3 Ways to Raise Your Financial IQ

By Harvey Investment Management on August 8, 2021

Did you know that this Saturday, August 14^th, is National Financial Awareness Day? While the origins of this day are unclear, it is a day “dedicated to understanding finances and preparing everyone for financial stability,” according to NationalToday.com. We’ve all heard the stories about how there is an absence of financial literacy in the U.S. Several states don’t require high school students to take a class in personal finance. While no one would argue that other topics, such as math and English are essential, so is teaching our youth to manage their finances wisely. Without this basic knowledge, perhaps we are setting our youth up to fail, dooming them to credit card and student loan debt and a life of living from paycheck to paycheck.

No matter your age, in recognition of National Financial Awareness Day, here are three ideas to help you raise your financial IQ:

Do a deep dive – utilize the available sources and learn about personal finance. The Securities and Exchange Commission has a website (Investor.gov) that provides many helpful articles, financial tools, and calculators. Review the section on protecting your investments: do all that you can.

Ask questions – don’t just blindly sign up for credit cards or other long-term debt without reading the disclosures. Lending companies must inform clients of the loans’ costs regarding monthly interest rate charges and late fees. If you want to hire someone to invest on your behalf, do your research. Before hiring a financial advisor, check BrokerCheck.com to see if they are registered to sell securities, offer investment advice, or both. See if they have any formal actions against them, including complaints. Ask if they will serve as a fiduciary and agree in writing to put your interests above their own when providing investment advice. If they say no or don’t know what the term “fiduciary” means, run, don’t walk, the other way.

Plan – Since none of us know exactly how long we’ll need to make our money last in retirement, it makes sense to start planning early. As prices will rise during our lifetimes, not decrease, we need to make sure that we are spending and saving our money wisely. The rule of compound interest here is an important one. Otherwise known as the Rule of 72, this Rule helps you project how long it will take for your money to double. For example, if your average rate of return is 7.2%, that number goes into 72 ten times, so it would take approximately ten years for your money to double that rate of return.

We employ various methods to help our clients and prospective clients increase their financial literacy, including blog posts, an “Ask the Advisor” video series, and our monthly women’s educational seminars. If you have financial or investing questions you would like us to answer, please email Harvey@RIAgroups.com.

Harvey Investment Management, Inc. is a group comprised of investment professionals registered with Hightower Advisors, LLC, an SEC registered investment adviser. Some investment professionals may also be registered with Hightower Securities, LLC (member FINRA and SIPC). Advisory services are offered through Hightower Advisors, LLC. Securities are offered through Hightower Securities, LLC.

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