discover is the knowledge, understanding and the application of financial math, budget forecasting, creating spreadsheets, investment, insurance and credit fundamentals. With the underlying knowledge applied effectively to your personal circumstances, you are able to manage personal financial decisions in a variety of situations, with a complex overlap of issues much easier. This is why and how the MoneyMinding resources are developed the way they are: to assist with decision making at the time of a transaction. The purpose is to assist in helping you access necessary knowledge in a way that it is understood and can be applied even when you don’t know that there could be addition information to help you get your desired results. This is also how I / we can say that MoneyMinding can help you produce results what you would not have previously thought possible.