tag:blogger.com,1999:blog-5465015914589377788.post1757565686401428656..comments2024-02-17T11:07:06.232-05:00Comments on Michael James on Money: Personal Finance Education Can’t Solve All ProblemsMichael Jameshttp://www.blogger.com/profile/10362529610470788243noreply@blogger.comBlogger16125tag:blogger.com,1999:blog-5465015914589377788.post-45886989562428848682014-05-03T08:26:04.417-04:002014-05-03T08:26:04.417-04:00I always read with interest folks who chat about f...I always read with interest folks who chat about financial literacy. It reminds me of my time teaching financial literacy to teenagers as part of a basic math course they had to take (and pass). Seldom did I feel I was taken seriously. We looked at all the financial literacy topics so many people talk about. Debt management, credit ratings, budgeting, living within your means, you name it. <br />Now that these people I taught are in their mid 20's, maybe they'll look back at my class and say "OMG! The old guy [me] was right!" You are right, it can only go so far. We all know that experience is the best teacher, but I felt it was worth my time with them.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-2312381773189936472014-04-17T08:11:02.085-04:002014-04-17T08:11:02.085-04:00@Paul: I see a lot of people create tough circumst...@Paul: I see a lot of people create tough circumstances for themselves as well. Education is a good thing, but as I argued, I think it can only go so far.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-55162024029213593092014-04-16T18:56:28.680-04:002014-04-16T18:56:28.680-04:00I feel some common sense financial knowledge shoul...I feel some common sense financial knowledge should be taught. I think there is simply nothing now. Some kids parents might be in their 2nd or 3rd generation of living in debt and thinking this is just how life is. Somehow the "value" of money has to be shown to kids. As simple as that sentence sounds it sums up a culture of people who really don't have a concept of money and how it affects their life. <br /><br />Also good credit habits vs. bad. We here look at money differently. We have an interest to come to a website like MJ on J. I have 55 co-workers around me. If there was more then 5 here that weren't in trouble financially or have "hope the government pays me X..." as their retirement plan I would be really surprised. Maybe if when they were young basic home budgets, and investing, and credit use were taught in school more people would have a better chance at having a more stable financial life? I get so frustrated talking to people and hearing their sad stories that they could have avoided easily but they just don't get it.paulhttps://www.blogger.com/profile/00050081178673700867noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-57838625461052353312014-04-16T17:03:18.157-04:002014-04-16T17:03:18.157-04:00@Dave: Agreed. I'd like to combine this educ...@Dave: Agreed. I'd like to combine this education with some government innovation to help people avoid some of the worst choices.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-16554054264233988322014-04-16T16:17:40.325-04:002014-04-16T16:17:40.325-04:00A good starting point would be for people to leave...A good starting point would be for people to leave school with a cursory knowledge of the language of personal finance. As far as I can tell, this simply isn't the case today, generally speaking. Most late-teenagers can't even begin to adequately define taxable income, tax deduction, dividends, etc.<br /><br />This is borne out by the oft-cited anecdote that most people believe an RRSP is an investment-product, as opposed to an investment-container.<br /><br />As I remarked on Twitter, personal finance education is necessary rather than sufficient. It would at least slightly reduce the extreme information-asymmetry between retail-investors and investment-salespeople.Dave Liggathttp://liggat.orgnoreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-70813120568910381252014-04-16T13:15:48.649-04:002014-04-16T13:15:48.649-04:00@Robb: The biggest challenge I see is fending off ...@Robb: The biggest challenge I see is fending off those who wish to undermine the process to protect or even increase their income streams. Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-28946344080386397032014-04-16T13:14:20.481-04:002014-04-16T13:14:20.481-04:00@Gene: I seem to remember a comment from Bogle alo...@Gene: I seem to remember a comment from Bogle along those lines, but I can't remember where.<br /><br />The "while being poked in the ribs" is a nice touch that rounds out the mental image beautifully.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-13247765065012818132014-04-16T12:55:05.327-04:002014-04-16T12:55:05.327-04:00@Juan and @Gene: Very true. I've taken the a...@Juan and @Gene: Very true. I've taken the approach of emphasizing saving and no debt with my sons. Investing is secondary.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-85019789863080297412014-04-16T12:46:54.228-04:002014-04-16T12:46:54.228-04:00The new Financial Literacy Leader has a tall task ...The new Financial Literacy Leader has a tall task ahead of her to try and coordinate efforts between the private sector, public education, and not-for-profit groups who all want to promote financial literacy in their own way.Robb Engenhttp://www.earnsavegrow.comnoreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-75066707823774384182014-04-16T12:41:14.799-04:002014-04-16T12:41:14.799-04:00Good insight, Juan. A lot of friends/acquaintance...Good insight, Juan. A lot of friends/acquaintances know I'm a successful investor (I walk around dressed like the guy from the Monopoly board game (just kidding)), and ask for tips, but I get the impression that they don't have any surplus to invest anyway. What's the point in me giving investing tips? It comes down to reducing spending, paying off debt, etc. Boring, but simple!genehttps://www.blogger.com/profile/05608927986297939720noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-86956342856900334372014-04-16T12:34:31.568-04:002014-04-16T12:34:31.568-04:00Wish I could find a primary source, but I heard th...Wish I could find a primary source, but I heard that Jack Bogle figures people would rather pay $1000 in invisible MERs than say $50 out of pocket (the numbers aren't right in this example).<br /><br />I think a reasonable solution is to have mutual fund salesmen show up unannounced at an investor's house wearing a balaclava, carrying a bag with a huge dollar sign on it, and have the investor peel off copious twenty dollar bills to pay their MERs every year while being poked in the ribs.genehttps://www.blogger.com/profile/05608927986297939720noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-42011856437724301782014-04-16T12:30:24.569-04:002014-04-16T12:30:24.569-04:00The successful marketing of debt is key. People d...The successful marketing of debt is key. People don't know how to save money anymore (as the statistics bear out, with a negative savings rate here in BC -- ouch).<br /><br />I hear many of my own friends talk about hot stock tips, the latest investment guru they're following to beat the market, etc., etc., but very seldom is there any conversation about what percentage of their paycheque is going into a retirement/investment fund, or steps they might be taking to cut expenses. Worse still, some are foolish enough to take a cash advance from a credit card or LOC to use as funds for a speculative investment.<br /><br />Investing advice is important but I think it often puts the cart before the horse. Becoming a saver is the obvious but often overlooked first step in my humble view. Open a boring high-interest savings account. Set up a direct deposit to that account. Get used to regularly saving money. Foster a saving mentality. Accumulate some cash. THEN worry about deploying it to appropriate investments. That order of operations might forsake a little investment return, but, for myself at least, it was crucial in transforming from spender to saver, and in turn from saver to investor.Juan Refritonoreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-63215361109949466222014-04-16T10:04:40.606-04:002014-04-16T10:04:40.606-04:00@Loonie Lover: I've heard many people joke th...@Loonie Lover: I've heard many people joke that the only way to get your bank fees back is to own bank stocks.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-34755022986967258492014-04-16T09:36:56.748-04:002014-04-16T09:36:56.748-04:00"Financial institutions have been remarkably ..."Financial institutions have been remarkably successful at marketing debt to the masses."<br /><br />A very good point. <br /><br />[Warning: Star Trek reference]: It kind of reminds me of the Ferengi who travels back to 20th Century Earth and discovers that people "pay money to poison themselves" (tobacco). He sees what the banks see: an opportunity for endless profit.<br /><br />I love to own the banks, but otherwise try to have very little to do with them.Loonie Loverhttp://wp.me/p30UJt-snnoreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-1836905833706454062014-04-16T09:25:27.039-04:002014-04-16T09:25:27.039-04:00@AnatoliN: I don't think this is practical. P...@AnatoliN: I don't think this is practical. Perhaps the problem is credit companies giving credit to people who they know likely can't pay the money back.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-6085080963924768112014-04-16T08:33:32.799-04:002014-04-16T08:33:32.799-04:00Among good policies may I suggest a change of bank...Among good policies may I suggest a change of bankruptcy laws to effectively keep irresponsible consumers with their debts till paid back? Why do I have to pay for other people through fees, prices and taxes?!<br />AnatoliNhttps://www.blogger.com/profile/07937984526970646627noreply@blogger.com