[What I’ve Learned] Michael Gilmore: Financial Literacy Advocate – People

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[What I’ve Learned] Michael Gilmore: Financial Literacy Advocate – People

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Zach Petersen (The Jakarta Post)

Jakarta ●
Tuesday, November 1, 2022

2022-11-01
15:00 hours
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financial advice, Michael-Gilmore, What-I-learned, financial-literacy, advocates
Free of charge

What I’ve Learned is a column that features candid interviews with politicians, artists, activists and business people about facing challenges and making a difference.

Michael Gilmour is obsessed with money, but not in the way you think. The co-founder of the Money Awareness and Inclusion Awards (MAIAs) is obsessed with making sure people, especially poor people, understand how to save and what it means to make sound financial decisions and “do money better.”

Ahead of the G20 summit in Bali next month and with the impending recession on the minds of many, he shares his thoughts below on money, progress (especially in Bali) and financial freedom.

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I wonder what the world leaders will see from Bali when they arrive for the G20 in a few weeks. Some brand new roads and excellent airport infrastructure will get them from their planes to the Nusa Dua resort area so quickly that they probably won’t have time to see much of the ‘real Bali’, if there is any of it left.

In a few difficult years for the planet, Indonesia has done a truly impressive job. In the first nine months of the year, while the currencies of most developed countries fell by more than 10 percent against the US dollar, some by as much as 20 percent, the Indonesian rupiah lost only 6 percent. Notable for what has often been the most vulnerable currency in a financial crisis.

But it’s also a bit of a shame. Beyond the conference zone, Bali could pose bigger questions to the G20, ones that might actually be useful in the longer term. For example, what happens to the world while we constantly chase growth at all costs?

This is undoubtedly a development, but at what cost? We all promised ourselves during the pandemic that things would change, but the new normal is starting to feel a lot like the old normaland what brought us here will only bring us more.

If we teach young people about money, it can lead to so many positive changes. Yes, we could help them better prepare for their own futures, understand how they will need to pay, save and invest for their lives, but there are bound to be many other positive spin-offs in areas such as sustainable development.

For example, if the world had set out to improve health and global longevity 200 years ago, when the average life expectancy was only 28 years, it would probably have failed because only 15 percent of the world’s population could read. By teaching reading, we have enabled the spread of best practices in health, nutrition, medicine, and life expectancy has more than doubled.

This does not mean that we should teach children development economics. We just need to teach them at the earliest possible age what money is and what it can do. We can teach them all the skills they need to know to become a millionaire in their lifetime very easily.

Personal finance can be one of the simplest courses in school. They just need to save $7 [Rp 110,000] every day and invest it to get a 7 percent return, and they’ll have a seven-figure fortune before they’re 70 (that’s why I write books under the pen name The Seven Dollar Millionaire).

Then we can let them decide if they want to be entrepreneurs or philanthropists, but really understand the choices and the consequences. Maybe they will choose to waste the education and not change their lives, but that is no excuse for not teaching it. We don’t teach any of that right now, so we don’t even give young people a choice. As a result, money is a source of problems and stress, not solutions.

This is not a conspiracy, just a historical oversight, but it causes tragedies. People are accumulating too much debt, falling into poverty, even committing suicide. It’s global and affects all incomes and age groups, and while conversations about tackling it are finally gaining momentum, actual on-the-ground programs that de-emphasize schooling by placing required courses in front of students are still woefully scarce.

We have to do it now, because it won’t get any easier. Fintech is expanding financial inclusion to places these services couldn’t reach before, but a huge percentage of the people involved haven’t been taught the rules of the game. OJK’s [the Financial Services Authority’s] recent figures show that half of the people now involved in the financial system have a huge gap between their access and understanding of how to use services. While good, access is improving, access without education can accelerate abuse and lead to even more serious problems.

I don’t consider myself an activist, but I guess I am if the choice is between being active and being passive. Seeing things in the world that we think are wrong and doing nothing about it is a root cause of stress and anxiety. Then again, we’re wired as a species to enjoy agency and activity, so if I stretch the definition that far, then yes, maybe I’m an activist.

Of course, it makes sense to contribute to a topic you know something about, and for me that’s finance. It disappoints me that we know this with 100 percent hard fact every child who goes through school will need to know how to use the money when they leave. They will need to know how to earn it, save it and invest it, and we don’t teach any of those things. Instead, from the time they can read, write and do basic math, we teach things we think they might need, but which most will never use again.

We created the awards for money awareness and inclusion to try to speed up decisions. More work is done, but often hard to find. Even when you find it, it’s hard to know if it’s good or appropriate to use it in a different situation. MAIAs are designed to find the best work anywhere in the world to promote and spread it. Winners earlier this year included leading scientists and influencers from as far away as Peru and Malaysia. Including our judges Financial Times editors, academics, fintech entrepreneurs and influencers: all are invited.

But we have no records from Indonesiawhich was a huge disappointment. This vast archipelago has one of the youngest populations in the world, which will desperately need this information if it is to continue the rapid growth the country has achieved over the past 20 years. The G20 provides an incredible opportunity for Indonesia to present the case for teaching money, its plans to do so in the coming years and to urge other countries to start teaching financial education in schools.

I think Indonesia has a lot to teach the world about money. I’ve seen references to both [the] OJK and the Ministry of Education are promoting financial literacy in schools and beyond, but there is still much to be done given the sheer talent and creativity of Indonesians.

Past Ubud I had a quiet conversation with a batik artist, Wayan, overlooking some remaining rice fields. Wayan asked me about the global economy and what is happening in the markets. While his parents and grandparents before them had watched the weather and water to know how to tend their fields, developing other trades and skills to supplement their income when times were tough, Wayan knew he had to build different portfolio to weather today’s storms, but was never shown how to do it.

Someone like Wayne, somewhere, has the answer world leaders need, but he will have to be as financially literate as his savvy ancestors were agriculturally literate to provide that answer. We need these skills to be taught in schools in Indonesia and around the world if we are to achieve proper sustainable growth. The answer will come from Wayan, not a global summit. Our world leaders need to get off the new main road to Nusa Dua and onto the real Bali if they really want to solve the G20 problems.

Enter in maiawards.org For more information.


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