The World Needs Financial Education.. Here's Why
I started Khan Academy to help my cousins in math while my day job was being an investment analyst. It didn't take long, however, to realize that the same tools I was using to explain math could be helpful in finance as well. We had junior analysts at our firm who could use primers on accounting and investment analysis. Even more, I remember being struck by how my family and friends who were so knowledgeable in every other aspect of their lives were living by rules of thumb rather than any deep understanding of how money and markets work.
So I started making videos that explained how to think about stocks and bonds, macroeconomics and basic questions like when it is better to rent or buy. I also started to make videos explaining banking, credit, mortgages and some of the dynamics that seemed to be driving real estate values. At Khan Academy, our mission statement is 'a free world-class education for anyone, anywhere' and it was clear that a world-class education should now include an understanding of finance.
As we all know, these ideas became central to the public discourse in the Fall of 2008 during the financial crisis. It was then that the traffic, even on my videos on credit default swaps and mortgage-backed securities, spiked -- I even got an email from an investment banker saying, "Thank you so much for the video on mortgage-backed securities; I now know what I do for a living." I guess better late than never.
Late last year, Bank of America approached us with an idea: They wanted to help educate everyone about personal finance. We were already committed to doing that and were skeptical about working with such a big bank for all the reasons you could imagine (we were a 30 person nonprofit and they were a 280,000 person bank). So we spent a few months testing them with scenarios like 'what if we created videos on how to avoid bank fees?' They assured us that the whole reason they wanted to work with us was our intellectual independence -- they seemed to really just want more folks to be informed. After nearly a year, I can say that the folks we have worked with have been genuine in their interest in spreading financial knowledge. The result is a portal, 'BetterMoneyHabits.com,' which includes our videos and also some made by the bank in a similar conversational style that gets right to the facts (in addition to the finance content already available at KhanAcademy.org).
Now, we're excited to make these videos available on The Huffington Post as well. Given HuffPost's wide reach and its commitment to empowering readers with the tools of financial education, we think this is a natural partnership. Over time we will be expanding our approach in personal finance, covering more topics and adding interactive exercises. Our aim is to build a personalized learning solution similar to our new 'learning dashboard' in mathematics. To get started, watch the video above about how to choose a credit card.
It's still in the very early days and we'd love to hear your ideas on how we can develop personal financial education, so please leave us your thoughts in the comments below.
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