Ben Bernanke's financial advice: Money isn't everything

There's no such thing as a free lunch.

Particularly when it comes to getting a few hours of Ben Bernanke's time. The former chairman of the U.S. Federal Reserve charges from $200,000 to $400,000 for speaking engagements at private equity firms, hedge funds, banks, and trade associations around the world.

However, "Helicopter Ben" (also known as "Bearnanke") has made a few pro-bono appearances and speeches in which he provides some great advice on financial matters. Here are the five best pieces of financial wisdom from Ben Bernanke.

1. Be Smart About Student Loans

Student loans are a key issue for Millennials, so it's not a surprise that the topic came up during a speaker event at the Romain College of Business in March 2015.

Chasing a college degree is a two-edged sword for many Americans. On the one hand, workers with a bachelor's degree earn about $1 million more in their lifetimes than those with just a high school diploma. On the other, 2014 college graduates owe an average of $33,000 in student loans.

"People have to be smart about how much money they take out," Bernanke recommends to young people. This short piece of advice is very powerful for retirement planning reasons. Your initial employment years are key for retirement savings because money invested then has the most time to take advantage of interest compounding. If student loan payments are preventing you from maximizing retirement savings, you're at a disadvantage.

Bernanke points out that you must find and talk with a student loan adviser on a regular basis. Remember that education is an investment, so that means it must provide returns. Keep student loans in check, live a frugal lifestyle during your college years, and choose your major wisely. (See also: 20+ Freebies for College Students)

2. Remember Money Isn't Everything

During a graduation speech at Princeton, Bernanke gave this suggestion to the class of 2013: "Remember that money is a means, not an end."

He wasn't trying to convince you that money doesn't matter. He is aware that there are many of us that don't have enough of it. Instead, he was suggesting to avoid making big decisions purely based on money. The perfect example is choosing a career.

More than half of Americans are dissatisfied with their jobs. While workers making more than $125,000 are the happiest with their jobs, there are still about 35 percent of them who are dissatisfied.

How can this even be possible? Turns out that the two criteria that make people happiest at work are non-monetary. "Interest in work" and "people at work" were chosen by 59 percent and 60.6 percent of workers, respectively.

Bernanke is right in warning that choosing a career based only on money without consideration on love for the work or desire to make difference is a recipe for unhappiness. Give appropriate consideration to these factors, as well.

3. Evaluate If Annuities Make Sense for You

During his four-year tenure as Federal Reserve Chairman, Ben Bernanke had one of the toughest financial jobs in the world.

So, it's no surprise he kept his investments simple. His two largest assets are two annuities, TIAA Traditional and CREF Stock Large Cap Blend, each valued at between $500,001 to $1,000,000 as of 2007.

High net worth individuals, workers close to retirement age, and workers with a late start in the retirement saving race could all benefit from owning annuities for four reasons.

• Like with other retirement accounts, all monies contributed to an annuity grow tax-deferred until they are withdrawn at retirement age, when you're more likely to be in a lower tax bracket.
• Unlike other retirement accounts, annuities have no contribution limits. This means that high net worth individuals could put away more for retirement than the $18,000 limit set by the IRS.
• Immediate annuities allow workers close to retirement to stuff away more money in their nest eggs and start receiving distributions after a short period of time.
• Some annuities offer a guaranteed stream of income, which is key for those close to retirement age or who have very low tolerance to investment risk.

Owning annuities isn't for everybody, but evaluating whether or not annuities should be part of your retirement planning definitely is. Talk with financial advisor to learn more about these financial vehicles. (See also: Don't Know What Annuities Are? You Might Be Missing Out)

4. Improve Your Financial Literacy

"Financial education supports not only individual well-being, but also the economic health of our nation," said Bernanke during a teacher town hall meeting in 2012.

Low financial literacy is an issue for Millennials. According to a survey from FINRA, only 24 percent of them are able to correctly answer four or five questions on a five-question financial literacy quiz. While Millennials are offered courses in financial education in high school and college, or by an employer, only 61 percent of them participate in those courses.

However, Millennials aren't the only ones in dire need of improving their financial education. More than a fifth of Americans think that winning the lottery is the most practical way to accumulate wealth.

Bernanke advises us to improve not only our own financial literacy but also that of our children. He recommends that our focus shouldn't be on memorizing financial products or calculations, but learning essential skills and concepts necessary to make major financial choices. For example, to shop around for a loan to get the lowest interest rate and to start saving early for retirement. 

5. Minimize Costs

When discussing raising gas prices and their effect on the American worker, Bernanke said "it must be awfully frustrating to get a small raise at work and then have it all eaten by a higher cost of commuting."

This piece of wisdom is applicable to several financial scenarios.

• If you were to invest $5,000 in the average actively managed U.S. mutual fund, you would pay $66 in management fees. On the other, you could pay just $8.50 in fees by investing the same $5,000 in the Vanguard Total Stock Market Index (VTSMX) fund. Over a 30-year period that difference would give you an additional $4,692.21, assuming a 6 percent rate of return.
• When putting down less than 20 percent of the price of a property, you have to pay PMI on your mortgage. In 2014, the average PMI payment ranged between $775 and $1,551 per year. By saving enough for a 20 percent down payment to buy a property, you could avoid the PMI expense.

Whether it's the sale price of your home or the size of your nest egg, you can't always have full control on the returns of your investments. However, you always have much more command on the cost of your investments and purchases. Minimize any type of fees so that you give your investments a better fighting chance.