Financial Literacy
A survey of Adventist Pastors revealed eight different factors that may allow pastors to retire as millionaires. In this Best Practices series, I’m sharing each of these eight factors in bite size pieces. Coming in at number three in correlation strength is financial literacy. Those whose net worth is anticipated to be over one million update their financial knowledge a great deal more often than those whose net worth is anticipated to be less than a million (see bar graph).
Updating your financial knowledge through such things as books, magazines, and seminars can impact your net worth. In the chart we can see that those in the >1M group are three times more likely to update their knowledge a great deal than those in the <lM group, and seven times as likely to update their knowledge ‘A Lot’ than those in the <1M group. Financial literacy is a powerful skill to be learned and constantly updated in our always changing world. Knowledge is power.
Financial literacy can be intimidating when you first are blitzed with a brand-new vocabulary such as Roth, HSA, I Bonds, amortization, parsonage exclusion, FICA, ETFs, etc. Compounding the challenge is that not all financial knowledge is of equal value. If you surf the web or open your mailbox you may discover that solicitors offering you financial advice do so to entice you to buy their products or services. Where might you turn for the best financial information with the least amount of product selling?
A great place to begin is your employer’s retirement department. For example, those enrolled in NAD Retirement have a financial wellness booklet, dozens of short informational articles on different financial topics, and free consults with certified financial planners. Another great place to increase financial literacy is to enroll in a course at a local community college.
When it comes to learning financial vocabulary, nothing beats Investopedia, an ad-supported website with a mission of “simplifying financial decisions and information to give readers the confidence to manage every aspect of their financial life.” Think of it as a Wikipedia of personal investing finance. This is the place to go to decipher all of the financial jargon and increase your investing literacy.
When I’m having discussions with my future self, I find that nothing beats a financial calculator. Calculator.net is my go to place for quick personal finance calculations such as a mortgage calculator, loan calculator, amortization calculator, inflation calculator and many more.
Nerdwallet is an ad-supported website dedicated to providing clarity for all of life's financial decisions. Along with financial literacy articles, guides, tips, and calculators, this website specializes in comparing the features of different financial services such as banking, credit cards, travel, personal loans, mortgages, and investment brokers.
Kiplinger newsletter has been one of my personal favorites since my father-in-law first gifted me with a subscription 45 years ago. You don’t have to subscribe to read many of the ad-supported online financial literacy articles.
I subscribed to Money magazine for many years to stay current on financial literacy. Although the magazine ceased publication in 2019 the website continues with relevant personal finance articles.
For a more casual learning experience, watch the TV show titled Stupid Money hosted by John Mathews. Travel the country with John as he experiences the jobs real people do, asking them about the stupid things they’ve done with their money, and what they learned. Some are serious learning experiences and some are just funny. You will wonder, "What were they thinking?"
You’ll never entirely master financial literacy because it's always changing. Yet learning the basics and keeping up with current trends will greatly increase your odds of retiring with a greater net worth.
Author’s note: These articles are condensed from the full report of the study that was presented at the 2022 CALLED Pastors’ Family Convention and can be downloaded here: If you would like to dialogue with the author you can email him at davegemmell@gmail.com.
Dave Gemmell recently retired from NAD Ministerial and is enjoying spending more time with his family, especially his three grandsons.