Confidence through Education

Before I get to the realization I had while overhearing a family conversation in a restaurant last week, I want to pose some questions. Do you know how many children, even those who test in the high percentiles, believe their parents own their homes, when in fact they are buying them—and often have significant mortgages? Do you know how few people can correctly state the interest rate of their principal credit card, if they’ve had it for more than a year? What percentage of the Australian population directly invests in the stock market (anywhere in the world)?

In our society today, we often seem to talk a lot about money, finance, and economic issues—but do we really? More importantly, is what we say accurate?

The other day I was in a restaurant, listening to what was an apparently prosperous, perhaps even affluent set of parents explaining (or attempting to explain) the concept of credit to their son (perhaps 10 years-old). Now, explanations of anything to children may often need to be simplified, but it didn’t take long for me to grasp that what they were telling the boy was more than simplified, it was just outright wrong. Credit is a fairly basic general financial principle, but it’s a vital one. It underpins the whole nature of an economy, on any level, and it’s one of the key elements that drives any society or culture. If we can’t explain something this essential to younger people, we’re going to really struggle with more complex ideas, let alone instigating actual positive behaviors and processes.

It suddenly hit me—for all the information that’s available today, there’s very little real practical education for younger people on money matters. Many secondary schools never come close to teaching even a general economics class. Personal finance? Forget it. If people learn anything at all about financial affairs, it’s usually through family channels, and sometimes, even “successful” people aren’t putting out the right information. The same is often true about health and nutrition, sexuality and dating, etc. It’s not difficult to learn computer coding so that you may be eligible for a good job. When it comes to knowing how to manage the money you make? That’s a very different story, and one whose result is frequently left to chance or particular family backgrounds.

This creates a great number of problems in our society, and is the key reason why many people feel they aren’t in control of their financial affairs, even if they have strong incomes. It’s the main reason why many people feel prosperity and financial confidence is a matter of destiny and not decision. As with nearly every aspect of life, understanding starts early and grows, or it often doesn’t develop at all. As a consequence, you can meet people who feel they’re above taking too direct an interest in financial matters such as saving and investment, and concentrate solely on earning. Or the opposite extreme, of people who are obsessed, and never seem to integrate their passion for investment into a larger quality of life framework. I’ve known many people at the start of client relationships, who either are embarrassed to seek expert financial advice—or who mistakenly believe that financial expertise is somehow “magical”…as in some people just have a knack for it, or a good head for figures. Both these perspectives are problematic to say the least.

So, what I’m contemplating now is developing a series of educational training sessions that will help familiarize school-age children (in staggered age groups) in the areas of financial management, investment, and personal economic health and fitness. This idea fits in neatly with The IF Group’s commitment to delivering value and support to the community, and it ties in with our core business objective of creating more financially confident clients long term. If you have any comments or suggestions, I’d be very interesting in hearing from you. At The IF Group, we are always concerned with doing new things properly, with the right amount of preparation and consultation.