Financial IQ

By Malcolm Berko

February 4, 2015 5 min read

Dear Mr. Berko: I am 26 and make $39,000 a year, and my wife makes $26,000. We owe $29,000 on credit cards, $47,000 in student loans (we quit school to get married) and $27,000 on two cars and a motorcycle, and we have no savings. Our credit is so bad we can't get a mortgage, and we pay $1,650 in rent.

Both of our families live paycheck to paycheck, and so do our friends and the people we know and work with. We all feel as if we're in a rut, and the government does nothing to help. Good jobs, money and favors go to the rich with connections and friends in government. Most of us believe that the government has rigged the system to favor wealthy families. The government must help the poor and middle class.

I've heard that you give many people good advice. Please, is there any advice you can give to us? I'm scared to retire like our parents. — WN, Lowell, Mass.

Dear WN: Why do you want the government, which can't do diddly squat, to be your sugar daddy? Where are your initiative, self-reliance, self-sufficiency, determination and discipline? Those few nouns are all that separate you from success.

For many Americans, one of the most distasteful consequences of capitalism is the unequal sharing of its blessings. But the most distasteful consequence of socialism is the equal sharing of its miseries. We dream about "having plenty" of money for retirement, but we don't dream about how to make that "having plenty" a reality. Success must be planned and trained for. It won't fall in your lap like a napkin. Disparities among the wealthy, the middle class and the poor have existed for thousands of years. Little has changed except names, faces and places. What have you done to train yourself and prepare for success? If you must assign blame, look in the mirror.

I interviewed a tattooed college student for a part-time job two summers ago but didn't hire the kid after he explained that "1/4 is more than 1/2 because 4 is larger than 2." This dumbing down of America is among our biggest problems. Few Americans understand compounded interest, and fewer can explain the rule of 72 or compute a dividend yield. To be financially comfortable, you must speak the language and understand the process. Only then will you be equipped to plan your future rather than let your future plan you. Most Americans lack the determination, the discipline and the initiative to succeed. So they remain financially ignorant and can't tell the difference between financial fact and financial fiction.

Blaming the government for our wealth and income disparity is like blaming a mirror for its reflection. I remember some Mother Goose wisdom from years ago: "Before you pay the butcher, the baker and the candlestick-maker, pay yourself." And I recall my father telling me 55 years ago, "Be disciplined in your finances, religious in your saving, sparing in your spending, patient in your waiting and wise in your investing."

WN, don't mistake the edge of a rut for the horizon, because at age 26, you can still break the generational mold to enjoy a comfortable retirement. And I'm willing to help you prove that it can be done. Go to the library and check out a book titled "The Richest Man in Babylon." It was written in the 1920s, and there are no big words or fancy ideas. It is a delightful 144-page read, chock-full of easy-to-follow common-sense advice. The book was written by George Clason, who was born in Louisiana, Missouri, and died a man of means in 1957 at his home in Napa, California. Both you and your wife must read it. After you complete "The Richest Man in Babylon," you will understand my dad's advice and may have a bucket of questions. I'll be pleased to answer every one to help you on your way, and you should discuss this book with friends and family.

Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775, or email him at [email protected] To find out more about Malcolm Berko and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at

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