Not Just Literacy: Some Control Required

Control. Control. You must learn control. – Yoda, Star Wars Episode V: The Empire Strikes Back Approximately 57% of Americans are financially literate, typically measured by answering simple financial literacy questions correctly. The work of Anna Maria Lusardi and her colleagues have demonstrated the woeful state of the world related to financial knowledge and education in the United States and around the world. Often, this group of researchers measures financial literacy with a few questions[…]

Patterns of Wealth Experiences

Do you see patterns in your spending, saving, and investing behaviors that mirror those of your parents? Or, have you changed because, perhaps, their behaviors didn’t provide the best illustration of how to successfully manage finances? What types of parental experiences are positively related to a child’s future net worth? What sets of experiences would lead to someone accumulating more than his peers, regardless of income, age, and what what gifted to him? In examining the[…]

Do Social Security Benefit Statements Affect Worker Behavior?

Beginning in 1995 and then more broadly in 2000, the Social Security Administration (SSA) began mailing hard copy statements of estimated benefits to workers (the “Statements”; see the the SSA website). Included in the Statements were available disability insurance (DI) benefits and estimated monthly benefits at certain retirement ages, along with other information. The SSA stopped sending the Statements in 2011 for budget reasons but restarted the program in 2014. How did the Statements affect worker[…]

Money Lesson Plan for 2015

Will you be teaching children or students what it takes to build wealth this year? What will you teach them or encourage them to do? Think back to your time growing up. You probably can point to an event or a set of experiences that greatly influenced how you manage finances today. Recollections such as these were discussed extensively in the The Millionaire Next Door and The Millionaire Mind. Successful, financially independent Americans recounted childhood or early work experiences[…]