Are there any reasons for financial education?

When I think about my education, I can’t avoid looking backwards into my childhood. This journey is not especially long – only a half a century.  As you presume, I attended grammar school and then spent five years at university.  

I learnt many things, but  what of these are still valid today? Of course I can read, but mathematics I had to learn alone, when I was 40, because all my teachers did everything in their power to make me hate this great science. Meanwhile, I feel like a literary man and humanist in every square inch of my body – yet I work as a European Financial Adviser.

Despite being a deeply committed humanist I teach the lessons of financial mathematics. Not just the easy ones suitable for everybody interested in finances, but also for the attendees preparing to become financial advisers themselves.

From this small perspective of 50 years, I ask myself: what are the profits of this education I had, and what are the disadvantages?

I still remember the long, beer-fuelled discussions as a  teenager, about which is the best philosophy, which religion gives the best God’s care, what kind of literature is the coolest, and why only certain music makes me a trendy and jazzy man.

The fascination is gone, lives go on, but one hidden need remains. I had all the time – as a teenager as well as now – to use money, to manage money, to understand money.

Far, far away from the hard materialistic concept of life, with respect to all spiritual dimensions, I think I can say something – the absolute truth, whether in mathematics or physics or cosmology. This golden rule is:

If you have money you are always in a better position make decisions and manage any situation.

We can simply ask – is that all? Is it only that? My answer will always be: it is so much like that!

Unfortunately, I never had a good money coach. Living in socialist Poland, any business principles I learnt were from  criminal movies about Al Capone or America in the 1930s. And all that time I was more interested in the business processes than driving the car or shooting the cops.  Of course, as children, we played games with shooting but never games about doing business. I didn’t even know of such a game until today…   

It took a while for me to understand the simple truth –

Money that comes in is not the same as should be spent.

And, using my wisdom as a financial adviser, I can say: It is my fault that I mismanaged the money I owned. For the last 40 years I was able, on average, to put aside £100 a month. Over those 480 months, this would have amounted to £48 000. s everybody can see, this is simply the total amount, but what would  it be if the miracle of compound interests happens?

All the books I read on financial planning said the same, vital information: try to invest 12% of your money yearly.  What this means for your finances is shown in the short table below:

Analysing this data shows that, by not investing the money I could,  I lost approximately  £1.2m. So how much will you lose in your life? What if you could put aside £200 a month, or even more?

The question that every one of us should answer is ‘Why?’

  •    Why study financial education?
  •    Why fulfil several financial rules?
  •    Why think about finances all the time?
  •    Why be conscious with finances?
  •    Why plan a financial life?
  •    Why plan financial wealth?
  •    Why plan for your children to be rich?
  •    Why plan for your grandchildren to be rich?

I used to ask these questions in all my financial courses. And the answer is incredibly simple :

Why do you want to be in a better position to make decisions and manage your life situations?

Of course, you will not necessarily be in a better position by making a decision and managing your life situation. But I picture that you want to flow through life in a boat on a river, with tangerine trees and marmalade skies, and your girl will have kaleidoscope eyes…

To make this happen, to make dreams come true, we need financial education.

Every time I went to a bank for a credit card I was asked for a financial statement – never about the Middle Ages, the names of kings, or my understanding of romantic poetry’s main message.

But – no one knows why – I was asked what I earn, how many taxes I pay and what my account  balance is.  

This doesn’t mean that the other education given in schools is not needed, I merely wish to highlight that we have a great lack of common financial knowledge in Europe,probably in the whole world – and nobody is interested in changing that. Allan Greenspan, the long-term Chief of Fed in the USA, once said some words that encapsulate this perfectly:: “Children in primary and secondary schools should learn the basic principles of finance to escape the wrong decisions as adults.”   

I totally agree with this smart idea. It is important to understand that financial education is something that is in our own hands. No one will force us to learn about finances and no one cares if we lose £1m or £2min our lives.

Today’s financial world is highly complex compared with the one of a generation ago. It seems like it used to be enough to understand how to maintain a checking and savings account at your local financial institution. However, nowadays it is crucial for everybody to be able to differentiate between a wide range of products, complicated services, and specialised financial providers. Firstly knowing that we are good enough to successfully manage our personal finances.

So, while you are interested in this education, the Financial Manifesto is something that can support you. But there is still important homework to be done: Put aside £10, £20, £50 or £100 every single week, even if into the most basic bank account with no interest. This habit is so important because when you get used to doing this you will find a way to invest with better yearly interest, which is what I wish for you from the bottom of my heart.


Dr Andrzej Fesnak, EFC (European Financial Consultant)

The Financial Manifesto

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