Financial education
Evening all! I am undergrad student currently spearheading a community outreach initiative with the purpose of informing less financial savvy individuals about the subject of finance/personal finance. At the moment I'm developing a lesson plan and I'm interested in what topics the wso community thinks are imperative to becoming financially literate. In addition to topics, activities or other engagement ideas are appreciated! For the first workshop the audience is likely to be focused toward non business majors within the school and then, depending on participation, expanding to the rest of the community. Thanks!
Highly levered portfolios are definitely a starting point
You go first. What makes you feel qualified to teach a course?
Thanks for doing this. Very important as the general public knows very little about personal finances. As a financial planner for the past 30 years, I'm constantly reminded of how little basic financial knowledge the public has. This is not relegated to uneducated people as I find it quite common with all types, including physicians, lawyers and other professionals. At the end of the day, it's not what they do and they spend little time on getting up to speed. Literally have an oncologist client who is a major researcher at a top cancer research facility / hospital who was miffed to find out he would pay tax on his 403B distributions (as virtually all of his market based investments were tied to tax deferred instruments with pre 59.5 or 55 withdrawal penalties.). I think I learned that when I was 15!
A major topic to teach is debt management. The use of debt. The goal of becoming debt free. Too many are slaves to the debt mountain and are unprepared for life events unfolding (as they will - because they will eventually).
Debt free is a nice sounding phrase, but it is not always the best scenario - especially if the person has high returns on investments and low cost of carrying debt. Debt isn’t a bad word, necessarily. You want your debt to work for you.
Agreed but the average consumer needs to be much better educated about debt, develop better spending habits and learn how not to accumulate bad debt. Way to many folks have literally transferred wealth from themselves to the banks. They "buy" things they can't afford and build this debt snowball.
Should they learn about the arbitrage that occurs between investing to out pace the mortgage interest, deductible interest, carrying losses, depreciation in RE deals...Yes. But the first thing they need to learn is how to manage their money and not buy things they can't afford. If they saw what life could look like if they were earning the credit card interest payments vs. it going to the bank they'd be floored.
Let the haters hate.
Show them these two graphs. 1. Time it takes to pay off a credit card making minimum payment with the total interest paid. 2. Future value of saving $100/month for 30-40 years at 8%.
These illustrations will speak volumes. I still remember my first week of finance in undergrad with these images shown to me.
Have some fun with this. You're doing a good thing.
Great idea! You can show how 25k in debt is really a 250k (or more) lost opportunity cost. Makes you really think about those purchases (luxury car vs practical, larger house, and more realistically just a pile of crap that most people never need)
Lecture 1: Show them how institutional investors being short gamma, direct or indirect, can boost financial instability.
Lecture 2: How to short the vix.
How taxes work, nominal vs take home pay and progressive taxation.
What is credit. How to use it and how not to use it. When to go into debt and when not to.
Real estate ownership vs renting, pros and cons.
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