Be Mindful Where You Get Your Education

April is Financial Literacy Month, wherein we encourage Americans to create and maintain healthy financial habits. The only problem is, depending on your source for financial education, you can go down a rabbit hole quickly in the wrong direction.

Not every self-proclaimed financial “expert” delivers best practice information; in other words, generally accepted and researched principles and guidelines. And that means it’s sometimes hard for you to extrapolate what information is right for you. Most of the reputable talking heads deliver solid data, but they also have something to sell. And that can be problematic when what you are learning is sales opinion and not fact.

Part of my research for Madrina Molly™ is to know who is saying what in the world of finfluencers. And truly, there’s stuff that comes out of the mouths of well-known talking heads that boggles the mind. For instance:

· I read an article by a blogging expat couple, posted in a respected newsletter, who are advocating taking Social Security at 62. Of course, to make their 30% discounted Social Security retirement income work for them, they had to move to Ecuador. The only reason their plan works for them (for now) is because they moved to Ecuador.

· I listened to a podcast from a well-respected millennial money reporter decrying the prospective 401(k) changes to all after-tax contributions and the loss of a current-year tax deduction with zero understanding that the benefit of these plans is tax-free growth that far outweighs a current year tax hit.

· In the past two months, both Dave Ramsey and Suze Orman have gotten dinged for sharing ridiculous expectations for portfolio performance and design, completely missing both sequence of returns risk and the correct way to calculate average returns.

This and plenty of other examples are why I and my peers wear our credentials with pride and humility. (I even have my CFP® diploma staged behind me in my Zoom room.) There’s a lot more to the financial domain than any one person can know. The CFP® Board runs an ad campaign, “It’s Gotta Be a CFP®,” promoting both our fiduciary requirement and our ability to know where to get the reputable information we don’t have at hand.

People call themselves things like Financial Advisor, Financial Coach, Registered Investment Advisor. None are required to be full-time fiduciaries, proper stewards of your plan and assets. What’s more, exercising a fiduciary level of care over your assets for these titles does not necessarily extend to assets beyond their personal management. I find that many people don’t realize that, if most of your wealth is in your 401(k), but your Investment Advisor doesn’t manage it, she is not under the same obligations as for the wealth she does manage.

I’ve been asked if the CFP® exam is hard. It has about a 65% passing rate. There are fewer than 2,000 woman CFP® Professionals credentialed each year and about 23,500 total at this time. That’s not a lot to service our cohort. We are required to complete 30 units of continuing education every other year, including ethics units. And because the financial landscape changes constantly, we are endlessly reading and learning.

I’ve talked to a number of young women interested in exploring a career as a financial planner. I remind them that it involves much more than simply passing a test. It’s committing to a lifetime of financial education and continued credentialing. Is it hard? Yes. Is it worth it? Absolutely.

While I’m touting credentials, there are two others I carry: RETIREMENT INCOME CERTIFIED PROFESSIONAL® and CHARTERED FINANCIAL CONSULTANT®. Both are issued by The American College, the go-to institution for thought leadership, research, and reputation in the domain. There are other organizations that provide similar credentials. After all, it’s a competitive business.

The American College has an extraordinary reputation, and the faculty boasts some of the industry’s most admired thought leaders. (For those of us who love what we do, we soak up all we can. It’s like “financial porn,” and we’re addicted … to white papers by Dr. Wade Pfau and Dr. Michael Finke; seminars by Ed Slott. etc. “Feed me, Seymour!”)

As an aside, everyone I know who holds the RICP® credential has indicated that the three courses it comprises are the most instantly useful and impactful of anything we’ve ever taken. And the research that built the curriculum–about ways to fund retirement, to think about distribution, to understand the mathematical reality and not the hype–is nonpareil.

Do you need to work with a credentialed advisor versus one who is only licensed? When it comes to women of a certain agency, it seems everyone wants to tell us how to save and invest in the market, everybody is suddenly a genius for how to grow wealth, and the self-proclaimed “financial experts” come out of the woodwork. Most of the time, their simple strategies will work well because often, time and compounding do the heavy lifting no matter what your investing strategy.

No question, there are many ways to get it right.

As a CFP®, RICP®, ChFC®, I can do the above plus something more: I can guide you to withdraw your money safely, tax efficiently, and optimize for your longevity. In other words, I can also tell you how to get your money back so you can use it to have a magnificent NEXT 50 years.

One last thing: I love to tell people, “I’m not just the President of the Hair Club for Men, I’m a Member!” (Giving away my age again!) Yup. Been there, done that. What you politely refer to as gravitas I think of as “lived to tell.” I’ve been married and divorced and re-partnered into a blended family. I’ve been rendered invisible in corporate America, experienced sexism, ageism, probably even height discrimination (though I didn’t have the good sense to notice it). I’ve had health scares. I bounce among children, grandchildren and elder children as a part-time caretaker and extra set of wheels.

I am one of us.

Smart women of a certain age(ncy) come to me all the time saying, “I should be able to figure this out.” I believe if you are motivated, you can. Absolutely. And if you are determined to learn, I’m asking you to source your financial education carefully.

#WeRescueOurselves #NotYoungNotDone #TaxesMatter

Copyright © Madrina Molly, LLC 2024. All rights reserved.

The information contained herein and shared by Madrina Molly™ constitutes financial education and not investment or financial advice

Sherry Finkel Murphy, CFP®, RICP®, ChFC®, is the Founder and CEO of Madrina Molly, LLC.

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