“Don’t chase after money,” I told my students as they were trying to guess how much salary I make in a month.
Aside from it being my way of avoiding the question, I genuinely believe that it’s that one piece of advice I want to share to graduating students. After graduating from ME in 2011, I can still remember feeling slightly disappointed when I found out that some of my batch mates working in other industries earned as much as twice the amount I made. That disappointment didn’t last long, though. It turned out to be a blessing in disguise, as it made me realize that I couldn’t simply rely on salary to be able to save and buy the things or experiences I want. In order to do that, I had to invest.
Even when I was still in high school, I already had an interest (and small investments) in the stock market, which I attribute to my dad’s influence. When I finally started earning my own money, I made it a point to invest most of what I saved. It didn’t matter how much I was earning, or that I was earning lesser than my peers. What matters is that I was finding other ways to make money work for me, instead of the other way around.
Early on, I already knew the difference between investing and saving. I’m actually surprised that a lot of peers my age don’t even invest their money. They just keep it in the bank in savings accounts or time deposits! They say they don’t know where and how to start. It’s a (sad) fact. This is not something that is taught within the four walls of a classroom.
Financial literacy is not that widespread, even among those who studied in so-called top universities. Learning technical finance knowledge or taking all the required electives for a finance minor doesn’t necessarily make one financially literate. To me, being financially literate means knowing how to responsibly handle your money, regardless of value. How one manages less money now will be the same way one will manage more money later on.
We often hear of young people wanting to get good, high-paying jobs after graduation to be able to afford the latest gadgets, travel the world, or to simply save. The more money one gets, the bigger or the pricier the wants and the needs (which most of the time are wants that are justified as necessary) become. It then becomes a never-ending cycle of chasing after money. Rarely do we hear people wanting more money to have more money to invest, whether in properties, financial assets, or even education.
Being part of the academe, I hope to be able to somehow teach financial literacy to my students even if it is not part of the curriculum. I fully support a senator’s proposal to include financial literacy in as early as high school! When I started teaching part-time three years ago, I always made it a point to encourage my students to invest, whether through the stock market or other means. I told them that they can ask me anything about finance, even if it’s not related to what I was teaching. However, I don’t simply tell them to invest even if they don’t understand how the investments work. Part of financial literacy is equipping them with the ability to make rational and logical investment decisions—depending on their individual circumstances—risk tolerance, and return objectives. What works for one may not necessarily work for another, due to differences in any of these factors.
Being aware that there is no one-size-fits-all investment is a good start. I’m happy to know and to have met young people who understand that inasmuch as money itself is important, it’s more important to be armed with the right mindset and attitude to be able to handle money responsibly.
Charles Vincent Chua, CFA (BS ME ‘11) is a part-time lecturer from the Finance and Accounting Department.
