Financial Literacy - Did You Learn This At School
Thinking back over my days in high school, I remember the presence of some character in every class who was constantly asking the teacher, "How will this be useful for me in my life out of school?". No matter the class, no matter the situation, the question would arise, to the disbelief and annoyance of the teacher, who never really gave an answer.
It would be quite an experiment, if someone had a record of everything they used in life and which part, if any, came from classes in high school. Maybe the wise-crackers would be right most of the time, but we'll leave that discussion for another day. There are definitely a few subjects which every student could use, and one of them is Financial Literacy. For whatever reason, the principals and education experts have never made this a requirement, though it is hard to think of a better idea.
This subject "Financial Literacy" should teach you about the implications of making a bunch of decisions about your finances. From the simple things, to more complex things. The ultimate purpose of this subject should be to ensure that you are armed with enough financial knowledge, that you won't make the idiotic, financially ruining decisions so many people make every day. I'd see the curriculum running something like this.
Week 1. Avoiding scams. The teacher would deliver a tutorial on avoiding scams that prey on the young and naive.
Week 2. How to determine if you can take on a loan. Most young people have no conception of what it means to pay back a debt. The second phase of class would lay out the problems of taking on debt and when it should be done. Personal and business loans would be discussed, along with examining credit card statements and taking on mortgages. The positive aspects (tax-wise) will also be covered.
Week 3. How can you evaluate assets? Students would get an idea of how to size up their assets. Appreciating assets would be contrasted with depreciating assets. Consumables would be contrasted with earning assets. Students would see how purchasing different assets affects net worth over one's life span.
Week 4. What investment strategies are right for you? This lesson would run through different risk profiles, explaining both what can go right and what can go wrong with these profiles. This should enable you to work out your tolerance to financial risk and therefore make better investment decisions. From there, the class should explain some robust investment strategies for the different risk profiles.
Week 5. Should you leverage your investments. This lesson would run through the advantages and risks associated with leveraging investment portfolios. Tax would have to be covered to some extent in this lesson also as there are some definite tax advantages when borrowing to invest.
Final module. Coming to the end of Financial Literacy class, students would try and see the big picture. Laying out the biggest mistakes made by the young would be an excellent closing statement. Along with any cautionary tales, there would be a way to approach finances proactively. For the young, the advice given would be to work with what you have, and line up ways to increase your earnings without taking on high risks. - 23208
It would be quite an experiment, if someone had a record of everything they used in life and which part, if any, came from classes in high school. Maybe the wise-crackers would be right most of the time, but we'll leave that discussion for another day. There are definitely a few subjects which every student could use, and one of them is Financial Literacy. For whatever reason, the principals and education experts have never made this a requirement, though it is hard to think of a better idea.
This subject "Financial Literacy" should teach you about the implications of making a bunch of decisions about your finances. From the simple things, to more complex things. The ultimate purpose of this subject should be to ensure that you are armed with enough financial knowledge, that you won't make the idiotic, financially ruining decisions so many people make every day. I'd see the curriculum running something like this.
Week 1. Avoiding scams. The teacher would deliver a tutorial on avoiding scams that prey on the young and naive.
Week 2. How to determine if you can take on a loan. Most young people have no conception of what it means to pay back a debt. The second phase of class would lay out the problems of taking on debt and when it should be done. Personal and business loans would be discussed, along with examining credit card statements and taking on mortgages. The positive aspects (tax-wise) will also be covered.
Week 3. How can you evaluate assets? Students would get an idea of how to size up their assets. Appreciating assets would be contrasted with depreciating assets. Consumables would be contrasted with earning assets. Students would see how purchasing different assets affects net worth over one's life span.
Week 4. What investment strategies are right for you? This lesson would run through different risk profiles, explaining both what can go right and what can go wrong with these profiles. This should enable you to work out your tolerance to financial risk and therefore make better investment decisions. From there, the class should explain some robust investment strategies for the different risk profiles.
Week 5. Should you leverage your investments. This lesson would run through the advantages and risks associated with leveraging investment portfolios. Tax would have to be covered to some extent in this lesson also as there are some definite tax advantages when borrowing to invest.
Final module. Coming to the end of Financial Literacy class, students would try and see the big picture. Laying out the biggest mistakes made by the young would be an excellent closing statement. Along with any cautionary tales, there would be a way to approach finances proactively. For the young, the advice given would be to work with what you have, and line up ways to increase your earnings without taking on high risks. - 23208
About the Author:
Damian Papworth understands that you do not require mutual fund investments. With some simple strategies, you are capable of being your own investment manager.
posted by X - Men @ 2:58 AM
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