Navajo husband, wife team on a mission to promote financial literacy
FLAGSTAFF, Ariz. — Financial literacy and education is not common ground in many Native American communities and this often hinders economic progress for many tribal members across the country.
According to data compiled by the FINRA Investor Education Foundation and as reported in a 2017 report titled, “Race and Financial Capability in America,” Native Americans have higher levels of financial fragility and distress than many other groups in the country.
The report further indicates Native Americans are less likely to learn about managing finances from their parents and they demonstrate lower levels of confidence in managing their money.
Jason Allison, co-owner of DreamCatcher Financial Strategies LLC based in Phoenix, Arizona, agrees there is a serious lack of financial education amongst Native Americans. To help, he has made it his personal mission to get out into tribal communities and educate as many people as he can.
Jason, 42, and his wife and co-owner, Stephanie, 36, are both Navajo tribal members and their mission to educate is a personal mission. They were recently in Flagstaff to teach their financial literacy class and to recruit new clients.
Their company provides financial literacy and strategies for everyday people. They can help with creating a financial needs analysis, establishing a college savings plan, rolling over 401(k) plans, annuities, life insurance, debt management, wealth management, tax advantaged savings, final expense plans and individual retirement accounts (IRAs).
Their clients include government entities, corporate employees, small businesses, corporations, retirees, educational professionals and families.
Jason said their company does a lot of work with every day people and they primarily focus on Native American communities.
“We strive to create comfortable consultation to every day folks without an intimidating or pushy environment,” he said. “We strive to provide honest and ethical services to the families we help.”
Jason explained they started two and half years ago and they now boast more than 260 clients, mainly in the southwest area of the U.S.
Their clients vary greatly. He explained about 95 percent of their clients are Native Americans and a majority of their clients are people who are Generation Xers and millennials.
In addition, they have many working class people, professionals in the health care industry, teachers, tribal employees and casino/gaming employees that seek their guidance of financial services for savings accounts, retirement, life insurance policies and debt consolidation.
“We also have a big retirement community that we provide services to,” he said. “A lot of our market is geared toward baby boomers that are in retirement as well.”
“It’s mind-blowing to see how many people lack financial education,” he said. “It’s not anybody’s fault, the resources and the education is not there.”
As an example, Jason explained many Native Americans work and have 401(k) retirement plans, other retirement plans, various insurance policies through their employers but they have no idea what they are paying for and many do not know how they work.
There are various factors that can impact these financial plans.
Jason said he knows many that were impacted by the stock market crash in 2008 when the Dow Jones industrial average fell more than 700 points and it had major negative impacts on many personal 401(k) plans. Many people that were near retirement experienced great losses.
The impacts of the stock market crash were horrible for many.
In an effort to prevent future losses and threats, Jason often recommends the 7702 plan which is an IRS tax code meant for life insurance and retirement plans opposed to the traditional 401(k) plans that are volatile to the stock market.
As a stark difference to the 401(k), the 7702 plan accumulates deposited cash within the policies and it can later be used for retirement or any other needs tax free. He sees more positives in the 7702 plan versus the 401(k) plans because 401(k)s are “tax later” plans or tax-deferred savings plans that allow taxpayers to postpone the paying of taxes until the money is withdrawn at retirement.
Although both different, he did not entirely rule out the use of 401(k) plans but he did say they are good retirement plans if you know how to use them to your financial benefit to diversify your portfolio.
“A lot of people don’t know that those kinds of accounts and those kinds of laws are out there because there is not enough financial education out there,” he said.
Jason said they have found about 99 percent of attendees did not know how a 401(k) works.
“A lot of people can benefit from this education,” he said.
“Most employers offer it and say, sign here and that’s it,” he said. “A lot of people don’t know the advantages and disadvantages.”
“Nobody ever explained what benefits were,” said Stephanie. “We use Indian Health Services so we don’t know what benefits are.”
For Stephanie, it took years for her to learn the ropes about benefits by working in the human resources and accounting industries before co-owning DreamCatcher. She learned about health insurance, dental, vision, life insurance and retirement which were all foreign concepts to her at one time.
“I thought, ‘If this is foreign to me, I’m sure there are a lot of Native Americans that feel exactly how I feel,” she said.
This thought to help educate others motivated her to learn more about financial literacy.
“I’m motivated to keep learning all this information and do what our másánís and cheiis, our grandparents, told us to do — to go out there, learn what we can off the reservation and bring it back, then share it with our people and help them continue to grow and help them continue to know life in the future,” she said.
“I feel that is our real motivation behind our business,” she added. “I really care about our Native communities. It motivates me to get up and learn something new and to help more people each day.”
Jason agrees and said there is a lot of work and education that needs to be done to get Native Americans up to speed.
Financial literacy is important in order to function and compete in a world filled with financial decisions. One must have the capacity, skills, knowledge and access to financial information. Each day, people are faced with the ability to make financial decisions, even as simple as a parent deciding if car fuel is more important than buying groceries for the next few days.
“My goal is to expand to the Flagstaff area so that we have people who can provide financial education for communities,” he said.
More information about DreamCatcher Financial Strategies is available at (480) 415-5764 or by email at firstname.lastname@example.org.