Few leaders in the world of finance navigate the gap between novel financial innovations and established financial literacy with the finesse of Edmundo Rodriguez Iga, the Chief Financial Officer at Marengo Foods. Originating from Mexico and relocating to the United States for his higher education, by the age of 23, Edmundo had acquired an MBA, a certificate in international business, and an undergraduate degree in finance from Texas A&M University. Edmundo’s journey extends beyond his significant contributions to the food and agriculture sectors into a fervent exploration of financial education. He particularly emphasizes the essential nature of comprehending both classic finance principles and emerging financial technologies. This endeavor is deeply rooted in his own life, drawing from his upbringing in Mexico to his professional engagements in America.
Edmundo transitions from his career accomplishments to his educational mission, placing a spotlight on the leading edge of financial innovation. This shift is not just a change in subject but a continuation of his story, emphasizing the vital need for an all-encompassing grasp of finance in our swiftly changing economic environment.
He articulates his perspective below: Learning about the fundamentals of money is crucial. Regrettably, our education system falls short in teaching personal finance. Numerous individuals complete their education without knowledge of taxes, interest rates, inflation, or how to invest. The National Institute of Retirement Security highlights the shifting of more retirement risk onto workers amidst rising living costs. With the increasing expense of retirement, educational institutions fail to mention that a Roth IRA accumulates earnings tax-free. Despite soaring tuition fees, there’s no instruction on how a 529 plan supports educational expenses with tax-free earnings. Many find healthcare unaffordable, yet there’s no teaching on how an HSA offers a triple tax advantage for healthcare payments. Property taxes are reaching unprecedented highs without any guidance on exemptions. The Federal Reserve aims for a 2% inflation rate, effectively eroding 2% of our purchasing power annually, yet the curriculum favors saving over investing.
It’s optimistic to think actual inflation is only 2%. Since January 2020, the USD has seen a 25% reduction in purchasing power. What could be bought for $1 four years ago now costs $1.33. When examining the M1 money supply, it’s evident that a significant portion of all dollars were introduced into circulation recently.
It’s no surprise we’re in the midst of a housing crisis. In 2020, the average house price was $275,000 with a mortgage interest rate of 3.5%. A 10% down payment resulted in a monthly payment of $1,600. An annual income of $50,000 was necessary to secure this mortgage. Fast forward to the present, the average house price has escalated to $420,000 with interest rates at 7%. The initial 10% down payment has increased, elevating the monthly mortgage payment. Now, a significantly higher income is required to obtain a mortgage. However, the median household income in the United States illustrates a period where the median income falls short of qualifying for a median-priced home.
Previously, the U.S. dollar was gold-backed, but significant changes in the financial system have led to adjustments in currency valuation. From a period where the U.S. debt was considerably lower, it has ballooned significantly. This growth equates to an average annual increase that has accelerated recently. The only way to maintain this system is through accruing more debt. The U.S. issues treasury bonds primarily purchased by a central banking system, which introduces additional money into circulation. We’re entrenched in an economy reliant on increasing the money supply. Halting this would cause the system to fail, leading inevitably to further inflation. Therefore, it’s crucial for everyone to research and determine how best to safeguard themselves and their descendants from these conditions.
The dominance of the USD as the global reserve currency is under scrutiny, given the unsustainable fiscal trajectory. This demonstrates a significant shift in global financial dynamics and underscores the urgency for enhanced financial literacy.
Financial education remains a critical element in empowering individuals and should be a cornerstone of our educational framework. Advocates like Edmundo Rodriguez Iga are at the forefront of this movement, advocating for a comprehensive financial literacy. His commitment to this cause is a call to action for educational reform, aiming to prepare future generations for the complexities of a changing financial landscape. Through his advocacy, Edmundo seeks to ensure that financial education becomes a fundamental part of learning, equipping individuals with the knowledge to make informed financial decisions in an unpredictable economy.
Published by: Khy Talara
