I’m a believer in life-long learning. We’re better off when we take the time to learn what we can about personal finance. However, some people seem to believe that if we just taught personal finance well enough in schools, we’d prevent so many people from handling their money poorly. Education is valuable but will never be a complete solution. The first reason why personal finance education isn’t enough is human nature. We know we should eat well and exercise, but many of us are fat and out of shape anyway. When I eat a donut, it’s not because I lack education; it’s because I had a lapse in willpower and the donut was available. Similarly, personal finance education will help to a point, but even those who know better will often lack the impulse control to make consistently good money decisions. Another reason why personal finance education isn’t enough is that businesses that make money from our poor choices will adapt. Financial institutions have been remarkably successful...

Scott Adams (the Dilbert comic guy) described a very interesting idea for creating a type of marketplace for online teaching tools that would allow people to find the best materials for learning each individual subject. It would also allow highly-skilled developers of online courses to make money. I think some variant of this is likely to replace our current bricks and mortar method of teaching. But the transition won’t be easy. A critical component of online teaching tools that Adams didn’t mention is collecting student feedback in real time. Imagine if software could detect when a student looks tired or frustrated and could adapt the teaching style accordingly. This is what good tutors do and there is every reason to believe that a combination of a computer camera, microphone, and some great software could replicate some of this benefit. A problem that online teaching tools are certain to encounter once they become a bigger threat to the enormous business of bricks and morta...

I recently came across Andrew Hacker’s New York Times piece Is Algebra Necessary . He seems to be arguing that we don’t need to teach so much math, but I think all he demonstrates is that we teach it badly. Before looking seriously into these questions, I have some ideas for people with less thoughtful opinions than Hacker does on the uselessness of math, such as “why should we teach algebra if it obviously has no use in the real world?” I guess I’ve heard this question one time too many. <Rant On> Here are a few thoughts for the people who believe math has no use in real life and shouldn’t be taught so much in school. Remember to make the minimum payment on your credit cards this month. I like to keep my dividends flowing. When you look for a new vehicle, remember that leasing gets you the biggest truck for the payment you can afford. When you look for a house, your bank will tell you the biggest mortgage they’ll let you have. When you find a nice financial advis...

An RESP is a Canadian tax-advantaged savings vehicle for funding a child’s education. I’ll leave most of the details of RESPs to others and focus on one aspect: the actual investments bought with RESP money. Back when my children were very young, I looked into RESPs and was disappointed to find that there were severe restrictions on how the money could be invested and what the money could ultimately be used for. For the plans I investigated, investments were restricted to mutual funds with MERs over 2%, and the rules for how the money could be used were more restrictive than was required by law. When the Canada Education Savings Grant (CESG) came along, things were looking up. The government was going to match 20% of RESP contributions (up to a maximum amount). Surely this would make up for the high fees charged by the mutual funds, right? Not so fast. Costs due to MERs accumulate year after year, but the 20% CESG is only added to each RESP contribution once. So each dollar that...