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How Money Works Educator - Ron Harris

Ron Harris

HowMoneyWorks Educator

2029 Olympic Blvd.
Suite 115
Santa Monica, CA 90404

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April 8, 2021

Your Money Is Worth More Now Than Ever

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Closing The Gap

Closing The Gap

Women earn 82¢ for every $1 earned by men.(1)

The median annual salary for men is around $50,000. At 82¢ for every $1 earned by a man, the median annual salary for women is around $40,000.(2) For someone taking care of a family, how significant do you think that extra $10,000 would be?

By the time a woman reaches age 65, she will have earned $1 million less than a man who stayed continuously in the work force.(3) Consequently, retired women receive only 80% of what retired men receive in Social Security benefits.(4)

Women tend to be the primary caregivers for their children, parents and partners.(1) So women end up taking time away from their careers to care for loved ones. These career interruptions can significantly impact women’s chances to climb the corporate ladder – promotions, raises, bonuses and full retirement benefits.(3)

Since women earn less, we have less money to set aside for our financial goals. Of the Americans who live paycheck to paycheck, is it a surprise that 85% are women?(5) As a result, women own just 32¢ for every $1 owned by men. We accumulate only a third of the wealth accumulated by men.(6)

We may not see the gender pay gap or the gender wealth gap close in our generation. But women can change the financial trajectory of their lives by learning how money works and applying the 7 Money Milestones. By understanding and paying attention to all of the things that make up our financial picture – Financial Education, Proper Protection, Emergency Fund, Debt Management, Cash Flow, Build Wealth, and Protect Wealth, we have the power to take control over our financial future and create equal wealth for ourselves.

And, women need to think about their career decisions. We should consider choosing a career that pays more to women and men equally. With a company that doesn’t penalize women for time spent taking care of loved ones. A place where women can create equal pay for ourselves.

Women have made a lot of progress in pursuing higher education and professional careers, but we’ve only made incremental progress in our finances. If we want to bring about profound change, we have to make it happen for ourselves. We have the power to close the gap in our lives for ourselves and our families.

— Kim Scouller

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Sources:

  1. “The narrowing, but persistent, gender gap in pay,” Pew Research Center, April 2018
  2. Bureau of Labor Statistics, Jan 2019
  3. “Women & Financial Wellness: Beyond The Bottom Line,” Merrill Lynch and Agewave, March 2018
  4. “Fast Facts and Figures about Social Security,” SSA, 2019
  5. “Women Live Paycheck to Paycheck Roughly 5 Times as Often as Men – Here’s Why,” CNBC Make It, Oct 2019.
  6. “America doesn’t just have a gender pay gap. It has a gender wealth gap.,” The Washington Post, April 2019

How To Break Free From The Sucker Cycle

February 22, 2021

How To Break Free From The Sucker Cycle

Page 14 of “HowMoneyWorks, Stop Being a Sucker” reveals one of the biggest traps of financial illiteracy—the Sucker Cycle.

It’s a money whirlpool that sucks people into an endless loop of trying to spend their way to happiness and wealth.

Here’s how it works. You get a paycheck from someone wealthier than you. You spend it on lattes, lottery tickets, and a lot of other stuff you can’t afford—essentially handing the money back to someone wealthier than you. There’s little to nothing left to save—which is why it feels like everyone’s wealthier than you are. Every 30 days, the whirlpool races to the waterfall with the awful feeling that there’s “more month left at the end of the money.”

This financial phenomenon not only feeds the Sucker Cycle but also illustrates the very definition of financial disaster: “When your outgo exceeds your income, your upkeep becomes your downfall.“

But here’s the good news. Any of us can break the Sucker Cycle. It’s not a matter of money. It’s a matter of priority. The wealthy people of the world live by the following basic mantra: “Pay yourself first!”

From now on, every time you’re handed a paycheck—before you pay bills, buy coffee, or order pizza—make sure you take a portion of your money and put it to work—for your future!

Connect with a financial professional and put goals in place that are specific and intentional—no matter the monthly savings amount.

Saving first and saving consistently is the formula for financial success—and future fulfillment. So if you find yourself stuck in the Sucker Cycle, make a decision to stop being a sucker and BREAK FREE. Form new habits. Think like the wealthy. Pay yourself first. Leverage the power of compound interest.

The results can be astounding—AND—can create the momentum to do even more.


– J.D. Phillips


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The True Cost Of Financial Illiteracy

October 28, 2020

The True Cost Of Financial Illiteracy

The average American reported that they lost $1,279 in 2019 due to financial illiteracy, according to a recent survey.Âą

That’s enough to potentially cover a mortgage payment or car repair bill. If the assessment is accurate, that would mean the country lost $307 billion last year simply because citizens were clueless about how money works. (For reference, the entire annual GDP of Pakistan in 2019 was $278.22 billion.²)

But the situation is far worse than you might imagine.

The result of financial illiteracy is far greater than buying things you don’t need, sinking deeper in debt, and mismanaging your cash by shoving it all in low-interest savings accounts. It’s costing you the opportunity to truly build wealth and pursue your dreams. That’s the true price tag of financial illiteracy.

The opportunity cost of financial illiteracy
Think about a decision you wish you could redo. Maybe you missed out on an awesome job or experience because you chose a safer option or didn’t know what huge potential you were letting slip by. That’s called opportunity cost. It’s why you kick yourself for selling your home a year before a sellers’ market explodes or why you wish you’d studied abroad for a semester in college. Who knows what your life would look like now if you had just been able to see the future!

You need to start realizing that every dollar in your bank account is bursting with potential. What if the $1,279 that Americans think they lose every year was in an account earning 8% interest that compounded monthly? That squandered cash would grow to $13,987 after 30 years. That’s a much closer estimate to how much financial illiteracy actually costs Americans every year. We’re losing $1,279 every year plus however much that money could have grown if we had just known how money works.

The personal cost of financial illiteracy
But there’s more to the opportunity cost of financial illiteracy than just numbers. It can cost us the lifestyle that we’ve been daydreaming about. Financial instability and unpreparedness can result in massive emotional and mental stress that can take a serious toll on health and relationships. It can limit educational opportunities for our children. The true price tag of money ignorance isn’t just dollars in a bank account; it’s the ability to live our lives in confidence and to pursue our dreams.

The book, HowMoneyWorks: Stop Being a Sucker describes financial illiteracy as the #1 economic crisis in the world. As you can see, that’s not an exaggeration. Let me know if you want to learn more about the severity of our global financial ignorance pandemic and how it’s impacting you right now. I can get you a copy of the book and help you see the financial opportunities that surround you—if you just know how to take advantage of them!

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¹ “Financial Illiteracy Cost Americans $1,279 in 2019,” National Financial Educators Council, https://www.financialeducatorscouncil.org/financial-illiteracy-costs/

² “Pakistan GDP,” Trading Economics, accessed 2020, https://www.worldometers.info/gdp/gdp-by-country/

When Crises Collide: 3 Ugly Financial Illiteracy Truths The Pandemic Has Exposed

October 12, 2020

When Crises Collide: 3 Ugly Financial Illiteracy Truths The Pandemic Has Exposed

A crisis will always expose truth.

The coronavirus pandemic has shown us all just how fragile our normal lives can be. But it’s also revealed the ugly reality of another crisis that’s been ravaging the world for years—the economic crisis of financial illiteracy.

The combined consequences of these two plagues will be with us for generations. Here are three truths that Covid-19 and the economic shutdown have revealed about the state of our financial education.

1. We’re not ready for emergencies
26 million people have claimed unemployment over the last 5 weeks. That means 23% of workers currently don’t have jobs (1). Those numbers should stun you. That’s 26 million people with bills to pay, families to feed, and debt collectors to keep at bay with no paycheck coming in from their employers.

But it’s actually worse than it sounds.

44% of Americans don’t have enough cash to cover a $400 emergency (2). And that was before the economy shut down! What are millions of newly unemployed workers supposed to do without a financial safety net?

2. We don’t know how to use our money
The pandemic has conclusively demonstrated that too many people don’t know what to do even if the government quite literally puts money in their hands.

Given the unemployment numbers, it would make sense for people to use their Economic Impact Payments (i.e., stimulus checks) to cover things like groceries, gas, and rent. And some did. But only 29% of survey respondents planned to put the extra cash into savings and investments (3). While 35% plan to use their stimulus money to pay bills, 16% plan to spend it on non-grocery food, including delivery and takeout, and 5% plan to spend it on video games (4).

Buying groceries and paying bills is essential, but the fact that so few plan to save their stimulus checks exposes the massive numbers who have been living above their means with little to no emergency fund. Without knowing how money works, they live paycheck-to-paycheck—a lifestyle that prevents them from a perfect opportunity to put away a little extra cash for the future.

3. We want to learn more… But where are we looking?
The recent economic downturn has been a wake-up call for millions of Americans. 9 out of 10 respondents to a survey by the National Endowment for Financial Education (NEFE) reported financial stress due to the crisis, and 54% feared they hadn’t saved enough (5). 75% are trying to retool their financial strategy in the face of the crisis (6).

People are also reading about money and markets more than ever. Financial sites are seeing traffic soar as people try to keep up with the economy and learn more about preparing for the future (7).

Financial illiteracy is widespread, and it is devastating families across the nation. But people are also sick of it and want to take control of their money. The question then becomes who will step up to give families the resources they need to rebuild? Who has the cure for financial illiteracy and who can distribute it quickly and effectively across the country and eventually the world?

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Amplifying the Financial Literacy Message through National Media

September 21, 2020

Amplifying the Financial Literacy Message through National Media

Our mission is simple, singular in focus, and massive in scope: End financial illiteracy in America.

Ambitious? Yes. Impossible? No. In fact, with enough educators in force, an easy to understand guide book from which to teach, and the passion Americans have to control their own financial futures, we feel as though the odds are in our favor.

Yet even with thousands of energetic, excited educators, we realized from the beginning that our dream would require years, maybe even decades, to accomplish.

That wasn’t acceptable.

So we brainstormed. We lost sleep. We pushed ourselves for an answer, and then we finally realized what we needed to do, which was to amplify our message through the mass media. Not just social media, but mass media, meaning TV, radio, print, and online. We realized that with the implied endorsement and megaphone of the media, our dream could be attained in 10 years or less.

The question was: Would the biggest players in the press embrace the HowMoneyWorks book?

CNBC was first out of the gate to fact check the book and lend their support. ABC/WOR radio New York was next, calling it an “instant financial classic.”

In the opening months of the book’s release, the media has celebrated it at every turn. We’ve appeared on many TV shows, radio programs, and had hundreds of citations online.

As in any massive undertaking, one of the key requirements is credibility. People want to know that what they’re doing is widely accepted by experts with no financial connection to the product. After all, if you’re going to put your heart and soul into something, you want to be sure that it’s worthwhile. Fortunately, the press has responded exactly as we expected—with overwhelming coverage and support.

We’re predicting that the press coverage for this book will last until we end the scourge of financial illiteracy. This is when every American will be educated in the basics of personal finance, and will be fully equipped to chart their own course to financial independence and a comfortable retirement.


– Steve Siebold


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