Living the American Dream with HappiU
Nothing illustrates the pursuit of financial success and happiness better than the American Dream. 360F took a journey to New York recently to present the concept of its proprietary 360-HappiU®, a scoring system that forecasts one’s future financial satisfaction, and in the context of the United States, one’s achievement and protection of the American Dream.
Scores do not account for risks
To the modern layman, the American Dream can be a Harvard degree, dream home or affordable health care and so on. Alongside are scoring tools such as SAT scores and credit scores to signal, directly and indirectly, their chances of achieving the dream. For example, credit scores tend to determine the home mortgage loans one is qualified for.
While these scoring systems signal the chance of success, they fail to signal risks to the same person’s financial future. For example, a healthy 65-year-old couple retiring in 2019 has acquired their own property and retirement savings at the population average level of $270,000. However, they can expect to spend close to $400,000 for retirement health care costs, not including long-term care. This means that a major illness during retirement would not only wipe out their savings but also force the couple to sell their property for funds! They may have had a great credit score that supported their property dream but they had not planned to protect their dream.
Since the typical scoring systems are inadequate, the layman must have sufficient financial literacy to achieve and protect their American Dream in good and bad times.
But financial literacy has not caught up with financial needs and risk exposure.
Financial literacy worldwide has always been notoriously difficult to raise. In a Standard and Poor’s survey, merely 35% of global respondents answered questions about risk diversification correctly  .
The poor understanding of the fundamentals is just the tip of the iceberg. As one grows older and experiences different life stages, financial needs and risk exposure change and become less straightforward to fulfill. Financial knowledge therefore must evolve beyond the fundamental concepts. But financial products tend to be complex. In America, only 4% of survey respondents could correctly define common health insurance terms and answer seven out of ten questions on disability insurance. Despite making loan repayments, only 52% of Americans understood them to be based on term and interest rate  .
While financial literacy can be promoted through financial advice, inconsistent advice across advisors often leaves consumers more confused. Some eschew advice altogether while others just want to “get it over and done with”. A survey conducted in the United Kingdom found that 90% of insurance consumers considered only one insurance policy before purchase while 59% simply followed the financial advisor’s recommendations  .
Living the American Dream with 360-HappiU®
Though the popular scoring systems have severe shortcomings, the layman consumer can relate to them easily, making these systems extremely scalable.
In the ideal world, we would have a global scoring benchmark for financial advice. This benchmark is customizable to reflect country differences and product universe accessibility. It needs to be customizable at the personal level too, so that it is based on one’s priorities, values, and risk exposure. Using this benchmark, any layman can discern the advice quality without being overwhelmed by the complexities of the government insurance and social security systems and private offerings.
360F therefore innovates the scoring system, 360-HappiU®, which simulates all conceivable insurance and market risks specific to the individual and forecasts his or her financial future reliably.
Built upon the Nobel-Prize winning research of Prospect Theory, the resulting score, HappiU®, accounts for the individual’s value for the “peace of mind”, a human factor that has been neglected and even misrepresented in the classical wealth maximization planning. Hence the HappiU® score is ultimately a forecast of one’s financial satisfaction defined on personal criteria including competing aspirations and constraints, and ultimately used to guide holistic financial advisory, from insurance protection to wealth accumulation and inheritance.
The American Dream may not always be about financial satisfaction, but it is surely built upon it.
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 Tennyson, S. Consumer’s insurance literacy: evidence from survey data. Financial Services Review. 20(2011): 165-179