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On Teaching Financial Literacy to Kids and Giving Back

Sometimes I wonder if those folks who said that they are financially independent yet still teach a course that charge 4 digits are actually financially independent.

They probably are not so independent yet. It is easy to justify to yourself that people are paying for “your expertise” and you are “delivering value”. 

I had this conversation with a friend of mine on this industry. He was asking me what the fx#k are these people who ran these investment courses doing? If they are so good at what they do, their method work, can compound the money, why do they fx#king teach?

My answer is summarized as:

  1. Enough people bug them that they should be turning this to a course. They are selling you a valuable proposition. Some of these course will eventually be 0.1% of your final net worth. That is a crazy good price to pay. Some are absolutely not. The hindsight (like the markets) is that you won’t know it now.
  2. Same result as #1 but these people finally got past their impostor syndrome and think they are good enough
  3. Their investing method has major flaws. A lot is either the frequency of huge success, and the presence of probability of huge draw-down as well. It is much much much more profitable to teach you how to fish then to build wealth this way
  4. They are not financially independent or some would say, achieve “financial freedom”.  You are their ticket to it

As a wealth building practitioner, I only wonder in amazement how they juggle this business and do active trading and stock prospecting well. They have great time management, great focus, or …. their methods are really so passive and the results is so good or…. they have lost touched with what they teach as practitioners. 

I know this first hand since I have 3 jobs: my main work, this blog and active investing. Overtime the third one really takes a beating because of the other 2. I am not as good as people think I am. 

How should a financially independent person contribute back to society?

Perhaps it is to share with people what you do best. That is nurture the next generation to be as financially savvy as yourself. 

The Singapore government aims to ramp up financial literacy at a younger age. I have a point of view on this. Perhaps on the part of financial courses in another post. 

They will roll out a financial education curriculum to all polytechnic and ITE Year 1 students

Year 1 Mandatory module will be focus on:

  1. budgeting
  2. goal-setting
  3. financial basics such as the effect of compound interest on debt and savings

Year 2 and 3 would be:

  1. help them be more savvy consumers
  2. how to use insurance and investments
  3. CPF

The reason for this is that they find that young adults have really not planned out their financial future. 

Now I think them trying to do this is good effort but they should really spend the time studying, sitting in classes to see which best paid method or free education method out there works really well. 

It is no use going through the motion.

One of my co-worker told me that they were taught personal finance in polytechnic. 

They forget the stuff that they were taught. He said that they were taught concepts such as net worth. But it is only when he read the great Investment Moats that drums into him how powerful it is to know the concept of net worth.

A Financial Literacy Class for High School Kids that you Might Explore

This morning I came across this article by Tony Isola. Tony, together with his colleagues at Ritholtz Wealth Management are probably the unique financial wealth management firm that grew out from the blog world. A lot of them own and write the great financial blogs at Ritholtz.com, Reformed Broker, Of Dollars and Data, A Wealth of Common Sense, Abnormal Returns, Tony Isola, The Belle Curve, The Irrelevant Investor.

This is probably a topic for another day as well. 

Tony shared with us his experience volunteering his time to teach with his wife Dina, over 5 days to a class of 10-12th graders.

I want to put this out there, in case some Ministry of Education high flying scholar who is planning this reads my blog and this could be something to think about. 

The post basically went through how they conduct and what they taught the kids.

And I think the philosophy is to connect with them by tackling their most immediate money problems

A big criticism of financial literacy programs is they need to be taught in a “just in time” method. Teaching someone how to apply for a mortgage is much more effective right before they are about to purchase their first home rather than when they’re in high school.

I think that is most important. You have to shift from this being just another subject, to how this will impact your lives now, and in the future. 

Like what Ramit Sethi said, get the small wins in, convert them, then they will be interested in what you have to say.

Their strategy is to tackle the subjects closer to their hearts and not those stuff that requires a salary!

  1. Drilling into their brains the importance of compound interest. Instead of making your wealth grow, start by showing how compounding effect on their credit card bill payment
  2. Playing a game on 2 case studies of making ends meet to teach pay yourself first budgeting strategy
  3. Introducing low to zero hurdle high yield savings accounts
  4. Student loans. The students were shocked that student loans is higher than credit card debt. On financial aid. On different scholarships
  5. College money survival. Teaching that university cost is not just about tuition fees and dorm room costs
  6. Then they teach about investing and also through a simulated game pretty similar to the one we played with Dr Wealth
  7. Bring in guest speakers that the kids can connect to. One is a YouTube money sensation and another is a CNBC reporter

At the end of the day, it is to ensure the next generation is financial savvy. 

Personally I think it is also quite dangerous if it is successful because people will discover this blog and will get influence with some extreme financial mindsets. That will be bad for the economy.

If they have covered this in the courses, then that is great. If not, it might be something you should get in touch with. 

Tackling the Tough Financial Issues

So if you wish to connect to the kids, give them the small wins, you got to tackle the issues that are closest to them.

And those are issues that are damn tough.

So tough I wonder you, the educator has the solutions:

  1. Family income less than $1000 for a family of 4
  2. How to stop parents from fighting over money
  3. What is the best way to pull yourself out of this seemingly never ending no money life

These are perhaps what you will encounter most judging from talking to friends in ITE or teaching at ITE. 

Don’t share about investing and wealth building. Tackle the real issues first. 

The Right Way to Give Back

If you are in a financially better position, likely you get to where you are due to your financial wisdom. 

I think that might be as valuable as your wealth. 

And the best thing to do for yourself and others is to give back. If you look at the curriculum presented, it does involve areas that you could volunteer and participate. 

The next generation needs financial role models that the can connect with that feels closer to them.

You could be that person. 

For those that came from the privileged background, and are financially comfortable, it is a time to know whether you are really in touch with those who are less privileged. 

Do Like Me on Facebook. I share some tidbits that is not on the blog post there often.

Here are My Topical Resources on:

  1. Building Your Wealth Foundation – You know this baseline, your long term wealth should be pretty well managed
  2. Active Investing – For the active stock investors. My deeper thoughts from my stock investing experience
  3. Learning about REITs – My Free “Course” on REIT Investing for Beginners and Seasoned Investors
  4. Dividend Stock Tracker – Track all the common 4-10% yielding dividend stocks in SG
  5. Free Stock Portfolio Tracking Google Sheets that many love
  6. Retirement Planning, Financial Independence and Spending down money – My deep dive into how much you need to achieve these, and the different ways you can be financially free

 

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