In January the Senate confirmed WWE co-founder and former CEO Linda McMahon to head the Small Business Administration. The vote was nearly unanimous and one of the less controversial cabinet picks of the Trump administration. McMahon has been pursuing politics since 2009, with two failed bids for the Senate in Connecticut.
It seems worth mentioning that McMahon donated $6 million to the Trump campaign, although this seems to be status quo with his cabinet picks. Trump and McMahon have done business since the ‘80’s and have been personal friends for a long time as well. Unlike some of Trump’s other cabinet picks, McMahon has a background that easily translates to her current role. She and her husband founded WWE, which is now worth over $1.5 billion.
Entrepreneur reported in January that McMahon talked about the importance of financial literacy for the up and coming generation. Understanding how economics works and how to take care of personal finances such as balancing a checkbook, McMahon says, will be key to bringing the next generation of entrepreneurs onto the scene.
Low levels of financial literacy could be holding back entrepreneurs across all age levels. The National Financial Educators Council measures financial literacy across the United States, and the most recent data has both encouraging and discouraging news. The financial literacy score of 15 to 18-year-olds sits at 61.24%, which is a relatively low number. However, this number represents a steady increase in financial literacy since 2012, the earliest data set displayed on the website. While McMahon is right to place emphasis here, we can be encouraged that financial literacy has been steadily rising.
When financial literacy is broken down into age groups, the average overall score for 15 to 18-year-olds is 60%. That number jumps to 68% in the 19 to 24-year range, 72% from 25 to 35, 73% from 36 to 50, then 77% beyond. It’s easy to understand that the more we use financial products and manage our own finances, the better we understand them. But the frustrating part about this statistic is that many would-be entrepreneurs don’t have the financial literacy they need until they are 50. That represents about 30 years working for someone else before being empowered enough to become an entrepreneur.
While it’s definitely still worthwhile and perhaps more appropriate than ever to become your own boss in your 50s, wouldn’t it be great if we could shift these numbers so that more people had the financial know-how to start their own companies in their youth? If we can reach out to young people and help them gain the education they need to make smart financial decisions, we can empower an entire generation to become innovators, thinkers, and entrepreneurs.
Financial literacy is most definitely the cornerstone of success in any business model. It’s good to see more emphasis being placed on financial literacy at the highest levels of the SBA.