The first semester has finally come to an end, and the senior class is now a mere few months away from graduation. During their time at Saint Louis, the seniors have completed courses in a wide variety of subjects, ranging from English and mathematics to science and the fine arts, just to name a few. But there is one course that is conspicuously missing: financial literacy. Although offering it as an elective, it would behoove Saint Louis to consider making it a graduation requirement. Not only would it distinguish the school from others across the state, but it would equip students with the practical skills necessary for future success.
It is rather startling how big the dearth of financial literacy is among young people. According to a recent report from the World Economic Forum, only half of American adults are financially literate, with the number being smaller for members of Generation Z.
This is cause for great concern.
At Saint Louis School, we seek to create an environment in which “boys who want to change the world become the men who do.” Hence the need to make financial literacy classes mandatory, for any future leader must know how to manage his money. Any failure to do so may result in students taking on unsustainable debt, making uninformed investment decisions, or spending money on frivolous products. This is particularly resonant given the virtual inevitability of student loan debt that graduates may soon accumulate.
The push for financial literacy, however, must be based on a few core principles. It is recommended, although ultimately it’s up to the teacher’s discretion, that the class curriculum model the teachings of investment luminaries Jack Bogle and Warren Buffett. For those who may not know, Mr. Bogle was the founder of The Vanguard Group, an investment firm, and creator of the first index fund; likewise, Mr. Buffett is the longtime CEO and Chairman of Berkshire Hathaway.
While both men adhered to many solid financial principles, there are two that have stood the test of time–investing for the long-term and living within your means. Simple though it is, it serves as a powerful tool for wealth accumulation. Just to illustrate, in a 2018 interview with Yahoo Finance, Mr. Buffett gave an example demonstrating the power of long-term investing. If you had invested $10,000 in a low-cost S&P 500 index fund–which is a broad collection of stocks–in 1942, the money would’ve turned into $51 million by 2018. Isn’t it incredible?
Unfortunately, students are not aware of this reality. A mandatory financial literacy class would, therefore, allow Saint Louis to seize this opportunity and prepare its students for the future. Consider that the culture in which we inhabit is one characterized by temporary pleasures and short-term fixes, which undergird the natural impulsivity of teenagers. And given that the prevailing perception of Wall Street is that it’s a reckless casino, it wouldn’t be very hard for the youth to be absorbed by this tide.
Saint Louis School can help resist this tide. A financial literacy class grounded in prudence is the way to do it.
