It’s time to drastically rethink our interpretation of financial knowledge

In the not that distant past, the mysteries of finance were revealed nearly exclusively to boys from wealthy, well connected backgrounds  who could obtain entrée into a career within The hallowed Square Mile.  Then stocks and shares being available on the High Street.  We saw new style leaders emerge from outside the City, people like Sir Richard Branson and Lord Sugar, who came from very different backgrounds to equal and outstrip the traditional wealth.  

But with the availability of entrepreneurship and even a sense of entitlement to millions spreading like wildfire through the Millenials, both new opportunities and new problems have emerged:  the first being thata  large proportion of the population is uneducated in investing and finance.

The majority of parents think that is the schools’ job to teach children how to use money properly and  say they avoid talking to their children about money for fear it worries them.   If money is discussed in the home, it is more usually talked about in emotional terms, of what effect it is having on the family lives. There may be discussions on money worries or plans for treats.  But not the teaching of the use of money as a a financial tool.  The Money Advice Service last year found that only 4 in 10 children aged 16/17 were getting financial education.  59% could not even read a pay slip. Increasing knowledge in the schools is something the Enterprise Agencies are currently working to address but we are a long way off at the moment.

With people eager if not desperate to join the ranks of the wealthy,  we have seen in the last 5-10 years the growth of people selling “the knowledge”.  Cult wealth creation gurus have emerged, people like Robert Kiyosaki in the US or Kevin Green in the UK, who have made their millions in buy to let property and are adding a main stream income from books and seminars.  Advice such as this is still unregulated, and, a few years ago, the BBC  showed a terrible story of a woman who had spent 50k on such seminars and was still as broke as she was at the start.   Not a great advertisement for nurture over nature.

We have those who have made millions from buying and selling businesses and some of those too  have added further income streams from teaching others how to do it, such as Jeremy Harbour of the very exclusive Harbour Club, where Jeremy shares his strategies and provides guidance to others on acquisition.  To understand the breadth of this trend, one only has to look at social entrepreneur Roger Hamilton’s plans for his Enterprise Resorts worldwide.

Fast hitting the UK from US, is Wealth Coaching.  The US Wealth Coaching Academy describes wealth coaching as focussing on discovering “your true purpose for money and life” , and chosing family legacies and social capital legacies, while bringing clarity to your lifetime goals and philosophies.  All very different from the number crunching approach fo the traditional financial planning that has been on offer in Britain.

Some  life coaches now offer money coaching help, championing the need to shift beliefs and associations about money into a better flow, in order for you to make money.  You may be advised to use positive affirmations to condition you to wealth, by repeating daily affirmations such as “wealth flows at me from all directions” .

You can go all out and get Financial Therapy which combines traditional (but non-product specific) financial advice with the psychological,  while also claiming that money is less influenced by logic and more by beliefs.  While this has been available for some time in US, it is now spreading to Britain with pioneers such as Simonne Gnessen, author of Sheconomics.   Gnessen, also an NLP coach and therapist, argues people are held back from making money be low self-esteem making them believe they will never be worth much, and that negative emotions from abstract childhood concepts can result in recklessness or anxiety over money. 

Sadly, there is still a big disparity between the way girls and boys are taught about money.  More boys are taught to set financial goals,  finance and investing while girls still learn about how to manage the household budget.  The result is a huge confidence gap  between men and women with regard to investing and finance.  Responding to this need, there has been a particularly big growth in female orientated advisors, such as the SavvyWoman, Evolution for Women, The Talented Ladies Club, Miss Lolly, and Mrs Moneypenny.

From my own experience, I can now see how being insecure in my knowledge of financial matters held me back, not least when about 8 years ago,  I backed away from selling my last busines to a hugely successful acquistion group, who would have taken it a great deal further.   However, as so many women do, I felt afraid that I would be totally out of my depth with men who bought, developed and then sold businesses for breakfast.  I therefore applaud the idea of broadening financial knowledge.

I can see too that it is a trueism many of us avoid being totally truthful to family or friends when we talk about money, and that being able to talk honestly and in  confidence and shake off poor financial habits might be useful, if expensive.

Undoubtedly selling the “ability to get rich” in one form or another, is a massive and growing industry,  but inevitably it will often be preying on the most vulnerable or desperate people looking for fairy tales.

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