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Secret Knowledge That Will Improve Your Life

How would you like to have special knowledge that will improve every stage of

your life, from high school through old age? What if I told you this knowledge

will reduce your stress, make you more confident, improve your health, and

generally make your life better?

Would you be surprised to learn this special knowledge is just a basic

understanding of personal finance?

The consumer culture we live in does not value financial knowledge, yet one

of the most important life outcome determinants in every phase of life is

financial knowledge. Most people never learn how important this information

is until it is too late and they are mired in debt up to their ears. As you look

through the below sections regarding the various life stages we all (hopefully)

transition through, you get a glimpse of how important financial literacy is to

your overall life satisfaction.

Young Adults

  • The harm stemming from a lack of financial literacy begins immediately after high school, as over 60% of all students take out a student loan. 

  • The average school debt (2022) upon graduation is $37,574—although this number seems very low to me. On average, this loan takes approximately 21 years to pay off according to 

  • Conversely, the average score on the Teachers Institute for Annuity Association of America (TIAA) on a student loan quiz completed by graduating high school students is a dismal 59%. Not a score likely to provide the necessary background knowledge needed for a student to commit to a loan that will take almost a third of their life to repay. 

  • Students never learn (unless they seek out this information) about the return on investment of a specific degree or how long it will take to get a return on their investments of both time and money into the desired degree. 

  • 87% of high school graduates admit they are not financially literate.

Newly Employed Adults

Working adults don’t fare much better. On average, they score a dismal 50%

by only answering correctly half of 28 basic money questions in the quiz

produced by TIAA. Worse, the share of respondents (23%) who couldn’t

correctly answer more than seven questions is higher than it has ever been.

As a result, 78% of Americans are now living paycheck to paycheck

(Corporate Finance Institute).

  • Financial Investing Regulatory Agency (FINRA) found a direct link between those with higher financial literacy and workers with a higher net worth. 

  • A National Library of Medicine study showed a strong correlation between higher financial literacy and those who contribute to their company’s retirement plan, as compared with those who had lower scores and did not contribute to a savings plan.

Childbearing Age Adults

When it comes time to have children, most people have not prepared

financially. Studies show that each child you have creates a 14% to 15% rise in

debt over the average household debt of just under $100K. These facts are

never widely distributed and are largely ignored by the mainstream culture. 

At the same time, a study by the World Banking Organization also shows that

financially educated mothers more readily recognize the opportunity costs of

having kids (money they will spend having children vs the amount they could

be making if they did not have children) and will take the necessary financial

steps when they are ready to begin having children.

A study by the St. Louis Federal Reserve shows that half of all income

inequality may be caused by a lack of financial literacy. Additionally, other

studies involving students and teachers show those who are more financially

literate generated more income than those who were not. 


Finally we all (hopefully) reach retirement age. A study by TIAA reports that

senior citizens with higher financial literacy scores had more financial

resources at retirement and lived longer and had fewer health problems.

When seniors do need care, those who were financially literate throughout

their life had far more resources to secure the needed short-term or long-

term help they required. 

12 Concepts to Create Financial Literacy in Your Life:

  1. Research the necessary steps for making yourself more employable in your field.

  2. Study basic investing principles with an emphasis on best practices.

  3. Understand index funds, investing fees and why these fees are important.

  4. Learn why investment diversity is a vital investment concept.

  5. Acquire knowledge about compounding interest and how it works in loans and in your investments.

  6. Learn how to budget your money.

  7. Understand how debts and loans are structured and which loans are good deals and which are not.

  8. Read about debt management and debt-to-income ratios (DTI).

  9. Learn about credit scores and how they are calculated and reported.

  10. Understand the importance of goal setting and envisioning the future you want.

  11. Research the difference between ROTHs, 401Ks, and IRAs.

  12. Learn about taxes and how to minimize the amount you pay.

~Larry Faulkner

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