Money Doesn't Equal Knowledge

Just because you have money doesn't mean you know what to do with it.

That's the biggest commonality I see when people start out.

And it's something nobody talks about.

 

The Education Gap

It's not taught in high school.

It's not taught in college.

 

The basic basics of a budget.

Of a checking account.

Of how to be aggressive or conservative with investments.

 

You can graduate with honors and still have no idea how any of it actually works.

I've met doctors, lawyers, engineers, successful business owners—all making great money—who can't tell you what their 401k is actually invested in.

It's not their fault.

 

They were never taught.

 

The 401k Problem

It's funny how this plays out.

 

People with 401ks will tell you they want to be aggressive.

They'll say they have a high risk tolerance.

They understand they're young and should be in growth investments.

 

But if you ask them what their actual allocation is, they have no idea.

They just picked something during onboarding.

Usually whatever the default was.

 

Or they saw a list of funds and picked one that sounded good.

Some will just pick a target date fund and say, "Well, I retire in 2045," and assume that's enough.

 

They never look at it again.

They don't know if it's actually aggressive.

They don't know what percentage is in stocks vs. bonds.

They don't know what fees they're paying.

They just know they have "a 401k."

 

Access Doesn't Create Understanding

Having access to money doesn't create understanding.

 

And without understanding, even the right tools won't help you.

 

I see this all the time with people who suddenly come into money.

An inheritance.

A bonus.

A business sale.

 

They have the money.

But they don't know what to do with it.

 

So one of two things happens:

Either they do nothing—and the money sits in cash losing value to inflation.

Or they do something impulsive—and make decisions they later regret.

Both come from the same place: a lack of foundation.

 

What People Actually Need

Most people don't need more products.

They don't need more options.

They don't need another fund recommendation or a hot stock tip.

They need the basics first.

They need to understand:

What they actually have.
Not just "a 401k" or "some investments." The actual numbers. The actual allocation.

What it's doing.
Is it growing? Is it sitting in cash? Is it in the right risk level for their age?

What they're paying.
Fees matter. Even small differences compound over decades.

What their options are.
Not every option. Just the ones that actually apply to them.

What makes sense for their situation.
Not what works for everyone. What works for them.

Clarity Before Complexity

That's where real progress starts.

Not with complex strategies.

Not with advanced tactics.

With clarity.

When someone can clearly see their full financial picture, things change.

The stress drops.

Not because everything is perfect, but because it's understandable.

They can make decisions.

They can see the impact of those decisions.

They can course-correct when something isn't working.

The Path Forward

If you're reading this and you relate, here's what to do:

Start with what you have.
Log into your 401k. Look at your allocation. Write down what you see.

Ask questions.
If you don't understand something, ask. There are no dumb questions about your own money.

Get the basics down first.
Budget. Emergency fund. Debt plan. These aren't sexy, but they matter more than anything else.

Don't let confusion paralyze you.
The fact that you don't know everything doesn't mean you can't start somewhere.

Work with someone if you need to.
A good advisor doesn't just pick investments. They help you understand what you're doing and why.

Knowledge Builds Confidence

Money doesn't fix confusion.

Knowledge does.

 

And knowledge doesn't have to be complicated.

 

You don't need to become a financial expert.

You just need to understand your situation well enough to make informed decisions.

That's the gap most people need to close.

 

Not more money.

Not better returns.

 

Just clarity about what they have and what to do with it.

Once you have that, everything else gets easier.

Demystifying Economic Jargon

Economic news often comes with a slew of complex terms that can feel overwhelming. Understanding key economic indicators can help you make more informed decisions about your financial future. Here's a breakdown of five essential economic terms that frequently appear in market updates and policy discussions.

Producer Price Index (PPI)

The Producer Price Index (PPI) tracks the changes in selling prices received by domestic producers for their output. As a leading indicator of inflation, rising PPI values can signal forthcoming increases in consumer prices since higher production costs eventually lead to higher retail prices.

Consumer Confidence Index (CCI)

Published monthly by The Conference Board, the Consumer Confidence Index (CCI) gauges the overall optimism of consumers regarding the economy and their personal financial situations. A high CCI generally leads to increased spending and economic growth, as confident consumers are more willing to make purchases and investments.

10-Year Treasury Yield

The 10-Year Treasury Yield is a significant benchmark for interest rates across the economy. Rising yields can indicate expectations of inflation or economic growth, while falling yields may signal economic uncertainty or slower growth. Investors closely watch Treasury yields as they provide insights into the economic outlook and market conditions.

Consumer Price Index (CPI)

The Consumer Price Index (CPI) is a measure that examines the average changes over time in the prices paid by urban consumers for goods and services. As the primary measure of inflation, shifts in the CPI affect purchasing power. A rising CPI reflects increased inflation, which can erode the value of money, impacting how much you can buy.

Consumer Sentiment Index

Compiled by the University of Michigan, the Consumer Sentiment Index measures consumer attitudes toward personal finances, business conditions, and spending plans. Similar in purpose to the CCI, it provides additional insights into consumer psychology. While both indexes serve to gauge consumer confidence, they derive from different methodologies and samples. With an understanding of these terms, you are better equipped to interpret market fluctuations and align your financial strategies accordingly. Keep this guide handy for when economic terms cloud your thoughts, and consider sharing it with those who might also benefit from clearer economic insight.