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Teach your staff to be financially free

The Star Online - Tapping the 50 Plus Market by Carol Yip

By Carol Yip
Saturday September 26, 2009


It is one year after Lehman Brothers collapsed. What have you done differently to improve your retirement plan? Some of you have actually improved your financial wealth.

No matter how your financial wealth is being affected, this financial crisis experience only means that you must be wiser to get back on track to secure your retirement future. So, have you put in place a personal financial system or structure that is resilient against the future financial crisis?

If we have a slight inclination to believe that history may repeat itself – it is a matter of time and the magnitude of it, then it is appropriate to have sustainable education system (that last for generations) to beef up our people’s financial know-how. We need to prevent future (or further) financial damages to our people’s retirement plan especially in an ageing society.

If we are financially literate, we will be able to:

  • Make effective personal financial decision when we read financial documents like brochures, contracts and prospectus with financial technical terms and conditions.
  • Reduce financial feud in the family as we speak the same “financial language” at home.
  • Improve our relationship and avoid financial breakups of money.
  • Improve our mental and emotional well being.
  • Take responsibility and ownership of our financial situations instead of blaming others and having regrets due to ignorance
  • Communicate intelligently with our financial advisers, bankers and fund managers, asking right questions and getting accurate answers.
  • Increase our ability to understand sophisticated financial scheme and a variety of insurance, investment and loan structures.
  • Mitigate the seriousness of a crisis because we know how to analyze the world financial market movements and news with financial jargons.
  • And cultivate moral and ethics for quality financial products and services instead of scams and toxic investment products.

Have we not done enough to educate the public? Nowadays we are overwhelmed with tonnes of information about financial and retirement planning via media. We should be wiser by now. If not, what do we need to do differently and immediately?

There is a serious need to put together proper personal financial education at home, in school and at work place. After all, we live with our family, go to school to get an education and go to work to make money.

Personal financial education should start at school because money management skill that can be taught instead of learning through making costly mistakes. Teaching our kids money management is no different from teaching them the regular school subjects.

But if adding a subject about money in school takes time, how about putting in place a personal financial education program for adults at work?

Is there a difference between human resource training in leadership skills, sales and marketing skills, technical skills, project management skills or communication skills as opposed to personal money management skills? I don’t think so.

I would like to think that we should be smart enough not to repeat mistakes because of greed and short term memory. But being human, it will be great if we have constant reminders at work - how to save our salary to pay off our debts and how invest our salary wisely for retirement. After all, personal finance textbooks tell us to start saving when we get our first salary.

I would also like to acknowledge the fact that market forces will soon stimulate demand for staff to work for longer years. It is inevitable because of rising cost of living, medical costs and lifestyle that is just too tempting for us to spend our money. If companies can help to continuously educate employees to improve personal money management skills including retirement education, then some of these pressing issues of having to work beyond the retirement age will be mitigated to some extend. After all, we work to accumulate retirement money to enjoy life.

For employer, if you embrace the belief in human capital development, then putting in place a structured personal financial education and training program for staff is a logical thing to do, regardless of your company size. Such good intention is as admirable as putting in place a strong message of corporate social responsibility (CSR) towards the public, starting with the employees. Like the saying, “Charity begins at home”. In this case, charity begins at workplace.

Even if personal financial education and training program is not “HRDF (Human Resource Development Fund) approved”, there are more benefits than costs for you to spend some money to enhance employees’ personal financial knowledge. This is because you may just save your employees financial distress and create financial security for them and their family.

More importantly, employees are your credential. They are your word-of-mouth marketing for recruiting good people. There is nothing to lose by having an effective staff development program that teaches employees to be financially intelligent and retire from company experiencing financial freedom. Employees will have good praises for the company. Your retired employees will encourage their children to work for you. Your company will have better bargaining power to select quality recruits and have choices to retain good workers. Employees who are not performing need to beef up if they want to remain in the company.

Be a caring employer. Your employees are helping you to make money. May this idea be a credit to you and your company as The Best Employer of The Year!

Carol Yip is a personal financial coach who is founder and CEO of Abacus for Money.

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