Comment by triceratops

Comment by triceratops 4 days ago

I don't know what you mean by that. They teach compound interest in every school. Basic economics too. Anything more advanced is going to be lost on most kids, because that's most adults' level of financial literacy too.

The problem is many kids don't have much money to save or invest. Or if they do, real banks kinda suck when you only have a kid amount of money ("Here's the 0.2% interest on your $37 balance"). So they can't apply what they learned. An app like this, backed by the Bank of Mom and Dad, is great for practice.

danielbarla 4 days ago

While I certainly had the _concept_ of compound interest taught to me at some abstract mathematical level, the application to real life practical financial scenarios was definitely not done [1]. Economics as a whole was an optional subject.

I think schools and curriculums could do a whole lot better in representing this important facet of life. More broadly, I often feel that "applying all that math you've learned to real things" is a subject that could be taught.

[1] Seriously, having applied math questions like "Johnny earns X per year, with a cost of living of Y. Assuming inflation of Z and average yearly returns of R, what percentage should he be putting away, starting at age 25, so that at age 50 he essentially gets the equivalent of his own salary each month?" would likely cause some lightbulbs to go off in the kids' heads.

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triceratops 4 days ago

> the application to real life practical financial scenarios was definitely not done
Of course it was. You can't teach compound interest without referring to money or banks. That's the whole point of it. Otherwise it's just multiplication.

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- sebastiennight 4 days ago
  
  It... is just multiplication. And can't talk about GP's experience, but I can tell you that going through scientific schooling and engineering schools in the French system you'll learn exactly how to calculate the math and never have a single example such as mentioned above.
  We're here to build bridges, not count stashes of money after all!
  You'd probably get those if you went through "economic studies" (which is a different track and where math includes a lot more statistics even in high school).
  
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- TeMPOraL 3 days ago
  
  Not only you can, I still don't see how the financial "magic of compounding" isn't bullshit for vast majority of people - you can't really make significant money this way in reasonable time spans (5 years rather than 50).
  
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  a96 3 days ago
  
  5 years is "get rich quick!" scam territory. The real aim is to manage finances for the rest of your life which may or may not be 50+ years, but will definitely be in double digits if you're of an age for thinking of managing your savings. If your horizon is shorter than that, you're essentially on your deathbed already.
  
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  triceratops 3 days ago
  
  5 years isn't a reasonable timespan. Compounding over the course of a 35 year career, earning a modest wage, will fund a comfortable 20 year retirement. If that's "bullshit" for most people then too bad. Good things come to those who wait etc.
  
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Ekaros 3 days ago

I wonder where it will go when Y>X. Maybe open question what is the solution. A) Violent revolution and Johnny taking over means of production. B) Death.

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array_key_first 4 days ago

The problem is that the financial industry is, like, capitalism-maxxing.
How do you teach "financial literacy" in a practical way without referring to specific products, offerings, or corporations? You really can't.
If you talk to people about investing or retirement, they're gonna talk about Fidelity, Vanguard, whatever. Which is very practical. But I'm not so sure we need our government and education system to basically directly endorse these corporations.

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ericyd 3 days ago

My statement was intentionally under specified, and as usual my word choice was not great. My primary intention with the comment was to indicate that knowledge of investment alone is not very useful without surplus money. There is a narrative that investment alone can alleviate poverty or provide financial independence. I don't believe that's true and that was my main point.

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spectrum1234 2 days ago

Economics was optional in high school. It was also extremely basic. It was quite basic in college and also never covered this.

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recursive 4 days ago

Where do you send your money to invest? What is a stock? This is the type of information missing.

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triceratops 4 days ago

> Where do you send your money to invest?
If they had taught you that in high school 10 or 20 years years ago, it would be outdated by now. People used to save in savings accounts. Then 401ks. Then individual brokerage accounts with index funds. Now crypto or whatever is hot using some fintech app.
> What is a stock?
That's fair. It can come up in basic economics but not always.

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- recursive 4 days ago
  
  > If they had taught you that in high school 10 or 20 years years ago, it would be outdated by now.
  That's a fair criticism, but I don't think it's enough to outweigh the benefits. I think I learned how to write a check in second grade. It was useful information.
  
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- pfannkuchen 3 days ago
  
  I think an understanding of why those systemic changes happened would go a long way in preparing for what’s next.
  
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- brailsafe 4 days ago
  
  > it would be outdated by now.
  It's way easier to update the tail end of knowledge you have and practices you've learnt than to start from scratch when you have no time.
  Likewise, if the only stuff we could teach in grade school was stuff that would never become outdated, then we wouldn't even be able to teach more than the highest level of recent history, math foundations, super basic geology and physics, which is a pathetically low bar. Things change, it's the way it is, we should have a higher standard.
  Kids won't otherwise get early exposure to learning how to start a business unless their parents did so, or investing unless their parents did, which means they probably had a surplus of resources at home and the cycle of a widening class divide continues.
  The most powerful type of compound interest is early exposure to anything; an idea, a sport, money, business, computers, art. If your parents did it, you're off to a great start, but if they didn't, you're automatically set back at least a decade if not two for any of those, and public school should aim to smooth out those bumps.
  
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seemaze 4 days ago

> that's most adults' level of financial literacy too.

The vicious cycle! We have to start somewhere..

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bluGill 4 days ago

I give my kids a copy of their 529 accounts I opened and contribute to in their name. This is real money and they can see a return on investment and growth happening.

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