Ring goes the bell. The recess has ended. Class is back in session.
On the Home page of this website, I stated that the main purpose of education is to prepare students to become responsible, productive, self-disciplined, and self-supporting members in contemporary civil society, which is characterized by a division and specialization of labor. I also stated that education should serve to teach students how to behave civilly by leading principled lives with the utmost respect for self, respect for others, respect for the property of others, respect for the rule of law, and respect for human life regardless of race, color, creed, ethnicity, gender, sexual orientation, religion, disability, national origin, socioeconomic birth status, political opinion, and so forth.
To these educational ends, the purpose of this page is to present students with a cursory examination of the meaning of financial responsibility. This page's purpose is to introduce students to various online financial tools. These financial tools are meant to help students get a headstart on attaining financial stability and prosperity as they transition into the adult stage of life—for the sooner students get started adhering to these financial principles in life, then the better off, financially, they most likely will become later in life. This page's dual purpose is to prepare students to succeed at working and living in the 21st century.
Where do students go to acquire the skills to meet the requirements of a given career? How do students gain the knowledge to competently perform certain jobs? One way to proceed would be to take the on-the-job training route for beginning and advancing a career. Another way to proceed would be to seek out and enroll in places that teach the knowledge and impart the skills required by given careers and professions. The other answer to these two questions would be for students to seek higher learning beyond the high school diploma. The hyperlinks inside the following boxes are meant to introduce students to some of the avenues for attaining higher learning.
How is the proposition of financial stability and prosperity attained? A starting point would be for students to go to school each day, pay attention in class, study hard, complete their homework assignments, and obtain a degree. As illustrated by the next graphic, education pays. That is to say, generally speaking, a higher level of educational attainment translates into higher pay or higher salaries. As indicated by the graphic immediately below, not only does education pay significant financial dividends but also the type of education obtained or career path pursued is a crucial determinant of pay. That is to say, an individual with a college degree generally earns more over a lifetime than an individual with only a high school diploma. An individual who completes the educational requirements for, say, a career in engineering generally earns substantially more pay than an individual who meets the educational requirements for a career as an elementary school teacher.
Additionally, as illustrated by the graphic immediately below, certain types of jobs are in higher demand than others. For instance, the graphic shows that the employment rate is 100% for, say, students who obtain a college degree in pharmacology. In contrast, generally speaking, the unemployment rate is close to 20% for students who obtain a college degree in social psychology. The lesson to be learned here is this: While attending college or vocational school, students should strive to complete the kinds of courses that will enhance their chances of finding a (good-paying) job immediately upon graduation. Granted, some jobs of the future do not exist yet as characterized by some of the more recent developments in science and technology such as the advent of autonomous driving vehicles, machine learning, artificial intelligence, big-data manipulation, genomics, robotics, drone probes, nano probes, 3D printing, and so forth.
Another important determinant of financial stability and prosperity is the credit rating. Most consumers do not possess enough money to make an outright cash purchase of a big-ticket item such as the purchase of a home, boat, electric or motor vehicle, home improvements, home furnishings, college education, and so forth. As a result, most consumers need to borrow money or rely on credit to make these types of big-ticket purchases. Obviously, if a consumer acquires a poor credit rating, either lenders will be very reluctant to lend money to that particular consumer or lenders will charge that particular consumer a higher-than-normal interest rate as a safeguard against the risk of default on the loan. Not only is a good credit rating an important indicator of whether or not a consumer is likely to repay a loan but also, in some instances, employers might consider a job seeker's credit rating as a condition for employment; apartment owners or landlords might consider an applicant's or prospective tenant's credit rating as a condition for renting an apartment to the applicant. To be sure, other extraneous factors that possibly could adversely impact a consumer's future employment and housing opportunities include things such as a police arrest record, a prison incarceration record, or a substance abuse record. So, it becomes equally important for students to stay out of trouble by obeying the law. The graphic immediately below provides an overview of the credit rating process. Click this link to obtain a free credit report: www.annualcreditreport.com.
After students graduate, the final determinant of financial stability and prosperity would be for students to choose a career and then proceed to make wise and disciplined financial choices in life. Accordingly, assorted online financial calculators are presented below to assist students in making wise financial choices. The lesson to be learned here is this: Before making any serious financial commitments, consult the calculators. Even better, consult a Certified Financial Advisor.
Online Financial Calculators
A critical part of financial discipline relates to the practice of consistently saving and shrewdly investing. When it comes to saving, ideally, students would want to deposit their money into an account which pays compound interest. For instance, bank money market accounts, high-yield certificates of deposit (CD) accounts, and IRA accounts pay compound interest, but confirm it with your financial institution before investing in any of these financial instruments. Government zero-coupon bonds pay the equivalent of compound interest.
Numerous investment opportunities exist. These investment opportunities include financial transactions offered in the bond market, stock market, commodities market, futures market, foreign exchange market, and real estate market. A general word of wisdom to investors has always been to diversify their investment portfolios such that a sudden market downturn will not result in them losing all of their money, that is, by not investing all of their money in a given market or by not investing all of their money on, say, a single corporation's stock offering.
The purchase of a home typically is viewed as a consumer's most important investment. Students should strive to purchase a home shortly after graduating from college or vocational school. Not only is a home a permanent place of residence but also, in most instances, a home's value tends to appreciate over time at a rate equivalent to earning compound interest.
Tip: Quicken is a popular and leading desktop/laptop software product for tracking and managing personal finances. Mint.com is the cloud equivalent for Quicken. Free alternatives to Quicken include software applications such as HomeBank and MoneyManager Ex.
Read (Building Wealth: A Beginner's Guide to Securing Your Financial Future)
Extra Credit: The Business Angle
For extra credit, students are invited to explore some business-related hyperlinks inside the boxes below. Assume some students intend to pursue the entrepreneurial route to attaining financial stability and prosperity in life. These hyperlinks will help students to determine if they have the right stuff (i.e., aptitude) to succeed as an entrepreneur.
Tip: QuickBooks Pro is a popular and leading desktop/laptop software product for tracking and managing business finances. QuickBooks Online is the cloud equivalent for QuickBooks Pro. It further should be noted that one advantage of using the cloud version of a software application is the fact that a cloud application is operating-system neutral. Instead of requiring the presence of a specific operating system to use it, a cloud-based software application only requires a modern web browser to make use of the application (along with a device connected to the World Wide Web). Free alternatives to Quickbooks include software applications such as Manager.io and GnuCash.
Read (Entrepreneurs)
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