MSG Presents: Eric On Money- "My Parents Didn’t Teach Me Sh*t About Money - Challenging Notions of Financial Literacy and Race"

This episode of "MSG Presents: Eric On Money" features a conversation between Eric McLoyd and his homie Scott. The discussion revolves around financial literacy, challenging the stereotype that certain races inherently have more financial knowledge. Scott, a white man from a working-class background in Chicago, shares how he lacked financial education growing up and had to learn about money management the hard way.

He talks about accumulating debt during college and early adulthood and eventually gaining financial literacy through self-education, working with a financial advisor, and staying curious about economics and finance. 

The conversation highlights that financial knowledge often correlates more with class and access to resources rather than race. Scott emphasizes the importance of actively seeking financial education, questioning assumptions, and using trusted sources to build a solid financial foundation.

The episode aims to challenge myths about racial differences in financial literacy and stresses the need for persistence, humility, and ongoing learning in personal finance.

Chapters

• 0:00 Introduction: Breaking the Money Myths
• 3:14 Scott’s Story: A White Guy from a Working-Class Background
• 12:14 Debt, Budgeting, and the Road to Financial Literacy
• 20:24 Class vs. Race: What Really Shapes Financial Knowledge?
• 30:24 Learning the Hard Way: From Debt Consolidation to Investing
• 50:24 Humility and Growth: Overcoming Financial Illiteracy
• 1:00:24 Final Thoughts: Take Control of Your Financial Journey

Transcript

[00:00:00] I am here with a friend of mine's name, Scott, and we're gonna have a really important conversation and we've titled this episode. My parents didn't tell me Ish about money, and you all know what ish means. So. We felt it was important to have this conversation I was chatting with with Scott, and I'm gonna let him introduce himself, however he feels comfortable, most comfortable in a second.

But I wanted to have this conversation because many times black people, particularly, sometimes we assume that people from other cultures. Have just all this financial literacy information passed down to them. And many times it's just not the case. And so we're gonna get a chance to hear from Scott and see what his experiences were.

But before we do that Scott, tell us a little bit about yourselves. Introduce yourself. Well, my friend, thanks for [00:01:00] having me on. I know we've been talking about this topic lately, and actually over the years we've talked a lot about it and, and of course it leads into the thrust of what you're trying to achieve, which is financial literacy for folks.

And yeah, you know, I'm in my late forties. You know, I am white. I grew up in the Chicago suburbs in, working class family. My dad was an electrician, my mom was a substitute teacher. And I went to state school and I had to pay for it myself through working during college. And yeah, I mean, on the topic, you know, I remember I.

When I told my parents that I was interested in going to Syracuse University when I was in high school, 'cause there was a program I was interested in, and it was like this harsh slap of reality when they said to me, well, how are you gonna pay for that? [00:02:00] Right? 'cause you know, I was a kid, I was probably a junior in high school.

I was ignorant as to, you know, the. Cost of college, which, you know, back then was a lot more reasonable. And I said to myself, well, that's a good question. You know, I, I started working as soon as I could when I was, you know. 15 in the summer of the year, I turned 15. You know, because I realized that, you know, there were certain things that I wanted that my parents either couldn't or wouldn't provide me.

And, you know so I, I started working at an early age and had to work my way through school. And yeah, I, it, it. It is just one of those things, right? Like you open the show with talking about perhaps some misconceptions. You know, the reality is, is that most of us, no matter [00:03:00] where we come from or you know, what the color of our skin is in the United States, we, we come from, you know, humble means most of us.

Yep. And, and you know. The vast majority of those of us who, you know increase our financial wherewithal, I think have to sort of do it on our own. And along the way, you know, we do make a lot of mistakes, but, but the key is to, to learn from those mistakes, you know? Absolutely. And I like the fact that.

You kind of explained what your background was, and I, and I wanna just say to the listeners, this is what I'm not trying to do in this episode. I'm not trying to do one of these things where it's like, oh, you know, if you're black, you don't really have any excuse not to be financial literacy. Look at this white gentleman.

He's financially literate. You know, I'm not, that's not what this is. This is about, this [00:04:00] is really more so about. Understanding what other people's experiences were. I think we all know that certain cultures we have a little more of a challenge overall, but I, the point of this episode is just to really shine a light on, although some things might be largely true, they're not absolute right and I really want to get.

Into what you did to actually become financially literate. Because as you mentioned, it wasn't just, it wasn't a thing where, oh, my skin is this color. I'm just automatically financially literate. A lot of this information we depend on our parent, we would want our parents to pass down if they don't know it.

We have to go on our own journey. So what did you do? To become financially literate. And I will say to you all I know, Scott, he is very much financially literate. We would have some really great conversations. So I know that he is actually financially literate, but what [00:05:00] I didn't know, I didn't know until recently maybe what his actual family history was around that.

So I just wanna know, what did you actually do to become literate? So it's a good question and I think that I. The learning process began with debt, and I think that a lot of us, are the same in that way. You know, like I said, I did work all throughout college. However, I did have to take out a little bit of, of, of student debt.

You know, luckily for me, those were federal loans. They weren't private loans, so the interest rate was reasonable, if I can recall. Mm-hmm. And then, you know, after I finished undergrad, I moved to the city and moved in with some, some friends and, you know. We were living in the north side of Chicago and having a good time.

And, you know, I was gainfully employed, but, you know, I started spending a lot of money [00:06:00] and you know, I, I got myself into some credit card debt, which had carried over from my undergrad experience. And, you know, one day I realized that, you know, I wasn't making enough to, to get out of the red. And you know, through the help of a friend of mine who was one of my roommates in college who became a financial advisor.

He was very young at the time. He was new in the job. However, he knew enough to point me in the direction of a, like a debt consolidation firm. And, and so I, I consolidated a few credit cards. I think it was two or three. It was no more than three. And, you know I, for the first time in my life realized that I had to create a budget.

And, you know, sort of the, the, the fulcrum of that budget was, you know, those [00:07:00] debt payments, right? And, and getting those, getting that, that credit card consolidated, credit card debt paid off as well as the student loan debt. And I did that. And, you know, as I continue to work, I continue to earn more money, you know and you know.

And, and, and by, by the nature of my job, I started to learn more about economics and, and finance. You know, I was a corporate paralegal. And I started to, you know, sort of self-educate. I, I remember a very deliberate thing I did once back then, and, you know, I was probably. My, yeah, I was in my mid twenties, so I, I subscribed to the Economist magazine.

Wow. In your twenties? Yeah. Okay. Yeah, in my mid twenties. Yeah. And, and I think maybe it's because I had picked it up in, in, in an airport once, [00:08:00] you know? Okay. Because I was just curious and, and I thought, wow, you know, like if I read this. You know, I didn't read it cover to cover, but you know, I, I read a lot of it and, you know, that was, that was early internet days, right?

So this was like early two thousands, and so it was pre smartphone, so I feel like it was during a time where we could spend more time concentrating on, you know, reading a magazine or concentrating on reading a book, you know? Mm-hmm. You know, I, it was, there was just list distractions back then in terms of like information, you know, and so yeah, so I became a regular subscriber to the Economies magazine and I started to learn more about finance and economics.

Now that doesn't necessarily relate to personal finance, but you know, it was, it was something yeah, for sure. And then, you know, I started to invest. And, you know, [00:09:00] I, and, and you know, this is something that has continued to this day. You know, so it's been, you know, over 20 years of investing. I, I just tried to learn as much as I possibly could, and I still do.

You know, I'm constantly learning about, you know, investing my, my money and, you know. Mm-hmm. My, my, my wife and I are our family's money and, you know, in my late twenties, I realized that I had, you know, after I had, you know, satisfied all my debts and I had accumulated some capital, you know, I realized that, you know, I probably need a, an advisor.

Mm-hmm. And, you know, I did, I did do that, you know, but I, but I, but I never left it at that, you know, I, I, I, I was always. Learning and always seeking out information because, you know, I feel like it's just one of those things where, you know, if, if you want it done right, you gotta do it [00:10:00] yourself in a way, you know?

Right. And so, not to say that, you know, folks shouldn't rely on their advisors, but I guess my personality is such that as I kept learning more and more, I, I just realized that like. I'd be better off, you know, doing it myself, you know? Right. And, and, and you know, it also involves, you know, not just like.

Reading and listening, but also involves like speaking, you know to people like, all right, well what do you do? You know, or speaking to people like you who like, have experience in the industry and, you know, I'm lucky I have a couple of other friends in the industry. Mm-hmm. You know, and, and you know, it's one of those things where are, you have to, you have to sort of.

Be aware of what's going, not only what's going on with your money, but like what's going on, you know, in the greater world. And, and because you [00:11:00] can't just remain static and stagnant with, with your money, right? You have to adapt, you know? And so yeah, I just feel like. Financial wellness and financial literacy is a consistently evolving and changing thing that we will be better off if we are, are, if we accept that and, and, you know, we, we pay attention.

You know? Absolutely couldn't agree with you more. And as you were sharing that, I wondered about something. So I've been around you a lot and so I know. From my perspective, you're not a person that, I feel like when you look at somebody that race is the first thing that comes to your mind. Mm-hmm. So this might sound like a strange question, but I was wondering when you kind of realized that you needed to get some financial literacy and you didn't kind of know some things that you needed to know, did you kind of feel [00:12:00] like you, like based on your race, that you should already know some of these things?

Was there maybe any embarrassment? Like how, what was your awareness about those around you from other cultures and how that played into your thoughts about where you stood? Well, I think that, I think for me, in my experience, you know, it was more about class, right? Okay. Because, you know, I was a, a kid from a.

A working class family. You know, my dad was a union electrician, you know my mom was a substitute teacher. My grandpa was a union electrician. You know, my grandma was a teacher, you know, and, you know, I lived in a mixed suburb, a racially mixed suburb, but also like a, an economically mixed suburb, you know?

Mm-hmm. Like I had friends who were certainly better off than me, you know? Okay. But then I also had friends that weren't as well off as me, and of course I had friends that, you know, kind of fell. [00:13:00] Somewhere in the, in the middle, lower middle, like me, you know, and, and, and you know, my awareness of of, of that.

I, I think, you know, it became apparent to me when I got to high school. I started to understand class better, right? Mm-hmm. 'cause you know, it just becomes more obvious, like, well look at those people wearing those clothes and driving those cars, right and Right. And they don't have jobs, you know? Right. I mean, I worked all throughout high school too.

You know, and I drove crap cars. Okay. Even, even, even through college, you know I mean, some really bad ones that would be a fun podcast just by itself. But but yeah, you know, and then, you know, like I said before, I got to the point in, you know, in my early to mid twenties where I was like, all right, I'm in the red.

And like, if I don't make some changes, like I'll never get out of it, right? Mm-hmm. And so, yeah, I mean, did I [00:14:00] think, you know, like any normal human who has a challenge to overcome in this way, like, oh, like I wish that like my parents had more money and I wish that, like I didn't have to like be, you know, practically solely responsible for all of these things.

Of course. Right. I think that's. Plus I was a kid, you know? And so I think that's a normal emotional reaction for a young person. But nevertheless, you know, I, I ha you know, I, I had to make a decision to like, turn it around, you know? I don't know. Does that, does that answer your question? Like. It does. I, I really like the fact that you're really honing into class because that's something that I don't think we get into enough Sometimes.

It's like, yeah, I'm this race and this person's that race. But yeah, we might both be upper middle class, for [00:15:00] example, and that upper middle class standing might come with. This certain set of expectations, or maybe they actually got financial literacy versus somebody that's middle class or lower middle class, or someone that actually might be considered indigent, you know, or poor.

And I, I think we should probably get into that more in these money conversations, because I do think even in the black community, if you're in a different, in a higher economic group. You're more likely to get the information. And here's, here's why. I'll say that partly because of something you said earlier, which was, yeah, I knew some financial advisors, you know, like, it's like, who's around me?

I'm not doing that well, but I still got a couple of people around me that I can access to get this knowledge and resources that I need. Whereas somebody else, they may not even have that level of access to these people. Yeah, I mean, [00:16:00] that's a great point. And I think a lot of that has to do with class, frankly, you know?

Yeah. Especially these days, you know, especially these days. You know, like I remember my, I made reference earlier to, you know, one of my old college roommates who, you know, right outta college, you know, this is late nineties, chose to become a financial advisor and, and. You know, I, I'll, I'll never forget, like his first sit down with me to try to like sell me on some things.

And like, I'll never forget, that was the first time I had heard of the concept of dollar cost averaging. Oh, okay. And he explained it to me, you know, and then it stuck, right? Mm-hmm. It stuck. And then, you know, I think along with that concept, which is an important concept that we all need to understand.

Is the, is the understanding of compounding, right? Sure. Which is again, another foundational concept that we all need to understand. And so, yeah, I mean, I was lucky in that, you know, I was around him, [00:17:00] you know and that, yeah, like had I not gone to college, I probably wouldn't have been around him, you know?

Right. But you know, back in the, you know, back then, you know, advice and information was, you know, not as easy to get, you know? Yeah. Anybody now with a smartphone can get advice and information like at a snap, you know? But, you know, I think that, and I think this goes back to something I was saying earlier about, you know, when I was talking about, you know, the ability to concentrate on, you know, a text, you know, like a, an actual, like physical text.

I think sometimes these days, you know, whether we know it or not, like we either avoid getting the information or, or we immediately start drowning in it because we don't really know where to go. 'cause there's so much out there and a lot of it is garbage. And so, [00:18:00] you know, there's a, people don't have the confidence and they don't trust, you know, and so then they just kind of.

Avoid it, you know? Yeah, for sure. Yeah. I definitely see that happen. There's so much information out there, it, it can get confusing. I know when people come to me, a lot of times they're very well versed in different influencers online that talk about money and this, that, and the third, but they're still not able.

To make that connection between what that influencer is saying and what's going on with their actual financial situation. And I also feel like, because there's, like you said, so because there's so much information, how can you like process it all? You know what I mean? It's like you have to kind of piece together this and it's like you're you got a bunch of different pieces of fabric and you're trying to sew together a coat for yourself.

It is like all these different pieces of fabric make it difficult to sew the coat 'cause there's just so many different things that you have to work with. So I definitely [00:19:00] think that's a problem. One other thing I wanted to ask you about, and I'm really enjoying this conversation, is very important. If you're just tuning in, this is Confessions of a six Figure Earner.

I'm your host, Eric mlo. I'm here with buddy Scott, and we're talking about. The fact that certain cultures, we assume that they got all this financial literacy and all of this knowledge, and it's not necessarily the case. I wanted to ask you, so now that you are actually financially literate and we were just talking about social media, who are some of the people in the media that you feel based on your financial literacy are worth listening to?

Well, I think it starts. First with, for me, and I think this is a healthy approach, is you start with the institution, right? So the, the source, the, the institution that is, you know, the baseline source [00:20:00] of the information, right? So, you know, in this example, you know, some sort of a financial publication, right?

So earlier I mentioned The Economist. Now while that isn't, you know, necessarily a financial literacy or a personal finance publication, you know, from time to time that topic is covered, you know Bloomberg, you know again, a broad scope of information yet, you know. Personal finance is an element, you know yeah.

Kiplinger, you know, you name it. Right. So I think for me it always starts with a reputable source. And then from there, perhaps it goes to, you know, perhaps individuals, you know because I think that, you know. You know how it is with anything, right? Like, you know, someone's reputation, you know, you know can be associated with the [00:21:00] institution with which they're associated.

And so, like, you know, I, I feel, feel like for me, like that is, that is worth opening. It's worth opening that door. If I know that person is associated with that particular institution, that doesn't guarantee that I'm going to find that person or that what that person's saying, valuable or trustworthy. But nevertheless, it's a starting point.

That's a good point. And yeah. And you know, obviously. And we, we talked about this earlier, like sometimes it can be personal relationships, you know, sometimes like, like you are an example of that. My other friend that I've referenced to, sometimes we have the fortune of, you know, being able to. Have personal relationships with people who not only are in the industry, but are financially literate themselves.

You know? Right. I mean, you know, you, you, you encounter it probably, I don't know, maybe daily. It's just, [00:22:00] you know, when you're, you know, talking to other people or, or if you're, you know, in social situations, you know, people are always. Curious to know what other people are doing with their money, right?

Mm-hmm. And I feel like those conversations are valuable, whether or not, like the information is good, right? Because mm-hmm. Okay. Yeah. Yeah. Because you know it's worth it to listen, right? But when you do listen, always be skeptical, right? Right. Because it's your money, right? It's like, it's like your money and your health, right?

Always listen to, to what people have to say, but be very skeptical, right? And, and you know, I'll give you an example. The other day, you know, I was, I was, I had met a, a, a someone through a friend. And I don't, the conversation between those two started on like, you [00:23:00] know, you know you know, basically being a landlord, right?

And. You know, the, the, the, the, you know, challenges of, you know, managing an investment property, right? Yeah. You know, a residential property. And, you know, I just made the comment, I said, well, for me, I, I, I'd rather just put the money in the market and not have to deal with that hassle, you know, particularly if it's a long-term investment.

And then. The, the woman who I just met, she's like, well, what do you mean in the market? Right? And, and then, and I said, well, you know, the way I like to do it, or you know, broad index funds that are cheap, you know, and preferably ETFs, you know, and then she's like, well, tell me more. You know? And because you know, to her ears.

Like in the market. Well, her, she probably very quickly thought, well that could mean a lot of different things. Right? Sure. And I might not be comfortable with a lot of those things. Right. So, but at the same time, she obviously was considering, or had been [00:24:00] considering investing some of her money in, you know real estate, you know, but, and, and, and so she was like, oh, well.

There obviously is an alternative, and so I want to hear more. Now, whether or not she bought what I was selling, I don't know. Right. But nevertheless, it was worth listening to and considering, right. Because then perhaps it will po you know, pose more questions, I think. I think part of this process of taking care of your money throughout your life, you constantly have to question.

Question, question, question, question. Definitely. Right? Yeah. It's very important 'cause, 'cause we live in a dynamic economy and it will only continue to become more dynamic, not only domestically but globally. And so therefore I should always be questioning like what we're doing and why. You know?

Absolutely. Those are some solid jewels you're giving up and I really like your [00:25:00] strategy of paying attention to the institution. You mentioned a few of 'em. You mentioned Kiplinger, which I'm, I'm excited that I'm one of the newest freelance contributors for, but you, you made, you made a point that I think is interesting to think about it.

It's like this is a publication with, it's been around. They've got an audience and so yeah, if someone writes an article, you can pretty much be sure if the information has been vetted and it's a reliable source. But then you also talked about, Hey, you know what though? If I meet somebody at a party or we go out for lunch, that's valid as well.

As long as I'm able to take it with a grain of salt, keep an open mind and, and think about, Hey, you know what, this may or may not be right and exact, but it's gonna help me either way to have this conversation. Yeah, I mean, look, it's like anything else, right? You, you, you're out in the world. You receive a piece of information that might be useful to you or important to [00:26:00] you, right, that could affect your life.

Well, what do you do with that piece of information? Well, you test it, right? And how do you test it? Well, you test it through research, and that research could be asking other people about it, right? It could be, Hey, what do you think about this? Or it could be, Hey, I'm gonna go. To a reliable source, right?

Like an institution and, and see what that institution and source has to say about it. Yeah. And you know, it's like anything else, right? It's like you're gonna buy a car, right? You're talking to somebody on the street, Hey, I got this car, I really like it, and here's why. And then you're like, huh, you don't just immediately go out and buy the car.

What do you do? Well, you go to like, you know, you Blue Book, or you go to Car and Driver or whatever, and then you're like, oh, well that might sound good. Then what do you do? Well, you actually go to the dealer, right? And you look at it and you touch it and you feel it, and you [00:27:00] get under the hood and, and whatnot, right?

So I think with, with personal finance, it's the same thing, right? Like you gotta, you've gotta know and understand and try to make the effort to understand where you are putting your money. You know, what is this thing right? Because you will be better able to sleep at night that way, and you will feel like you have more control over your destiny.

Definitely couldn't agree more and, and a lot of times sometimes we jump straight to the investing conversation, but even in budgeting, one point I always like to make about financial literacy is. It's all the things that we're talking about today, but what it's not is just information. And I think sometimes people get confused about just knowing a lot of information and [00:28:00] actually being literate.

Literacy to me is awareness of your own situation. So if I'm talking to Scott and he's talked to me about an advanced healthcare directive, you know, something based. Estate planning, he explains that. I look it up. All of that's great. It's cute. Oh, now I know what an advanced healthcare directive is. But to me, if you're literate now you go back and say, do I have an advanced healthcare directive?

Does my mom have one? My dad? Like it's, you're using the information. It's an illuminating activity that you use to now go take action. That's true. Literacy. Just like when we talk about reading, somebody's not literate just because they can read the words. You have context, you have inferences that you have to make.

There's all these different things that constitute actually being literate when you're looking at words, and it's the same thing with financial literacy. [00:29:00] So yeah, I appreciate all of these points and I hope that we've been able to. As we wind down kind of dispel a little bit of the myth that people from certain cultures absolutely kind of wake up and just have literacy.

It's definitely not the case. I think we've concluded that maybe on a class level there's a little more access that's, that is there. But even that is not absolute. And so you have to kind of do the work of becoming literate. Scott, do you have any final thoughts that you want to give people about this conversation?

Yeah, I think that it's very beneficial for our constitution, right, on our stress levels. If we, if we decide, look like I'm gonna take control. Of my situation and I'm going to really seek to [00:30:00] understand. Right. Because that's the, that's the final point of, of the literacy, right, is, is the understanding, right?

And it's okay if I don't know things. It's okay if I don't understand things, but I'm not gonna be ashamed about that. And I'm gonna, and I'm gonna find out, you know and. And I'm gonna find people who I trust and sources that I trust to, you know, help me along the way. And, and, and, and for people to just remember, look, you gotta be patient.

You gotta be patient and you gotta be persistent. And it'll come, you know, like, it, it'll, it'll definitely come, but you know, many of us. Like I alluded to my, my situation in the past, like many of us start the journey like in the hole, so to speak, right? Mm-hmm. And you know, it takes courage and effort to dig yourself out of the hole, right?

But then remember, [00:31:00] once you dig yourself out of the hole, it's just a continuous, you know. Process, you know, I, I slow and steady wins the race, you know? Absolutely. It's the, it's like this tortoise in the hare, right? So that I, that's a, that's a huge thing for me is, is patience and courage. You know? I love it.

And that makes me think of something that I'll say is my final thoughts, which is a lot of times with six figure earners, there's a lot of pretending. So we don't want to admit that we don't know the information or we're not acting on the information because we have people around us who may look up to us because we have a high income, and it's assumed just like there's assumptions made on race, some assumptions based on class.

There are assumptions just strictly dealing with income that, hey, you're a six figure earner. You already know. So I think we have to have a level of humbleness. [00:32:00] As a six figure earner to say, you know what? I don't know, but I'm committed to learning. I'm committed to doing all the things that Scott was just talking about, but I do have to humble myself first so that I can actually know versus looking like I know, and I feel like that's one of the most important things we have to do.

So Scott, I want to thank you for coming on. I also want to thank you for your, your wisdom and helping me put this show together.

Thank you for coming on and I hope that you can come back and join us again one day. It's been a pleasure, my friend. I would love to, and I wish you the best of luck with this endeavor, and I wish all your listeners the best of luck as well.

Thank you very much, sir.