Financial Education for School Children

Habits die hard. So, if we are going to be slaves of our habits, lets at least have good habits. If we stretch this point, it is easy to see the case for money and financial education for school children. Children are inherently curious about the things happening around them. However, in our day to day life, we take much of what we see for granted. Often times, children ask very interesting questions like “Where does money come from?”, “Why do prices of some goods keep going up while the prices of other goods keep coming down?”, etc. However, many adults are not able to answer these questions in a satisfactory manner. The climax of much of modern education is a job, which is something people have to endure to earn money. However, managing money and growing it, which are life skills are not taught to students at all. The parents don’t teach it, the schools don’t teach and in the end, we bring up yet another generation of clueless adults who fall prey to financial intermediaries. In order to break this vicious cycle, it is really important for parents to ensure that their children get right financial and money education.

Are there examples of financial education at an early age making a difference in anyone’s life? The answer is a resounding “Yes”! In fact, we don’t have to look beyond Mr. Warren Buffet. Buffet started saving and investing very early in his life. We all know that the key to unlock the power of compound interest is to start early. By the time an average adult is aware of all these facts, he is already in his mid thirties. As Malcolm Glad well mentions in his “Outliers”, it takes 10,000 hours of practice to become very good in any endeavor. Thus, it is abundantly clear that children are exposed to the concept of money and compounding at an early age. This will ensure that by the time they reach adulthood, they would have spent a few hundred hours, if not a few thousand hours pondering about making and managing money. The head start will help them lifelong as the early birds get the benefit of the compounding effect of their wealth.

Another advantage of teaching school students about finance is that they become confident of taking their own decisions. This means that they can do away with middle men like financial planners, brokers, insurance agents, etc. This leads to substantial savings in terms of money over a 20 year period. The savings are likely to be approximately 2% – 3% every year. This is not an insignificant amount and the end result is that the retirement nest egg of the adult who had the benefit of early financial education is way larger than that of a person who has to learn the lessons the hard way, if at all.

Real money education is based on a curriculum that is a synthesis of several disciplines – History, business, banking, economics, etc. The key is to integrate these concepts so that the children are confident of taking decisions in the real world. Traditional education stresses more on analysis than synthesis, but in real world most problems are solved by synthesis of ideas from several disciplines rather than through analysis.

To summarise, it is important for the parents and the school teachers to equip the children with money and financial knowledge to survive and prosper in today’s complex world. As financial products grow ever complex, a basic understanding of the fundamentals are the least that is required of any future adult to compete in the highly challenging world of tomorrow. So let us sow the seeds of financial knowledge in the minds of young children, so that they may reap the benefits in their adulthood.

Blackjack Quick Tips – A Mini-Education For Casino Players

This lesson serves as a mini-education offering strategies, rules and game terms delivered in quick informational bites.

1) Blackjack: Play ‘Dealer must stand on ALL 17′s tables.

2) Best: single deck tables, no double down restrictions. Re-splitting and surrender allowed.

3) You only have to beat the dealer: you can win with a 13 or 14 hand and a dealer bust.

4) Master the hit/stand strategies and true count system for card counting.

5) Snag the third base seat to survey all the cards on the table before your decision.

6) Watch for dealer ‘tells’. Signs that can give away hands.

7) Don’t take Insurance.

8) Don’t play blackjack at a table where player’s blackjack pays 6-5 or even money.

Stick with the standard 3 to 2 payout.

9) Pass up blackjack tables that utilize a continuous shuffling machine where cards are returned to the shuffler after each round.

10) A Quick Tip Blackjack Strategy follows:

Your Hand against Dealer Upcard (D)

12 to 16: (D) stand on 2 to 6, hit on 7 to ace

17 to 21: (D) stand

10 or 11: (D) double down on 2 to 9

Soft 13 to 17: (D) hit except double down on 5, 6

Soft 18 to 21: (D) stand except double down on soft 18 and 5, 6

2,2; 3,3; 6,6; 7,7; 9,9: (D) split on 2 to 7 but stand on 9,9 against a 7.

5,5; 10,10: never split

8,8; A,A: always split

Blackjack Terms:

Action: Blackjack or 21 is a game where the player’s goal is to get closer than the dealer to 21 without going over. Blackjack pays 3 to 2 or $3 for every $2 bet.

Anchor: Player to the right of the dealer receiving the last card. Aka Third Base.

Burn Cards: number of cards casino discards at the beginning of a new shuffle.

Bust/Busted: Total count is over 21. This is a losing hand even if the dealer also busts.

All players whose count is less than 21 win if the Dealer Busts.

Double Down or Doubling Down: Doubling the bet before being dealt one additional card. Blackjack rule for Doubling Down is that the player receives only one card after a DD decision. Player may bet up to his/her original bet, but not more and places this second bet behind the original bet. Some casinos allow Double Down only with a count of 10 or 11.

Five-Card Charlie: 5-card Blackjack that totals 21 or less.

Hard Hand: a hand that does not include an ace.

Hit: dealt additional card(s) to the 2 cards already dealt originally. Aka Draw, Draw Card or Hit Card. The decision to hit is indicated by a sweeping motion on the felt by the player or tapping the felt in a Face Up game.

Hole Card: Dealer’s card dealt face down.

Multiple Decks: four or more decks played in a game, always dealt face up.

Paint: Term for face cards-Jack, Queen and King.

Push: same count as the dealer or a tie. No money is exchanged, you don’t win or lose.

Soft Hand: a hand that includes an ace in first two cards dealt. It has two values, depending on whether you use the ace as 1 or 11. A five and an ace would be 6 or 16.

Split or Splitting Pairs: splitting a matched pair to play separately. The extra bet is placed on one of the split cards. If a third like card is dealt, that too can be split based on casino rules.

Stiff Hand: a potential bust hand, such as a 13 or 14. Also, a hard 15 or 16.

Surrender: Choose surrender after receiving first two cards and you lose only 50% of the bet.

Toke: Tip to the Dealer.

Twenty-One: Term for the game of Blackjack.

If you play blackjack with poor strategy or instinct, you give the casino an advantage of over 5%.

A final Quick Tip: I suggest you print out this Blackjack mini-education for future use.

Finance Education for Bank and Credit Union Directors: Lending Is a Risky Business

When it comes to director finance education, the differences between banks and credit unions fade away. The message is clear for all directors. Understand the finances of your financial institution well enough to do your job as director.

How would you answer these questions?

  • How do I know what I should know about financial institution finances?
  • How do I know if I know it well enough?
  • How would I demonstrate that I have met my responsibilities in this area?

Duty of Care

All directors of every type of board have a ‘duty of care’ which requires “such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances.”

The idea of a reasonably prudent person does not provide for a clear-cut definition. At the very least, the director should seek information from reliable sources outside of their financial institution’s management. Bank and Credit Union conferences are a good source for this outside perspective. I recommend each director keep your own records of your continuing education.

Test yourself: The Seven Risks

The regulators do give some guidance. Here is a quick quiz. Before you continue to read this article:

  • List the seven types of risks found in depository institutions that the regulators indicate are essential for a director to understand
  • Define each of the seven in a sentence or two
  • Rate your financial institution on each (poor, fair, good, excellent) and explain why you chose that rating

I’ll tell you the seven risks at the end of this article. Before you check, consider how difficult or easy that quick exercise was. If you are a director, do you need to better understand the risks or how to evaluate your financial institution in the seven areas?

Test yourself: Your Board Packet

When you receive your next board packet, consider the ‘dashboard’ metrics provided. Is there information about capital ratio? Loan growth? Deposit growth? Loan to deposits? I am not suggesting these are the best or the only metrics for your board to monitor, but I am wondering what you are provided.

Then consider:

  • Do you understand how that metric is calculated?
  • Is increasing or decreasing favorable for that metric?
  • If it is changing, is that movement or that direction expected or unexpected?
  • Do you know what the target is? Is there a target?
  • How and why is it important to your financial institution?
  • How and why is it important that the board consider that metric?

Whose ‘Duty of Care’ is it, anyway?

The ‘Duty of Care’ is an individual duty of each director. It is one of the things you cannot delegate to management or to other directors. Three steps toward meeting the duty of care include taking independent action to understand your financial institution’s finances, learning about the risks you are responsible to monitor, and asking questions about the financial information you receive at board meetings.

The Seven Risks

The risks the regulators identify are right here. How did you do?

  1. Credit
  2. Liquidity
  3. Interest rate
  4. Compliance
  5. Strategic
  6. Transaction
  7. Reputation