The essence of a financial education

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Much as schools are effective in nurturing students academically, there’s still room for improvement when it comes to providing them with some scaffolding and support to develop their financial sense. School curriculum in most educational systems are catered to enable students to join the workforce upon graduation but not much guidance are given to provide them with inroads into other forms of life career other than starting out as an employee and climbing the corporate ladder (as lifetime employment is passe, there is a current trend which converges on entrepreneurship. Timothy Ferriss’  ‘The 4-hr Workweek’, Daniel H. Pink‘s “Free Agent Nation“, Seth Godin‘s “Tribes” and Malcolm Gladwell‘s “The Tipping Point” are great reads).

There are other paths available in life.

This was first mentioned by financial educator Robert Kiyosaki in his book ‘Rich Dad, Poor Dad‘ where he defined the four cash flow quadrants that one can place oneself in when it comes to work and career. He encouraged that one shifts from the Employee (E) or Self Employed (S) quadrants to the Business Owner (B) and/or Investor (I) quadrants. This seems to imply a shift from working within an organisation to embarking on road to entrepreneurship.

Ultimately, it’s still a personal choice and there are people who do well in the “E” and “S” quadrants.  Regardless of one’s choices, it seems that most educational systems are nurturing students in the “E” and “S” quadrants.

Awareness should be created in students that there is still the B and I quadrant. Maybe there are greater challenges in entering these two quadrants upon graduation (one needs entrepreneurial spirit and enterprising capabilities to pull a business off for “B”, while one needs excess cash to be an investor for “I”, both of which carries much higher risk than the “E” and “S” quadrants).

Nevertheless, students should be given the chance to try. After all, isn’t failure the key to success?

Every student possess in him or her different and diverse personalities and temperaments, and an interesting fact from my years of teaching experiences is that not all of them are suited for the “E” and “I” quadrants. With this fact in mind, wouldn’t it be regretful if students suited for the “B” and “I” quadrants are not given the necessary support to optimise their potentials in life? Yes, the main goal of most businesses and investors are to generate wealth, and wealth is often considered by many not to be the most important thing in life.

This is true to a great degree but it is important to note that wealth also provides one with peace of mind and when knowledge of wealth is applied to one’s financial plans, one can at least ensure that one’s life is financially secured.

More importantly, one is able to plan one’s life with much greater ease than if one lives life on a day-to-day basis with no knowledge of wealth management.It is indeed ironic that despite having a lifelong academic education, one can’t live a financially-free life in one’s golden years.

Financial education is especially crucial in these current times of unstable economies, increasing unemployment and retrenchments, contractual over permanent jobs, technical unemployment and rising inflation.

So when it comes to financial education, students deserve this education – for themselves and for their loved ones.

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