The FinancialVerse: A Common Sense Approach For Your Money

By Harry N. Stout

In a straight forward, easy to read style, The FinancialVerse presents what the reader can expect at each stage of their financial lives and offers ideas and resources to assist decision making. The book is made up of the knowledge, decisions, resources, risks, and tools that an individual encounter in life's financial journey. It has been written to help people reduce their levels of financial anxiety and stress. Authored by financial services leader Harry N. Stout, The FinancialVerse provides a much-needed roadmap of what to expect in our financial lives.


 

• Language: English
• Publisher: Vertel Publishing
• Release date: Oct 9, 2019
• ISBN: 9781641120203

Book preview

INTRODUCTION

The Value of This Book

Do you understand how money works? Have you achieved financial security for yourself and your family? Have you reached a point where you pay bills without thinking of whether you have enough in your bank account to cover the ATM withdrawal, check, or electronic payment? Do you have an up-to-date personal cash budget? Do you have the requisite insurance coverage in place to protect your family and property? Are financial issues not a daily part of your family discussions? Do you have enough savings to live the life you want in your older age? Do you have someone you can talk to about your money concerns? If the answer to most of these questions is no, you are failing in what I call the FinancialVerse—just like the majority of Americans.

It’s time to become better aware of where you are in your life’s financial journey and where you are headed. You should not fear this journey. It’s all about common sense. You can make it work, but you must have a basic understanding and awareness of where you are and where you are headed.

I am here to help you by providing thoughts and ideas on how to find the financial security you desire. What is the financial story of your life? What chapter are you on? Just beginning? Are you halfway through? Creating the last chapters? If you could, would you like a chance to rewrite how your story has unfolded to date? Would you like to change the plotline? Or would you like to read ahead to see how the journey ends?

I can help you make your unwritten or unfinished story a more successful and less stressful journey. In my view, the most important financial goal for most people is to find their way to financial security. I am not talking about becoming a multimillionaire or better. I am not talking about the Financial Independence, Retire Early (FIRE) approach to your financial life, although I admire a lot of what the FIRE movement espouses. I am talking about living a relatively stress- and anxiety-free financial life. I am talking about knowing the key money decisions you will need to make and where to go to get help making them. I am talking about having the financial resources to draw on when they are needed. I can help get you there.

I was driven to write The FinancialVerse for several key reasons. The first is to provide a much-needed, big-picture financial overview of what a financial life should look like for the average person. I will do this using easily understood concepts and language. The second is to help people who live in what I call the without world to better understand what their financial lives should look like and what actions they can take to improve their lifelong financial journeys. Lastly, I want to give people guidance on why they should begin lifelong financial learning that will pay benefits many times over during their lifetimes. I don’t believe we adequately prepare people for the financial decisions they will face in life. This book will help significantly with what you need to know regardless of where you are in your journey.

To help you, I am drawing on over thirty years’ experience in the global financial services industry. I will offer you simple, proven ideas and practical advice to improve your financial life. I will make it worthwhile for you to read this book. It will help you reduce the anxiety and stress that financial matters can cause.

THE NEED FOR FINANCIAL EDUCATION

Despite a booming economy, record corporate profits, a healthy stock market, fifty-year low levels of unemployment, and improving wages, most people are struggling financially. They are one missed paycheck away from financial oblivion. The Center for Financial Services Innovation reported on November 1, 2018, in its inaugural US Financial Health Pulse (CFSInnovation.org) that only 28 percent of Americans can be considered financially healthy. This report struck home to me, as it summarizes what I have seen in my recent travels, reading, and experience in the financial services industry.

In an interview published in USA Today as part of the report’s release, Jennifer Tescher, CEO of the Center for Financial Services Innovation, was quoted as saying: We felt like we needed to create a definitive study that helped to demonstrate that while the larger economic headlines around a roaring stock market, and low unemployment, and great consumer spending are out there, that’s not actually telling an accurate story.

The organization, which works with startups that are building financial health tools, surveyed more than five thousand Americans. Here are some of the report’s key findings:

Nearly half said their spending had equaled or exceeded their income in the last twelve months.

Forty-four percent of those surveyed relied on credit cards to make ends meet.

Only 45 percent have enough to cover three months of living expenses (even though the majority of Americans say they save whenever possible).

Forty-two percent have no retirement savings.

Thirty percent have more debt than is manageable.

The report aims to give a fuller picture of financial health than typical studies. We tested dozens and dozens of indicators, Tescher was quoted as saying. Looking at something like annual income, for example, doesn’t necessarily indicate whether someone can cover his or her expenses. If you’re not really understanding how people are managing their money in a day-to-day kind of way, you’re missing the whole picture, she said.

As I write this introduction, I have seen the same financial reality that most Americans experience. My reading and research tell me the following about today’s average American family’s financial situation:

About 80 percent of families live paycheck to paycheck.

Over 60 percent of families would be in a financial panic if they needed to come up with $400 to cover an unexpected bill such as a medical cost, a major car repair, a house repair, or the unexpected costs of an accident.

Consumer debt of all types is at historically high levels, with student loan debt increasing the fastest.

The average family has less than $100,000 saved for their retirement, which will likely be twenty to thirty years in length.

The average family has less than one month of their annual cash expenses in savings.

A record number of individuals over age sixty-five are filing for bankruptcy protection.

Why are families struggling so much in favorable times? I believe the root cause is that we have not educated people about what to expect in their life’s financial journey and what financial decisions they will be called on to make. They simply do not know what to do or where to go to get the help they need.

My belief is that families are in a much more precarious financial situation than the financial media is reporting. People are having great difficulty making their money stretch to meet all of their lifetime needs. As I have heard Philip Hudgins of InVida Financial Network say many times: Most people run out of money before they run out of month.

Given today’s economic environment, the pace of technological change, and projections of what our economy will look like over the next few decades, we are rapidly moving to a point where more and more families are approaching the financial abyss. It will not take much of a push to put them over the edge.

I strongly believe we have not properly prepared people of all ages about how money is earned, spent, saved, and invested. I am not talking about the realities of the frequently mentioned 1 percent or how to become a millionaire overnight. I am talking about attaining basic financial security for the majority of Americans regardless of which identity group, race, religion, or demographic cohort they identify with or belong to. The case for better education is abundantly clear from the financial distress most people face today. I know as my life progressed, I went from living in the without world to the reality of financial security and comfort I longed for. It’s time we got back to common-sense basics because we have become detached from financial reality everywhere we look.

THE WITHOUT WORLD

I grew up in the without world—without sufficient food, reasonable clothing, financial resources, sufficient education, and practical knowledge of the social graces of life. I had no one to take me under his or her wing and educate me on how to live successfully. My role models came from generations of people who worked hard without educations and sufficient payback for their efforts. They continually lost out due to their lack of financial learning, which resulted in their inability to earn reasonable cash income and properly manage their money. They had to fight day-to-day to get the most meager of basics for their families. This cycle of wanting was passed from generation to generation.

To break this cycle, I had to learn the key aspects of living on my own. I needed to determine the lifestyle I wanted, how to earn enough income to support that lifestyle, what it meant to be educated, how to approach and manage my money, and how to deal with the practicalities of the outside world. Each day, week, and year was a major struggle. I lived in a constant state of without and feeling the anxiety of not knowing how I could get the financial resources I needed to succeed. I did not really understand the financial journey my life would take, as I was focused on just surviving in the short term. This without world has motivated me throughout my life. I made a vow to escape it and provide my family with financial security. In reality, my without world continued until I reached my thirties, when I clearly learned what I needed to do and how I wanted to live.

In my youth, like most people, I saw both my parents work as hard as they could to support our family with meager results. I respected them for all they did to support our family. They could not work enough hours to earn a livable income—similar to today’s campaign to mandate a living hourly wage of fifteen dollars an hour for workers. My father worked seven days per week. In retrospect, he truly exemplified the concept of the working poor. He could not make enough money to get ahead regardless of the number of hours he worked. In fact, he never really got ahead in life—financially or in any other respect. He dealt with struggle after struggle—some were his fault, while others were created by happenstance. My mom saved us, as she had a part-time cleaning job at our neighborhood church that paid enough for our monthly groceries. There were many months that without her earnings, we would have had little to eat.

As I grew up, a good portion of my free time with my father, when he was not working, was spent collecting newspapers and scrap metal in our family truck during school nights (this was before recycling became a common practice). We would take what we collected to the scrap yard the next day after school when my dad got home from work to earn a