Blog #33 – The Problem Is Lack Of Financial Education

One of the major reasons people don’t become wealthy in our country is lack of financial education, and Wall Street, banks, and financial institutions want to keep it this way.

Financial education, or how money works, is not taught in our schools and the knowledge that we have, if any, has been transmitted from our grandparents to our parents and from our parents to us. We were told to pay cash for things we wanted and to study hard so we could get a good job that took care of us by providing a nice pension, good benefits and a gold watch when we retired. They didn’t explain to us, because they didn’t understand themselves, how compound interest, leverage and velocity of money work, and how banks make money.

Financial education transmitted by our parents worked relatively all right up to the 1970’s. Pensions were the responsibility of our employers and they had to worry to be sure that pensions were properly funded so employees would receive in retirement what they were promised. In the 1970’s, pushed by Wall Street, banks, financial institutions and most employers themselves, the government came up with qualified plans and among them the 401(k) plan. They were created to replace pensions and they were investing in Wall Street mostly through mutual funds.

Employers loved the idea that 401(k) plans transferred the responsibility of planning for employees’ retirement from them – using pensions – to the employees themselves; employers didn’t have to worry anymore about properly funding employees’ pensions.

Wall Street, banks and financial institutions were delighted in pushing high internal cost mutual funds to millions of employees who had no idea of how the stock market worked.

Employees were enticed to believe that 401(k) plans were good for them because now they could invest in the stock market and they could delay paying taxes on the amounts they contributed to the plan. Anything that could give them immediate gratification (not paying taxes now) and could delay pain (paying higher taxes later) had a tremendous acceptance in a population that lacked financial education and that wanted immediate gratification in anything they did.

It is a sad reality that most 401(k) plans would not provide their owners the retirement benefits that they expect and it is even sadder that there is a way to increase your wealth and which require just patience and discipline, but most people don’t know about it. The alternative is called Infinite Banking; it is an economic strategy that uses as its key tool a specially-designed dividend-paying whole life insurance policy.

If you would like to learn how you can grow a substantial amount of cash that you have access to at any time without penalties, is unrelated to the stock market, and will generate income that is not included in your tax return, visit our website at / or feel free to email us your questions at or call us toll-free at 1-844-443-8422.

Isis B. Palicio, LUTCF, MBA
Pedro A. Palicio, MBA, Ph.D.
Infinite Banking Concepts® Authorized Practitioners

We are experts in designing high cash value dividend-paying whole life policies.

Call Now Button