Now we know that eggs, consumed in moderation, are an excellent source of protein.
A similar deference to orthodoxy has also led to confusion around personal finance education.
I also encourage citizens to live within their means and save for retirement. But the starting point isn’t Financial Literacy. It should be Accounting Literacy.
Accounting literacy is the ability to see clearly the current status of your finances — to have an honest assessment of what actually is.
Financial Literacy is an understanding of the banking spectrum — things like interest rates, investment strategies, retirement funds and the like.
Regarding personal finances, I recommend you first understand where you currently are.
This means knowing just five things:
- Your assets
- Your liabilities
- Your net worth
- Your value generation
- Your value consumption
Promoting Financial Literacy first is like advising people to build the roof before they start on the basement. It’s not going to work.
As Yogi Berra might have put it, “If I were you, I wouldn’t start from here.”