Here's a reminder of why individual investors fail

[Nutria]

Until regulators get smart and realize it is their regulations that are causing problems, they will continue to regulate even more, thus further exacerbating the problems.

Lack of regulation caused the 1929 crash.

[disneysteve]

Lack of regulation caused the 1929 crash.

There's nothing inherently wrong with regulation. But regulation needs to be in the best interests of the people it is intended to protect, not the people running the show. It also needs to be well-enforced. Making a rule and having virtually nobody who is around to make sure it is being followed is a waste of everyone's time.

[dczech09]

Lack of regulation caused the 1929 crash.

There were so many things that caused the crash that led to the Great Depression. A case could be made it was a lack of regulation. A case could be made it was too much regulation. Too much regulation like taxing check writing. Too little regulation like reserve issues for banks leaving them open to runs.

Some regulation is good, I will admit. But other regulation, while good intentioned, is catastrophic. Plenty of examples of both.

No Child Left Behind. Common Core. Yet we can't require personal finance to be taught in high schools even though personal finance is a pivotal part of everyone's adult life? Regulation leads to one requirement at the absence of another that is just as (if not more) important.

[disneysteve]

Yet we can't require personal finance to be taught in high schools

Sure we can. It is required in many states. Here in NJ, it is mandatory. My daughter had to take it, although I think she knew more than the teacher .

[Nutria]

No Child Left Behind. Common Core. Yet we can't require personal finance to be taught in high schools even though personal finance is a pivotal part of everyone's adult life? Regulation leads to one requirement at the absence of another that is just as (if not more) important.

Last I checked, NCLB is a law, and CC is an initiative pushed by governors to ensure minimum standards from HS graduates.

[greenskeeper]

market cycles are a good thing in that you can make MORE money on the way down than on the way up in most instances.

[dczech09]

Last I checked, NCLB is a law, and CC is an initiative pushed by governors to ensure minimum standards from HS graduates.

Right. And they are examples of regulation by regulatory bodies. I am not saying that they are bad or wrong.

My point is that personal finance is not nearly as prevalent in schools as it should be. And unfortunately not much is being done to address curriculum redesign or even modernizing curriculum to match what needs to be taught to prepare children for the real world. Instead of focusing first on "what" is being taught, and "why" it is being taught, everyone is focusing on "how" everything should be taught. Its backwards.

Financial literacy is low. More regulation occurs in a well-intentioned attempt to help people, but instead of helping people, it actually hinders them. Case and point: over-regulation of the financial markets is making financial services prohibitively expensive for those who actually need it most.

Back to the point of this thread - why individual investors fail. Financial literacy is a major problem.

[dczech09]

Sure we can. It is required in many states. Here in NJ, it is mandatory. My daughter had to take it, although I think she knew more than the teacher .

Yes, it is required in quite a few states now, but not all. Even in some states where personal finance is "required," it is required to be offered as an elective. Not necessarily required to be taken.

A step beyond that... how suitable is the personal finance education in the schools that require it? How up-to-date is it?

My point is we should require it to be taken in all schools. In all states. But we have stepped away from that narrative in this country and have prioritized under-water basket-weaving and finger-painting over balancing a household budget and learning how the financial markets work at even a basic level.

[LivingAlmostLarge]

Maybe how to balance a check book and what is a credit card and how it works. IE you are borrowing money you have to pay back, it's not free money and you pay minimum. Eventually you are supposed to pay it back. Seriously I think people see CC as free money and never realize they still have to pay it.

[disneysteve]

Seriously I think people see CC as free money and never realize they still have to pay it.

I don't know if they see it as free money but they see that they can spend $1,000 and only have to pay $40/month. They focus on the payment rather than the total. They don't care that it's 29.9% interest. They don't care that it will take them 15 years to repay it.

[Nutria]

Seriously I think people see CC as free money and never realize they still have to pay it.

"I've still got checks, so I can spend more?" Sexist trigger!!!

[Nutria]

They focus on the payment rather than the total.

Because that's what's pushed -- hard -- by everyone trying to sell you something.

[disneysteve]

Because that's what's pushed -- hard -- by everyone trying to sell you something.

For sure. I hate when I see car commercials that only state the monthly payment. Nowhere in the ad do they give you the sale price of the car. "Only $299/month" is all the information they provide.

[Nutria]

Nowhere in the ad do they give you the sale price of the car. "Only $299/month" is all the information they provide.

They do: it's the law. Of course, it's in the (very!) fine print, and on radio the hyper-fast disclaimer at the end of the ad.