Abdur Rashid’s Post

How does education affect investor behavior? Researchers from the Higher School of Commercial Studies in Montreal, Irina Gemmo and Pierre-Carl Michaud, along with Professor Olivia S. Mitchell from the University of Pennsylvania, tried to find answers by conducting an experiment involving 2,005 participants.   Initially, researchers conducted mathematical and cognitive tests with the participants. Then, they gave each participant $30 and asked them to distribute the money among 3 funds with different potential returns and volatilities. Almost a quarter (24.4%) of the respondents evenly distributed the funds among the 3 funds. Another 10.8% took the risk and invested all the money in the fund with the highest potential return and volatility. Participants who performed best in the tests made the most informed investment decisions, reflected by a higher Sharpe ratio in their portfolios. After understanding how overall literacy influences investment preferences, the researchers moved to the second stage – testing the willingness to learn. Participants were given additional $30 and offered an educational course to learn about the relationship between risk and return, and diversification rules. However, the knowledge wasn't free. The cost was randomly set between $0 and $5. If the cost was less than what the respondent was willing to pay, they could take the course; otherwise, they would miss out. Essentially, participants had to choose between investing the full $30 or slightly less, potentially improving their portfolio. 24.5% of participants didn't want to learn even if it was free. Those willing to learn were willing to pay an average of $2.91 out of a maximum of $5. The more advanced the participants were (with high test scores or investment experience), the less likely they were to refuse learning; while the less advanced participants rated their financial knowledge highly and refused more often.   What happened next with the portfolios of Gemmo, Michaud, and Mitchell's participants? They were asked again to allocate the remaining money among the same 3 funds. The portfolios of participants who didn't undergo training hardly changed. While those who took the course built a more efficient portfolio in terms of the relationship between expected return and volatility. They were less likely to split the money evenly among the 3 funds or invest everything in one high-return fund. However, the results of education depend not only on a person's general abilities but also on their character. For example, patience can influence outcomes as much as access to education or family wealth. The influence also depends on the program itself. Mandatory financial education reduces its effect, while timely education, i.e., when it is related to solving a relevant problem for the target group, increases it. Read more on the topic (in Russian): https://lnkd.in/dyGwDWkY  

INVESTING IN EDUCATION: THE PLAN (10/12) We've explored tax-efficient investing, and now it's time to shift our focus to another important aspect of financial planning: investing in education. 📚💡 Investing in Education: For yourself, and for the next generation. Education is one of the most valuable investments you can make for yourself and your children. However, the rising cost of education can be daunting. That's why it's essential to start planning early and explore strategies to fund education expenses effectively. CHILD CARE PLANS & OTHER WAYS There are some interesting Child Care Plans available but more importantly one needs to earmark portions of wealth into products and ideas that remain untouched, and maintain the right asset allocation pattern. START EARLY The key to maximizing the benefits of education savings accounts is to start early and contribute regularly. Even small contributions can add up over time, thanks to the power of compound interest. By starting early, you give your investments more time to grow and accumulate. BEYOND COLLEGE Smart mutual fund products can also be used to fund other educational expenses, such as K-12 tuition, vocational training, and even certain apprenticeship programs. This flexibility makes them valuable tools for planning for a variety of educational goals. STAY TUNED Together, we're investing in knowledge and securing our children's future. Are you ready to start planning for education expenses? Let's make it happen! 💪🎓 #EducationSavings #InvestingInKnowledge #SecureYourFuture

Reflecting on my journey in finance, I'm reminded of a pivotal moment in my high school days. Young, eager, and filled with a passion for the stock market, I convinced my parents to open a trading account for me. With every bit of income I earned, I funneled it into this account, armed with nothing more than a 9th grader's intuition and, admittedly, rather poor research skills. Investing in various stocks, I have to admit, I did have my fair share of precocious successes, making calls that seemed well ahead of my time. But, as expected, there were numerous significant losses - many of which were entirely avoidable. Had I possessed a better understanding of financial concepts such as diversification, fundamental analysis, and value investing, the story might have been different. But all I lacked back then was education. I see a mirror of my younger self in many kids today, brimming with enthusiasm for investing yet constrained by a lack of proper financial education. This is not just a personal story but a broader narrative about the investment education crisis we face today. Without sounding like a pushy salesman, I genuinely believe INVRS - Gamified Investment Education and Research, a company I've certainly not been shy promoting on my page, is the solution to this problem. INVRS isn't just about investment education, but also about delivering it in a way that resonates with young, modern learners. It uses gamification and micro-learning to make finance and investment concepts not just comprehensible but engaging and fun. Jennifer Cameron CPA CFA's approach at INVRS is straightforward: start learning through FinTrivia and FinEd, engage in collaborative community portfolios, earn rewards like Playdough and badges, and compete in InvestQuest Challenges. INVRS really is more than just a platform, it's a community where learning is social, collaborative, and, most importantly, effective. I wish I had access to something like INVRS in my high school days. It would have been a game-changer. So, for anyone out there looking to embark on their investment education journey, or for those looking to deepen their understanding, I encourage you to check out INVRS. It's an experience where learning meets fun and where investment education is made accessible to everyone. Discover more about this innovative platform here: https://www.invrs.com/home #FinanceEducation #Investing #INVRS #FinancialLiteracy #Microlearning #Gamification #InvestmentJourney

Don't wait until you enter the workforce to start learning about money. Incorporate financial education into your current studies. Read books, take online courses, and seek advice from mentors in the field. Let's break the stereotype and ensure that as future scientists, engineers, and innovators, we are as adept at managing our finances as we are at solving complex problems. #FinancialLiteracy #STEM #MoneyManagement #Economics #Education #ScienceAndEngineering #FinancialFreedom https://lnkd.in/dZMky9ZB

Is College Really That Important? 🤔 1. **Importance of College Education** - Many believe a college education is crucial for success, especially in fields like real estate or investments. - A degree can be a stepping stone to financial payoff. 2. **Personal Experience with Degrees** - Many clients with high incomes (e.g., doctors) gained financial success through their degrees. - My engineering degree and Fortune 50 experience taught me management structures and decision-making. 3. **Family Business Insights** - Family businesses often require real-world experience before passing the torch. - Leading a project right out of college provides invaluable experience. 4. **High-Paying Jobs and Essential Skills** - College can open doors to high-paying jobs and essential skills. - I advise my staff to use every job to learn and make mistakes on someone else’s dime. 5. **Growth Mindset** - Emphasizing the importance of learning, experimenting, and growing, even if they don’t plan to start their own business. 6. **Parental Perspective on College** - College is seen as an incredible journey, especially top-tier institutions. - Not all college lessons are practical, but life is about experiences enriched by financial freedom. 7. **Bill Perkins’ Insight** - Sharing a story about someone who chose experiences over immediate financial security, such as taking a loan to backpack after college. - College exposes students to diverse people and perspectives, pivotal in business. 8. **Value of Liberal Arts Degrees** - Even liberal arts degrees offer valuable life experiences. - As a parent, allowing kids to explore in college is beneficial if affordable but requires vigilance to avoid wasted time and money. 9. **Irreplaceable Life Experiences** - Life experiences, like trips or bonding moments with friends, are irreplaceable. - These moments fade as we age, making them valuable. 10. **Seeking Opinions** - Asking the audience: Is college worth it for the experiences, or should focus be solely on financial gains? - Encouraging readers to share their thoughts. Feel free to share these points with your audience!

🎓 Investing in a college education isn't just about earning a degree. It's about unlocking your potential and securing a brighter future! Dive into our latest article on Capital Maniacs to discover how higher education can boost your career and happiness. #EducationEmpowers #careergrowth https://lnkd.in/dk7hPhth

Are you ready to complete your bachelor's degree online? If you started a degree but never finished, you may qualify for a special one-time scholarship opportunity designed to help eliminate financial barriers, including bursar holds preventing re-enrollment at OU. Read the blog to learn more. #finishyourdegree #onlinedegreecompletion

Learning how to invest in stocks is a valuable skill for high school students. Use the summer break to enhance your knowledge and add it to your resume. 💎 https://lnkd.in/efKNdfr5 https://lnkd.in/efKNdfr5

Exciting to see young Americans' wealth building momentum! According to CNBC, wealth among this group has surged by almost 50% in recent years.📈 But can we sustain this? I believe the key lies in empowering financially savvy students and young professionals. Too many young people enter the workforce saddled with debt and little financial know-how. Let's change the narrative! Here's how: Prioritize financial literacy: Schools, families – we must equip students with money management skills before college. Smart college choices: Let's explore alternatives to traditional 4-year paths – trade schools, apprenticeships, tech boot camps, etc. – to minimize debt. Encourage early investing: The power of compound interest is a young person's best friend. Let's teach them to start small, start now. With these strategies, we can empower a generation of financially secure young adults. As a real estate investor (with several doors!), I see firsthand the impact of wise financial decisions early in one’s career. What are YOUR thoughts? How do we build on this positive trend? #financialliteracy #studentsuccess #generationalwealth #realestateinvesting

Title: The Rise of Young Investors: Empowering Students to Shape Their Financial Future. The investing landscape has seen a significant change in recent years. Young people are becoming active investors rather than merely being passive consumers. The way we see financial literacy and investing education is changing as a result of this trend.   Benefits of Young Investors:- Risk Tolerance: Young students may afford to take on greater risk when investing because they usually have fewer financial responsibilities. This is known as risk tolerance. They could possibly get bigger returns as a result of this. Learning Experience: Students who start investing early in life gain important financial literacy skills that they can use throughout their lives. They gain knowledge of risk management, budgeting, and the value of long-term planning. Time Advantage: The biggest advantage young students have is time. The power of compound interest allows their investments to grow significantly over decades. For example, a 83,390 INR investment at a 7% annual return would grow to over 8,35,192 INR in 20 years! (https://lnkd.in/gErFH-yz) Why are young students investing? Accessibility: Investing is now easier than ever thanks to the development of digital platforms and smartphone apps. The entry barriers have been decreased by apps like Zerodha, Upstox, Groww,etc which let students start investing in mutual fund starting from Rs 500. Financial Literacy: Investing helps young students understand the value of money and how it can grow over time. This knowledge is crucial for making informed financial decisions in the future. Future Planning: The economic issues that lie ahead are well known to Generation Z. They know that they must begin accumulating wealth at a young age in order to cover housing and education debt. Fascinating Statistics:  1.A study by Charles Schwab found that 25% of Gen Z (born between 1997 and 2012) are interested in investing (https://lnkd.in/gfTwKfa2). 2. According to a survey by TD Ameritrade, 33% of teens aged 13-18 expressed interest in learning more about investing (https://lnkd.in/gDSTKba7). 3. According to a survey by the National Endowment for Financial Education (NEFE), 64% of Gen Z (born between 1997 and 2012) are interested in investing, compared to 45% of Millennials (born between 1981 and 1996). #invest,#younginvestors,#investindia,#sharemarket