'Getting Started on the School System' PT III: Importance of Math

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It appears every decade or, so the educational system goes through some sort of re-invention process as if they are going to magically improve, simplify, and make a better way. Efforts to introduce a “Better Way” date back to the 1800’s so as with most things history repeats itself over and over and we still have some of the same problems as before. I don’t want to waste your time reading about my opinion of the current school system and all the issues surrounding it and why maybe things are the way they are, because that would be an entire article in of itself. But, the idea that you can take all people, from all races, walks of life, and social economic groups and lump them into one box that suggests this is exactly what everyone needs to survive and thrive is ridiculous!

Mo Money

So why is it that every time we change curriculums and core competencies we don’t see real measurable results? So, let’s look at just a couple of recent changes over the last couple of decades starting with the 2001 “No Child Left Behind Act”. This Act affected elementary and secondary education grade levels K-12 which included Title 1 provisions for “Disadvantaged” students. (I remember they announced our kids school was going to become a Title 1 school and we pulled them out, of concern it would be a “No Child Can Excel Act” because they’d have to wait for everyone to catch up.) The premise of this Act was to create higher standards and improve the outcome in education. Obviously, testing was involved to measure and assess basic skills, so the Fed’s threw out the carrot of Federal Funding for schools to receive dollars and the State’s were responsible to develop their own standards. Of course, this Act failed and by 2015 it was replaced by the “Every Student Succeeds Act”. Chuckling as I even type that; Sounds like “More of the Same” Act to me.

But wait…. there’s more because we Do NOT Fail, we only solve problems. During this time, we the people decided that Common Core would become the new Standard, and this new way of learning would lead everyone to victory in education. So, in 2009, 48 states initiated Common Core Standards. Enticed by Obama that same year as a Race to The Top Grants with $4 Billion up for grabs. Now because of this new Standard our educational platform is more fragmented then ever. Arizona repealed the Standard while other States have adopted it, others have dropped it, and some never opted in! Wow confusing? Sure, is for me. Why do these reforms always fail? Is this a teacher problem? I think NOT! Teachers are the victim’s unfortunately that are set up for failure every time and it’s not their fault. Teachers are expected to teach without a system in place for them to learn how to teach them. With Common Core teachers are once more being asked to UN-learn the old approach and Learn an entirely new one on their own. Furthermore, the reality now, is teachers are forced to teach a curriculum that only focuses on the test scores. Seriously? Why can’t we just follow the good old fashion KISS principle in education? In my opinion, because Money is the driver, and Common Core was sold as a “Bill of Goods” sort of speak for that $4 Billion. It was designed as a “Better Way” to teach and reduce the gaps between Black & White, as well a Rich & Poor.

I understand that we are in a global economy and in a race to be #1 at everything including educating our kids! It’s disturbing for me to read in the NY Times that a “2012 study comparing 16-to-65-year-olds in 20 countries found that Americans rank in the bottom five in numeracy. On a scale of 1 to 5, 29 percent of them scored at Level 1 or below, meaning they could do basic arithmetic, but no computations requiring two or more steps.” Wow, that’s alarming but maybe the answer to why we live in such a financial illiterate, and fiscally irresponsible society. So maybe drawing dots and counting them or breaking simple addition problems down into complicated forms makes more sense as Common Core might suggest (48+31 for example would become 40+8+30+1). Hmm, I think NOT!

As quoted in contributing partner Daniel Gombrich’s post https://www.asbelite.com/blog/dont-get-me-started-on-the-school-system according to the Employee Benefit Research Institute (EBRI) the average IRA for an individual over age 70 is roughly $219,000. The blog post talks about the financial realities that are faced with a nest egg like that. If you’re cool with $13,140 in income per year for retirement from that then you know the magic number. Just don’t forget to add Tax or should I say, “subtract for tax”! lol

Why the Failure?

What’s your worth? Better yet what’s your rate? These are things that everyone should know and see a position report on daily whether they are an employee or a business owner. It boils down to the very basic of basic arithmetic to succeed in life. There are four basic operations of arithmetic. The first two, adding and subtracting in my opinion are the ONLY must have knowledge to succeed in life of the four. (You’ll see why I say that a bit later) The other two as I learned it back in the 70’s and 80’s are simply “shortcuts” for adding and subtracting, known as multiplication and division. Why is it that we live in an innumerate world these days? Innumerate definition is “without a basic knowledge of mathematics and arithmetic”. Forget about the mathematical elitist that exist out there spouting off about as many types of math as there are colors that may exist. I believe that even the mathematical elitist’s have forgotten how to use basic arithmetic functions. Although that may sound like a bold statement it’s certainly evidenced by our society and culture.

We live in a world of want it now at whatever the cost. Even if it breaks us. The idea of paying yourself first, planning, or creating even an emergency fund is thrown to the side with the lust of stuff! Why aren’t we educating with simple addition and subtraction basic functions like balancing a checkbook, or better yet creating a budget. Here’s my income for the month, here’s my expenses for the month, is that positive or negative? Let’s elaborate on the thought of this budget concept and being upside down. Most everyone you talk to or read about will tell you “you have an expense problem, lower expenses”. That simply isn’t true, it’s the reverse of that coming from experience. You don’t have an expense problem you have an income problem! Increase your income, problem solved. From experience, I had a business that failed, things in the industry changed etc. but bottom line I couldn’t generate enough sales as a result. At about 30 years old I was a couple million in the hole with debt service for the business and couldn’t support my existing personal run rate of around $25k per month. Long story short we kept cutting expense after expense to the point where our run rate was around $4k per month and we were still broke. We didn’t have an expense problem, we had an income problem. Unfortunately, our culture and society replaces’ the income problem often with debt. That’s how financial disasters are created, and lack of ability to ever prepare or plan.

Solution

Everyone should learn to tally up all their assets (simple addition), tally up all their liabilities (simple subtraction) the sum is equal to their worth. Every day, every week, every month, every year people should be striving to increase that number. For hourly wage earners it’s very easy to know their rate, it’s so much per hour, salaried wage earners can easily figure out their rate. Small business owners can easily figure out their rate, as with people that are in commissioned sales. Knowing your rate and increasing it as much as you can will help with everything we’ve talked about. It’s all simple arithmetic at its core. Shouldn’t we be educating our children around the types of math that are most important.

In our business dealing with financial optimization I get asked one question all the time, repeatedly and again. “When can I quit working and retire?” The answer is simple: “When you have more income coming in than you do expenses. That’s when you can retire!”

I struggled with certain abstract math concepts when I was younger, and I remember asking a very wealthy wise man for some mathematic advice. He gave me two extremely valuable pieces of advice that have stuck with me from my youth that I’ll share with you.

“All you really need to know how to do is to add and subtract so that way you’ll know if you are making or losing money.”

“You’ll know that you’re making money if at the end of the month, all the bills are paid and there’s money in the bank.”

If you are interested in learning more about Financial Optimization which includes creating guaranteed income streams you cannot outlive, growing money tax deferred, taking income tax free, eliminating any penalties and restrictions to access your money, and no restrictions or limitations on what you can contribute, let’s connect and set up a time to chat!