Let’s face it, when it comes to money and personal finance, most people are idiots. They constantly get into debt. They invest in crappy mutual funds with high fees. They finance new cars. They do a million and one things that, financially don’t make a lick of sense.
This plague has bothered mankind ever since the invention of money. Some people seemed to accumulate it, while most just spent every last bit of it. We all know why the savers get ahead and why the spenders don’t. It’s really not that hard. So why don’t we have more savers?
The culprit who commonly comes to mind is the public school system. The system is notoriously bad at teaching even basic financial literacy. Kids come out of high school knowing nothing about basic stuff like credit cards or compound interest. They don’t even have a sniff of knowledge of more advanced stuff. They might be able to tell you what a mutual fund is, but not how to invest in one, or the fees they charge, or anything else. A lot of people view this as a failure of the school system. But is it?
I challenge that the public school system is actually pretty poorly equipped to teach students more than the very basics of financial literacy.
First of all, let’s examine the people giving the education. Now, I know quite a few teachers. And, for the most part, they’re hardworking, decent, honest folks. Sure, there’s some bad apples in there, just like in any profession. This isn’t a rant against teachers.
Yet I’d say that as a group, teachers aren’t very motivated to do well financially. They work in a system that rewards longevity over performance. They have no need to save for retirement, as their pensions take care of that for them. They don’t need to negotiate raises, as their union takes care of that too. There’s no haggling over starting salaries either, as the only variables are the amount of experience and education the teacher has.
Does that sound like the blueprint for great financial education?
I’m going to go one step further with this post. The more I think about it, the less I see wrong with the way things are right now. If you want to get a basic financial education, then buy one of the 7 bazillion books out there. Or go to a personal finance blog. There are so many options out there if you want to learn the information. It’s just a matter of putting in the effort to acquire it. And isn’t life all about the effort we put into it?
Ignorance doesn’t cut it as an excuse anymore. Laziness doesn’t either. You are literally a few seconds away from getting a basic education on absolutely anything you want. This is probably the most remarkable thing about the age we live in. So why do we have so many financial idiots? Simple, because for the most part, we don’t want to learn. I’m not sure we’ll ever change either.
How about your friend that does stupid financial things? Don’t bother talking to him about it. He doesn’t care. We’re living in a fantasy world if we think a high school course is going to change that attitude.