Thanks to Bilal Zia for sharing his global perspectives on financial literacy and financial capability that he has gleaned from his field studies in countries such as Indonesia, India, Brazil and South Africa. Bilal is not afraid to tackle the difficult questions facing the field including how to translate financial knowledge into behavioral change and whether financial education works. He shares some surprising insights gleaned from his study of Brazilian high school students, as well as an innovative approach to infuse financial concepts into popular TV programming in South Africa. Not only will you enjoy our conversation but you will also get a few ideas that you can use in your classroom or home.
Hat tip to Mike Finley, who I met today at the Iowa JumpStart conference outside of Des Moines and showed me this great interactive tool developed by Vanguard (Thanks to Mike Johnson and Julie Ntem for the invitation to present there and for organizing a great event!).
Here are the details about this tool and how you might incorporate into an investing lesson:
The students get an opportunity to toggle two variables: expense ratio and average annual return. The results appear in a series of bar charts for 1,5,10,25 and 50 years with the shaded portion representing the returns you keep and the unshaded portion representing returns lost to investors (and gained by investment management firms).
Here’s the set-up for a mini-activity:
The math is pretty convincing:
Hopefully, if you listen to this Tim Ferriss podcast with Ramit Sethi, you won’t have this reaction as you start saving money on your everyday expenses:
This infographic is a doozy but is rich with data and the potential for some great discussions. From Visual Capitalist:
Ok, I admit this may seem a little far-fetched, but stick with me for a minuter here. Ron Lieber (NY Times) has a column this Saturday imploring parents to write a money letter to their kids to get a conversation going:
The Money Talk, capital “M” and capital “T,” is overrated. As with the Sex Talk, children can sense that one is coming. And if they get antsy, your words will go in one ear and out the other.
Tempted to hand over a notecard instead? Your first principles may fit on it, and making one for a new graduate is a fine thing to do. But there isn’t much space for storytelling.
So in this season of transitions, consider the old-fashioned letter. It’s long enough to tell some tales to bolster your advice, and if it’s written with enough soul, there’s a good chance the recipient will keep it for a long time. Plus, it’s a literal conversation piece, since the good letters will inspire more curiosity about how the writers oversee their own financial affairs.
What makes a good money letter (Here’s a template that a writer, Kimberly Palmer, shared with the Times):