Here we go again, an academic trying to make a name by
sharing “study” findings that make their point.
I’m talking about Shawn Cole, Professor of Finance at Harvard Business
School. In this video The-best-way-to-teach-children-about-money, Professor
Cole tells the WSJ’s Tanya Rivero that academia has not been able to establish
a relationship between financial education and financial literacy, and
especially how these translate to financial behavior.
So he’s basically saying that teaching
finance, investing, etc. has no correlation with a student becoming financially
literate. Really? Wow.
Isn’t that the story of every subject course taught in high school?
How many of you can speak Spanish or French today? Well, didn’t you take three years in high
school? How many of you can tell me about
the Ideal Gas Law with clarity?
But…didn’t you take chemistry?
Okay, Professor Cole, so far there’s nothing going on around
here. Everyone keep moving.
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http://thefinancialbrand.com |
Professor Cole then asserts that our policymaker’s
benevolence in funding financial education, in response to our Great Recession,
has been well intentioned but misguided.
It’s true. Politicians like to
just throw money at things in reactionary style. I’ll give Professor Cole this one.
Over 40 states in the nation require high school students to
take some sort of financial education course.
Cole states,
“…And what we found really surprised us, is that people who
are exposed to these financial education courses had no better financial
outcome then the people who didn’t have to take the course.”
Well then, Professor Cole, should we just stop teaching
financial education? I can assure you
that my teacher peers all across this great nation would tell you
different. They would tell you that some
of their students went to college and majored in Economics, Finance, or
Business Administration. And you would
tell me that they got into college because they had the necessary math
coursework. And we would both be right
about something: There is no substitute for great teaching! Regardless of the subject matter.
An extra semester of math, you say, makes all the
difference. Of course it does! Since you do not work at a high school, I’ll
let you in on something: Kids struggle in math.
The majority of them want no more than their graduation-required
load. Math is a gateway to college, and it keeps many of our low socioeconomic students from making their A-G course college requirement. College, as we know, is a gateway to better economic
prospects for a person.
Like most of us, Professor Cole has no idea what actual
financial literacy skills need to be taught.
He suggests students need to understand interest rates and compounding
interest. I agree.
Then Professor Cole insults the layman, saying that he, as a
scholar, thinks about things more rationally and carefully than the typical
person. I’d like to see Professor Cole’s
personal investment performance over a ten-year period. The typical person may not understand, for
example, the menu of options from a mortgage.
Seriously? Professor
Cole, the reason the average American doesn’t understand the menu of options
for a mortgage is because they are written in difficult to understand
language, sold by shady banks and lenders, and pitched by commission hungry
loan officers.
Did you know that in some cases, loan officers are paid
entirely on commission? Some get base
salary plus commission.
In addition, having been burned by the real estate bubble,
the average American is now more cautious when applying for a home loan. They may not all know what to look for, but
they are more leery, that’s for sure.
Professor Cole concludes by saying that he does talk to his
daughters about finances, but only before dinner. After dinner, he’s helping his daughters hone
their math skills. Well of course he
is! He wants them to go to Harvard.
Thanks for Reading!
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