How to Find the Best Financial Education Program

If you’re reading this then hopefully you are looking for a way to take control of your own finances by completing some form of financial education program. Perhaps you have sacked your financial adviser because he’s done such a crap job over the last couple of years and you reckon you can do a better job. Or maybe you’re just starting off and have decided to take responsibility for your financial future at an early stage.

If so, congratulations! The path to true wealth and prosperity lies in understanding your own finances and taking control of them. The path to failure is letting others, like financial advisers, family or friends, take control of your future by managing your investments or telling you what you should be doing. Worse still, is trying to do it on your own without understanding where you are going.

To benefit from the ability to control your own finances you need initial and ongoing financial education and that is best achieved through a properly structured financial education program. It’s like learning to play golf. If you have never played before, then the best way to learn is to seek a professional who will show you how to achieve that low handicap through a perfect swing. Your ongoing performance on the golf course also relies on your ongoing practice and continued support from the golf pro or other professional sources. We all know what sort of golfer a person is likely to be who has never taken a golf lesson and relies on advice from their mates when things go from bad to worse with the swing.

Financial well being is no different to playing golf. You need to learn the basics through a comprehensive financial education program. The program also needs to teach you the right mindset for achieving prosperity. Financial freedom or success can have different definitions to many people but any financial education program needs to also teach you beyond the basics and principles of how to swing a golf club.

What about when your ball goes into a bunker? Did your golf pro teach you how to get out of trouble? We all know the world of finance and investment does not run smoothly all the time. For the untrained, making financial decisions can be like not knowing what club to use on the tee or any other part of the course – because they do not know what the outcome may be. To the trained golfer you know what club to use and will be successful more often than not when you play a shot from any position.

To find the best financial education program you need it to cover the fundamental basics like budgeting, cash flows, understanding all types of investments, investment structures and understanding company reports and research papers. It also needs to teach all the advanced strategies like minimising your taxes, estate planning issues, retirement planning strategies and protecting your assets. It also needs to teach you about prosperity, financial well being and the importance of a healthy lifestyle. Probably the most important aspect, just as the golfer needs constant revision and practice to keep a low handicap, you will need constant reviews and ongoing access to professionals and mentors.

Achieving financial freedom is an ongoing pursuit of knowledge and education. If you don’t do it right you’ll end up in the trees or someone else’s forest.

Why Do You Need to Invest in Your Financial Education?

Wikipedia defines financial literacy as the ability to understand finance. More specifically, it refers to an individual’s ability to make informed judgement and effective decisions based on sound financial knowledge and understanding.

Our school system was designed to train employees for the industrial age. No wonder you were not taught how to handle your money and make wise financial decisions. Most financial knowledge comes from your own experiences (either good and bad) and your close ones like your parents, friends and relatives. You invest in 401K or RRSP and diversify your mutual fund portfolio because that’s what other people do and you don’t know any other investment options. It becomes a serious problem during the economic downturns. While many people saw their lifetime saving shrank dramatically from the last global financial crisis, some with a solid financial education became richer than ever. You wonder how they made it.

It is time to invest in your own financial education. It is time for our school system to adopt financial education into the curriculum of high school and college/university. Because a sound financial education gives you an unfair advantage to those without.

In his best-selling book “The Conspiracy of the Rich”, Robert Kiyosaki lists four basic investment categories (business, real estate, paper assets and commodities) and says a sophisticated investor invests in all four categories to achieve true diversification. If you have only one source of income (e.g. “Job”, “self-employed”), no matter how much you earn, you are vulnerable to any financial instabilities. You need to have multiple sources of income. You need to have more than one investment vehicle to build and protect your wealth. You may ask “Sounds great but where do I start?” Well, the best and the quickest way to success is to learn from those who have been successful. In this section, you will be introduced to some of the most successful and influential investors, entrepreneurs and financial educators of our time in North America. So fasten your seat belt and let’s explore their world.

Robert Kiyosaki — author of Rich Dad Poor Dad, is an investor, entrepreneur, educator and New York Times best-selling author. His financial education book series Rich Dad Poor Dad has been translated to over 100 languages and sold more than 26 million copies world wide. He also created the educational board game Cashflow 101 to teach individuals the financial and investment strategies that his rich dad spent years teaching him. Robert Kiyosaki’s perspectives on money and investing are different from traditional teaching. The old beliefs of getting a good job, working hard, saving money, getting out of debt, and investing for the long term are obsolete in today’s world. Robert Kiyosaki’s teachings focus on generating passive income through investment opportunities, such as real estate and businesses, with the ultimate goal of being able to support oneself by such investments alone. Some of Robert Kiyosaki’s bestselling books:

Cashflow Quadrant: Rich Dad’s Guide to Financial Freedom by Robert Kiyosaki (1998)

Find out which quadrant you belong to, why people from different quadrant think and react differently and which path to take to achieve financial freedom. Download Notes taken from Cashflow Quadrant.

Conspiracy of The Rich: The 8 New Rules of Money by Robert Kiyosaki (2009)

If you are still in the mentality of having a secure well-paid job and counting on your mutual funds to retire you comfortably at age 65, you need to read this book. In this book, Robert Kiyosaki shares his view of global economics and explores why people are finding themselves challenged by these turbulent times. If you are worried about or were hit by the last financial crisis, you want to be prepared for the next one. Notes taken from Conspiracy of The Rich.

Michael Maloney — To escape the rat race, you not only need to build wealth but also need to protect it against inflation and financial downturns. Gold and silver serve such purposes for hundreds of years. If you are interested in investing in gold and silver, you’ve got to learn from Michael Maloney, who is Rich Dad’s advisor. Michael’s book Guide to Investing in Gold & Silver presents a historical view of economic cycles, money history, gold and silver, fiat currencies, and the Federal Reserve in an easy-to-understand way. It explains how the US government is driving inflation by diluting its money supply and people’s purchasing power, why to invest in gold and silver, and how to invest in gold and silver. Through the lens of the history, you know where we stand today and how to prepare for our future.

You will find updated news and analysis on gold and silver investment from Michael’s website goldsilver.com which attracts hundreds of visitors daily. You can purchase gold and silver online through his website.

Robert G. Allen — a Canadian born financial author. Some of his best-selling books are: Multiple Streams of Income, Creating Wealth and Nothing Down. He has helped tens of thousands of people achieve their financial goals with his books and seminars. His Multiple Streams of Income covers the topics such as stock market, real estate, tax liens, network marketing, internet marketing, etc.

Robert Allen reveals the secret formula for extreme networking marketing success through his 14-page eBook “The Secret Formula For Financial Prosperity”.

Don R. Campbell — Canadian-based real estate investor, author, and market researcher. Formerly worked for Sears back in early 1980, Don achieved his financial freedom through real estate. He is the president of Real Estate Investment Network (REIN) which one of the largest organization of its kind in Canada and has more than 15 years history. To be a REIN member, you need to fulfill a 17-month membership obligation. The monthly fee is relatively high to some people but the information on Canada’s most current real estate market and education you will get are worthwhile. If you are new to real estate, it is definitely a good starting place and save you many trial and error.

If you are interested in Canadian real estate investment, Don R. Campbell’s best selling book 97 Tips for Canadian Real Estate Investors is a must for you. It offers Canadian specific content and advice that are relevant to Canadians.

Chris Martenson — a trained research scientist, and a former Fortune 300 VP. His free video series Crash Course gives a clearest and most straightforward explanation of how our economy, energy systems and environment interact — how we got to where we are today, and some reasonable expectations for the future. Chris sends out the same message Robert Kiyosaki has been teaching over the years — the next twenty years are going to look very different from the last twenty years.

Financial Education – A Global Perspective

Continuing social, economic and political change over the last five years has meant that the need for financial capability in young people is even more pressing. In many western counties issues surrounding increasing levels of personal debt, crashing markets and their effect on pensions mean that there is a greater need for individuals to take a more active and informed interest in their own financial future.

This article looks at various initiatives for teaching children about money around the world.

In South Africa, Teach Children to Save (TCTS) is a one-day initiative designed to spotlight the importance of teaching the country’s youth about saving money. The objectives of the project include:

To raise awareness about the benefits of savings, financial planning and foster a culture of saving. To demonstrate the important role that the financial services sector can play in creating a financially literate nation. To initiate a national program that encourages a collaborative, industry-wide effort to increase financial literacy.

Teach Children to Save South Africa (TCTS SA) was launched during July Savings Month on the 25th July 2008. On this day, volunteer bankers and financial professionals became teachers for a day and delivered a one hour savings lesson to learners in grades 4 to 7. This pilot initiative laid the groundwork for an annual event that spotlights the important role that financial service providers can play in educating the nation’s youth about saving. While modelled on the U.S. program, TCTS SA was customized to align with South African culture, financial education needs and the school curriculum especially Economic Management Science.

Scotland was the first part of the UK to publish guidance for schools in this area, back in 1999 Learning and Teaching Scotland, published Financial Education in Scottish Schools – A Statement of Position. This document describes managing money is “one of the most important and challenging features of everyday living” while outlining a minimum entitlement within the school curriculum. Their aims are for young people to understand key financial and economic ideas; be skilled in managing their financial affairs; recognise the importance of using financial resources responsibly and be able to operate in a confident and enterprising manner.

The Scottish programme as part of the 3-18 Curriculum for Excellence is under-pinned by the expectation that every teacher is a teacher of Numeracy, Literacy and Health and Well-being. A thematic / topic framework is suggested which schools may adapt to their particular needs. The four main elements of Financial Education in Scotland include: Financial Understanding, Financial Competence, Financial Responsibility and Financial Enterprise

An Australian report, ‘Financial Literacy – Australians Understanding Money’, found that young people are particularly interested in learning more about issues such as budgeting, saving, managing debt and avoiding financial scams.

Australian schools have introduced a nationally agreed Framework that provides an integrated cross- curriculum approach for all students from Kindergarten to Year 10.

Consumer and financial literacy will be integrated in programs across English, Mathematics, Science, Humanities – (Business, Commerce, Economics, Technology and Enterprise) Civics and Citizenship and ICT. This will allow all Australian students in their compulsory years of schooling to develop knowledge and understanding, skills and values in consumer and financial literacy.

An example of a Chinese approach to financial education is a theatre program for children aged between 8 and 12 years old in the cities of Beijing, Shanghai, Guangzhou and Shenzhen.

The program is based on a comic book, entitled “Agent Penny and Will Power in Operation Finance”. Scenes are based on stories of daily life and present students with commonly-used financial tools and concepts, including budgeting and compound interest, as well as the formation of healthy financial habits.

According to schedules of the program, the Cheeky Monkey Theatre, presenting itself as the world’s first ‘Chinglish’ Theatre Company, will visit between 40 and 50 schools in Beijing, Shanghai, Guangzhou and Shenzhen over the next ten months, and this play is expected to be seen by around 20,000 children.

In summary, financial literacy is regarded in many countries as a key life skill. The financial world is characterised by a wide range of choices and often high complexity, and as consumers we all need to take advantage of this dynamic environment. Young people are being targeted as consumers at an increasingly early age and may face complex financial choices. As 18 year olds, they are likely to have access to credit and loans in a way that would have been unheard of 20 years ago. Providing young people with good financial literacy skills helps to establish responsible attitudes and good habits from an early age. It helps foster an attitude to managing money that can enhance their long-term financial security and lifestyle.

Financial Education for Children – Teaching Money Management Skills

Isn’t it an irony that we teach our children to read and write but disregard the importance of a financial education for them? Isn’t imparting and teaching money management skills and knowledge to our children just as important for them to be ready to face the reality of the real world we live in?

Due to the ease of obtaining credit cards these days, there are now more reports of youths in their twenties and early thirties in position of debts than ever before. It is due to such a scenario that it is imperative that children of today are taught to be financially literate with the right money management skills.

The following steps could be taken to educate your children on basic money management:-

Start off by setting up a savings account for them. Give them an allowance, an amount slightly more than their daily estimated expenditure so that they put into their piggy bank that little extra daily. Explain to them that they should put aside say perhaps 10 to 20% of the allowance given. Set them a target to open an account in the nearby bank and later a target monthly savings. Even if that little amount is just ten cent per day, you will be surprise how quickly their savings will grow. The children themselves will be pleasantly surprised. Reward them if they meet their monthly target. This way, good saving habits can be inculcated into them early in life.
Introduce them to the Monopoly and other cash flow games that are available in the market. These games are a good way to educate them on the basic principles of budgeting and the understanding of incomes and expenditures for purchases.
Encourage them to take up part time jobs during their school break to earn some income and extra pocket money.

There are many books written to guide and assist you on a financial education for your children but since this subject is not a syllabus in the most school curriculum, it will be up to you to take the necessary initiatives in teaching the necessary money management skills to them to pave the way for them to gain financial independence early in life.

Financial Education for School Children

Habits die hard. So, if we are going to be slaves of our habits, lets at least have good habits. If we stretch this point, it is easy to see the case for money and financial education for school children. Children are inherently curious about the things happening around them. However, in our day to day life, we take much of what we see for granted. Often times, children ask very interesting questions like “Where does money come from?”, “Why do prices of some goods keep going up while the prices of other goods keep coming down?”, etc. However, many adults are not able to answer these questions in a satisfactory manner. The climax of much of modern education is a job, which is something people have to endure to earn money. However, managing money and growing it, which are life skills are not taught to students at all. The parents don’t teach it, the schools don’t teach and in the end, we bring up yet another generation of clueless adults who fall prey to financial intermediaries. In order to break this vicious cycle, it is really important for parents to ensure that their children get right financial and money education.

Are there examples of financial education at an early age making a difference in anyone’s life? The answer is a resounding “Yes”! In fact, we don’t have to look beyond Mr. Warren Buffet. Buffet started saving and investing very early in his life. We all know that the key to unlock the power of compound interest is to start early. By the time an average adult is aware of all these facts, he is already in his mid thirties. As Malcolm Glad well mentions in his “Outliers”, it takes 10,000 hours of practice to become very good in any endeavor. Thus, it is abundantly clear that children are exposed to the concept of money and compounding at an early age. This will ensure that by the time they reach adulthood, they would have spent a few hundred hours, if not a few thousand hours pondering about making and managing money. The head start will help them lifelong as the early birds get the benefit of the compounding effect of their wealth.

Another advantage of teaching school students about finance is that they become confident of taking their own decisions. This means that they can do away with middle men like financial planners, brokers, insurance agents, etc. This leads to substantial savings in terms of money over a 20 year period. The savings are likely to be approximately 2% – 3% every year. This is not an insignificant amount and the end result is that the retirement nest egg of the adult who had the benefit of early financial education is way larger than that of a person who has to learn the lessons the hard way, if at all.

Real money education is based on a curriculum that is a synthesis of several disciplines – History, business, banking, economics, etc. The key is to integrate these concepts so that the children are confident of taking decisions in the real world. Traditional education stresses more on analysis than synthesis, but in real world most problems are solved by synthesis of ideas from several disciplines rather than through analysis.

To summarise, it is important for the parents and the school teachers to equip the children with money and financial knowledge to survive and prosper in today’s complex world. As financial products grow ever complex, a basic understanding of the fundamentals are the least that is required of any future adult to compete in the highly challenging world of tomorrow. So let us sow the seeds of financial knowledge in the minds of young children, so that they may reap the benefits in their adulthood.