Integrating Financial Education Into The Education System – Part 3
With the world changing so quickly today, schools have failed to keep up and as a result, their students get trained to become obsolete. This is especially true financially because many people are misguided daily, causing them to lose money unknowingly. Because of this, 2 more lessons ought to be added to the curriculum apart from the 4 already mentioned in Part 1 and 2.
Today, in the realm of investing, there are 2 aspects and students ought to know the difference between them well to avoid making mistakes in investments. These 2 are fundamental investing and technical investing.
Fundamental investing involves analyzing a company’s financial performance via its financial statement. In contrast, technical investing involves the measure of the market’s emotions and moods via technical indicators like charts without caring for fundamentals like earnings, book value, etc. In technical investing, investors look for historical patterns in markets based on cash flow to know where money is flowing to.
In my opinion, technical investing can be good in markets without much changes as they tend to follow patterns like seasons. However, in fast-changing markets, fundamentals would be more important because being the core of investments, they are easier to track. Should students already have known this in school, many would not now have fallen prey to using wrong investment methods and as a result lost money.
Another key lesson to drill into the education system would be knowing how to choose good people. This is important because in business, having good people will drive you to success while knowing bad ones will kill you. However, as the saying goes, the only way to find a good partner is to know a bad one. Given this, schools should place more emphasis on team activities and structure them in a way that knowing how to judge is the critical moral to learn.
Among the many other lessons proposed, I believe this to be the easiest for implementation because schools have more experience in doing so. In addition, after this lesson carries out its primary role, the advanced version can subsequently be developed where schools will ingrain into students the importance of having good partners, favorable financing and good management in investments.
If done successfully, students will become wiser financially and this can really help reduce financial problems by busting the myths they once knew for money and finance.
In conclusion, given the relative importance of these lessons, I hope schools really would consider them to upgrade the quality of its curriculum to provide a truly holistic education. This will certainly help people prevent many financial mistakes and nurture them into better individuals equipped with better skills to benefit society.