Thoughts on finance from a 17 year old

I know this may not be the most polished article, but I just want to get some things I have learned about finance recently, and over my teenage years.

First off, finance and investing topics may be considered “hard”, or even “impossible” to learn as there is so much nuance. But as anything in life it is just an excuse to avoid something, only because you it is not “normal” in society to discuss financial topics, or requires a capacity for thought. In fact, I know this in personal life because as a highschool student, learning about finance is not prioritized, but rather learning arbitrary topics that don’t apply to everyone is taught(ie. History, calculus, biology, chemistry, etc.)- I am not saying school can't help you, just showing some of the shortcomings school has. The most amazing part is finance, is never part of, and guess what, are you an aspiring CS person, engineer, or already in the industry. What do you have to always do, oh, make financial decisions, I forgot, but for about 20 years of your life, it is never taught, interesting. Which for the record is about a 1/4 of the average life expectancy in the US. And to push this point further, even if you were lucky enough to learn about various financial and investing topics, have you considered non financial concepts, like happiness? Or better yet, do you just know it all, and are the best investor, and overall finance person? If you haven't considered the former, I would really hope that my content, will push you to learn more about why what your goals, really are important when making a financial plan, and making financial decisions. But if you think the latter, all I can say is that you have fallen into the trap of considering your self an "expert", without realizing there is still so much to learn, you are falling into the dunning kruger effect- an idea in which when someone learns something at the start they know it all, but as they learn more they think the know less.

I know this might seem like a digression, but, stay with me, you see will why this all matters. According to a recent study done by cigna, they found that 40% of adults are stressed about finances. And it seems if anything, this stress could be even more out side of the US because of the generally low levels of financial literacy globally.

But wait Joseph, you may be asking, how was financial literacy measured in the above study? Well take a look below.

Survey Questions

The financial literacy questions?address five basic dimensions of financial comprehension on the individual level

• Risk Diversification

Suppose you have some money. Is it safer to put your money into one business or investment, or to put your money into multiple businesses or investments? [one business or investment; multiple businesses or investments; don’t know; refused to answer]

• Inflation

Suppose over the next 10 years the prices of the things you buy double. If your income also doubles, will you be able to buy less than you can buy today, the same as you can buy today, or more than you can buy today? [less; the same; more; don’t know; refused to answer]

• Numeracy (Interest)

Suppose you need to borrow 100 US dollars. Which is the lower amount to pay back: 105 US dollars or 100 US dollars plus three percent? [105 US dollars; 100 US dollars plus three percent; don’t know; refused to answer]

• Compound Interest

Suppose you put money in the bank for two years and the bank agrees to add 15 percent per year to your account. Will the bank add more money to your account the second year than it did the first year, or will it add the same amount of money both years? [more; the same; don’t know; refused to answer]

Suppose you had 100 US dollars in a savings account and the bank adds 10 percent per year to the account. How much money would you have in the account after five years if you did not remove any money from the account? [more than 150 dollars; exactly 150 dollars; less than 150 dollars; don’t know; refused to answer]

As you just took a look at the survey that was used in the global financial literacy survey, do you think it was really easy, hard, or just ok? Well, as you already saw above most people can't answer the questions, but if you were able to answer the questions, or are curious what the answers are to these questions, go to the link below the graphic- and for the record I believe that this is just the tip of what should be known to be considered financially literate.

Overall though, you may be asking what does this all mean? Well, what this truly means is that most people really need to make it a point to keep learning more about finances, and not make a part of there life that causes them anxiety, or problems, but rather just a part of there life, that can help them life to there fullest potential.

I hope this helps you understand the importance of pursuing financial education, and why I really care about the topic. With that I hope you follow me, and ask any questions you may have, or even any points/topics I should specifically talk about!