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Finances: What they don’t teach in school

Help your young adults learn about finances and building a stable future for themselves

Money, investing

The knowledge of financial topics and investments are underserved in our communities, especially for young people. It is important for young adults to understand fiscal management when they are young and about to move on from both high school and college. 

Micro-investments made by the younger generation potentially have a large positive monetary impact over time due to compounding and good financial rigor. Whether the investment is $5 or $500, the learning is the same.

READ MORE: Helping teens develop financial literacy

Wealthsimple, a Canadian boutique online investment firm focused on millennials, offers an “InvestingMaster Class” course that is tailored to provide a video-based learning opportunity for young adults. The videos are free to view and the course is narrated by Nicholas Braun, who presents the content in a light and witty approach that works well with young people. Braun is an actor with many roles in both movies and television.

The course’s topics include:

1. The Stock Market

2. Investing 101

3. Saving vs. Investing

4. The Five Simple Rules of Investing

5. The Waterfall Method

6. Automating Your Finances

7. Should I Pay Someone to Help Me? (Wealthsimple services)

8. Socially Responsible Investing (Wealthsimple services)

9. When It’s Actually Okay to Pick Stocks (Wealthsimple services)

10. How Much Do I need to Retire?

Sessions 3, 4 and 5 have the most impact and value.

Session 3, Saving vs. Investing, covers the basics of saving money and how each person can reap the future benefits of small or micro-investing by starting now. It focuses on financial timelines and how near-term requirements should certainly be housed in savings accounts. But to meet longer term financial goals, money needs to be invested to provide higher returns. 

Session 4 describes the following rules/topics: Leverage Compound Interest, Don’t Pick Stocks, Keep Costs Low, Diversify and Tune Out the Noise. These supply solid advice for the new investor who is looking to create wealth over time. Young adults can take control of their financial futures by following the suggested rules, setting up a micro-investing strategy and sticking to it.

Session 5 discusses the basics of financial priorities and managing money such as high interest debts/credit cards, savings and emergency funds, employer matching, taxes, low interest debts, and financial goal setting. This session builds on the previous ones and wraps up the learning sessions for the Master Class. Although young adults may not be interested in taxes and its implications at this stage, the video presents valuable concepts to build on.  

The remaining sessions focus on information about the Wealthsimple financial services.

Most online brokerages offer no commission custodial accounts (for minors) or joint accounts that could be setup for young adults to get started on investing and research. Parents can setup accounts and work with their kids by discussing investment options and approaches to keep their investments on track. Given the long-term horizons of young adults, even micro-investments made today can provide significant gains and  more financial freedom and independence as they get older.

Paul Goldstein is the father to two kids, a teen and a college student. He introduced the Wealthsimple video-based course to his own kids. He uses the financial concepts introduced as a base of discussion about money and investments.

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