Financial Education = Financial Freedom

Did you know that the individual debt in this country is growing 23 times faster than the economy? Did you know that the average person spends $1.05 for every dollar that is earned? Did you know that although it is tougher to declare bankruptcy; bankruptcies are higher than they ever have been in our history, and that the average family is only about three months from trying to declare a bankruptcy? Wow, some sobering facts, wouldn’t you say? The trouble is that the rules are changing and they are changing rapidly. Some of the wealth builders that we have relied on in our lives are no longer as reliable as they once were. One of the perfect examples is owning your own home.

Certainly owning a home is still a good thing, but the housing boom over the past couple of years have done us no favors. The foreclosures, by some statistics are up 50%. Mark Zandi, chief economist at Moody’s estimates that every foreclosed home lowers the value of all homes on that block nearly 1.5%. Many experts predict that home prices will continue to fall to the tune of an additional 10% by the end of 2009. Hold on to your seats..the roller coaster is still going strong…

Foreclosures and credit card debt seem to go hand in hand. Again, the average person spends $1.05 for every dollar that is earned; this is called negative spending. On average, nearly half of what we purchase is purchased on our credit card. We as an American society have accumulated a mind boggling 2.2 trillion dollars in credit card debt in 2007. Yet an additional sign that credit card debt is stressing our wallets is that most credit card users pay only the minimum and are typically delinquent in their payments. What this does is increase fees, increase rates, cuts the actual credit limits and gives poorer and poorer credit rating..which then again starts the cycle of higher interest rates, lower credit limits, and higher fees. The circle continues to go around and around.

So what is an individual to do in this challenging economy? The answer is relatively simple: start to take responsibility in becoming financially educated. People are finally starting to turn the corner on understanding that they need to know and understand more about their own financial situation. Amazon Books has reported more than 3,500 book titles on the topic of building wealth, and Time Magazine recently named financial expert Suze Orman as one of the World’s Most Influential People of our time. So, people are starting to understand that they need to take ownership and responsibility for their finances.

But where do people go who need help and advice in becoming financially educated? Depending upon what type of education you are looking for; realize that you may need to access more than one expert. Expert….you must demand the individuals that you seek advice from are actual experts in their respective field. Ask about their credentials, experience and their successes. Do your own due diligence on these people who are calling themselves the expert. You are starting to set up your personal financial freedom, you owe to yourself to have the best of the best.

The areas you might consider looking for financial experts to help you in becoming financially healthy are debt elimination and restructuring; the quicker the better, asset protection, tax minimization, and credit restoration to name just a few. While looking for experts in these areas, can they also offer solutions that help you save the money you will need for an emergency fund? What’s an emergency fund you ask? It’s savings that you have set aside specifically for the emergencies that pop up in life unexpectedly like a tire blowing out on your car, like a new hot water heater that you need, like being in a car accident and needing to get your car repaired. This money is used for unexpected emergencies and nothing else.

Now that you are on your way to becoming financially healthy, can your experts help you choose the right investments that will help you to meet your retirement goals. Can they help you with investment opportunities that are not your typical 401K’s and mutual funds? Many experts believe that you will need at least one million dollars in your savings account to retire comfortably. If you are relatively young and reading this article, that is terrific, but if you are the average 50 year old American..guess what..the average 50 year old American has saved only $50,000.00 towards their retirement. That is a far cry from the one million dollars that experts are predicting that we will need to have in savings and this is with only ten years to go until retirement age.

A word of caution; you may not be able to find one person who is the expert in all of these areas. I would tend to think that if they are a true expert, you won’t, however there are companies out there who have experts in each of these areas under one umbrella so you don’t have to search from one company to another to find the best of the best.

So, if you are like so many Americans and are in debt, living on credit and you see no way out..there are educational lifeguards out there. Now that you know what to look for..go out and find yourself the best of the best.

Disclaimer: You shouldn’t make any investment decision based solely on what you read here. This is not an offer to buy or sell a security. Should you choose to invest in the markets, it should be only after exhaustive due diligence and possibly in consultation with a licensed investment advisor.