April is Financial Literacy Month, and to celebrate, CNBC features tips from some of our contributors. This is how they think about financial education and its impact on their lives.
CNBC Writer Stephanie Link is the Chief Investment Strategist and Portfolio Manager at Hightower, a wealth management firm that provides retirement planning services to individuals. Fresh out of college, Link received advice that would shape her long-term investment philosophy.
“As soon as I got out of college, my dad suggested I take money out of my paycheck and put it in the S&P 500, in an ETFAnd alone average cost in dollars each month. Save it. He said you’ll never see it. You won’t miss it. And he said it could be $5, it could be $25. But it was the point of investing for the long term and not worrying about the day-to-day movements in the markets. And I still use this process in my investing style to this day.”
The Latino population, more than 63 million people, is the fastest growing ethnic group in the US But Esther Aguilera, president and CEO of the Latino Corporate Directors Association, says the Latino community still lacks access to the main personal financial products and the financial system. the industry needs to do a better job of bridging that gap.
“Did you know that 12% of Latino households are unbanked and another 22% are underbanked? This Financial Literacy Month, let’s remember that investing in Latinos is smart business.”
For Jim Lebenthal, a CNBC contributor and chief equity strategist at financial advisory firm Cerity Partners, being a financially savvy investor means understanding both the potential risks and potential returns of an investment. And this focus on risk has to go beyond stocks.
“When I say investment, it can be more than just a stock or a bond. It can be a complete investment plan, a complete asset allocation.”
Finances can be confusing. In fact, some institutions rely on industry jargon and complicated language to convince the average person that they can’t understand finance like professionals.
For Guy Adami, CNBC contributor and director of the Private Advisor Group, financial education can empower investors to ask better questions and this, in turn, will make the financial industry better overall. And he says recent history provides a compelling reason why people shouldn’t trust the industry to know better.
“The great mythology for years was that no one understands money better than we do. Us being Wall Street. Well, 2008 and 2009 proved the exact opposite. Now we can ask questions we never asked Wall Street before.”
Understanding how the financial system works will increase personal wealth, according to CNBC contributor Nelson Reyneri, director of ESG at consultancy Point B and president-elect of the US Hispanic Chamber of Commerce. He learned from personal experience.
“I arrived with my family when I was three and a half years old from Cuba. And we had nothing but $50 and a lot of dreams. But what we learned was that we live in a country, that for those who are willing to learn how the financial system works, educate themselves and work hard, there are paths to increase personal wealth. It’s an exciting journey, and I encourage all Americans to take advantage of many of the free resources to become more educated about personal finance. .”
People can improve their financial education for free, in most cases, with resources from sites like the Economic Education Council.
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Disclosure: NBCUniversal and Comcast Ventures are investors in acorns.