Yesterday, I pointed out that schools as institutions are flawed.  I promised I would explain what, exactly schools fail to teach us.  Here is a list of 6 major problems with instruction in our schools:

1) No cheating allowed.  In school, you’d get in trouble if you cheated on an exam or on a homework assignment.  But, in the real world, don’t we consult others for help on a project when our skill sets don’t adequately cover a particular area?  In my job, if I don’t know the answer to a question but know that someone else has that answer, I walk over to that person’s office and ask him or her.  I don’t get in trouble for that.  That’s called cooperation or teamwork. 

Even more important, if you decide, for example, to invest in a rental property, you alone don’t take care of all the tasks involved.  There is no rule that prohibits you from enlisting the help of others to complete the deal.  For example, you hire an inspector to inspect the property and alert you to any problems or defects.  You hire a title company to make sure there are no defects to the title of the property.   You hire an accountant to help you figure out what types of tax advantages the property has.  If you tried to tend to all these tasks yourself, you’d be in trouble.  It would also be foolish.  It’s critical that we secure a team comprised of individuals with skill sets superior to our own.  A good team helps you succeed. 

2) No mistakes.  In school, your teacher frowned upon mistakes.  If you got an answer wrong in class, the teacher would make that clear and call on another student who might have the right answer.  If you got an answer wrong on an exam, you were penalized for it without an opportunity to correct it.  As students, we learned that mistakes were bad, and that we should try to avoid them.

But when you’re learning how to succeed at anything in real life, the only way you learn is from your mistakes.  A mistake is the best opportunity for improvement.  When you make a mistake, you realize what you did wrong, and you can compare what you did with what you should have done.  Then you figure out how to bridge that gap and improve on your previous result.  By improving, we enhance our skills and move closer to our goals.

If you start a business and fail, it’s not the end of the world.  Rather, it’s the beginning of something special.  When you gather yourself together, learn what you did wrong, and start another business in the future, you won’t make the same mistake again.  And that provides you with a greater chance of success.  School doesn’t teach us that failure is essential to success.   

3) No financial education.  The most glaring omission in any school curriculum is the lack of any financial education.  We learn about science, math, history, art, music, etc., but we never learn about spending habits, investing, passive income, etc.  If we can teach third graders about photosynthesis (which is utterly useless unless you become a botanist), we can certainly teach them about saving money vs. spending it, or investing in real estate and businesses, or cash flow, etc.  The latter concepts are universally useful while arcane concepts like photosynthesis are only helpful in very narrow niches.  Moreover, a consistent emphasis in financial education prepares grade school and high school students not only to survive financially in the real world, but to thrive as potential investors.financialeducation.jpg    

4) No focus on entrepreneurship.  In addition to the lack of financial education, schools don’t teach their students anything about entrepreneurship.  I remember when I was in the third grade, and we had week in which we learned about different professions.  One student’s dad was a police officer and came to talk to us about his job.  Another student’s mom was a doctor, and she talked to us about that.  But I never saw or heard from an entrepreneur.  I never heard from an entrepreneur about the value of starting one’s own business. 

What’s funny about school is that it teaches us to identify what we love and pursue a job in that area.  The irony, however, is that entrepreneurship is what truly allows us to pursue our passions without obstacles or restrictions.  What school should teach us, instead, is to identify what we love and pursue a business in that area.   

5) No accounting.  I never understood what a balance sheet was until I voluntarily took accounting my junior year in college.  I was 20 years old then.  I already had a bank account for two years and a credit card.  I had been working part-time since I was 16.  I would have benefited greatly from an understanding of balance sheets and financial statements. 

Yet our schools don’t teach children about balance sheets and the difference between an asset and a liability.  Comprehending these concepts is critical to investing, managing a business, and, most important, managing your own money.  Too many people today are suffering from this “credit crunch” because they didn’t understand the difference between an asset and a liability. 

Schools teach students various levels of math, including multiplication, division, algebra, geometry, and even calculus in advanced classes in high school.  It’s no tall order to include in math classes the basic lessons of addition and subtraction associated with a balance sheet.  

6) No current events.  Our children learn about history, but rarely do they learn about what’s going on in the world right now.  Current events don’t have to be complicated.  When I was in school I learned about how England was a superpower, and then, after the American Revolution, the U.S. rose, and England retreated into the background.  I learned about the Roman empire and how and why it fell. 

If schools teach our children about these past events, they can certainly teach them–in broad strokes–about important events taking place right now.  Our children should learn about China emerging as an economic superpower.  They need to know about India’s rise as a ”brainpower,” with its millions of engineers and doctors infiltrating the U.S. workforce.  The U.S. no longer is an isolated country.  World events are affecting us here, and the future depends on our understanding of what’s happening abroad.  This new global economy affects investment and business opportunities here at home.  An understanding of the world in its present and emerging form should begin in school.

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