In high school there were only 2 classes that prepared me for life. The first was typing and second was an elective course in computer programming. The rest was filler. OK, yes, the math and English probably helped me more than I realize but our education system in America is severely lacking when it comes to teaching practical life skills. Namely … personal finance.
In my senior year of high school we had to take a semester of economics. We learned about Adam Smith, supply and demand, money supply, etc. Why the hell didn’t our teacher spend even a single day teaching us about credit cards. They could have told us why making the minimum credit card payment never pays down the balance. How 22% interest is a giant scam. Why it’s important to buy real estate at the youngest age possible. Why you should only be an employee until you learn enough to start a business. Why you should always save 10% or your paycheck. How selling your time for an hourly wage is a surefire path middle class mediocrity. They could have taught us how a car loan or adjustable rate mortgage works. They could have taught us the difference between stocks, bonds, treasury bills, and stock options.
High School should be designed to prepare kids for life. Save the Econ 101 curriculum for college and instead teach a semester of personal finance. This stuff isn’t rocket science and it would have a REAL benefit on peoples lives.
Here’s a true story. I own a small company and we employ about 10 young people. They all have college degrees and a few of them from prestigious ivy league schools. One of my employees who graduated from Brown (YES BROWN University!) didn’t know what a T-Bill was. He had no idea how to buy real estate (this kid is 24 years old). He had no clue that you can put 10% down as a first time home buyer and a condo. He has ZERO concept of saving and investing. (I bought him a copy of Rich Dad Poor Dad, let’s hope he reads it).
Why are we surprised that millions of Americans got teaser rate adjustable mortgages that blew up in their face (or rather all taxpayers faces)? These are people who don’t even understand how a basic loan is amortized much less an adjustable note tied to LIBOR or PRIME. These weren’t all dumb people. They just weren’t taught how loans and credit work and how to judge a good deal from a scam deal.
If every student in America was taught about loans and credit we could have avoided this multi-trillion dollar mess. Yes, a lot of it was caused by greed but a big factor was ignorance.
Just a quick message to thank u 4 your joyful post. Do u know where I can find more on the subject? well done. Michelle x