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The dismal state of financial education in our country

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Fenixgoon

Lifer
Jun 30, 2003
27,875
3,009
126
and this is why i have 20% of my salary going towards retirement (15% mine, 5% employer contribution)
 

fuzzybabybunny

Moderator<br>Digital & Video Cameras
Moderator
Jan 2, 2006
10,455
31
91
I agree that there needs to be financial education in schools. Right now there doesn't seem to be any, not even a basic personal finance class.

I'm 27 and remember taking a class that taught you how to write checks. That was it. It didn't give any kind of foundation on anything except perhaps compound interest, but I remember taking nothing from that class because they didn't have any real world examples or applications.

That's the thing I hate about school and academia in general. It doesn't tie into the real world at all. It's too theoretical. You're reading books and listening to people talk about things instead of actually DOING them with real world examples and real world institutions. It's like taking a photography class and NOT taking photos but instead writing on paper about the relationship between aperture, shutter speed, and ISO. You gotta relentlessly hammer in the relationship to the physical world to properly teach something.

Students don't need to have real money to practice this either - easy enough to set up simulation software with fake money.

Goddamn there are so many things I don't like about our education system.
 
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Muse

Lifer
Jul 11, 2001
29,609
3,330
126
Not an investor, not by a long shot. I could not answer that with any idea of certainty. Then I calculated the entire process with excel and on the 31st day you'd have $10,737,418.24. Nice...

You'd pass the national debt by day 52.
No, they'd have you in jail by 6 weeks.
 

Muse

Lifer
Jul 11, 2001
29,609
3,330
126
I agree that there needs to be financial education in schools. Right now there doesn't seem to be any, not even a basic personal finance class.

I'm 27 and remember taking a class that taught you how to write checks. That was it. It didn't give any kind of foundation on anything except perhaps compound interest, but I remember taking nothing from that class because they didn't have any real world examples or applications.

That's the thing I hate about school and academia in general. It doesn't tie into the real world at all. It's too theoretical. You're reading books and listening to people talk about things instead of actually DOING them with real world examples and real world institutions.

Students don't need to have real money to practice this either - easy enough to set up simulation software with fake money.

Goddamn there are so many things I don't like about our education system.
Best ideas I've seen in this thread are about financial education, and the very best advocates having it in high school, and mandatory. Everyone needs to understand the basics if they are capable. It will promote responsibility, and we absolutely need that.
 

fuzzybabybunny

Moderator<br>Digital & Video Cameras
Moderator
Jan 2, 2006
10,455
31
91
Best ideas I've seen in this thread are about financial education, and the very best advocates having it in high school, and mandatory. Everyone needs to understand the basics if they are capable. It will promote responsibility, and we absolutely need that.
Here's the thing that I think our education completely misses.

The stuff we teach doesn't leave students feeling empowered. I always wondered why some classes I hated and some classes I liked. The classes I hated I just didn't find interesting, and the classes I liked I found interesting. BUT I believe that I would have liked the classes I would have normally hated if they left me feeling empowered.

I couldn't give a shit about finance. To me it was boring grown up number stuff that was not applicable to my day to day life (something, by definition, can't be empowering if it isn't applicable). And that's exactly how most schools would teach it - as boring number stuff with no effort to convince students how powerful and useful it would be in their actual day to day lives (remember, most young people don't really think that far into the future - they simply can't fathom it).

But have a mandatory finance class that's engaging and empowering and with relations to actual financial instruments and products that they can sign up for the next day, and I think you've got a good class. Start with the theoretical stuff but quickly move into real world examples and scenarios, scenarios that would be of the student's choosing.

Ex. I remember problems sets like "Andrew is trying to save up for a bicycle blah blah blah."

WTF? I don't give a shit about Andrew and his bicycle. And why am I solving a problem for someone else? I want the newest XBOX360 and I want to be able to buy it. How do I get there with the money I have? Credit cards? Savings accounts? CDs? Checking accounts? What?
 

boomerang

Lifer
Jun 19, 2000
18,897
638
126
And you hired this guy??? :\
Starting a new business is in many ways like being between a rock and a hard place. You can't afford the talent at the level you need so you must hire someone that you feel has the potential to grow into the job, grow with the business and is willing to work at the price you can afford.

You don't always know what you've got until you get it. He's still within his probationary period.
 

Exterous

Super Moderator
Jun 20, 2006
19,194
2,040
126
The stock market has been flat for over 10 years, meaning that unless you are very skilled you are very likely not going to benefit from investing in stocks, mutual funds, etc.
:confused: The S&P is up 61% over the last 10 years and the Dow Jones is up 60%

Its only really flat or negative for money invested during the 2007-2008 time frame. That money would be down about 4 to 7%. That would be more than offset by money invested in late 2008 to mid 2009 which would have returned between ~48 and 103(!)%

So - if you were to invest $10,000 at the peak in July of 2007 you lost 6.5% so you'd now have $9350. If you were to take another $10,000 and invest it sometime between October 27, 2008 and July 31, 2009 you'd have gained at least 48% return on your money which is now $14,800

So your $20,000 investment returned an additional $4150 over 5 years. Keep in mind that that was investing at the worst possible time. I didn't even cherry pick the lowest point either - that 48% was from the highest stock market point during that 9 month period.

If you picked the highest point in over a 24 month period starting in October of 2009 you'd still be up 6% total. Not bad considering you chose the worst time to invest in 2007 and the worst time to invest 2009 through almost 2011

WTF? I don't give a shit about Andrew and his bicycle. And why am I solving a problem for someone else? I want the newest XBOX360 and I want to be able to buy it. How do I get there with the money I have? Credit cards? Savings accounts? CDs? Checking accounts? What?
Relating it to the kids is an important part of teaching but does seem to be getting lost. IMO its from a breakdown in our education system stemming from low parent responsibility/involvement, the teaching to the test mentality from NCLB and teacher performance reviews, teacher burn out, and an over concern from administrators about PCness and coddling the parents who vote for them
 
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ichy

Diamond Member
Oct 5, 2006
6,940
6
81
I agree. i think financial education should be taught in high school.
Unfortunately what little "financial education" there is often consists of dumb shit like stock picking contests that does more harm than good.

One valuable lesson I got was actually during my last month of AP Calculus in high school. Once we'd taken the AP exam there wasn't any real work left for us to do, so for the last few weeks we were told to plan a post-college budget. We had to look up average salary for our chosen profession & figure out expenses for things like rent, how much we'd contribute to retirement, etc etc. That was a GREAT eye opener.
 

ShawnD1

Lifer
May 24, 2003
15,999
2
81
I agree. i think financial education should be taught in high school.
I have a hard time believing it's not already in US schools. Math classes in Canada involved a lot of stuff about money and radioactivity because there are few practical examples of exponents and logarithms.

I was amazed when in college how many didn't know how to keep a checkbook (back then there were not as many debit cards etc.). kids would write checks and not put it in the ledger. then get bounced check fees and be shocked.
Or you could just not be retarded. I use my credit card for everything, and I never write it down, but I've never been shocked to see the bill. Your bank account shouldn't be hovering anywhere close to $0. Even in the days of writing cheques, floating around $0 is when you start to use cash only.
 

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