Life is a journey whose destination varies for us all. Where we end up in life is often the product of our decisions, choices and chance. There’s not a single path to follow and many people find themselves becoming financial nomads along the way.
A financial nomad works and earns wages to support their families, but forgoes the assistance of a financial services provider to help guide their journey. They choose to do this either because they don’t have access, or they don’t fully understand how important a financial service provider is to their overall financial health.
For financial nomads, the world of finance and investing can seem like a towering Aztec temple whose sides are steep, with a sacred yet intimidating appearance. Often, they don’t feel they can access the opportunities contained within because they fear the costs and learning curve it takes to enter. This is a belief that billions of people around the world share, and they’re robbing themselves of the reliability and stability that institutional financial services can provide.
Oftentimes, financial nomads use institutional financial services only when it’s the only option they have remaining. Negative experiences, the perception that they won’t have enough assets to receive service and the costs of financial services keep them from looking towards the future and putting money into savings accounts and retirement funds. This is to their detriment and keeps them reliant on even more expensive services, such as payday loans, which can cause considerable damage to their financial health.
The distribution of financial nomads isn’t even around the world. Industrialized nations with higher incomes tend to have fewer financial nomads than within developing countries. Clearly, income, age and education level plays a big factor in this, but it is also important to note that there are wide variations between urban, suburban and rural areas where access to financial services vary.
As studies show, those under age 25 and above 65 are the least likely to have financial services accounts. Further, those living in cities are more likely to have accounts than those living in rural communities. Then, of course there’s the gender difference, which shows that fewer than 40 percent of women have their own financial services accounts.
The world is full of financial nomads, but there are ways you and I can help make financial services more inclusive and accessible for these individuals, which I’ve discussed in depth in my upcoming book “Financial Inclusion at the Bottom of the Pyramid.” I invite you to ‘like’ my book on Facebook, to join the conversation on financial inclusion, as well as to be the first to know the release date of my book.