Carl Sagan, Grimsby and the 3 reasons for why we’re misguided when we “understand money&

Carl Sagan was one of the first.

Alan Alda (he of M.A.S.H and The West Wing) has an in depth interest in this.

Brian Cox, Neil DeGrasse Tyson and (the relatively unknown but equally brilliant) Hal Sosabowski spend a lot of their time involved in this pursuit of late.

I am of course talking about…

The pursuit of public education in the field of Science

Many of us would have heard Carl Sagan’s “Pale Blue Dot” video or Brian Cox looking thoughtful in various locations across the globe whilst explaining the universe or chatting with Dara Ó Briain about the universe.

I believe the fact that we have individuals committed to helping us understand more about how our world works is great. It also shows that complex concepts can be explained so simply that even an ignoramus like me can understand it!

It’s also incredibly important that Science educators challenge and debunk dangerous myths. The simple fact is that the more we understand about our world the more potential we have to make informed choices (instead of ill informed ones).

Helping all of us understand science is a good thing. It’s supported by among others mainstream media (although mainly via the BBC), Government and academic institutions….and it’s important.

However one thing confuses me. Why don’t we  intelligently invest the same amount we focus on the education of science on helping people understand a subject which has a genuine power (both long and short term) to make a positive impact on loads of our lives..

The pursuit of public education in the field of Money

As a nation we do currently engage in the pursuit of public education in the field of Money but I believe we are like my Dad, before the days of Sat Nav systems, taking the family on a trip to Skegness and he ended up “accidentally” taking us to Grimsby….

Well meaning but ultimately misguided.

Here are the three main reasons why I believe that to be the case…

1. We work on the assumption that more information is a good thing

Great scientific educators do a couple of things really well. They tell simple stories and use relatable analogies. Brian Cox used sandcastles to explain time travel and author Bill Bryson told stories of really ‘eccentric’ scientists (in this book) to bring complex concepts to life.

Now here’s a challenge….

Try finding a simple story or a relatable analogy on the Money Advice Service website.

I believe that the Money Advice Service website serves a specific purpose. It is great for finding information if I’m looking for it. It serves as an incredibly reliable resource for a range of financial topics….

….but it doesn’t excited us. It doesn’t inspire us. It doesn’t make us want to visit.

However more information on any financial subject isn’t really what any of us want.

We live in an information culture after all and therefore we’re not short of access to information. However what’s still relatively rare (and therefore in demand) is…

Translation of this information into concepts we understand. Concepts we care about. Concepts we want to know about.

It’s often argued that money is too complex a subject to be explained simply. Really? More complicated than quantum physics? I really don’t think so! Do you?

If you want to see an example of “money explained simply and powerful”  take a  look at the Wonga model. I don’t like the business they’re in but there’s no denying they have built a business around making the process simple.

2. Our state funded financial education system is run by individuals (on the whole) with mainly bureaucratic or regulatory experience

Individuals who work in regulatory or government organisations tend to be pretty good at what they do. The main responsibility of a regulator is to minimise risk and the main responsibility of a bureaucrat is to ensure processes run smoothly.

However there’s the danger of individuals with these talents running organisations committed to communicating powerful messages.

Regulators and Government organisations (we’re talking the civil servants not the politicians) don’t “Sell”.

They communicate via statement

That’s fine when you’re regulating and running government however when it  comes to engaging people you need to ‘sell’.

You need to engage passionately and with personality (like Cox and Sagan do and did).

You need to do things differently (like DeGrasse Tyson does on his appearances on American chat shows)

You need to (and here’s the kicker) take a few risks…

Interestingly the lions share of the  “executive team” within the Money Advice Service have a breath of experience within both the public and private sector . That’s a positive sign.

However when you’re funded via a regulator and your chief executive has been recruited from the civil service I’d suggest that the natural focus will be on risk mitigation and not on potentially riskier and slightly more succesful ways to “Talk Money” powerfully and passionately.

3. There are mixed messages everywhere

I’m writing this after watching a channel 4 documentary on Pensions.

Whilst it made some fair points it seemed to imply that property is an infallible retirement investment. If you’re reading this it’s likely you understand there’s risks and rewards of both which need to be explored. However this wasn’t the story which was told.

Now I appreciate that the media have no obligation to provide a clear picture. Private media’s job is to sell papers/tv ads/radio ads.

However if we could tell more compelling stories about the power of financial knowledge we would be more likely to be able to communicate more compelling stories in partnership with the press.

The ones who tell better, more relatable, more simple stories are the presenters of property programs who do engage with peoples lives but only influence individuals who now assume that “Bricks and Mortar” are the only way to go when in reality we know that whilst property is usually part of the puzzle it”s never the full picture.

So, we receive mixed messages (ones from the media, ones from the government and others from the financial planning community)….but that’s a good thing right?

Not for most people….it makes really important financial decisions way too confusing and therefore easier to either defer or ignore.

In Conclusion

I actually think the concept behind the money advice service is a great idea.

(I know there are issues with names and meanings but I’m going to leave them to one side for now)

I’m also committed to playing my part in helping people understand the world of money in my own little way(by getting actively involved in the Institute of financial planning’s “Financial Planning Week”)

However does it represent good value?

Their  2012/13 annual report states that 2.1 million people used the service at a net cost of 77.1 million.

That’s a cost of £36.71 per individual ‘helped’….

…that seems quite expensive and I’m convinced we can do much much better.

By doing simple things,

By Telling Stories,

and by engaging the media, the profession and government.

What do you think?