Did you know that Robin Williams’ son Zak co-teaches a course at San Quentin prison with Curtis Carroll, convicted for murder and armed robbery? They teach financial literacy and have inmates lined up for the classes. Carroll is known locally as “Wall Street” and “The Oracle of San Quentin” and Williams has an MBA from Columbia.
My cousin, Paulette Turcotte, is a poet and artist and much more. Since I have trouble with stick figures and am more prose than poetry, I was surprised and pleased to find that she reads articles I produce and suggested this topic. I think the commonality that triggered her message was an article on how we need to relearn how to help each other. You can see the article about Zak Williams here. You can learn more about her here.
The CNN Money article clearly makes the point that helping is part of all of us and we make our world better by doing so. The article makes another point that is interesting.
“Whether they are [in for] non-violent or violent crimes, a grossly disproportionate amount [of the crimes] are money related,” Williams told CNNMoney. “What we want to do is reveal a whole slew of ways to think about money, and hopefully reveal to people that they can earn it in ways that they didn’t previously see.”
From my reading of the article, the class seems to derive its energy from studying the stock market. Markets are sexy and complex and rewarding, but they are just one element of financial literacy. Market investment is about moving money from the present into the future, ideally with an investment return. I have the sense that the inmates like best, the idea of an investment return. Who doesn’t?
For financial literacy purposes, the important element here is that markets give you a return if:
- You invest initial money you acquired in some other way
- You invest risk tolerance
- You wait a long time
- You study the businesses behind the stock, not necessarily the stock itself.
- You study the economic environment within which the business operates
- You understand how other investors behave relative to the same factors
- You are willing to quit when things move against you
- You understand taxation
In life, the investment values do not occur in isolation. The capital and time to run the investments, must come from some other place and those resources must be balanced against other needs in the person’s life and that of their family. One element of balance is risk. Education plans have different time and risk parameters than do retirement plans or end of life estate plans. The purpose of the plan shapes the risk and thus the method.
In looking at investments in isolation, there is a tendency to fall into the “getting money” trap. Getting money is different from earning money and the difference is crucial to financial literacy. Acquire skills that earn money and are not dependent on markets.
Learn to earn. When you think about it, many of these folks are in San Quentin because they made poor choices around getting money and likely missed the opportunity to acquire the skills to earn it.
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Don Shaughnessy is a retired partner in an international public accounting firm and is now with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.