Americans need financial education, report says

11-Dec-2013

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An eternal optimist, Liu-Yue built two social enterprises to help make the world a better place. Liu-Yue co-founded Oxstones Investment Club a searchable content platform and business tools for knowledge sharing and financial education. Oxstones.com also provides investors with direct access to U.S. commercial real estate opportunities and other alternative investments. In addition, Liu-Yue also co-founded Cute Brands a cause-oriented character brand management and brand licensing company that creates social awareness on global issues and societal challenges through character creations. Prior to his entrepreneurial endeavors, Liu-Yue worked as an Executive Associate at M&T Bank in the Structured Real Estate Finance Group where he worked with senior management on multiple bank-wide risk management projects. He also had a dual role as a commercial banker advising UHNWIs and family offices on investments, credit, and banking needs while focused on residential CRE, infrastructure development, and affordable housing projects. Prior to M&T, he held a number of positions in Latin American equities and bonds investment groups at SBC Warburg Dillon Read (Swiss Bank), OFFITBANK (the wealth management division of Wachovia Bank), and in small cap equities at Steinberg Priest Capital Management (family office). Liu-Yue has an MBA specializing in investment management and strategy from Georgetown University and a Bachelor of Science in Finance and Marketing from Stern School of Business at NYU. He also completed graduate studies in international management at the University of Oxford, Trinity College.







By Herb Weisbaum, CNBC,

Financial service companies spend billions of dollars a year marketing their products and services—credit cards, checking and savings accounts, car loans, mortgages and home equity products.

By comparison, very little is spent to provide American children with the tools they’ll need to deal with the financial decisions they’ll face in life.

A new study from the Consumer Financial Protection Bureau (CFPB) documented the huge disparity in this spending. The study found that the industry spends approximately $17 billion annually on consumer marketing. But only about $670 million is spent on financial education each year in this country.

Put another way: While $54 a person is spent on financial marketing to American consumers, only $2 per person is spent to educate them on money matters.

“When consumers receive the vast majority of their financial information from companies that are trying to promote an image or sell products, consumers have very little unbiased information,” Richard Cordray, director of the CFPB, said in a statement.

Cordray said the report, “Navigating the Market,” “further reinforces the dire need for more and better financial education in this country.”

There’s nothing wrong with truthful advertising. But to some, the huge disparity in expenditures is troubling.

“Our financial lives are becoming increasingly complicated and it’s hard to make good decisions when you don’t even understand the basics,” said Gerri Detweiler, director of consumer education at Credit.com. “Marketing is designed to sell products and sometimes those may not be the products you need or should be spending your money on.”When a young person makes mistakes, such as not contributing to a company 401(k) plan, maxing out credit cards or making late bill payments, the repercussions can be serious and long lasting.

“It’s absolutely crucial that we teach this information,” Detweiler told me. “I don’t think there’s anything you can say that is more important than how to manage your financial future.”

A Credit.com survey of consumers 18 and up done earlier this year, found that nearly 63 percent of those polled believe America’s children learn little to nothing about personal finance. More than half (56 percent) of the young adults surveyed said they know very little about how to manage their finances.

“This is completely unacceptable,” said Adam Levin, chairman and co-founder of Credit.com. “We should do better. We must do better.”Only 14 states require schools to offer courses in personal finance, according to the latest study by the Council for Economic Education. Only 22 require a high school course in economics. And the number of states that require students to take tests on financial life skills dropped from nine in 2009 to just five in 2011.

“Teens and young adults who grow up in states that require financial education courses are better at managing their money” Levin said. “They are significantly more likely to put money into savings and pay their credit card balances in full every month, and less likely to max out their credit cards, make late credit card payments or become compulsive shoppers.”

Laura Levine is the executive director of the Jump$tart Foundation, a nonprofit that promotes financial literacy for children. She would like to see personal financial education start in elementary school and applauds the CFPB for focusing attention on the need for more education.

“We are not spending nearly enough in dollars, time or attention to this issue,” she said. “Not only do we need to reach more students, but we need to reach them more often. We must start earlier and reinforce it over time.”


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