Investing should be taught at high school

Some extra money in the bank is something most Dutch people have, but they often don’t try to grow their savings a bit faster than the close-to-zero annual interest rate. For many individuals, investing in shares is still a bridge too far even though it’s actually not all that hard. Investing is easy, fun and affordable. It’s a message they should have learnt at secondary school.

In September 2022, Dutch households had in total more than €420Bn in savings in the bank. As the inflation rate is significantly higher than the savings rate, this is money losing significant value. For example, €100 in 2010 is now only worth €84 due to inflation and low interest rates. Why is the retail penetration rate for investing still so low??

Dutch people do want to invest but often have no idea how to go about it. A survey commissioned by BUX and carried out by Kantar shows that fewer than a quarter of Dutch individuals interested in investing are actually active in the stock market. Their main reservation about investing is not a lack of money but a lack of knowledge(!). Sixteen percent of respondents cite this as the most important reason. In addition, factors such as uncertainty about the appropriate investment mix, not knowing where to begin and the alleged risks involved all play a bigger role than the idea that they don’t have enough money to be able to invest.

The lack of knowledge is disturbing. Managing your personal finances is as mundane as doing the laundry, cooking a meal, or driving a car. So why is it that growing your assets in any other way than through a savings account is not a standard piece of know-how? And why do high school students take subjects like chemistry and history but not learn how to act responsibly when it comes to their personal finances, allowing them to work on their financial health and future?

Knowledge about the stock market, ETFs and other funds helps you get a better grip on how the world around us works. Shares enable you to read the world. Key global developments like war, the housing crisis, climate change or the energy crisis (to name just a few examples) are all reflected in share prices, which show the effect of such events on market sentiment and the economy.

Nowadays, there are numerous simple and accessible investment opportunities. Yet many people consider investing as tricky, boring, risky or pricey. Our research shows, for instance, that the Dutch think you need at least €1,800 to get onto the investment ladder and then should invest more than €950 a month. They are wrong. You can get started with just a modest amount. And you can find plenty of information on how to go about it such as the 50/30/20 rule, which tells you to first take care of living expenses (50%) and personal needs (30%), leaving 20% that you can then “put to work”.?

It worries me that most people in the Netherlands don’t have this kind of knowledge about stock markets and investing. That’s why I’m calling for more attention at all secondary schools to personal finance, with investing as a natural topic. The role of the financial market has only grown further in society and learning how to deal with this situation is something that people should be treating as basic knowledge. Especially for the next generation this is increasingly important. By working on the financial health of our schoolchildren, we will also improve their mental well-being, which in turn will give them a healthier future, both financial and otherwise.?