Ask us anything: What should we teach kids about money?

0:02Damo, what are you doing? well while we're waiting for our next podcast episode i'm sat here reading this magazine that's on the table about wallpaper very very quaint very old school you know what i never realized how much i missed those little rip-off sniffy perfume things that are in the middle but yeah i think um magazines are making a comeback mate in a world where everything feels digital and i'm just dying to put down a screen all of the time i quite enjoy sitting down with a magazine and having a read of it it's almost like you know buying a vinyl record yeah feels more real more tangible the music's more authentic it's richer yeah that's right which kind of leads us into today's sponsor one of the best finance publications in the uk is money week they're in print and online so you can get that nice magazine feeling in your hands money week sift and summarize the biggest stories in finance and then add their own journalism on top it means no more endless scrolling if you want to give money week a try you can get six issues in print and on the app absolutely free by visiting moneyweek.com forward slash money.

1:01After your trial you'll save an extra five pound on a quarterly subscription exclusive to Making Money listeners. That's moneyweek.com forward slash money and there's a link in the description for you.

1:18Welcome to our mini episodes where we answer your biggest questions about money. Let's see who's slid into the DMs today. Let's have a little gander. Okay. Who've we got? So Ray asks, this is my dad, you know. Is it? Ray, yeah. Yeah, yeah. So what should the government do to educate children about personal finance? There's a class on the curriculum called PHSE, which is personal health, social and economic. But in the four years of middle school, there hasn't been one lesson on the economic side. You both have kids. What would you recommend? T's child majoring on crypto and Deimos son having seven bank accounts.

1:53He don't need seven bank accounts. He only needs mine. He rinses it. But yeah, go on. Let's start. What financial education did you have at school? I won't name the school. I went to a very good school and we had a class of economics. I think I lasted like a term and I dropped it because it was so boring. None of it was about - None of that's personal finance. None of it was personal finance. It was all just about boring stuff. Economics, yeah. I just dropped out after a term switch to something else. but yeah I find and nothing talking about um investing in my MBA I did do a course on investing um and I was talking about Warren Buffett and different types of investing and that was quite cool um but a lot of that was like financial because I did the finance degree at Durham and it's like financial markets risk management and it's you you're basically doing things that you would do in an investment bank to calculate risk um you know like analyzing a business or whatever none of that's teaching you how to use an ISA, how to set like the actual things.

2:51What strikes me about my channel is I can often worry that the message I'm putting out is too simple. And then I'll get people that are like, oh, I'm a QC, I'm a lawyer, I'm a judge. And I don't know this. And I'm too embarrassed to say that I don't. And your video has just opened my eyes to this. And these are highly intelligent people that you will trust to operate on you or to make judgments on murder trials that don't understand how to invest inside of an ISA. that's a failing from an education perspective because they're clearly smart and i find a lot of people our age as well like i was so surprised that so many people like oh i found this so interesting it's so simple to understand now i've never thought about my pension i've never thought about my isa or the stock market so i think people just get scared because no one's actually held their hand and showed them the way yeah and and like schools almost have this attitude of we teach them what we teach them and then it's up to the parents to teach them like these life skills but But if a parent's bad with money, you just compound that problem through generations.

3:49And then you just get whole family stuck with bad financial habits because your mom might be a bit of a spender and she gets loads of debt and you learn that that's their normal. And you see your parents arguing about money and you think that money is this negative thing. Or you have people who their parents made a lot of money, like doctors, lawyers, whatever. They leave it to their kids and their kids blow it in one generation because they don't know how to invest it, how to manage it. And then they just spend it all. so it's yeah it's a problem for everyone i think so you know we had that phsce whatever it was called back then when i was at school and i remember putting condoms on bananas i don't remember them ever talking about personal finance do you know i mean like that sticks in my head um like what's one hour a week just one hour a week from a young age to introduce the topic of money and you think the government would be behind it because it's going to benefit the whole economy if everyone's investing in like things in the uk and everyone's got more money so it's going to help the gdp so i don't understand why this isn't a priority so like one one aspect of the uk economy that's a bit broken is the housing market and there's a strong argument that the uk has an obsession with owning homes right and everyone's like oh safe as houses blah blah blah but actually there's just tons of money sat in houses up and down the country that's not doing anything all this value right and people if you educated them better might go well actually i could get a better return elsewhere or that I could deploy that money in a different way and you know people think oh I'll just keep getting bigger and bigger house and then when I retire I'll sell it and then I'll dance you know there might be better ways like the use of an ISA I think three million people in the UK have stocks and shares ISA but like 20 million have a cash ISA what's going on there that's literally just money going backwards long term and I find like even things like always go back to crypto just because the reason that people will go be like oh i'll buy dogecoin because elon musk said something like why are you making your financial decisions based on oh my friend made money in it or i read this thing on twitter or someone said something on reddit so i bought this like really you should be doing a lot more research and you should be thinking about why you're investing in something but people are oh so-and-so made money in this i'll do it because they don't have the education and the fundamentals why really it's like even like people who have debt investing like people don't really know what to do in the right order just because it's never been taught to them yeah financial literacy makes you richer and live longer makes you happier there's just everything everything is a positive if you teach people about how to manage their finances you know wealthier happier live longer why wouldn't a government want that for for their population you know i think for me it should start very young because i think we have this attitude of like oh don't discuss money around the kids and then that just teaches the kids that money is something that shouldn't be discussed.

6:37That's a very British thing though, isn't it? Yeah, it's bad. Americans are like, yeah, I made like 40 ,000 this month. But like English people just never, ever talk about how much you make, how to invest, how to save, how much things, sometimes how much things cost. Even when it's time to ask for, to invoice someone, we're so shy about it. Or the bill. Or the bill. Yeah, it comes folded. Can I get the bill and it's all folded, it's all secretive. I tell my lad, I'm like, he's like, oh, I got 20 pounds, I'm loaded. I'm like, dinner was 200 quid, mate. And he's like, what? It wasn't even that good.

7:05I'm like, I know. So I try and bring to light just how expensive things are in the world so that they can see these costs. But I think I would introduce money very young, in a simple way. I'm not gonna pretend that I know how to educate kids. What I will say is that kids' YouTube captures the imagination of kids like nothing you've ever seen. They teach kids about spelling and all of that. these videos have got like hundreds of millions of views. And there's child psychologists that work on the channels that are very good at grabbing kids attention and teaching them things through a way that they enjoy.

7:42Apply that to money knowledge. I'm not gonna sit here and say that I know what the curriculum should be for children cause I'm not a child educator, but I do think that it should start at the age of three, four because money is fundamental. As Deborah says in a book, it makes the world go round. Deborah Meaden, sorry, is who I'm name dropping there. future guest um yeah i mean i think there are so many like you said youtube channels like kids watch other kids playing ryan's toys playing all of this playstation games and like they'll watch it for hours so and then there's educational it's like my kid i give him all these stuff not meant to watch tv as a baby but i give him now like 20 minutes of like counting and like dancing and six songs and stuff dancing vegetables yeah so they should they should have a little finance one this is one sesame street could do it very well or the muppets they should do it yeah Yeah.

8:29And, you know, could you teach children about compounding and investing and the sacrifice of consumption today for the hope of greater consumption tomorrow? So could you teach kids to delay gratification? I think that'd be so powerful because now kids have everything whenever they want. Whereas if you could say to them, no, if you don't have this, at the end of the day, you'll get two or whatever. It's these kind of lessons that we can teach to stop the consumerism and to stop the misery that comes from that. you know everyone just pursuing more and more and more i can see it in my own children it's like they don't want to wait for anything yeah i went yeah i was i went to visit my friend uh you know ollie i went to go see him the other weekend and his kid was like we went to the shop and his kid's like oh can i get the pokemon cards and it was like the small packs of 10 and he's like oh no i want to get you the big pack uh like a 50 or something and the kid's like no no i want the pack of 10 i want the packet he's like look this cost five pounds but the pack of 50 cost 10 pounds but you get five times more wouldn't you like a big box and then he like had to explain to his son It took about five minutes, but at the end he got it.

9:28So it's about putting in the effort, I think, convincing them that you can get more later if you don't spend it right now or you don't have it right now. It's got to be in ways they can understand, like Pokemon cards. Yeah, it needs to be relatable to them. It needs to start small and expand over time. But by the time you're coming out of school, you should know how to invest, why you pay into a pension, how to do that effectively and efficiently. You should know how to manage a credit card and how to pay a direct debit. all of these things should be taught to you. First time I hit a credit card I got to uni and they're like they've sent me a little letter would you like a credit card?

10:01I'm like I've never had one why not? Ran it up ran it up on holiday and then I was like oh I've got to pay it back now. It's a weapon of mass destruction that just lands on your door step at 18 as well. I was taking money out the cash machine and that's crazy. It's crazy that they that they can just fling those out of people. I wasn't responsible enough to own one at that time but I was like 18 in university in Durham and I was like well I've got a credit card terrible terrible idea but if I had that Student overdraft. I was just like. Oh, student loan. Two grand of free cash. Yeah, I'll have that.

10:27Thank you, man. We're going out. Took six years to pay it off. We're going out? Yeah.

10:36Next question. Neely asks, or Nelly, sorry if I got it wrong. What should I do right now with a lump sum to help grow it? Just so you know, this is not financial advice. Put it all in crypto. No, don't. Go to a guy in Peckham. Go, yeah. I've got a guy, he'll turn 10 into 20. Buy some shady gold. Yeah, he'll turn 10 into 20. but for two, it's worth eight. No questions asked. I would say diversification. Before I would have said, buy, how much? Lump sum of money. Say you've got like, I don't know. Five million quid. I don't think Neely has five million quid. Say you've got like, I don't know, 30 grand.

11:12Yeah. I'd be like, okay, cool. Buy one. A couple of years ago, I'd be like, buy one Bitcoin. Next year, it'll be a hundred grand. Laughing. But there's no guarantees it'll be after doing the making money podcast i was like wait a minute this might not actually be 100 grand next year so i would probably buy like quarter half a bitcoin and then put the rest in like ices stocks and shares isa lyser lifetime isa and um yeah global global index fund yeah spread it out so you do it that's how i do it i'm gonna it's the right a bit of aggression and a bit of stability yeah but that's me i i've got a high risk appetite yeah but i wouldn't recommend most people to do that no i would be saying to neely or nelly um first of all when do you want the money for because that like totally impacts how you would deploy it i would say so if it's like you know i need it in the next five months maybe you just put it in a high interest savings account or or the money markets you get some bonds which you can get like six percent on or whatever um if it's more i want it for a house deposit then you like you say you use the lisa allowance you put 4k in and that'll go up by the government bonus of 25 % instantly.

12:21So for every 4k you put in, you get an extra k once a year, you can do that. If it was for, I need it for retirement, I don't need it for 10 years, I'm then putting it in the stock market inside of a tax efficient vehicle like a pension or an ISA. But again, the question that needs, the caveat that needs to come with that is when do you need the money for, you know, that's kind of how I would approach it. Yeah. And also what's your risk appetite? Yeah, yeah, exactly. Yeah, yeah, 100%. So, I mean, you know, I put a little bit of money into crypto every month. Good man. Just in case it moonshots, you know, it's my schmuck insurance.

12:57I can't wait for next year when it's gone to the moon and I'm sitting here. I can't wait to be - 17 gold chains on. I'm like gold teeth, fully gold teeth. And I'm like, I told you guys. I can't wait till next year. When it's down. I'll burn my six to seven grams worth of crypto just to sit here and rinse you. And I've sold all my jewelry and I'm hearing shorts and flip flops. Topless. Topless. Can't afford clothes anymore, guys. Put it all in crypto. That guy, Peckham, took the shirt off your back. Literally. Yeah. I mean, it's a win-win for me. It's like betting on the other team to beat your team.

13:26Do you know what I mean? Like either way, I'm either making a load of money or I get to sit here and rinse you. So it's great news. Tune in next year, guys. What do you want to ask us or future guests? email us at makingmoney at kindling.media or just slide into the dms this isn't advice whilst we discuss individual examples we can't give you personal financial advice what we can do is offer a perspective and discuss the issues investments can fall and rise in fact that's almost a guarantee remember past performance is no guarantee of future results so your money is at risk with investing. Also, remember other fees may apply.

14:06I'm Damo. I'm T. And we'll be back next week answering some more of your questions.