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The value of teaching our children about financial education

Gaining an early understanding of personal finance can be an important building block to provide youth with the tools they need to become fiscally responsible adults. It seems like a topic that should have already been engrained in curriculums across schools. However, it has only been about four years since a compulsory financial education programme was put in place in secondary schools across the UK. And despite financial education now being compulsory, a majority of students still report their parents and family as their primary source of financial information.

What is the Reconstitution Effect and How Does it Impact my Portfolio?

Exchange Traded Funds or ETFs, came into existence in the early 1990’s. They have grown tremendously in popularity by institutional and retail investors alike. As a refresher, ETFs are marketable securities that typically track an index, a commodity, bonds or a basket of assets. One of the major differences between mutual funds and ETFs is that the latter trades like a stock, meaning you can use limit orders, use margins, short positions, and trade throughout the trading session. In addition, like stocks, one of the most likable characteristics of an ETF is that it’s usually very inexpensive. ETFs offer a diverse range of options for investors seeking investments with low fees. From the days of Benjamin Graham to the present, value investors have always touted investments that are broad-based and low cost; ETFs fit the bill.  However, the benefits of ETFs do not come without trade-offs. In order to replicate the index, an ETF fund manager must sacrifice trading flexibility.

The value of teaching our children about financial education

Gaining an early understanding of personal finance can be an important building block to provide youth with the tools they need to become fiscally responsible adults. It seems like a topic that should have already been engrained in curriculums across schools. However, it has only been about two years since a compulsory financial education programme was put in place in secondary schools across the UK.

The mandatory lessons involve education on basic money matters like calculating simple interest and learning how to approach budgeting and saving. The education is based on four aspects; financial understanding, financial competence, financial responsibility and financial enterprise.