what school didn't teach you about money

Summary

This video delves into the surprising absence of financial education in schools and the resulting stress and confusion for many post-graduation. It explores the historical prioritization of academia over life skills and the current shift towards acknowledging the importance of financial literacy. The video offers practical advice on managing money, including budgeting, saving, investing, and dealing with debt, emphasizing the need for a balanced approach to financial health and happiness.

Takeaways

• 😣 Many people graduate from school without proper financial education, leading to stress and confusion about money management.
• 💼 The historical focus on academic subjects in schools has often sidelined life skills like financial literacy.
• 🏦 A significant portion of financial knowledge is inherited from parents, potentially perpetuating wealth disparities.
• 📈 The modern economy offers many opportunities to learn and earn money, but financial education is still lacking in schools.
• 💰 Personal finance is about reducing stress and living within one's means, not just about accumulating wealth.
• 📊 Basic financial management includes making money, spending wisely, and saving effectively.
• 🏦 Good financial habits like having an emergency fund and budgeting are crucial for financial stability.
• 📈 Investing should be approached with caution, starting with understanding low-risk options like index funds.
• 🚫 Avoiding bad debt and managing good debt is essential; professional advice can be beneficial for complex financial situations.
• 🔮 Financial scams often exploit fear or the promise of high returns; due diligence and skepticism are key in avoiding them.

Q & A

Why does the video suggest that many people graduate high school without a proper understanding of money?

The video suggests that many people graduate without understanding money because financial education is often not emphasized in schools. It is either not taught or combined with other subjects like math in a way that doesn't feel relevant or memorable.

What is the '20, 30, 50 rule' mentioned in the video for budgeting?

The '20, 30, 50 rule' is a simple budgeting guideline where 50% of your income should go towards needs like rent and food, 30% towards wants like entertainment, and 20% should be saved for the future.

According to the video, why might someone feel stressed about money even when they have it?

The video suggests that people might feel stressed about money even when they have it because they are unsure about how to manage it effectively. They might worry about saving too little, spending too much, or not knowing the right financial actions to take.

What is the role of Shopify in the video, and how does it relate to financial education?

Shopify is a sponsor of the video and is mentioned as a commerce platform that helps people sell online and in person. It also provides resources and guides on how to make money through side hustles or starting a business, which is a part of financial education.

Why does the video discuss the idea of 'good debt' and 'bad debt'?

The video discusses 'good debt' and 'bad debt' to help viewers understand the difference between debts that can be beneficial in the long term, like mortgages, and those that are generally high-interest and buy depreciating assets, like credit card debt.

What is the advice given in the video for someone who is struggling with debt?

The video advises those struggling with debt to get their spending under control, increase their income if possible, and consider seeking professional financial advice. It also suggests strategies like the debt avalanche (paying off highest interest debts first) or the debt snowball (paying off smallest debts first).

How does the video address the issue of financial scams and bad financial advice?

The video addresses financial scams and bad financial advice by suggesting viewers do their due diligence, search online, and be wary of offers that sound too good to be true. It also mentions tactics like using celebrities for endorsements and creating a sense of urgency as red flags.

What is the significance of the '98% rule' mentioned by Pete in the video?

The '98% rule' mentioned by Pete in the video suggests that the majority of people only need to know three key financial principles: spend less than you earn, insure against uncontrollable events, and save for the future. These principles are the foundation for managing personal finances effectively.

Why does the video emphasize the importance of having an emergency fund?

The video emphasizes the importance of an emergency fund because it serves as a financial safety net for unexpected expenses or emergencies, helping to prevent the accumulation of more debt and providing a sense of financial security.

What is the main takeaway from the book mentioned in the video about personal finance?

The main takeaway from the book mentioned in the video is that money should be used as a tool for happiness and fulfillment, not just for accumulating wealth. It emphasizes the importance of financial literacy for achieving safety, security, and the ability to pursue passions.