Scrolling your socials nowadays is a surefire way to encounter all the uncertainty surrounding finance. Inflation, recession, crypto—any news seems to be bad news. And, with an estimated 53% of U.S. families investing in stocks, a dip in the markets can mean financial anxiety for millions.
The solution? Financial literacy and understanding the economy.
WITH is a private wellness club specializing in wellness of the mind, body, and spirit. We partner with health and wellness experts to help you learn how to care for yourself and the people you love.
At WITH, we understand financial wellness is as important as mental and physical wellness. As the #1 cause of stress in the U.S., financial worries have a clear impact on mental, emotional, and physical wellness.
In episode 7 of Priorities, our health and wellness podcast, Bryan and I tackle financial literacy with the Investing Tutor himself, Dr. Hans Boateng, aka Dr. Hans. We explore:
- Ways leaders and employees can combat financial stress through financial literacy
- Understanding inflation and market shifts
- How to remain calm even in uncertain times
Meet Dr. Hans
Dr. Hans Boating, aka Dr. Hans, founded the Investing Tutor in 2016 as a resource of financial literacy, especially for underserved communities.
“Once I learned and understood how money works, how to build wealth, it inspired me to begin reading as many books as I could.I just felt called to this business, the investing tutor, to help individuals in my community—specifically, immigrants and minorities, but also women and millennials—better understand how money works.”
Living the anxieties of financial uncertainty, Dr. Hans started his journey as an investing tutor from humble beginnings. Immigrating with his parents from Ghana to the Bronx and sharing apartment complexes with other families, Dr. Hans learned an early lesson about asset management.
“You're told, Hey, become a doctor, engineer, lawyer, nurse, right? Some kind of profession which guarantees that your parents will have a steady stream of income, because most immigrant parents don't necessarily invest for retirement. So, the child is the retirement asset, if you will.”
Jump to today, and Dr. Hans is sharing his knowledge on asset management, crypto, NFTs, and all things financial literacy with CEOs and employees alike.
“I love helping people [learn financial literacy],” says Dr. Hans. “I got all of this information. I'm not gonna keep it all to myself.”
Teaching and Learning Financial Literacy
Dr. Hans launched the first investment tutoring business in the U.S., aka The Investing Tutor, working with underrepresented groups in simplifying the topic of money, wealth building, and helping people in our community understand how to really build wealth.
Before we go any further, we should answer an important question:
What is Financial Literacy?
Financial literacy is the understanding and application of all things finance. Dr. Hans focuses on:
The first step of financial literacy is self-education. As Dr. Hans says, no one can take away what you’ve learned.
The second step: putting what you’ve learned into practice.
Some of the best minds in finance only ever complete step one, learning all the ins and outs of financial markets without ever making a profit. We want you to be fully financially literate.
Daunting, we know. That’s why Dr. Hans is here to help.
Financial Literacy in a Recession
The current economic downturn has every talking head and analyst worried about inflation. This has led to pressures on the U.S. economy, as businesses have been forced to pass on the higher costs to consumers. The result has been a decrease in purchasing power for consumers and an increase in the cost of living, forcing businesses to lay off workers and cut back on spending.
Dr. Hans agrees. “We are more than likely going to see the economy really tighten,” admits Dr. Hans. “And I want individuals to be prepared for that.”
To share how the economy affects us, Dr. Hans hones in on three areas of financial literacy:
- Supply and demand
- Interest rates
- The Federal Reserve
Supply and Demand
Everyone knows about supply and demand, right? But what does it have to do with a potential recession?
“If there's high demand for something, then prices go up, right?” says Dr. Hans. “So everyone wants something. The price is going to go up. Supply is the quantity of that thing that's available. If everyone wants something and supply is low, then it's really going to go out because there's not a lot of it to go around.”
One surprising factor in recent demand: COVID-19.
“COVID caused the U.S. government to print a ton of money. So what?” Dr. Hans shares. “There's more money in the hands of people, which means that now there's greater demand, right? At the same time, because COVID kept us indoors, we are not able to produce more cars or more toilet tissues, because you saw what happened with that.”
So when demand goes up but supply goes down, ECON 101 tells us prices are bound to head the wrong way.
Once we know all about supply and demand, the next topic Dr. Hans recommends studying up on is interest rates.
If demand is skyrocketing while supply plummets, how do markets push demand back down to reach the (fancy econ term) equilibrium price?
“They increase interest rates, which makes borrowing very expensive,” Dr. Hans informs us. “It also causes businesses to slow down, because businesses now can’t borrow more money to grow, so they're gonna slow down.”
Hence, inflation. To reach that equilibrium price and quell rising demand, markets shift interest rates up, causing prices on goods and services to also increase.
But who is in charge here? Who decides the when and why of increasing interest rates?
The Federal Reserve
Aka, “The Fed.” The Federal Reserve serves as the central bank of the U.S., and its main focus is to protect the country against financial crises. The bank uses interest rates to control demand, lowering rates when demand is low and raising them when it’s high.
Okay, so maybe it’s a bit more complicated than that, but Dr. Hans explains.
“The Federal Reserve’s only way they can impact inflation is through the cooling of demand. Because the central bank cannot make more products. They cannot make more services, right? They can't just create things. The only thing they can do is to control the flow of money in an economy, or how easy it is to borrow, or how difficult it is to borrow.”
This is where interest rates come in.
“So the Fed only has one tool,” Dr. Hans continues, “which is, do I make money easy to get or very hard to get? So right now, the way you bring inflation down from the Fed's perspective is to cool down demand, meaning they have to make it so people cannot buy a lot of things. The way they do that: interest rates.”
Dr. Hans simplifies financial literacy for us, because we know it’s a lot more complicated than this. Otherwise, there would never be prolonged inflation or recession uncertainties.
So, the next big question: with a solid intro to financial literacy, how do we prepare for uncertain times?
According to Dr. Hans, the answer is simple: prioritize saving.
Financial Literacy: Make Saving a Priority
Ask around about financial well-being and you will uncover a ton of uncertainty.
As of 2022, 42% of Americans have less than $1,000 in savings. Less than one in four adults in the U.S. feel they are in a good place financially, and even fewer are saving enough for retirement.
Millennials are especially making costly mistakes when planning their financial futures. They are:
- Saving without investing
- Ignoring retirement savings accounts
- Failing to understand and use health savings accounts
- Taking on too much consumer debt
- Not developing a long-term financial plan
In short, millennials are failing to become financially literate. Dr. Hans has a few solutions.
How to Optimize For Your Retirement
Dr. Hans offers a quick tutorial on how to avoid unnecessary losses by prioritizing saving.
“Let’s say you have a retirement account through an employer, say a 401K. Continue to fund that 401k, especially if that employer has a matching contribution. And the reason is you put $4,000 or $5,000 into your retirement accounts, the employer is matching it with another $4,000 or another $5,000. So many people are not realizing that they're getting a hundred percent return on their savings. So even if the stock market is going down, this is the only place where you are guaranteed a doubling of your money just by contributing.”
We get it: making better decisions, especially with your money, can be difficult. But leaving easy money on the table is where investors go wrong too often, Dr. Hans informs us.
How do we make easy money, then? And, more importantly, how do we make easy money work for us?
Dr. Hans has answers:
- Always prioritize saving
- Acquire revolutionary assets, like real estate and crypto (don’t worry, we’re getting to it)
- Employ the 10-Year Method
- Invest extra or disposable income
Always Prioritize Saving
If you’ve ever seen that old Alec Baldwin movie, Glengarry Glen Ross, you remember the scene where he yells at his salesmen to remember, “ABC: Always Be Closing.” Dr. Hans should have his own: ABS. Always Be Saving.
“Ultimately the people who have savings or capital to be able to purchase assets after they've been depreciated are the individuals who will ride that exponential wave of growth. It is the best opportunity to position yourself for generational wealth. It really is.”
Dr. Hans wants you to come away with one specific lesson on financial literacy: acquire assets.
“If you focus on acquiring assets, you're going to be incredibly wealthy. No one told me this when I was young, that acquiring assets is the secret to building wealth, and it transformed my life in all honesty.”
Simply put, Dr. Hans describes an asset as “something that's either going to grow in value over time, or it's something that's going to make you money.”
But what is a revolutionary asset? Dr. Hans identifies a few:
- Real estate
- Tech stock during the dotcom boom
A revolutionary asset, essentially, is any asset that can generate generational wealth, usually in a short amount of time. The goal is of course to acquire revolutionary assets in their most profitable timeframe—before the bubble bursts, so to speak—but Dr. Hans offers a word to the wise.
“Nothing great comes without some kind of challenge or some sacrifice or some tough experience. And if you want to position yourself as a first or early adopter of a technology that could potentially change and transform the world and build significant wealth, you have to be willing to stick through.”
The 10-Year Method
In 2022, things aren’t looking so hot for your wallet. Inflation is driving that grocery bill up, gas prices are through the roof, and crypto is supposedly going the way of the dinosaur.
Time to start burying money in the backyard? Not so fast, says Dr. Hans.
Applying a ten-year outlook to your finances, Dr. Hans advises, can provide higher yields.
“In 2032, if we're looking back now, let's assume there is a 99% chance an asset makes it, and there's a 1% chance that it doesn't, right? And we're looking back, what is it going to look like for the people who are, you know, nibbling or dollar-cost averaging or getting into this asset over the next three to seven months? It's going to look incredible. It's going to look great. It's going to look life-changing.”
If it’s that easy, then what’s the issue?
“Many of us are just looking back at the past 10 years. That's why it looks like the people who came in earlier are beneficiaries. There's an opportunity for us, and the strategy is, you are not committing everything into this asset. The strategy is—the way I personally view it—if an individual has anywhere between a 5 to 10% allocation in the asset, they are going to do incredibly well.”
Changing up the view, Dr. Hans advises, is key to financial literacy.
Invest Disposable Income
WITH preaches the abundance mindset, but we know what it’s like to have a tax return burning a hole in our pocket, or disposable income already spent before it even hits the account.
Dr. Hans wants you to think about that disposable income as something more: retirement funds.
By investing even a portion of your tax return each year, you can build a healthy retirement account for you and your loved ones. It’s ultimately up to you to decide where to trust your money, but Dr. Hans has a suggestion.
Financial Literacy: The Big Crypto Question
Any talk of investing and financial literacy is going to come back to the Bitcoin-sized elephant in the room. Like stocks and gas prices, crypto hasn’t been immune to all the bad financial news lately.
So why is Dr. Hans predicting a big future for digital currency?
Remember that asset he mentioned, the one 99% likely to make it to 2023, do incredibly well, and become life-changing? He was talking about crypto.
Dr. Hans provides three reasons to keep an eye on crypto markets as a major asset:
- Long-term outlook. Buy the dip, so they say. With crypto’s first foray into inflation, Dr. Hans predicts a big rally for the next decade.
- No gatekeeper. Unlike stocks or real estate, you don’t need thousands or even just hundreds of dollars to get into crypto. A couple bucks and an internet connection can start your investing.
- U.S. backing. With the White House commissioning reports and China blocking digital currency, U.S. investors already have a leg up in profiting from crypto.
There are no surefire investments out there. Investing for the long-term, though, is the safest move, and Dr. Hans sees crypto investors reaping the rewards of seeing it through.
“The best time to have gotten into real estate is not now. Most of the appreciation has happened, right? The next best asset that we can own at those comparable prices is crypto. And that's what I want people in our community to understand. This is our opportunity, and if that 99% of success of this crypto asset class or ecosystem does become a reality, we are going to reap the benefits tremendously.”
Keeping Financial Literacy a Priority
With all the uncertainty in stock markets, inflation, cryptocurrency, and international finance, financial literacy is a priority to maintaining wellness.
Going forward, what is the one step to better financial literacy?
“Please educate yourself. I will not tell you what to buy, but I will educate you about what's available, and you make the decision that fits you and your family, so that we can just all build generational wealth.”
Some Dr. Hans-recommended resources to get you started:
- The Investing Tutor
- Rich Dad, Poor Dad – Richard Kiyosaki
- The Richest Man in Babylon – George S. Clason
If you want to hear more about what Dr. Hans had to say about financial literacy and how he is helping investors navigate the recession, increase financial literacy, and build generational wealth, you can check out the latest episode of our podcast on Spotify, Captivate, and Apple Podcasts.
Plus, you can check out more articles from us in our health and wellness magazine:
- How to Reset When Avoiding Burnout is a Priority
- How to Lead a Team: When When They Shouldn't Be a Priority
- How to Make Decisions, an Expert's Take
P.S. Love the podcast? Want to get in touch with us? You can contact us here.