Post image for The (Totally Unfair) Secret Advantage of the 1% — and How to Level the Field

Want to know why the top 1% of Americans are super rich and why the gap keeps getting wider and wider between them and the rest of us?

It’s because money is a competitive sport and they know the rules — and then they teach them to their children at an early age.

That’s not fair.

When I was growing up, I was a pretty good student. I got decent grades in Math, English, and Science, though I was certainly lacking talent in the Art and Music departments. But there was one subject that I didn’t master. I didn’t even get the basics down. In fact, I was never even taught it.

That subject was Finance (aka “Wealth Creation”).

A Lack of Education

I blame my lack of structured financial education squarely on the Maryland Public School System (I’m from a small town called Clarksville, MD). They gave millions of students, including myself, a crippling disadvantage in entering the workforce. I blame that system — and every single leader in our education system — for the incredible head start you gave to the private school children, including the sons and daughters of the 1%, who were taught core financial concepts that were reinforced throughout their childhoods.

Related: 6 Lessons My Work Life Has Taught Me About Managing Finances

It has taken me years of self-study to develop any semblance of understanding on personal finance. I shouldn’t have had to do that on my own time. You should have taught me.

I graduated from high school not having been taught the following:

What “investing” actually means
How to balance a checkbook
How to prepare taxes
How to set up a brokerage/retirement/checking account
How to calculate ROI
How to apply for a loan
Pretty much everything else related to money

Like it or not, in our capitalist society, food, shelter, transportation, wealth, and power stem largely from one thing: money. The fact that we don’t absolutely mandate the education of all things money through the duration of our children’s schooling is totally mind-boggling. Apparently, I’m supposed to compete in the economy to earn money and build a portfolio for the duration of my life with zero formal preparation.

What is the purpose of education? To prepare children to contribute to society? To prepare them to take care of themselves? To prepare them to further industry? What is the single most important thing that they can learn (aside from basic forms of communication and mathematics)?


The Importance of Starting Young

I also want to point out that it’s an open secret that human beings learn best at an early age. Try teaching people to speak English at ages 4, 8, 12, 16, 20, and 24 — I’ve got a good guess as to which individual from that list is going to speak the language more like a native.

Or look at our famous athletes. Yes, some of them are naturally, beautifully, and outrageously talented. But even among that select group, even with athletes that win the genetic lottery, I’d bet that they still might not have be able to perform at that pinnacle of athletic prowess had they not started practicing and playing at an early age.

Here’s a surprise (read: not actually a surprise): 60-70% of NFL players played pop-warner football at an early age. The NBA, MLB, NHL, etc. exhibit similar patterns. Yes, there are exceptions, but I’d argue that professional athletes who pick up their trade later in life, even past the ages of just 12-13, are just that: incredible exceptions — and not the rule.

Early education is just as important with finance. Wealthy children are some of the only ones to play this “sport” starting very young in life, yet we all have to play it for the duration of our lives. 60% of the Forbes 400 come from “substantial privilege” — funny how that is remarkably close to the number of NFL players that started young.

The article that provided the data on the Forbes 400 calls these “self-made” aristocrats “the hallucinating rich.” I think that’s a little harsh, but it certainly seems that, even if these tycoons didn’t inherit their net worth, they inherited their parents’ wealth of knowledge on the subject of making and investing money — which is just as valuable and just as rare.

So, what’s my point here?

Assuming that we’ve agreed upon the paramount importance of the study of money and on the incredible statistical advantages of early education on success in a given field, the next question is this:

How can we remedy educational inequality and give every child a chance to compete fairly with the children of the 1% in terms of financial literacy?

The answer is very simple: We have to mandate education of this subject to the children in our public schools.

Even a lousy financial education would have set me up to compete in the economy better than my excellent education in subjects like advanced biology, calculus, chemistry, literature, history, art, etc. How is this missed? I truly don’t understand: Why is this critical component of our children’s education missing?

Having researched and debated this topic extensively, there seems to be three reasons that finance is not taught in any material fashion at public schools. Just in case you weren’t able to infer my opinion on the subject already, I think these reasons are silly and hope that you aren’t surprised that I attempt to systematically dismantle the logic behind them.

3 Reasons to NOT Teach Finance (With Rebuttals)
Reason Number 1: “It’s the Parent’s Job to Teach Finance!”

I’ve often heard it suggested that Financial Education is the job of parents, not schools. In my opinion, that is a ludicrous proposition. Think about this: 40% of American households will never exceed $10,000 in net worth. How the heck can these parents who have never and will never master basic finance give their kids a competitive education in this field? Are you kidding me?

I don’t have the stats on this one (I tried!), but how many parents have the capability to pass a …read more