Richard, an 8th grade student, is baffled by the increase in cost of sugar in the last two months. His parents cannot make him understand how prices go up. Nor are they able to explain what inflation means.
But, ask V. Venkatesh, Co-Founder and Director of Money-Wizards, to explain inflation to Richard. He will teach it in simple terms using prices of pizza, tickets and chocolates as examples. Finance education is not just for adults. It is also for kids who need to be taught the basics of managing money.
Venkatesh will get Richard to track how the prices of items have changed over the years and then calculate the inflation associated with these. For slightly older children, he teaches them to compute the Family Price Index, which is a better measure of inflation than Consumer Price Index and Wholesale Price Index.
Money-Wizards conducts classes in various centres and plans to have an online programme in a year. It gets its revenues from each student, who pays either for a module or an annual subscription. Schools pay the company for the programmes that are mandatory.
The school courses on financial literacy and money education called “Money-Champs” integrates concepts from finance, economics, business and critical thinking to give them a solid foundation in money education.
Right from managing their pocket money, the children are taken through different aspects of banking and investments along with economic concepts such as inflation. A lot of examples and exercises are given to introduce entrepreneurship as a career option for the students. At the end of every term, the students embark on an entrepreneurial project, which gives them confidence to strike out on their own when they grow up to be adults, says Venkatesh, 40, an alumnus of Indian Institute of Management, Bangalore.
The company conducts programmes in Chennai to children of 9 years and above on value of money, money management, managing pocket money and entrepreneurship in a fun-filled interactive way through games and activities. It has developed courses for school segment. It has graded curriculum such as martial arts for school children starting from age 8 all the way up to age 17. These are being rolled out in Singapore and Chennai currently, he says.
Leaving behind a sound financial career in Singapore, Venkatesh relocated to Chennai last year with a vision to educate people on financial literacy. “We want people to make them understand how they get money and the concept of risk and “returns. He roped in Thillai Rajan, his classmate from IIM, who is now a leading finance professor at IIT Madras, Department of Management Studies.
One of the company’s general objectives is to help people to be aware of fraudulent “get rich quick” schemes. These come serenading as investment opportunities that finally end up stealing our precious hard earned money, says Venkatesh. “We are educators and not financial advisors or intermediaries. We want to make people literate on finance. We aim to clarify, simplify and demystify concepts related to money, investment and finance,” he says.
During his career in international finance for over 14 years, Venkatesh says he saw first hand how the government policies and financial markets impact the life of a layman. Yet, the average man on the street had no clue about all this. As globalisation of economies proceed at a rapid pace, it is important for people to take care of themselves financially. Yet, the knowledge for this is difficult to obtain, unless one is a seasoned finance professional.
Interestingly, the people who need this knowledge most had the least awareness about its importance. People continue to get manipulated by greedy intermediaries, whose interests are diametrically opposite to that of their clients, says Venkatesh. Sensing this huge opportunity to educate people financially, Venkatesh started Money-Wizards.
As an academician, Thillai Rajan was thinking on similar lines. He wanted to do what Veta (Vivekananda English Teaching Academy) has done for English teaching. He wanted to take finance knowledge to common man in an engaging and entertaining manner. When Venkatesh sounded out the idea to Rajan, he agreed to be a co-founder of Money-Wizards.
Currently, people make a lot of wrong decisions when it comes to buying insurance products, pension products and even mutual funds. There is a large group of people for whom stock market is some kind of casino. The company aims to demystify it so that people understand the basics of all these financial products.
Topics covered are banking, savings, loans, insurance, taxation, investment in stock markets, elementary economics, bond markets, commodity markets, currency markets, and derivatives. “We can also meet customised needs in advanced topics such as investment in alternate asset categories like real estate, private equity, art and antiquities.”
When it comes to school and college students, much of the learning is imparted through activities and games. The activities are set in a context that they can relate to. For example, school students are taught life-time cost of ownership (for example ownership of say a car or even a house), but the activity that is used is life time cost of a pet ownership. Children are generally interested in pets and so when that example is given, they are curious and interested and because the context interests them, they learn the concepts without getting bored.
Classes for home makers
Surprisingly, says Venkatesh, educated housewives are showing keen interest in understanding various financial products and also the basics and intricacies of stock market and the commodity markets – specifically commodities such as gold and silver.
Because they have spare time, they are able to spend time and effort in grasping the concepts. They are also open to go out of their comfort zone to learn how to maximise the return on their savings. The classes for educated home makers are interactive and the engagement level of the participants is quite high. The firm has been funded by the promoters and through profits from operations, he said.