Cork student: We must teach finance in secondary schools

OWNING a home is becoming an unwinnable battle. The prospect of a decent and dignified retirement is becoming bleaker.

With no clear end in sight for various crises, it is time for my generation to take matters into our own hands and learn how to bring these dreams closer to a reality ourselves.

I am in my final year of secondary school. Sport was never my thing so I found another direction. Since first year, I have engaged with the topic of finance and investing.

I have taken any finance industry exams I could and competed internationally in stock pitch competitions. During that process, I learned a basic truth. The younger you begin investing, the more likely the value of your efforts and investments will be worth considerably more.

Let’s take an example of someone who begins to invest €100 a month in a pension fund with a 6% APR, from the age of 18 until they are 65. The person who begins at 18 will have invested €56,400 over the 45 years and would have achieved over €245,000 in interest over the investment period.

Compare this to somebody who contributes the same €56,400 by investing in equal instalments every month, at the same APR, but does so between the ages of 40 to 65. Their total interest comes out at around €70,000 when they reach 65, less than a third of what would be earned if they had started at 18.

After learning this, I would often sit in PE, and wonder why this is not taught in detail in every secondary school in the country. 

After all, according to the Licensed Vintners Association, the average cost of a night out is around €81 - €19 more than that sum invested every month can create a pension pot of about €300,000 at retirement, around three times the current national average pension pot, according to a recent survey.

Possessing the exceptional financial asset of time, it is clear that school pupils need to be taught to be financially literate and savvy to the wealth of investment opportunities, which can be invaluable tools for buying homes, retiring and every other financial goal in their lives.

The longer we leave students without a comprehensive knowledge of investments, the more we erode my generation’s financial future. 

But what would making financially literate students even look like? Being financially literate is broadly understood as having the skills and knowledge which allow you to make informed and effective decisions with your financial resources. This is not something that comes naturally to students, or anyone for that matter.

To develop these skills in students, schools have a variety of possible options at their disposal. For schools who feel the sense of urgency to teach their students to become financially literate, an option that has worked well in my school to raise awareness was establishing a school finance society.

When I was in transition year, I established the finance society in my school with the goal of giving students the tools to learn about financial literacy in a fun and engaging way, during lunch on Fridays. I did this at no cost whatsoever to my school or fellow pupils.

I had heard about finance societies being a phenomenon in the USA and the UK, where students would come together to educate themselves about investments and run simulated investment funds. After co-ordinating with my principal, the finance society became a part of school life.

Every Friday the Finance Society meets and students learn about one new financial concept. We learn how to read quarterly earnings reports, understand derivatives, what IPOs are and more. We also make researched stock pitches for the society’s simulated investment portfolio.

Every week, three students research a company and present their case as to why our mock fund should invest in that company. The competition for having a stock voted for is fierce. Those who come up with flimsy research are voted down, to put it politely. There’s a lot of banter, a lot of laughing, but chiefly there is genuine engagement.

Through this, students are given a platform to learn about concepts for their investing future, experience first hand how real world events affect global financial markets, and enjoy the fun and jokes that ensue during every meeting with their friends.

The best thing about a school finance society is they are free to establish. Free resources are offered online and practice accounts, which are offered by most large online brokerages, allow schools with an enthusiastic community to start a student-led administration.

The U.S has non-profit organisations with the goal of spreading financial literacy in schools and ardently welcome international participants. Irish schools can leverage these in order to access courses, competitions, and a community for their school society.

Investment institutions offer extensive play-lists on their YouTube channels teaching the fundamentals of investing. These have short videos devoted to everything from bonds, derivatives, what type of investment plans should be made at different ages, and more.

Alongside this, schools can utilise free practice investment accounts to give students experience managing portfolios, without any risk. This expedites the process for schools to curate the facilities needed to have a vibrant school society.

My generation is entering adulthood in an uncertain Europe and wider world plagued by war, climate change, the recent pandemic, and more. We need to allow students to leverage the certainty of their young age and give them the financial education they need.

• Senan Skalkos, a 6th year student in CBC Cork, is the 2021 Ireland winner for the Chartered Institute for Securities & Investment Introduction to Investment: The Foundation Qualification Award. He received the highest results in Ireland in the finance industry professional qualification exams. At 16, he was the youngest in the UK and Ireland to receive the award. Last year, he was second in the Young Investors Society International Stock Pitch competition.