I recently had the pleasure of interviewing noted financial expert, Dr. David Phelps, one of the members on the 13-member working group developing the State of Florida’s new financial literacy curriculum, which is being implemented in all K-12 schools throughout the state.

Dr. Phelps was chosen in large part due to his financial expertise, but also because of his commitment to financial education, which has been a personal mission of his for quite some time.

While he was entrepreneurial as a kid, he still initially followed his father’s path into the dental field, as many young people do. But when his daughter developed serious health issues, it made him realize he wanted more time to spend with her than his dental practice would allow. So he evaluated the revenue produced by his practice and by his real estate investments and realized that could sell the practice and live off of his real estate — allowing him to spend more time with his daughter.

This was the inception of his company, Freedom Founders, but when he realized he was limited in how many people he could help through his company, he began to produce tons of content — books, podcasts, articles and social media posts, to help educate even more people.

And the rest, as they say, is history.

This is a 3-part segment where we will be discussing financial literacy for young people as well as inflation and the economy. The first segment will be about Phelps' motivation to take time away from his business to help ensure future generations of students will be better educated on financial literacy .

So, why does financial literacy matter for students and kids?

Phelps says, “Well, more so than ever before, our entire governmental financial system is completely abysmal. Our young people don't have anybody to look up to, really, in terms of government officials, leaders, administration, senators, etc., because they do the very thing that we preach about not doing — that is, to be responsible about financial outcomes, financial obligations, responsibilities, not spending too much, etc. That’s why, year after year, the national debt swells by billions and billions of dollars. That doesn't bode well for any of us.”

A shocking 43% of Americans are not financially literate, but think they are, according to research by the Milken Institute. Rising debt and delinquency rates further prove this point. But this problem has broader implications, according to Phelps.

While this may seem to be an individual problem, the truth is that it actually causes significant problems all the way up to the national level because the effects of poor financial decisions ripple out far beyond the person who first made them.

Right now, we have people today who are voting for entitlements because they don't have the education, the financial background of financial literacy, to understand that there is no magical printing press that can just create money out of thin air.

My generation, the older generations, are somewhat at fault because we've been playing this speculative game of using cheap money that's been artificially presented to us by the Federal Reserve for a long time, and every time we see the financial markets get into some kind of problem, the Fed comes to the rescue and bails everybody out. So the lesson we're teaching is, there's no real risk to go out and wing it, to throw money at Robinhood or crypto or any other speculative investment.

Rather than learning what investing is playing the long game, they’re speculating on get-rich-quick schemes. No one has patience for the fundamentals anymore, and I think that's warped the financial situation in our society today.

Phelps says there is a solution, though, and that is teaching financial literacy to our younger generations.

Phelps explains, “Look, we require young people to pass a Driver's Ed course before they're given the keys to a car, so why don't we do the same thing for financial literacy? Why aren't we doing that today? It’s a disservice to them, as well as the rest of the country.”

That lack of financial literacy leads to a lack of freedom, because if you don’t understand financial topics, your options are limited compared to someone who does.

But when people are financially literate, they not only understand how money and the economy works, they also tend to make better financial decisions. This leads to greater financial stability, wealth accumulation, and opportunities.

Now, extrapolate that out over a few generations. If a family improves their financial situation by 20% over a lifetime, imagine how much better off their children will be. Now imagine those children improving their own financial situations by 20% over their lifetimes, followed by the next generation. And this cycle can repeat from now until the end of time. If you understand the concept of compounding, it’s easy to see how powerful this can be.

It puts families in a better position to afford a quality education, invest for retirement, or even start a business. Not to mention the added peace of mind that comes from being financially stable and the fact that it can enable them to afford better healthcare to live longer, happier, and more productive lives.

The positive impact of financial literacy is incalculable and profound, and while that impact starts with the individual, the ripple effect reaches far beyond them.

And the public education system has also begun working to bring this vital knowledge to future generations because of the impact it has not only on the individual, but also on families, communities, and the nation. That’s why Phelps, along with 12 other financial experts and educators, was asked by the Florida Department of Education to help craft and guide the new curriculum for Florida’s new financial literacy program that was signed into law last year under the leadership of Governor Ron DeSantis.

Phelps says, “I’m both grateful for the opportunity to play a role in this, as well as excited about the long-term impact it will have for all Americans”

This is part one in a three-part series about financial literacy, inflation, and the economy. Be sure to check back for the next two articles.
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Mario Henry (www.housevisors.com), a former National Football League player, is a financial services professional with 18 years of experience in the industry and author of How to Hire Your House, an innovative guide on how to create a tax-free pension and sustain sufficient income through retirement. Mario also is a licensed insurance broker and a national motivational speaker. He was a wide receiver with the NFL’s New England Patriots and a scholarship football player at Rutgers University.