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Comment by mellosouls | Hacker News Reader

everyone should a fundamental understanding of how a savings account, CD account, IRA, Roth IRA, 401(k) and MSA account work. Likewise, everyone should have a fundamental understanding of the equity markets, derivatives markets, futures markets, bond and treasury markets along with an understanding of how interest rates work and their effects on financial instruments like mortgages.

How much money do you think most people have? Half this stuff is completely irrelevant to average workers who don't have income to invest in variety or depth.

Sure, basic financial responsibility and options should be core, or near, but beyond that a detailed dive is going to supplant some other core educational area for no obviously good reason.

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Completely disagree. Even $100/mo invested into an index fund using a Roth IRA in your 20s will have a huge positive return on your quality of life later on. Millions of workers can afford this and don't do it because they haven't been taught/shown the value.

I acknowledged the basics should be taught; and how compound interest and small investment early on would be part of that - the multitude of further options and detail aren't core.

We need more VTSAX and less english majors. Start saving young and income doesn't really matter if your trying to FIRE.

Also healthy eating habits and information about birth control should be taught in addition to financial literacy and at the expense of the current curriculum, but it is not because politics (both left and right here).

I'd agree with most of that; my point is there are many years of education - investing a significant amount of that in knowledge about the complexities of financial markets is utterly irrelevant to most people's lives; Maths and English are far more important at a deeper level over a life lived than bloody stocks and shares.

I know several people with university English degrees who receive government assistance. I would guarantee you that they disagree.

How is knowledge of the markets utterly irrelevant to most people's lives?

Knowing the reasoning behind not trying to time the market will allow you to have the moral foritude to not sell your retirement fund when the market is freaking out, like it did this spring. That is much more valuable knowledge for most people then knowing higher math and English literature.

Another place that the education system is totally worthless is healthcare. Do the schools teach us to contact our insurance companies for interaction Id numbers to see if a provider is in network and then proce we contacted 6months later...hah no. Yet just this last week I had two different providers offices try and schedule me for an appointment costing $160-$200 that subsequently my insurance would not pay for. However the in-network rate is $10. Yes this is a mess but even though it is a mess education is instead trying to teach a classical liberal arts education which most people neither want nor need.

We need educational reform in this country and significant cuts to the educational system could be exactly what is needed as a wake-up call.

How is knowledge of the markets utterly irrelevant to most people's lives?

Misquote. "knowledge of the complexities of the financial markets...". Again, I've acknowledged the importance of basic financial education; deeper compulsory coverage would just displace other more useful subjects.

I wouldn't know as I live in a different country, but perhaps at least in this instance the problem is not your education system but your healthcare...

the median net worth of a US household is $121,411. you have to go down into the bottom quartile to find households with a net worth under $10k. most americans absolutely have enough money to make investments relevant.

https://dqydj.com/average-median-top-net-worth-percentiles/

I would assume that that ‘net worth’ is mostly caught up in housing, and very much not available for investment.

Median household investable income after all expenses, including housing, is about $12,000 per year, per the US government. So at least half of American households are in a position to do significant investment.

The data consistently indicates that Americans have significantly more ability to invest than the impression many people seem to have.

What is the source for that, please?

I'm not doubting, I just found it hard to find drill down info, including my own (not American) country.

after all expenses

To clarify - does it include all reasonable expenses for recreation, culture, food, commuting, etc, basically any normal (neither profligate or frugal) expenses for a balanced life?

This is based on ordinary spending, not essential spending. It has nothing to do with frugality. Transportation expenses are "ordinary" without regard for how much someone chooses to spend on a car. A lot of luxury spending is captured in "ordinary" at the aggregate level.

The US Bureau of Labor and Statistics (BLS) tracks the expenditures of every income decile of the population in considerable detail. If you want to know how much the average person at the 30th percentile of income spends on eggs, fresh vegetables, commuting, or many types of entertainment or non-essential spending, BLS can tell you in surprising detail. I have not seen similarly detailed data for other countries, which makes comparisons difficult.

The expenses BLS defines as "ordinary" are comprehensive, pretty much everything you'd expect, and they make no value judgments regarding how people actually spend in a particular category. The only category exclusion from ordinary living expenses that might be controversial is eating out at restaurants, but that is based on the fact that most Americans do so infrequently (it won't feel this way to the urban minority).

Subtract the median ordinary expenses from median income to arrive at $12,000 per year. Anecdotally, this number feels about right.

Thank you (though I'd hoped for a link to that figure but I guess there's not a direct one, it's an implied result). It's higher than I would expect but of similar scale, perhaps my own perspective is a little biased by being non-US (though comparative), and mostly being used to a low-income environment and culture.

fair point, although even if the majority of your net worth is tied up in your house, it's worth at least considering whether you would be better off selling or trading down and investing the remainder.

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