The Hidden Curriculum of Money

My grandfather never invested in the stock market. It seemed to him that investing was an awful lot like gambling.

And gambling was a sin, so if A = B and B = C … investing in the stock market must be sinful too.

The way my dad tells it, he’s not entirely sure his parents would have had money to invest anyway. They had five kids, and my grandpa was a principal at a Christian grade school in Iowa.

The school owned their house. The reduced rent was helpful, but it counted against his salary and didn’t build equity. When they eventually moved to the suburbs of Chicago, it was his school’s janitor who loaned him money for a down payment on a house.

Given my grandpa’s aversion to the stock market, my dad didn’t learn anything about investing at home. And despite enough schooling to earn his doctorate, he was never required to take a personal finance class.

So it wasn’t until he reached his 40s that my dad even considered investing. Nobody had ever talked to him about it until then.

I learned all of this just recently while our family sat around my dad’s dinner table.

“What do you wish you had known about personal finance in your 20s?” I asked as we ate.

People had a lot to say. There’s a lot we didn’t know in our 20s.

I wish someone had told me to start saving for retirement. I look back and think, “What did I spend that money on?”

Living as a graduate student in the humanities is … really hard.

Credit cards! People in their 20s – no, much sooner! – should know the dangers of credit card debt.

I asked my next question: “What hidden curriculum about money did you learn growing up?”

We’ve written about the hidden curriculum of money before – all the things we learn about money without being formally taught.

Talking about money is often considered taboo, so we’re left largely on our own to gather information. All of us pick up things here or there – from our parents, our peers, our faith traditions, the media.

The thing is, it’s hard to know whether what we’ve picked up is well-informed or not. Take my grandfather, for example.

I wish someone had explained to him the difference between investing and trading. Maybe he would’ve felt differently if he had understood the distinction. Investing, then, wouldn’t have been about making bets.

I think he would’ve been drawn to Park Piedmont’s emphasis on humility – and the acknowledgement that nobody, even investment advisors, can predict the future (nor should they try!).

The first chapter of our new book begins this way:

Our approach to investing flows from a single bedrock principle: the future is unpredictable and uncertain. Indeed – and this is actually quite interesting – even having knowledge of the future doesn’t provide actionable insight as to how markets will behave given that future.

As we note, many in the financial services industry and media want you to believe that they know what will happen in the future – and that they’ll be able to successfully make bets on your behalf.

But the markets prove over and over that nobody knows.

Our book continues with an excerpt from our monthly column written in February 2014:

But most people remain skeptical, continually asking the same basic question … What is the market likely to do over the next “fill-in-the-blank” time period?

And when we answer that we simply do not know … there is always lingering doubt on the part of the questioner.

However, we think we are only stating the obvious, that no one can predict the future and that future stock prices, bond prices, interest rates, or economic growth rates are all subject to unpredictable future events.

Financial media and financial organizations wanting you to believe that someone knows the future is of course in their interest, so you will buy their reports, or research, or investment products, but unfortunately these efforts are all, in our view, an exercise in futility.

Maybe this humble approach to investing would’ve piqued my grandfather’s interests. Maybe not, but perhaps.

If so, in turn, maybe my dad’s hidden curriculum about money wouldn’t have been to avoid the stock market altogether.

Talking about money can be awkward – even, or maybe especially, with family. I don’t remember my parents talking about money much when I was growing up, so I wondered a few weeks ago how my line of questioning would be received.

It turns out that it led to a delightful dinner conversation full of family stories I had never heard before. I learned new things about everyone sitting around the table and about those who came before us.

And it also paves the way for future conversations about money – as family members get older – that may be trickier.

One more chapter to my grandparents’ story:

After my grandpa died, my grandmother lived nearly 25 more years and never remarried. Fortunately, she found a financial advisor whom she trusted.

According to my dad, my grandma’s advisor helped her realize that she wouldn’t be gambling her savings away.

Pious though she remained, she became a long-term investor in the stock market – and even a rather successful one.

We’re creating a financial literacy class for young adults, and your input is hugely helpful for creating our not-so-hidden curriculum about money.

• What do you wish you had known about life with money in your teens and 20s?
• What do you hope your kids or grandkids know by then?
• Are there conversations about money you don’t know how to have with your kids?

We’d love to hear your thoughts. Please share your input. It will shape the class we hope will be helpful for the teens and young adults in your life.

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Read “The Hidden Curriculum of Money” in the Piedmont Exedra.