Why Pay for Education?

August 25, 2010

As some of you may know, I used to be a financial advisor with the brokerage affiliate of a national bank.  As a financial advisor, I made a living by providing advice and selling investment products and services.  Since the only way I would make money is if I sold investment products or services, it did not make much sense for me to spend time helping bank customers that did not have assets to invest or a need for my services.  That, however, did not stop many of the bankers from referring their customers to me when they needed financial help.  Whether it was helping someone to get out of debt, or to simply create a budget, the bankers figured that since I was a financial planner it was my job to help their customers with these issues.  The truth is I loved to help, but the reality was I could not afford to help as much as I wanted to.

Ironically, it was on one occasion when I was meeting with a friend at the local coffeehouse to discuss his personal finances that I was approached by a lady who overheard our conversation.  I’ll ignore the fact that she was eavesdropping, but she was impressed with the way I addressed my friend’s issues.  As it turns out, she specialized in helping people to budget and get out of debt.  In fact, that was how she made a living.  Now, without going into too much detail, she shared with me how she had been on the brink of bankruptcy, and how she was able to turn her personal financial situation around, and now she wanted to help others to do the same.  This had become her mission in life, and she was willing to give her secrets to success away—so why didn’t she?

I asked her that question, and her response was very revealing.  As it turned out, she DID give it away.  She used to give people free financial education, but not anymore.  Whenever she gave someone financial education free of charge, no matter how passionate she was about the information she shared, the recipient had nothing at stake.  You would think that getting information that would help you balance your budget or get out of debt would be enough of an incentive to want to learn, but it wasn’t.  It was not until someone was financially at risk that they actually embraced the financial education and used it to change their lives.

Look at it this way.  When I give my children a toy to play with, they may enjoy the toy for a while, but when it is left outside and is ruined by the rain, it hurts me more than it hurts them.  Why?  Because I paid for it.  I know what it cost.  To them it was a free gift, to me it was a loss of value.  And this is way people who paid $100 or more to participate in my friend’s financial education program were much more likely to succeed than those who were given the opportunity to participate at no cost.

So the next time you are given an opportunity to receive financial education, or access to an employee benefit at work, or anything that can improve your life, make a financial commitment to it.  Bet your coworker, pay a professional, do something that amounts to a loss of value if you don’t do it, and you will be much more likely to succeed.