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we have some very financially smart people who take a big interest in their financial lives and are successful.
we have a group of financially aware people who are just doom and gloomers and they never act with their knowledge and they end up just squeeking by in life.
then we have the largest group who run on just myth and bull-sh*t. they basically blame the world,the rich and everything and everyone around them for their lack of financial success . they never understand its their own lack of interest in learning thats crippling them.
for the third group I often sense there's an overabundance of interest in the wrong things: unhelpful things, excessive entertainment or vices, escapism through alcohol. the list goes on and on. IMO, in some cases a "boring" subject can be made fun with an attitude adjustment- or maybe I just have an inherent skill/gift in that regard. my brother doesn't have it though. he's very much focused on entertainment
As I shared previously years ago I had great experience in economics education and teacher training. There are certain principles that can be taught and a floor given to be built on. There are certain core principles:
Medium of Exchange
Supply/Demand and the Elasticity of Supply/Demand. This is core principle that so much else originates from. A bubble like the housing bubble can be anticipated when you see the supply of housing reaching the point where it exceeds demand and has passed the level of demand based on reasonable financing guidelines.
Interest rates and Financing. How compounding can work for you or against you.
Wealth as a concept and the acquisition of and ways to achieve. Wealth building and net worth. Simple life concept. Is your net wealth increasing or decreasing? Is your debt/wealth or debt/income level improving or getting worse.
These are just a few of the basic concepts that can be taught and most pariticpants in this forum understand them well.
See?
This is the subjective stuff I'm talking about.
These 'rules' that really are NOT one size fits all.
And no...it's not like teaching any other course. Because in math, the answer is 5.
In biology, it's the mitochondria. In physics, pv=nrt. In lit, the butler did it.
I took econ in high school - would that not be a good place to introduce various financial vehicles instead of just all the hokey pokey theory b.s. we learned for the AP test?
If you took AP Econ the purpose of the course was to prepare you to get a 4/5 on the exam and the resulting college credit if your college accepts AP courses.
for the third group I often sense there's an overabundance of interest in the wrong things: unhelpful things, excessive entertainment or vices, escapism through alcohol. the list goes on and on. IMO, in some cases a "boring" subject can be made fun with an attitude adjustment- or maybe I just have an inherent skill/gift in that regard. my brother doesn't have it though. he's very much focused on entertainment
i agree , i see it with the people at work, friends , our kids friends.
they can cite sports statistics spanning decades but they havent a clue about what to even do with their 401k money.
they all copy off each other like anyone of them has a clue.
then we have the political group that spends lunch time discussing politics , like any of that will ever improve their lives.
its almost as if they would rather spend time with anything other then their own financial well being.
Americans aren't exactly the sharpest when it comes to financial basics
And yet, some people think that doing away with SS and allowing people to invest their money themselves for their retirement is going to work.
Good point. The problem is our politicians aren't any better at managing SS than the general public is at investing. Our economic ship sure does seem to be sinking.
Yes, but at which point are you teaching facts and then at which points do the whole strategy and advice thing become more opinion and personal style?
Finance is not black and white. It can be very subjective.
For example, take mortgages and down payments. 100s of different opinions on 'the right thing to do.' The same with leasing/buying a car.
The same with portfolio management.
The same with credit card vs debit card use.
It's endless. You can say, "This financial product is X," but who gets to decide the context within which it will be discussed?
I do not want my kid learning financial hokey pokey at the hands of some idiot who probably can't balance their checkbook and took an 80/20.
But people should at least know the basics. Ask a lot of adults, even college educated folks about what a mutual fund is, vs. a stock, a bond, etc. Most couldn't give you a working definition. People don't know what retirement accounts are. They don't know basic information about taxes, etc. People also don't understand the power of compound interest. All of these concepts could be taught in school.
for the third group I often sense there's an overabundance of interest in the wrong things: unhelpful things, excessive entertainment or vices, escapism through alcohol. the list goes on and on. IMO, in some cases a "boring" subject can be made fun with an attitude adjustment- or maybe I just have an inherent skill/gift in that regard. my brother doesn't have it though. he's very much focused on entertainment
I think that's a good point. Entertainment is another aspect of human enslavement. It's the modern version of the Roman "bread and circuses". It keeps people distracted with things of no import so that they don't pay attention to what's really going on in finance and many other important aspects of life.
Last edited by mysticaltyger; 09-23-2012 at 11:55 AM..
See?
This is the subjective stuff I'm talking about.
These 'rules' that really are NOT one size fits all.
And no...it's not like teaching any other course. Because in math, the answer is 5.
In biology, it's the mitochondria. In physics, pv=nrt. In lit, the butler did it.
I took econ in high school - would that not be a good place to introduce various financial vehicles instead of just all the hokey pokey theory b.s. we learned for the AP test?
It's true, nothing is black and white in finance. But you can certainly teach people the odds.
Odds are, if you're getting a mortgage based on your overtime pay, you're going to run into trouble.
I also have to say I do think there needs to be stricter regulation of the banks. Many of those mortgages issues should never in a million years been legal. I don't have much faith that it will really happen (since the banks own the political system), but it definitely should.
I don't know...I kind of like the fact that most Americans are financially stupid. How else would I get cash back from my credit card if not for the fact that "stupid" Americans pay interest on unpaid balances? How else would I get interest from my bank account (albeit currently negligible) if not for people paying interest on money borrowed? How else would I make money on the stock market by investing when the sheeple have fled and selling when the sheeple are furiously day-trading? How else would I make money on government bonds if not for the stupid voters that continually elect spendthrifts?
So here's to the stupid Americans...making the smart richer!
That's sort of true in a short term kind of way. But Americans' collective financial stupidity is a big reason why our economy is in the toilet now...and that has affected us all and will continue to do so for many years.
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