Financial Literacy

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April is National Financial Literacy Month. Jerry Guttman of Guttman Financial Group is president of the local chapter of the Society of Financial Awareness, or SOFA. He will talk about how people can take better control of their finances.

Ted Simons: April is national financial literacy month, and here now to talk about ways to become more financially literate is Jerry Guttman of Guttman financial group and President of the local chapter of SOFA, the society of financial awareness. Good to have you here and thanks for joining us.

Jerry Guttman: Thanks.

Ted Simons: Financial literacy, what does that mean?

Jerry Guttman: Well, in 2004, President Bush put something in place every year, and in the month of April we have the ability to try to reach out and help people more often, and it's a particular time. I think that the financial literacy has been an issue for years. But people don't learn enough or know where to turn. The same person that's retiring after 30 years at a company, is not trained what to do with social security, where to go, debt, first-time home buyers. There's limited training.

Ted Simons: What are folks most illiterate about?

Jerry Guttman: Think about this. You buy a car. You walk into a dealership, and they help you, and they -- you buy a payment. Besides that, then, you might own a home. You have a retirement plan, your retirement plan is something that you need to be involved with. You need to understand the differences and what a mutual fund is and how it works, what it's going to be, it might be the largest investment you have in your life. And the training is limited. The education is very limited for people, and it's sad, quite frankly. Some of my largest institutions I work with, I help them to teach their staff to teach the employees what the difference, how mutual funds work and how does it affect them.

Ted Simons: The housing crisis, was that a lesson learned for many?

Jerry Guttman: It started forever ago, and it will continue. Today, you can still buy a house with almost nothing down. I don't know -- it's unfortunate, but if you walk in, they have programs through the Federal Government for 3%, and that's wonderful, but people, if you sign that document, do what you need to do, and everybody got hurt. Everybody got hurt. I feel bad for the small business owner. I feel bad for the small employee that goes to work with two jobs, three jobs, and they want to put bread on the table and they are having challenges because they are not taught.

Ted Simons: And who teaches them? Who teaches the first time home buyer? Who teaches the first-time landlord that wants to get into buying property and renting it out? Who is there to instruct?

Jerry Guttman: Unfortunately, nobody, in many cases. You want to go into a house, you go to a model and there is somebody that's going to sell you that model. Years ago, you could buy a house, and it would be four and five times what you were supposed to buy. That's what the bank said and the banks don't care. You are a number to a bank, an underwriting decision to a bank. But I always say that as parents, we should teach our children, but in many cases when I do a presentation, I do seminars regularly. And I always ask for people to put their hands up and say, and tell me how many of your parents taught you how to be financially -- fiscally responsible? And one out of 30, one out of 50 will put their hands up. And it's sad because people don't know where to turn.

Ted Simons: So, let's talk about retirement now, because I know that that's big and you mentioned it's big, and social security is big. Most common mistakes that you see from those entering retirement years.

Jerry Guttman: Taking money at age 62.

Ted Simons: Interesting.

Jerry Guttman: If you lose your job and you don't have the financial wherewithal, when social security came out in August of 1935, so 80 years old this August, it was designed for people in poverty. It was designed to take -- to give people income at 65, they resigned it and reworked it many times, as they normally do, but you are giving up the biggest part of the growth of social security if you, if you don't take it at 62 and wait until 70, you will get almost an 80% growth in your money and the income you are going to get. People don't go to social security offices and sit with the folks there. And if you take a husband and wife, both take their social security at 65, and one of them suspends, the husband, for example, suspends, he'll have a bucket of money that he could take any time before he's 70. There is so many choices out there that people don't know.

Ted Simons: Small business owners, common fiscal mistakes they make.

Jerry Guttman: Don't spend enough time teaching. SOFA, I've been with SOFA now for - I've been teaching and doing seminars for 25 years, I will come into any company, a church, an organization, and I will do seminars for free. I do lunch and learns, and I will teach people the fiscal responsibilities and the basics. We call them financial -- there is financial blunders and financial fitness, and it's the basics on, for example, I tell people to cut up their debit cards all the time. Because they don't balance. Cut up the card because it's a convenience to buying something. You never balance your debit card. I tell people, take a -- put it in a drawer for 30 days, and don't spend it for 30 days and see how much better or how much money you have in the bank that you would not have spent. And I will always get people to call me and say, oh, my God, it's remarkable how much money I saved.

Ted Simons: But, it seems like folks, let's say, they are buying a house, or they are buying a rental property, or they are a small business owner, all these people that we have talked about. And they have to know a bit before get into this. They cannot be completely illiterate.

Jerry Guttman: Many of them are. Forgive me, do you ever read your mortgage note?

Ted Simons: I did once when I had to sign the papers.

Jerry Guttman: Most people don't know what they are signing but they sign it. They do, just because they figure the person, the professional that's helping them from the title company is giving them the right direction. They trust. I'm not suggesting that people at title companies are not -- that they are doing anything wrong, but they assume that everything is ok. Leasing a car is the worst way to buy a car. But the auto companies aren't going to tell you that.

Ted Simons: Well, you are renting the car, basically.

Jerry Guttman: You are renting a car, and you give it to them with no equity. We need to -- we need to go back and live with less. Ted Turner said years ago in an interview, how did you get to where you are? Understanding his family owned the business before him, he said I did with less when I was younger. We should all do with less.

Ted Simons: That question, we're running out of time but, Millennials, younger folks, are they a little more literate than maybe the boomers were back then?

Jerry Guttman: They are.

Ted Simons: So they are, they are kind of getting this better than the boomers?

Jerry Guttman: They do, but many boomers are getting better. And unfortunately, as I used to, when I first got in the business, I used to go to people's homes, and there is nobody that's doing that any more. And people are buying products through their car insurance companies, and these are not investment people and, I'm not knocking them. They're not investment people, they do car insurance. Find a financial planner that will sit with you and help you understand the choices, I do that all the time with people. And I do financial plans for free. Somebody comes to me, I will teach them. I get pleasure in doing that.

Ted Simons: And the society for financial awareness is a place to go for folks who are listening right now saying, I think that I'm illiterate.

Jerry Guttman: Absolutely.

Ted Simons: Ok.

Jerry Guttman: You go online and go to or Call me, it's my pleasure to help.

Ted Simons: All right, it's good to have you here and thank you very much for joining us.

Jerry Guttman: Thanks for having me.

Ted Simons: Tuesday on Arizona Horizon, we will look at a pivotal U.S. Supreme Court ruling that could make same sex marriage the law of the land. And we'll find out about a Phoenix project that helps start businesses that make products from waste. That's at 5:30 and 10:00 on the next Arizona Horizon. That is it for now. I'm Ted Simons. Thank you very much for joining us. You have a great evening.

Jerry Guttman:President, Society of Financial Awareness Local Chapter;

Phoenix Mayor Greg Stanton

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