A Broke Person’s Guide to the Economy
When they start talking “Economy” here is your cheat sheet.
You are going to hear a lot about the economy and i want to simplify the terms and concepts you hear often.
Millions of Americans require information to aid their financial decisions, however we are more likely to respond irrationally when the information is hard to understand.
It’s important to ensure there are standards in how we communicate information, to make sure the widest potential audience is engaged in the topic.
Unfortunately, that is not always the case, and the economy is the best example.
The stock market is erratic. Inflation is higher than its been in decades. Gas prices swing wildly, and fears of a recession loom.
And you do not know what any of it means.
Why?
Readability scales are based on how comprehensible content is based on an attained education level. Ex. A 9th-grade education means a readability scale of 9; a 10th-grade education means a scale of 10, etc. With the background on readability, consider the following information;
- 62% of Americans do not have a college degree
- The easiest to understand are sports and entertainment: Sports news is the easiest to comprehend at 9.35, while Arts & Entertainment has a scale of 11.11
- The most difficult to understand is our business and complex topics. Each with readability scales above 12.
- In fact, loan documents, credit card documents, new account disclosures, and investment disclosures are all written at college or post-college levels.
Readability measures the widespread comprehension of topics we consume, and by this measure, many do not understand what they are hearing or reading in business and personal finance.
So again, for many people, you do not know what the talk of the economy means.
It doesn’t have to be this way.
There are straightforward explanations for what you hearing; however, a lack of understanding, diversity, and inclusion in major segments of our society means most people are not aware that their messaging is misunderstood.
Here’s a simple explanation of some common words or phrases you will continue to hear.
Recession:
You are about to hear a lot of doom and gloom regarding the economy; there will be some historical context, most likely in graph format, to show which decade reporters will compare our current recession. Why? A recession is a measurement; if specific measures are down a certain amount for more than a certain period, it’s called a recession.
Have no fear, you have felt this for far longer than the measurements think and its old news. You just want it to be over.
Inflation:
Middle-class people are feeling the impact of price increases for no good reason. More people are feeling like they are working more but earning less because everything is more expensive.
Have no fear, this is how you feel daily so do not absorb extra concern for no reason.
Raising Rates:
More people will experience what it’s like to use alternative financial services. It will cost most for regular people to use credit cards, finance cars, and finance mortgages. Sometimes, it will become too expensive for those not in middle management to maintain their lifestyle.
Have no fear, this is how it feels when anyone has to use an alternative financial service. It sucks and it happens to millions of people who do not deserve it either.
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George Blount coaches individuals on wealth building strategies, money tips, overcoming money blocks, and passive income strategies for the new generation of wealth builders. Sign up for the newsletter and take the Money Mask Quiz at https://moneymask.ck.page/gmblount.
