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.
I would really love to go back, and review the subjects I learned back then just to see how insightful those kids were. To see how much of what I learned back then has helped me get to where I am today. I won't though, rather I want to look into a slightly different topic. I believe that there is one subject that everyone should be taught at school as it would be invaluable in helping you make your way through life, no matter what background you come from, or where you are going. This subject is never on the curriculum though. I don't understand why. It is Financial Literacy.
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. Are you being scammed? Students would be shown how to spot a scam and avoid it. It will prevent a variety of mistakes.
Week 2. Will you be able to pay back the money you borrow? The second part of the class would help students figure out if borrowing money for business or personal use is a smart idea. Credit card debt, mortgages, and other loans would be discussed. The idea would be to give students a concept of cash flow and how to service a debt, while exploring tax benefits of debt.
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 phase. At the end of the course, the student would try and make it all come together. There would be a layout of common mistakes and how to avoid making them. The ways to use the law in your favor and how to protect yourself would be covered. Finally, there would be suggestions on how to work with whatever types of finances you have to create the maximum amount of wealth. - 23200
I would really love to go back, and review the subjects I learned back then just to see how insightful those kids were. To see how much of what I learned back then has helped me get to where I am today. I won't though, rather I want to look into a slightly different topic. I believe that there is one subject that everyone should be taught at school as it would be invaluable in helping you make your way through life, no matter what background you come from, or where you are going. This subject is never on the curriculum though. I don't understand why. It is Financial Literacy.
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. Are you being scammed? Students would be shown how to spot a scam and avoid it. It will prevent a variety of mistakes.
Week 2. Will you be able to pay back the money you borrow? The second part of the class would help students figure out if borrowing money for business or personal use is a smart idea. Credit card debt, mortgages, and other loans would be discussed. The idea would be to give students a concept of cash flow and how to service a debt, while exploring tax benefits of debt.
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 phase. At the end of the course, the student would try and make it all come together. There would be a layout of common mistakes and how to avoid making them. The ways to use the law in your favor and how to protect yourself would be covered. Finally, there would be suggestions on how to work with whatever types of finances you have to create the maximum amount of wealth. - 23200
About the Author:
Damian Papworth acknowledges that you do not require mutual fund investments. Having learned some simple investment strategies, you can be your own investment manager.
posted by X - Men @ 6:22 AM
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