Do your clients have a financial question? A lot of people do.
Today, they frequently turn to Google to find the answer. And, as advisors, you may be surprised to learn that your clients, and potential clients, have questions about fundamental concepts that you take for granted.
Digital Third Coast, a Chicago digital marketing and search agency, and Liberty Bank for Savings, based in Chicago, wanted to know what questions are top-of-mind, so the two firms tallied the number of Google searches for financial questions made in a year. The data was then broken down into which question scored highest in each state.
“Being financially secure goes a long way towards peace of mind, and being financially secure starts with being financially literate,” the firms said in a statement.
Following are the top 12 questions people asked the most, the number of searches made over the period of a year from July 2017 through June 2018 rounded to the nearest hundred and the states where the question ranked at the top of the list. The questions are listed in reverse order with the most popular listed last.
Finally, the captions also include a basic answer to the question—something that should help if the question pops up in your next client meeting.
12. What is a budget?
27,100. Louisiana, South Carolina, Texas.
A budget is a financial plan for a defined period of time that can often help with saving money and meeting various financial goals.
11. What is a foreclosure?
60,500. Alaska, Arizona, Arkansas, Idaho, Iowa, Missouri, Montana, Nevada, North Dakota, Oklahoma, Oregon, South Dakota, Utah, Washington, West Virginia, Wyoming.
Foreclosure is a legal process by which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments to the lender by forcing the sale of the assets used as the collateral for the loan.
10. What is debt consolidation?
90,500. New Jersey
Debt consolidation is a form of debt refinancing that entails taking out one loan to pay off many loans.
9. What is a cash advance? 1
10,000. California.
A cash advance is a service provided by most credit card and charge card issuers. The service allows cardholders to withdraw cash up to a certain limit.
8. What are interest rates?
110,000. Alabama, Florida, Indiana, Kentucky, Michigan, Mississippi, Nebraska, Ohio, Rhode Island, Tennessee.
An interest rate is the amount of interest owed or earned as a proportion of the amount lent, deposited or borrowed.
7. What is compound interest?
165,000. Minnesota.
Compound interest is the addition of interest to the principal sum of a loan or deposit, or in other words, interest on interest.
6. What is a credit union?
301,000. Colorado, North Carolina, Wisconsin.
A credit union is a member-owned financial cooperative, democratically controlled by its members and operated for the purpose of promoting thrift, providing credit at competitive rates and providing other financial services to its members.
5. What is a 401(k)?
301,000. Massachusetts, Connecticut.
A 401(k) is a retirement savings plan sponsored by an employer. It lets workers save and invest a piece of their paycheck before taxes are taken out. Taxes aren’t paid until the money is withdrawn from the account.
4. How do payday loans work?
360,000. Georgia.
Payday loans are short-term, high-interest loans, generally for $500 or less. They are repaid when the borrower receives his or her next paycheck.
3. What is a car loan?
568,100. New Hampshire.
Unless you or your spouse has enough cash lying around to pay for a car in full you will likely use a car loan to pay for the purchase.
2. What is a mortgage?
2,300,500. Maine, Pennsylvania.
A mortgage is a loan that a bank or mortgage lender gives you to help finance the purchase of a house.
1. How do student loans work?
2,441,000. Maryland, New Mexico.
Student loans are sums of money that borrowers use for their education and pay back over time, in most cases with interest.
