A Case For A Financial Literacy Class
One of my most enduring memories from high school is that in almost every class I attended, it didn't matter what the subject was, there was always some smarty pants who would say to the teacher "I just don't see how this will help me later in life". Its funny how the teachers never really gave them a satisfactory 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.
Financial Literacy as a subject in school would be a course examining the impact of certain decisions on your finances, encompassing major and minor decisions. Basically, the goal would be to arm students with enough knowledge of the financial world that they wouldn't go out and make the foolish mistakes that drive so many people to financial ruin every year. The curriculum would go in the following direction.
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. What type of assets do you own? In this lesson, different assets would be explained. For example, an appreciating asset would be compared to a depreciating asset. Similarly a consumable would be compared to an earning asset. These assets would be compared over time, so you can see the impact purchasing different items has to your net wealth over time.
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. How leveraging investments works. Getting into more advanced material, students will learn how investment portfolios use leveraging to their advantage. The tax breaks possible would be included in the discussion, giving students the ability to use the tax code to their advantage.
Final lesson. The final lesson of this course would be put it all together. The steps you should take to avoid the financial problems so many people face. How to structure yourself to maximize your legal protection and your tax position. And of course, how to use the money you have to most effectively create wealth and income, given your personal tolerance to risk. - 23204
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.
Financial Literacy as a subject in school would be a course examining the impact of certain decisions on your finances, encompassing major and minor decisions. Basically, the goal would be to arm students with enough knowledge of the financial world that they wouldn't go out and make the foolish mistakes that drive so many people to financial ruin every year. The curriculum would go in the following direction.
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. What type of assets do you own? In this lesson, different assets would be explained. For example, an appreciating asset would be compared to a depreciating asset. Similarly a consumable would be compared to an earning asset. These assets would be compared over time, so you can see the impact purchasing different items has to your net wealth over time.
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. How leveraging investments works. Getting into more advanced material, students will learn how investment portfolios use leveraging to their advantage. The tax breaks possible would be included in the discussion, giving students the ability to use the tax code to their advantage.
Final lesson. The final lesson of this course would be put it all together. The steps you should take to avoid the financial problems so many people face. How to structure yourself to maximize your legal protection and your tax position. And of course, how to use the money you have to most effectively create wealth and income, given your personal tolerance to risk. - 23204
About the Author:
Damian Papworth acknowledges that you do not require mutual fund investments. Having learned some easy strategies, you are capable of being your own investment manager.
posted by X - Men @ 6:58 AM
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