My investing history didn't need to be so brief...after all your first million is the toughest.
If you would have asked me what a dividend was while I was in my third year of university I likely would have given you a blank stare. Through conversations with a friend of mine during my latter years of university I became interested in personal finance. When I graduated in 2002 I quickly joined the working world as I needed to pay the rent. Around this time I began to have conversations with people in my life who had an interest in mutual funds, stocks, and the markets. Acting on my new found interest in these topics, as well as a realization of the power of compound interest, I plunked down a hard earned $500 and bought a Canadian Equity mutual fund.
Even though I was earning a very meagre salary, and I had a $4,500 outstanding student loan I felt I needed to get involved and participate in the economic power of corporations growing my capital for me. In hindsight I wish I would have stumbled upon the world of the stock markets, and personal finance much, much earlier. I strongly believe that there should be a mandatory personal finance class in high school or even elementary school. Knowing what I know now, even though my resources were very tight in my high school and university days I might have skipped that extra case of beer or that new golf shirt and bought some shares of Royal Bank of Canada (RY) instead.
3 comments:
I think in school when you first learn to count money (everyone remembers all those flash cards and stuff right?) then next you should learn about income, then taxes, then budgeting. After this in middle school you should learn about investing types (IE, the difference between bonds/stocks etc), reading income statements and balance sheets, and general financial math like how to figure out how much things cost when financed, how to calculate what your paying on interest etc.
High School should then have a mandatory course in personal finance which includes things like how to set up savings, emergency funds, investment accounts, etc. There should be a second elective that actually does simulated stock investing, and real financial math like P/E rations, ROC and ROE, and all those good finance mumbo jumbo.
Wow, would our country ever be in good shape if people understood how taxes on their paycheck are calculated, how much they can make by investing, how much they are actually spending on that car loan at 'only'14% . . .
I also though mandatory personal finance courses were a good idea... at first. Then I remembered they TRIED to teach me all kinds of things in high school. I just wasn't mature enough at the age of 16/17 to take serious interest in the high school curriculum. I doubt I would have felt any differently about personal finance courses.
By the time I reached the age of 26/27... different story.
I agree with traciatim...
Until the government makes personal finance compulsory at schools we will continue to have this huge mis-match between what people understand and what they actually do with their money.
Financial freedom should be fairly straightforward because in the simplest form it is really just being smart with money.
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