Raising a family of his own, Mario Romano has begun to instill in his children essential knowledge of how the modern market-driven world works. There are very impressive technological advancements, notes Mario Romano, that make our youth the most potentially informed generation in recorded history. The drawback, says Mario Romano, is our culture’s penchant for entertainment and social play. Mario Romano points out that even with fantastic increases in technology, little of it is focused on substantively improving education for our children. Mario Romano knows that many parents are familiar with this issue.
Children in school today, says Mario Romano, can graduate high school and be sent off into the world without an understanding of the most basic elements of financial independence. Mario Romano observes that simple things, like establishing a bank account or buying a stock are usually overlooked. In today’s world, asserts Mario Romano, a high school graduate should know the difference between a mutual fund and a bond, but the vast majority does not. Mario Romano co-founded Wealth Engineering & Development, LLC, to financially educate current and future adult investors. Mario Romano believes that such an education can begin during middle childhood, and certainly no later than adolescence.
According to Mario Romano, the best way to ensure a sound financial future for our country is to educate the next generation. Mario Romano says that high school curriculum ought to instill knowledge of basic finance that includes banking, investing, debt, appreciation and mortgages. People who graduate high school knowing how to plan for their financial success, says Mario Romano, are more likely to establish fulfilling, independent lives out on their own.
Mario Romano gives an example of an elementary rule of finance that remains a mystery to most high school graduates. That principle, notes Mario Romano, is the Rule of 72. Ask a high school student what the Rule of 72 is, suggests Mario Romano, and you are likely to be met with a blank stare. The Rule of 72, explains Mario Romano, is a simple method for estimating how long a capital investment will take to double. All an individual has to do is divide 72 by whatever the interest rate is on their investment, says Mario Romano. The answer derived, adds Mario Romano, is the approximate amount of time it will take, in years, for an investment to double at the given interest rate.
For example, says Mario Romano, pretend you are investing $100 at an interest rate of 9%, compounded annually. According to the Rule of 72, explains Mario Romano, 72 divided by 9 equals 8. It will take approximately 8 years, says Mario Romano, for that $100 investment to become $200. The Rule of 72, notes Mario Romano, is a good way to make quick investment calculations in the absence of charts and calculators. But even these simple concepts, says Mario Romano, are beyond an average American high school education. Mario Romano concludes that this is a situation that must be changed, and the sooner the better.