Author Topic: Need financial literacy video for mildly retarded man  (Read 599 times)

Poundwise

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Need financial literacy video for mildly retarded man
« on: May 21, 2020, 08:31:33 AM »
I have a young friend who is very mildly retarded and living on his own in public housing and food stamps.  He recently received his covid check. He has never seen so much money together at one time, and has already started spending it on plastic toys, eating out, etc. I would guess he is like a perpetual 12-14 year old in terms of ability to care for himself and emotional maturity.

I fear that as states feel the crunch, marginally able bodied single men like him will lose their benefits.  He has variously worked as a security guard and grocery cart worker, but seems to have trouble keeping jobs because of his lack of control (he was also an abused child.)

Is there a video series that could be shared with him about saving and life skills?

Thank you!

nickinak

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Re: Need financial literacy video for mildly retarded man
« Reply #1 on: May 21, 2020, 08:33:23 PM »
Here is one on the index card finance planning.  It is a decent, simple explanation.  There is a book describing the plan that sells for about $20.  In my opinion the book doesn't really have anything more than the video.


https://www.youtube.com/watch?v=JdUKhgW1gOo&t=361s

Nerdscatchfire

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Re: Need financial literacy video for mildly retarded man
« Reply #2 on: May 22, 2020, 08:00:23 PM »
Thanks for sharing the link to that video nickinak. I read the book last fall and I agree that the book doesn't do much more than the video. I also agree that this video is a great place to start for beginners and I will definitely recommend it to my friends that are new to this.

My biggest issue with this type of standard investment advice though is the low savings rate recommendation. The 10% savings rate is really not enough, IMO. If your 10% went only to retirement and nothing more, that's 51 years until retirement (if it's well invested)- minimum age 69. For a <a href="https://www.businessinsider.com/social-security-life-table-charts-2014-3">20 YO male</a>, the likelihood that they will die before reaching age 70 is 19.9%- that's a pretty significant probability that they won't live long enough to reach retirement.

In reality though, some of your savings goes to unexpected costs and saving for large purchases like a down payment on a home. Then on top of that already paltry savings rate that the experts recommend, the video acknowledges that it's difficult to save 10% of your income and don't bother trying if you make $20,000 per year for example. This is ridiculous. If people aren't able to save 10% because their income is too low, that is an emergency. At this rate they are likely teetering on the edge of financial ruin. Saving less than 10% is not a sustainable way to live. At this point they need to invest in learning a more marketable skill if they really can't afford to save more.

In reality this standard advice is setting people up for a pretty sad life IMO. And there's no warning or explanation that if they just saved more, they could retire earlier. Maybe I'll just include the "shockingly simple math" article with any recommendation- to balance out the advice a bit.

nickinak

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Re: Need financial literacy video for mildly retarded man
« Reply #3 on: May 23, 2020, 07:17:57 AM »
I certainly agree about the limited savings level.  I used the video to "teach" some young co-workers about the most basic concepts of getting control of their finances.  I don't see the video as a final goal but rather a starting point that is less intimidating than most other videos or books.

Another tool I used that was very eye opening for several of them was just a compound interest calculator.  There are several free apps that have them.  I think many people have no idea what compound interest is or how it applies to debt or investing.   My audience was people from mid 20s to mid 50s.  Just showing them the video planted the seed.   Helping them download the free app gave them something as a take away that reinforced the learning and maybe helped one or two go further. 

Nerdscatchfire

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Re: Need financial literacy video for mildly retarded man
« Reply #4 on: May 23, 2020, 01:00:55 PM »
Agreed, that's definitely another thing I see people misunderstanding. They are too afraid to invest their money wrong, so it just sits in a bank account and loses it's value. A friend of mine was saying that he has 2 years of expenses just sitting in his bank. I think he's been saving it for 10 years. It makes me sad.

Frankies Girl

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Re: Need financial literacy video for mildly retarded man
« Reply #5 on: May 23, 2020, 05:22:09 PM »
She doesn't to my knowledge have any videos, but this book may be a good read for someone in the position to guide an at-risk person. If the friend is operating at the level of a 12 year old (especially regarding impulse control) then they really should have some sort of appointed social worker/guardian to help them. That this person does not is very sad.

https://www.amazon.com/Rising-Strategies-Broke-At-Risk-Those/dp/151874043X

She is a member here, but she's taken a break from actively participating for a very long time.

Poundwise

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Re: Need financial literacy video for mildly retarded man
« Reply #6 on: May 30, 2020, 12:13:29 PM »
Thank you so much for these resources!  I'm afraid that the video is probably too complicated for my friends-- a lot of million dollar words like "epiphany" and "chronicle".  He doesn't have a 401k.  Mutual funds or investing, probably too much for him.  But I have other friends whom it may help.

I'll look for videos directed at kids and teens. Hopefully it is not too late to persuade him from spending all his money yet on toys. He has been buying all these WWE replica belts... I had no idea until just now that they are over $150 each!!!

The book looks very useful; I have downloaded it and will hope for the best.

maizeman

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Re: Need financial literacy video for mildly retarded man
« Reply #7 on: May 30, 2020, 12:35:44 PM »
My biggest issue with this type of standard investment advice though is the low savings rate recommendation. The 10% savings rate is really not enough, IMO. If your 10% went only to retirement and nothing more, that's 51 years until retirement (if it's well invested)- minimum age 69. For a <a href="https://www.businessinsider.com/social-security-life-table-charts-2014-3">20 YO male</a>, the likelihood that they will die before reaching age 70 is 19.9%- that's a pretty significant probability that they won't live long enough to reach retirement.

...

In reality this standard advice is setting people up for a pretty sad life IMO. And there's no warning or explanation that if they just saved more, they could retire earlier. Maybe I'll just include the "shockingly simple math" article with any recommendation- to balance out the advice a bit.

I suspect the standard advice leans pretty heavily on social security income in addition to personal savings in order to enable retirement. The shockingly simple math post doesn't factor in social security (since it's really not a big factor for those of us planning to retire early). Which is why a lot of people retire in their 60s despite saving only 10%, or even less than 10% of their lifetime earnings.

For a person earning $20,000/year, social security is going to be a pretty substantial part of any plan to retire at conventional retirement ages (60s). Keep in mind that if a person earned the inflation adjusted equivalent of $20,000/year for 35 years they'd receive ~$13,000/year in social security income.

Assuming they paid no net income tax and saved 10% of their income, this hypothetical person's spending would be about $18,000, so they'd only need to make up the difference of those two ($5,000/year) from personal savings or spending reductions once they no longer had to work. That $5,000/year could come from withdrawing 4% /year from a stash of $125,000. Saving up that stash by putting aside 10% of their income ($2,000/year), would take about 25 years (assuming 7% return).

But the bad part about counting on social security for such a large chunk of one's retirement income is that there is really not as much incentive to save more since even if you up your savings by what can feel like a lot to a normal person (going from 10% to 15 or 20%), you still likely won't be in a position where you feel confident retiring before hitting either 62 or more likely full retirement age.