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Health & Fitness

John Knox and the Wealth Gap

Much political noise reverberates relative to the “wealth gap. ” Economist Paul Krugman in the New York Times decries an “arbitrary and inequitable distribution of wealth and incomes” in American society. President Obama posits inequality as a target for government activism. No matter how you address income disparities, education is a factor.

 John Knox (1514-1572) was a Scottish clergyman and reformer, the founder of the Presbyterian denomination. In his day, only the rich were educated. Most of Scotland’s population was poor and illiterate. Ignorance bred superstition and immoral behavior, he thundered. Believing that everyone should be able to read God’s word in the Bible, in 1560 he detailed a plan for “the vertue and godlie upbringing of the youth of the Realm.” He saw education of rich and poor alike as a responsibility shared by the family, the school, “and the Kirk.” That same year the Scottish Parliament made education a national priority.

 The Wall Street Journal on 3/16/2013 reviewed a report from the National Marriage Project entitled “The New Unmarried Moms.” There is a clear link between unmarried childbearing and educational achievement, which in turn impacts social mobility and lifetime earning power.

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 We live in a knowledge economy. Education enhances job, career, and earning prospects. How do birth and marriage statistics enter into the equation?  The Journal article indicated that among college graduates only 12% of first births are outside of marriage. For those who did not finish high school, the poorest segment of our population, 83% of first births are outside of marriage. A number of those unmarried mothers go on to have additional children with different fathers. The children, caught in a “maze of step parents, siblings, grandparents, and homes,” are more likely to battle emotional, social, and academic challenges, including poor grades, behavioral problems, drug abuse, and perpetuation of a cycle of out-of-wedlock births and dependency on welfare programs.

 As in any situation, there can be hope. I was raised by my grandparents until age 10 and they taught me to read at a young age even before I entered public school in Flushing, NY. Education was emphasized at an early age. As an advisor I have helped young unmarried women make financial decisions, including getting a will and sufficient term life insurance to fund education and care of the child by guardians in case of the mother’s death.

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 New parents should have wills that specify who would raise children in the event of a disaster that orphans offspring. One million dollars or more in face amount in low-cost term life insurance is reasonable given the costs of raising and educating a child. Well-thought-out trust provisions should be included.

 Beyond “what if?” planning, education planning is critical to a child’s future success. One study projects future private 4-year college costs at $409,913 for a newborn; $305,884 for a 6-year old. Don’t wait until a child is 10 before you start funding 529 College Savings Plans. The “time value of money” counts!

 The Autism Society of America pegs autism as the fastest-growing developmental disability; one of every 88 children will be afflicted. Parents of children with physical and learning disabilities face added costs for health care as well as education. Challenges with public schools have some parents opting for private educations at some point from pre-school through grade 12. Educations rank as one of a family’s greatest costs. Higher costs mean fewer choices; almost half of families cut spending to afford college, recognizing a strain on their “saving for retirement” budgets.

 Young people must recognize that in a knowledge-centric world with growing competition for good jobs, education and personal development counts. If not college, certainly vocational training. Someone has to know how to fix things, whether hair, high tech equipment, cars, or your heating system when it blows up on a cold holiday day.

 John Knox was the father of the Protestant work ethic, which motivated my grandfather—education, hard work, and thrift. Not a bad formula for today. I owe Clyde Rea, my Scottish heritage grandfather, a debt of gratitude.

 Lewis Walker is President of Walker Capital Management LLC. and Walker Capital Advisory Services, Inc., a Registered Investment Advisor (R.I.A.) Securities and certain advisory services offered through The Strategic Financial Alliance, Inc. (SFA).  Lewis Walker is a registered representative of SFA which is otherwise unaffiliated with the Walker Capital Companies. ▪ 3930 East Jones Bridge Road ▪ Suite 150 ▪ Peachtree Corners, GA 30092  ▪ 770-441-2603 ▪ lewisw@theinvestmentcoach.com

 

 

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