What if everyone had financial education?

[Wictorian]

What if everyone had proper financial education? Would any negative effects occur?

Edit : I am not talking about adding one more subject to elementary school. Assume everyone will be financial gurus, easily. I know not hundred percent realistic but let's assume. Also I know some industries will be effected but doesn't matter on the great scheme of things.

Edited September 8, 2021 by Wictorian

[markwoll]

Scammers would be out of business, negative for them, which would be positive for the rest of us.

[Avocado Diaboli]

1 hour ago, markwoll said:

Scammers would be out of business, negative for them, which would be positive for the rest of us.

I doubt it, Bernie Madoff managed to run his scam for quite a while even with investments from people with a financial education, even just fiduciaries of his wealthy investors.

 

Anyway, if more people were to have a financial education, many would come to the conclusion that capitalism is an inherently broken system that causes wealth to pool with very few people (rarely those who actually deserve it) while keeping the rest of the population poor. What would be the negative outcomes? Well, people tend to not look too kindly on alternative economic models that I won't name here because this will invariably devolve into a political discussion.

[CerealExperimentsLain]

2 hours ago, markwoll said:

Scammers would be out of business, negative for them, which would be positive for the rest of us.

Ha ha ha...

 

Quote

A public treasurer in the Michigan county of Alcona stands accused of embezzling tax payers out of more than $1.2m, at least part of which was used to cover costs he incurred falling for a Nigerian banking fraud.

Thomas Katona, the former Treasurer of Alcona County, was charged with nine felonies. According to the Michigan Attorney General's office, the 56-year-old beancounter, who held his post for 13 years, also plowed $72,000 of his own money into the fraud.

Keep dreaming.

[ARikozuM]

Took accounting 1 and 2 and Consumer Mathematics in high school.

 

The more people see how much it takes an individual to rent an apartment, buy groceries, penny pinch to the limit, the more they wonder why they work for a market system that invariably keeps you down unless you get lucky or work too hard to make it worthwhile. 

[Zodiark1593]

17 minutes ago, ARikozuM said:

Took accounting 1 and 2 and Consumer Mathematics in high school.

 

The more people see how much it takes an individual to rent an apartment, buy groceries, penny pinch to the limit, the more they wonder why they work for a market system that invariably keeps you down unless you get lucky or work too hard to make it worthwhile. 

Luck is one way. Most often however, the self-made wealthy folk tend to be cutthroat predators, at least, on their way up. America seems to often reward those that toe the moral, and sometimes legal, line.

 

Anyone can achieve wealth in America if you have the fangs to do so, and the will to use them. The "Land of Opportunity" isn't a lie. Though, you'll probably find that you will need to sideline your moral compass in favor of cold pragmatism, so as to have the wherewithal to cut down the competition, that has gotten progressively fiercer and merciless over the years. This last bit, I feel (ie, this is an opinion), is the real divide in our society.

[Gaijin]

3 hours ago, markwoll said:

Scammers would be out of business

More like the banks, central banks especially would be in trouble if people understood what they were up to.

[Wictorian]

6 hours ago, Avocado Diaboli said:

I doubt it, Bernie Madoff managed to run his scam for quite a while even with investments from people with a financial education, even just fiduciaries of his wealthy investors.

 

Anyway, if more people were to have a financial education, many would come to the conclusion that capitalism is an inherently broken system that causes wealth to pool with very few people (rarely those who actually deserve it) while keeping the rest of the population poor. What would be the negative outcomes? Well, people tend to not look too kindly on alternative economic models that I won't name here because this will invariably devolve into a political discussion.

I mean wouldn't everyone be rich?

[YellowJersey]

33 minutes ago, Wictorian said:

I mean wouldn't everyone be rich?

Nope. Doesn't matter how financially educated you are when nearly all of your pay goes to pay for necessities. There's only so much good budgeting can do.

[SansVarnic]

Financial education should be mandatory in high school (for non-us citizens, that's grades 9-12). You have to have some understanding when you reach the age of 14 as that is the age you can get a job and pay taxes.

 

[Arika]

7 minutes ago, SansVarnic said:

Financial education should be mandatory in high school (for non-us citizens, that's grades 9-12). You have to have some understanding when you reach the age of 14 as that is the age you can get a job and pay taxes.

 

at a minimum you should be taught about taxes, loans and interest rates. The amount of young people who get into a bad financial position early in their lives and cannot climb out it is concerning.

 

the only reason i know as much as i do about them is because i work in a bank. i wasn't taught any of it in school, it's heartbreaking to see people destroying their lives because they don't understand it (see: payday loans and maxing out credit cards)

 

edit:

1 hour ago, Wictorian said:

I mean wouldn't everyone be rich?

if everyone is rich, no one is. hyperinflation is a bitch

[BondiBlue]

1 hour ago, Wictorian said:

I mean wouldn't everyone be rich?

Having financial education does not equal being rich. 

[Avocado Diaboli]

1 hour ago, BondiBlue said:

Having financial education does not equal being rich. 

I think he's more referring to that unnamed economic model I alluded to.

 

@Wictorian what I'd be proposing isn't simple wealth distribution, because as others have pointed out, wealth is a relative term and if everybody has the same amount of money, nobody is wealthy by comparison. You can't give everybody a billion dollars without also increasing the price of bread into the millions, because nobody is going to continue working as a baker for the salary that selling bread at current prices would pay out if they already had a billion in the bank. You effectively need to decouple certain aspects of life from the economic cycle, otherwise you just end up with a feedback loop. What I'm talking about has more to do with free access to certain foundational necessities of life that are currently subject to capitalism and therefore treated as a market. Because this current implementation typically leads to 1) inflated prices for those basic necessities and 2) favors the immoral who are willing to feed off of the misery of others for personal gain.

[Wictorian]

2 hours ago, Arika S said:

 

if everyone is rich, no one is. hyperinflation is a bitch

Why is everyone crying for an equal distribution of wealth?

 

Also not nevessarily the case. For instance let's say everyone wants to buy a supercar. If there aren't 8 billion supercars yes the price would hyperinflate, but otherwise there wouldn't be a problem. You might say this is not realistic but everyone being rich isn't either, for instance if it has happened via astroid mining then there would be enough resources.

[Wictorian]

1 hour ago, Avocado Diaboli said:

I think he's more referring to that unnamed economic model I alluded to.

 

@Wictorian what I'd be proposing isn't simple wealth distribution, because as others have pointed out, wealth is a relative term and if everybody has the same amount of money, nobody is wealthy by comparison. You can't give everybody a billion dollars without also increasing the price of bread into the millions, because nobody is going to continue working as a baker for the salary that selling bread at current prices would pay out if they already had a billion in the bank. You effectively need to decouple certain aspects of life from the economic cycle, otherwise you just end up with a feedback loop. What I'm talking about has more to do with free access to certain foundational necessities of life that are currently subject to capitalism and therefore treated as a market. Because this current implementation typically leads to 1) inflated prices for those basic necessities and 2) favors the immoral who are willing to feed off of the misery of others for personal gain.

There are possibly a trillion pieces of bread in stock. The process can be automated. Why are people like Elon Musk keep working? 

[Wictorian]

2 hours ago, SansVarnic said:

Financial education should be mandatory in high school (for non-us citizens, that's grades 9-12). You have to have some understanding when you reach the age of 14 as that is the age you can get a job and pay taxes.

 

My point is, why is this not already the case? Are politicians and teachers brain dead? Or would it lead to negative conseuqences? 

[Wictorian]

2 hours ago, BondiBlue said:

Having financial education does not equal being rich. 

 

[Avocado Diaboli]

32 minutes ago, Wictorian said:

There are possibly a trillion pieces of bread in stock. The process can be automated. Why are people like Elon Musk keep working? 

If we assume that every process can be automated, there's even less incentive to keep capitalism around, because essentially nobody would ever need to work again. This, in my estimation, should be the eventual end goal here, a utopia where people don't have to do any labor of any kind to secure their survival and only do whatever they please with their lives. Far fetched and probably impossible, but a better trajectory than whatever we're on currently where, if things continue like this, I expect the guillotines to get wheeled out again against the modern day aristocracy, just like last time.

 

Speaking of which, Elon Musk keeps working because he, like any billionaire entrepreneur, drank his own Kool-Aid and thinks that his wealth and success is based on his own ability alone and not his inherited wealth, the ability of people he employs and sheer luck. And he's also a massive narcissist, so he needs this kind of validation.

[Wictorian]

12 minutes ago, Avocado Diaboli said:

If we assume that every process can be automated, there's even less incentive to keep capitalism around, because essentially nobody would ever need to work again. This, in my estimation, should be the eventual end goal here, a utopia where people don't have to do any labor of any kind to secure their survival and only do whatever they please with their lives. Far fetched and probably impossible, but a better trajectory than whatever we're on currently where, if things continue like this, I expect the guillotines to get wheeled out again against the modern day aristocracy, just like last time.

 

Speaking of which, Elon Musk keeps working because he, like any billionaire entrepreneur, drank his own Kool-Aid and thinks that his wealth and success is based on his own ability alone and not his inherited wealth, the ability of people he employs and sheer luck. And he's also a massive narcissist, so he needs this kind of validation.

So basically if everyone has financial education everyone will be rich and won't want to work and we won't be able to buy bread. Still government can make it mandatory for people to produce bread. Also every process can't be automated, at least in a few hundred years. I think the more things are automated, the less people work, the less people will fight capitalism. That is what happened with the industrial revolution.

[captain_to_fire]

Then less people succumbing to excessive debt and bankruptcy. So many people seem to forget that it’s not always about how much you earn, but more about how much you save and invest. Saving in a bank is a good start but money should be growing, not being stagnant in a savings account. Another thing many people take for granted is the importance of life insurance plans. Social security is nice but in my opinion people shouldn’t be completely reliant on it by the time they retire. 

[Wictorian]

2 minutes ago, captain_to_fire said:

Then less people succumbing to excessive debt and bankruptcy. So many people seem to forget that it’s not always about how much you earn, but more about how much you save and invest. Saving in a bank is a good start but money should be growing, not being stagnant in a savings account. Another thing many people take for granted is the importance of life insurance plans. Social security is nice but in my opinion people shouldn’t be completely reliant on it by the time they retire. 

The floor is made of floor

[Avocado Diaboli]

1 minute ago, Wictorian said:

So basically if everyone has financial education everyone will be rich and won't want to work and we won't be able to buy bread. Still government can make it mandatory for people to produce bread. Also every process can't be automated, at least in a few hundred years. I think the more things are automated, the less people work, the less people will fight capitalism. That is what happened with the industrial revolution.

No, universal financial education won't inherently lead to universal wealth. It will just lead to more people realizing that the current economic system is untenable, because it will eventually either lead to 1) a continuously repeating cycle of booms and busts that, if current trends stay the way they are, will occur with greater frequency, 2) a complete and total collapse or 3) another (French) revolution.

 

Also, the industrial revolution is a pretty poor comparison here. Over the last century, workers have clawed a lot of rights from entrepreneurs (I hope I don't have to remind you that child labor was commonplace during the industrial revolution) and these worker rights have been continuously stripped away over the last couple of decades, with big corporations influencing politics through lobbies and how red scare tactics in particular have convinced people that it's in their best interest if corporations have as many liberties as possible, even to workers' detriment, for example by not unionizing.

 

Now this is where I have to draw the line, because even though I have been trying to stay vague with political allusions (and economics is always intertwined with political philosophy to some degree, because they both inform each other to an extent), I don't think I can further explain my train of thought here without completely crossing the line over into political territory.

[Wictorian]

13 minutes ago, Avocado Diaboli said:

No, universal financial education won't inherently lead to universal wealth. It will just lead to more people realizing that the current economic system is untenable, because it will eventually either lead to 1) a continuously repeating cycle of booms and busts that, if current trends stay the way they are, will occur with greater frequency, 2) a complete and total collapse or 3) another (French) revolution.

 

Also, the industrial revolution is a pretty poor comparison here. Over the last century, workers have clawed a lot of rights from entrepreneurs (I hope I don't have to remind you that child labor was commonplace during the industrial revolution) and these worker rights have been continuously stripped away over the last couple of decades, with big corporations influencing politics through lobbies and how red scare tactics in particular have convinced people that it's in their best interest if corporations have as many liberties as possible, even to workers' detriment, for example by not unionizing.

 

Now this is where I have to draw the line, because even though I have been trying to stay vague with political allusions (and economics is always intertwined with political philosophy to some degree, because they both inform each other to an extent), I don't think I can further explain my train of thought here without completely crossing the line over into political territory.

I think it is the other way around. Only people who are not financially educated think capitalism is a bad system. And the ones who are financially educated become rich. So you think people should not be financially educated? That's not really communist. 
 

Why are you so afraid of politics? I agree it is not very pleasant when the debate turns into an argument of yes and no's without points, but everything you say is influenced by politics so you have already crossed the line, but even the forum rules allow going a little bit deeper.

[Avocado Diaboli]

1 hour ago, Wictorian said:

I think it is the other way around. Only people who are not financially educated think capitalism is a bad system. And the ones who are financially educated become rich. So you think people should not be financially educated? That's not really communist. 

I absolutely believe more people should be financially educated. But I'm just pointing out that if you come to the conclusion that capitalism is bad because of said financial education and the outlined decades long scare tactics of any alternative economic system, it could potentially lead to civil war over those disagreements in many countries. You asked for potential downsides. As much as I dislike capitalism, I don't think armed conflict is a good solution. And make no mistake, this isn't just some idle fantasy, most wars haven been fought over economics in some way, shape or form, because money and resources represent power. Ideology has always just been a crutch to justify it to the masses dying on the battlefields.

 

Also, I'm sure that bit about only financially uneducated people would believe capitalism to be bad wasn't intended as an insult, but that's how it comes across. 

 

1 hour ago, Wictorian said:

Why are you so afraid of politics? I agree it is not very pleasant when the debate turns into an argument of yes and no's without points, but everything you say is influenced by politics so you have already crossed the line, but even the forum rules allow going a little bit deeper.

For one, I doubt the forum rules are as lenient as you portray them, because this topic doesn't really concern tech in the slightest. And for two, you already engaged in the kind of rhetoric that wouldn't lead to any greater clarity by stating that only people who don't know anything about economics would condemn capitalism. Also, you have a tendency to misrepresent what I said so I'm not confident that a political discussion would lead anywhere fruitful.

[Wictorian]

7 minutes ago, Avocado Diaboli said:

Also, I'm sure that bit about only financially uneducated people would believe capitalism to be bad wasn't intended as an insult, but that's how it comes across. 

Yeah I haven't worded it well. Mostly financially uneducated people think capitalism is bad. And this causes some correlation.