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By Jonathan Chevreau
National Post
FP Investing
Thursday, May 05, 2005 |
Readers of Saturday's column on the need to teach financial planning to young people agree it should be a priority for our high schools.
Adrian Mastracci, investment counsel at Vancouver’s ‘fee-only’ KCM Wealth Management, says, "With the financial constraints most schools are under, parents still need to take prime responsibility for teaching kids the basics of money.”
"High school is the perfect place to teach students about RRSPs," says math and economics teacher Murray Kass of Markham, Ont. "The business curriculum offers nothing in this regard. The math curriculum does not offer anything until grade 11."
I heard from one young person who learned personal finance not from the schools but from his parents.
"I never took any financial planning courses in high school, but I am sure glad that my mom knows a thing or two about managing money," wrote Winnipeg-based software developer Brian Kates.
"As a teenager, I started reading financial planning books aimed at that demographic. Now that I'm 22, I've learned the basics of avoiding debt and the importance of compound interest, so I've turned my attention to the stock market."
Thanks to a lucrative co-op job as a student, Kates has already assembled an impressive stock portfolio. "Given my investment horizon of at least 30 years, by the time I'm ready to retire I'll be quite wealthy."
Kates laments the fact few of his friends were fortunate enough to receive the financial education he received. "The root of the problem is the education system doesn't teach people how to make money -- let alone save" it.
For years, consumer advocate Joe Killoran has called RRSPs and RESPs the "missing 4th 'Rs' in education. He says financially illiterate and unknowing consumer/ investors constitute the "sheeple food chain" of Canada's financial services industry.
Some financial advisors agree their clients could have benefited from far-earlier instruction in personal finance. Toronto-based financial planner Heather Franklin says she "definitely agrees with your thesis; in fact in a few states in the U.S. it has become a requirement."
As a fee-for-service advisor, Franklin finds "the level of financial illiteracy is amazing; what is unfortunate is that most of these illiterates would not even glance at an article of this nature. Many will be forced to encounter financial difficulty when they are 50 and finally wake up."
Fred Kirby of Armstrong, B.C., says lack of personal financial training at the secondary or even elementary school levels is the root cause of many of the social and behavioural difficulties people will later encounter in life.
Kirby has a problem with school administrators who may not have mastered financial skills themselves.
"Unfortunately, when individuals who are minimally trained in finance or business make curriculum decisions, it is not surprising that issues of money are treated as unimportant."
Kirby says these decision-makers have little incentive to learn about the benefits of financial planning, saving and investing because they will themselves be recipients of generous defined benefit plans once they retire.
Maggi Waddell, a retiree in Collingwood, Ont. who has been a stockbroker, broadcaster and academic, says "the schools have failed to impart the lessons of practical finances throughout life. An early grounding in practical financial knowledge is a key to a less stressed working life."
As things stand, it is mostly parents who impart this information to the young, Waddell says.
Indeed, Vancouver-based financial advisor Adrian Mastracci at KCM Wealth Management says that with the financial constraints most schools are under, parents still need to take prime responsibility for teaching kids the basics of money. Mastracci's web site at www.kcmwealth.com contains a number of essays on kids and money.
The original column mentioned a recent initiative in Ontario to get more parental input into high school curricula. But I also heard from some in other provinces who say personal finance has begun to find its way into some schools.
"We just started doing that in British Columbia this year," says Doug Hyndman, chair of the British Columbia Securities Commission. Planning 10 is a new mandatory course designed to teach Grade 10 students the skills needed to make the transition to adult life. It includes a financial life skills component developed by the BCSC (www.bcsc.bc.ca).
Economic education has long been a required course in the final year of some high schools in Quebec, reports Bob Ewart of Otterburn Park, Que.: "at least it still was when I retired seven years ago after teaching the course for a number of years."
The course was popular with students and one "we didn't have to make an excuse for teaching."
Oh, to be young again and this time, fully acquainted with the time value of money!
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