Hmm…since we got so much reaction to the money discussion, I am going to continue it. Before I do that, though…the O count is at 11, because you asked;-) My stomach muscles hurt…hee hee.
And Munchkin is in Tortolla. Lucky little bitch…lol. They slept on the boat Tuesday and Wednesday, but in a hotel last night (and I think tonight). She is having a blast, which is not terribly surprising…she tends to have fun wherever she goes. And no seasickness, either, which is obviously good!
OK, back to money, and to some of the comments that were left. First, allbilly said “I find people with money love to talk about it and those without loathe talking about it.” I only really think this is partially true. I think people without money spend an inordinate amount of time talking about how little of it they have. I feel like it was sort of an 18 year running conversation around my house growing up. And I realize that I am making some really, really broad generalizations, but I am allowed to…it is my blog:-P
And there are clearly some wealthy people who love to highlight exactly how much money they have. But I would also say that I have observed a lot of wealthy people that are extremely uncomfortable with the subject because it can generate resentment and unfair expectations of generosity. I will spare you the stories because I think this is already going to be a long post, but maybe more on it later if I decide to.
Then I would like to get to something that Bob said “Save and invest as much of your money as possible now and you will be able to do what ever you want later in life. I started investing in my 401k when I was 19 and I really have quite a pile now (for a poor kid who ate free gub'ment lunches in JR High school).” First, he is dead on with the saving part.
But, his second point, that he started saving when he was 19. There is a huge gap in financial literacy, and I feel like it hits harder as you move down the economic scale. Who taught Bob to start funding his 401K when he was 19? Whoever it was, he should bake them some cookies because it is a life lesson that will serve him tremendously. It is likely to be more important than anything he learned in school…
We hear often about the importance of having Math and Science education, as well as the importance of well-rounded kids with art, music, sports and theater opportunities. All of which is very valid…but why has no one ever brought up the importance of basic financial education? By the time someone finishes high school in America, they should have had basic teachings in budgeting, saving, borrowing and investing.
They should know how to budget money to allow for some savings (even if it is $10 a week). They should know how credit works, how to build your credit profile so that you are in a position to buy a home when the time is right. They should know what they are in for when they buy a house and borrow a huge sum to do it. They should know the difference between a savings account, a CD, a bond, a stock and a mutual fund. They should know what each can and should be used for.
And especially girls!!! I don't think boys get much of an education in this stuff, but I do feel like they are more likely to have it brought to their attention than girls are.
I don’t feel like this are overly-complicated lessons, but I think it would erase an enormous amount of trouble as people get older. It will also begin to erase the social divide…I think that part of the reason that the poorest people in America remain poor is that noone has ever informed them that there are vehicles available to them to change that.
The Baby Boomer generation is getting close to retiring, and while they have an enormous amount of wealth, there are HUGE numbers of them with basically no savings. Many of those with no savings made plenty of money during their adult life, but spent every single nickel of it. Which means more support from those of us who will be working during their retirement years. Why did they buy so many BMW’s and so few mutual funds? (That was witty!!!) Could it be that while they were dropping acid and having sit-ins in 1968 they missed the lesson where someone tells you that you might need some money when you retire?
Anyway, I am rambling again, but it is a big topic that is worth a lot of ink. It also probably comes off as a little bit preachy of me (the 24 year-old lecturing on saving and investing…) But I don’t care:-P It’s my blog and I will preach if I want to!
Friday, December 29, 2006
More on Money and Stuff
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7 comments:
I could rant about this topic too. And one thing that I have observed is that informing people of this information when they are older isn't that helpful. It's very hard to teach an old dog new tricks, and financial responsibility is a way of life that must be learned.
I certainly think a two week course could be fit into a senior's schedule. We had a little bit about balancing a checkbook in high school, but that was literally the extent of my formal education on finances. As soon as you get to college, you're bombarded with credit card offers and a lot of people begin their downfall into the land of debt then. And it's amazing how even people from seemingly well-educated families don't understand the importance of building a credit history and completely eschew credit cards. Anyway, I could ramble on forever about this subject, and it's timely since I'm about to up my percentage put into my 401k...So where did you learn to save, etc.? Papa Bear?
Awe...you quoted me. New investors LOVE to talk about investing. My friend Eddie talks to me all the time about it.
As far as learing to manage money, I think you are correct in that it should be a high school course.
Having worked in the criminal courts here in Houston, I can tell you first hand that the bulk the bottom third of the earning scale are totally hand to mouth. Some by poor decisions, others by lack of intelligence and or opportunity.
Juvenile courts will teach you what is truly important to the lower class teenagers. STUFF. SHIT. Like shoes, gameboys, CD's, and particularly GANGS.
I think the education you received is a perfect example of how the gap will continue to grow in America.
Upper and upper middle-class folks will learn and thrive via investing and the rest will once again be behind.
I think you should say whatever you want on your blog. That's the beauty of it. And don't discount your knowledge based upon age. I know a ton of dumb older people.
I mean..you quoted ME..AllBilly. This google/blogger sign in thing they have going on keeps screwing me up.
oh...and i am new to this blog, but that is quite a number of orgasms in such a few days. bragger
Wow I got a quote!
My father told me all about the 401K and automatic investing. He always said "Pay yourself first" That means that one should put a set amount into savings every payday and then leave it to grow. I started by putting 2% into my 401k and each time I got a raise, I bumped the amount by a couple percent. I have never missed the money.
I agree with AM that our schools should have some basic financial education for all students. Education can help reduce many of society's problems (duh, but many people act as if they are ignorant of this fact). But I also believe that many people CHOOSE to live for the moment, and spend their money accordingly.
I am very interested in what makes successful people successful. So that someday I may be able to emulate them. While some people seem to have a good business sense early in life, the skill is definitely something that one can learn.
Well I got to go shovel snow for a couple of hours. (I am in Colorado)
Kind of odd but my 7th grade middle school teacher was actually the only teacher I've ever had to get into finances. He made us follow the stock market, and taught us the differences between a CD, bond, mutual fund, etc. I think it was definitely really helpful, but it probably would have been better if we learned about it in high school. We actually did follow the stock market in AP Gov senior year, but I can't remember learning about anything besides just picking a stock and following it, but that could have been my senioritis kicking in. Anyway I think your post is right. I'm 19 and I'm in a little debt (trying to get out of it at the moment), but I've been trying to put a little money in my savings every week, and as soon as I get out of debt, I definitely plan to take your advice and educate myself a little more...because you're right, most college students I know are struggling to get by, and are in huge amounts of debt, I don't even know anyone that's actually saving money.
Once again, way behind the 8-ball. Great topic, though. My Dad came from nothing and has definitely made something of himself -- so he beat saving, balancing, and investing into my head from a young age. Before we could go into 9th grade (uh, was he going to hold us back a year himself??) we had to research a stock and then decide how many shares of it we wanted to purchase with $1,000. I ended up picking Coca Cola and it has since been a decent investment for me. (Even when the economy is bad, there's always $1 to spare for a Coke!) That could be a good idea for something to do with Munchkin. I have absolutely no interest in finance but I track my finances and balance my checkbook always. I see so many of my friends struggling b/c they just do NOT keep track of their finances at ALL.
Also, I agree -- not all 'wealthy' people like to discuss money. I grew up in a wealthy family (I myself am not wealthy at all currently) and I hated talking about money. People always made assumptions and were often times very mean because my family had money. Quite unfair as my Dad was definitely a 'self made man' and I was rarely just given things in life. But, such is life.
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