Financial Literacy | Acquired skill or just common sense?

I currently work in the finance industry and I get a lot of questions about stocks, finances, and other assorted finance-type stuff all the time.  Whether it’s from coworkers, friends, or family there are always lots of questions!  One person just has me explain things to help her fall asleep sometimes.  That degree in Economics is coming in handy!  What I’m getting is that people tend to turn to me for help with finance stuff instead of doing it on their own (or hiring a financial adviser, a topic for another time!) and made me think: is financial literacy an acquired skill or is it just common sense?  I know that a lot of people out there (Dave Ramsey and Robert Kiyosaki come to mind) think that it is an acquired skill but is it really?

For me, I’ve always loved economics and finance type topics.  I took my first economics class in high school and loved it so much that I knew I was going to get a degree in it. I’ve always been OK with money but by no means am I a wiz kid entrepreneur making millions at age 18.  I just watched my mom save her money and kind of went from there.  Reading books about financial literacy was something I would do in my spare time.  I know plenty of people with parents who saved and thrifted but the kids can’t save a dime.  Even so, I really have to agree with Dave Ramsey et al, I think this is an acquired skill that we learn over time.  It’s easier to learn if our parents impart the good examples on us or if we work in a budgeting and finance capacity in the real world but it’s something anyone can learn.

Even with my background in finance and economics, I’m still learning about finance, investing, and real estate all the time.  Quick tangent here: I used to be a track athlete, running all the time around a tiny oval and trying to get better by increasingly tiny, marginal amounts.  Back then I read a book called Once a Runner which, although fictional, was probably the most accurate portrayal of the difficulty in knocking a mere tenth of second off your best time.  A big part of the book was “The Secret.”  Everyone wanted to know what the Olympian’s secret was.  How did he get so fast and become the world’s best?  Was it a special nutrition drink?  Did he lift weights differently?  Aerobics, calisthenics, plyometrics?  I’m not going to ruin the book for you but just know this: There is no Secret

I feel that if anything, that should be evident to most people but unfortunately, it is not.  There is no secret recipe or path to success in my mind, neither in running nor in finance.  Sure, if you somehow make it onto Wall Street you can make millions but you don’t just end up there.  You study, you network and if you can’t hack it, you won’t make it.  You can try to trade forex or stocks but without putting in the work, you’ll ultimately fail.  And without a budget, a plan, and some knowledge I think you’ll fail at making yourself financially free as well.

Maybe I’m a bit hard on myself and on others but really, I think it comes down to educating yourself, making a plan, and then executing the plan.  Financial literacy is not something we’re born with.  We have to learn through our mistakes, those around us, and every available source (Budgets are Sexy anyone?) in order to become better with our money.  And with every step we take, we will get a bit closer to achieving financial freedom and being able to sleep well at night.