Saturday, October 26, 2013
Majoring in Money
A couple of Websites are aimed at raising the financial acumen of high-school students. How much do I have to make to afford that lifestyle?
Like most people in my profession, I’m an advocate of financial literacy. I believe the 2007-08 financial crisis would have been avoided—or at least less severe—if more people had understood what kind of collateral was backing too many mortgages and financial instruments.
That’s one of the reasons I was intrigued by Moneythink (moneythink.org).
The company’s mission is the expansion of economic opportunity in the U.S. by developing financial-literacy programs for urban youth. The aim is to educate every teenager in how to navigate the financial challenges of adult life. Moneythink has set up a program in which college volunteers mentor local youth, teaching them how to make and manage money. Among the colleges involved are U.C. Berkeley, Carnegie Mellon, and Rice.
The mentors teach their students about networking, budgeting, banking, investing, saving, and managing debt and government benefits. They work with small groups—at most five students—to encourage strong financial and career decision-making. Making use of pop culture to illustrate the upside of sound financial management and the downside of fiscal imprudence, the once-weekly sessions help students better understand the financial landscape so they can develop their own personal financial blueprint. It was created by Ted Gonder, Shashin Chokshi, and Greg Nance.
It’s a lofty aim, and financed by donors that include the Center for Financial Services Innovation and the Blackstone Charitable Foundation, the Website is definitely worth a look.
The late Muriel Siebert and I often discussed the financial-literacy program she developed for high-school students. It became part of New York City’s high-school curriculum, and Siebert worked to expand it nationally. The Jump$tart Coalition (jumpstart.org) has a map on its Website that shows financial-literacy education requirements by state. Only four, Utah, Missouri, Tennessee, and Virginia, require at least a semester course devoted to personal finance. Twenty others, including New York, require personal-finance instruction to be incorporated into other subjects. The other 26 states have no requirements.
Jump$tart has a terrific library of financial-literacy resources, many of which are free to teachers and caregivers. It also conducts a biennial survey; unfortunately, when last conducted in 2010, it demonstrated that graduating high-school seniors continue to struggle with the basics of financial literacy.
If you’ve got high school- or college-age offspring in your household, it would be of great benefit to them—and to you—to run them through Jump$tart’s Reality Check, which you can find under the Resources tab. It’s a short questionnaire that will tell you how much you would have to make per hour to support the lifestyle desired without going into debt. It’s a real eye-opener.
I have some informal personal experience here. I’m currently volunteering with a terrific, local (to me) organization called 10 Books A Home (10booksahome.org). I have an hour-long tutoring session each week with a preschool child from an underprivileged family that does not speak English at home. We read, play, and converse in English, and I often throw in money-related items. My learner’s mother told me recently that her child is looking at prices at the grocery store and suggesting less-expensive items. There may be a way you can help promote literacy in your neighborhood.
PRODIGIO/TRADEMONSTER: Earlier this month, tradeMonster (trademonster.com) announced that it has partnered with mPower, publisher of Prodigio, an analytical platform that allows you to back-test a trading system. We raved about Prodigio when it was introduced by thinkorswim (thinkorswim.com) several years ago. But when TD Ameritrade bought thinkorswim, Prodigio wasn’t folded in, and it initially planned a partnership with OptionsHouse. That agreement has since dissolved.
Among Prodigio’s features are strategy back-testing, pivot studies, pairs-trading functionality, and a complete charting package. You set up a strategy scan using drag-and-drop technology. Prodigio is capable of helping a trader develop and test strategies, and then set them up to automatically trade for you. Anyone putting Prodigio to use needs a very high level of financial literacy.
Published in Barron’s, October 21, 2013.