Back on the Horse

I've been neglecting the blog for the past nine months, and it's time to attempt to revive it. It's amazing how busy unemployment can be. I've had some friendly encouragement lately, along with some advice from a marketing expert friend about how to post in a sustainable way. So, I'm going to attempt to post more often, but the posts will likely be shorter and involve more use of outside sources to get conversations started.

Today, I'll refocus the mission. I can't remember where I heard the theory about the three types of education needed to succeed, perhaps it was from Rich Dad Poor Dad (which I haven't read) or Why Smart People Make Big Money Mistakes & ... (which I have read and found to be good). Anyway, the general idea is that a person needs three types of knowledge to succeed in life:

• Book Smarts: factual knowledge, an employable skill, literacy, the ability to write a memo and do algebra, etc.
  
• Street Smarts: how to make friends, code switching language style based on audience, how to flirt, etc.
• Finance Smarts: understanding how your markets work, the ability to manage your money and other resources, etc.

Everybody has heard of the first two, but Finance Smarts is new to many. In fact, it seems that a lot of people think that finance and economics shouldn't be understood by all. "Economics is too complicated, leave it to the experts, and it wouldn't help me anyway," is the argument.

You don't need to be intimate with the orange futures market to succeed in life, true. You do need to understand how the prices of goods and services (e.g. gas, milk, housing, education) are set. You do need to know why a bank pays you 1% on your savings account, and charges 6% on your mortgage. You do need to understand what steps to take to successfully retire at age 65 and still have a place to live at age 105. You do need to understand how an investment in education affects you and your society in the long-run.

I hope Grokking Finance will help you learn about these things (and others) and build your Finance Smarts.