Financial Wisdom

Financial literacy is an important tool that a lot of us are not fully equipped with. Essentially it is the ability to understand and properly apply financial management skills. Effective financial planning, properly managing debt, accurately calculating interest, and understanding the time value of money. These are are characteristics of being financially literate as defined by Investopedia (a financial planning website). These are essential tools that we ordinarily are not equipped with, because for the most part we do not learn it in school or even in our college economic courses.

This article is dedicated to an old co-worker of mine Mr. Perry. The deepest conversation we ever had before he passed away was related to financial literacy. We discussed retirement funds, 401k options and overall just how much information he lacked when he started working compared to the time of our conversation. Perry passed away earlier this year during the height of the covid-19 crisis but the conversation that we had still resonates with me. Time is money and the realest sense of that is perhaps in relationship to investing.

At my job, enrolling in the pension plan and 401k is something you hear often during your initial months. Over time the tiers or level that the employer offers for the pension plan often change. The minimum age for retirement and the minimum years that must be worked to be eligible for the pension are often in the name for that tier level. For example, a 62/5 plan allows participants to retire at age 62 with at least five years of credited service.

However, a lot of people are unaware or just do not prioritize registering for these funds. In some communities and even cultures, the idea of generational wealth is not something frequently discussed or passed on. Pensions, 401k’s, stock portfolio’s, real estate and life insurance. All examples of generational wealth and things that we could all benefit from increasing our knowledge base on.

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