It wouldn’t be a personal finance blog post without someone lamenting the lack of financial literacy in North America, so allow me to jump on that with the enthusiasm of an undersexed guy at the Spearmint Rhino. Canada’s debt levels are still floating around record high levels, partially brought on by our obvious housing bubble, but mostly just because we consume way the hell too much. Government finances are a mess in the United States, with unfunded liabilities now soaring into the trillions of dollars. Anybody with a pulse can get credit, and a lot of those people abuse the privilege. Us financially responsible folk are in the minority, and I don’t think that’s about to change anytime soon.
So naturally, people who are financially literate want to pass on the message, and often approach this with all the zeal of a newly converted Jehovah’s Witness. They shout their message from the proverbial rooftops, engaging anyone who will listen. If only we could just solve our financial literacy problem, then the world would be an infinitely better place. It’d be like having steaks and blow jobs, BUT ALL THE TIME.
Yeah, financial literacy is all fine and good. You should always be looking to further your financial education, whether it’s learning about complex stuff like trading stock options, or learning about the forex market, or even simple stuff like figuring out how to get people to buy you dinner. (Having boobs helps A LOT with that last one.) Taking control of your finances will make just about every part of your life better.
With that last paragraph being said, the rest of this post is going to sound a little strange, but here goes. Even though I’m all for everyone being financially literate, nobody has the obligation to teach it to you. You need to learn it on your own.
We often bitch and moan about the lack of an effort teaching even the basics of finance to high school kids. And it’s true, at least it was a million years ago when I went to high school. We learned the very basic concepts in grade 10 math, and that was it. I think we spent a total of 10 hours on the whole thing, and it was a joke. I did get 100% on the test though, proving once and for all I am a finance GOD. BOW BEFORE ME IF WE’RE EVER IN THE SAME ROOM.
But there are plenty of other subjects we don’t teach high school students about either. I don’t remember hearing a thing in high school about responsible drinking, although I’m sure most 17 year-old kids wouldn’t have listened to a word of it anyway. I distinctly remember the pro-college attitude of my teachers, as they barely mentioned career alternatives that didn’t involve 4 years at a school in a big city. I don’t remember a minute spent on taxes, or gardening, or how to replace the spark plugs on my car either, and people who are passionate about those things would argue they’re pretty important life skills.
The point? I’ve said before that high school isn’t the place to teach people financial literacy, for a couple of reasons:
- Teachers are, as a group, no more financially literate than random people
- It’s harder to grasp the concepts when the only financial stress you have is saving up for a car
The internet is filled with porn, cute kitty videos, and articles written by guys like me (less attractive guys, obviously) about how to take control of your finances. Anyone with a little self control and 9th grade math skills can grasp the basic concepts, and anything more complicated than that has been written about a billion times over anyway. If you want to do it, obtaining a decent amount of financial literacy has never been easier.
Besides, as someone who is financially literate, you don’t want everybody knowing what’s going on. You want to keep all the good opportunities to yourself.
Many small cap value investors keep their top picks close to their chest, mostly because they’re looking at tiny stocks with very little liquidity, and there’s always a risk of a bigger investor getting a whiff of the opportunity. If they can get in first, that leads to greater gains, assuming the pick works out.
It’s the same thing with finances in general. Sure, there are plenty of opportunities out there, but it’s better for you if there’s fewer people competing for them. I’m not just talking investments either, things like taking a pay cut to explore a cool new career are off the table if you’ve got debt coming out of your ears. It’s a whole lot easier to rise to the top when you’re surrounded by mediocrity.
I think the system we have right now is working pretty well. If you want to learn all about the big bad world of finance, all the tools are out there. Nobody owes you much of anything, including a financial education. Just because we think everyone should learn doesn’t mean they’re going to. It’s a shame if people don’t bother, but I kinda like the lack of competition I have right now. The top becomes much less cool when it’s crowded.