Interesting Motley Fool article given the varying perspectives that these writers noted (which obviously got me thinking about lessons or activities that we have created to teach these lessons). Here are what the writers wish they had been taught:

• Compound interest: “Specifically, I think every high school student should graduate with the knowledge that compound interest could be your best friend or worst enemy. If you’re borrowing money — especially on a credit card – most young adults (or even the older ones) don’t realize just how much it really costs.”
  • NGPF Lesson: How Savings Grow
  • NGPF Activity: Calculate Compound Interest

• Loans:  “It amazes me that we allow people to graduate high school without the slightest understanding of how loans work, and how much they cost. I can’t help but think that if the average American had a better understanding of how loans worked the housing crisis might have been much less damaging, and the amount of student loans outstanding wouldn’t be anything close to $1 trillion.”
  • NGPF Unit: Types of Credit
  • NGPF Activities: Types of Credit

• Making money with money: “One thing I wish I learned long, long before I did was how you can make a lot of money with money. In my teens and 20s, I just let any extra money I had languish in my savings account at the bank, and I only thought of it as there for when I wanted to buy something, such as a new stereo or car. I knew I was earning interest on my savings, but it rarely seemed like much, and I paid little attention to that.
  • See compound interest examples above

• Buy and hold investing philosophy: “Over my 16-year investing career I’ve studied pretty much every kind of investing method you can imagine, from short-term speculating into penny stocks, leveraged options, currency trading, day-trading, and commodities. From very painful personal experience I’ve come to the conclusion that consistent long-term buy-and-hold investing in quality companies with dividend reinvestment is the absolute best way to build wealth and achieve one’s financial dreams.”
  • NGPF Activity: The Value of Dividends
  • NGPF Activity: Dollar Cost Averaging in Action

     

• Understanding the value of frugality: “Home economics classes that my classmates and I were required to take in middle and high school were great — they focused on cooking, how to run a “mock” restaurant, and everyday home activities. They helped us realize what it meant to be frugal. There was only one problem: no one wanted to be frugal. We wanted all the latest bells and whistles. We didn’t see the point in having money and not spending it. Other than “staying out of debt,” we never covered the “why” of frugality.”
  • Spent simulation helps students understand what it means to live paycheck to paycheck.

• Career readiness skills: “As my colleagues point out, there’s quite a bit that schools fail to teach. But, I can find no more egregious error than not being taught how to properly market ourselves to prospective employers. At no time during high school or college can I recall being taught the basics of self-marketing, which includes how to properly create a resume; how to fine tune it to demonstrate your skills and how they would be pertinent to an employer; how to use social media and other channels to find appropriate jobs commensurate with your skill level; how to interview for a job; or how to network once you’ve landed a job to ensure you have some potential for upward mobility.”
  • NGPF Career Unit covering such lessons as getting that first job, networking, informational interviews and how to interview for a job.

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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