Tuesday, December 11, 2012

Let Bad Banks Pay for Financial Literacy

BURLINGTON, Vt. (MarketWatch)—If Ben Franklin were alive today, he might edit his famous quote to say: “In this world, there is nothing that is certain except death, taxes and bank scandals.”

In my previous column, I discussed the current bank industry LIBOR scandal and the extent of other recent transgressions by financial institutions.

In that column, I proposed that, as was done in the 1990s with fines of the tobacco industry, a percentage of all fines and penalties paid to federal regulators by financial service companies accused of breaking laws be given to a newly created National Public Education Foundation for Financial Capability.

Why do we need this foundation? Numerous surveys and studies show that the personal finance knowledge of most Americans is very poor. Many of our citizens are not learning these critical life skills at home, at school or college, or in the workplace...

To continue reading, view John's full article from December 5, 2012 on Marketwatch here.

Thursday, November 29, 2012

Bank scandals can aid Financial Literacy

BURLINGTON Vt. (MarketWatch)—Since the financial crisis began in 2008, Americans have witnessed a constant stream of scandals and settlement by the financial services industry. Banking, securities, consumer protection, commodity, asset management and brokerage regulators have all fined and penalized large institutions for putting profit and personal economic gain ahead of the law and doing the right thing for their clients.

The LIBOR scandal by itself is shocking enough. Large global banks manipulated the London interbank offer rate on products worth an estimated $800 trillion, and The Wall Street Journal estimates that these banks could face legal liability of $176 billion, excluding regulatory penalties...

To continue reading, view John's full article from November 12, 2012 on Marketwatch here.

Interest-rate seesaw tips in your Favor?

BURLINGTON, Vt. (MarketWatch)—Interest rates are like the seesaw you played on as a kid. Savers are on one side and borrowers are on the other side. In a normal economy, you want there to be a balance between these groups. The person taking a loan gets a fair deal and the person lending money through their savings makes a fair return.

The Federal Reserve board greatly influences the price of credit—the interest rate paid on a home, an auto loan and bonds issued by the U.S. government, municipalities and corporations—and when it uses its power like it did last week to manipulate interest rates, there are winners and losers...

To continue reading, view John's full article from October 1, 2012 on Marketwatch here.

Why go to College if I can’t get a Job?

BURLINGTON, Vt. (MarketWatch) — Late summer is when parents bring their children to college. As they drive to campus they’re worried about tuition increases, the burden of student debt and whether their children will find jobs when they graduate.

Some parents and high-school students are beginning to question the value of a four-year college degree in this post-Great Recession world.   And you can certainly understand why they have these concerns...

To continue reading, view John's full article from August 23, 2012 on Marketwatch here.

Avoid these 10 Money Mistakes your Parents Made

STOWE, Vt. (MarketWatch)—Not being a best-selling author, film star or U.S. senator, I won’t be giving commencement speeches this spring. But as I imagine myself at the podium in front of eager young college graduates, I know exactly what I would say.

I would tell them to thank their parents for their support and to live and work with passion and purpose. But the bulk of my address would focus on the importance of avoiding the financial traps into which many adults, including some of their parents, have fallen. I would review my list of top 10 personal-finance habits for a successful financial future...

To continue reading, view John's full article from May 9, 2012 on Marketwatch here.

College grads: Think about Retirement Now

STOWE, Vt. (MarketWatch) — The majority of this spring’s college graduates are not ready to take on the world financially. On average, two-thirds of students will graduate with student loans of $25,250 and more than $4,000 in credit card debt.

With a job or not, all these young people will strike out on their own, and my question is how many will have the personal finance savvy to avoid the same mistakes their parents made?

To continue reading, view John's full article from April 16, 2012 on Marketwatch here.

Financial Literacy Must be Taught in our Schools

BURLINGTON, VT (MarketWatch) — This summer marks the fourth anniversary of the beginning of the financial crisis that led to America’s recent Great Recession. In the summer of 2007, the first warning tremors were felt in our credit markets, and U.S. citizens began to learn about terms like mortgage-backed securities, subprime loans and credit default swaps. 

As we look back four years later, we need to ask: What have we done as a nation to ensure that we do not suffer from another financial crisis? Two solutions are clearly required: new regulations on the financial-services industry as well as personal-finance education of our citizens. Progress has been made on the regulatory front — but little has been done on the education front...

To continue reading, view John's full article from July 26, 2011 on Marketwatch here.