Regardless of what students think – money does make the world go round. If any high school student does not have the simplest notion of where money comes from then “we have a problem, Houston.” Money, in many cases, wages and salaries allow us to turn our vocational time into recreational time. We work to make money to spend on the day-to-day items we deem important to us. An iPod Touch, the latest Black Eyed peas CD, movie tickets, and gaming software – you get it. However, spending money all the time makes us all “negative” savers. Approximately, 98% of North Americans do not save and that is about 320 million people – essentially, they live for the moment. This is great when you are young but as you get older and have more commitments – relationships, marriage and children – then life becomes more complicated. In 1984, I read the book entitled, The Wealthy Barber by David Chilton. I was right out of university and ready to conquer the world. Essentially, the book suggests that we pay ourselves first (10% of our gross income and save it), invest in affordable real estate, invest in mutual funds that you understand and regardless of one’s age, plan for retirement.
This might sound ridiculous for high school students but thinking about careers, opportunities, investment strategies and long term financial goals is critical to long-term personal fulfillment. So, here are a three websites that will come in handy before you graduate from high school:
1. National Endowment for Financial Education - http://www.nefe.org/HighSchoolProgram/tabid/146/Default.aspx
2. Investor Education Fund
http://www.investored.ca/Pages/default.aspx
3. Financial Education
http://www.financial-education-icfe.org/children_and_money/index.asp
Unfortunately, there is too much personal financial information out in cyber land to digest so what you ultimately want to do is:
1. Discuss investing and saving your money with your parents.
2. By the age of 16, all high school students should have a bank account – consider one.
3. Understand the differences between stocks, bonds and mutual funds.
4. Meet with your bank manager and ask for a tour of the bank and its services.
5. Ensure your high school principal has a financial literacy program available for all high school students. If he/she does not, get them to contact me and I’ll set one up.
6. Keep it simple – do not get involved in any financial arrangement that you cannot draw on the palm of your hand.
Anecdote: In the tech boom craze of the late 1990’s I invested $10,000 in an Internet company that was supposed to take personal information and, well I still do not know what it was going to do with it to this day. I was given a tip from a friend of a friend and was going to make ten times my investment – six months later my $10,000 investment evaporated and the company went bankrupt. Poof – up went $10,000 in flames. Mea culpa.
Moral of the Story: Don’t invest in something you don’t know anything about.
So there you have it – simple personal financial strategies to get you started. A solid financial strategy will reap consistent dividends, as you grow older. Happy saving and investing!
