Motivation to Learn


“Effort is felt only when there is a conflict of interest in the mind.” William James, The Principles of Psychology

We have been thinking a lot lately about how to motivate people to learn.  The reason for this is that we know that financial education is not a topic where a common person wakes up thinking, “I am going read today about high yield savings instruments.”  Financial education is a dry topic, but, it is an important topic.

If you are on a mission to assist people in becoming financially secure, how do you incite an appetite to learn this path?  A contributor on Forbes and marketer Sujan Patel says that there are three main deterrents from being motivated to do something; in this case mastering financial education.  The first deterrent is the notion that we “have to” do something.  We’ve all been there, we see the mountain of dishes on the counter and they aren’t going to wash themselves.  We “have to” wash the dishes.  This fairly trivial task freely balloons in our minds.  As a teen, choosing to simply focus on one dish at a time minimized the task and forever changed my perception on doing the dishes.  Instead of looking at dishes as a “have to” I “chose to” dissect the chore.  The mental shift was all it took and while I still need to remind myself at times to “chose to” do the dishes, it has been easier since.

The second deterrent in the Sujan Patel article is thinking that “we don’t feel right about something.”  If you have children, you hear about this one daily.  You get home from work, have dinner with the family, and for a few minutes before bedtime the house needs some clean up.  You assign one of your children the family room.  What is there objection?  “None of this stuff is mine, this is Mom’s or Dad’s or anyone else’s.”  The child’s efforts are crippled because they create a moral dilemma in their minds; they simply won’t justify their responsibility for another’s crimes against cleanliness.  The fix is a realignment of the view of the task.  Understanding that Dad is cleaning the toy room, that none of the toys are his, and all members of the family are simply pitching in, cleaning up after one another for the greater good allows a departure from the mentally crafted moral dilemma.

The last deterrent is thinking, “I can’t do this.”  In other words we feel unequal to the task.  Your boss asks you to perform a public speaking engagement and you detest public speaking.  You can’t do it.  Wait, can you really not do it?  While many fear public speaking more than death,  let’s use another example.  Your boss asks you to build a rocket to take to outer space.  Unless you are an aerospace engineer, you are probably thinking you really can’t build a rocket.  Rather than dwelling on what we can’t do, if we recognize that it is our efforts that create excellence, we start thinking about how the task can be accomplished.  If you’re interested, apparently YouTube can teach you how to build a rocket or at least connect you with an open source project to build a rocket.

We now have a general idea of the obstacles to learning and the mental reframing used to overcome those obstacles, and maybe that is enough to motivate some, but how do you “market” learning?  Researcher and author Annie Murphy Paul has spent some time on this line of thought.  She suggests starting with a question rather than the answer.  Great.  Easy enough, “how do we encourage financial inclusion and financial security for all?”  This is a huge question.  Just a few years ago over half the world’s population was living on less than $2.50 per day.  Over 80% of the world was living on less than $10 per day.  If we are among the privileged 20% living on more than $10 per day, we should probably be putting more thought into solving the world’s poverty than those in poverty, I think they call this social responsibility.  Solving this problem begins with solving the problem for ourselves but immediately transitions to solving it for others.  Do we now start a non profit that markets to those living with enough with the question, “how do we encourage financial inclusion and financial security for all?”  That’s a rhetorical question, we have all seen something similar to that before, right?

Annie Murphy Paul makes a few other suggestions that can help to govern our thoughts on motivating others to learn financial literacy, she says we should connect abstract learning to concrete situations (refer back to the post It’s Not the Drill That You want, it is the Hole for a recent attempt at this), make the learning process social, and “go deep” on the subject matter.  We have never had better tools to make a learning process social.  For the sake of putting forth an example, I just went through my Facebook feed.  In order of appearance this is what I learned:

  1. Jennifer Aniston says, “The objectification and scrutiny we put women through is absurd and disturbing.”  My Facebook friend comments that Aniston’s actions speak louder than words citing photoshopped magazine covers contributing to the mentioned objectification.
  2. Bernie Sanders was the last chance at having a representative president according to a Facebook friend.
  3. Stabbing in Japan leaves 19 dead and 45 injured.  Facebook friend scoffs at the gun control argument saying that governments should look at “knife control.”
  4. Video on how to cook fresh tomato soup.
  5. Video on how to take making spaghetti to the next level.

I should say that I am not making any moral, political, or cuisine endorsements here, I am simply citing the most recent learning related posts in my feed.  My point is that the tools for making a social movement to financial literacy are present, and literally at our fingertips.  We can share virtually whatever learnings we desire across social media today.

In order to “go deep” as Annie Murphy Paul suggests, we first need to plunge through the surface.  This concept is important once we have our target market’s attention, but it doesn’t solve the problem of motivating others to get in to the topic of financial literacy. How do we “market” this message of financial literacy?

Drawing on a conversation I had with an accomplished marketer recently, he said that he thought financial education is something that people don’t know they need.  In a case like this it is best to make a comparison to a product that is already used, such as comparing digital cash to cash, or stevia to sugar.  We know that people add more value to society and their communities when they educate themselves.  There is a fair amount of information that supports this notion, we are going to use the most myopic and probably least significant measure of value:  income by level of education, see below.

income by education

(Table by Baum, Ma, Payea,

Just as higher education increases earning power, financial education increases your ability to retain what you have earned.

We are going to leave this post as an open item.  Clearly we have not explored the topic enough to draw meaningful conclusions.  Please comment and share your ideas on how best to incite desire to become financially literate.

Paul Proctor




No es el Taladro lo que Quiere Usted, es el Agujero

Hole not Drill

Tengo que empezar por dar crédito al profesor de Harvard Theodore Levitt como autor del título de este post, ya que es una derivación de algo que él dijo.

¿Sabe que cuando alguien compra un taladro en los EE.UU. el uso medio de la broca es de un total de 12 minutos por el tiempo total de la propiedad? 12 minutos. Acabo de hacer una búsqueda rápida del taladro Dewalt. Lo encontré con un rango de precios entre $99-$439 por un taladro nuevo. En el extremo inferior del rango ($99), basándome en el uso de la broca durante 12 minutos,  su costo por minuto es de $8.25. Este es un gran ejemplo de un producto que caracteriza nuestro comportamiento de consumo masivo. Sentimos que necesitamos productos para hacer la vida más cómoda. Pero, como se ha mencionado en el título, en realidad no necesitamos el taladro, necesitamos el agujero. Entonces, ¿qué pasa si su vecino tiene un taladro? A dos cuadras de mi casa hay un octogenario que se retiró y trabaja mucho con la madera. Él tiene un montón de herramientas y dependiendo del proyecto, puede buscar prestada una herramienta u orientación. Esto es conveniente para nuestra familia. Si no fuera conveniente, o si nuestro amigo no tuviera opciones (herramientas) que necesitamos, podríamos salir y comprar estas herramientas.

Si cuelgo una foto en casa, necesito un martillo. Si cambio las baterías del juguete de un niño, necesito un desarmador. Si mi hijo hace un agujero en la pared, necesito una espátula, papel de lija, y un pincel. Si no tengo acceso a estos instrumentos, voy a sentir la “necesidad” de comprar estos artículos, aunque su uso durante su vida puede ser sólo 10-20 minutos. ¿Tiene sentido ser los propietarios de estos productos? Dewalt cree que sí, al igual que las marcas de productos de mejoras del hogar. Pero cuando tenemos en cuenta a una persona promedio, es difícil justificar la posesión de un taladro cuando el coste por minuto es de 8,25$. De forma alternativa, ¿podrían ser las herramientas compartidas entre vecinos? ¿Y si hubiera una empresa que subsidiará para un miembro del barrio y compartiera con ellos los costos para alquilar las herramientas a otros miembros de la vecindad? Haciendo otra búsqueda rápida he encontrado “Comparte mi Caja de herramientas” una aplicación que espera contribuir a este tipo de intercambio de herramientas. es un portal web diseñado para permitir que las comunidades se organicen en  redes de intercambio propias.

De alguna forma, los últimos 40 años hemos estado convencidos de que era necesario poseer personalmente un montón de cosas. En los años 90 me convertí en un fan de una cita de una película @chuckpalahniuk, “Usted no es su trabajo, usted no es la cantidad de dinero que tiene en el banco. Usted no es el coche que conduce. No es el contenido de su cartera. no son sus p#$%& caquis.” A pesar de que nos guste la idea de no sentir la necesidad de consumir, comprar sin motivo, para acumular cosas, somos productos de una máquina de marketing. Estamos constantemente bombardeados con mensajes de marketing que nos dicen que compremos. Es difícil no pensar, “Necesito un teléfono nuevo,” simplemente por las nuevas características ya que su teléfono actual funciona perfectamente.

La razón por la que estoy hablando del consumo masivo en un blog de educación financiera es que muchos de nuestros problemas financieros se derivan de una “necesidad” de consumir. Vea la tabla de abajo del Bureau of Labor Statistics:


El ingreso promedio antes de los impuestos en 2014 fue de $66,877, y el gasto promedio fue  $53,495 en el mismo año. ¿Qué pasa cuando nos fijamos en los números después de impuestos? Vea la tabla a continuación de la Fundación Peter G. Peterson:

Tax rates

Si tomamos una media combinada de los cinco quintiles (nótese el quintil superior se divide en cinco partes) obtenemos que un 11,448% de la renta se grava. Esto significa que lo que llega a casa del estadounidense promedio son $59,221, y estamos gastando $53,495. Estamos ahorrando aproximadamente el 10% de nuestros ingresos anuales en promedio. Algunos dicen que esta es la regla de oro para el ahorro. Veamos el ahorro desde una perspectiva diferente, ¿cuánto tenemos que ahorrar, y por cuánto tiempo, con el fin de alcanzar la libertad financiera? Esto requiere el establecimiento de metas y puede ser complementado mediante el aprovechamiento de las conductas de consumo de colaboración. Hemos tocado esto antes, pero el “consumo colaborativo es un modelo económico basado en compartir, el intercambio, el comercio, o el alquiler de productos y servicios, lo que permite el acceso por la propiedad.” @rachelbotsman

Si nos limitamos a ahorrar $5,726 al año y obtenemos un modesto interés de digamos el 5% anual, con el interés compuesto después de 10 años tendríamos un saldo de $84,949. En dos años de retiro se agotará el equilibrio. Tras 30 años con la misma tasa de ahorro y de rendimiento, tendríamos $424,198, esto se extiende a nuestro retiro de 8 años. En 50 años y el saldo sería de  $1,324,325, ahora cómodamente puede retirarse (a los 70 años con unos 25 años de retiro). ¿Pero qué pasa si empleamos consumo colaborativo? ¿Qué pasa si en lugar de ser dueño de un coche, podemos reducir este gasto anual a través de plataformas de intercambio de paseo? ¿Qué pasa si se reducen los gastos en alimentos porque participamos en una plataforma de intercambio de tierra en la que comparten las comunidades en el cultivo de alimentos frescos? ¿Qué pasa si gastamos menos en ropa y accesorios a causa de consumo colaborativo? Para nuestro punto anterior, se pueden reducir otros gastos si se consumen artículos en colaboración para el hogar que reciben muy poco uso como consumidores individuales. ¿Podemos llegar a una tasa de ahorro promedio de un 20%? Con el 20% después de 10 años ahorraríamos $169,898  (porque nuestro ritmo de gasto se reduce de  $53,495 a $47,769, estiramos el tiempo de trabajo no más de 3.5 años). Con el 20% después de 30 años ahorraríamos  $848,395 (17.8 años de retiro). Con el 20% después de 50 años ahorraríamos  $2,648,650 (55 años de retiro si vivimos tanto tiempo).

El punto clave aquí es que la participación en el consumo de colaboración puede crear calidad significativa en los cambios en su vida simplemente por el hecho de tener acceso a las cosas en lugar de tener que poseerlas. Muchos de estos tipos de servicios para el consumo de colaboración existen en la actualidad. No dude en ver esta lista de las oportunidades de consumo de colaboración con proximidad geográfica.

Piense de forma creativa sobre el ahorro de dinero. Si no podemos ahorrar más mediante la limitación de los gastos tradicionales, tal vez la clave es aprovechar los modelos de consumo de colaboración.


It is Not the Drill That You Want, it is the Hole

Hole not Drill

I have to start off by giving credit to Harvard Professor Theodore Levitt as the title of this post is a derivative of something he said.

Did you know that when someone buys a drill in the U.S. the average use of the drill is a total of 12 minutes over the total time of ownership?  12 minutes.  I just did a quick search for Dewalt Drill.  I came up with a cost range of between $99-$439 for a new drill.  At the low end of the range ($99), based on using the drill for 12 minutes, the per second cost for the drill is $.14, the per minute cost is $8.25.  This is a great example of a product that typifies our hyper consumptive behavior.  We feel like we need products to make life more convenient.  But, as mentioned in the title, we don’t really need a drill, we need the hole.  So what if your neighbor down the street has a drill?  Two blocks from my home there is an octogenarian that is retired and works a lot with wood.  He has lots of tools and depending on the project we may run down the street to borrow a tool or seek guidance.  This is convenient for our family.  If it were not convenient, or if our friend did not have the options (tools) that we needed, we may go out and purchase these tools.

If I hang a picture in the home, I need a hammer.  If I replace a battery in a child’s toy, I need a screwdriver.  If my kid puts a hole in the wall, I need a putty knife, sandpaper, and a paintbrush.  If these items are not convenient for me to access it is likely that I will feel the “need” to purchase these items while their use over their lifetime may only be 10-20 minutes.  Does it make sense to own these products?  Dewalt thinks so, as do myriad home improvement product brands.  But when you look at ownership for an average person more analytically, it is hard to justify owning a drill when your per minute cost is $8.25.  Alternatively, could tools be shared amongst neighbors?  What if there was a company that subsidized tool cost for a neighborhood member and shared revenue with them to rent tools to other neighborhood members?  Doing yet another quick search I found “ShareMy Toolbox” an app that looks to facilitate this type of tool sharing.  There is that is a web portal designed to allow communities to organize there own sharing networks.

Somewhere in the last 40 years we were convinced that we needed to personally own lots of stuff.  In the 90s I became a fan of a quote from a movie by @chuckpalahniuk, “You are not your job, you’re not how much money you have in the bank. You are not the car you drive. You’re not the contents of your wallet. You are not your f*&%ing khakis.”  Even though we may like the idea of not feeling a need to consume, to buy wantonly, to accumulate things, we are products of a marketing machine.  We are constantly barraged with marketing messages telling us to buy.  It is hard not to think, “I need a new phone,” simply because of new features when your current phone is very much functional.

The reason I’m talking about hyper consumption on a financial education blog is that many of our financial problems stem from a “need” to consume.  See the below chart from the Bureau of Labor Statistics:


The average income BEFORE taxes in 2014 was $66,877, and the average expenditures were $53,495 in the same year.  What happens when we look at the post tax numbers?  See the chart below from the Peter G Peterson Foundation:

Tax rates

If we take a blended average of all five quintiles (notice the top quintile is divided into five parts) we get 11.448% of income is taxed.  This means that the take home pay of the average American is $59,221 and we are spending $53,495.  We are saving about 10% of our income annually on average.  Some say that this is the rule of thumb for saving.  Let’s look at saving from a different perspective, how much do we need to save, and for how long, in order to reach financial freedom?  This requires goal setting and can be complimented by taking advantage of collaborative consumption behaviors.  We touched on this earlier, but “collaborative consumption is an economic model based on sharing, swapping, trading, or renting products and services, enabling access over ownership.” @rachelbotsman

If we simply saved $5,726 per year and earned a modest return of say 5% annually, with annually compounded interest after 10 years we would have a balance of $84,949.  Two years of retirement would deplete the balance.  After 30 years at that same savings rate, and rate of return, we would have $424,198, this stretches our retirement to 8 years.  Push it all the way to 50 years and the balance would be $1,324,325, now we can comfortably retire (at age 70 with roughly 25 years of retirement).  But what if we employ collaborative consumption?  What if instead of owning a car we can reduce this annual expense through ride sharing platforms?  What if our food expenditures are reduced because we participate in a land sharing platform where communities share in the cultivation of fresh foods? What if we spend less on clothing and accessories because of collaborative consumption? To our earlier point, other expenditures can be reduced if we collaboratively consume household items that get very little use as individual consumers.  Can we push the average savings rate to 20%?  At 20% after 10 years we would save $169,898 (and because our spending rate decreases from $53,495 to $47,769, we stretch the non working time further to 3.5 years).  At 20% after 30 years we would save $848,395 (17.8 years of retirement).  At 20% after 50 years we would save $2,648,650 (55 years of retirement if we lived that long).

The point here is that participating in collaborative consumption can create significant quality of life changes simply by having access to things rather than having to own them. Many of these types of services for collaborative consumption exist today.  Feel free to view this list of the collaborative consumption opportunities near you.

Think creatively about saving money.  If we can’t save more through limiting traditional expenditures, maybe the key is leveraging collaborative consumption models.