It is a very sad reality, but at the time when most American teenagers are graduating from high school and entering college, they know very little about basic financial aspects, like budgets, the banking system, credit cards and credit scores, and the difference between good debt and bad debt. Sure, some of them have taken a basic financial course and can tell you what the P/E ratio is, or what an option is, but how helpful is that to the average student who does not have very much money at this point, might be going into debt to pay for college and may get bombarded with free t-shirts, towels or backpacks if they only sign up for a credit card.
High schools don't have classes or even brief lectures about how to avoid racking up credit card debt with 30% APR or how not to mess up your credit. Colleges generally don't teach what an IRA is, much less about the benefits of Traditional vs Roth Ira, unless you take specific financial courses.
If the education system does not teach people about basic financial topics, I suppose it is up to the parents to do so. Which brings us back to the starting point. What if the parents do not know the correct answers, or much worse have incorrect ideas? Ask any parent what a credit score is and how it works and you're likely to receive one of a few answers ranging from: "My score is perfect" or "It's about credit cards," to "Well, it is important to have a good one."
I feel it is very important to have a solid understanding of financial concepts and I've put together resource of reading material. Please understand that most of the material one reads are biased in some way, but that does not make them bad books. Just keep that in mind.
Financial reads:
1)A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing (Revised and Updated)
A historical book with a lot of information about mutual funds, charting, expense scams and the stock market.
2)The Wealthy Barber, Updated 3rd Edition: Everyone's Commonsense Guide to Becoming Financially Independent
An excellent book which covers most of the financial questions in an easy to follow conversation flow.
3)The Intelligent Investor: The Classic Text on Value Investing
A classic about finding value in stocks. Will teach about how to look at a company and a stock and how to try to figure out how to place a value on one.
4)The Four Pillars of Investing: Lessons for Building a Winning Portfolio
A book which will explain the fundamentals of investing.
5)Liar's Poker
Not very useful information wise, but an overall interesting and fast read about Salomon Brothers.
This list will be updated.
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