I am honored to have a guest post by my good friend Edmund Lao. Edmund is a Registered Financial Planner and a columnist for Business Mirror. He is also in the forefront of financial literacy for Filipinos.
The Right Education by Edmund Lao
Education is the formal process by which society deliberately transmits its accumulated knowledge, skills, customs, and values from one generation to another. Whatever knowledge we acquired from experiences, experiments and discoveries of the past generations became the basis of our education today. Without formal education nowadays, one is surely bound to be bracketed in lower caste. Such importance is given to education that the status of a person depends on what school school he or she graduated from. Taking a look at the present , it cannot be denied that education has become a luxury already. In the early 80s, tuition fees cost only around Php 50 per unit. Tasking a full load will mean only around a thousand per semester. Nowadays, the fees range from Php 30,000 to Php 200,000 per semester. Worse, the quality of education is not even at par with that of our Asian counterparts.
Just imagine the hardship all the parents have to endure just to have their children finish schooling. Then when the graduate finds a job, unless he comes from an exclusive school, the compensation he will receive pales in comparison to the expense incurred to finish his course.
Then the new graduate will be in the rat race, taking the same road traveled by The Tired, The Retired, and The Re-Tired. This is because our current educational system gave too much emphasis on the technical aspect. Our system gave little importance to teaching the basics and the values to our generation. Ever wonder why we have corrupt people in the government and in the workplace? The only culprit is the lack of right education. The more information and knowledge we have now, the more ignorant we become. The more ignorant we are financially, the more risk we make in handling our finances. Just observe. If really we are more educated especially in this high technology age, why are there more people who cannot make both ends meet despite the fact that they are earning good income? The painful truth is that more and more people are having low emotional and financial intelligence quotient.
To a certain extent, Robert Kiyosaki was right in saying that our current education system is designed to make us employees rather than entrepreneurs. His biological dad had an excellent education and great job, yet constantly struggled for wealth. His “poor dad” followed all the rules, yet died penniless. His best friend’s dad, on the other hand, dropped out of school but always asked himself how he could make more money. The “rich dad” was a savvy businessman and investor, however, and become very prosperous. We have also our version of Rich Dad in the persons of Henry Sy, John Gokongwei, Lucio Tan, etc. They never finished schooling but they knew the basics of creating wealth. I am not emphasizing that our youths drop out of school and become wealthy. What I am driving at is that
unless schools modify their curriculum, definitely there will be more future “poor dads”. Their experiences and the basic principles of finance can be shared to inspire the students to emulate them in terms of growing wealth the righteous way… Doesn’t it the progress of a country depends on the citizens comprise it? If majority of the people belong to the poor bracket, no matter how good the economy of a country is, it will still belong to the so-called Third World countries. Just take a look at our more progressive neighboring countries and see the difference. Most of these countries have a savings ratio of more than 30% while we are at around 15%. The only way for a country to upgrade its current status is to help educate its citizens be financially aware.
There are two viable solutions:
First is to teach children at home and create the mindset and habit of saving money. I, for one, teach my kids by example. It is very important to practice what you want to teach. I have my own piggy bank to show them I save and now they have their own piggy banks. Whenever I give them coins, they automatically put it into their piggy banks. What RFP Randell Tiongson said is true, that personal finance is 80% behavior and 20% knowledge.
Second is to include personal finance as a curriculum starting from elementary up to college as a continuation and strengthening of what was learned at home.. To some, personal finance is boring but it depends on the professor. In fact, having heard RFPs like Randell Tiongson, Efren Cruz, Alvin Tabanag speak, I can say that they help create interest and excitement in the minds of the audiences. Schools have been including minor subjects which have no bearing on the course. Why not include personal finance subject which can create positive impact on their lives later. If the government wants to create a progressive Philippines, then make financial education an investment that will give the country an unlimited return.